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

HB 5088 removes a requirement that mutual funds must hold at least 50% of their assets in state or local government bonds to qualify for paying tax-exempt dividends under Connecticut's personal income tax. This change directly affects mutual funds seeking to offer tax-free dividend distributions to Connecticut residents. The bill amends Connecticut's statutes to eliminate this specific asset allocation rule, allowing funds greater flexibility in their investment portfolios while still qualifying for the tax-exempt status. The policy change focuses solely on modifying the eligibility criteria for mutual funds, with no other provisions or impacts described in the bill text.