You asked for summaries of the 2010 acts, including vetoed ones, benefiting small businesses.

SUMMARY

The legislature passed at least eight acts benefiting small businesses. Some specifically target small businesses, such as those providing start-up and expansion capital or tax credits for investing in new businesses or creating new jobs. These acts limit this assistance to businesses based on the number of people they employ or the amount of revenue they generate.

The other acts mostly target businesses, regardless of size, that need state permits to operate. They require state permitting agencies to issue permits more quickly or consider less burdensome ways for businesses to comply with a regulation. Although these agencies must do these things for small and large businesses, small businesses stand to gain more because they generally lack the staff and resources needed to absorb the costs of complying with permitting requirements.

We grouped these acts according to whether they offer financial or technical assistance, regulatory relief, or other forms of assistance.

FINANCIAL ASSISTANCE

PA 10-75, AAC the Recommendations of the Majority Leaders' Job Growth Roundtable (“Jobs Bill”)

Among other things, this act authorizes many policies and programs helping small businesses.

Pre-Seed Funding. The act authorizes $5 million in bonds for businesses developing a new product or service (i.e., concept). A business developing a concept qualifies for up to $150,000 in investment capital if it is principally located in Connecticut and 75% of its employees work here. The business must apply to the state's venture capital agency—Connecticut Innovations, Inc. (CII).

Effective: July 1, 2010

Tax Credits for Angel Investors. The act creates a new tax credit designed to attract more private investment for start-up, technology-based businesses. People who invest at least $100,000 qualify for an income tax credit equal to 25% of their investment, up to $250,000. The business must be situated in Connecticut and have:

1. grossed no more than $1 million in its most recent fiscal year;

2. fewer than 25 employees, at least 75% of whom are Connecticut residents;

3. operated in Connecticut for less than seven consecutive years; and

4. received less than $2 million from investors who qualify for the credit.

Effective: July 1, 2010 and applicable to tax years beginning on or after January 1, 2010.

Small Business Loans. Businesses and nonprofit organizations employing fewer than 50 people qualify for up to $500,000 in direct loans and lines of credit under the revolving loan program the act creates. The economic and community development commissioner runs the program with $15 million in bonds that had been authorized for another program.

Effective: July 1, 2010

Green Manufacturing Pilot Program. Connecticut-based manufacturers taking steps to conserve energy or adopt other improvements qualify for loans under this program if they employ fewer than 250 people, most of whom work in the state (under some federal programs, businesses with up to 500 people qualify as small businesses). The economic and community development commissioner runs the program.

Effective: July 1, 2010

Insurance Reinvestment Fund Program. The act revamps this program, which provides tax credits for investing Connecticut businesses. Under the old program, individuals and businesses qualified for tax credits if they invested in insurance businesses that developed new facilities, occupied them for at least 10 years, and employed at least 25% of their workforce in new jobs. The taxpayers had to have done so through a state-certified fund, which could invest in small and large businesses.

The new program has the same structure but matches different investors and businesses. Only insurers qualify for credits under the new program if they invest in a state-certified fund, which may invest in any type of business as long as it:

1. employs fewer than 250 people when it received the investment;

2. netted no more than $10 million in the previous year; and

3. conducts its principal operations in Connecticut, that is, at least 80% of its workers live here or 80% of its payroll goes to Connecticut residents.

Effective: July 1, 2010

Small Business Job Creation Tax Credits. Small businesses (fewer than 50 Connecticut-based employees) qualify for income and business tax credits for each new full-time job they create between May 6, 2010 and December 31, 2012. The credit equals $200 per month per new employee and is good for three years. The law already authorizes a 60% credit based on the amount of income tax a business withholds for new employees.

Effective: Upon passage (May 6, 2010) and applicable to income years beginning January 1, 2010

PA 10-179, AA Making Adjustments To State Expenditures For The Fiscal Year Ending June 30, 2011

This act makes it easier for small businesses (fewer than 50 full-time employees) to obtain loans for energy conservation projects. It does so by authorizing the Connecticut Health and Educational Facilities Authority to guarantee these loans with state bond funds. Individuals and nonprofit organizations also qualify for the loan guarantees.

Effective: Upon passage

REGULATORY RELIEF

PA 10-158, AAC the Permit and Regulatory Authority of the Department of Environmental Protection and Establishing an Office of the Permit Ombudsman within the Department of Economic and Community Development

This act makes several changes to the ways agencies issue permits and adopt regulations imposing requirements and setting standards.

1. It requires expedited permitting for economic development projects that need environmental, public health, and transportation permits and directs the economic and community development commissioner to create an office specifically for this purpose. (Effective: October 1, 2010)

2. The act also sets timeframes for completing specific steps in the process of issuing environmental permits and requires the Department of Environmental Protection (DEP) commissioner to account for instances when the department did not meet those timeframes. (Effective: Upon passage)

3. The act allows the DEP commissioner to extend the expiration dates of general permits (effective October 1, 2010), provides a procedure for canceling public hearing requests regarding pending permit applications (effective upon passage), and requires the commissioner to streamline the process for conducting hearings (Effective: Upon passage).

4. It requires the DEP commissioner to establish a service for advising people and organizations on how to comply with environmental laws (Effective: Upon passage).

5. The act changes the scope of the regulatory flexibility analysis all agencies must prepare before adopting a proposed regulation. Before, agencies had to identify and consider using other methods to achieve the regulation's goal while minimizing the adverse impact the regulation could have on small businesses. The act instead requires the agencies to use the other methods to the extent it is appropriate (Effective: October 1, 2010).

6. The act requires DEP to adopt water quality standards in regulations, which means it must now submit proposed standards to the Regulations Review Committee for approval (Effective: March 1, 2011).

7. Lastly, it requires DEP to adopt regulations allowing certain water discharge systems to operate without first submitting plans and specifications to the department for approval (Effective: October 1, 2010).

TECHNICAL ASSISTANCE

PA 10-4, AAC Premium Quotes and Information for Small Employer Health Insurance Coverage

This act creates a clearinghouse for information about health insurance policies and care available in Connecticut. The clearinghouse is for individuals and businesses with 50 or fewer employees.

PA 10-145, AAC the Office of Small Business Affairs and Establishing the Small Business Advisory Board

This act requires the Department of Economic and Community Development's (DECD) Small Business Affairs Office to:

1. provide a single contact point for small businesses seeking financial and technical assistance from state and quasi-state agencies,

2. coordinate all state small business revolving loan funds, and

3. establish an information webpage listing all small business resources.

It also requires the DECD commissioner to appoint and convene a Small Business Advisory Board to advise DECD about resources available to small businesses.

Effective: Upon passage, except for the provision establishing the advisory board, which is effective July 1, 2010.

OTHER FORMS OF ASSISTANCE

PA 10-190, AAC State Contracts for Micro Businesses, Utility Deposits for Connecticut Businesses, the Set Aside of Department of Transportation Contracts for Small Businesses, Grants for Regional Revolving Loan Programs for Microenterprises, and the Issuance of Eligibility Certificates for Certain Economic Development Programs

This act authorizes different types of assistance for small businesses.

1. By law, the Department of Public Works creates panels to review and recommend consultants for state construction and educational facilities projects. When selecting businesses for these projects, the act requires the panels to consider whether a business is a “micro business,” that is, whether it grossed less than $3 million in its most recently completed fiscal year. (Effective: July 1, 2010)

2. The act prohibits utility companies (except phone companies) from requiring businesses and other nonresidential customers to pay a deposit that exceeds what a company charges for 1.5 months of service. (Effective: Upon passage)

3. It allows the Department of Transportation to set aside contracts or parts of a contract for exclusive bidding by contractors and subcontractors that grossed less than $3 million in their most recently completed fiscal year. (Effective: July 1, 2010)

4. Lastly, the act allows DECD to grant funds to the state-chartered, nonprofit Community Economic Development Fund, which in turn must disperse them to organizations that help “micro enterprises” prepare business plans and loan applications. Under the act, micro enterprises are small businesses with 10 or fewer employees and less than $500,000 in annual revenues. (Effective: Upon passage)

TAXATION

PA 10-45, AAC the Preservation of Jobs in Connecticut (Vetoed)

Among other things, this act would have exempted certain businesses with annual net incomes of $50,000 or less from the $250 business entity tax for two years. The tax applies to foreign and domestic S corporations, limited liability companies, limited partnerships, and limited partnerships that file annual reports with the secretary of the state.

JR:ts