AN ACT ESTABLISHING THE CONNECTICUT GROWTH INVESTMENT FUND.

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General Assembly Raised Bill No. 512
February Session, 2026 LCO No. 3371

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
(FIN)

AN ACT ESTABLISHING THE CONNECTICUT GROWTH INVESTMENT
FUND.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective from passage) (a) As used in this section: 1
(1) "Connecticut Innovations, Incorporated" means the corporation 2
created under section 32-35 of the general statutes; 3
(2) "Potential estate tax exposure" means the estimated tax liability of 4
a resident of this state under section 12-391 of the general statutes, as 5
amended by this act, as determined and certified by the Commissioner 6
of Revenue Services based on the resident's estimated net taxable estate 7
at the time of election under this section; 8
(3) "Qualified Connecticut business" means a business entity that 9
maintains its principal place of business in this state and has at least 10
seventy-five per cent of its employees domiciled in this state; and 11
(4) "Resident of this state" has the same meaning as provided in 12

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subdivision (1) of subsection (a) of section 12-701 of the general statutes. 13
(b) On and after January 1, 2027, a ny resident of this state may elect 14
to invest a one -time payment in the Connecticut Growth Investment 15
Fund in accordance with the provisions of this section , in lieu of such 16
resident's estate being subject to the tax imposed by section 12-391 of the 17
general statutes, as amended by this act. The amount of such payment 18
shall be thirty per cent, forty per cent or fifty per cent , as selected by 19
such resident, of such resident's maximum potential estate tax exposure. 20
(c) (1) Connecticut Innovations, Incorporated shall establish, not later 21
than January 1, 2027, a Connecticut Growth Investment Fund that shall 22
(A) be managed under a pooled fund structure by Connecticut 23
Innovations, Incorporated , (B) invest exclusively in qualified 24
Connecticut businesses, (C) hold the principal of any payment made to 25
the fund as a contingent investment, returnable only in accordance with 26
the provisions of subsection (e) of this section, and (D) allocate not less 27
than ten per cent of the amount in the fund to be made available for 28
investments in qualified Connecticut businesses founded by student or 29
faculty entrepreneurs affiliated with institutions of higher education in 30
this state. 31
(2) Connecticut Innovations, Incorporated shall be entitled to an 32
annual management fee of not more than two per cent of the total assets 33
under management in the fund, for the administration, due diligence 34
and oversight of the fund's investment portfolio. 35
(d) (1) Connecticut Innovations, Incorporated shall establish three 36
distinct investor classes for the Connecticut Growth Investment Fund , 37
based on the percentage of the potential estate tax exposure selected by 38
the resident under subsection (b) of this section: 39
(A) Class A senior preferred units shall be for resident s of this state 40
who make an investment of fifty per cent of such resident's potential 41
estate tax exposure . This investor class shall receive first -priority 42
distribution of realized gains and the highest rate o f preferred returns 43

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from the fund; 44
(B) Class B preferred units shall be for residents of this state who 45
make an investment of forty per cent of such resident's potential estate 46
tax exposure . This investor class shall receive priority over Class C 47
investors for the distribution of realized gains; and 48
(C) Class C common units shall be for resident s of this state who 49
make an investment of thirty per cent of such resident's potential estate 50
tax exposure. This investor class shall receive the baseline rate for the 51
distribution of realized gains. 52
(2) Upon the realization of any gains from any investment made by 53
the fund, Connecticut Innovations, Incorporated shall remit ten per cent 54
of the net realized profit to the General Fund prior to making any 55
distributions to a resident or a decedent's estate or designated 56
beneficiary. 57
(e) (1) If a resident of this state who made a payment under subsection 58
(b) of this section remains a resident until the time of death and such 59
death occurs at least five years after the date such payment was made , 60
(A) the initial payment amount shall be permanently retained by the 61
Connecticut Growth Investment Fund for continued investment in 62
qualified Connecticut businesses, (B) the right to receive future 63
distributions of realized gains and preferred returns shall vest in the 64
decedent's estate or designated beneficiaries, and (C) any tax liability of 65
the decedent's estate under section 12 -391 of the general statutes , as 66
amended by this act, shall be extinguished. 67
(2) If a resident of this state who made a payment under subsection 68
(b) of this section dies within five years of the date such payment was 69
made and was a resident of this state at the time of death, (A) the amount 70
of such payment shall be credited toward the amount of such decedent 71
estate's tax liability under section 12 -391 of the general statutes, as 72
amended by this act, and (B) the estate's right to distributions of realized 73
gains and preferred returns at the time of death shall be determined in 74

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accordance with the following schedule: (i) If the death occurs prior to 75
the second anniversary of the date the payment was made, one hundred 76
per cent of any realized gains and preferred returns shall be forfeited to 77
the fund; (ii) if the death occurs on or after the second anniversary but 78
prior to the third anniversary of the date the payment was made, thirty-79
three per cent of any realized gains and preferred returns shall be 80
forfeited to the fund; (iii) if the death occurs on or after the third 81
anniversary but prior to the fourth anniversary of the date the payment 82
was made, sixty-six per cent of any realized gains and preferred returns 83
shall be forfeited to the fund; and (iv) if the death occurs on or after the 84
fourth anniversary but prior to the fifth anniversary of the date the 85
payment was made, the decedent's estate shall receive distribution of 86
one hundred per cent of any realized gains and preferred returns. 87
(3) If a resident of this state who made a payment under subsection 88
(b) of this section subsequently ceases to be a resident of this state at any 89
time, (A) the initial payment amount made by such person shall be 90
returned without interest not later than twenty -four months after such 91
person has certified to Connecticut Innovations, Incorporated of such 92
person's change of domicile , or as fund liquidity permits, and (B) such 93
person's right to receive future distributions of realized gains and 94
preferred returns shall be forfeited. 95
(f) Not later than April 1, 2028, and annually thereafter, Connecticut 96
Innovations, Incorporated shall submit a report, in accordance with the 97
provisions of section 11 -4a of the general statutes, to the joint standing 98
committee of the General Assembly having cognizance of matters 99
relating to finance, revenue and bonding, that includes, for the calendar 100
year immediately preceding: (1) The number of qualified Connecticut 101
businesses receiving investment funds from the Connecticut Growth 102
Investment Fund and the industry sectors of each such business; (2) the 103
overall performance and internal rate of return of the fund; and ( 3) a 104
data-driven analysis, prepared in consultation with the Department of 105
Revenue Services and the Department of Economic and Community 106
Development, of the indirect tax revenue generated by the investments 107

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made by the Connecticut Growth Investment Fund, including estimated 108
revenue for the taxes imposed by chapters 219 and 229 of the general 109
statutes from increased business activity in this state and new or 110
retained jobs in this state. 111
Sec. 2. Subdivision (9) of subsection (g) of section 12-391 of the general 112
statutes is repealed and the following is substituted in lieu thereof 113
(Effective from passage): 114
(9) [With] (A) Except as provided under subparagraph (B) of this 115
subdivision, with respect to the estates of decedents dying on or after 116
January 1, 2023, the tax based on the Connecticut taxable estate shall be 117
as provided in the following schedule: 118
T1 Amount of Connecticut
T2 Taxable Estate Rate of Tax
T3 Not over the None
T4 federal basic exclusion amount
T5 Over the 12% of the excess over the
T6 federal basic exclusion amount federal basic exclusion amount

(B) The provisions of section 1 of this act shall apply to the estate of a 119
decedent dying on or after January 1, 2027, where such decedent made 120
a payment to the Connecticut Growth Investment Fund in accordance 121
with the provisions of said section, provided any applicable exemption 122
under section 1 of this act for the tax imposed by this section shall not 123
relieve any person from the obligation to file a return under the 124
provisions of this chapter. 125
This act shall take effect as follows and shall amend the following
sections:

Section 1 from passage New section
Sec. 2 from passage 12-391(g)(9)

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Statement of Purpose:
To establish the Connecticut Growth Investment Fund as an alternative
to the tax imposed by section 12-391 of the general statutes.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]