Last fall’s Jobs Session gave Connecticut businesses an array of new tools to help them create jobs and drive economic recovery; this week’s special session expanded on and added to those programs.
After House leadership failed to call the comprehensive "jobs bill" (SB 1) for a vote at the end of the 2012 regular session, some legislators vowed to have the proposals in it return in the June budget-implementation session.
This week lawmakers adopted HB 6001, which expands eligibility for the state's Small Business Express and STEP UP programs. Originally open to employers with fewer than 50 employees, the programs will now expand to businesses with up to 100 employees.
The Express program, administered by the Department of Economic and Community Development (DECD), provides revolving loans and new-hire grants and tax credits. Available loans under the program have been modified to extend the repayment period from five to 10 years and the maximum job incentive loan has been increased to $300,000.
The Department of Labor’s STEP UP program – which subsidizes training and salary expenses for new hires – will now be offered to employers creating permanent, non-seasonal retail jobs and to businesses that are based in other states so long as they have operations in Connecticut.
The legislation further creates special incentives for the hiring and training of unemployed combat veterans returning from Iraq and Afghanistan.
Also approved were:
- Expansion of the Governor’s “First Five Plus” economic incentive package to allow the Commissioner of DECD to give award preference to creators of at least 200 jobs that “in-source” by relocating overseas jobs to Connecticut.
- Establishment of a program at UConn to assist small and midsize companies with research and development, and measures designed to promote tourism and Connecticut manufactured goods.
Manufacturing Reinvestment Account (MRA)
HB 6001 also addresses a detail about the state’s new Manufacturing Reinvestment Account (MRA), part of last year’s jobs bill, that has hindered the program’s use. The MRA is a commonsense program that encourages businesses to invest funds in expanding their operations in Connecticut. It allows small manufacturers (50 or fewer employees) to defer tax payments for up to five yearson funds that will be used to invest in machinery, equipment, facilities, or workforce training.
When the funds are withdrawn for an eligible use, a flat 3.5% tax will be assessed irrespective of the company’s organization as a C-Corp or pass-through entity.
New language clarifies that interest earned on account deposits does not count against the annual yearly maximum contribution.
The Connecticut Development Authority (CDA) will merge into Connecticut Innovations Inc. (CI) as part of the new legislation.
These two quasi-public economic development agencies make and guarantee business loans, provide financing for business and infrastructure projects, and invest venture capital in early stage technology-based businesses. The merger is intended to make the operations of the programs covered by CDA and CI more efficient and effective.
These steps will help Connecticut employers as they seek to maintain or expand capacity as the economy struggles to gain momentum.