Connecticut 2021 Regular Session

Connecticut House Bill HB06467 Compare Versions

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7	7		General Assembly Substitute Bill No. 6467
8	8		January Session, 2021
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14	14		AN ACT CONCERNING TH E SMALL BUSINESS EXP RESS
15	15		PROGRAM.
16	16		Be it enacted by the Senate and House of Representatives in General
17	17		Assembly convened:
18	18
19	19		Section 1. Section 32-7g of the general statutes is repealed and the 1
20	20		following is substituted in lieu thereof (Effective July 1, 2021): 2
21	21		(a) There is established within the Department of Economic and 3
22	22		Community Development the Small Business Express program. Said 4
23	23		program shall provide small businesses with various forms of financial 5
24	24		assistance, using a streamlined application process to expedite the 6
25	25		delivery of such assistance. The Commissioner of Economic and 7
26	26		Community Development, at his or her discretion, may partner with the 8
27	27		lenders in the Connecticut Credit Consortium, established pursuant to 9
28	28		section 32-9yy, in order to fulfill the requirements of this section. A small 10
29	29		business eligible for assistance through said program shall (1) employ, 11
30	30		on at least fifty per cent of its working days during the preceding twelve 12
31	31		months, not more than one hundred employees, (2) have operations in 13
32	32		Connecticut, (3) have been registered to conduct business for not less 14
33	33		than twelve months, and (4) be in good standing with the payment of 15
34	34		all state and local taxes and with all state agencies. 16
35	35		(b) The Small Business Express program shall consist of various 17
36	36		components, including (1) a revolving loan fund, as described in 18 Substitute Bill No. 6467
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43	43		subsection (d) of this section, to support small business growth, (2) a job 19
44	44		creation incentive component, as described in subsection (e) of this 20
45	45		section, to support hiring, (3) a matching grant component, as described 21
46	46		in subsection (f) of this section, to provide capital to small businesses 22
47	47		that can match the state grant amount, (4) not more than two minority 23
48	48		business revolving loan funds, as described in subsection (g) of this 24
49	49		section, to support the growth of minority-owned businesses, [and] (5) 25
50	50		a component established in consultation with representatives from 26
51	51		Connecticut-based banks and a banking industry association, as 27
52	52		described in subsection (h) of this section, and (6) a component 28
53	53		established in consultation with Connecticut Innovations, Incorporated, 29
54	54		as described in subsection (i) of this section. The Commissioner of 30
55	55		Economic and Community Development shall work with eligible small 31
56	56		business applicants to provide a package of assistance using the 32
57	57		financial assistance provided by the Small Business Express program 33
58	58		and may refer small business applicants to the Subsidized Training and 34
59	59		Employment program established pursuant to section 31-3pp and any 35
60	60		other appropriate state program. Notwithstanding the provisions of 36
61	61		section 32-5a regarding relocation limits, the department may require, 37
62	62		as a condition of receiving financial assistance pursuant to this section, 38
63	63		that a small business receiving such assistance shall not relocate, as 39
64	64		defined in section 32-5a, for five years after receiving such assistance or 40
65	65		during the term of the loan, whichever is longer. All other conditions 41
66	66		and penalties imposed pursuant to section 32-5a shall continue to apply 42
67	67		to such small business. 43
68	68		(c) The commissioner shall establish a streamlined application 44
69	69		process for the Small Business Express program. The small business 45
70	70		applicant may receive assistance pursuant to said program not later 46
71	71		than thirty days after submitting a completed application to the 47
72	72		department. Any small business meeting the eligibility criteria in 48
73	73		subsection (a) of this section may apply to said program. The 49
74	74		commissioner shall give priority for available funding to small 50
75	75		businesses creating jobs and may give priority for available funding to 51
76	76		(1) economic base industries, as defined in subsection (d) of section 32-52 Substitute Bill No. 6467
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83	83		222, including, but not limited to, those in the fields of precision 53
84	84		manufacturing, business services, green and sustainable technology, 54
85	85		bioscience and information technology, (2) businesses attempting to 55
86	86		export their products or services to foreign markets, and (3) businesses 56
87	87		located in designated innovation places, as defined in section 32-39j. 57
88	88		(d) (1) There is established as part of the Small Business Express 58
89	89		program a revolving loan fund to provide loans, loan guarantees, loan 59
90	90		portfolio guarantees, portfolio insurance and grants to eligible small 60
91	91		businesses. Such loans shall be used for acquisition or purchase of 61
92	92		machinery and equipment, construction or leasehold improvements, 62
93	93		relocation expenses, working capital, which may be used for payment 63
94	94		of rent, or other business-related expenses, as authorized by the 64
95	95		commissioner. 65
96	96		(2) Loans from the revolving loan fund may be in amounts from ten 66
97	97		thousand dollars to a maximum of one hundred thousand dollars, shall 67
98	98		carry a maximum repayment rate of four per cent and shall be for a term 68
99	99		of not more than ten years. The department shall review and approve 69
100	100		loan terms, conditions and collateral requirements in a manner that 70
101	101		prioritizes job growth and retention. 71
102	102		(3) Any eligible small business meeting the eligibility criteria in 72
103	103		subsection (a) of this section may apply for assistance from the revolving 73
104	104		loan fund, but the commissioner shall give priority to applicants that, as 74
105	105		part of their business plan, are creating new jobs that will be maintained 75
106	106		for not less than twelve consecutive months. 76
107	107		(e) (1) There is established as part of the Small Business Express 77
108	108		program a job creation incentive component to provide loans for job 78
109	109		creation to small businesses meeting the eligibility criteria in subsection 79
110	110		(a) of this section, with the option of loan forgiveness based on the 80
111	111		maintenance of an increased number of jobs for not less than twelve 81
112	112		consecutive months. Such loans may be used for training, marketing, 82
113	113		working capital, which may be used for payment of rent, or other 83
114	114		expenses, as approved by the commissioner, that support job creation. 84 Substitute Bill No. 6467
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121	121		(2) Loans under the job creation incentive component may be in 85
122	122		amounts from ten thousand dollars to a maximum of three hundred 86
123	123		thousand dollars, shall carry a maximum repayment rate of four per 87
124	124		cent and shall be for a term of not more than ten years. Payments on 88
125	125		such loans may be deferred, and all or part of such loan may be forgiven, 89
126	126		based upon the commissioner's assessment of the small business's 90
127	127		attainment of job creation goals. The department shall review and 91
128	128		approve loan terms, conditions and collateral requirements in a manner 92
129	129		that prioritizes job creation. 93
130	130		(f) (1) There is established as part of the Small Business Express 94
131	131		program a matching grant component to provide grants for capital to 95
132	132		small businesses meeting the eligibility criteria in subsection (a) of this 96
133	133		section. Such small businesses shall match any state funds awarded 97
134	134		under this program. Grant funds may be used for ongoing or new 98
135	135		training, working capital, which may be used for payment of rent, 99
136	136		acquisition or purchase of machinery and equipment, construction or 100
137	137		leasehold improvements, relocation within the state or other business-101
138	138		related expenses authorized by the commissioner. 102
139	139		(2) Matching grants provided under the matching grant component 103
140	140		may be in amounts from ten thousand dollars to a maximum of one 104
141	141		hundred thousand dollars. The commissioner shall prioritize applicants 105
142	142		for matching grants based upon the likelihood that such grants will 106
143	143		assist applicants in maintaining job growth. 107
144	144		(3) The commissioner may waive the matching requirement for 108
145	145		grants under this subsection for working capital to small businesses 109
146	146		located within distressed municipalities, as defined in section 32-9p. 110
147	147		(g) (1) There are established as part of the Small Business Express 111
148	148		program not more than two revolving loan funds to provide loans to 112
149	149		eligible small businesses that are owned by one or more members of a 113
150	150		minority. As used in this subsection, (A) "minority business 114
151	151		development entity" means a nonprofit organization (i) having a 115
152	152		lending portfolio on or before June 9, 2016, from which at least seventy-116 Substitute Bill No. 6467
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159	159		five per cent of lending is provided to minority-owned businesses state-117
160	160		wide; and (ii) that provided technical assistance on or before June 9, 118
161	161		2016, provided at least seventy-five per cent of such assistance was 119
162	162		provided to minority-owned businesses state-wide; and (B) "minority" 120
163	163		means (i) Black Americans, including all persons having origins in any 121
164	164		of the Black African racial groups not of Hispanic origin; (ii) Hispanic 122
165	165		Americans, including all persons of Mexican, Puerto Rican, Cuban, 123
166	166		Central or South American, or other Spanish culture or origin, 124
167	167		regardless of race; (iii) all persons having origins in the Iberian 125
168	168		Peninsula, including Portugal, regardless of race; (iv) women; (v) Asian 126
169	169		Pacific Americans and Pacific islanders; or (vi) American Indians and 127
170	170		persons having origins in any of the original peoples of North America 128
171	171		and maintaining identifiable tribal affiliations through membership and 129
172	172		participation or community identification. 130
173	173		(2) Notwithstanding the provisions of section 32-7h, the 131
174	174		commissioner shall allocate from the available funding under the Small 132
175	175		Business Express program a total of five million dollars for grants-in-aid 133
176	176		to not more than two minority business development entities in each of 134
177	177		the fiscal years ending June 30, 2016, to June 30, 2020, inclusive, for the 135
178	178		purpose of establishing and administering minority business revolving 136
179	179		loan funds. Moneys from such funds shall be used to (A) provide loans 137
180	180		to eligible small businesses, and (B) fund the administrative costs 138
181	181		associated with the provision of such loans by a minority business 139
182	182		development entity, provided a minority business development entity 140
183	183		may not use more than ten per cent of the amount received as a grant 141
184	184		under this section to fund such costs. Such loans shall be used for 142
185	185		acquisition or purchase of machinery and equipment, construction or 143
186	186		leasehold improvements, relocation expenses, working capital, which 144
187	187		may be used for payment of rent, or other business-related expenses, as 145
188	188		authorized by the minority business development entity. 146
189	189		(3) Loans from a minority business revolving loan fund may be in 147
190	190		amounts from ten thousand dollars to a maximum of [one hundred] two 148
191	191		hundred fifty thousand dollars, shall carry a maximum repayment rate 149 Substitute Bill No. 6467
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198	198		of four per cent and shall be for a term of not more than ten years. The 150
199	199		minority business development entity shall review and approve loan 151
200	200		terms, conditions and collateral requirements in a manner that 152
201	201		prioritizes job growth and retention. 153
202	202		(4) Any eligible small business owned by one or more members of a 154
203	203		minority may apply for assistance from a minority business revolving 155
204	204		loan fund, provided the minority business development entity shall 156
205	205		give priority to applicants that, as part of their business plan, are 157
206	206		creating new jobs that will be maintained for not less than twelve 158
207	207		consecutive months. 159
208	208		(5) Loans from a minority business revolving fund shall be provided 160
209	209		in such a manner that, on or before five years after the date such loan 161
210	210		fund is established, the annual funds or revenues derived from 162
211	211		investment income, loan repayments or any other sources received by 163
212	212		the minority business development entity in connection with such loan 164
213	213		fund is sufficient to fund the administrative costs associated with such 165
214	214		loan fund. 166
215	215		(6) A minority business development entity receiving a grant 167
216	216		pursuant to this subsection shall annually submit to the commissioner a 168
217	217		financial audit of grant expenditures until all grant moneys have been 169
218	218		expended by such entity. Any such audit shall be prepared by an 170
219	219		independent auditor and if the commissioner finds that any such grant 171
220	220		is used for purposes that are not in conformity with uses set forth in 172
221	221		subdivisions (2) and (3) of this subsection, the commissioner may 173
222	222		require repayment of such grant. 174
223	223		(h) The commissioner, in consultation with representatives from 175
224	224		Connecticut-based banks and a banking industry association, may 176
225	225		establish as part of the Small Business Express program a component 177
226	226		operated in collaboration with Connecticut-based banks, which may 178
227	227		include, but need not be limited to, loan guarantees, short-term loans 179
228	228		used as a bridge to private sector financing and the transfer of loans 180
229	229		issued under subsection (d) or (e) of this section. Any loans issued under 181 Substitute Bill No. 6467
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236	236		such component shall be used for acquisition or purchase of machinery 182
237	237		and equipment, construction or leasehold improvements, relocation 183
238	238		expenses, working capital, which may be used for payment of rent, or 184
239	239		other business-related expenses, as authorized by the commissioner. 185
240	240		The provisions of subsections (d) to (g), inclusive, of this section shall 186
241	241		not be construed to apply to such component. Such component shall be 187
242	242		administered by the Department of Economic and Community 188
243	243		Development in consultation with Connecticut Innovations, 189
244	244		Incorporated. Notwithstanding the provisions of section 32-7h, the 190
245	245		commissioner may allocate not more than ten per cent of available 191
246	246		funding under the Small Business Express program to such component. 192
247	247		For purposes of this section, "Connecticut-based banks" means banks 193
248	248		and out-of-state banks, each as defined in section 36a-2, having deposit-194
249	249		taking branches in the state. 195
250	250		(i) The commissioner, in consultation with Connecticut Innovations, 196
251	251		Incorporated, may establish as part of the Small Business Express 197
252	252		program a component operated in collaboration with Connecticut 198
253	253		Innovations, Incorporated, which may include, but need not be limited 199
254	254		to, financial assistance consistent with the provisions and purposes of 200
255	255		sections 32-23e, 32-23ii and 32-265, as amended by this act. Such 201
256	256		component shall be administered by the Department of Economic and 202
257	257		Community Development, in consultation wi th Connecticut 203
258	258		Innovations, Incorporated. 204
259	259		[(i)] (j) Not later than June 30, 2012, and [every six months] annually 205
260	260		thereafter, the commissioner shall provide a report, in accordance with 206
261	261		the provisions of section 11-4a, to the joint standing committees of the 207
262	262		General Assembly having cognizance of matters relating to finance, 208
263	263		revenue and bonding, appropriations, commerce and labor. Such report 209
264	264		shall include available data on (1) the number of small businesses that 210
265	265		applied to the Small Business Express program, (2) the number of small 211
266	266		businesses that received assistance under said program and the general 212
267	267		categories of such businesses, (3) the amounts and types of assistance 213
268	268		provided, (4) the total number of jobs on the date of application and the 214 Substitute Bill No. 6467
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275	275		number proposed to be created or retained, and (5) the most recent 215
276	276		employment figures of the small businesses receiving assistance. The 216
277	277		contents of such report shall also be included in the department's annual 217
278	278		report. 218
279	279		Sec. 2. Subsection (b) of section 32-265 of the general statutes is 219
280	280		repealed and the following is substituted in lieu thereof (Effective July 1, 220
281	281		2021): 221
282		-	(b) In order to stimulate and encourage the growth and development 222
283		-	of the state economy, the Connecticut Capital Access Fund is created to 223
	282	+	(b) In order to stimulate and encourage the growth and development of 222
	283	+	the state economy, the Connecticut Capital Access Fund is created to 223
284	284		provide portfolio insurance to participating financial institutions to 224
285	285		assist them in making loans that are somewhat riskier than conventional 225
286	286		loans. The insurance shall be based on a portfolio insurance mechanism 226
287	287		applicable to loans enrolled by a financial institution in the program, 227
288	288		rather than loans by loan guarantees. The state, acting through 228
289	289		Connecticut Innovations, Incorporated, shall enter into a participation 229
290	290		agreement with each financial institution approved to participate in the 230
291	291		program. A participation agreement entered into by the corporation and 231
292	292		a financial institution shall establish a separate loan loss reserve account 232
293	293		within such financial institution or a third-party financial institution 233
294	294		approved by Connecticut Innovations, Incorporated, owned and 234
295	295		controlled by Connecticut Innovations, Incorporated, but earmarked to 235
296	296		cover losses on loans enrolled by that financial institution in the 236
297	297		program. A separate loan loss reserve account shall be established for 237
298	298		each participating financial institution. Each time a financial institution 238
299	299		enrolls a loan in the program, payments shall be made into the 239
300	300		earmarked loan loss reserve account by the borrower, financial 240
301	301		institution and the corporation, in amounts consistent with the 241
302	302		provisions of the participation agreement. The financial institution shall 242
303	303		be allowed to recover the cost of its payment from the borrower.243
304	304		This act shall take effect as follows and shall amend the following
305	305		sections:
306	306
307	307		Section 1 July 1, 2021 32-7g Substitute Bill No. 6467
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314	314		Sec. 2 July 1, 2021 32-265(b)
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316	316		CE Joint Favorable Subst.
317		-	FIN Joint Favorable
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