Substitute House Bill No. 5402
Public Act No. 02-86
AN ACT CONCERNING TERMS AND CONDITIONS OF STATE ECONOMIC DEVELOPMENT ASSISTANCE.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2002) As used in sections 1 to 4, inclusive, of this act:
(1) "Awarding authority" means the Commissioner of Economic and Community Development, the board of directors of the Connecticut Development Authority, the board of directors of Connecticut Innovations, Incorporated, and the head of any other quasi-public agency, as defined in section 1-120 of the general statutes, as amended, and any state agency authorized to award state assistance, as defined in subdivision (2) of this section.
(2) "State assistance" means any grant, loan, loan guarantee or issuance of tax benefit not of general applicability for the purpose of economic development that is (A) made to a business entity operated for profit, and (B) in an amount greater than one million dollars or that, if added to any other such state assistance made to the same business entity during the preceding two years, would total greater than one million dollars.
Sec. 2. (NEW) (Effective July 1, 2002) (a) The terms and conditions of any agreement for state assistance under any program of the general statutes to a business entity operated for profit administered by the Department of Economic and Community Development, Connecticut Development Authority and Connecticut Innovations, Incorporated, shall include provisions for (1) specific goals for the creation and retention of full-time and part-time jobs and for periodic reports by the recipient on progress in achieving such goals if the primary purpose of the state assistance is job creation or retention, and (2) a requirement that an applicant for any type of state assistance, except grants and loans of a term of less than one year, provide the agency with appropriate security for such financial assistance, including, but not limited to, a letter of credit, a lien on real property or a security interest in goods, equipment, inventory or other property of any kind and that the recipient of such state assistance will remain in substantial material compliance with state and federal law.
(b) If a recipient fails to create or retain the number of jobs in this state stipulated in an agreement for state assistance and such failure is due to circumstances within the control of such recipient, the recipient shall repay an amount that is in proportion to the number of jobs that it failed to create or retain unless the awarding authority deems it is in the best interests of the state or the community in which the recipient is located to revise such job creation goals. In such event, the parties shall enter into a revised agreement subject to the approvals required by subsection (c) of this section. Upon request of the awarding authority, a recipient shall provide information necessary to determine compliance with this section, including information showing the compensation paid to employees on jobs created as a result of the state assistance.
(c) The awarding authority, in its discretion, may modify the terms and conditions of any state assistance, including, but not limited to, forgiveness of repayment of a loan, revision of job creation and retention goals or changes to interest rates, provided such awarding authority notifies the State Bond Commission or the appropriate board of directors, if any, of the modification.
Sec. 3. (NEW) (Effective October 1, 2002) If an awarding authority finds that a recipient of state assistance is not in substantial compliance with any other provision of the agreement and such noncompliance is within the recipient's control, the awarding authority shall provide written notice, by registered mail, to the recipient and shall order the recipient to come into compliance with such agreement not less than one hundred eighty days following receipt of such notice. Failure to comply with reporting requirements set forth in such agreement shall constitute a default. If the recipient fails to come into compliance with such agreement within the one-hundred-eighty-day period, the awarding authority may (1) rescind the agreement and require that the state be made whole by the repayment by the recipient of (A) the amount of any grant made, (B) the amount of any loan outstanding, including any interest necessary to make the state whole, or (C) the amount of any tax benefit received, or (2) impose a penalty on such recipient, for the period of failure to comply, at the rate of one per cent per month or any part thereof of the amount of the grant, tax benefit or loan outstanding. The awarding authority may foreclose on any collateral or bond related to such grant, tax benefit or loan for the purpose of payment of such penalty and any costs incurred by the awarding authority in connection with collection of such penalty.
Sec. 4. (NEW) (Effective July 1, 2002) If the terms and conditions of an agreement for state assistance, except an agreement for grants only, provide for security, the awarding authority providing such state assistance shall have a lien on such security in an amount equal to the amount that is due on such state assistance or other appropriate security for such financial assistance. Any such lien shall have priority over all other subsequent liens except state tax liens, except if the awarding authority determines it is not in the best interests of the state to have such priority. The awarding authority shall notify the State Bond Commission or the appropriate board of directors, if any, of such determination.
Approved June 3, 2002