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Malloy signed the bill on June 2, and it goes into effect on Oct. 1. The bill passed through the state House and Senate unanimously with bipartisan support.
“Taxpayers need to know exactly how their money is being spent. Until now, the state has not provided rigorous enough oversight of the grants it provides to businesses. This law makes the state accountable for these funds by requiring clearer, stiffer provisions in grant agreements.” Lavielle said in a statement.
In particular, the law focuses on grant agreements between the state and individual businesses.
An audit by the state in November revealed that over $65,000 in grant money given by the Department of Economic and Community Development (DECD) wasn't returned in a timely manner within two years.
The law requires the DECD to include in its agreements a date in which a business must either return unused grant funds or reapply for authorization for the rest of the grant.
“While the Small Business Express program has definitely been helpful to many small Connecticut businesses, I believe there are limitations on how effective one-shot grants and loans can be in creating the structural changes necessary to stimulate long-term economic development,” said Lavielle.
“The state must be accountable to taxpayers for every penny spent on these initiatives, and this legislation will ensure that it is,” she said.
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