Connecticut Seal

General Assembly

File No. 713

    February Session, 2016

Substitute Senate Bill No. 1

Senate, April 25, 2016

The Committee on Finance, Revenue and Bonding reported through SEN. FONFARA of the 1st Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING INNOVATION, ENTREPRENEURSHIP AND CONNECTICUT'S ECONOMIC FUTURE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective from passage) (a) There is established ImpaCT within Connecticut Innovations, Incorporated. The purposes of ImpaCT shall be to foster innovation, start-up businesses and entrepreneur community building; to serve as a catalyst to protect and enhance the innovation ecosystem; to connect start-up entrepreneurs with other start-up entrepreneurs and with state, federal and private resources; to facilitate the establishment of innovation districts; to facilitate mentorship for start-up entrepreneurs; and to provide technical training and resources to start-up businesses and entrepreneurs. ImpaCT shall not be an employer as defined in section 5-270 of the general statutes.

(b) ImpaCT shall be overseen by a board of directors, which shall be known as the ImpaCT board of directors or the ImpaCT board. The ImpaCT board of directors shall consist of seven members, a majority of whom shall be serial entrepreneurs. By education or experience, such members shall be qualified in one or more of the following: Start-up business development and investment, innovation district development, urban planning and technology commercialization in higher education. The ImpaCT board shall consist of the following members: (1) One appointed by the Governor for an initial term of four years; (2) one appointed by the speaker of the House of Representatives for an initial term of two years; (3) one appointed by the president pro tempore of the Senate for an initial term of two years; (4) one appointed by the minority leader of the House of Representatives for an initial term of two years; (5) one appointed by the minority leader of the Senate for an initial term of two years; and (6) two jointly appointed by the chairpersons of the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding for an initial term of four years. Thereafter, all members shall be appointed by the original appointing authority for four-year terms. Any member of the board shall be eligible for reappointment. Any vacancy occurring other than by expiration of term shall be filled in the same manner as the original appointment for the balance of the unexpired term. The appointing authority for any member may remove such member for misfeasance, malfeasance or wilful neglect of duty.

(c) All initial appointments to the board of directors shall be made not later than July 1, 2016. The chief executive officer of Connecticut Innovations, Incorporated shall schedule the first meeting of the board, which shall be held not later than July 15, 2016. The ImpaCT board of directors shall designate the chairperson of the board from among its members.

(d) Members of the ImpaCT board of directors may not designate a representative to perform in their absence their respective duties under this section or section 2 of this act.

(e) The chairperson shall, with the approval of the members of the ImpaCT board of directors, appoint an executive director of ImpaCT who shall be an employee of ImpaCT and paid a salary prescribed by the members. The executive director shall supervise the administrative affairs and technical activities of ImpaCT in accordance with the directives of the board.

(f) Each member of the ImpaCT board of directors shall serve without compensation but shall be entitled to reimbursement for such member's actual and necessary expenses incurred in the performance of such member's official duties.

(g) Members may engage in private employment, or in a profession or business, subject to any applicable laws, rules and regulations of the state regarding official ethics or conflict of interest.

(h) Five members of the ImpaCT board of directors shall constitute a quorum for the transaction of any business or the exercise of any power of ImpaCT. For the transaction of any business or the exercise of any power of the authority, and except as otherwise provided in this section or section 2 of this act, the ImpaCT board may act by a majority of the members present at any meeting at which a quorum is in attendance.

(i) ImpaCT shall continue as long as it has obligations outstanding and until its existence is terminated by law, provided no such termination shall affect any outstanding contractual obligation of ImpaCT and the state shall succeed to the obligations of ImpaCT under any contract. Upon the termination of the existence of ImpaCT, all its rights and properties shall pass to and be vested in Connecticut Innovations, Incorporated.

(j) It shall not constitute a conflict of interest for a trustee, director, partner or officer of any person, firm or corporation, or any individual having a financial interest in a person, firm or corporation, to serve as a member of the ImpaCT board of directors, provided such trustee, director, partner, officer or individual complies with all applicable provisions of chapter 10 of the general statutes. All members shall be deemed public officials and shall adhere to the code of ethics for public officials set forth in chapter 10 of the general statutes.

Sec. 2. (NEW) (Effective from passage) (a) For the purposes enumerated in subsection (a) of section 1 of this act, ImpaCT is authorized and empowered to:

(1) Sue and be sued in its own name, and plead and be impleaded;

(2) (A) Employ such assistants, agents and other employees as may be necessary or desirable who shall not be employees, as defined in subsection (b) of section 5-270 of the general statutes; (B) establish all necessary or appropriate personnel practices and policies, including personnel practices and policies relating to hiring, promotion, compensation, retirement and collective bargaining, which need not be in accordance with chapter 68 of the general statutes but may be in accordance with the personnel practices and policies of Connecticut Innovations, Incorporated; and (C) engage consultants, attorneys and appraisers as may be necessary or desirable to carry out its purposes in accordance with this section;

(3) Receive and accept grants or contributions from any source of money, property, labor or other things of value, to be held, used and applied to carry out the purposes of this section subject to such conditions upon which such grants and contributions may be made, including, but not limited to, grants or contributions from any department, agency or instrumentality of the United States or this state for any purpose consistent with this section;

(4) Make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this section, including contracts and agreements for such professional services as the authority deems necessary, including, but not limited to, financial consultant and technical specialists;

(5) Procure insurance against any liability or loss in connection with its property and other assets, in such amounts and from such insurers as it deems desirable, and procure insurance for employees;

(6) Account for and audit funds of ImpaCT and funds of any recipients of funds from ImpaCT;

(7) Establish advisory committees to assist in accomplishing its duties under this section, which may include one or more members of the ImpaCT board of directors and persons other than members;

(8) Serve as a resource to start-up entrepreneurs in this state by (A) providing counseling and technical assistance in the areas of entrepreneurial business planning and management, financing and marketing for start-up businesses; and (B) conducting business workshops, seminars and conferences with local partners, including, but not limited to, public and independent institutions of higher education, municipal governments, regional economic development districts, private industry, chambers of commerce, small business development organizations and economic development organizations;

(9) Facilitate partnerships between innovative start-up businesses, research institutions and venture capitalists or financial institutions;

(10) Increase the quantity and availability of capital for start-up businesses and entrepreneurs including, but not limited to, angel investors and venture capitalists;

(11) Promote technology-based development in the state;

(12) Encourage and promote the establishment of and, within available resources, provide financial aid to advanced technology centers;

(13) Maintain an inventory of data and information concerning state and federal programs that are related to the purposes of this section and serve as a clearinghouse and referral service for such data and information;

(14) Promote and encourage and, within available resources, provide financial aid for the establishment, maintenance and operation of incubator facilities;

(15) Promote and encourage the coordination of public and private resources and activities within the state in order to assist technology-based business entrepreneurs and business enterprises;

(16) Promote science, engineering, mathematics and other disciplines that are essential to the development and application of technology;

(17) Coordinate its efforts with existing business outreach centers, as described in section 32-9qq of the general statutes;

(18) Provide financial aid to persons developing smart buildings, as defined in section 32-23d of the general statutes, incubator facilities or other information technology intensive office and laboratory space;

(19) Coordinate the development and implementation of strategies regarding technology-based talent and innovation among state and quasi-public agencies, including the creation and administration of the Connecticut Small Business Innovation Research Office to act as a centralized clearinghouse and provide technical assistance to applicants in developing small business innovation research programs in conformity with the federal program established pursuant to the Small Business Research and Development Enhancement Act of 1992, P.L. 102-564, as amended from time to time, and other proposals;

(20) Encourage the retention of younger generation start-up entrepreneurs in the state;

(21) Promote entrepreneurship among students at institutions of higher education;

(22) Make planning grants to entities seeking to apply for innovation district status pursuant to section 7 of this act, provided each such entity demonstrates that its proposed innovation district meets the purposes set forth in section 6 of this act; and

(23) Do all acts and things necessary or convenient to carry out the purposes of this section and the powers expressly granted by this section.

(b) The board shall:

(1) Develop a plan to facilitate stronger relationships between Connecticut businesses and institutions of higher education in order to support entrepreneurial research and entrepreneurial talent development;

(2) Establish an investment fund that supports student-owned start-up businesses;

(3) Establish a state-wide technology transfer office to (A) support the commercialization of ideas from students and faculty of institutions of higher education; (B) identify the most efficient and effective location for such office; (C) recommend the annual funding level for such office; (D) promote and support entrepreneurship and innovation among public institutions of higher education, private institutions of higher education and Connecticut businesses; and (E) provide advice and assistance to public and private research institutions on strategies for technology transfer, including, but not limited to, (i) assessing the viability and value of developing technologies; (ii) defining and exploiting potential markets for such technologies; (iii) commercialization strategies; (iv) intellectual property issues, including, but not limited to, licensing strategies; and (v) business development;

(4) Create an informational Internet web site known as ImpaCT that (A) lists services, programs or events offered to entrepreneurs; (B) advertises Connecticut based start-up businesses seeking funding, including links to the Internet web sites where such funding opportunities are available; (C) serves as an online community for entrepreneurs; (D) lists current research projects related to entrepreneurship and innovation being conducted by professors at institutions of higher education; (E) provides information concerning innovation and entrepreneurial programming available at institutions of higher education, including, but not limited to, engineering, computer science and bioscience; and (F) connects businesses seeking to buy Connecticut made products for their business inputs;

(5) Publicize such informational Internet web site and any workshops, seminars and conferences facilitated by such office;

(6) Advise the Governor, the General Assembly, the Commissioner of Economic and Community Development, the president of The University of Connecticut and the president of the Board of Regents for Higher Education on matters relating to science, engineering and technology that may have an impact on state policies, programs, employers and residents, and on job creation and retention;

(7) Make recommendations for the designation of innovation districts pursuant to sections 5 to 8, inclusive, of this act;

(8) Annually develop, update and implement a strategic state-wide innovation and entrepreneurship marketing plan for the promotion of Connecticut as an innovation and entrepreneurship hub. The executive director shall report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding, on or before January 1, 2017, and annually thereafter, concerning the content of such plan;

(9) Develop a gap year program model for institutions of higher education under which students work for a cybersecurity, data science, software development, or other technology based start-up business for one year prior to graduation and are provided with matching funds from such start-up business to support their cost of living during the year; and

(10) Develop a student loan deferral or forgiveness program for students who start businesses in the state immediately after graduation.

Sec. 3. (NEW) (Effective from passage) The members of the ImpaCT board of directors shall adopt written procedures, in accordance with the provisions of section 1-121 of the general statutes, for: (1) Adopting an annual budget and plan of operations, including a requirement of board approval before the budget or plan may take effect; (2) hiring, dismissing, promoting and compensating employees of ImpaCT, provided such procedures may be in accordance with those of Connecticut Innovations, Incorporated and shall include an affirmative action policy and a requirement of board approval before a position may be created or a vacancy filled; (3) acquiring personal property and personal services, including a requirement of board approval for any nonbudgeted expenditure in excess of an amount to be determined by the board; (4) contracting for financial, legal and other professional services, including a requirement that ImpaCT solicit proposals at least once every three years for each such service which it uses; (5) awarding grants and other financial assistance, including eligibility criteria, the application process and the role played by ImpaCT's staff and board of directors; and (6) the use of surplus funds to the extent authorized under this section or section 2 of this act or other provisions of the general statutes.

Sec. 4. (NEW) (Effective from passage) (a) For the purposes of this section, "administrator" means Connecticut Innovations, Incorporated in its capacity as administrator of the ImpaCT Fund established pursuant to this section.

(b) There is established an ImpaCT Fund, to be held, administered, invested and disbursed by the administrator. The fund shall contain any moneys required or permitted by law to be deposited in the fund and any moneys received from any public or private contributions, gifts, grants, donations, bequests or devises to the fund. Any balance remaining in the fund shall be carried forward in the fund for the fiscal year next succeeding.

(c) Any return on investment attributable to the investment of the fund by the administrator shall be deposited and held for the use and benefit of the fund. Moneys in or received for the fund may be deposited with and invested by any institution as may be designated by the administrator at its sole discretion and paid as the administrator shall direct. The administrator may make payments from deposit accounts for use in accordance with the provisions of this section.

(d) The ImpaCT Fund shall not be deemed an account within the General Fund and shall be used exclusively for the purposes provided in this section.

(e) The ImpaCT Fund shall be used (1) to provide grants to innovation entities, as defined in section 5 of this act, (2) to provide planning grants to entities pursuant to section 2 of this act, (3) to provide grants to innovation places pursuant to section 8 of this act, (4) to provide grants to business accelerators pursuant to section 21 of this act, (5) for the purposes enumerated in sections 1 and 2 of this act, and (6) for technology transfer purposes.

(f) All expenditures from the ImpaCT Fund shall be approved by the ImpaCT board of directors. Any such approval shall be specific to an individual expenditure to be made or for budgeted expenditures with such variations as the ImpaCT board of directors may authorize at the time of such budget approval.

(g) Connecticut Innovations, Incorporated shall provide any necessary staff, office space, office systems and administrative support for the administration of the ImpaCT Fund in accordance with this section. In acting as administrator of the fund, the administrator shall have and may exercise all of the powers of Connecticut Innovations, Incorporated set forth in section 32-39 of the general statutes, as amended by this act, provided expenditures from the fund shall be approved by the ImpaCT board of directors pursuant to subsection (f) of this section.

(h) Beginning January 1, 2017, the administrator shall prepare for each fiscal year a plan of operations and an operating and capital budget for the ImpaCT Fund. Not later than ninety days prior to the start of the fiscal year, the administrator shall submit the plan and budget to the ImpaCT board of directors for its review and approval.

(i) Not later than April 15, 2017, and annually thereafter, the administrator shall provide a report of the activities of the ImpaCT Fund to the ImpaCT board of directors for its review and approval. Upon its approval of such report, the ImpaCT board of directors shall provide such report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding. Such report shall contain available information on the status and progress of the operations and funding of the ImpaCT Fund and the types, amounts and recipients of grants awarded.

Sec. 5. (NEW) (Effective from passage) For the purposes of this section and sections 6 to 8, inclusive, of this act, the following terms shall have the following meanings unless the context otherwise requires:

(1) "Anchor institution" means an entity having a significant and stable presence in the community, including, but not limited to, an institution of higher education, hospital, major corporation, research institution or existing business incubator or business accelerator;

(2) "ImpaCT board" or "board" means the ImpaCT board of directors established pursuant to section 1 of this act;

(3) "Designated innovation district" means an area designated as an innovation district pursuant to section 6 of this act;

(4) "District plan" means the plan submitted to the ImpaCT board pursuant to subsection (a) of section 7 of this act;

(5) "Entity" means a corporation, association, partnership, limited liability company, benefit corporation, nonprofit organization, municipality, institution of higher education or any other similar entity;

(6) "Executive director" means the executive director of ImpaCT;

(7) "Innovation entity" means an entity that has submitted an application for innovation district status for a proposed innovation district that is designated as an innovation district by the executive director pursuant to subsection (a) of section 6 of this act;

(8) "Municipality" means any town, city, consolidated town and city or consolidated town and borough;

(9) "New Haven Line" means the rail passenger service operated between New Haven and intermediate points and Grand Central Station, including the Danbury, Waterbury and New Canaan branch lines;

(10) "Public transit" means the New Haven line, Shore Line East, the New Haven Hartford Springfield rail line and the New Britain to Hartford busway and any planned expansion of such busway; and

(11) "Shore Line East" means the rail service operating between New Haven and New London.

Sec. 6. (NEW) (Effective from passage) (a) There is established an innovation district program within ImpaCT. The purpose of such program is to (1) foster innovation and entrepreneurship by facilitating the designation and establishment of innovation districts in compact geographic areas having entrepreneurial and innovation potential where (A) existing anchor institutions, institutions, companies and recreational spaces are in close proximity to start-up businesses, (B) public transit is accessible, (C) a significant portion of the underlying zoning allows for mixed-use development, including, but not limited to, housing, office and retail, and (D) foot traffic is facilitated; (2) identify, designate and fund the initial costs associated with development of an innovation district; (3) encourage collaboration among institutions of higher education, medical institutions, hospitals, existing companies, start-up businesses, researchers and investors; (4) encourage the leveraging of private investment in designated innovation districts; (5) connect entrepreneurs who are facing similar opportunities and challenges with other entrepreneurs and with private and public resources; and (6) facilitate the establishment of innovation places in municipalities having a connection to an innovation district by transit, labor market patterns or some other relationship, provided such innovation places have entrepreneurial and innovation potential and are located in a compact geographic area of high density land use within a walkable commercial and residential center.

(b) The executive director shall designate as an innovation district any proposed innovation district recommended for innovation district status by the ImpaCT board pursuant to the provisions of section 8 of this act, unless the executive director determines that good cause exists, supported by substantial evidence, to reject such recommendation on the grounds that the proposed innovation district fails to comply with the purposes set forth in subsection (a) of this section. The executive director shall award grants to innovation entities in an amount equal to the amount recommended by the ImpaCT board. Prior to awarding any such grant, the executive director shall (1) enter into an agreement with any such innovation entity concerning (A) allowable grant expenses, provided such expenses shall be limited to those recommended by the ImpaCT board, and (B) submission of an annual financial audit of grant expenditures to the executive director until all grant moneys have been expended by the innovation entity, provided any such audit shall be prepared by an independent auditor, and (2) confirm that a significant portion of the underlying zoning of the proposed district allows for mixed-use development, including, but not limited to, housing, office and retail. If the executive director finds that any such grant is being used for purposes that are not in conformity with the expenses allowed pursuant to subdivision (1) of this subsection, the executive director may require repayment of such grant.

(c) The executive director shall report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding on or before July 1, 2017, and on or before July first annually thereafter until July 1, 2020, regarding the grants distributed pursuant to this section and concerning the operation and effectiveness of the innovation district program.

Sec. 7. (NEW) (Effective from passage) (a) Any entity may submit an application for innovation district status to the ImpaCT board. Such application shall be submitted on or before September 1, 2016, on a form prescribed by the board and shall contain sufficient information to establish that the proposed innovation district is suitable for the purposes set forth in section 6 of this act.

(1) Such application shall include: (A) Information concerning the proposed geographical boundaries of the proposed innovation district, including, but not limited to, a map indicating the boundaries of the proposed innovation district; (B) information concerning at least two anchor institutions located within the geographical boundaries of the proposed innovation district and how such anchor institutions have agreed to participate in the development of and activities within the proposed innovation district; (C) a summary of existing and proposed transportation-related infrastructure within and around the proposed innovation district; (D) a summary of existing and proposed businesses, recreational facilities, public parks and any other public or private gathering spaces located within the proposed innovation district; (E) information concerning the walkability of the proposed innovation district; (F) a district plan for the development of the proposed innovation district, including a plan for connecting the proposed district to public transit via rail or bus, a plan for leveraging private investment and a proposed budget and timeline for use of any moneys granted by the executive director. Such budget shall indicate priority for the expenditure of grant funds in the event that moneys granted are insufficient to cover the costs of the entire proposed budget; (G) a list of municipal and state legislative action that may be required for the execution of such district plan; (H) a letter of support from the chief elected official of the municipality where the innovation district is proposed that shall include a statement that the legislative body of such municipality has, by majority vote, indicated its support for the proposed innovation district and for any municipal legislative action recommended in the district plan, provided a chief elected official may only submit a letter of support for one proposed innovation district located within the municipality; (I) letters of support from private investors; (J) information concerning consistency with the state plan of conservation and development adopted pursuant to chapter 297 of the general statutes; and (K) information concerning the capability of the applicant and other entities partnering with the applicant to implement and administer the district plan and how such partners will be involved in the decision-making process for the proposed innovation district.

(2) A district plan may include, but shall not be limited to, (A) plans for: (i) Attracting and directing support to start-up businesses; (ii) development, in collaboration with private partners, of a business incubator, coworking space, business accelerator or public meeting space; (iii) events and community building; (iv) marketing and outreach; (v) open space improvement; (vi) housing development; (vii) improvement of technology infrastructure, including, but not limited to, broadband improvement; (viii) bicycle paths; and (ix) attracting anchor institutions, and (B) community letters of support from persons or entities other than the applicant.

(b) The ImpaCT board shall screen all applications submitted to it pursuant to subsection (a) of this section and shall select therefrom a limited number of finalist applicants. The ImpaCT board shall hold at least one public hearing on each application submitted by a finalist applicant. Such hearing shall be held in the municipality where the proposed innovation district is to be located and shall consist of a presentation by the applicant finalist on its proposal and a public comment period. The ImpaCT board shall conduct a site walk of any proposed innovation district submitted by an applicant finalist. The chairperson of the ImpaCT board shall give appropriate notice of such hearing. The notice shall (1) state the time and place of the hearing to be held not fewer than ten days after the date of such notice, and (2) be posted in a conspicuous place in or near the office of the town clerk for the municipality where the proposed innovation district is to be located and posted on the Internet web site of such municipality. Applicants may submit revised applications to the ImpaCT board based on public comments received at such hearing.

Sec. 8. (NEW) (Effective from passage) Through the innovation district program established pursuant to section 6 of this act, the ImpaCT board shall:

(1) Review and evaluate applications for innovation district status submitted by entities pursuant to section 7 of this act;

(2) (A) Make recommendations to the executive director on or before January 1, 2017, for the approval of such applications. If no such application meets the purposes set forth in subsection (a) of section 6 of this act or the criteria set forth in this subdivision, the board shall not recommend the approval of any application for innovation district status to the executive director. Recommendations for the approval of applications for innovation district status may include modifications to an application, agreed to by the applicant, as a condition for approval thereof. Such recommendations shall include recommendations for the amount of grant moneys to be awarded to each recommended applicant and recommendations for allowable grant expenses, including, but not limited to, expenditures set forth in such applicant's application, expenditures associated with any modifications recommended thereto by the ImpaCT board, operating expenses and the cost of the audit prescribed by subdivision (2) of subsection (b) of section 6 of this act.

(B) No application may be recommended for innovation district status by the ImpaCT board unless such application (i) such application is consistent with the purposes set forth in section 6 of this act, (ii) is for a proposed innovation district where a significant portion of such proposed district is located in an existing or proposed mixed-use zoning district, (iii) the application was prepared in collaboration with the local chamber of commerce and the municipal economic development department, or similar municipal authority, of the municipality in which the proposed district is located, and (iv) is approved by majority vote of the legislative body of the municipality in which the proposed district is to be located.

(C) In determining whether to recommend an application for approval, the ImpaCT board shall consider, but such consideration shall not be limited to: (i) Whether the entities partnering together to implement and administer the proposed district plan are of the quality to, and have demonstrated the commitment to, implement and administer the district plan in a manner sufficient to achieve the purposes set forth in section 6 of this act. Preference shall be given to applicants having (I) diverse partners, including, but not limited to, anchor institutions, and (II) partnerships with entities located within the proposed innovation district; (ii) whether the geography of the proposed innovation district is sufficiently compact to achieve the purposes set forth in section 6 of this act, provided no proposed innovation district having a proposed geographic area consisting of more than one half square mile shall be recommended by the ImpaCT board unless the applicant demonstrates that good cause exists for expanding such district beyond one half square mile; (iii) whether the district plan is sufficient to achieve the purposes set forth in section 6 of this act and whether such plan includes (I) sufficient measures to ensure walkability within the proposed district; (II) sufficient measures to enhance regular interpersonal interactions among residents, workers and visitors of the district; (III) adequate and accessible public transportation; and (IV) existing or proposed restaurants, affordable housing options, retail spaces and public spaces, indoor or outdoor, that provide adequate opportunity for interpersonal interaction; (iv) the extent to which the district plan leverages private investment; (v) self-sustainability of the district after moneys granted by the executive director are fully expended; (vi) whether the underlying zoning of the proposed district provides for, or will be amended to provide for, reduced minimum floor area for residential dwelling units; and (vii) any other criteria the ImpaCT board determines is relevant for evaluating whether the proposed district, if granted innovation district status, will achieve the purposes set forth in section 6 of this act;

(3) Publicize and post on its Internet web site the deadline for applications for innovation district status pursuant to section 7 of this act; and

(4) Develop a program to provide grants to innovation places, including, but not limited to, a process to apply for such grants, the criteria for grant approval and a process for approving such grants, provided such grants shall only be provided to innovation places that meet the purposes set forth in section 6 of this act.

Sec. 9. (Effective from passage) On or before June 1, 2016, the Commissioner of Economic and Community Development shall publicize and post on its Internet web site the deadline for applications for innovation district status pursuant to section 7 of this act and the language of sections 5 to 8, inclusive, of this act.

Sec. 10. Section 32-235 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) For the purposes described in subsection (b) of this section, the State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate one billion four hundred fifteen million three hundred thousand dollars, provided (1) one hundred forty million dollars of said authorization shall be effective July 1, 2011, and twenty million dollars of said authorization shall be made available for small business development; (2) two hundred eighty million dollars of said authorization shall be effective July 1, 2012, and forty million dollars of said authorization shall be made available for the Small Business Express program established pursuant to section 32-7g, as amended by this act, and not more than twenty million dollars of said authorization may be made available for businesses that commit to relocating one hundred or more jobs that are outside of the United States to the state; and (3) one hundred million dollars of said authorization shall be effective July 1, 2016. Any amount of said authorizations that are made available for small business development or businesses that commit to relocating one hundred or more jobs that are outside of the United States to the state, but are not exhausted for such purpose by the first day of the fiscal year subsequent to the fiscal year in which such amount was made available, shall be used for the purposes described in subsection (b) of this section. For purposes of this subsection, a "small business" is one employing not more than one hundred employees.

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by the Department of Economic and Community Development (1) for the purposes of sections 32-220 to 32-234, inclusive, including economic cluster-related programs and activities, and for the Connecticut job training finance demonstration program pursuant to sections 32-23uu and 32-23vv, provided (A) three million dollars shall be used by said department solely for the purposes of section 32-23uu and not more than five million two hundred fifty thousand dollars of the amount stated in said subsection (a) may be used by said department for the purposes of section 31-3u, (B) not less than one million dollars shall be used for an educational technology grant to the deployment center program and the nonprofit business consortium deployment center approved pursuant to section 32-41l, (C) not less than two million dollars shall be used by said department for the establishment of a pilot program to make grants to businesses in designated areas of the state for construction, renovation or improvement of small manufacturing facilities, provided such grants are matched by the business, a municipality or another financing entity. The Commissioner of Economic and Community Development shall designate areas of the state where manufacturing is a substantial part of the local economy and shall make grants under such pilot program which are likely to produce a significant economic development benefit for the designated area, (D) five million dollars may be used by said department for the manufacturing competitiveness grants program, (E) one million dollars shall be used by said department for the purpose of a grant to the Connecticut Center for Advanced Technology, for the purposes of subdivision (5) of subsection (a) of section 32-7f, (F) fifty million dollars shall be used by said department for the purpose of grants to the United States Department of the Navy, the United States Department of Defense or eligible applicants for projects related to the enhancement of infrastructure for long-term, on-going naval operations at the United States Naval Submarine Base-New London, located in Groton, which will increase the military value of said base. Such projects shall not be subject to the provisions of sections 4a-60 and 4a-60a, (G) two million dollars shall be used by said department for the purpose of a grant to the Connecticut Center for Advanced Technology, Inc., for manufacturing initiatives, including aerospace and defense, and (H) four million dollars shall be used by said department for the purpose of a grant to companies adversely impacted by the construction at the Quinnipiac Bridge, where such grant may be used to offset the increase in costs of commercial overland transportation of goods or materials brought to the port of New Haven by ship or vessel, (2) for the purposes of the small business assistance program established pursuant to section 32-9yy, provided fifteen million dollars shall be deposited in the small business assistance account established pursuant to said section 32-9yy, [and] (3) to deposit twenty million dollars in the small business express assistance account established pursuant to section 32-7h, (4) to deposit twenty-five million dollars in the ImpaCT Fund established pursuant to section 4 of this act, which shall be used by ImpaCT to provide grants to designated innovation districts, as defined in section 5 of this act, or planning grants pursuant to section 2 of this act, (5) to deposit five million dollars in the ImpaCT Fund established pursuant to section 4 of this act, which shall be used by ImpaCT to provide grants to innovation places pursuant to section 8 of this act, (6) sixty million dollars shall be used by Startup CT for the purposes of providing loans pursuant to section 20 of this act, (7) to deposit twenty-five million dollars in the ImpaCT Fund established pursuant to section 4 of this act, which shall be used by ImpaCT to provide grants to business accelerators pursuant to section 21 of this act, and (8) five million dollars shall be used by the State Department of Education to provide grants to technical high schools for the provision of evening training programs in the skilled trades, including, but not limited to, manufacturing, masonry, electrical, plumbing and carpentry trades, provided the purpose of any such program shall be to prepare participants for earning a credential or degree recognized by employers or trade associations, as applicable.

(c) All provisions of section 3-20, or the exercise of any right or power granted thereby which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization, which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

Sec. 11. Section 32-39 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

The purposes of the corporation shall be to stimulate and encourage the research and development of new technologies, businesses and products, to encourage the creation and transfer of new technologies, to assist existing businesses in adopting current and innovative technological processes, to stimulate and provide services to industry that will advance the adoption and utilization of technology, to achieve improvements in the quality of products and services, to stimulate and encourage the development and operation of new and existing science parks and incubator facilities, and to promote science, engineering, mathematics and other disciplines that are essential to the development and application of technology within Connecticut by the infusion of financial aid for research, invention and innovation in situations in which such financial aid would not otherwise be reasonably available from commercial or other sources, and for these purposes the corporation shall have the following powers:

(1) To have perpetual succession as a body corporate and to adopt bylaws, policies and procedures for the regulation of its affairs and conduct of its businesses as provided in section 32-36;

(2) To enter into venture agreements with persons, upon such terms and on such conditions as are consistent with the purposes of this chapter, for the advancement of financial aid to such persons for the research, development and application of specific technologies, products, procedures, services and techniques, to be developed and produced in this state, and to condition such agreements upon contractual assurances that the benefits of increasing or maintaining employment and tax revenues shall remain in this state and shall accrue to it;

(3) To solicit, receive and accept aid, grants or contributions from any source of money, property or labor or other things of value, to be held, used and applied to carry out the purposes of this chapter, subject to the conditions upon which such grants and contributions may be made, including but not limited to, gifts or grants from any department or agency of the United States or the state;

(4) To invest in, acquire, lease, purchase, own, manage, hold and dispose of real property and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes; provided, however, [that] (A) all such acquisitions of real property for the corporation's own use with amounts appropriated by the state to the corporation or with the proceeds of bonds supported by the full faith and credit of the state shall be subject to the approval of the Secretary of the Office of Policy and Management and the provisions of section 4b-23, and (B) the corporation shall relocate its main office to a designated innovation district, as defined in section 9 of this act, on or before January 1, 2018, and shall establish a satellite office in each other designated innovation district;

(5) To borrow money or to guarantee a return to the investors in or lenders to any capital initiative, to the extent permitted under this chapter;

(6) To hold patents, copyrights, trademarks, marketing rights, licenses, or any other evidences of protection or exclusivity as to any products as defined herein, issued under the laws of the United States or any state or any nation;

(7) To employ such assistants, agents and other employees as may be necessary or desirable, which employees shall be exempt from the classified service and shall not be employees, as defined in subsection (b) of section 5-270; establish all necessary or appropriate personnel practices and policies, including those relating to hiring, promotion, compensation, retirement and collective bargaining, which need not be in accordance with chapter 68, and the corporation shall not be an employer, as defined in subsection (a) of section 5-270; and engage consultants, attorneys and appraisers as may be necessary or desirable to carry out its purposes in accordance with this chapter;

(8) To make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this chapter;

(9) To sue and be sued, plead and be impleaded, adopt a seal and alter the same at pleasure;

(10) With the approval of the State Treasurer, to invest any funds not needed for immediate use or disbursement, including any funds held in reserve, in obligations issued or guaranteed by the United States of America or the state of Connecticut and in other obligations which are legal investments for retirement funds in this state;

(11) To procure insurance against any loss in connection with its property and other assets in such amounts and from such insurers as it deems desirable;

(12) To the extent permitted under its contract with other persons, to consent to any termination, modification, forgiveness or other change of any term of any contractual right, payment, royalty, contract or agreement of any kind to which the corporation is a party;

(13) To do anything necessary and convenient to render the bonds to be issued under section 32-41 more marketable;

(14) To acquire, lease, purchase, own, manage, hold and dispose of personal property, and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes;

(15) In connection with any application for assistance under this chapter, or commitments therefor, to make and collect such fees as the corporation shall determine to be reasonable;

(16) To enter into venture agreements with persons, upon such terms and conditions as are consistent with the purposes of this chapter to provide financial aid to such persons for the marketing of new and innovative services based on the use of a specific technology, product, device, technique, service or process;

(17) To enter into limited partnerships or other contractual arrangements with private and public sector entities as the corporation deems necessary to provide financial aid which shall be used to make investments of seed venture capital in companies based in or relocating to the state in a manner which shall foster additional capital investment, the establishment of new businesses, the creation of new jobs and additional commercially-oriented research and development activity. The repayment of such financial aid shall be structured in such manner as the corporation deems will best encourage private sector participation in such limited partnerships or other arrangements. The board of directors, chief executive officer, officers and staff of the corporation may serve as members of any advisory or other board which may be established to carry out the purposes of this subdivision;

(18) To account for and audit funds of the corporation and funds of any recipients of financial aid from the corporation;

[(19) To advise the Governor, the General Assembly, the Commissioner of Economic and Community Development and the president of the Board of Regents for Higher Education on matters relating to science, engineering and technology which may have an impact on state policies, programs, employers and residents, and on job creation and retention;

(20) To promote technology-based development in the state;

(21) To encourage and promote the establishment of and, within available resources, to provide financial aid to advanced technology centers;

(22) To maintain an inventory of data and information concerning state and federal programs which are related to the purposes of this chapter and to serve as a clearinghouse and referral service for such data and information;]

[(23)] (19) To conduct and encourage research and studies relating to technological development;

[(24)] (20) To provide technical or other assistance and, within available resources, to provide financial aid to the Connecticut Academy of Science and Engineering, Incorporated, in order to further the purposes of this chapter;

[(25)] (21) To recommend a science and technology agenda for the state that will promote the formation of public and private partnerships for the purpose of stimulating research, new business formation and growth and job creation;

[(26)] (22) To encourage and provide technical assistance and, within available resources, to provide financial aid to existing manufacturers and other businesses in the process of adopting innovative technology and new state-of-the-art processes and techniques;

[(27)] (23) To recommend state goals for technological development and to establish policies and strategies for developing and assisting technology-based companies and for attracting such companies to the state;

[(28) To promote and encourage and, within available resources, to provide financial aid for the establishment, maintenance and operation of incubator facilities;

(29) To promote and encourage the coordination of public and private resources and activities within the state in order to assist technology-based entrepreneurs and business enterprises;]

[(30)] (24) To provide services to industry that will stimulate and advance the adoption and utilization of technology and achieve improvements in the quality of products and services;

[(31) To promote science, engineering, mathematics and other disciplines that are essential to the development and application of technology;

(32) To coordinate its efforts with existing business outreach centers, as described in section 32-9qq;]

[(33)] (25) To do all acts and things necessary and convenient to carry out the purposes of this chapter;

[(34)] (26) To accept from the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the department, and (C) loan assets or equity interests in connection with any program under the supervision of the department; to make advances to and reimburse the department for any expenses incurred or to be incurred by it in the delivery of such assistance, revenues, rights, assets, or interests; to enter into agreements for the delivery of services by the corporation, in consultation with the department and the Connecticut Housing Finance Authority, to third parties, which agreements may include provisions for payment by the department to the corporation for the delivery of such services; and to enter into agreements with the department or with the Connecticut Housing Finance Authority for the sharing of assistants, agents and other consultants, professionals and employees, and facilities and other real and personal property used in the conduct of the corporation's affairs;

[(35)] (27) To transfer to the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the corporation, and (C) loan assets or equity interests in connection with any program under the supervision of the corporation, provided the transfer of such financial assistance, revenues, rights, assets or interests is determined by the corporation to be practicable, within the constraints and not inconsistent with the fiduciary obligations of the corporation imposed upon or established upon the corporation by any provision of the general statutes, the corporation's bond resolutions or any other agreement or contract of the corporation and to have no adverse effect on the tax-exempt status of any bonds of the state;

[(36)] (28) With respect to any capital initiative, to create, with one or more persons, one or more affiliates and to provide, directly or indirectly, for the contribution of capital to any such affiliate, each such affiliate being expressly authorized to exercise on such affiliate's own behalf all powers which the corporation may exercise under this section, in addition to such other powers provided to it by law;

[(37)] (29) To provide financial aid to enable biotechnology, bioscience and other technology companies to lease, acquire, construct, maintain, repair, replace or otherwise obtain and maintain production, testing, research, development, manufacturing, laboratory and related and other facilities, improvements and equipment; and

[(38) To provide financial aid to persons developing smart buildings, as defined in section 32-23d, incubator facilities or other information technology intensive office and laboratory space;]

[(39)] (30) To provide financial aid to persons developing or constructing the basic buildings, facilities or installations needed for the functioning of the media and motion picture industry in this state. [;]

[(40) To coordinate the development and implementation of strategies regarding technology-based talent and innovation among state and quasi-public agencies, including the creation and administration of the Connecticut Small Business Innovation Research Office to act as a centralized clearinghouse and provide technical assistance to applicants in developing small business innovation research programs in conformity with the federal program established pursuant to the Small Business Research and Development Enhancement Act of 1992, P.L. 102-564, as amended, and other proposals.]

Sec. 12. Subsection (h) of section 32-35 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(h) The corporation shall provide funding for the operation of the Connecticut Small Business Innovation Research Office in accordance with subdivision [(41) of section 32-39] (19) of section 2 of this act.

Sec. 13. (NEW) (Effective from passage) Notwithstanding any provision of the general statutes, any venture agreement, investment agreement or other similar agreement entered into by Connecticut Innovations, Incorporated on or after the effective date of this section shall involve one or more private partners.

Sec. 14. (Effective from passage) On or before December 1, 2016, Connecticut Innovations, Incorporated shall submit a performance audit of such corporation conducted by an independent accounting or management consulting firm which shall include, but not be limited to a recommendation as to: (1) Whether the staffing levels of such corporation are appropriate; (2) if any innovation district has been designated as an innovation district pursuant to section 6 of this act on or before December 1, 2016, a recommendation as to which of such districts the corporation should relocate to; (3) whether the corporation should shift to a fund model similar to that established pursuant to section 20 of this act; (4) recommended measures for the corporation to take in order to improve its ranking in two or more ranking systems prepared by organizations that rank public venture capital entities by varying success measures; (5) an analysis of performance based on any other performance measures recommended by the ImpaCT board, established pursuant to section 1 of this act; and (6) an analysis of compensation policies at private investment firms and recommendations for compensation amounts for employees of Connecticut Innovations, Incorporated that will maximize performance by said employees in a manner that allows Connecticut Innovations, Incorporated to achieve its purposes.

Sec. 15. (NEW) (Effective from passage) (a) The Commissioner of Economic and Community Development shall establish a mentorship network to connect start-up entrepreneurs in technology based ventures, including, but not limited to, cybersecurity, data science, software development, and other technology based start-up business, with qualified mentors. The commissioner shall provide mentorship training to any Connecticut business seeking to participate in such mentorship network.

(b) The commissioner may forgive a portion of any state assistance received by a technology based business and owed to the state if such business participates in the mentorship network established pursuant to subsection (a) of this section. The commissioner shall develop a formula to calculate such state assistance forgiveness based on the hours of mentorship provided by any such business.

Sec. 16. Section 52 of public act 11-1 of the October special session is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) For the purposes described in subsection (b) of this section, the State Bond Commission shall have the power, from time to time to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate one hundred twenty-five million dollars, provided twenty-five million dollars of said authorization shall be effective July 1, 2012, twenty-five million dollars of said authorization shall be effective July 1, 2013, twenty-five million dollars of said authorization shall be effective July 1, 2014, and twenty-five million dollars of said authorization shall be effective July 1, 2015.

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used (1) by Connecticut Innovations, Incorporated for the purpose of recapitalizing the programs established in chapter 581 of the general statutes, provided (A) up to fifteen million dollars shall be made available for the preseed financing program established pursuant to section 32-41x of the general statutes, (B) five million dollars is deposited per year in the ImpaCT Fund established pursuant to section 4 of this act in each of the fiscal years ending June 30, 2017, to June 30, 2021, inclusive, which shall be used for the purposes enumerated in subsection (a) of section 1 of this act, and (C) one million dollars is deposited per year in the ImpaCT Fund established pursuant to section 4 of this act in each of the fiscal years ending June 30, 2017, to June 30, 2021, inclusive, which shall be used by ImpaCT for technology transfer purposes, and (2) by The University of Connecticut for the purpose of hiring staff for its entrepreneurship program in an amount up to one million dollars in each of the fiscal years ending June 30, 2017, to June 30, 2021, inclusive, which shall be used for such purposes, provided (A) the university provides matching funds for such hiring, and (B) the university establishes a partnership with a designated innovation district, as defined in section 5 of this act, in which said university agrees to establish, in such district, its branch campus for programs that relate to the specialty of such innovation district.

(c) All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby, which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the State Treasurer shall pay such principal and interest as the same become due.

Sec. 17. Subsection (c) of section 32-7g of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(c) The commissioner shall establish a streamlined application process for the Small Business Express program. The small business applicant may receive assistance pursuant to said program not later than thirty days after submitting a completed application to the department. Any small business meeting the eligibility criteria in subsection (a) of this section may apply to said program. The commissioner shall give priority for available funding to small businesses creating jobs and may give priority for available funding to (1) economic base industries, as defined in subsection (d) of section 32-222, including, but not limited to, those in the fields of precision manufacturing, business services, green and sustainable technology, bioscience and information technology, [and] (2) businesses attempting to export their products or services to foreign markets, and (3) businesses located in designated innovation districts, as defined in section 5 of this act.

Sec. 18. Section 10-395a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

There is established an account within the General Fund to be known as the "state-wide tourism, innovation and entrepreneurship marketing account". The account may contain all moneys required by law to be deposited in the account. Any balance remaining in said account at the end of any fiscal year shall be carried forward in said account for the fiscal year next succeeding. The moneys in said account shall be allocated for implementation of the state-wide marketing plan in accordance with section 10-396 and implementation of the state-wide innovation and entrepreneurship marketing plan in accordance with section 2 of this act.

Sec. 19. Section 12-704d of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016, and applicable to taxable years commencing on or after January 1, 2016):

(a) As used in this section:

(1) "Angel investor" means an accredited investor, as defined by the Securities and Exchange Commission, or network of accredited investors who review new or proposed businesses for potential investment and who may seek active involvement, such as consulting and mentoring, in a Connecticut business, but "angel investor" does not include (A) a person controlling fifty per cent or more of the Connecticut business invested in by the angel investor, (B) a venture capital company, or (C) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business;

(2) "Cash investment" means the contribution of cash, at a risk of loss, to a qualified Connecticut business in exchange for qualified securities;

(3) "Connecticut business" means any business with its principal place of business in Connecticut that is engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner of Economic and Community Development;

(4) "Bioscience" means manufacturing pharmaceuticals, medicines, medical equipment or medical devices and analytical laboratory instruments, operating medical or diagnostic testing laboratories, or conducting pure research and development in life sciences;

(5) "Advanced materials" means developing, formulating or manufacturing advanced alloys, coatings, lubricants, refrigerants, surfactants, emulsifiers or substrates;

(6) "Photonics" means generation, emission, transmission, modulation, signal processing, switching, amplification, detection and sensing of light from ultraviolet to infrared and the manufacture, research or development of opto-electronic devices, including, but not limited to, lasers, masers, fiber optic devices, quantum devices, holographic devices and related technologies;

(7) "Information technology" means software publishing, motion picture and video production, teleproduction and postproduction services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services and computer training;

(8) "Clean technology" means the production, manufacture, design, research or development of clean energy, green buildings, smart grid, high-efficiency transportation vehicles and alternative fuels, environmental products, environmental remediation and pollution prevention; and

(9) "Qualified securities" means any form of equity, including a general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position that must be convertible into common stock.

(b) There shall be allowed a credit against the tax imposed under this chapter, other than the liability imposed by section 12-707, for a cash investment of not less than twenty-five thousand dollars in the qualified securities of a Connecticut business by an angel investor. The credit shall be in an amount equal to twenty-five per cent of such investor's cash investment, provided the total tax credits allowed to any angel investor shall not exceed two hundred fifty thousand dollars. The credit shall be claimed in the taxable year in which such cash investment is made by the angel investor. [and shall not be transferable.] The credit may be sold, assigned or otherwise transferred, in whole or in part.

(c) To qualify for a tax credit pursuant to this section, a cash investment shall be in a Connecticut business that (1) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section; (2) had annual gross revenues of less than one million dollars in the most recent income year of such business; (3) has fewer than twenty-five employees, not less than seventy-five per cent of whom reside in this state; (4) has been operating in this state for less than seven consecutive years; (5) is primarily owned by the management of the business and their families; and (6) received less than two million dollars in cash investments eligible for the tax credits provided by this section.

(d) (1) A Connecticut business may apply to Connecticut Innovations, Incorporated, for approval as a Connecticut business qualified to receive cash investments eligible for a tax credit pursuant to this section. The application shall include (A) the name of the business and a copy of the organizational documents of such business, (B) a business plan, including a description of the business and the management, product, market and financial plan of the business, (C) a description of the business's innovative technology, product or service, (D) a statement of the potential economic impact of the business, including the number, location and types of jobs expected to be created, (E) a description of the qualified securities to be issued and the amount of cash investment sought by the qualified Connecticut business, (F) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities, and (G) such other information as the chief executive officer of Connecticut Innovations, Incorporated, may require.

(2) Said chief executive officer shall, on a monthly basis, compile a list of approved applications, categorized by the cash investments being sought by the qualified Connecticut business and type of qualified securities offered.

(e) (1) Any angel investor that intends to make a cash investment in a business on such list may apply to Connecticut Innovations, Incorporated, to reserve a tax credit in the amount indicated by such investor. The aggregate amount of all tax credits under this section that may be reserved by Connecticut Innovations, Incorporated, shall not exceed six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and shall not exceed three million dollars in each fiscal year thereafter. Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investment made on or after July 1, [2016] 2019.

(2) The amount of the credit allowed to any investor pursuant to this section shall not exceed the amount of tax due from such investor under this chapter, other than section 12-707, with respect to such taxable year. Any tax credit that is claimed by the angel investor but not applied against the tax due under this chapter, other than the liability imposed under section 12-707, may be carried forward for the five immediately succeeding taxable years until the full credit has been applied.

(f) If the angel investor is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the angel investor. If the angel investor is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by such limited liability company's owner, provided such owner is a person subject to the tax imposed under this chapter.

(g) A review of the cumulative effectiveness of the credit under this section shall be conducted by Connecticut Innovations, Incorporated, by July 1, 2014, and by July first annually thereafter. Such review shall include, but need not be limited to, the number and type of Connecticut businesses that received angel investments, the number of angel investors and the aggregate amount of cash investments, the current status of each Connecticut business that received angel investments, the number of employees employed in each year following the year in which such Connecticut business received the angel investment, and the economic impact in the state, of the Connecticut business that received the angel investment. Such review shall be submitted to the Office of Policy and Management and to the joint standing committee of the General Assembly having cognizance of matters relating to commerce, in accordance with the provisions of section 11-4a.

Sec. 20. (NEW) (Effective July 1, 2016, and applicable to taxable years commencing on or after January 1, 2016) (a) For the purposes of this section:

(1) "Cash investment" means the contribution of cash, at a risk of loss, to a qualified Connecticut business in exchange for qualified securities;

(2) "Connecticut Innovations, Incorporated" means Connecticut Innovations, Incorporated or any successor thereto;

(3) "Eligible debt security" means a senior debt instrument issued by a growth fund in exchange for cash, at par value or a premium;

(4) "Eligible equity investment" means an equity investment in or eligible debt security issued by a growth fund that is acquired at its original issue solely in exchange for cash; and

(5) "Start-up fund" means an entity certified by Connecticut Innovations, Incorporated pursuant to this section.

(b) (1) There is established a Connecticut venture loan program to be known as Startup CT for the purposes of increasing the amount of preseed financing and seed financing, as defined in section 32-34 of the general statutes, available in Connecticut. Connecticut Innovations, Incorporated shall certify up to six entities as start-up funds under this section and may make up to sixty million dollars in forgivable loans to such entities, provided one such start-up fund shall make investments exclusively in intellectual property and start-ups developed by students, faculty and researchers from The University of Connecticut. On and after September 1, 2016, entities may submit applications for approval as a start-up fund, on a form prescribed by Connecticut Innovations, Incorporated, which shall include: (A) A description of intended industry targets, preferred stage of investment and any geographic cluster strategy; (B) a detailed description of the track record of key fund managers with an emphasis on experience with seed and early stage investments; (C) the specific strategy the fund manager will pursue to raise the necessary private capital to qualify for a growth loan and a fund-raising track record for funds with similar characteristics and targets; and (D) any other information reasonably required by Connecticut Innovations, Incorporated.

(2) Connecticut Innovations, Incorporated shall review and consider each application and approve or reject such application within thirty days of receipt. Upon approval of an entity as a start-up fund, Connecticut Innovations, Incorporated shall: (A) Enter into a loan agreement with the start-up fund which shall (i) provide a loan in an amount up to ten million dollars, which shall be specifically conditioned upon the start-up fund securing equity investments in the form of cash in an amount at least equal to twenty million dollars; and (ii) include the economic goals the start-up fund must achieve to be granted loan forgiveness, and (B) make an allocation of tax credits to the start-up fund, if applicable, pursuant to subsection (c) of this section. Approved applicants may submit an additional application for loans under this section in the event that Connecticut Innovations, Incorporated has not approved the maximum number of start-up funds by October 15, 2016.

(3) Within sixty days after receiving approval for a loan under this section, the start-up fund shall collect an amount of eligible equity investments in an amount equal to twenty million dollars. Within sixty-five days after receiving such approval, the growth fund shall send documentation to Connecticut Innovations, Incorporated sufficient to prove receipt of such equity contribution. Upon receipt of such documentation, the state shall make the growth loan to the start-up fund.

(4) Prior to any cash investment by a start-up fund, Connecticut Innovations, Incorporated shall certify such business as eligible for investment based on guidelines promulgated by Connecticut Innovations, Incorporated. Such guidelines shall require that the business be (A) principally located in or willing to relocate to Connecticut, and (B) in the early stages of development.

(5) On or before December thirty-first of the year containing the fifth anniversary of the closing date of the loan, and annually thereafter, the start-up fund shall provide a state revenue impact assessment prepared by a nationally recognized third-party independent economic forecasting firm using a dynamic economic forecasting model that analyzes the economic impact of the investments of the start-up fund, including, but not limited to, jobs created or retained thereby. Connecticut Innovations, Incorporated shall forgive all or part of the loan upon the achievement of economic development goals agreed to by Connecticut Innovations, Incorporated and the start-up fund in the loan agreement.

(c) (1) There shall be allowed a credit against the tax imposed under chapter 207 or 208 of the general statutes for an equity investment in the form of cash in a start-up fund. The credit shall be earned and vested upon the making of an eligible equity investment into a start-up fund and shall be available for utilization against the tax imposed by chapter 207 or 208 of the general statutes in an amount equal to twenty-five per cent of such investment in each of the years containing the third and fourth anniversaries of the investment date, for a total credit equal to fifty per cent of the investment and shall be transferable.

(2) The credit earned under this subsection shall be subject to recapture if a start-up fund fails to invest thirty million dollars within five years of the loan awarded under this section within four years of the closing date of such loan. If a start-up fund fails to comply with the provisions of this subdivision, Connecticut Innovations, Incorporated shall notify the officers of the start-up fund of the potential recapture, in writing, ninety days prior to such potential recapture. Such credit shall be recaptured by Connecticut Innovations, Incorporated unless the deficiency is waived by Connecticut Innovations, Incorporated or is corrected by the start-up fund within such ninety days.

(3) The credit earned under this section may be sold, assigned or otherwise transferred, in whole or in part.

(4) The aggregate amount of tax credits that may be earned under this section as a result of equity investments in the form of cash in a start-up fund shall not exceed sixty million dollars.

Sec. 21. (NEW) (Effective from passage) There is established, within ImpaCT, AccelerateCT, which shall provide grants to qualified private business accelerators for the purpose of developing such accelerators and providing financial assistance to growth stage companies utilizing such accelerators. Such grants may be in an amount up to four hundred thousand dollars and shall be disbursed over two years. Such grant moneys may be used by a qualified private business accelerator for (1) overhead and operational expenses associated with such business accelerator, including, but not limited to, lease payments for up to two years, information technology infrastructure and management personnel costs, and (2) providing financial assistance to growth stage companies utilizing such accelerator. ImpaCT shall establish an application process for such grants, the criteria for approval for such grants and an approval process for such grants, provided the criteria for approval shall include, but not be limited to, consideration of sufficiency of matching private capital, the location of the qualified private business accelerator, investment team expertise, network capacity, and the number of growth stage companies committed to utilizing such business accelerator. For the purposes of this section, growth stage company means a company with five hundred thousand to five million dollars in revenue, at least one intern, defendable intellectual property, strong management and proven sales, as determined by the qualified private business accelerator.

Sec. 22. (NEW) (Effective October 1, 2016) (a) Notwithstanding the provisions of section 32-70 of the general statutes, the Commissioner of Economic and Community Development may establish a knowledge center enterprise zone surrounding any institution of higher learning in the state upon receipt from such institution of a proposal recommending the establishment of such a zone, provided: (1) The commissioner determines that the economic development benefits of establishing such a knowledge center enterprise zone outweigh the anticipated costs to the state and the affected municipalities; and (2) such proposal complies with the state plan of conservation and development adopted pursuant to chapter 297 of the general statutes. The commissioner may establish not more than ten knowledge center enterprise zones.

(b) Any proposal submitted by an institution of higher learning pursuant to subsection (a) of this section shall include, but not be limited to: (1) The geographic scope of the proposed knowledge center enterprise zone, including designation of all census blocks that such institution proposes incorporating into such zone, provided no zone shall extend beyond a two-mile radius of such institution; (2) the nature of business and industry that will be developed and how such business and industry align with the mission of such institution; (3) how such business and industry will collaborate with such institution to create jobs and the anticipated number of jobs to be created; (4) such institution's experience with business collaboration or plan for such collaboration; (5) any other economic and community developments anticipated from the establishment of such zone; and (6) the anticipated lost revenue to the state and municipalities as a result of establishing such zone.

(c) The commissioner may modify the geographic scope of any proposed knowledge center enterprise zone to improve the balance between the anticipated economic benefit and the cost to the state and affected municipalities.

(d) Businesses located within a knowledge center enterprise zone shall be entitled to the same benefits, subject to the same conditions, under the general statutes for which businesses located in an enterprise zone qualify.

(e) The commissioner shall adopt regulations in accordance with the provisions of chapter 54 of the general statutes to implement the provisions of this section. Such regulations shall include, but need not be limited to: (1) A review and approval process for proposals submitted pursuant to subsection (a) of this section; (2) goals and performance standards for knowledge center enterprise zones; and (3) procedures to assess the performance of knowledge center enterprise zones.

(f) Not less than ten years from the original date of approval of a knowledge center enterprise zone, the commissioner shall assess the performance of such zone. The commissioner may remove the designation of such knowledge center enterprise zone if such zone fails to meet the goals and performance standards set forth in the regulations adopted pursuant to subsection (e) of this section.

Sec. 23. Subsection (e) section 13 of public act 15-1 of the June special session is amended to read as follows (Effective from passage):

(e) For the Department of Economic and Community Development: (1) For the Connecticut Manufacturing Innovation Fund established by section 32-7o of the general statutes, not exceeding $20,000,000, provided (A) not more than $3,500,000 shall be used as a grant-in-aid to the Connecticut Center for Advanced Technology for research and development of the machining of high rate laser-engineered additive manufacturing; and (B) $2,750,000 shall be used as a grant-in-aid to be deposited in the Innovation Talent Fund established pursuant to section 24 of this act for use by ImpaCT to provide grants to programs intended to increase software development technology talent and other technology talent as provided in subsection (e) of section 24 of this act;

(2) For the Small Business Express program established by section 32-7g of the general statutes, not exceeding $50,000,000;

(3) For the Brownfield Remediation and Revitalization program, not exceeding $20,000,000; and

(4) For the implementation of a minority business enterprise assistance program to assist such businesses in obtaining surety bonds, including bid, performance and payment bonds, for capital construction projects, which program may be run by a nonprofit entity with which said department shall contract, not exceeding $2,000,000.

Sec. 24. (NEW) (Effective from passage) (a) For the purposes of this section, "administrator" means ImpaCT in its capacity as administrator of the Innovation Talent Fund established pursuant to this section.

(b) There is established an Innovation Talent Fund, to be held, administered, invested and disbursed by the administrator. The fund shall contain any moneys required or permitted by law to be deposited in the fund and any moneys received from any public or private contributions, gifts, grants, donations, bequests or devises to the fund. Any balance remaining in the fund shall be carried forward in the fund for the fiscal year next succeeding.

(c) Any return on investment attributable to the investment of the fund by the administrator shall be deposited and held for the use and benefit of the fund. Moneys in or received by the fund may be deposited with and invested by any institution as may be designated by the administrator at its sole discretion and paid as the administrator shall direct. The administrator may make payments from such deposit accounts for use in accordance with the provisions of this section.

(d) The Innovation Talent Fund shall not be deemed an account within the General Fund and shall be used exclusively for the purposes provided in this section.

(e) Amounts in the Innovation Talent Fund shall initially be used to provide grants to programs intended to increase software development technology talent in this state. After such grants are made, amounts in the fund shall be used to provide grants to programs intended to increase other technology talent in this state.

(f) All expenditures from the Innovation Talent Fund shall be approved by the ImpaCT board of directors. Any such approval shall be specific to an individual expenditure to be made or for budgeted expenditures with such variations as the ImpaCT board of directors may authorize at the time of such budget approval.

(g) ImpaCT shall provide any necessary staff, office space, office systems and administrative support for the operation of the Innovation Talent Fund in accordance with this section. In acting as administrator of the fund, the administrator shall have and may exercise all of the powers of ImpaCT set forth in section 2 of this act, provided expenditures from the fund shall be approved by the ImpaCT board of directors pursuant to subsection (f) of this section.

(h) Beginning January 1, 2017, the administrator shall prepare for each fiscal year a plan of operations and an operating and capital budget for the Innovation Talent Fund. Not later than ninety days prior to the start of the fiscal year, the administrator shall submit the plan and budget to the ImpaCT board of directors for its review and approval.

(i) Not later than April 15, 2017, and annually thereafter, the administrator shall provide a report of the activities of the Innovation Talent Fund to the ImpaCT board of directors for its review and approval. Upon its approval of such report, the ImpaCT board of directors shall provide such report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding. Such report shall contain available information on the status and progress of the operations and funding of the Innovation Talent Fund and the types, amounts and recipients of grants awarded.

Sec. 25. (Effective July 1, 2016) The proceeds of securities of any issue, not exceeding in the aggregate the amount specified under subsection (a) of section 10a-109e of the general statutes, as amended by this act, shall be used to provide grants-in-aid to the city of Waterbury, to be administered by the Department of Administrative Services, for the purpose of property acquisition, construction, reconstruction, renovations and improvements by the city of Waterbury of real property in the city of Waterbury that shall be leased by The University of Connecticut as part of its downtown Waterbury campus.

Sec. 26. Subsection (a) of section 10a-109e of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):

(a) The university may administer, manage, schedule, finance, further design and construct UConn 2000, to operate and maintain the components thereof in a prudent and economical manner and to reserve for and make renewals and replacements thereof when appropriate, it being hereby determined and found to be in the best interest of the state and the university to provide this independent authority to the university along with providing assured revenues therefor as the efficient and cost effective course to achieve the objective of avoiding further decline in the physical infrastructure of the university and to renew, modernize, enhance and maintain such infrastructure, the particular project or projects, each being hereby approved as a project of UConn 2000, and the presently estimated cost thereof being as follows:

T1

UConn 2000 Project

Phase I

Phase II

Phase III

T2

 

Fiscal Years

Fiscal Years

Fiscal Years

T3

 

1996-1999

2000-2005

2005-2024

T4

       

T5

Academic and Research

   

[450,000,000]

T6

     

443,000,000

T7

Facilities

     

T8

       

T9

Agricultural Biotechnology

     

T10

Facility

9,400,000

   

T11

       

T12

Agricultural Biotechnology

     

T13

Facility Completion

 

10,000,000

 

T14

       

T15

Alumni Quadrant

     

T16

Renovations

 

14,338,000

 

T17

       

T18

Arjona and Monteith

     

T19

(new classroom buildings)

   

66,100,000

T20

       

T21

Avery Point Campus

     

T22

Undergraduate and

     

T23

Library Building

   

35,000,000

T24

       

T25

Avery Point Marine

     

T26

Science Research Center –

     

T27

Phase I

34,000,000

   

T28

       

T29

Avery Point Marine

     

T30

Science Research Center –

     

T31

Phase II

 

16,682,000

 

T32

       

T33

Avery Point Renovation

 

5,600,000

15,000,000

T34

       

T35

Babbidge Library

0

   

T36

       

T37

Balancing Contingency

 

5,506,834

 

T38

       

T39

Beach Hall Renovations

   

10,000,000

T40

       

T41

Benton State Art Museum

     

T42

Addition

 

1,400,000

3,000,000

T43

       

T44

Biobehavioral Complex

     

T45

Replacement

   

4,000,000

T46

       

T47

Bishop Renovation

   

8,000,000

T48

       

T49

Budds Building

     

T50

Renovation

 

2,805,000

 

T51

       

T52

Business School

     

T53

Renovation

 

4,803,000

 

T54

       

T55

Chemistry Building

53,700,000

   

T56

       

T57

Commissary Warehouse

   

1,000,000

T58

       

T59

Deferred Maintenance/

     

T60

Code/ADA Renovation

     

T61

Lump Sum

39,332,000

 

805,000,000

T62

       

T63

Deferred Maintenance &

     

T64

Renovation Lump Sum

     

T65

Balance

 

104,668,000

 

T66

       

T67

East Campus North

     

T68

Renovations

 

11,820,000

 

T69

       

T70

Engineering Building

     

T71

(with Environmental

     

T72

Research Institute)

   

36,700,000

T73

       

T74

Equine Center

 

1,000,000

 

T75

       

T76

Equipment, Library

     

T77

Collections &

     

T78

Telecommunications

60,500,000

 

470,000,000

T79

       

T80

Equipment, Library

     

T81

Collections &

     

T82

Telecommunications

     

T83

Completion

 

182,118,146

 

T84

       

T85

Family Studies (DRM)

     

T86

Renovation

   

6,500,000

T87

       

T88

Farm Buildings Repairs/

     

T89

Replacement

   

6,000,000

T90

       

T91

Fine Arts Phase II

   

20,000,000

T92

       

T93

Floriculture Greenhouse

   

3,000,000

T94

       

T95

Gant Building Renovations

   

34,000,000

T96

       

T97

Gant Plaza Deck

 

0

 

T98

       

T99

Gentry Completion

   

10,000,000

T100

       

T101

Gentry Renovation

 

9,299,000

 

T102

       

T103

Grad Dorm Renovations

 

7,548,000

 

T104

       

T105

Gulley Hall Renovation

 

1,416,000

 

T106

       

T107

Hartford Relocation

     

T108

Acquisition/Renovation

 

56,762,020

70,000,000

T109

       

T110

Hartford Relocation Design

1,500,000

   

T111

       

T112

Hartford Relocation

     

T113

Feasibility Study

500,000

   

T114

       

T115

Heating Plant Upgrade

10,000,000

   

T116

       

T117

Hilltop Dormitory New

 

30,000,000

 

T118

       

T119

Hilltop Dormitory

     

T120

Renovations

 

3,141,000

 

T121

       

T122

Ice Rink Enclosure

2,616,000

   

T123

       

T124

Incubator Facilities

   

10,000,000

T125

       

T126

International House

     

T127

Conversion

 

800,000

 

T128

       

T129

Intramural, Recreational

     

T130

and Intercollegiate

     

T131

Facilities

   

31,000,000

T132

       

T133

Jorgensen Renovation

   

7,200,000

T134

       

T135

Koons Hall Renovation/

     

T136

Addition

   

7,000,000

T137

       

T138

Lakeside Renovation

   

3,800,000

T139

       

T140

Law School Renovations/

     

T141

Improvements

   

15,000,000

T142

       

T143

Library Storage Facility

   

5,000,000

T144

       

T145

Litchfield Agricultural

     

T146

Center – Phase I

1,000,000

   

T147

       

T148

Litchfield Agricultural

     

T149

Center – Phase II

 

700,000

 

T150

       

T151

Manchester Hall

     

T152

Renovation

   

6,000,000

T153

       

T154

Mansfield Apartments

     

T155

Renovation

2,612,000

   

T156

       

T157

Mansfield Training School

     

T158

Improvements

 

27,614,000

29,000,000

T159

       

T160

Natural History Museum

     

T161

Completion

   

4,900,000

T162

       

T163

North Campus Renovation

2,654,000

   

T164

       

T165

North Campus Renovation

     

T166

Completion

 

21,049,000

 

T167

       

T168

North Hillside Road

     

T169

Completion

   

11,500,000

T170

       

T171

North Superblock Site

     

T172

and Utilities

8,000,000

   

T173

       

T174

Northwest Quadrant

     

T175

Renovation

2,001,000

   

T176

       

T177

Northwest Quadrant

     

T178

Renovation

 

15,874,000

 

T179

       

T180

Observatory

   

1,000,000

T181

       

T182

Old Central Warehouse

   

18,000,000

T183

       

T184

Parking Garage #3

   

78,000,000

T185

       

T186

Parking Garage – North

10,000,000

   

T187

       

T188

Parking Garage – South

 

15,000,000

 

T189

       

T190

Pedestrian Spinepath

 

2,556,000

 

T191

       

T192

Pedestrian Walkways

 

3,233,000

 

T193

       

T194

Psychology Building

     

T195

Renovation/Addition

   

20,000,000

T196

       

T197

Residential Life Facilities

   

162,000,000

T198

       

T199

Roadways

 

10,000,000

 

T200

       

T201

School of Business

20,000,000

   

T202

       

T203

School of Pharmacy/

3,856,000

   

T204

Biology

     

T205

       

T206

School of Pharmacy/

     

T207

Biology Completion

 

61,058,000

 

T208

       

T209

Shippee/Buckley

     

T210

Renovations

 

6,156,000

 

T211

       

T212

Social Science K Building

 

20,964,000

 

T213

       

T214

South Campus Complex

13,127,000

   

T215

       

T216

Stamford Campus

     

T217

Improvements/Housing

   

13,000,000

T218

       

T219

Stamford Downtown

     

T220

Relocation – Phase I

45,659,000

   

T221

       

T222

Stamford Downtown

     

T223

Relocation – Phase II

 

17,392,000

 

T224

       

T225

Storrs Hall Addition

   

4,300,000

T226

       

T227

Student Health Services

   

12,000,000

T228

       

T229

Student Union Addition

 

23,000,000

 

T230

       

T231

Support Facility

     

T232

(Architectural and

     

T233

Engineering Services)

   

2,000,000

T234

       

T235

Technology Quadrant –

     

T236

Phase IA

38,000,000

   

T237

       

T238

Technology Quadrant –

     

T239

Phase IB

 

16,611,000

 

T240

       

T241

Technology Quadrant –

     

T242

Phase II

 

72,000,000

 

T243

       

T244

Technology Quadrant –

     

T245

Phase III

 

15,000,000

 

T246

       

T247

Torrey Life Science

     

T248

Renovation

 

17,000,000

 

T249

       

T250

Torrey Renovation

     

T251

Completion and Biology

     

T252

Expansion

   

42,000,000

T253

       

T254

Torrington Campus

     

T255

Improvements

   

1,000,000

T256

       

T257

Towers Renovation

 

17,794,000

 

T258

       

T259

UConn Products Store

   

1,000,000

T260

       

T261

Undergraduate Education

     

T262

Center

650,000

   

T263

       

T264

Undergraduate Education

     

T265

Center

 

7,450,000

 

T266

       

T267

Underground Steam &

     

T268

Water Upgrade

3,500,000

   

T269

       

T270

Underground Steam &

     

T271

Water Upgrade

     

T272

Completion

 

9,000,000

 

T273

       

T274

University Programs

     

T275

Building – Phase I

8,750,000

   

T276

       

T277

University Programs

     

T278

Building – Phase II

     

T279

Visitors Center

 

300,000

 

T280

       

T281

Waring Building

     

T282

Conversion

7,888,000

   

T283

       

T284

Waterbury Downtown

     

T285

Campus

   

3,000,000

T286

       

T287

Waterbury Property

     

T288

Purchase and Grants-in-Aid

AAAAAid

     

T289

to Waterbury for Acquisition

     

T290

Construction, Reconstruction,

     

T291

Renovations/Improvements

325,000

 

7,000,000

T292

       

T293

West Campus Renovations

 

14,897,000

 

T294

       

T295

West Hartford Campus

     

T296

Renovations/

     

T297

Improvements

   

25,000,000

T298

       

T299

White Building Renovation

2,430,000

   

T300

       

T301

Wilbur Cross Building

     

T302

Renovation

 

3,645,000

 

T303

       

T304

Young Building

     

T305

Renovation/Addition

   

17,000,000

T306

       

T307

HEALTH CENTER

     

T308

       

T309

CLAC Renovation

     

T310

Biosafety Level 3 Lab

   

14,000,000

T311

       

T312

Deferred Maintenance/

     

T313

Code/ADA Renovation

     

T314

Sum – Health Center

   

61,000,000

T315

       

T316

Dental School Renovation

   

5,000,000

T317

       

T318

Equipment, Library

     

T319

Collections and

     

T320

Telecommunications –

     

T321

Health Center

   

75,000,000

T322

       

T323

Library/Student Computer

     

T324

Center Renovation

   

5,000,000

T325

       

T326

Main Building Renovation

   

125,000,000

T327

       

T328

Medical School Academic

     

T329

Building Renovation

   

9,000,000

T330

       

T331

Parking Garage – Health

     

T332

Center

   

8,400,000

T333

       

T334

Research Tower

   

60,000,000

T335

       

T336

Support Building

     

T337

Addition/Renovation

   

4,000,000

T338

       

T339

The University of

     

T340

Connecticut

     

T341

Health Center

     

T342

New Construction and

     

T343

Renovation

   

394,900,000

T344

       

T345

Planning and Design Costs

   

25,000,000

T346

       

T347

Total – Storrs and Regional

     

T348

Campus Project List

   

2,583,000,000

T349

       

T350

Total – Health Center

     

T351

Project List

   

786,300,000

T352

       

T353

TOTAL

382,000,000

868,000,000

3,369,300,000

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

New section

Sec. 2

from passage

New section

Sec. 3

from passage

New section

Sec. 4

from passage

New section

Sec. 5

from passage

New section

Sec. 6

from passage

New section

Sec. 7

from passage

New section

Sec. 8

from passage

New section

Sec. 9

from passage

New section

Sec. 10

from passage

32-235

Sec. 11

October 1, 2016

32-39

Sec. 12

October 1, 2016

32-35(h)

Sec. 13

from passage

New section

Sec. 14

from passage

New section

Sec. 15

from passage

New section

Sec. 16

from passage

PA 11-1 of the October Sp. Sess., Sec. 52

Sec. 17

October 1, 2016

32-7g(c)

Sec. 18

from passage

10-395a

Sec. 19

July 1, 2016, and applicable to taxable years commencing on or after January 1, 2016

12-704d

Sec. 20

July 1, 2016, and applicable to taxable years commencing on or after January 1, 2016

New section

Sec. 21

from passage

New section

Sec. 22

October 1, 2016

New section

Sec. 23

from passage

PA 15-1 of the June Sp. Sess., (e) Sec. 13

Sec. 24

from passage

New section

Sec. 25

July 1, 2016

New section

Sec. 26

July 1, 2016

10a-109e(a)

FIN

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

SUMMARY

The bill results in the following impacts enumerated below. Specifically the bill:

The following sections provide further detail on the impacts by topic.

BONDING

The bill reauthorizes and repurposes bond authorizations for various agencies and programs for the new programs created within the bill.

1. Manufacturing Assistance Act

The bill carves out $120 million from the Manufacturing Assistance Act (MAA) for various purposes listed in the table below.

Manufacturing Assistance Act Bond Authorizations

To Agency/Program

Amount

Description

ImpaCT

25,000,000

Innovation District program grants and planning grants

ImpaCT

5,000,000

Innovation Places Grants

ImpaCT

25,000,000

Accelerate CT

Startup CT

60,000,000

Loans

SDE

5,000,000

Grants to technical high schools

TOTAL

120,000,000

 

The current unallocated bond balance for MAA, after the March 24 State Bond Commission meeting, is approximately $114.3 million. An additional $100 million is authorized for FY 17 from PA 15-1 JSS. sSB 11, as voted out of committee, includes a cancellation of $10 million.

Background: The Manufacturing Assistance Act is a multipurpose program administered by DECD which provides different types of financing for businesses and infrastructure development, including the First Five Program. The State Bond Commission allocated $119,478,850 to MAA during FY 15.

2. Connecticut Innovations Recapitalization

The bill carves out $35 million from bond authorizations for the recapitalization of CI for various purposes listed in the table below.

CT Innovations Recapitalization Bond Authorizations

To Agency/Program

Amount

Description

ImpaCT

25,000,000

$5 million per year from FY 17 to FY 21 for purposes of ImpaCT outlined in the bill

ImpaCT

5,000,000

$1 million per year from FY 17 to FY 21 for technology purposes

UConn

5,000,000

$1 million per year from FY 17 to FY 21 for hiring staff for its entrepreneurship program.

TOTAL

35,000,000

 

The current unallocated bond balance for CI's recapitalization , after the March 24 State Bond Commission meeting, is approximately $85 million. sSB 11, as voted out of committee, includes a cancellation of $35 million.

Background: PA 11-1 of the October Special Session, authorized a total of $125 million for grants-in-aid to recapitalize the CI's programs. CI's current venture pipeline alone is over $31 million in order to finish out FY 16 and continue through FY 17. The breakdown of the Equity Pipeline is as follows:

• $10 million for Follow-on Funding for current portfolio,

• $15 million in Equity Pipeline for new companies and

• $6 million in PreSeed Funds.

The State Bond Commission allocated $80 million of the $125 million since 2011 to CI.

3. Connecticut Manufacturing Innovation Fund

The bill carves out $2.75 million from the Connecticut Manufacturing Innovation Fund (MIF) for providing grants under the technology talent program ImpaCT develops.

The current unallocated bond balance of MIF is $29.5 million as of March 24th. sSB 11, as voted out of committee, includes a cancellation of $10 million.

Background: The Manufacturing Innovation Fund, administered by DECD, targets financial assistance to support the growth, innovation, and progress of Connecticut's advanced manufacturing sector. It provides matching grants to manufacturers to assist with purchase of equipment as well as research and development costs. The State Bond Commission allocated $13.5 million to MIF during FY 15.

4. UConn 2000

The bill carves out $7 million from the UConn 2000 authorization to finance a project at the UConn Waterbury campus. The bill subsequently decreases an existing Academic and Research Facilities project from $450 million to $443 million to do so.

IMPACT

Sections 1 – 4, 11 and 12 establishes ImpaCT within CI. The bill provides $5 million in bond authorizations carved out of CI's recapitalization authorization for the purposes of funding the entity and its duties as outlined in the bill.

The bill also establishes various programs to be administered by ImpaCT, including the Innovation District program, Accelerate CT, and Innovation Talent Fund. These programs are also funded by existing bond authorizations carved out under the bill, as listed above.

CONNECTICUT INNOVATION RELOCATION

Section 11 results in a one-time cost of up to $50,000 in moving expenses to CI by requiring the agency to relocate its main office to an innovation district and establish a satellite office in each of the other districts. The agency may also incur potential increases in rent associated with more offices and new locations.

As a quasi-public state agency, CI's funding sources include returns on investment and loans, as well as General Obligation (GO) bonds proceeds from the state, as mentioned above. The identified costs will not be incurred by state-appropriated funds.

VENTURE INVESTMENTS

Section 13 requires CI to enter into venture capital agreements, investment agreements, and other similar agreements. It is anticipated that CI may require additional GO bond funds to support this requirement. Future General Fund debt service costs may be incurred sooner under the bill to the degree that the bill causes authorized GO bond funds to be expended more rapidly than they otherwise would have been. 

STARTUP ENTREPRENEUR MENTORSHIP NETWORK

Section 15 requires DECD to establish a mentorship network for entrepreneurs and provide training for businesses seeking to participate in the network. There is a potential cost of up to $50,000 to DECD to create the network and provide training supports to participants. The cost will depend upon the level of training and outreach needed to prepare businesses for roles as mentors.

The bill also allows DECD to forgive a portion of any state assistance received by certain businesses if they are participating in the network. This may impact repayments that may otherwise be used for future projects.

Such assistance is typically funded by GO bond funds. Future General Fund debt service costs may be incurred sooner under the bill to the degree that the bill causes authorized GO bond funds to be expended more rapidly than they otherwise would have been. 

PRIORITY SMALL BUSINESS EXPRESS

Section 17 allows DECD to give priority for financial assistance in the Small Business Express program to businesses located in innovation districts. There is no anticipated fiscal impact.

STATEWIDE MARKETING ACCOUNT

Section 18 expands the Statewide Marketing account, a General Fund appropriated account, to include innovation and entrepreneurship.

sHB 5044, the revised FY 17 budget bill, as favorably reported by the Appropriations Committee, appropriates $8 million to the account in FY 17.

ANGEL INVESTOR TAX CREDIT

Section 19 extends the Angel Investor Tax credit program through July 1, 2019 and makes the credits transferable, which results in a $3 million revenue loss annually from FY 17 through FY 19.

STARTUP CT

Section 20 establishes a tax credit for certain investments made through the Startup CT program under the bill. This results in an aggregate revenue loss of $60 million in the out years; it is anticipated that revenue loss will occur no earlier than FY 20 and will not exceed $30 million in any given fiscal year.

KNOWLEDGE ENTERPRISE ZONES

Section 22 allows DECD to establish up to ten knowledge enterprise zones. These zones receive the same benefits as those located in general enterprise zones.

This may result in a significant annual revenue loss from the corporation tax and the real estate conveyance tax beginning as early as FY 17. The revenue loss could be off-set by additional tax revenue from the creation of new or the expansion of existing businesses to the extent that these financial incentives result in economic development that otherwise would not have occurred.

There is a potential grand list reduction to municipalities with knowledge enterprise zones beginning as early as FY 18 due to multiple five-year property tax breaks for which certain businesses located in enterprise zones are eligible. Such grand list reductions result in a loss of property tax revenue, given a constant mill rate. Towns will be partially reimbursed for the revenue loss relating to this provision via the Distressed Municipalities grant program administered by the Office of Policy and Management. Correspondingly, this increases the cost of fully funding the Distressed Municipalities grant program.  As the grant is subject to proration, if the grant is not fully funded, then an increase in grant funding to towns with knowledge enterprise zones will result in a decrease in funding to other towns that receive Distressed Municipalities funding.

UCONN WATERBURY CAMPUS

Section 25 of the bill results in a future cost to the University of Connecticut in excess of $150,000 per year and an equal revenue gain to the city of Waterbury as it requires the university to lease property from Waterbury as part of a downtown campus.  The university currently leases a smaller property in downtown Waterbury for $150,000 per year. 

The Out Years

State Impact: See Above

Municipal Impact: See Above

OLR Bill Analysis

sSB 1

AN ACT CONCERNING INNOVATION, ENTREPRENEURSHIP AND CONNECTICUT'S ECONOMIC FUTURE.

SUMMARY:

This bill establishes a number of mechanisms to stimulate and support innovation and entrepreneurship in Connecticut.

It establishes within Connecticut Innovations, Inc. (CI) a new entity called “ImpaCT” to support the entrepreneurship community and new business development in Connecticut ( 1-4). It gives ImpaCT a number of broad and innovation-specific powers and duties and creates a board of directors to carry them out. ImpaCT must develop and administer a number of programs to promote, among other things, university-based entrepreneurship, including a technology transfer office and a website to connect entrepreneurs to existing resources in the state. The bill funds ImpaCT and its programs by earmarking $87.75 million in existing Manufacturing Assistance Act (MAA), CI, and Manufacturing Innovation Fund bond authorizations ( 10, 16 & 23).

The bill creates an Innovation District program to designate districts in compact geographic areas having innovation and entrepreneurial potential. These areas, among other things, must have access to public transit and be anchored by significant institutions (e.g., higher education institutions and major corporations). ImpaCT selects the districts through a competitive process and provides grants to develop them ( 5-9).

The bill also establishes a number of new programs to provide businesses, particularly new and young businesses, with financial and technical assistance. These programs include the following:

The bill creates the following initiatives to develop entrepreneurs and other talent in technology-based industries: (1) the “Innovation Talent Fund,” administered by ImpaCT, to provide grants to programs intended to increase technology talent in the state ( 24) and (2) a mentorship network to connect certain entrepreneurs to qualified mentors ( 15).

In addition to the programs above, the bill provides funding from existing bond authorizations for (1) UConn's entrepreneurship programs, (2) grants to technical high schools to expand skilled trade training programs, and (3) a grant to Waterbury for its UConn campus ( 10, 16, 25 & 26).

The bill also makes a number of changes to existing programs and laws by doing the following, among other things:

EFFECTIVE DATE: Upon passage, unless otherwise noted below.

1-4, 11 & 12 — IMPACT

The bill establishes ImpaCT, a new entity within CI. CI is a quasi-public agency subject to the statutory procedural, operating, and reporting requirements for quasi-public agencies. The bill, however, does not specify (1) the type of entity ImpaCT is (e.g., subsidiary or department) or (2) with one exception, its relationship to CI. Consequently, it is unclear if certain government administration laws that generally apply to quasi-public agencies (e.g., employee indemnification and compliance audits by the auditors of public accounts) apply to ImpaCT. For the purpose of these laws, CI subsidiaries are deemed quasi-public agencies under existing law, but it is not clear if ImpaCT is a CI subsidiary (CGS 32-11e (c)).

Under the bill, ImpaCT must:

ImpaCT continues as long as it has outstanding obligations and until it is legally terminated. Termination does not affect any of its outstanding contractual obligations. Upon termination, (1) the state succeeds to ImpaCT's obligations under any contract, and (2) ImpaCT's rights and properties pass to and vest in CI.

ImpaCT is not subject to state collective bargaining laws.

ImpaCT Board (1)

ImpaCT is governed by a seven-member board of directors, most of whom must be serial entrepreneurs. (Although the bill does not explicitly define the term, "serial entrepreneur," it presumably refers to someone who has created and developed more than one business or product.)

Board members must have education or experience in at least one of the following areas:

Appointment and Length of Terms. Three members of the board serve initial four-year terms, and four members serve initial two-year terms. The chairs of the Finance, Revenue and Bonding Committee jointly appoint two of the members serving initial four-year terms; the governor appoints the third such member. The House speaker, Senate president pro tempore, and House and Senate minority leaders each appoint one member to serve an initial two-year term. Successor members, appointed by the original appointing authorities, serve four-year terms.

Board members are eligible for reappointment, and the original appointing authority fills any vacancy for the balance of an unexpired term. The appointing authority may remove, for misfeasance, malfeasance, or willful neglect of duty, any member it appoints.

Reimbursement and Conflicts of Interest. Board members are reimbursed for the actual and necessary expenses they incur performing their official duties. They are public officials and may engage in private employment or in a profession or business, subject to applicable state laws, rules, and regulations on ethics and conflict of interest.

It does not constitute a conflict of interest for a trustee, director, partner, or officer of any person, firm, or corporation or any individual with a financial interest in a person, firm, or corporation to serve on the board, provided such trustee, director, partner, officer, or individual complies with the State Code of Ethics. Among other things, this means that members must abstain from taking official action on a matter if they have a substantial conflict of interest.

By law, directors, officers, and employees of quasi-public agencies, including CI and their subsidiaries, are generally not personally liable for the debts, obligations, or liabilities of the agency, and such agencies must generally protect, save harmless, and indemnify them from financial loss and expense arising from claims against the agency (CGS 1-125 and 32-11e (e)). It is unclear whether these provisions apply to ImpaCT's directors, officers, and employees.

Officers, Meetings, and Quorum. The board must designate its chairperson from among its members. Initial appointments to the board must be made by July 1, 2016, and CI's chief executive officer must schedule the board's first meeting, which must be held by July 15, 2016.

Five members of the board constitute a quorum to transact business and exercise any power. Except as the bill provides otherwise, the board may act by a majority of the members present at any meeting at which there is a quorum. A board member may not, in his or her absence, designate a representative to perform his or her official duties under the bill (e.g., entering into contracts or promoting technology-based development).

Executive Director. The chairperson, with board approval, must appoint an executive director to supervise ImpaCT's administrative affairs and technical activities as the board directs. The executive director is an ImpaCT employee and receives a salary set by the board.

ImpaCT Powers and Duties ( 2, 11 & 12)

General Administrative Powers. The bill gives ImpaCT many of the general powers and duties of state quasi-public agencies. It specifically allows ImpaCT to do the following:

Powers and Duties Specific to Innovation and Entrepreneurship. The bill also grants broad powers and duties to ImpaCT that it needs to fulfill its purpose. ImpaCT may do the following:

The other powers and duties the bill assigns to ImpaCT are narrower. ImpaCT may do the following:

The bill reassigns the following CI powers to ImpaCT:

Under the bill, ImpaCT, instead of CI, must coordinate the development and implementation of strategies regarding technology-based talent and innovation among state and quasi-public agencies. This includes creating and administering the Connecticut Small Business Innovation Research Office to provide information and technical assistance to businesses seeking to participate in the federal small business research and development programs. The bill makes a conforming change requiring CI to fund ImpaCT's operation of the office.

The bill also requires the ImpaCT board to perform some of the advisory responsibilities that the law currently assigns to CI. Specifically, ImpaCT must advise several state officials on science, engineering, and technology matters that may affect (1) state policies, programs, employers, and residents and (2) the state's efforts to create and retain jobs. Those officials are the governor, legislators, the economic and community development commissioner, and the Board of Regents for Higher Education president.

EFFECTIVE DATE: The provisions eliminating CI's ability to exercise the powers and duties the bill reassigns to ImpaCT are effective October 1, 2016.

Specific Powers and Duties Given to the ImpaCT Board. The bill requires the board to make recommendations regarding the designation of innovation districts (see 5-9). It must also do several things to promote university-based entrepreneurship and innovation, including the following:

Statewide Technology Transfer Office. ImpaCT must also establish a statewide technology transfer office to encourage faculty and students to find commercial applications for university research and perform other specified tasks. The statewide technology transfer office must do the following:

Informational Website. The board must also (1) create an informational Internet website (also called “ImpaCT”) that offers information and services of value to entrepreneurs and (2) publicize the website and other workshops, seminars, and conferences ImpaCT offers. (In practice, CI maintains a website called CTNext that provides similar information.) The website must:

Marketing. The board must also annually develop, update, and implement a strategic statewide plan for promoting Connecticut as a hub for innovation and entrepreneurship. ImpaCT's executive director must report on the plan to the Commerce and Finance, Revenue and Bonding committees by January 1, 2017 and annually thereafter.

ImpaCT Written Policies and Procedures ( 3)

ImpaCT's board must adopt written procedures, according to the laws that quasi-public agencies follow, for the following:

ImpaCT Fund ( 4)

The bill establishes the ImpaCT Fund as a nonlapsing fund outside the General Fund and requires CI to administer it. The fund must contain any money the law requires and any contributions, gifts, grants, donations, bequests, or devises from any public or private source.

CI may invest the fund's money in any institution it chooses, and these institutions must invest or pay that money as CI directs. CI may tap the fund, with approval by the ImpaCT board, for (1) grants to fund ImpaCT programs, specifically innovation districts, innovation places, and business accelerators; (2) technology transfer purposes; and (3) other ImpaCT purposes as the bill specifies.

Under the bill, the ImpaCT's board must approve individual and budgeted expenditures under the conditions it established when it approved the budget.

CI must administer the fund, providing any staff, office space, office systems, and administrative support needed to operate it. CI can do so by using all of its statutory powers but must obtain the board's approval before it can spend funds.

Starting January 1, 2017, CI must annually prepare an operations plan and capital budget for the fund and submit it to the board for review and approval at least 90 days before the fiscal year begins.

Starting April 15, 2017, CI must also submit an annual report on the fund's activities to the board for review and approval. The report must provide available information on fund's status and operations, including information on the grants it awarded. After the board approves the report, it must submit the report to the Commerce and Finance, Revenue and Bonding committees.

5-9 — INNOVATION DISTRICT PROGRAM

The bill establishes, within ImpaCT, an innovation district program to foster innovation and entrepreneurship in compact, mixed use geographic areas with “anchor institutions” and access to public transit. Under the bill, an “anchor institution” is an entity having a significant and stable presence in the community, including an institution of higher education, hospital, major corporation, research institution, or existing business incubator or accelerator. “Public transit” means the New Haven rail line (including the Danbury, Waterbury, and New Canaan branch lines), the Shore Line East rail line, the New Haven Hartford Springfield rail line, and the New Britain to Hartford busway and any planned expansion of such busway.

Under the bill, entities such as corporations, associations, nonprofit organizations, municipalities, and institutions of higher education may submit applications for the designation of an innovation district. The bill (1) establishes eligibility and selection criteria and (2) specifies the information an application must include. Among other things, an application must outline a plan for developing the district and leveraging private investment. Designated districts are eligible for grants for initial development costs. Additionally, “innovation places” are eligible for grants, if they serve the program's purposes.

Applications are due by September 1, 2016. By January 1, 2017, the ImpaCT board must recommend applications for approval to ImpaCT's executive director.

The bill requires ImpaCT's executive director to report by July 1, 2017 and annually for three years thereafter to the Commerce and Finance, Revenue and Bonding committees on the operation and effectiveness of the innovation district program and grants distributed under it.

Program's Purposes

Under the bill, the purpose of the innovation district program is to do the following:

Applying for Innovation District Designation

The bill requires the ImpaCT board to screen all submitted applications and select several finalists. It specifies the required application contents and the criteria by which the board must judge them.

The bill requires the ImpaCT board to publicize and post on its website the deadline (September 1, 2016) by which entities must submit an application for innovation district designation. (This requirement applies on passage, but ImpaCT does not yet have a website.) The bill also requires DECD to publicize and post on its website, by June 1, 2016, the (1) application deadline and (2) portion of the bill setting forth definitions related to the innovation district program, the program's purposes, and the application and review process.

Application Contents. Applicants must submit an application on a board-prescribed form and include with it information on the proposed innovation district, including (1) a plan for its development (“district plan,” see below), (2) a list of municipal and state legislative action that may be required to execute such plan, and (3) information concerning the capability of the applicant and its partners to implement and administer the plan and how such partners will be involved in the decision-making process.

The application must also include information on the following topics:

The application must also include a letters of support from (1) private investors and (2) the chief elected official of the affected municipality. The latter letter must include a statement that the municipality's legislative body has, by majority vote, indicated its support for the proposed district and for any municipal legislative action recommended in the district plan. A chief elected official may submit a letter of support for only one proposed district in his or her municipality.

District Plan. As noted above, the application must include a district plan outlining the applicant's plans for developing the district. The plan must include a proposal for connecting the district to public transit via rail or bus and leveraging private investment. It must also establish a proposed budget and timeline for spending grant money awarded by the ImpaCT board. The budget must indicate spending priorities, should grants be insufficient to cover the entire proposed budget.

Applicants may include in their submitted plan letters of support from community members and plans for the following initiatives:

Application Review

The ImpaCT board must review and evaluate applications and recommend to the executive director by January 1, 2017 which should be approved, if any. The board must select from the applicants a limited number of finalists.

Minimum Requirements. The bill prohibits the board from recommending an application for approval unless the following occurs:

Other Criteria. In determining whether to recommend an application for approval, the ImpaCT board must consider whether the entities partnering together to implement and administer the proposed district plan are of the quality to, and have demonstrated the commitment to, implement and administer the district plan in a manner sufficient to achieve program's purposes. The board must give preference to applicants with diverse partners (including anchor institutions) and partnerships with entities located within the proposed district.

The board must generally consider whether the plan is sufficient to achieve the program's purposes and specifically consider whether the plan leverages private investment and includes the following:

The board must also consider whether the (1) district will be self-sustaining after it expends any ImpaCT grants and (2) district's underlying zoning provides for, or will be amended to provide for, dwellings with reduced square footage.

The bill authorizes the board to consider any other criteria it determines is relevant for evaluating whether the proposed district will achieve the program's purposes.

Finalists. The ImpaCT board must conduct a site walk of each finalist's proposed district and hold a public hearing on each finalist's application in the affected municipality. The board's chairperson must give at least 10 days' notice of the hearing. The notice must include the hearing's time and place and be posted (1) in a conspicuous place in or near the town clerk's office and (2) on the municipality's website. (It appears that some municipalities lack a website.)

At the public hearing, the applicant must present its proposal, and the public must be given an opportunity to comment. Applicants may revise their applications based on public hearing comments.

Application Approval

ImpaCT's executive director must approve any recommended application unless he or she determines that good cause exists, and is supported by substantial evidence, to reject such recommendation on the grounds that the proposed district fails to comply with the program's purposes.

The board may condition its recommendation on modifications agreed to by the applicant.

Grants to Innovation Districts and Innovation Places

Innovation Districts. Entities designated as innovation districts are eligible for grants for expenses (1) outlined in their application, (2) associated with application modifications suggested by the board, and (3) related to financial audits of grant spending. The grant amounts are determined by the ImpaCT board; it submits grant recommendations to the executive director at the same time that it submits applications recommended for approval. The executive director must award grants in the amounts recommended by the board.

Before awarding a grant, the executive director must enter into an agreement with the grantee (1) concerning allowable grant expenses (i.e., those recommended by the board) and (2) requiring an annual financial audit of grant expenditures prepared by an independent auditor. The executive director must also confirm that a significant portion of the underlying zoning of the proposed district allows for mixed-use development.

If a grantee uses grants for expenses other than those specified in the agreement, the executive director may require the grantee to repay the misused amounts.

Innovation Places. The bill requires the ImpaCT board to develop a program for making grants to “innovation places,” which are places (1) in municipalities connected to an innovation district by transit, labor market patterns, or some other relationship; (2) with entrepreneurial and innovation potential; and (3) located in a compact geographic area of high density land use within a walkable commercial and residential center.

In developing this program, the board must establish a process for applying for and approving grants and criteria for grant approval. Grants may only be provided to innovation places that serve the same purposes as innovation districts.

10, 16, 23, 25 & 26 — EARMARKED BOND FUNDS

Bonds for ImpaCT's Programs and Purposes

As shown in Table 1, the bill earmarks $87.75 million from existing bond authorizations to fund ImpaCTs programs and purposes.

Table 1: Bonds Earmarked for ImpaCT's Purposes

Existing Authorization

Total Amount

To

Purpose

10

MAA

$25,000,000

ImpaCT Fund

Innovation District program grants and planning grants

10

MAA

5,000,000

ImpaCT Fund

Innovation Places Grants

10

MAA

25,000,000

ImpaCT Fund

Accelerate CT

16

CI

25,000,000

ImpaCT Fund

ImpaCT's general purposes1

16

CI

5,000,000

ImpaCT Fund

Technology Transfer Program2

23

Manufacturing Innovation Fund

2,750,000

Innovation Talent Fund (see 24)

Providing grants under the technology talent program ImpaCT develops

1Under the bill, $5 million per year in each FY 17 to 21 must be deposited into the ImpaCT fund for these purposes.

2Under the bill, $1 million per year in each FY 17 to 21 must be deposited into the ImpaCT fund for these purposes.

Bonds for Other Purposes

As shown in Table 2, the bill earmarks $77 million from existing bond authorizations for other purposes.

Table 2: Bonds Earmarked for Other Purposes

Existing Authorization

Total Amount

To

Purpose

10

MAA

$60,000,000

Startup CT1

Startup CT Loans (see 20)

10

MAA

5,000,000

State Department of Education (SDE)

Grants to technical high schools (see below)

16

CI

5,000,000

UConn

UConn's Entrepreneurship programs (see below)

25 & 26

UConn 2000, Phase III

7,000,000

City of Waterbury

UConn Waterbury Campus (see below)

1Presumably, this means to CI for the purposes of the Startup CT program.

Grants to Technical High Schools. Under the bill, the bond funds the State Department of Education (SDE) receives for technical high school grants must be used to provide evening training programs in the skilled trades, including, but not limited to, manufacturing, masonry, electrical, plumbing, and carpentry trades. The purpose of any program that receives grants must be to prepare participants for earning a credential or degree recognized by employers or trade associations, as applicable.

UConn Entrepreneurship Programs. Under the bill, UConn receives $1 million per year in each FY 17 to 21, for a total of $5 million, in order to hire staff for its entrepreneurship program. UConn may only receive the money if it (1) provides matching funds and (2) establishes a partnership with a designated innovation district in which UConn agrees to establish a branch campus in the district for programs that related to the district's specialty. It is unclear whether UConn could receive funds in the event that the ImpaCT board does not designate any innovation districts.

Grant to Waterbury for UConn Branch Campus. The bill adds a new $7 million project to Phase III of the UConn 2000 infrastructure improvement program and reduces the cost of another project by the same amount. Specifically, it adds this funding to an existing Waterbury property purchase project and expands it to include grants to Waterbury for acquisition, construction, reconstruction, renovations, or improvements. It decreases an existing Academic and Research Facilities project from $450 million to $443 million.

The bill also specifies that the proceeds of any bond issuance, up to the total amount of bonds authorized under UConn 2000, must be used to provide grants to the city of Waterbury, administered by the Department of Administrative Services, to acquire, construct, reconstruct, renovate, and improve real property in the city to be leased to UConn as part of its downtown Waterbury campus. Presumably, this provision refers to a bond issuance for the $7 million grant to Waterbury described above.

EFFECTIVE DATE: The provisions providing bond funds for a grant to Waterbury are effective July 1, 2016.

11, 13 & 14 — CI CHANGES

Relocation of CI to Innovation District ( 11)

The bill requires CI to relocate, by January 1, 2018, its main office to an innovation district designated under the bill and establish a satellite office each of the other designated districts.

EFFECTIVE DATE: October 1, 2016

Venture Investments ( 13)

The bill requires CI to enter into venture capital agreements, investment agreements, and other similar agreements with one or more private investor partners. By law, CI invests in people and businesses in Connecticut that research, develop, or apply specific technologies, procedures, services, and techniques. In exchange, CI receives rights to products or inventions, a share of the proceeds from their sale, or equity in the businesses that make the products or provide the services. The equity can be in the form of common and preferred stocks (CGS 32-39 (2)). CI makes these investments by entering into venture agreements with a person or business.

Performance Audit ( 14)

The bill requires CI to have an independent accounting or management consulting firm conduct a performance audit of its operation and submit it to an unspecified party by December 1, 2016. The audit must make recommendations concerning the following:

The audit must also analyze (1) CI performance based on performance measures ImpaCT's board recommends and (2) private investment firms' compensation policies. The analysis of the compensation policies must include recommendations for a compensation policy that will maximize the performance of CI's employees in way that allows CI to achieve its public purposes.

15 — START-UP ENTREPRENEUR MENTORSHIP PROGRAM

The bill requires the DECD commissioner to (1) establish a mentorship network connecting start-up entrepreneurs in technology-based ventures with qualified mentors and (2) provide training to businesses seeking to participate in the network. Eligible start-up ventures include those in the cybersecurity, data science, and software development areas.

The bill allows the commissioner to forgive a portion of state assistance provided to a technology-based business according to a formula she must develop that bases the forgiveness on the number of hours the business spends mentoring a start-up entrepreneur.

17 — PRIORITY SMALL BUSINESS EXPRESS (EXP) PROGRAM

DECD's EXP program provides grants, loans, and other forms of financial assistance to eligible businesses with fewer than 100 employees. The bill allows the commissioner to give priority to businesses located in designated innovation districts. Current law requires her to give priority to businesses that create jobs and allows her to give priority to businesses that sell most of their products or services to customers located outside Connecticut (i.e., economic base businesses) or attempt to export them to foreign markets.

EFFECTIVE DATE: October 1, 2016

18 — FUNDING FOR THE STATEWIDE INNOVATION AND ENTREPRENEURSHIP MARKETING PLAN

The bill provides a source to fund the strategic statewide innovation and entrepreneurship marketing plan that ImpaCT's board must prepare. It requires the funds deposited in the existing statewide tourism marketing account to be used for this purpose and renames the account the “statewide tourism, innovation and entrepreneurship account.” By law, the account must contain any funds appropriated to it, and any year-end fund balances must be carried forward to the next fiscal year.

19 — ANGEL INVESTOR TAX CREDIT

The bill extends the sunset date for the angel investor tax credit by three years, from July 1, 2016 to July 1, 2019, and allows taxpayers to sell, assign, or transfer all or part of the credit to other taxpayers.

The credits, which are available through CI, apply against the personal income tax and equal 25% of the amount taxpayers invest in technology-based businesses, up to $250,000.

EFFECTIVE DATE: July 1, 2016 and applicable to taxable years beginning on or after January 1, 2016

20 — STARTUP CT

The bill creates a venture loan program called “Startup CT” in order to increase the amount of preseed and seed financing in the state. By law, “preseed financing” means financial aid provided for research and formulation of a concept, and “seed financing” means financial aid to an inventor or entrepreneur to assess the viability of a concept and to qualify for start-up financing (CGS 32-34).

Under the bill, CI must certify up to six entities as “start-up funds” and may provide up to $60 million in forgivable loans to the entities, as long as one start-up fund invests exclusively in intellectual property and start-ups developed by UConn students and faculty researchers. (It appears that, in order to comply with the bill, the first entity CI approves as a start-up fund must invest exclusively in UConn start-ups and intellectual property.) The loans are contingent on the start-up funds raising matching capital. Under the bill, CI also allocates tax credits to approved start-up funds, which provide them to people and businesses that invest in their fund. These credits are capped at $60 million overall.

CI must develop guidelines for certifying businesses as eligible for investments from a start-up fund. The guidelines must require that the business be (1) principally located in or willing to relocate to Connecticut and (2) in the early stages of development. Before a start-up fund invests in a business, CI must certify that the business is eligible according to the guidelines.

Start-up Fund Approval

Beginning September 1, 2016, entities may apply to CI, in a form CI prescribes, for approval as a start-up fund. The applications must include the following:

Within 30 days of receipt, CI must review and consider each application for approval as a start-up fund. If CI has not approved six start-up funds by October 15, 2016, approved start-up funds may submit applications for additional loans.

Loan and Tax Credit Agreement. Upon approving an entity as a start-up fund, CI must (1) enter into a loan agreement with the fund and (2) allocate tax credits to the fund, if applicable. The loan agreement must (1) provide up to a $10 million loan, conditioned on the start-up securing at least $20 million in private capital, and (2) include the economic goals the start-up fund must achieve to be granted loan forgiveness.

Loan Issuance and Forgiveness

Under the bill, start-up funds must collect $20 million in private capital within 60 days of receiving approval for a CI loan. (Presumably, “receiving approval for a loan” refers to entering into a loan agreement with CI.) Within 65 days of the approval, the start-up fund must send CI sufficient documentation to prove it has collected the required private capital. After receiving the documentation, CI must make the loan to the start-up fund.

By December 31st of the year containing the fifth anniversary of the closing date of the loan, the start-up fund must provide a state revenue impact assessment prepared by a nationally-recognized third-party independent economic forecasting firm using a dynamic economic forecasting model that analyzes the economic impact of the start-up fund's investments. The impacts analyzed must include, but are not limited to, jobs created or retained by the investments. CI must forgive all or part of the loan when the start-up fund achieves the economic development goals agreed to in the loan agreement.

Tax Credits

The bill creates a tax credit, applicable against the corporation business and insurance premium taxes, for investing in a start-up fund. The credit amount equals 50% of the investment. Half of the credit may be claimed in each of the third and fourth years after making the investment. Under the bill, the credit (1) is earned and vested when a person or business invests in the start-up fund and (2) may be sold, assigned, or otherwise transferred, in whole or in part.

Under the bill, these credits are subject to recapture if a start-up fund fails to invest $30 million within a certain time period. It is unclear whether this time period is four or five years. If a start-up fund does not invest the required amount, CI must notify the start-up fund's officers, in writing, of the potential recapture 90 days before the recapture. CI must recapture the credits unless it waives the deficiency or the start-up fund corrects the deficiency within 90 days.

EFFECTIVE DATE: July 1, 2016, and applicable to taxable years beginning on or after January 1, 2016.

21 — ACCELERATE CT

The bill establishes, within ImpaCT, the Accelerate CT program to provide grants to qualified business accelerators. The grants may be up to $400,000 and must be dispersed over two years. The bill does not define “business accelerator”, but it is generally understood to mean an organization that provides a variety of support services, with or without office space, to help later-stage start-ups grow.

Under the bill, accelerators may use the grants for (1) overhead and operation expenses related to the accelerator, including, but not limited to, up to two years of lease payments, information technology infrastructure, and management personnel costs and (2) providing financial assistance to growth stage businesses using the accelerator. For the purposes of the Accelerate CT program, a “growth stage company” is one who has, as determined by the accelerator, $500,000 to $5,000,000 in revenue; at least one intern; defendable intellectual property; strong management; and proven sales.

ImpaCT must establish, for Accelerate CT grants, an application process, an approval process, and approval criteria. The criteria must consider, but is not limited to, (1) the sufficiency of matching private capital, (2) the accelerator's location, (3) investment team expertise, (4) network capacity, and (5) the number of growth stage companies committed to using the accelerator.

22 — KNOWLEDGE CENTER ENTERPRISE ZONES

The bill authorizes the DECD commissioner to establish up to 10 knowledge center enterprise zones in the state based on proposals submitted by higher education institutions.

Proposing and Approving Zones

Under the bill, a higher education institution may submit a proposal to DECD to establish a knowledge center enterprise zone, which must include the following components:

The bill authorizes the DECD commissioner to approve a zone if she determines that (1) its economic development benefits outweigh the anticipated costs to the state and affected municipalities and (2) the proposal complies with the State Plan of Conservation and Development. She may modify the proposed zone's geographic scope to improve the balance between its anticipated economic benefit and cost to the state and affected municipalities.

Zone Benefits

Under the bill, businesses located in knowledge center enterprise zones receive the same benefits, subject to the same conditions, as those located in general enterprise zones.

By law, benefits given to businesses in enterprise zones include the following:

Performance Assessment

The bill requires the DECD commissioner to assess each zone's performance within 10 years of its establishment. It authorizes her to remove a zone's designation if it fails to meet the established goals and standards outlined in regulations.

Regulations

The bill requires the DECD commissioner to adopt regulations to implement the knowledge center enterprise zone program, including regulations on (1) reviewing and approving proposals, (2) establishing zone goals and performance standards, and (3) assessing their performance.

EFFECTIVE DATE: October 1, 2016

23 & 24 — INNOVATION TALENT FUND

Purpose

The bill establishes an “Innovation Talent Fund” to provide grants for increasing the development talent in the software technology and other unspecified technology fields. It requires ImpaCT to administer grants, presumably allowing it to determine grant amounts and eligible uses and recipients.

Fund Administration

The bill establishes the fund as a nonlapsing fund outside the General Fund and capitalizes it with (1) $2.75 million in bonds authorized for DECD's Connecticut Manufacturing Innovation Fund; (2) any other funds the law requires or allows to be deposited in the fund; and (3) public or private contributions, gifts, grants, donations, bequests, or devises made to the fund.

Although CI administers the ImpaCT fund, ImpaCT must hold and administer the Innovation Talent Fund, which includes investing and dispersing its money. ImpaCT may deposit the fund's money in an institution for investment as ImpaCT directs. Any returns on these investments must remain with the fund and be used for its benefit. ImpaCT may use the fund only to make grants for developing technology talent.

ImpaCT must provide staff, office space, office systems and administrative support needed to operate the fund and may do so by using all of its authorized powers. But it cannot spend funds without its board's approval.

Beginning January 1, 2017, ImpaCT must prepare the fund's annual operations plan and operations and capital budget and submit it to the board of directors for its review and approval at least 90 days before the fiscal year begins.

Grant Administration

ImpaCT must initially award grants for increasing talent in the software technology field and then may award them for increasing talent in other technology fields. ImpaCT's board of directors must approve each expenditure from the fund, including budgeted expenditures subject to any variations the board allows.

Annual Report

Starting in 2017, ImpaCT must submit an annual report to the board on the fund's activities by April 15 annually. After the board approves the report, the board must submit it to the Commerce and Finance, Revenue and Bonding committees. The report must contain any available information on the fund's status and progress, including the types and amount of grants ImpaCT awarded and the grant recipients.

BACKGROUND

Related Bill

sHB 5592 (File 610), favorably reported by the Finance, Revenue and Bonding Committee, suspends the angel investor tax credit program in FY 17 and restarts it in FY 18 with no sunset date.

SB 383 (File 385), favorably reported by the Education Committee, requires the technical high school system's superintendent to create a manufacturing training for incumbent workers pilot program at one of the technical high schools after regular school hours.

COMMITTEE ACTION

Finance, Revenue and Bonding Committee

Joint Favorable Substitute

Yea

51

Nay

0

(04/07/2016)

TOP