Substitute House Bill No. 6605

Public Act No. 01-10

AN ACT CONCERNING TECHNICAL REVISIONS TO THE BANKING AND SECURITIES STATUTES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-42 of the general statutes is repealed and the following is substituted in lieu thereof:

A financial institution may not disclose to any person, except to the customer or the customer's duly authorized agent, any financial records relating to such customer unless the customer has authorized disclosure to such person or the financial records are disclosed in response to (1) a certificate signed by the Commissioner of Administrative Services or the Commissioner of Social Services pursuant to the provisions of section 17b-137, (2) a lawful subpoena, summons, warrant or court order as provided in section 36a-43, (3) interrogatories by a judgment creditor or a demand by a levying officer as provided in sections 52-351b and 52-356a, (4) a certificate issued by a medical provider or its attorney under subsection (b) of section 17b-124, provided nothing in this subsection shall require the provider or its attorney to furnish to the financial institution any application for medical assistance filed under section 17b-259 or pursuant to an agreement with the IV-D agency under subsection [(e)] (c) of section 17b-137, or (5) a certificate signed by the Commissioner of Veterans' Affairs pursuant to section 27-117.

Sec. 2. Subdivision (2) of section 32-350 of the general statutes is repealed and the following is substituted in lieu thereof:

(2) ["Women-owned] "Woman-owned business" means any business (A) of which fifty-one per cent or more of the capital stock, if any, or assets are owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business, and (B) that is a small business having fifty or fewer employees.

Sec. 3. Section 32-351 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) (1) There is established a micro-loan program for [women-owned] woman-owned businesses. The commissioner may enter into a contract with a quasi-public agency, financial institution or nonprofit corporation to provide for the administration and the state-wide promotion of the program. On or before July 1, 2001, the program shall be a self sustaining revolving loan fund. No loan or loan guarantee that is not in accordance with the provisions of such contract shall be made from the fund established under subdivision (2) of this subsection.

(2) There is established a fund to be known as the "Micro-Loan Revolving Fund for [Women-Owned] Woman-Owned Businesses". The fund shall contain (A) any moneys allocated pursuant to subdivision (3) of this subsection, and (B) any moneys required by law to be deposited into the fund, including, but not limited to, any moneys appropriated by the state and interest payments and principal payments on loans. Any balance remaining in the fund at the end of any fiscal year shall be carried forward in the fund for the next succeeding fiscal year. The fund shall be used to make loans and loan guarantees pursuant to subsection (b) of this section and to pay reasonable and necessary expenses incurred in administering such loans and loan guarantees and the program established under this subsection.

(3) The commissioner may allocate moneys from the Economic Assistance Revolving Fund, established under section 32-231, to the fund established under subdivision (2) of this subsection.

(b) The state, acting by and in the discretion of the commissioner, may, pursuant to a contract entered into under subdivision (1) of subsection (a) of this section, provide funds to a quasi-public agency, financial institution or nonprofit corporation to be used by such quasi-public agency, financial institution or nonprofit corporation [,] to make loans, interest-free loans, deferred loans or loan guarantees to [women-owned] woman-owned businesses. Any such loan or loan guarantee shall be used by [the women-owned] a woman-owned business for business start-up costs or the day-to-day operation of the business. The proceeds from any loan made pursuant to this subsection shall not be used for the refinancing of existing loans.

(c) The amount of any loan made pursuant to subsection (b) of this section shall not exceed fifty thousand dollars. The amount of any loan guarantee made pursuant to subsection (b) of this section shall not exceed thirty per cent of the principal amount.

(d) Each [women-owned] woman-owned business applying for a loan or loan guarantee under subsection (b) of this section shall submit an application in such form and containing such information as the commissioner shall require. Security for such loan may include a security interest, an assignment of a lease or the subordination of a mortgage. In addition to any other conditions of default under such loan or loan guarantee, the [women-owned] woman-owned business shall be in default if such loan or loan guarantee is not used for the purposes set forth in subsection (b) of this section or if the [women-owned] woman-owned business fails to participate in the business management training program required under section 32-352.

(e) Payments of principal and any interest on loans, interest-free loans and deferred loans made pursuant to subsection (b) of this section shall be deposited into the Micro-Loan Revolving Fund for [Women-Owned] Woman-Owned Businesses established under subdivision (2) of subsection (a) of this section.

(f) The commissioner may adopt regulations, in accordance with chapter 54, to carry out the provisions of this section. Such regulations may provide for loan procedures, repayment terms, interest and security requirements, default and remedy provisions, and such other terms and conditions as the commissioner deems appropriate.

Sec. 4. Section 32-352 of the general statutes is repealed and the following is substituted in lieu thereof:

Each [women-owned] woman-owned business that receives a loan or loan guarantee pursuant to section 32-351 shall participate in a business management training program as designated by the commissioner. The commissioner may establish a business management training program to be administered by either the Office of Small Business Affairs or a nonprofit corporation, as determined by the commissioner, and may arrange for the participation of such other programs as the commissioner deems appropriate in implementing the business management training program. The commissioner may enter into a contract with a nonprofit corporation to provide for the administration of the business management training program pursuant to this section.

Sec. 5. Subsection (b) of section 32-354 of the general statutes is repealed and the following is substituted in lieu thereof:

(b) The state, acting by and in the discretion of the commissioner, may, pursuant to a contract entered into under subdivision (1) of subsection (a) of this section, provide funds to a quasi-public agency, financial institution or nonprofit corporation to be used by such quasi-public agency, financial institution or nonprofit corporation [,] to make loans, interest-free loans, deferred loans or loan guarantees to minority-owned businesses. Any such loan or loan guarantee shall be used by the minority-owned business for business start-up costs or the day-to-day operation of the business. The proceeds from any loan made pursuant to this subsection shall not be used for the refinancing of existing loans.

Sec. 6. Subsection (f) of section 36a-252a of the general statutes is repealed and the following is substituted in lieu thereof:

(f) After receipt of the commissioner's approval, the uninsured bank shall promptly file such approval and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the bank shall cease to be an uninsured bank subject to the provisions of subdivisions (3) and (4) of subsection (t) of section 36a-70 and shall be a Connecticut bank subject to all of the requirements and limitations and possessed of all rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to its type of Connecticut bank. Such Connecticut bank shall not commence business unless its insurable accounts and deposits are insured by the Federal Deposit Insurance Corporation or its successor agency. Upon such filing with the Secretary of the State and with the town clerk, all of the assets, business and good will of the uninsured bank shall be transferred to and vested in such Connecticut bank without any deed or instrument of conveyance, provided the Connecticut bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. Such Connecticut bank shall be subject to all of the duties, relations, obligations, trusts and liabilities of the uninsured bank, whether as debtor, depository, registrar, transfer agent, executor, administrator or otherwise, and shall be liable to pay and discharge all such debts and liabilities, and to perform all such duties in the same manner and to the same extent as if the Connecticut bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the predecessor uninsured bank and all liens upon the property of such bank shall be preserved unimpaired and the Connecticut bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of the uninsured bank and whether made or created to take effect prior to or after the expansion of powers.

Sec. 7. Subsection (e) of section 36b-65 of the general statutes is repealed and the following is substituted in lieu thereof:

(e) The following business opportunities are exempt from subsections (a) and (b) of section 36b-62; sections 36b-63 and 36b-64; subsections (a), (b), (c), (d) and (f) of this section; section 36b-66 and subdivisions (1), (2) and (3) of section 36b-67: (1) (A) Subject to the provisions of subparagraph (B) of this subdivision, any business opportunity for which the initial payment made by the purchaser-investor per business opportunity does not exceed two hundred dollars, if no representations are made that the seller guarantees, either conditionally or unconditionally, that the purchaser-investor will derive income from the business opportunity. For purposes of this subparagraph, "initial payment" means the total amount the purchaser-investor becomes obligated to pay to the seller or to any third party either prior to or at the time of delivery of the products, equipment, supplies or services or within one year of the commencement of operation of the business by the purchaser-investor. If payment is over a period of time, "initial payment" shall include the sum of the down payment and the total periodic payments. "Initial payment" does not include periodic payments where the amount or rate of the payment is based on net revenue or gross revenue generated by the business. (B) The commissioner may, by regulation or order as to any business opportunity or type of business opportunity or transaction exempt under subdivision (1) (A) of this subsection, modify, withdraw, further condition or waive such conditions, in whole or in part, conditionally or unconditionally, on a finding that such regulation or order is necessary and appropriate, in the public interest or for the protection of purchaser-investors; (2) any business opportunity sold in this state exclusively to purchaser-investors each of whom has a net worth of not less than one million dollars exclusive of principal residence, home furnishings, and personal automobiles; and (3) any other business opportunity that the commissioner by regulation or order may exempt, conditionally or unconditionally, if [he] the commissioner finds that enforcement of all the provisions of sections 36b-60 to 36b-80, inclusive, with respect to such business opportunity is not necessary to protect the public interest, and for the protection of purchaser-investors due to the limited character of the business opportunity, or because such business opportunity is, in the judgment of the commissioner, adequately regulated by federal law. [(4)] The commissioner may by order deny, suspend or revoke any exemption with respect to a particular offering of one or more business opportunities in accordance with the provisions of section 36b-68. No order under this [subdivision] subsection may operate retroactively. No person may be considered to have violated any order issued under this [subdivision] subsection by reason of any offer or sale effected after the entry of such order if [he] such person sustains the burden of proof that [he] such person did not know, and in the exercise of reasonable care could not have known, of such order. [(5)] In any proceeding under this subsection, the burden of proving an exemption is upon the person claiming it.

Approved May 4, 2001