KLS Keeping Law Simple Legislation in plain English

Straight-ahead summaries built from the official bill text. We keep the source links front and center and leave the decision up to you.

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HB05088 • 2026

AN ACT CONCERNING THE ASSET REQUIREMENT FOR MUTUAL FUNDS TO BE QUALIFIED TO PAY EXEMPT-INTEREST DIVIDENDS.

AN ACT CONCERNING THE ASSET REQUIREMENT FOR MUTUAL FUNDS TO BE QUALIFIED TO PAY EXEMPT-INTEREST DIVIDENDS.

Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Rep. Devin R. Carney, 23rd Dist.
Last action
2026-02-09
Official status
Referred to Joint Committee on Finance, Revenue and Bonding
Effective date
Not listed

Plain English Breakdown

The official source material does not provide information on the specific impacts or changes in qualification methods beyond removing the fifty percent asset requirement.

Changing Rules for Mutual Funds

This act removes the requirement that mutual funds must hold at least fifty percent of their assets in state and municipal government obligations to be able to pay exempt-interest dividends.

What This Bill Does

  • Removes a rule that requires mutual funds to hold at least fifty percent of their assets in state or municipal government obligations.

Who It Names or Affects

  • Mutual fund companies
  • Investors who receive exempt-interest dividends from mutual funds

Terms To Know

mutual fund
A type of investment where many people pool their money to buy a wide variety of stocks, bonds, or other securities.
exempt-interest dividends
Dividends that are not taxed under personal income tax rules.

Limits and Unknowns

  • The bill does not specify what happens to mutual funds already meeting the old requirement.
  • It is unclear how this change will affect state and local government bonds in mutual fund portfolios.

Bill History

  1. 2026-02-09 Connecticut General Assembly

    Referred to Joint Committee on Finance, Revenue and Bonding

Official Summary Text

To eliminate the requirement that at least fifty per cent of the assets of a mutual fund consist of state and municipal government obligations for the fund to be qualified to pay exempt dividends, for purposes of the personal income tax.

Current Bill Text

Read the full stored bill text 
LCO No. 692 1 of 1

General Assembly Proposed Bill No. 5088
February Session, 2026 LCO No. 692

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
REP. CARNEY, 23rd Dist.

AN ACT CONCERNING THE ASSET REQUIREMENT FOR MUTUAL
FUNDS TO BE QUALIFIED TO PAY EXEMPT-INTEREST DIVIDENDS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

That chapter 229 of the general statutes be amended to eliminate the 1
requirement that at least fifty per cent of the assets of a mutual fund 2
consist of state and municipal government obligations for the fund to be 3
qualified to pay exempt dividends, for purposes of the personal income 4
tax. 5
Statement of Purpose:
To eliminate the requirement that at least fifty per cent of the assets of a
mutual fund consist of state and municipal government obligations for
the fund to be qualified to pay exempt dividends, for purposes of the
personal income tax.