AN ACT CONCERNING THE CONNECTICUT WORKFORCE AND A PRODUCTIVITY GAP SURCHARGE.

Senate
SB515 / File No. 700 1

General Assembly File No. 700
February Session, 2026 Senate Bill No. 515

Senate, April 20, 2026

The Committee on Finance, Revenue and Bonding reported
through SEN. FONFARA of the 1st Dist., Chairperson of the
Committee on the part of the Senate, that the bill ought to pass.

AN ACT CONCERNING THE CONNECTICUT WORKFORCE AND A
PRODUCTIVITY GAP SURCHARGE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (Effective from passage) (a) As used in this section: 1
(1) "Augmented productivity" means the portion of gross revenue 2
that exceeds an employer's three-year historical average, provided such 3
increase is achieved through the integration of collaborative technology 4
while maintaining a stable workforce; 5
(2) "Collaborative technology" means any hardware, software or 6
algorithmic system, including artificial intelligence, designed to be 7
operated by or to assist an employee in the performance of such 8
employee's duties, where the technology serves as a multiplier of the 9
employee's individual productivity rather than as a stand -alone 10
replacement of the employee; 11
(3) "Productivity gap" means the measurable increase in revenue-per-12
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employee hours that occurs when Connecticut payroll is reduced 13
materially while gross revenue remains stable or increases; and 14
(4) "Stable workforce" means a Connecticut -domiciled workforce 15
where the total headcount and aggregate payroll expenses for such 16
workforce remain at or above ninety -five per cent of the three -year 17
historical average of the employer. 18
(b) (1) Not later than January 1, 2027, the Secretary of the Office of 19
Policy and Management shall, in consultation with the Commissioner 20
of Revenue Services, the Labor Commissioner and the Chief Workforce 21
Officer, submit an implementation plan to the General Assembly, in 22
accordance with the provisions of section 11 -4a of the general statutes, 23
to ensure that technological advancements serve to augment worker 24
capability rather than render it obsolete and productivity gains lead to 25
a more skilled workforce, by establishing (A) a mechanism to reinvest 26
capital when business output and labor costs become materially 27
decoupled, (B) steps to be actively taken by the state to minimize such 28
decoupling by fostering collaborative productivity models that increase 29
output without a corresponding decline in the workforce, and (C) a 30
workforce and productivity gap contribution from employers. 31
(2) The workforce and productivity gap contribution plan shall 32
include: 33
(A) A formula for a surcharge to be assessed annually for each income 34
or taxable year in which an employer maintains a productivity gap. 35
Such surcharge shall reflect the financial delta between an employer's 36
baseline productivity levels and its reduced payroll expenses for the 37
applicable income or taxable year, and shall be structured to ensure that 38
efficiency gains realized through the displacement of employees are 39
recaptured by the state on an ongoing basis to mitigate the resulting 40
economic impact; 41
(B) An augmented productivity tax exemption that ensures that any 42
augmented productivity achieved by an employer is permanently 43
exempt from taxation by the state; 44
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(C) Administrative procedures for the reporting and collection of 45
such surcharge, based on Connecticut-specific payroll and tax data; and 46
(D) The establishment of a workforce and economic stability account, 47
in which the surcharges collected shall be deposited and shall be used 48
exclusively for the purposes of workforce retraining, technical 49
education and career transition programs for displaced employees. 50
(c) If the General Assembly does not enact, prior to July 1, 2027, the 51
implementation plan submitted pursuant to subsection (b) of this 52
section, notwithstanding the provisions of sections 4 -168 to 4 -172, 53
inclusive, of the general statutes, the Secretary of the Office of Policy and 54
Management shall issue policies and procedures to implement the 55
provisions of such plan. The secretary shall post such policies and 56
procedures on said office's Internet web site and submit such policies 57
and procedures to the Secretary of the State for posting on the 58
eRegulations System, at least fifteen days prior to the effective date of 59
such policies and procedures. Any such policies and procedures shall 60
no longer be effective upon the adoption of such policy or procedure as 61
a final regulation in accordance with the provisions of chapter 54 of the 62
general statutes. 63
This act shall take effect as follows and shall amend the following
sections:

Section 1 from passage New section

FIN Joint Favorable

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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Policy & Mgmt., Off. GF - Cost Up to
$300,000
Potential
Note: GF=General Fund

Municipal Impact: None
Explanation
The bill results in a cost of up to $300,000 to the Office of Policy and
Management (OPM) in FY 27 for a consultant to (1) develop a plan for
technological advancements and productivity gains related to the
workforce, and (2) submit the plan by January 1, 2027. Consultant costs
are dependent on the complexity of the plan as it must meet certain
requirements outlined in the bill.
The bill also results in a potential cost to OPM in FY 28 to the extent
OPM is required to issue policies and procedures to implement this plan
in the instance that the General Assembly does not enact the plan prior
to July 1, 2027.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.

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OLR Bill Analysis
SB 515

AN ACT CONCERNING THE CONNECTICUT WORKFORCE AND A
PRODUCTIVITY GAP SURCHARGE.

SUMMARY
The Office of Legislative Research does not analyze Special Acts.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable
Yea 34 Nay 20 (03/30/2026)