PA 10-190—sHB 5498

Commerce Committee

Appropriations Committee

AN ACT CONCERNING STATE CONTRACTS FOR MICRO BUSINESSES, UTILITY DEPOSITS FOR CONNECTICUT BUSINESSES, THE SET ASIDE OF DEPARTMENT OF TRANSPORTATION CONTRACTS FOR SMALL BUSINESSES, GRANTS FOR REGIONAL REVOLVING LOAN PROGRAMS FOR MICROENTERPRISES, AND THE ISSUANCE OF ELIGIBILITY CERTIFICATES FOR CERTAIN ECONOMIC DEVELOPMENT PROGRAMS

SUMMARY: This act provides several forms of assistance to smaller businesses. It:

1. requires Public Works Department (DPW) selection panels to consider whether a consulting business has annual gross revenues under $3 million in deciding which consultants are pre-qualified to work on projects;

2. prohibits a utility company, other than a telephone company, from requiring nonresidential customers to pay a deposit greater than the amount the company charges for 1. 5 months of service;

3. requires the Public Utility Control Department (DPUC) to study utilities' use of service deposits from nonresidential customers;

4. permits the Transportation Department (DOT) to set aside contracts or portions of contracts for very small businesses;

5. opens participation in the microloan program to regional revolving loan funds; and

6. allows the Department of Economic and Community Development (DECD) commissioner to use the North American Industrial Classification Code designations in place of those in the older Standard Industrial Classification Code when issuing eligibility certificates for tax credits and exemptions and grants under the Job Incentive Grant and Urban, Enterprise Zone, and Industrial Site Reinvestment programs.

EFFECTIVE DATE: July 1, 2010, except for the provisions related to utilities, the microloan program, and the North American Industrial Classification Code, which take effect on passage.

DPW CONSULTANT SELECTION

By law, the DPW commissioner can establish a selection panel to review and recommend the most qualified consultants to provide services on certain state construction and Connecticut Health and Education Facilities Authority projects. Consultants are architects, professional engineers, landscape architects, surveyors, accountants, interior designers, environmental professionals, construction administrators, planners, and financial specialists.

The act requires the selection panel to consider whether a business is a “micro business,” that is, a business that had less than $3 million in gross revenues in the most recently completed fiscal year. The panel must already consider a consultant's knowledge of state building and fire codes.

UTILITY DEPOSITS

The act prohibits a utility company, other than a telephone company, from requiring a nonresidential customer to pay a deposit that is more than the amount the company charges for 1. 5 months of service. It does not define “public service company. ” Under the utility statutes, these include electric, gas, and water companies, but not competitive gas and electric suppliers.

The act requires DPUC to open a proceeding to look at utility company deposit collection from nonresidential customers. DPUC must examine, at a minimum, (1) criteria for determining these customers' creditworthiness, (2) criteria for returning deposits plus interest, and (3) provisions for collecting deposits from customers that move within the same service area of the same company. The act requires DPUC to report to the Energy and Technology Committee by January 1, 2011.

DOT SET-ASIDE

The act permits DOT to set aside contracts or parts of contracts for contractors or subcontractors that had less than $3 million dollars in gross revenues in the most recently completed fiscal year. It also permits DOT to require general or trade contractors or other entities DOT authorizes to award contracts to do this.

By law, each state agency must set aside at least 25% of the value of its contracts each year for small contractors and minority-owned businesses. Under this law (CGS 4a-60g), a small contractor is one that, among other criteria, had less than $15 million in gross revenues in the most recently completed fiscal year. The act that specifies its provision are not to be construed to diminish the total value of contracts that DOT must set aside under this law.

MICROLOAN PROGRAM

The law authorizes DECD to make a grant to the Connecticut Economic Development Fund (CEDF), which must disperse the funds to organizations that help microenterprises (those with 10 or fewer employees and less than $500,000 in annual revenues) prepare business plans and complete loan applications, among other activities. The act permits DECD to make such grants to regional revolving loan programs and requires these programs, as the law already requires CEDF to do, to work with other agencies and organizations to help micro businesses.

OLR Tracking: JR: KM: JL: ts