Support for Entrepreneurs, Manufacturers Included in Connecticut Jobs Package

Building on several of the new programs enacted during the regular legislative session (see the June 15, 2011 issue of the Digest), Gov. Dan Malloy last week signed into law HB 6801, a comprehensive legislative package that authorizes $626 million in bonds to support efforts aimed at job creation. The bill has several components to support high-tech entrepreneurship, workforce development, and incentivize manufacturers and small businesses.

To encourage more early stage investment in startup, technology-based businesses, the bill reduces the minimum cash investment to qualify for the angel investor income tax credit from $100,000 to $25,000. Aggregate new credits are limited to $6 million per year in FY12-13 and $3 million in FY14.

Connecticut Innovations, a quasi-public organization supporting high-tech industries in the state, is recapitalized with $125 million over five years under the bill. Of that amount, $15 million is reserved for the existing preeseed financing program, which provides capital and support services to businesses developing new concepts.

In support of workforce training for new economy jobs, three community colleges will be chosen and receive up to $20 million in bonds to establish or enhance manufacturing technology programs. Colleges selected must demonstrate a commitment to precision manufacturing and the ability to expand such programs through space and faculty.

The bill also doubles the limit, from 50 to 100, on the number of small manufacturing companies eligible to participate in the Manufacturing Reinvestment Account (MRA) program and doubles from $50,000 to $100,000 the maximum annual amount a company may deposit in an MRA. This program allows small manufacturers to deposit a percentage of their gross domestic receipts to save for training, developing or expanding their workforce, or for purchasing machinery, equipment or facilities.

The First Five program, established last legislative session, is expanded under the bill to allow the Department of Economic and Community Development (DECD) commissioner to provide state assistance to up to five additional business development projects in FY12. Under the program, companies must create at least 200 new jobs within two years or invest at least $25 million and create at least 200 new jobs within five years.

Other components of the bill include the creation of a Small Business Express program and Subsidized Training and Employment Program (STEP). Under the small business express program, the Department of Economic and Community Development will provide loans, forgivable loans or matching grants up to $250,000 to Connecticut-based small business and small manufacturers.