SB 9

Substitute Senate Bill No. 9
  Public Act No. 26-21
AN ACT SUPPORTING COMMUTERS AND MICROTRANSIT
SERVICES AND CONCERNING PUBLIC TRANSPORTATION.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
   Section 1. (NEW) (Effective January 1, 2027, and applicable to income
years commencing on or after January 1, 2027) (a) As used in this section:
   (1) "Eligible employer" means any entity licensed to operate a
business in the state that is subject to the tax imposed under chapter 207,
208 or 228z of the general statutes, employs at least five employees in
the state and provides a qualified commuter transportation benefit to
one or more participating employees. For the purposes of this
subdivision, the number of employees shall be the average number of
employees employed during the preceding twelve months;
   (2) "Qualified commuter transportation benefit" means any benefit
provided by an eligible employer to an employee for the purpose of
commuting between the employee's residence and place of
employment, including (A) participation in the CTpass program
established pursuant to section 13b-38ee of the general statutes, and (B)
any other transportation benefit that qualifies as a qualified
transportation fringe under 26 USC 132(f), as amended from time to
time. "Qualified commuter transportation benefit" does not include
  Substitute Senate Bill No. 9
reimbursement for fuel or mileage for the use of a single occupancy
vehicle to commute between the employee's residence and place of
employment;
   (3) "Qualified commuter benefit expenditures" means amounts paid
or incurred by an eligible employer during the income year to provide
a qualified commuter transportation benefit to participating employees
pursuant to an approved commuter benefit plan;
   (4) "Approved commuter benefit plan" means a written proposal
submitted by an eligible employer and approved by the Commissioner
of Transportation; and
   (5) "Participating employee" means an employee who works at least
twenty hours per week in the state and receives a qualified commuter
transportation benefit.
   (b) For income years commencing on or after January 1, 2027, and for
the first five income years in which an eligible employer provides a
qualified commuter transportation benefit pursuant to an approved
commuter benefit plan, such eligible employer shall be allowed a credit
against the tax imposed under chapter 207, 208 or 228z of the general
statutes. The amount of such credit shall be equal to: (1) Twenty-five per
cent of the qualified commuter benefit expenditures made in the first
income year in which such expenditures are made, (2) twenty per cent
of the qualified commuter benefit expenditures made in the second
income year in which such expenditures are made, (3) fifteen per cent of
the qualified commuter benefit expenditures made in the third income
year in which such expenditures are made, (4) ten per cent of the
qualified commuter benefit expenditures made in the fourth income
year in which such expenditures are made, and (5) five per cent of the
qualified commuter benefit expenditures made in the fifth income year
in which such expenditures are made.
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   (c) An eligible employer seeking to claim the credit under the
provisions of this section shall submit an application to the
Commissioner of Transportation, in such form and manner prescribed
by the commissioner. Such application shall describe the eligible
employer's proposed commuter benefit plan and include (1) the type of
qualified commuter transportation benefits to be established or
expanded, (2) the projected qualified commuter benefit expenditures to
be made over the five-year period, (3) the number of participating
employees expected to be covered, and (4) any additional information
as the commissioner may require. Upon approval of an application and
commuter benefit plan, the commissioner shall determine and reserve
the amount of the credit the eligible employer will be entitled to claim
over the five-year period.
   (d) On an annual basis, an eligible employer shall submit
documentation to the Commissioner of Transportation demonstrating
actual qualified commuter transportation benefit expenditures made
pursuant to the approved commuter benefit plan. Upon verification of
such expenditures, the commissioner shall issue a voucher to the
employer in the amount of the applicable credit percentage under the
provisions of subsection (b) of this section.
   (e) If an eligible employer notifies the commissioner that such
employer is discontinuing its approved commuter benefit plan or fails
to submit required annual documentation within a reasonable time
period established by the commissioner, the commissioner shall issue a
written notice of noncompliance to such employer. If the employer does
not address such noncompliance not later than ninety days after such
notice, the commissioner shall revoke approval of the commuter benefit
plan and any reserved credit associated with such employer.
   (f) Any credit not used in the income year for which it was allowed
may be carried forward and credited against the taxes imposed for the
three immediately succeeding income years or until the full credit has
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been allowed, whichever occurs first.
   (g) Any credit allowed pursuant to this section may be sold, assigned
or otherwise transferred, in whole or in part, to one or more taxpayers
subject to chapter 208 of the general statutes, and such taxpayers may
sell, assign or otherwise transfer, in whole or in part, such credit.
   (h) The Commissioners of Transportation and Revenue Services may
examine any books, papers or records relating to an approved
commuter benefit plan or any credit claimed under the provisions of
this section for purposes of verifying compliance and accuracy.
  (i) The total amount of all tax credits which may be reserved by the
Commissioner of Transportation pursuant to this section shall not
exceed seven million five hundred thousand dollars.
   Sec. 2. (Effective from passage) The Commissioner of Transportation
shall, in consultation with chambers of commerce, community-based
organizations and business advocacy organizations, develop and
implement a public awareness campaign to inform employers of the tax
credit allowed under section 1 of this act.
   Sec. 3. (Effective October 1, 2026) Not later than January 1, 2027, the
Commissioner of Transportation shall submit a report, in accordance
with the provisions of section 11-4a of the general statutes, to the joint
standing committee of the General Assembly having cognizance of
matters relating to transportation, detailing (1) the status of sites
identified as opportunities for transit-oriented development, as defined
in section 13b-79o of the general statutes, (2) the timelines associated
with any request for proposals regarding transit-oriented development,
including reviewing and evaluating the responses to any such request
for proposals, and (3) an estimate of the number of housing units
associated with such opportunities for transit-oriented development.
  Sec. 4. Section 23 of public act 22-40 is repealed and the following is
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substituted in lieu thereof (Effective July 1, 2026):
   (a) As used in this section, "microtransit" means transportation by a
multipassenger vehicle that uses a digital network or software
application service to offer fixed or dynamically allocated routes and
schedules in response to individual or aggregate consumer demand.
   (b) The Commissioner of Transportation shall establish a [two-year]
three-year pilot program to test microtransit services in the state,
including rural areas not currently served by public transportation. The
commissioner may enter into agreements with third parties to provide
such services.
   (c) Not later than January 1, [2025] 2028, the commissioner shall
submit a report on the implementation of the pilot program and any
recommendations concerning the future deployment of microtransit
services in the state, to the joint standing committee of the General
Assembly having cognizance of matters relating to transportation, in
accordance with the provisions of section 11-4a of the general statutes.
   Sec. 5. (Effective from passage) (a) The sum of $4,000,000 of the amount
appropriated in section 2 of public act 25-168 to the Department of
Transportation, for Rail Operations, for the fiscal year ending June 30,
2027, shall be made available in said fiscal year for the Shore Line East
rail line.
   (b) The sum of $3,000,000 of the amount appropriated in section 2 of
public act 25-168 to the Department of Transportation, for Rail
Operations, for the fiscal year ending June 30, 2027, shall be expended
in said fiscal year for the purpose of increasing service on the Shore Line
East rail line.
   Sec. 6. Section 13b-38h of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
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   (a) The Department of Transportation shall provide for changes in
fares for mass transportation by land in accordance with the provisions
of this section and shall not be required to conform to the procedures in
chapter 54.
   (b) Prior to adopting any [change] increase in fares for mass
transportation by land, the department shall (1) give notice of the
proposed fare [change] increase, its amount and the date and time it is
proposed to take effect by advertising, at least once, in one or more
newspapers having [general] circulation in all areas [of the state] that
[may] would be affected by such [change in fares] proposed fare
increase, and (2) in such notice, provide information on the date, time
and place a public hearing is to be held on such proposed [change] fare
increase. Such notice shall be provided at least fifteen days prior to such
public hearing. The department shall, at least fifteen days prior to such
public hearing, send a copy of such notice to the chairpersons and
ranking members of the joint standing committees of the General
Assembly having cognizance of matters relating to transportation and
finance and to the Connecticut Public Transportation Council,
established under section 13b-212b. A public hearing on the proposed
fare [change] increase shall be held at such date, time and place as will
be convenient for public attendance.
    (c) When the department is required to hold a public hearing
regarding a proposed major service change to commuter rail service in
accordance with the Federal Transit Administration Title VI Circular
4702.1B, as amended from time to time, the department shall, at least
fifteen days prior to such public hearing, provide notice of such public
hearing to the chairpersons and ranking members of the joint standing
committees of the General Assembly having cognizance of matters
relating to transportation and finance and to the Connecticut Public
Transportation Council.
  Sec. 7. (NEW) (Effective July 1, 2026) (a) The Department of Education
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shall administer a grant program to provide grants to local and regional
boards of education for the purchase of passes for the use of state-owned
or state-controlled bus public transportation services and distribution of
such passes, without cost, to students who are enrolled in grades nine
to twelve, inclusive, of a public school under the jurisdiction of such
local or regional board of education. Applications for grants shall be
filed with the department at such time and in such manner as the
department prescribes. The department may develop guidelines and
grant criteria as it deems necessary to administer such grant program.
   (b) Each local or regional board of education receiving a grant award
under this section shall submit, at such time and in such form as the
department prescribes, any reports and financial statements required by
the department. If the department finds that any grant awarded
pursuant to this section is being used for purposes that are not in
conformity with the purposes of this section, the department may
require the repayment of the grant to the state.
   (c) Not later than July 1, 2027, and annually thereafter, the
Department of Education shall submit a report, in accordance with the
provisions of section 11-4a of the general statutes, to the joint standing
committees of the General Assembly having cognizance of matters
relating to education and transportation. Such report shall include, but
need not be limited to, the amount of grants awarded during the prior
year and an assessment of the impact of the grant program on student
outcomes.
   Sec. 8. (NEW) (Effective July 1, 2026) (a) For the purposes of this
section, "veteran" and "armed forces" have the same meanings as
provided in section 27-103 of the general statutes.
  (b) The Department of Veterans Affairs shall purchase passes for the
use of state-owned or state-controlled bus public transportation services
and distribute such passes, without cost, to veterans in the state.
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Applications for such passes shall be filed with the department at such
time and in such manner as the department prescribes. The department
may develop guidelines and criteria as it deems necessary to distribute
such passes.
   (c) Not later than July 1, 2027, and annually thereafter, the
Department of Veterans Affairs shall submit a report, in accordance
with the provisions of section 11-4a of the general statutes, to the joint
standing committees of the General Assembly having cognizance of
matters relating to veterans' affairs and transportation. Such report shall
include, but need not be limited to, the amount of passes purchased and
distributed during the prior year and an assessment of the impact of the
distribution of such passes to veterans.
   Sec. 9. Subsection (d) of section 4-186 of the 2026 supplement to the
general statutes is repealed and the following is substituted in lieu
thereof (Effective October 1, 2026):
   (d) The provisions of this chapter shall not apply: (1) To procedures
followed or actions taken concerning the lower Connecticut River
conservation zone described in chapter 477a and the upper Connecticut
River conservation zone described in chapter 477c, (2) to the
administrative determinations authorized by section 32-9r concerning
manufacturing facilities in distressed municipalities, (3) to the rules
made pursuant to section 9-436 for use of paper ballots, [and] (4) to
guidelines established under section 22a-227 for development of a
municipal solid waste management plan, and (5) to changes in fares for
mass transportation by land made in accordance with the provisions of
section 13b-38h, as amended by this act.
  Sec. 10. Sections 12-217s, 13b-38o, 13b-38p, 13b-38t, 13b-38v and 13b-
38x of the general statutes are repealed. (Effective January 1, 2027)
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Governor's Action:
Approved May 27, 2026
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