Connecticut HB 5211: AN ACT PERMITTING MUNICIPAL FINANCIAL DECISION-MAKING FOR CERTAIN SCHOOL-RELATED EXPENSES.

Bill Text

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General Assembly Substitute Bill No. 5211
February Session, 2026

AN ACT CONCERNING COMMERCIAL FINANCING.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 36a-861 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2026): 2
As used in this section and sections 36a-862 to 36a-872, inclusive: 3
(1) "Commercial financing" means any extension of sales-based 4
financing by a provider, [in an amount not exceeding two hundred fifty 5
thousand dollars,] the proceeds of which the recipient does not intend 6
to use primarily for personal, family or household purposes; 7
(2) "Commercial financing broker" means a person, other than a 8
financer, who, for compensation or the expectation of compensation, 9
offers, or offers to obtain, commercial financing for a recipient from a 10
provider that is not exempt; 11
(3) "Finance charge" means the cost of financing expressed as a dollar 12
amount, including (A) any charge payable directly or indirectly by the 13
recipient and imposed directly or indirectly by the provider as an 14
incident to, or a condition of, the extension of financing, and (B) all 15
charges that would be included under the definition of "finance charge" 16
in 12 CFR 1026.4, as amended from time to time, as if the transaction 17
were subject to said section; 18

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(4) "Financer" means a person who provides, or will provide, 19
commercial financing to a recipient; 20
(5) "Person" means an individual, corporation, partnership, limited 21
liability company, joint venture, association, joint stock company, trust 22
or unincorporated organization, including, but not limited to, a sole 23
proprietorship; 24
(6) "Provider" means a person who extends a specific offer of 25
commercial financing to a recipient and includes, unless otherwise 26
exempt under this section, a commercial financing broker, but does not 27
include any (A) bank, out-of-state bank, bank holding company, 28
Connecticut credit union, federal credit union, out-of-state credit union 29
or any subsidiary or affiliate of the foregoing, as those terms are defined 30
in section 36a-2, (B) person acting in such person's capacity as a 31
technology services provider to an entity exempt under this section for 32
use as part of the exempt entity's commercial financing program, 33
provided such person has no interest, arrangement or agreement to 34
purchase any interest in the commercial financing extended by the 35
exempt entity in connection with such program, (C) lender regulated 36
under the federal Farm Credit Act, 12 USC 2001 et seq., as amended 37
from time to time, (D) person or provider who extends or brokers a 38
commercial financing transaction secured by real property, (E) person 39
or provider who extends or brokers a lease, as defined in section 42a-40
2A-102, (F) person or provider who extends or brokers a purchase-41
money obligation, as defined in section 42a-9-103a, (G) person or 42
provider who extends not more than five commercial financing 43
transactions in this state in a twelve-month period, (H) person or 44
provider who extends or brokers a commercial financing transaction 45
entered into pursuant to a commercial financing agreement or 46
commercial open-end credit plan of at least fifty thousand dollars, in 47
which the recipient is (i) a dealer, as defined in section 14-1, or an 48
affiliate of such a dealer, or (ii) a motor vehicle rental company, or an 49
affiliate of such a company, or (I) person or provider who extends or 50
brokers a commercial financing transaction in connection with the sale 51
of products or services that such person or provider manufactures, 52

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licenses or distributes, or whose parent company, subsidiary or affiliate 53
manufactures, licenses or distributes; 54
(7) "Recipient" means a person, or the authorized representative of a 55
person, who applies for commercial financing and is made a specific 56
offer of commercial financing by a provider, but does not include a 57
person acting as a commercial financing broker; 58
(8) "Sales-based financing" means a transaction that is repaid by the 59
recipient to the provider over time (A) as a percentage of sales or 60
revenue, in which the payment amount may increase or decrease 61
according to the volume of sales made or revenue received by the 62
recipient, or (B) according to a fixed payment mechanism that provides 63
for a reconciliation process that adjusts the payment to an amount that 64
is a percentage of sales or revenue; and 65
(9) "Specific offer" means the specific terms of commercial financing, 66
including, but not limited to, a price or amount, that is quoted to a 67
recipient based on information obtained from or about the recipient, 68
which, if accepted by the recipient, would be binding on the provider, 69
subject to any specific requireme