As lawmakers plan for another special session this summer, economic development officials are hoping two key pieces of legislation that surprisingly died on the last day the legislative session get a do over.
Two separate bills proposing to expand eligibility of the state’s new Small Business Express program and permit a merger between Connecticut Innovations and the Connecticut Development Authority were thought to have had bipartisan support.
But neither pieces of legislation were voted on in both the House and Senate, even as steps were already being taken in preparation for their passage.
Officials from CI and CDA, for example, have already put in months of planning for how a combined entity would operate to stimulate the state’s efforts to finance business development.
But political gamesmanship and a May 9 midnight deadline put a kibosh on those efforts for now.
“We are disappointed it didn’t get done,” said Catherine Smith, the commissioner of the state Department of Economic and Community Development. “There didn’t seem to be any opposition. The bills got caught up in the last few days of a busy session.”
Smith, a proponent of both proposals, said she will continue to push for the measures and she hopes they can somehow be included in a special session that is planned for this summer.
Adam Joseph, a spokesman for the Senate Democrats, said no date has been finalized for a special session but it could take place sometime in June.
No agenda has been set either, but the main focus will be passing measures needed to implement the next state budget.
Senate Democrats, who did actually pass the expansion of the Small Business Express program, plan to bring up the bill during the special session, Joseph said, where they will likely still have the votes to pass it.
Meanwhile, Democratic House Speaker Christopher Donovan, who was seen as the major force preventing the passage of the bill, known as Senate Bill 1, said he supports the measure that “along with an increase to the minimum wage will be part of a special session bill.”
But just because both the House and Senate Democrats say they support the measure doesn’t guarantee its passage.
In the waning days of the recent legislative session, Donovan was at odds with Senate Democratic leaders over the passage of a bill that would raise the state’s minimum wage by 50 cents over the next two years. When the Senate Democratic leadership failed to garner enough votes to pass the increase, S.B. 1 was held hostage in the House. The clock eventually struck midnight on both measures.
It appears Donovan still plans to tie the fate of both bills together, at least for now. And that could complicate their passage.
Business lobbyists pushed hard against a minimum wage increase, arguing it could lead to job cuts and reduction in hours for workers. But they favored Senate Bill 1, which expanded on many of the measures passed during the special October jobs session in 2011, including the Small Business Express and Step-Up programs.
Currently, small businesses with 50 or fewer employees may qualify for the programs, but S.B. 1 would redefine small businesses as companies with 100 or fewer employees.
The Small Business Express program is providing $100 million in loans, forgivable loans or matching grants to employers to grow jobs or purchase equipment, while the Step-Up program has set aside $20 million to subsidize training and employment for the unemployed, veterans and the disabled.
The proposed law would also change the loan terms of the Small Business Express program, extending the repayment period from five to 10 years. Lenders involved in the program have raised concerns that the five-year payback period was too short for many small businesses.
Other measures in S.B. 1 include the creation of a “Made in Connecticut” label campaign that would promote products manufactured by in-state companies. Another program in the bill would designate locations in the state with cultural, historical, or educational significance as “Connecticut Treasures,” to be promoted by the state.
The CI-CDA merger, meanwhile, was a key piece of legislation being touted by Smith, the state’s economic development director.
The combined entity would have paired an equity investment firm with a traditional bank lender to create a one-stop quasi-public agency responsible for investing in economic development initiatives.
The merger is part of Smith’s efforts to create a much bigger role for CI, which is getting a $125 million cash injection over the next five years to help spur more start-up companies. The organization also has a new CEO, Claire Leonardi, whose main task was to oversee the merger.
The benefits of aligning both organizations, Smith said, is that each has tools in its tool box that can benefit the other agency’s customers. CI places equity investments in start-ups while CDA guarantees bank loans.
Sources say the CI-CDA merger bill could also be included in the special session, but there are no guarantees.
“We’ve done some planning already and are ready to move forward with it,” Smith said.
