It seems like years ago, but the short 2010 Legislative session was actually a watershed for technology issues. Years of hard work paid off for the technology community last Spring when the Connecticut General Assembly passed and Governor M. Jodi Rell signed into law the so-called “Jobs Bill” HB 5435 . The state’s political rank and file finally embraced a number of issues that the Technology Council and others have pushed for and many legislative leaders have endorsed over the last four years and longer.
First among the breakthroughs was the new $6 million a year reserved for a 25% tax credit for so-called “Angel Investments.” Similar tax credit proposals have been supported by Commerce Committee Co-Chairmen State Senator Gary LeBeau (D-East Hartford) and State Rep. Jeffrey Berger (D- Waterbury) for many years but the bills never were passed.
When Connecticut first began looking at the tax credit at the urging of the CTC and investors only a handful of states had formerly begun to incentivize early stage investments in this way. By May 2010 when the bill passed, some 32 states had gotten in line ahead of Connecticut.
Matthew Nemerson, is still delighted at the outcome, “other states may have beaten us to the starting line in helping Angels, but given our concentration of tech firms, great workforce and IP producing universities, we still have the ability to take advantage of the 25% boost in deals or in overall investments that Angels should be able to make due to this legislation. On paper few locations should benefit from this funding as Connecticut.”
This year was different in that the Majority Leaders of the Legislature, State Senate Majority Leader Martin Looney (D-New Haven) and State House Majority Leader Denise Merrill (D-Mansfield) organized a task force focused on how the state could create more jobs quickly. Meeting for the first time in September and then often twice a month or more through January, the group included a cross section of the state including CTC’s Nemerson.
“With the support of Denise and Marty and their staffs, we were able to bring our long standing agenda for a variety of issues that help high potential early stage companies into the discussions. This included the Angel Tax Credit, significant funding for pre-seed programs and the use of existing state tax credit programs to create a large and focused venture fund for early stage investments,” said Nemerson.
Other groups which pitched in to support the package included the CURE, the Angel Investment Forum, former venture capitalist and Next Gen Chairman David Pepin and members of the CT Venture Group. CTC members also wrote over 300 letters of support to legislators and the Governor on behalf of parts of the Jobs Bill. Despite fears about large deficits, the legislature was convinced by its leadership that supporting what CTC and Nemerson dubbed the “Innovation Eco-System” through parts of the “Jobs Bill” would make a difference over the short and medium term.
The Bill 5435 ended up being combined with parts of legislation that came from other key leaders and the Governor, and ended up with over 25 sections, including student loan forgiveness, job creation tax credits and many other items. Everyone is pleased the Legislature’s leadership saw the value of technology as a jobs creator this year. The 2010 Connecticut Legislative session may have been the last “normal” time for the state House and Senate for some time. Given a new Governor after the elections in early November, and then the difficulty of a $3 billion or more state deficit facing 2012 budget deliberations, the 2011 Session will be an almost surreal time for the “land of steady habits.”
Kevin Burns, CEO of Precision Combustion and CTC Board Chairman of the Council’s Legislative Grass Roots Taskforce looks ahead to 2011, “even though there won’t be much new money on the table, having the ‘Jobs Bill’ on the record this year means we can modify it and look at new ways to help create tech jobs as part of what will no doubt be a major overhaul of the government in 2011. I think we got people’s attention, generated a lot of support from our members for the bill and added tech, as a source of good jobs, into the conversation. The 2010 session was all good from that standpoint.”
The Council is looking for volunteers to work with Kevin to create a statewide presence and swat team to work with the new legislature in November and then into the 2011 session.