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General Assembly Raised Bill No. 6467
January Session, 2021
LCO No. 3345
Referred to Committee on COMMERCE
Introduced by:
(CE)
AN ACT CONCERNING TH E SMALL BUSINESS EXP RESS
PROGRAM.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 32-7g of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2021): 2
(a) There is established within the Department of Economic and 3
Community Development the Small Business Express program. Said 4
program shall provide small businesses with various forms of financial 5
assistance. [, using a streamlined application process to expedite the 6
delivery of such assistance. The Commissioner of Economic and 7
Community Development, at his or her discretion, may partner with the 8
lenders in the Connecticut Credit Consortium, established pursuant to 9
section 32-9yy, in order to fulfill the requirements of this section. A small 10
business eligible for assistance through said program shall (1) employ, 11
on at least fifty per cent of its working days during the preceding twelve 12
months, not more than one hundred employees, (2) have operations in 13
Connecticut, (3) have been registered to conduct business for not less 14
than twelve months, and (4) be in good standing with the payment of 15 Raised Bill No. 6467
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all state and local taxes and with all state agencies.] 16
(b) The Small Business Express program shall consist of various 17
components, including (1) a revolving loan fund, as described in 18
subsection [(d)] (c) of this section, to support small business growth, [(2) 19
a job creation incentive component, as described in subsection (e) of this 20
section, to support hiring, (3) a matching grant component, as described 21
in subsection (f) of this section, to provide capital to small businesses 22
that can match the state grant amount, (4)] (2) not more than two 23
minority business revolving loan funds, as described in subsection [(g)] 24
(d) of this section, to support the growth of minority-owned businesses, 25
[and (5)] (3) a component established in consultation with 26
representatives from Connecticut-based banks and a banking industry 27
association, as described in subsection [(h)] (e) of this section, and (4) a 28
component established in consultation with Connecticut Innovations, 29
Incorporated, as described in subsection (f) of this section. [The 30
Commissioner of Economic and Community Development shall work 31
with eligible small business applicants to provide a package of 32
assistance using the financial assistance provided by the Small Business 33
Express program and may refer small business applicants to the 34
Subsidized Training and Employment program established pursuant to 35
section 31-3pp and any other appropr iate state program.] 36
Notwithstanding the provisions of section 32-5a regarding relocation 37
limits, the department may require, as a condition of receiving financial 38
assistance pursuant to this section, that a small business receiving such 39
assistance shall not relocate, as defined in section 32-5a, for five years 40
after receiving such assistance or during the term of the loan, whichever 41
is longer. All other conditions and penalties imposed pursuant to 42
section 32-5a shall continue to apply to such small business. 43
[(c) The commissioner shall establish a streamlined application 44
process for the Small Business Express program. The small business 45
applicant may receive assistance pursuant to said program not later 46
than thirty days after submitting a completed application to the 47
department. Any small business meeting the eligibility criteria in 48
subsection (a) of this section may apply to said program. The 49 Raised Bill No. 6467
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commissioner shall give priority for available funding to small 50
businesses creating jobs and may give priority for available funding to 51
(1) economic base industries, as defined in subsection (d) of section 32-52
222, including, but not limited to, those in the fields of precision 53
manufacturing, business services, green and sustainable technology, 54
bioscience and information technology, (2) businesses attempting to 55
export their products or services to foreign markets, and (3) businesses 56
located in designated innovation places, as defined in section 32-39j.] 57
[(d) (1)] (c) There is established as part of the Small Business Express 58
program a revolving loan fund to provide loans, loan guarantees, loan 59
portfolio guarantees, portfolio insurance and grants. [to eligible small 60
businesses. Such loans shall be used for acquisition or purchase of 61
machinery and equipment, construction or leasehold improvements, 62
relocation expenses, working capital, which may be used for payment 63
of rent, or other business-related expenses, as authorized by the 64
commissioner. 65
(2) Loans from the revolving loan fund may be in amounts from ten 66
thousand dollars to a maximum of one hundred thousand dollars, shall 67
carry a maximum repayment rate of four per cent and shall be for a term 68
of not more than ten years. The department shall review and approve 69
loan terms, conditions and collateral requirements in a manner that 70
prioritizes job growth and retention. 71
(3) Any eligible small business meeting the eligibility criteria in 72
subsection (a) of this section may apply for assistance from the revolving 73
loan fund, but the commissioner shall give priority to applicants that, as 74
part of their business plan, are creating new jobs that will be maintained 75
for not less than twelve consecutive months. 76
(e) (1) There is established as part of the Small Business Express 77
program a job creation incentive component to provide loans for job 78
creation to small businesses meeting the eligibility criteria in subsection 79
(a) of this section, with the option of loan forgiveness based on the 80
maintenance of an increased number of jobs for not less than twelve 81 Raised Bill No. 6467
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consecutive months. Such loans may be used for training, marketing, 82
working capital, which may be used for payment of rent, or other 83
expenses, as approved by the commissioner, that support job creation. 84
(2) Loans under the job creation incentive component may be in 85
amounts from ten thousand dollars to a maximum of three hundred 86
thousand dollars, shall carry a maximum repayment rate of four per 87
cent and shall be for a term of not more than ten years. Payments on 88
such loans may be deferred, and all or part of such loan may be forgiven, 89
based upon the commissioner's assessment of the small business's 90
attainment of job creation goals. The department shall review and 91
approve loan terms, conditions and collateral requirements in a manner 92
that prioritizes job creation. 93
(f) (1) There is established as part of the Small Business Express 94
program a matching grant component to provide grants for capital to 95
small businesses meeting the eligibility criteria in subsection (a) of this 96
section. Such small businesses shall match any state funds awarded 97
under this program. Grant funds may be used for ongoing or new 98
training, working capital, which may be used for payment of rent, 99
acquisition or purchase of machinery and equipment, construction or 100
leasehold improvements, relocation within the state or other business-101
related expenses authorized by the commissioner. 102
(2) Matching grants provided under the matching grant component 103
may be in amounts from ten thousand dollars to a maximum of one 104
hundred thousand dollars. The commissioner shall prioritize applicants 105
for matching grants based upon the likelihood that such grants will 106
assist applicants in maintaining job growth. 107
(3) The commissioner may waive the matching requirement for 108
grants under this subsection for working capital to small businesses 109
located within distressed municipalities, as defined in section 32-9p.] 110
[(g)] (d) (1) There are established as part of the Small Business Express 111
program not more than two revolving loan funds to provide loans to 112
eligible small businesses that are owned by one or more members of a 113 Raised Bill No. 6467
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minority. As used in this subsection, (A) "minority business 114
development entity" means a nonprofit organization (i) having a 115
lending portfolio on or before June 9, 2016, from which at least seventy-116
five per cent of lending is provided to minority-owned businesses state-117
wide; and (ii) that provided technical assistance on or before June 9, 118
2016, provided at least seventy-five per cent of such assistance was 119
provided to minority-owned businesses state-wide; and (B) "minority" 120
means (i) Black Americans, including all persons having origins in any 121
of the Black African racial groups not of Hispanic origin; (ii) Hispanic 122
Americans, including all persons of Mexican, Puerto Rican, Cuban, 123
Central or South American, or other Spanish culture or origin, 124
regardless of race; (iii) all persons having origins in the Iberian 125
Peninsula, including Portugal, regardless of race; (iv) women; (v) Asian 126
Pacific Americans and Pacific islanders; or (vi) American Indians and 127
persons having origins in any of the original peoples of North America 128
and maintaining identifiable tribal affiliations through membership and 129
participation or community identification. 130
(2) Notwithstanding the provisions of section 32-7h, the 131
commissioner shall allocate from the available funding under the Small 132
Business Express program a total of five million dollars for grants-in-aid 133
to not more than two minority business development entities in each of 134
the fiscal years ending June 30, 2016, to June 30, 2020, inclusive, for the 135
purpose of establishing and administering minority business revolving 136
loan funds. Moneys from such funds shall be used to (A) provide loans 137
to eligible small businesses, and (B) fund the administrative costs 138
associated with the provision of such loans by a minority business 139
development entity, provided a minority business development entity 140
may not use more than ten per cent of the amount received as a grant 141
under this section to fund such costs. Such loans shall be used for 142
acquisition or purchase of machinery and equipment, construction or 143
leasehold improvements, relocation expenses, working capital, which 144
may be used for payment of rent, or other business-related expenses, as 145
authorized by the minority business development entity. 146
(3) Loans from a minority business revolving loan fund may be in 147 Raised Bill No. 6467
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amounts from ten thousand dollars to a maximum of [one hundred] two 148
hundred fifty thousand dollars, shall carry a maximum repayment rate 149
of four per cent and shall be for a term of not more than ten years. The 150
minority business development entity shall review and approve loan 151
terms, conditions and collateral requirements in a manner that 152
prioritizes job growth and retention. 153
(4) Any eligible small business owned by one or more members of a 154
minority may apply for assistance from a minority business revolving 155
loan fund, provided the minority business development entity shall 156
give priority to applicants that, as part of their business plan, are 157
creating new jobs that will be maintained for not less than twelve 158
consecutive months. 159
(5) Loans from a minority business revolving fund shall be provided 160
in such a manner that, on or before five years after the date such loan 161
fund is established, the annual funds or revenues derived from 162
investment income, loan repayments or any other sources received by 163
the minority business development entity in connection with such loan 164
fund is sufficient to fund the administrative costs associated with such 165
loan fund. 166
(6) A minority business development entity receiving a grant 167
pursuant to this subsection shall annually submit to the commissioner a 168
financial audit of grant expenditures until all grant moneys have been 169
expended by such entity. Any such audit shall be prepared by an 170
independent auditor and if the commissioner finds that any such grant 171
is used for purposes that are not in conformity with uses set forth in 172
subdivisions (2) and (3) of this subsection, the commissioner may 173
require repayment of such grant. 174
[(h)] (e) The commissioner, in consultation with representatives from 175
Connecticut-based banks and a banking industry association, may 176
establish as part of the Small Business Express program a component 177
operated in collaboration with Connecticut-based banks, which may 178
include, but need not be limited to, loan guarantees, short-term loans 179 Raised Bill No. 6467
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used as a bridge to private sector financing and the transfer of loans 180
issued under subsection [(d) or (e)] (c) of this section. Any loans issued 181
under such component shall be used for acquisition or purchase of 182
machinery and equipment, construction or leasehold improvements, 183
relocation expenses, working capital, which may be used for payment 184
of rent, or other business-related expenses, as authorized by the 185
commissioner. The provisions of subsections [(d) to (g), inclusive,] (c) 186
and (d) of this section shall not be construed to apply to such 187
component. Such component shall be administered by the Department 188
of Economic and Community Development or Connecticut Innovations, 189
Incorporated. [Notwithstanding the provisions of section 32-7h, the 190
commissioner may allocate not more than ten per cent of available 191
funding under the Small Business Express program to such component.] 192
For purposes of this section, "Connecticut-based banks" means banks 193
and out-of-state banks, each as defined in section 36a-2, having deposit-194
taking branches in the state. 195
(f) The commissioner, in consultation with Connecticut Innovations, 196
Incorporated, may establish as part of the Small Business Express 197
program a component operated in collaboration with Connecticut 198
Innovations, Incorporated, which may include, but need not be limited 199
to, financial assistance consistent with the provisions and purposes of 200
sections 32-23e, 32-23ii and 32-265, as amended by this act. Such 201
component may be administered by the Department of Economic and 202
Community Development or Connecticut Innovations, Incorporated. 203
[(i)] (g) Not later than June 30, 2012, and [every six months] annually 204
thereafter, the commissioner shall provide a report, in accordance with 205
the provisions of section 11-4a, to the joint standing committees of the 206
General Assembly having cognizance of matters relating to finance, 207
revenue and bonding, appropriations, commerce and labor. Such report 208
shall include available data on (1) [the number of small businesses that 209
applied to the Small Business Express program, (2)] the number of small 210
businesses that received assistance under [said program] the Small 211
Business Express Program and the general categories of such 212
businesses, [(3)] (2) the amounts and types of assistance provided, [(4)] 213 Raised Bill No. 6467
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(3) the total number of jobs on the date of application and the number 214
proposed to be created or retained, and [(5)] (4) the most recent 215
employment figures of the small businesses receiving assistance. The 216
contents of such report shall also be included in the department's annual 217
report. 218
Sec. 2. Subsection (b) of section 32-265 of the general statutes is 219
repealed and the following is substituted in lieu thereof (Effective July 1, 220
2021): 221
(b) In order to stimulate and encourage the growth and development 222
of the state economy, the Connecticut Capital Access Fund is created to 223
provide portfolio insurance to participating financial institutions to 224
assist them in making loans that are somewhat riskier than conventional 225
loans. The insurance shall be based on a portfolio insurance mechanism 226
applicable to loans enrolled by a financial institution in the program, 227
rather than loans by loan guarantees. The state, acting through 228
Connecticut Innovations, Incorporated, shall enter into a participation 229
agreement with each financial institution approved to participate in the 230
program. A participation agreement entered into by the corporation and 231
a financial institution shall establish a separate loan loss reserve account 232
within such financial institution or a third-party financial institution 233
approved by Connecticut Innovations, Incorporated, owned and 234
controlled by Connecticut Innovations, Incorporated, but earmarked to 235
cover losses on loans enrolled by that financial institution in the 236
program. A separate loan loss reserve account shall be established for 237
each participating financial institution. Each time a financial institution 238
enrolls a loan in the program, payments shall be made into the 239
earmarked loan loss reserve account by the borrower, financial 240
institution and the corporation, in amounts consistent with the 241
provisions of the participation agreement. The financial institution shall 242
be allowed to recover the cost of its payment from the borrower. 243
Sec. 3. Section 32-7h of the general statutes is repealed and the 244
following is substituted in lieu thereof (Effective July 1, 2021): 245 Raised Bill No. 6467
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(a) There is established an account to be known as the "small business 246
express assistance account" which will be a separate, nonlapsing 247
account within the General Fund. The account shall contain any moneys 248
required by law to be deposited in the account. Repayment of principal 249
and interest on loans shall be credited to such fund and shall become 250
part of the assets of the fund. Moneys in the account shall be expended 251
by the Department of Economic and Community Development for the 252
purposes of the Small Business Express program established pursuant 253
to section 32-7g, as amended by this act. Except as provided in 254
subsection [(g)] (d) of section 32-7g, as amended by this act, all moneys 255
received for the purposes of the Small Business Express program and 256
payments of principal and interest on any loans given under said 257
program shall be credited to the account. 258
(b) Except as provided in subsection [(g)] (d) of section 32-7g, as 259
amended by this act, the Commissioner of Economic and Community 260
Development may provide for the payment of any administrative 261
expenses or other costs incurred by the department or its lender partners 262
in carrying out the purposes of the Small Business Express program not 263
to exceed five per cent of funding from this program from the account 264
established pursuant to subsection (a) of this section, provided one per 265
cent shall be dedicated to develop capacity for capital construction 266
projects for minority business enterprises. 267
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2021 32-7g
Sec. 2 July 1, 2021 32-265(b)
Sec. 3 July 1, 2021 32-7h
Statement of Purpose:
To increase access to capital for businesses, opportunity zones and
distressed municipalities.
[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.]