March 14, 2016
Reporter's Notebook

State wants more leeway to dole out gov’t aid

Catherine Smith is the commissioner of the state Department of Economic & Community Development.

Two state entities that provide low-interest loans, financial assistance and equity investments to Connecticut companies are asking lawmakers to give them more autonomy to make bigger deals without legislative signoffs.

The Department of Economic & Community Development (DECD) and the quasi-public venture capital lender Connecticut Innovations have again asked the legislature to allow them to award larger assistance packages without requiring review by the legislature's Finance, Revenue and Bonding Committee. A similar 2014 bill died in that committee. It had opposition from the Foundation for Fair Contracting of Connecticut, a nonprofit that aims to increase transparency of state-funded construction projects.

This year's proposed bill would allow DECD to provide up to $40 million in Urban and Industrial Sites Reinvestment (UISR) tax credits to a company without getting legislative approval. That would double the current $20 million exemption threshold.

DECD is also asking lawmakers to increase the legislative approval exemption threshold on financial assistance provided to businesses through the state's Manufacturing Assistance Act (MMA) from $10 million to $20 million.

The MAA, created in 1990, is funded by general obligation bonds and is DECD's flagship program for economic loans and grants, while the UISR, created in 2000, provides state tax credits to incentivize investment in urban centers and economically distressed areas.

DECD Commissioner Catherine Smith argued in testimony that the current financial thresholds are outdated and put her agency at a disadvantage to counterparts in some other states, which have wider discretion.

Smith said it would make Connecticut more competitive if the legislature eliminates the caps altogether.

CI CEO Matthew McCooe said legislative oversight can slow down deals, which can be particularly damaging when negotiating with biotech companies.

– Matt Pilon

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