OLR Bill Analysis

sSB 405 (File 629, as amended by Senate “A”)*

AN ACT CONCERNING TARGETED HEALTH AREAS

SUMMARY:

This bill opens the Small Business Express Program to licensed physicians and physician offices in up to 10 state-designated Targeted Health Areas (THAs), which the Department of Public Health (DPH) commissioner must designate based on the bill's criteria and in consultation with the parties the bill specifies. The program provides business loans and grants to Connecticut-based businesses with 50 or fewer employees.

*Senate Amendment “A” deletes provisions establishing a separate loan and grant program for THA-based physicians and physicians modeled after the Small Business Express Program.

EFFECTIVE DATE: Upon passage

DESIGNATING THAs

The bill requires the DPH commissioner to designate, by October 1, 2012, and within available appropriations, up to 10 municipalities as THAs, in consultation with the social services commissioner and a representative of the Connecticut State Medical Society. The commissioner may designate a municipality as a THA if it has a medically underserved population or a high chronic disease rate.

FINANCIAL ASSISTANCE

Licensed physicians and physician offices in THAs qualify for financing under the Department of Economic and Community Development's (DECD) Small Business Express Program, which provides revolving loans, creation incentive loans, and matching grants. Table 1 summarizes the program's eligible expenditures and terms and conditions for each type of assistance.

Table 1: Summary of Small Business Express Financial Assistance

Program Characteristic

Financial Assistance

Revolving Loans

Licensed Physician Hiring Loans

Matching Grants

Type of Assistance

Loans

Deferrable or forgivable loans for businesses that increase or maintain jobs

Matching capital grants

Eligible Expenditures

Acquiring machinery and equipment

Construction or leasehold improvements

Working capital

Other DECD-approved business expenses

Training

Marketing

Working capital

DECD-approved expenses supporting the hiring of licensed physicians

New or ongoing training

Working capital

Acquisition of machinery and equipment

Construction or leasehold improvements

Other DECD-approved business expenses

Terms and Conditions

$ 10,000-$ 100,000 loans

Up to 4% interest

Maximum 10-year term

Loan terms, conditions, and collateral requirements to meet prioritized job growth and retention

$ 10,000-$ 250,000 loans

Loans deferred may be deferred based on commissioner's assessment of business' job attainment goals

Loans may also be forgiven based on business attaining job creation goals or maintaining an increased number of jobs for at least 12 consecutive months

DECD reviews and approves loan terms, conditions, and collateral requirements to prioritize job creation and retention

$ 10,000-$ 100,000 grants

Business must match grant

DECD prioritizes based on likelihood of application maintaining job growth

The commissioner may combine Express Program loans and grants with financing and tax credits provided under other programs.

ELIGIBILITY

The bill opens the Express Program to licensed physicians and physician offices in THAs. Physicians qualify if they meet one of two sets of criteria. Under the first set, a physician qualifies if he or she practices medicine in a THA and actively provides (1) primary care for adults and children or (2) any medical specialty the commissioner determines the THA needs. The physician must also be up-to-date on all state and local taxes.

Alternatively, the physician qualifies under current law if he or she meets the Express Program's criteria. The physician must employ no more than 50 people during the prior 12 months and:

1. be based and operate in Connecticut,

2. have been registered to do business here for at least 12 months,

3. be current on all state and local taxes, and

4. be in good standing with all state agencies.

Physician offices qualify for Express loans and grants under the first set of criteria.

BACKGROUND

Legislative History

The Senate referred the bill (File 411) to the Finance, Revenue and Bonding Committee, which reported a substitute eliminating the original file's $ 10 million bond authorization.

COMMITTEE ACTION

Commerce Committee

Joint Favorable

Yea

13

Nay

4

(03/27/2012)

Public Health Committee

Joint Favorable

Yea

24

Nay

1

(04/24/2012)

Finance, Revenue and Bonding Committee

Joint Favorable Substitute

Yea

45

Nay

0

(05/03/2012)