Promoting Innovation and Entrepreneurship
Connecticut state lawmakers spent a considerable amount of time during the 2016 General Assembly session focusing on innovation and entrepreneurship.
The legislature’s Commerce Committee began by discussing bills to encourage and assist entrepreneurs and opportunities when higher education institutions work with businesses which can spur growth.
The Finance, Revenue, and Bonding Committee looked at ecosystems for entrepreneurs and funding opportunities.
In the end, several measures were adopted in an effort to build an innovation ecosystem in Connecticut.
All of the measures listed below were approved by the legislature.
SB 502, Sections 1-31 and 35, (formerly SB 1) is a massive effort to create an innovation ecosystem in Connecticut.
This measure combines a variety of different ideas encouraging greater innovative activity in Connecticut, attempting to better link entrepreneurs with higher education and funding opportunities.
Instead of creating the different entities (ImpaCT and Startup CT) as originally proposed, the measure builds upon the existing CTNext.
It requires Connecticut Innovations, Inc. to make CTNext a subsidiary of CI, and substantially expands its mission and responsibilities.
With the changes, CTNext’s primary goal is to encourage innovation and assist entrepreneurs and startup and growth-stage businesses.
CTNext is supposed to do this by “serving as a catalyst for Connecticut’s innovation ecosystem” (Bill Analysis for SB 502, Office of Legislative Research).
They are charged with, in part, building entrepreneurial communities, connecting entrepreneurs and growth-stage companies with each other as well as public and private resources.
They are also supposed to help with the creation of innovation places as well as innovation and entrepreneurship at colleges and universities in Connecticut.
With the changes, CTNext's primary goal is to encourage innovation and assist entrepreneurs and startups.
It also permits CI to enter into certain partnership agreements or other contracts with investment funds and allows Connecticut residents to invest in certain funds too.
The measure also extends the angel tax credit for an additional three years. This is an effort to make more private sector dollars available to entrepreneurs and grow Connecticut’s innovation community.
The bill creates advisory boards, attempts to place CI and CTNext staff in entrepreneurial communities, and better connect with schools.
This effort is funded by reallocating $90 million of prior authorized bonds, primarily from CI and the Manufacturing Assistance Act.
Small Business Express Program
SB 502, Section 16, adds to the list of priority businesses where the state’s Small Business Express Program is concerned any company located in a CTNext designated “innovation place.”
First Five Plus Program
SB 502, Section 18 (formerly HB 5573) expands the First Five Plus program.
The Department of Economic and Community Development may fund up to five additional (20 total) projects and the program is extended by three years to June 30, 2019.
The changes to the First Five Plus program also include the commissioner being permitted to give preference to projects where jobs, in the innovation, invention and research fields, are relocated to Connecticut.
Knowledge Center Enterprise Zones
SB 502, Section 24, (formerly SB 307) allows the DECD commissioner to create up to 10 “knowledge center” enterprise zones within the state's designated distressed municipalities. The zone requests must be submitted by higher education institutions.
The higher education institutions proposals must include specified information regarding types of business that will be in the zone, the institution fit with the businesses they’re seeking, municipal revenue that might be lost, jobs that will be created, and more.
There are also factors specified in the measure which the commissioner must consider when making the decision to create the requested enterprise zones.
The commissioner does have the authority to change the proposed zone's geographic range to improve the balance between expected economic advantage and financial impact on the affected municipalities and state.
Knowledge center enterprise zones will have the same business benefits that regular enterprise zones have and businesses will be subject to the same conditions.
Under the measure DECD, is required to adopt regulations on review and approval of proposals, identifying standards and goals for the zone, and evaluating zone performance.
Commission on Economic Competitiveness
SB 502, Sections 20-21, makes changes to the Commission on Economic Competitiveness, adding 10 additional members, making it a 23 member commission.
The 10 new individuals include the chairs and ranking members of the legislature’s Finance and Commerce committees, the chairperson of CTNext (or designee), and a gubernatorial appointment.
The measure also expands CEC’s responsibilities considerably by assigning it a new task called Connecticut 500 Project.
The purpose of the project, in part, is to develop a plan that over the next 25 years will result in significant new economic activity in the state.
The goals of the project include increasing the state's population and drastically increasing net new job growth, helping to establish certain startup businesses, moving Connecticut into the top five in certain national state rankings, and maintaining our top five rankings in other categories.
To accomplish this, CEC is charged with creating the project’s governing board (made up of business, state, and community leaders) that will be responsible for implementing the plan.
The CEC is also required to solicit bids from consultants with expertise in economic development to develop the plan for the project. This must be done by January 1, 2017.
Another measure allows CI to invest in private investment equity funds.
SB 401 expands eligibility for funds from the Connecticut Bioscience Innovation Fund and expands how the returns on such funds can be invested.
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