Connecticut Seal

General Assembly

File No. 464

    February Session, 2018

Substitute Senate Bill No. 262

Senate, April 12, 2018

The Committee on Commerce reported through SEN. HARTLEY, J. of the 15th Dist. and SEN. FRANTZ, L. of the 36th Dist., Chairpersons of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING CERTAIN REPORTING REQUIREMENTS OF THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT.

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

Section 1. Section 32-1m of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) Not later than February first, annually, the Commissioner of Economic and Community Development shall submit a report to the Governor, the Auditors of Public Accounts and the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, finance, revenue and bonding and commerce, in accordance with the provisions of section 11-4a. Not later than thirty days after submission of the report, said commissioner shall post the report on the Department of Economic and Community Development's web site. Such report shall include, but not be limited to, the following information with regard to the activities of the Department of Economic and Community Development, [and to business assistance or] business assistance programs administered by Connecticut Innovations, Incorporated and tax incentive programs not administered by the department, during the preceding state fiscal year:

(1) A brief description and assessment of the state's economy during such year, utilizing the most recent and reasonably available data, and including:

(A) Connecticut employment by industry;

(B) Connecticut and national average unemployment; and

(C) Connecticut gross state product, by industry.

(2) An analysis of the economic development portfolio of the department, including, but not limited to, each business assistance or incentive program, including any business tax credit or abatement program, grant, loan, forgivable loan or other form of assistance, enacted for the purpose of improving economic development. The analysis shall include:

(A) The Internet web site address of the state's open data portal and an indication of where the name, address and location of each recipient of the department's assistance is published on the site along with the following information concerning each recipient: (i) Business activities, (ii) standard industrial classification codes or North American industrial classification codes, (iii) whether the recipient is a minority or woman-owned business, (iv) a summary of the terms and conditions for the assistance, including the type and amount of state financial assistance and job creation or retention requirements, (v) the amount of investments from private and other nonstate sources that have been leveraged by the assistance, and (vi) the amount of state investment;

(B) A portfolio analysis, including an analysis of the wages paid by recipients of financial assistance by industry;

(C) An investment analysis, including (i) total portfolio value, (ii) total investment by industry, (iii) portfolio dollar per job average, (iv) portfolio leverage ratio;

(D) An overview of the business assistance and incentive programs administered by the department and an analysis of their estimated economic impact on the state's economy. The analysis shall include, for each business assistance or incentive program for which such data is available, the number of new jobs created, the borrowing cost to the state and the estimated impact of such program on annual state revenues;

(E) An analysis of whether the statutory and programmatic goals of each business or incentive program are being met, with obstacles to such goals identified, if possible;

(F) (i) Recommendations as to whether any existing business assistance or incentive program should be continued, modified or repealed and the basis or bases for such recommendations, and (ii) any recommendations for additional data collection by the state to better inform future evaluations of such programs; and

(G) The methodologies and assumptions used in carrying out the analyses under this subdivision.

(3) An analysis of the community development portfolio of the department, including:

(A) The Internet web site address of the state's open data portal and an indication of where the name, address and location of each recipient of the department's assistance is published on the site along with the following information concerning each recipient: (i) Amount of state investment, (ii) a summary of the terms and conditions for the department's assistance, including the type and amount of state financial assistance, and (iii) the amount of investments from private and other nonstate sources that have been leveraged by such assistance; and

(B) An investment analysis, including (i) total active portfolio value, (ii) total investments made in the preceding state fiscal year, and (iii) total portfolio leverage ratio.

(4) An analysis of each business assistance [or incentive program, including any business tax credit or abatement program, grant, loan, forgivable loan or other form of assistance,] program administered by Connecticut Innovations, Incorporated and each tax incentive program enacted for the purpose of improving economic development [, that (A) (i)] and not administered by the department that (A) had ten or more recipients of assistance in the preceding state fiscal year, or [(ii)] (B) credited, abated or distributed more than one million dollars in the preceding state fiscal year. [, and (B) is not administered by the department.] The analysis shall include:

(i) An overview of the business assistance or tax incentive program and an analysis of its estimated economic effects on the state's economy; [, including, for each program where such data is available, the number of new jobs created and the estimated impact of such program on annual state revenues;]

(ii) An analysis of whether the statutory and programmatic goals of each business assistance or tax incentive program are being met, with obstacles to such goals identified, if possible;

(iii) Recommendations as to whether any such existing business assistance or tax incentive program should be continued, modified or repealed and the basis or bases for such recommendations, and any recommendations for additional data collection by the state to better inform future evaluations of such programs; and

(iv) The methodologies and assumptions used in carrying out the analysis under this subdivision.

(5) A summary of the department's international trade efforts in the preceding state fiscal year, and, to the extent possible, a summary of foreign direct investment that occurred in the state in such year.

(6) A summary of the total social and economic impact of the department's efforts and activities in the areas of economic and community development, and an assessment of the department's performance in terms of meeting its stated goals and objectives.

(7) With regard to the Small Business Express program established pursuant to section 32-7g, data on (A) the number of small businesses that applied to the Small Business Express program, (B) the number of small businesses that received assistance under said program and the general categories of such businesses, (C) the amounts and types of assistance provided, (D) the total number of jobs on the date of application and the number proposed to be created or retained, and (E) the most recent employment figures of the small businesses receiving assistance.

(8) With regard to airport development zones established pursuant to section 32-75d, a summary of the economic and cost benefits of each zone and any recommended revisions to any such zones.

(9) An overview of the department's activities related to tourism, the arts and historic preservation.

(10) An overview of the department's activities concerning digital media, motion pictures and related production activity, and an analysis of the use of the film production tax credit established under section 12-217jj, the entertainment industry infrastructure tax credit established under section 12-217kk and the digital animation production tax credit established under section 12-217ll, including the amount of any tax credit issued under said sections and the total amount of production expenses or costs incurred in the state by the taxpayer who was issued such a tax credit.

(11) A summary of the department's and the office of the permit ombudsman's brownfield-related efforts and activities in the preceding fiscal year.

(12) A summary of the department's dry cleaning establishment remediation account activities in the preceding fiscal year.

(b) Any annual report that is required from the department by any provision of the general statutes shall be incorporated into the annual report submitted pursuant to subsection (a) of this section.

(c) [On or before March 1, 2018, and annually thereafter] Not later than sixty days after the submission of a report by the Auditors of Public Accounts pursuant to section 2-90c, the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, finance, revenue and bonding and commerce shall hold, individually or jointly, one or more public hearings on such report and the analyses included in the annual report under subdivisions [(3)] (2) and [(5)] (4) of subsection (a) of this section.

Sec. 2. Section 10-425 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) The Commissioner of Economic and Community Development shall establish a Sports Advisory Board within the department that shall advise the commissioner on the most effective ways to utilize state resources to promote, attract and market in-state professional and amateur sports and sporting events. Said board shall also advise the commissioner on ways to coordinate the use of state-owned facilities in order to enhance sports-related tourism in the state and develop methods for the dissemination of information concerning in-state professional and amateur sports and sporting events to residents of the state and the northeast.

(b) Said advisory board shall consist of one member from each of the following entities: (1) The University of Connecticut's Athletic Department; (2) the Connecticut State University System's Athletic Department; (3) the XL Center; (4) Northland AEG; (5) the Traveler's Championship Golf Tournament; (6) the Pilot Pen Tennis Tournament; (7) the Special Olympics; (8) the Mohegan Sun Arena; (9) Foxwoods Resort Casino; (10) Lime Rock Park Race Track; (11) the Arena at Harbor Yard; (12) New Britain Stadium; (13) the Connecticut Marine Trades Association; (14) the Office of Policy and Management; (15) the Culture and Tourism Advisory Committee; (16) the Capital Region Development Authority; (17) the Nutmeg State Games; (18) the Connecticut Interscholastic Athletic Conference; (19) Fairfield University; (20) Quinnipiac University; (21) Sacred Heart University; (22) any other entity involved in sports or sporting events that the commissioner deems appropriate; (23) the Connecticut State Golf Association; and (24) Dodd Stadium.

(c) The first meeting of the Sports Advisory Board shall convene not later than November 15, 2008, and the advisory board shall meet not less than once per calendar quarter thereafter. The advisory board shall provide any recommendations of the advisory board to the commissioner not later than thirty days after any such meeting.

(d) The members of the advisory board may select a chairperson from among its membership who shall be responsible for the scheduling and conducting of any such meeting.

(e) The Department of Economic and Community Development shall provide staff support to the board.

[(f) Not later than thirty days prior to each regular session of the General Assembly, the Commissioner of Economic and Community Development shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to commerce that includes information on the status of the Sports Advisory Board's activities, the implementation of any recommendations of said advisory board and any legislative proposals related to such recommendations.]

Sec. 3. Section 31-362d of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

For purposes of sections [31-362b] 31-362c to 31-362f, inclusive, as amended by this act:

(1) "Commissioner" means the Commissioner of Economic and Community Development, and

(2) "Minijob" means a job with a maximum work week of twenty-five hours per week.

Sec. 4. Section 31-362e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

The commissioner shall: [in addition to the responsibilities prescribed by section 31-362b:]

(1) Develop a plan to implement the minijob concept;

(2) Coordinate and implement the minijob development plan, including the provision of those general support facilities considered by the commissioner to be necessary, desirable or appropriate in carrying out the provisions of the minijob implementation plan;

(3) Provide for the education and training of persons in order to match such persons with available jobs;

(4) Provide for utilization of private employers for implementation of some or all of the requirements of the minijob development plan.

Sec. 5. Section 31-362f of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

The commission shall institute a pilot minijob program in a limited area and shall report to the 1977 session of the General Assembly on or before February 1, 1977, with respect, thereto, including in such report any recommendations for legislation to further the purposes of sections [31-362b] 31-362c to 31-362f, inclusive, as amended by this act.

Sec. 6. Section 31-362b of the general statutes is repealed. (Effective October 1, 2018)

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

Section 1

October 1, 2018

32-1m

Sec. 2

October 1, 2018

10-425

Sec. 3

October 1, 2018

31-362d

Sec. 4

October 1, 2018

31-362e

Sec. 5

October 1, 2018

31-362f

Sec. 6

October 1, 2018

Repealer section

CE

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:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Department of Economic & Community Development

GF - Potential Savings

Minimal

Minimal

Various State Agencies

GF - Potential Cost

Less than $1,000

Less than $1,000

Note: GF=General Fund

Municipal Impact: None

Explanation

DECD Reporting Requirements

The bill is not anticipated to result in a fiscal impact by modifying and eliminating certain reporting requirements of the Department of Economic and Community Development (DECD). Section 1 of the bill limits the types of business programs that DECD must report on while Sections 2 - 6 eliminate obsolete reports. It is anticipated that these provisions will result potential minimal savings by streamlining the number of items that DECD must analyze and report.

Legislative Hearings

Section 1 of the bill also changes the timing and basis of hearings several committees must hold on economic development programs. In the event that a committee meeting occurs when the legislature is not in session, there may be a cost of less than $1,000 in FY 15 to those agencies participating to reimburse legislators and agency staff for mileage expenses.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

sSB 262

AN ACT CONCERNING CERTAIN REPORTING REQUIREMENTS OF THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT.

SUMMARY

This bill reduces the Department of Economic and Community Development's (DECD) reporting requirements. It limits the types of business assistance programs DECD must include in the report and reduces the analysis of the tax incentive programs it must also include in the report. The bill also eliminates the requirement that DECD submit separate annual reports on the Sports Advisory Board's activities and the state's workforce needs.

Lastly, the bill changes the timing and basis of the hearings several committees must hold on economic development programs.

EFFECTIVE DATE: October 1, 2018

DECD REPORTING

Business Assistance Programs

Current law requires DECD to (1) analyze all state business assistance programs, including those administered by other agencies and (2) include its findings in its annual legislative report. The bill instead requires DECD to report only on those programs it and Connecticut Innovations, Inc.'s, the state's quasi-public venture capital agency, administer.

Tax Incentive Programs

Current law requires DECD to analyze state tax incentive programs, including those administered by other agencies, based on the total value of the credits they awarded or the number of recipients, and include the results in the annual report. The bill eliminates a requirement that, if the data is available, for the analysis to include the number of new jobs the programs created and estimates of how they affected state revenues.

Sports Advisory Board

The bill eliminates the requirement that DECD annually report to the Commerce Committee on the Sports Advisory Board's activities, which include advising the DECD commissioner about how to promote the state's sports industry. Under current law, DECD must submit the report no later than 30 days before each regular session begins. The board includes state officials and representatives of specified organizations that sponsor or conduct sporting events.

Annual Workforce Needs Assessment

The bill eliminates the requirement that the DECD commissioner annually assess and report to the legislature and governor on the state's workforce needs by February 15. Under current law, as part of this assessment, she must:

LEGISLATIVE HEARINGS

The bill changes the timeframe and expands the basis for the hearings the Appropriations; Commerce; and Finance, Revenue, and Bonding committees must hold on economic development programs. It requires these committees to hold the hearings within 60 days of receiving an auditors' economic development program report, which the auditors must prepare each time they audit DECD. Under current law, the committees must hold hearings by March 1.

The bill also modifies the hearings' purpose. Under current law, the hearings must address those sections of DECD's annual report that analyze DECD's community development portfolio and summarize the department's efforts to promote international trade and the foreign direct investment that occurred in Connecticut during the year. The bill instead requires hearings to address those sections that analyze DECD's economic development portfolio, CI's business assistance programs, and other agencies' tax incentive programs.

The bill also requires the hearings to address the auditors' report on economic development programs. The report must present the results of the statutorily required (1) performance review of the state's tax incentive programs and (2) evaluation of the accuracy of the annual reports DECD submitted to the legislature since the auditors' last departmental audit.

BACKGROUND

Related Bill

HB 5438, favorably reported by the Commerce Committee, makes a conforming change to require that the auditors' evaluation of DECD's annual reports include the analyses of DECD's business assistance programs and other agencies' tax incentive programs, rather than DECD's community development portfolio and summary of the department's international trade.

COMMITTEE ACTION

Commerce Committee

Joint Favorable Substitute

Yea

15

Nay

5

(03/27/2018)

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