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General Assembly Committee Bill No. 6767
January Session, 2025
LCO No. 5278
Referred to Committee on VETERANS' AND MILITARY
AFFAIRS
Introduced by:
(VA)
AN ACT CONCERNING A DISABLED VETERANS REVOLVING LOAN
FUND.
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 Section 32-7g of the general statutes is repealed and the 1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, 2025): 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. A small business eligible for assistance through said program 6
shall (1) employ not more than one hundred employees, (2) have 7
operations in Connecticut, and (3) be in good standing with the payment 8
of all state and local taxes and with all state agencies. It shall be the goal 9
of the Department of Economic and Community Development that, on 10
or before July 1, 2026, the Small Business Express program be self-11
funded and that the default rate of small businesses that receive 12
assistance under said program be not more than twenty per cent. 13
(b) The Small Business Express program shall consist of various 14
components, including (1) a revolving loan fund, as described in 15
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subsection (c) of this section, to support small business growth, (2) at 16
least one minority business revolving loan fund, as described in 17
subsection (d) of this section, to support the growth of minority-owned 18
businesses, (3) at least one disabled veteran business revolving loan 19
fund, as described in subsection (e) of this section, to support the growth 20
of disabled veteran-owned businesses, (4) a component established in 21
consultation with representatives from Connecticut-based banks and a 22
banking industry association, as described in subsection [(e)] (f) of this 23
section, and [(4)] (5) a component established in consultation with 24
Connecticut Innovations, Incorporated, as described in subsection [(f)] 25
(g) of this section. Notwithstanding the provisions of section 32-5a 26
regarding relocation limits, the department may require, as a condition 27
of receiving financial assistance pursuant to this section, that a small 28
business receiving such assistance shall not relocate, as defined in 29
section 32-5a, for five years after receiving such assistance or during the 30
term of the loan, whichever is longer. All other conditions and penalties 31
imposed pursuant to section 32-5a shall continue to apply to such small 32
business. 33
(c) There is established as part of the Small Business Express program 34
a revolving loan fund to provide loans, loan guarantees, loan portfolio 35
guarantees, portfolio insurance and grants. 36
(d) (1) There is established as part of the Small Business Express 37
program at least one revolving loan fund to provide loans to eligible 38
small businesses that are owned by one or more members of a minority. 39
As used in this subsection, (A) "minority business development entity" 40
means a nonprofit organization (i) having a lending portfolio on or 41
before June 9, 2016, from which at least seventy-five per cent of lending 42
is provided to minority-owned businesses state-wide; and (ii) that 43
provided technical assistance on or before June 9, 2016, provided at least 44
seventy-five per cent of such assistance was provided to minority-45
owned businesses state-wide; and (B) "minority" means (i) Black 46
Americans, including all persons having origins in any of the Black 47
African racial groups not of Hispanic origin; (ii) Hispanic Americans, 48
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including all persons of Mexican, Puerto Rican, Cuban, Central or South 49
American, or other Spanish culture or origin, regardless of race; (iii) all 50
persons having origins in the Iberian Peninsula, including Portugal, 51
regardless of race; (iv) women; (v) Asian Pacific Americans and Pacific 52
islanders; or (vi) American Indians and persons having origins in any of 53
the original peoples of North America and maintaining identifiable 54
tribal affiliations through membership and participation or community 55
identification. 56
(2) Notwithstanding the provisions of section 32-7h, as amended by 57
this act, the commissioner shall allocate from the available funding 58
under the Small Business Express program a total of five million dollars 59
for grants-in-aid to not more than two minority business development 60
entities in each of the fiscal years ending June 30, 2016, to June 30, 2020, 61
inclusive, for the purpose of establishing and administering minority 62
business revolving loan funds. Moneys from such funds shall be used 63
to (A) provide loans to eligible small businesses, and (B) fund the 64
administrative costs associated with the provision of such loans by a 65
minority business development entity, provided a minority business 66
development entity may not use more than ten per cent of the amount 67
received as a grant under this section to fund such costs. Such loans shall 68
be used for acquisition or purchase of machinery and equipment, 69
construction or leasehold improvements, relocation expenses, working 70
capital, which may be used for payment of rent, or other business-71
related expenses, as authorized by the minority business development 72
entity. 73
(3) Loans from a minority business revolving loan fund may be in 74
amounts from ten thousand dollars to a maximum of five hundred 75
thousand dollars, shall carry a maximum repayment rate of four per 76
cent and shall be for a term of not more than ten years. The minority 77
business development entity shall review and approve loan terms, 78
conditions and collateral requirements in a manner that prioritizes job 79
growth and retention. 80
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(4) Any eligible small business owned by one or more members of a 81
minority may apply for assistance from a minority business revolving 82
loan fund, provided the minority business development entity shall 83
give priority to applicants that, as part of their business plan, are 84
creating new jobs that will be maintained for not less than twelve 85
consecutive months. 86
(5) Loans from a minority business revolving loan fund shall be 87
provided in such a manner that, on or before five years after the date 88
such loan fund is established, the annual funds or revenues derived 89
from investment income, loan repayments or any other sources received 90
by the minority business development entity in connection with such 91
loan fund is sufficient to fund the administrative costs associated with 92
such loan fund. 93
(6) A minority business development entity receiving a grant 94
pursuant to this subsection shall annually submit to the commissioner a 95
financial audit of grant expenditures until all grant moneys have been 96
expended by such entity. Any such audit shall be prepared by an 97
independent auditor and if the commissioner finds that any such grant 98
is used for purposes that are not in conformity with uses set forth in 99
subdivisions (2) and (3) of this subsection, the commissioner may 100
require repayment of such grant. 101
(e) (1) There is established as part of the Small Business Express 102
program at least one revolving loan fund to provide loans to eligible 103
disabled veteran-owned businesses. As used in this subsection, (A) 104
"disabled veteran business development entity" means a nonprofit 105
organization (i) having a lending portfolio on or before July 1, 2025, from 106
which at least seventy-five per cent of lending is provided to disabled 107
veteran-owned businesses state-wide; and (ii) that provided technical 108
assistance on or before July 1, 2025, provided at least seventy-five per 109
cent of such assistance was provided to disabled veteran-owned 110
businesses state-wide; (B) "disabled veteran" means a veteran, as 111
defined in section 27-103, who has a disability rating of at least thirty 112
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per cent, as determined by the United States Department of Veterans 113
Affairs; and (C) "disabled veteran-owned business" means a small 114
business of which greater than fifty per cent is owned by one or more 115
disabled veterans. 116
(2) Notwithstanding the provisions of section 32-7h, as amended by 117
this act, the commissioner shall allocate from the available funding 118
under the Small Business Express program a total of two million dollars 119
for grants-in-aid to not more than two disabled veteran business 120
development entities in each of the fiscal years ending June 30, 2026, to 121
June 30, 2030, inclusive, for the purpose of establishing and 122
administering disabled veteran business revolving loan funds. Moneys 123
from such funds shall be used to (A) provide loans to eligible disabled 124
veteran-owned businesses that have been formed for at least three years, 125
as reflected in the records of the Commercial Recording Division of the 126
office of the Secretary of the State, prior to the provision of any such 127
loan, and (B) fund the administrative costs associated with the provision 128
of such loans by a disabled veteran business development entity, 129
provided a disabled veteran business development entity may not use 130
more than ten per cent of the amount received as a grant under this 131
section to fund such costs. Such loans shall be used for acquisition or 132
purchase of machinery and equipment, construction or leasehold 133
improvements, relocation expenses, working capital, which may be 134
used for payment of rent, or other business-related expenses, as 135
authorized by the disabled veteran business development entity. 136
(3) Loans from a disabled veteran business revolving loan fund may 137
be in amounts from ten thousand dollars to a maximum of five hundred 138
thousand dollars, shall carry a maximum repayment rate of four per 139
cent and shall be for a term of not more than ten years. The disabled 140
veteran business development entity shall review and approve loan 141
terms, conditions and collateral requirements in a manner that 142
prioritizes job growth and retention. 143
(4) Any eligible disabled veteran-owned business may apply for 144
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assistance from a disabled veteran business revolving loan fund, 145
provided the disabled veteran business development entity shall give 146
priority to applicants that, as part of their business plan, are creating 147
new jobs that will be maintained for not less than twelve consecutive 148
months. 149
(5) Loans from a disabled veteran business revolving loan fund shall 150
be provided in such a manner that, on or before five years after the date 151
such loan fund is established, the annual funds or revenues derived 152
from investment income, loan repayments or any other sources received 153
by the disabled veteran business development entity in connection with 154
such loan fund is sufficient to fund the administrative costs associated 155
with such loan fund. 156
(6) A disabled veteran business development entity receiving a grant 157
pursuant to this subsection shall annually submit to the commissioner a 158
financial audit of grant expenditures until all grant moneys have been 159
expended by such entity. Any such audit shall be prepared by an 160
independent auditor and if the commissioner finds that any such grant 161
is used for purposes that are not in conformity with uses set forth in 162
subdivisions (2) and (3) of this subsection, the commissioner may 163
require repayment of such grant. 164
[(e)] (f) The commissioner, in consultation with representatives from 165
Connecticut-based banks and a banking industry association, may 166
establish as part of the Small Business Express program a component 167
operated in collaboration with Connecticut-based banks, which may 168
include, but need not be limited to, loan guarantees, short-term loans 169
used as a bridge to private sector financing and the transfer of loans 170
issued under subsection (c) of this section. Any loans issued under such 171
component shall be used for acquisition or purchase of machinery and 172
equipment, construction or leasehold improvements, relocation 173
expenses, working capital, which may be used for payment of rent, or 174
other business-related expenses, as authorized by the commissioner. 175
The provisions of subsections (c), [and] (d) and (e) of this section shall 176
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not be construed to apply to such component. Such component shall be 177
administered by Connecticut Innovations, Incorporated, in 178
collaboration with the Department of Economic and Community 179
Development. For purposes of this section, "Connecticut-based banks" 180
means banks and out-of-state banks, each as defined in section 36a-2, 181
having deposit-taking branches in the state. 182
[(f)] (g) The commissioner, in consultation with Connecticut 183
Innovations, Incorporated, may establish as part of the Small Business 184
Express program a component operated in collaboration with 185
Connecticut Innovations, Incorporated, which may include, but need 186
not be limited to, financial assistance consistent with the provisions and 187
purposes of sections 32-23e, 32-23ii and 32-265. Such component may be 188
administered by Connecticut Innovations, Incorporated, in 189
collaboration with the Department of Economic and Community 190
Development. 191
[(g)] (h) Not later than February 1, 2022, and annually thereafter, the 192
commissioner shall provide a report, in accordance with the provisions 193
of section 11-4a, to the joint standing committees of the General 194
Assembly having cognizance of matters relating to finance, revenue and 195
bonding, appropriations, commerce and labor. Such report shall include 196
available data on (1) the number of small businesses that received 197
assistance under the Small Business Express program and the general 198
categories of such businesses, (2) the amounts and types of assistance 199
provided, (3) the total number of jobs on the date of application and the 200
number proposed to be created or retained, (4) the most recent 201
employment figures of the small businesses receiving assistance, (5) the 202
default rate of small businesses that received assistance under said 203
program, and (6) the progress of the lenders participating in said 204
program in becoming self-sustainable. The contents of such report shall 205
also be included in the department's annual report. 206
[(h)] (i) The commissioner may contract with nongovernmental 207
entities, including, but not limited to, nonprofit organizations, economic 208
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and community development organizations, lending institutions, and 209
technical assistance providers to carry out the provisions of this section. 210
Sec. 2. Section 32-7h of the general statutes is repealed and the 211
following is substituted in lieu thereof (Effective July 1, 2025): 212
(a) There is established an account to be known as the "small business 213
express assistance account" which will be a separate, nonlapsing 214
account within the General Fund. The account shall contain any moneys 215
required by law to be deposited in the account. Repayment of principal 216
and interest on loans shall be credited to such fund and shall become 217
part of the assets of the fund. Moneys in the account shall be expended 218
by the Department of Economic and Community Development for the 219
purposes of the Small Business Express program established pursuant 220
to section 32-7g, as amended by this act. Except as provided in 221
[subsection (d)] subsections (d) and (e) of section 32-7g, as amended by 222
this act, all moneys received for the purposes of the Small Business 223
Express program and payments of principal and interest on any loans 224
given under said program shall be credited to the account. 225
(b) Except as provided in [subsection (d)] subsections (d) and (e) of 226
section 32-7g, as amended by this act, the Commissioner of Economic 227
and Community Development may provide for the payment of any 228
administrative expenses or other costs incurred by the department or its 229
lender partners in carrying out the purposes of the Small Business 230
Express program not to exceed five per cent of funding from this 231
program from the account established pursuant to subsection (a) of this 232
section, provided one per cent shall be dedicated to develop capacity for 233
capital construction projects for minority business enterprises. 234
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025 32-7g
Sec. 2 July 1, 2025 32-7h
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Statement of Purpose:
To establish, as part of the Small Business Express program, at least one
revolving loan fund to provide loans to eligible small businesses of
which greater than fifty per cent are owned by one or more disabled
veterans.
[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.]
Co-Sponsors: REP. FOSTER, 57th Dist.; REP. ROJAS, 9th Dist.
H.B. 6767