State lawmakers this week overrode Governor Malloy's veto of a measure designed to ease the regulatory burden on small businesses.

Both the House and the Senate overrode the veto of SB 302 (Public Act 16-32), which requires state agencies to analyze the impact of proposed regulations.

Agencies must answer a variety of questions concerning the types of businesses (with fewer than 250 employees or gross annual sales under $5 million) that will be impacted by regulations and the extent of that impact.

The Senate voted unanimously to override the Governor's veto, while the House approved it 106-5.

Representatives James Albis (D- East Haven), Angel Arce (D-Hartford), Mike D'Agostino (D-Hamden), Matt Lesser (D-Middletown), and Peter Tercyak (D-New Britain) voted against the override.

The bill passed both chambers of the General Assembly unanimously during the 2016 legislative session.

In his May 31 veto message, the Governor said that while he supported the bill's intent, its requirements would "place an undue burden on our agencies."

Greater Transparency

Eric Brown, CBIA’s lead attorney on regulatory matters, applauded the General Assembly's veto override, saying the bill provides greater regulatory transparency.

"State agencies, policymakers, and the public will gain a better understanding of how proposed regulations will impact small businesses before final approval," he said.

"This is how Massachusetts and Rhode Island already do it, so Connecticut will join them in this regulatory transparency."

Connecticut will now join Massachusetts and Rhode Island in this regulatory transparency.
SB 302 requires that analysis of proposed regulations "articulate the scope and objectives of the proposed regulation, identify the types of businesses potentially affected, and the extent to which the agency communicated with small businesses in developing the proposed regulation."

Those assessments—which must be shared prior to any public hearing—also must address requirements such as reporting, recordkeeping, training, auditing, inspections, and the hiring of lawyers, accountants, engineers, auditors, or inspectors.

Other Overrides Fail

Connecticut state lawmakers failed to override the Governor's veto of three other bills impacting the state's business climate and economy.

The House voted 114-2 to override the veto of HB 5636, which modified how the manufacturing apprenticeship tax credit for pass-through entities could be applied.

Current law permits these primarily small and midsize employers to earn the credit, but they are not permitted to claim it against their personal income taxes, which is how such entities pay their business income tax.

HB 5636 would have allowed these small and midsize employers to apply the credit directly against their personal income tax instead of requiring them to sell it to a C corporation.

However, the Senate failed to act on the bill—which both chambers approved unanimously during the regular session—in the veto session.

The Senate also failed to act on HB 5261 after the House voted 101-15 to override the Governor's veto.

That bill clarified that coaches and referees who work for athletic programs, but not public school districts, were independent contractors and exempt from certain employer-employee rules.

The measure did permit operators of athletic programs and individuals to mutually agree, in writing, to enter into an employer-employee relationship.

That bill had overwhelming bipartisan support during the 2016 session.

Neither chamber acted on the Governor's veto of HB 5425, which created brownfields land banks to help non-profits and financial institutions acquire, remediate, and sell environmentally tainted property.

HB 5425 also had broad bipartisan support during the regular session.


For more information about environmental and regulatory issues, contact CBIA’s Eric Brown (860.244.1926) | @CBIAericb

For more information about labor and employment issues, contact CBIA’s Eric Gjede (860.244.1931) | @egjede

For more information about tax issues, contact CBIA’s Bonnie Stewart (860.970.44944.878804) | @CBIAbonnie