This year’s General Assembly addressed some of the issues impacting Connecticut’s business climate and economy, with lawmakers ultimately taking some good steps and making some missteps.
Positive actions—including creation of a state port authority, providing help for manufacturers, boosting the state’s aerospace industry, and others—were offset by legislators adopting yet another healthcare tax, again increasing the minimum wage, and putting in motion plans for a sweeping new workplace mandate.
Connecticut has tremendous assets and the potential to be one of the best states in the country to live and do business, but still faces real barriers to economic growth.
National rankings that claim we have a poor business climate, and the actual factors contributing to those rankings, are in fact holding us back. As a result we're not creating opportunities for people like we should.
The good news is, several new state laws going into effect on Oct. 1 are aimed at improving different aspects of Connecticut’s economy and business climate. While most are modest improvements, the new laws will be steps in the right direction.
Connecticut Port Authority
Many believe that there is an enormous economic potential in the state’s seaports and PA 14-222 (HB 5289) will create a quasi public state port authority to address that promise.
Businesses supported the measure throughout the legislative process because it could widen the flow of commerce to the state, open new markets to local businesses, and make Connecticut more competitive.
Connecticut should be seen as a place that encourages entrepreneurs and new types of businesses, and two new laws in October aim to help accomplish that goal.
Many investors today are interested in running both a successful business and accomplishing some positive societal or environmental goal.
Under part of the state budget bill, PA 14-217 (HB 5597), investors will be use a business model called a benefit corporation to form new companies in Connecticut.
Benefit corporations won’t receive tax or other legal advantages over companies organized under other corporate forms, but will be required to identify and fulfill their societal mission.
Another way to increase business startups in Connecticut is to nurture them in their beginning stages.
Under Special Act 14-16 (HB 5516), the Department of Economic and Community Development (DECD) will study the innovative “kitchen incubator” programs in New York, New Jersey, and Vermont that are providing funding and resources to entrepreneurs in the food business.
DECD will report its findings back to the legislature’s Commerce and Higher Education Committees by Jan. 1, 2015.
Connecticut already has made significant investments in developing bioscience and biotechnology businesses.
Under PA 14-217 (HB 5597), the Department of Economic and Community Development will use existing resources to implement a program to support the development of bioscience and biotechnology specifically in southeastern Connecticut, including:
- Conducting outreach to entrepreneurs in southeastern Connecticut
- Creating a marketing plan for southeastern Connecticut
- Convening a 15-person working group of southeastern Connecticut business and community leaders (to include Connecticut Innovations, Connecticut United for Research Excellence, the Southeastern Connecticut Enterprise Region, the Chamber of Commerce of Eastern Connecticut, and other organizations with expertise in the region)
Note: If you are interested in getting involved in this effort, you can contact the Executive Director of Business Development at the DECD–Jacob Galloza: firstname.lastname@example.org | 860.270.8045.
<p> Regulation Reform
One new law—PA 14-187 (HB-5049)—makes numerous changes to Connecticut’s regulatory adoption process that are designed to complement the state’s new eRegulations System.
The eRegulations System will transform much of the current paperwork processes to an electronically based system. Among other things, the new law will:
- Require agencies, when publishing a notice of a proposed regulation, to include a detailed description along with the proposed regulation, and provide a specified comment period of at least 30 days.
- Require agencies to post a notice, after the close of the public comment period and before submitting the regulation to the attorney general, stating whether they have decided to move forward with a proposed regulation
- Require the Secretary of State to post regulations on the eRegulations System 10 days after their submission by an agency, and maintain a electronic compilation of state regulations updated at least monthly
- Expand the official regulation-making record to include any documents created, received, or considered by an agency during the process, including the attorney general’s approval
New Energy Protections
Electricity consumers get sweeping new protections, through the state Public Utility Regulatory Authority (PURA), to help minimize any unfair or deceptive trade practices.
Among other things, PA 14-75 (SB 2) sets up new rules for electric contracts and bars rate increases for the first three billing cycles of new supplier contracts.
Manufacturers of certain consumer products will face expanded energy-efficiency certification requirements under PA 14-94 (SB 357), in particular whether their products are in compliance with Connecticut or California efficiency standards.
The law also requires any new construction or renovation of state buildings, new construction that uses significant state funding, or a major renovation of a public school facility to comply with new state energy regulations (rather than LEED or U.S. Green Building Council or Green Globes USA standards, as in current law).
State-Funded Growth Projects
Under PA 14-139 (HB 5056), the threshold at which certain state agency capital projects and grant authorizations are considered growth-related and must be undertaken in designated priority funding areas is raised from $100,000 to $200,000.
Currently, the State Plan of Conservation and Development is required to identify these areas, and state agencies, departments, or institutions are prohibited from providing funding for growth-related projects outside of the areas.
By raising this threshold, the law aligns it with the threshold for state agency actions that must be consistent with the State Plan of Conservation and Development.
Financial Services and Corporate Law
PA 14-89 (HB 5353) makes several changes to Connecticut mortgage and banking laws. It also calls for the creation of a 17-member Commission on Connecticut’s Leadership in Corporation and Business Law that will recommend legislation and other changes to help establish Connecticut as a leading and highly desirable location to organize a business entity.