(a) An Employment Incentive Revolving Fund is hereby created. In order to encourage business expansion and location in distressed municipalities, the state, acting through the Department of Economic and Community Development may make working capital loans to any industrial business organization in a distressed municipality which has or is reasonably expected to create new employment in the municipality. The business organization will be considered to have created new employment in such municipality if the number of persons employed by such business organization as a result of such loan has increased or is expected to increase by more than five. Working capital loans under this section shall not exceed seventy-five thousand dollars in amount nor ten years in term for any single loan and shall not be made unless the borrower receives concurrently with such loan another working capital loan from a private financial institution or local development corporation, as defined in Sections 501, 502 and 503 of the Small Business Investment Act, Public Law 699, as amended, in an amount at least equal to the amount of the working capital loan made by the state. Such working capital loans made by the state or by a private financial institution may be either secured or unsecured. Any business organization receiving a working capital loan from the state under this section shall demonstrate to the satisfaction of the Commissioner of Economic and Community Development that the availability of such loan was an important factor in the decision of such business organization to locate or expand in such distressed municipality.

(b) The state, acting through the Commissioner of Economic and Community Development, may make loans under this section to any nonprofit state or local development corporation. The purposes of such loans shall include, but not be limited to, working capital, start-ups and fixed assets. Such loans shall not exceed in the aggregate five hundred thousand dollars.

(c) The Commissioner of Economic and Community Development shall charge and collect interest on each loan extended by the state under this section at a rate not in excess of one per cent above the rate of interest borne by the bonds of the state last issued prior to the date such loan is made. Payments of principal and interest on such loans paid to the Treasurer for deposit in the Employment Incentive Revolving Fund shall be transferred to the Connecticut Growth Fund established under section 32-23v.

(d) The Commissioner of Economic and Community Development shall adopt regulations in accordance with chapter 54 to carry out the provisions of this section. Such regulations shall establish loan procedures, repayment terms, security requirements, default and remedy provisions and such other terms and conditions as said commissioner shall deem appropriate.

(e) For the purposes of this section the State Bond Commission shall have power from time to time to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate five hundred thousand dollars. All provisions of section 3-20 and the exercise of any right or power granted thereby which is not inconsistent with the provisions of this section, are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section. Temporary notes in anticipation of the money to be derived from the sale of any bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization, which is signed by the Secretary of the Office of Policy and Management or by or on behalf of such state officer, department or agency and stating such terms and conditions as said commission, in its discretion, may require. Bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due. Accordingly, and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

(P.A. 78-357, S. 2, 5, 16; P.A. 79-521; P.A. 82-434, S. 5, 6; P.A. 83-580, S. 4, 8; P.A. 86-107, S. 6, 19; P.A. 88-265, S. 33, 36; P.A. 95-250, S. 1; P.A. 96-211, S. 1, 5, 6.)

History: P.A. 79-521 inserted new Subsec. (b) re loans to nonprofit state or local development corporations, relettering former Subsecs. (b) to (d) accordingly and deleted “working capital” where referring to loans under Subsec. (c), formerly (b); P.A. 82-434 amended Subsec. (a) to delete the necessity of a physical expansion in order to be eligible for a loan; P.A. 83-580 provided for the transfer of outstanding assets and liabilities of fund to the small contractors and manufacturers revolving loan fund in Subsec. (c) and reduced bond authorization in Subsec. (e) from $1,00,000 to $500,000; P.A. 86-107 removed reference to the state treasurer as trustee of the fund; P.A. 88-265 substituted Connecticut growth fund for small contractors and manufacturers revolving loan fund in Subsec. (c); P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development.