House Bill No. 5716
               House Bill No. 5716

              PUBLIC ACT NO. 98-246


AN ACT REVISING THE DEFINITION OF DISPLACED PERSON
AND CONCERNING THE  ONE-STOP BUSINESS REGISTRY AND
GUARANTEES  ISSUED  UNDER  THE  CONNECTICUT  WORKS
GUARANTEE FUND.


    Be it enacted  by  the  Senate  and  House  of
Representatives in General Assembly convened:
    Section  1.  Section   8-267  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    As used in this chapter:
    (1)  "State  agency"   means  any  department,
agency or instrumentality  of  the  state  or of a
political  subdivision  of  the  state,  or  local
housing authorities, or  any department, agency or
instrumentality   of   two   or   more   political
subdivisions of the  state,  but shall not include
community    housing   development    corporations
authorized under section 8-217;
    (2)    "Person"    means    any    individual,
partnership,   corporation,   limited    liability
company or association;
    (3) "Displaced person"  means  (a)  any person
who, on or  after  July  6,  1971, moves from real
property, or moves his personal property from real
property, as a  result  of the acquisition of such
real property, in  whole  or  in  part,  or as the
result  of the  written  order  of  the  acquiring
agency to vacate  real  property, for a program or
project undertaken by  or  supervised  by  a state
agency or unit  of local government and solely for
the purposes of subsections (a) and (b) of section
8-268  and  section  8-271  as  a  result  of  the
acquisition of or as a result of the written order
of  the acquiring  agency  to  vacate  other  real
property, on which such person conducts a business
or farm operation, for such program or project; or
(b) any person  who  so moves as the direct result
of code enforcement  activities  or  a  program of
rehabilitation  of  buildings   pursuant  to  such
governmental program or  under  such  governmental
supervision, EXCEPT A  BUSINESS  WHICH  MOVES FROM
REAL PROPERTY OR WHICH MOVES ITS PERSONAL PROPERTY
FROM REAL PROPERTY ACQUIRED BY A STATE AGENCY WHEN
SUCH MOVE OCCURS  AT THE END OF A LEASE TERM OR AS
A  RESULT OF  EVICTION  FOR  NONPAYMENT  OF  RENT,
PROVIDED THE STATE AGENCY ACQUIRED THE PROPERTY AT
LEAST TEN YEARS BEFORE THE MOVE;
    (4)     "Nonprofit     organization"     means
associations incorporated under  chapters  598 and
600;
    (5)  "Business"  means  any  lawful  activity,
excepting a farm  operation,  conducted  primarily
(A) for the  purchase,  sale,  lease and rental of
personal   and  real   property,   and   for   the
manufacture, processing or  marketing of products,
commodities or any  other  personal  property; (B)
for the sale  of  services to the public; (C) by a
nonprofit  organization; or  (D)  solely  for  the
purposes of subsection  (a)  of section 8-268, for
assisting   in   the   purchase,   sale,   resale,
manufacture, processing, or marketing of products,
commodities, personal property, or services by the
erection and maintenance of an outdoor advertising
display or displays,  whether  or not such display
or displays are  located  on the premises on which
any of the above activities are conducted;
    (6)  "Farm  operation"   means   any  activity
conducted solely or  primarily  for the production
of   one  or   more   agricultural   products   or
commodities, including timber,  for  sale  or home
use, and customarily  producing  such  products or
commodities in sufficient  quantity  to be capable
of  contributing  materially   to  the  operator's
support;
    (7) "Mortgage" means  such classes of liens as
are commonly given  to  secure advances on, or the
unpaid purchase price of, real property, under the
laws  of this  state,  together  with  the  credit
instruments, if any, secured thereby.
    Sec. 2. Subsection  (a)  of  section 32-349 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)  There shall  be  established  a  one-stop
business registry in  the  Department  of Economic
and Community Development.  The  Secretary  of the
Office of Policy  and  Management shall coordinate
the establishment of  the business registry, which
shall  be  operational   by   July  1,  1995.  THE
DEPARTMENT OF ECONOMIC  AND  COMMUNITY DEVELOPMENT
AND  THE  OFFICE  OF  POLICY  AND  MANAGEMENT  MAY
JOINTLY  CONTRACT  WITH   PRIVATE   ENTITIES   FOR
PURPOSES OF IMPLEMENTING  THE  PROVISIONS  OF THIS
SECTION. The registry  shall provide the following
services  to  any   person,  firm  or  corporation
engaged in or  intending  to  engage  in  business
activities in the  state:  (1)  Access by computer
network  to  all   applicable  forms  relating  to
registration,  regulatory,  licensing,  permitting
and approval requirements  of  each  state  agency
which may have jurisdiction over the activities of
such person, firm  or  corporation, (2) assistance
in  the  completion   of   all   such  forms,  (3)
centralized collection of  any fees required to be
paid by the  person,  firm or corporation pursuant
to registration, regulatory, licensing, permitting
or approval requirements  of  state  agencies  and
distribution to each such agency of any such fees,
(4)  submission  of   completed   forms  to  state
agencies by computer  network and (5) liaison with
all agencies receiving  such  completed  forms  to
ensure that the forms are processed promptly.
    Sec. 3. Section 32-261 of the general statutes
is repealed and  the  following  is substituted in
lieu thereof:
    (a) There is  created within the authority the
Connecticut Works Guarantee  Fund.  The  authority
may issue or  make  advance  commitments  to issue
guarantees  of  loans   and  guarantees  of  other
investments. No guarantee or commitment to issue a
guarantee shall be provided or entered into by the
authority pursuant to  this  section  which  would
cause the aggregate  amount of all such guarantees
and commitments then  outstanding  to  exceed four
times the sum of the amounts available in the fund
plus the amount of any unpaid grants authorized to
be  made  by   the   Department  of  Economic  and
Community Development to the authority for deposit
in the fund which remain available for purposes of
the fund pursuant  to  the  bond  authorization in
section  32-262,  provided   the   amount  of  any
guarantee shall be  measured  by  the  portion  of
unpaid loan principal,  or  its  equivalent in the
case of other  investments, which is guaranteed by
the authority and  shall  exclude  for purposes of
such limitation the  amount  of any such guarantee
to the extent  that the liability of the authority
with  respect  thereto   has   been  reinsured  or
otherwise  assumed  by   an   eligible   financial
institution with a  long-term  credit rating equal
to or higher  than that of the state. The purposes
of such program  shall  be:  (1)  To encourage the
growth and retention  of  manufacturing  firms and
other businesses in  the  state that are unable to
obtain  financing  under   reasonable   terms  and
conditions due to  the contraction in liquidity in
the banking system;  (2)  to  stimulate the growth
and retention of  jobs,  the  development  of  all
geographic regions of  the  state and the increase
in state and  municipal  tax  revenue;  and (3) to
address   concerns  with   the   availability   of
financing which has  been  discontinued subsequent
to  a  merger,   takeover   or  liquidation  of  a
financial  institution  by   a  federal  financial
regulatory   institution.  The   authority   shall
utilize the authority  provided by this section to
achieve the maximum creation or retention of jobs,
especially high quality,  skilled  jobs,  with the
funds available. There  shall  be deposited in the
fund  all  guarantee  fees  and  all  proceeds  of
collateral and other  recoveries  with  respect to
payments made under  guarantees  and  any  and all
other moneys or  assets,  other  than  payments on
guarantees  issued  hereunder,   received  by  the
authority in return  for any guarantee provided or
offered,  whether  pursuant   to   any  applicable
contract  or  agreement   entered   into   by  the
authority  under  subsection  [(j)]  (i)  of  this
section or otherwise. Amounts in the fund shall be
used in accordance  with  this  section to satisfy
any valid guarantee  claim  payable  therefrom and
may be used  for  any  other purpose determined by
the  authority  to   be   in  furtherance  of  any
guarantee or any  contract  or  agreement  with an
eligible   financial  institution   entered   into
pursuant to this  section  or  determined  by  the
authority  to  be   necessary  or  appropriate  to
protect the interests  of  the  authority  or  the
fund,  including, without  limitation,  protecting
the interests of  the  authority  in  any  project
during any period of loan delinquency or upon loan
default. Any administrative  expenses  incurred in
carrying out the  provisions  of  this section, to
the extent not  paid  by  the  authority, shall be
paid from the fund. Each payment from the fund for
such administrative expenses  shall be made by the
authority upon certification by the chairperson of
the authority that the payment is authorized under
the  provisions  of   this   section,   under  the
applicable rules and regulations of the authority.
Any amounts in  the  fund  not currently needed to
meet the obligations  of the fund and the expenses
of the authority  may  be  invested in obligations
designated by the  authority,  and all income from
such investments shall become part of the fund.
    (b)  The  authority   may  issue  to  eligible
financial  institutions,  upon   such   terms  and
conditions  as  the   authority   may   determine,
guarantees  of  loans   and  guarantees  of  other
investments the proceeds of which will be used for
a business purpose  whose  economic impact will be
in this state.
    (c)  The  authority   shall   determine  which
financial institutions are eligible to participate
in  the  guarantee  program  consistent  with  any
applicable   principles   set    forth    in   the
participation guidelines for  the  loan  guarantee
program  of  the   Connecticut   Works  Fund.  The
authority  shall encourage  the  participation  of
financial  institutions  of  all  sizes  from  all
regions of the state.
    (d) (1) The  authority may issue guarantees of
loans and other  investments,  consistent with any
applicable principles set forth in the eligibility
guidelines for the  loan  guarantee program of the
Connecticut Works Fund,  for  any project used for
manufacturing,   industrial,   research,   product
warehousing, distribution or  other purposes which
will create or  retain jobs, maintain or diversify
industry, including new  or emerging technologies,
or  maintain  or   increase   the  tax  base.  The
authority also may  issue  guarantees of loans and
guarantees of other investments for other purposes
if the authority  determines  that  such  loans or
other investments will  materially  contribute  to
employment in the  state  by creating high quality
jobs, encouraging exportation  beyond the state of
goods and services,  developing  new  products  or
services,  creating  or   supporting  a  secondary
market for business loans made within the state or
otherwise supporting, contributing to or enhancing
activities important to  employment  levels in the
state. The authority  may issue loan guarantees to
women-owned  businesses  and   minority   business
enterprises. As used in this section, "women-owned
business" means any  business  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 "minority business  enterprise" shall have the
same meaning as in section 32-9e.
    (2) The authority  shall  not issue guarantees
authorized under this  section  to guarantee loans
for commercial real estate development projects or
for passive real  estate  ownership. The authority
may issue guarantees  for  projects  in  which the
borrower  intends  to   purchase  commercial  real
estate  for  use   in   its   principal   business
operations.
    (3) No guarantee  shall  be issued pursuant to
this section for  the  financing or refinancing of
any project unless  the  authority determines that
the  project  is   otherwise   unable   to  obtain
financing  in  satisfactory   amounts   or   under
reasonable  terms  or  conditions  or  unless  the
authority determines that  the  borrower is unable
to start, continue  to  operate,  expand, maintain
operations or relocate  to this state without such
guarantee.
    (4) No guarantee  shall  be issued pursuant to
this section for  the  financing or refinancing of
any project which  the authority determines may be
financed commercially, upon  reasonable  terms and
conditions, without such a guarantee, and which an
eligible  financial  institution  nonetheless  has
attempted  to  shift   into   this   program.  The
authority shall determine  whether  a  project has
been inappropriately diverted  into  this  program
consistent with the credit availability principles
set forth in  any  applicable  guidelines  for the
loan guarantee program  of  the  Connecticut Works
Fund. The authority  may require the participating
institution to submit  its  loan criteria and such
other information as  may  be  appropriate, and in
reviewing projects that involve the refinancing of
existing  loans, may  require  submission  of  the
classification assigned to  that loan by examiners
for any federal financial regulatory institution.
    (e)  (1)  The  authority  shall  maximize  the
leveraging  capability of  guarantees  under  this
section  to  the   extent   feasible.  The  amount
guaranteed shall not  exceed forty per cent of the
principal amount of  any  particular loan or other
investment, and the  total  guarantee  amounts for
all  outstanding  loans   or   other   investments
guaranteed by the  authority  under  this  section
shall not exceed  thirty  per  cent  of  the total
principal   amount   of   all   such   loans   and
investments, except that  in  the  case  of a loan
guarantee  extended  in   participation  with  the
United States Small  Business  Administration, the
amount guaranteed may  be  up to fifty per cent of
the total principal amount of loans to a borrower,
and such loan  guarantee  may  be  disregarded for
purposes  of  determining   compliance  with  such
overall  thirty  per  cent  guarantee  limitation,
provided at least an equal percentage of the total
principal amount of  the loans to such borrower is
guaranteed by the  United  States  Small  Business
Administration for at  least  the  same  term  and
otherwise on substantially  the  same basis as the
loan guarantee extended by the authority. The term
of any guarantee  issued  under this section shall
not exceed twenty-five years.
    (2)  No  more  than  ten  million  dollars  of
guarantees shall be  issued  for a single project.
No more than  ten  million  dollars  of guarantees
shall be issued  with  respect  to loans and other
investments to any  one  person  or  to any entity
owned by, controlled  by  or  under common control
with such person.
    (3) No loan  guarantee  shall  be issued to an
eligible financial institution  for  any  loan  or
other  investment  to  any  executive  officer  or
director   of  such   institution,   or   to   any
shareholder owning more  than five per cent of the
outstanding  stock of  such  institution,  or  any
executive officer of  any other eligible financial
institution or any  director or shareholder owning
more than five  per  cent of the outstanding stock
of  any such  institution,  or  a  member  of  the
immediate family of  such  an  executive  officer,
director  or shareholder  or  to  any  company  or
entity controlled by any such persons.
    (f) The authority shall consider all proposals
for  guarantees submitted  by  eligible  financial
institutions  consistent with  the  due  diligence
principles  set  forth   in  any  applicable  loan
presentation    guidelines    and     underwriting
considerations for the  loan  guarantee program of
the Connecticut Works  Fund.  The  authority shall
review and periodically  update  its due diligence
principles as appropriate.
    (g) To carry out the purposes of this section,
the authority shall  have  the powers set forth in
section 32-23e, provided  no  provision of section
32-23e  shall be  construed  to  limit  any  power
specifically granted to  the  authority under this
chapter and no  provision of this chapter shall be
construed to limit  any power specifically granted
to the authority under section 32-23e.
    [(h) The authority  shall  not  issue  any new
guarantees under this  program on or after July 1,
1998.]
    [(i)] (h) The  authority  is  authorized  from
time to time  to  enter into guarantee agreements,
reimbursement       agreements,      participation
agreements,    collateral   sharing    agreements,
servicing agreements, and  any other agreements or
contracts with borrowers  or  recipients  of other
investments    and   with    eligible    financial
institutions with respect to the fund and any loan
or other investment guarantee thereunder. Any such
agreement or contract,  and  any  procedure of the
authority,  may  contain   terms,   provisions  or
conditions necessary or  desirable  in  connection
with  the  program  subject  to  the  requirements
established  by this  section,  including  without
limitation,  terms,  provisions   and   conditions
relating  to  loan   documentation,   review   and
approval  procedures,  origination  and  servicing
rights and responsibilities,  default  conditions,
procedures  and  obligations,   the   payment   of
guarantee  fees,  the   giving  of  notice,  claim
procedures, the sources of payment for claims, the
priority  of competing  claims  for  payment,  the
release  or  termination   of  loan  security  and
borrower liability, the  timing  of  payment,  the
maintenance and disposition  of  projects  and the
use of amounts  received  during  periods  of loan
delinquency  or  upon   default,   and  any  other
provisions  concerning the  rights  of  guaranteed
parties   or  conditions   to   the   payment   of
guarantees. Any fees  for  guarantees issued under
the provisions of  this  section may be determined
on such basis,  be payable by such person, in such
amounts and at  such  times as the authority shall
determine, and the  amount of the fees need not be
uniform   among  the   various   guarantees.   The
agreements or contracts  may  be  executed  on  an
individual, group or  master  contract  basis with
eligible financial institutions.
    [(j)] (i) Any  guarantee made by the authority
under  the authorization  of  this  section  shall
provide that claims  payable  under such guarantee
shall  first be  paid  from  any  amounts  readily
available in the fund before any amounts available
from the bond  authorization  contained in section
32-262 are utilized  for  claim payment. The faith
and  credit  of   the  state  is  hereby  pledged,
pursuant  to  said   bond   authorization  and  in
accordance  with  section  3-20,  AS  AMENDED,  to
provide to the  fund  moneys as and when necessary
to make timely payments of all amounts required to
be paid under  the terms of any guarantee executed
by the authority pursuant to this section, but not
in excess of  the amount of bonds so authorized by
the State Bond  Commission  for  such purpose less
the amounts paid  by the state for deposit to such
fund. The obligation  of  the  authority  to  make
payments under any such guarantee shall be limited
solely to such  sources and shall not constitute a
debt or liability of the authority or the state.
    [(k)]  (j)  Any   guarantee  executed  by  the
authority under this  section  shall be conclusive
evidence of eligibility  for  such  guarantee, and
the validity of  any guarantee so executed or of a
commitment to guarantee  shall be incontestable in
the hands of  an  eligible  financial  institution
holding such guarantee or commitment from the date
of  execution and  delivery  thereof,  except  for
fraud or misrepresentation  on  the  part  of such
eligible   financial  institution   and,   as   to
commitments to guarantee,  noncompliance  with the
commitment or authority  rules  or  regulations in
force at the time of issuance of the commitment.
    [(l)]  (k)  As   used  in  this  section,  the
following terms shall  have the following meanings
unless the context  indicates  another meaning and
intent:
    (1)   "Authority"   means    the   Connecticut
Development Authority created under subsection (a)
of section 32-23d;
    (2)  "Eligible  financial  institution"  shall
have  the  same  meaning  as  "eligible  financial
institution",  as defined  in  subsection  (e)  of
section 32-23d;
    (3) "Loans" means  loans, notes, bonds and all
other forms of  debt  financing  or  extensions of
credit, secured or  unsecured, including loans for
working capital purposes;
    (4) "Other investments"  means (A) any and all
forms of equity financing made by the authority or
an  eligible  financial   institution,   (B)   any
participation or other  interest  in  such  equity
financing, however evidenced,  or  (C) any pool or
portfolio of, or  position  in, loans, such equity
financing or any combination thereof;
    (5) "Person" means  a  person,  as  defined in
subsection (s) of section 32-23d; and
    (6) "State" means the state of Connecticut.
    Sec. 4. This  act  shall  take effect from its
passage, except that  sections  1 and 2 shall take
effect October 1, 1998.

Approved June 8, 1998