Medium & Large Business Incentives
First Five Program
The First Five augments and combines the state’s best incentive and tax credit programs to encourage job creation. In addition to the incentives based on the creation of the first 200 new full-time jobs within Connecticut, businesses would continue to receive credits for each net new job created above 200, increasing the potential to thousands of jobs in the state.
The program was designed to: (1) Attract new companies into the state; (2) Keep the companies we already have and retain their current job levels; and (3) encourage businesses to expand and add new jobs. Before companies can be eligible for the First Five program, they must receive approval from the Department of Economic and Community Development. The State of Connecticut has expanded this program and will allow a total of 15 companies to take advantage of it.
Economic and Manufacturing Assistance Act (MAA)
MAA incentive-driven direct loans can be provided for projects when there is a strong economic development potential. Eligible uses of MAA funds are as follows:
- Planning, including but not limited to: feasibility studies, engineering, appraisals, market studies and related activities
- Acquisition of real property, machinery or equipment or any combination
- Construction of site and infrastructure improvements relating to a municipal or business development project
- Construction/renovation/demolition of buildings
- Relocation expenses for the purpose of assisting manufacturing or other economic-based businesses to locate, construct, renovate or acquire a facility
- Working capital in conjunction with a business development project
- Business support services such as labor training, day care, energy conservation, pollution control, recycling and the like, in conjunction with other state agencies
Industrial Revenue Bonds (IRB)
IRBs can provide financing for land, new machinery and equipment, or the construction, expansion or upgrade of facilities. Interest on the bonds is exempt from federal and state income-tax resulting in lower debt service. IRBs can be issued in an amount up to $10 million and can equal 100% of the project cost. The term can be up to 40 years or 120% of the economic life of the asset financed. Bonds are repaid from project and/or borrower’s revenues. Borrowers must typically be a manufacturer or be recognized as an eligible non-manufacturing projects.
Tax Increment Financing
Significant economic projects may be eligible to receive funds from tax-exempt or taxable bonds, payable entirely or in part from incremental taxes generated by the project. Large-scale Economic Development projects approved by the State are eligible. Each project must be evaluated by an independent financial assessment, that the incremental taxes generated meet the debt service of the bonds.