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statutes is repealed and the following is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