Stonington — State Rep. Diana Urban, D-North Stonington, plans to introduce a bill in the upcoming General Assembly session that would use a portion of the state $300,000 annual funding of Discovering Amistad to repay the Connecticut creditors of Amistad America.

Urban has been pressing state officials to repay the small businesses, individuals and organizations around the country that are owed $2 million by the now defunct Amistad America. She estimates Connecticut groups, such as Mystic Seaport and MBTees of Taftville, are owed about $250,000.

Last week Urban had proposed having the state bond the money but has now settled on taking a portion of the Discovering Amistad funding. The bonding plan was criticized by some who do not want to spend more money on the ship. The 2017 state funding for the ship already is approved.

"It's the same boat. It’s the same mission. It’s the same money," Urban said, adding that state Sen. Cathy Osten, D-19th District, has agreed to co-sponsor the bill.

Len Miller, chairman of Discovering Amistad, which took over the ship after it was sold out of state receivership, said Wednesday that Urban's proposal was "very disconcerting, very troubling."

He said that when his group acquired the ship with state funding, there was an understanding that the state would continue to provide funding "until we could establish educational programs and raise private funds which we are out doing now. But it's early in the game and we rely on that (state) funding," he said. "This is money that is absolutely needed."

Urban has said the state has a responsibility to repay the in-state creditors because those who were not paid relied on the fact that the Amistad was state-funded and deemed the state’s flagship, but the state Department of Community and Economic Development did not monitor how Amistad America was spending $9 million in state funding.

"DECD was delinquent in their duty, in my mind. There is no question," she said.

Urban has said the loss of money has a big impact on small businesses, which she called critical to the state’s economic web.

She said that under her plan, every year a portion of the owed money would come out of the ship’s state funding until the bills are paid. The repayment would not be available to creditors who have used it as a tax write-off.

"We also need to start to talk about the fact this ship should be self-funded," she said. "It’s time this boat is self-sufficient. Do we want our tax money building and funding a ship or paying for education and improving our roads and bridges so they are safe?"

Miller said it would not be setting a good precedent for the state to be paying off creditors of a now defunct organization.

Miller said the ship, which was relaunched with its new mission last summer, is spending the winter at Mystic Seaport, where additional maintenance work is taking place. He said the educational curriculum, developed by two social studies teachers, has been completed. The organization is talking to schools across the state about implementing the Amistad curriculum this spring. The ship will visit Connecticut ports such as New London, New Haven and Bridgeport next year.

"Everything is positive, but it will take us a while to be self-sufficient," he said, adding that compared to his founding 25 years ago of the successful SoundWaters schooner educational program in Stamford, restarting the Amistad is more challenging because of the negative feelings about Amistad America.

"But we’ll get through it," he said.

Amistad America, formed in 1998 and based in Hamden, lost its nonprofit status in 2012 for failing to file three years of tax returns. Nevertheless, the state continued to make annual $360,000 payments to the organization, which fell deeper and deeper into debt, until finally freezing funding for the 2014-15 fiscal year as controversy over the organization’s lack of fiscal accountability intensified. The organization had provided little documentation about how it was spending state funding.

Following stories by The Day about how Amistad America had spent the $9 million in state funding and calls for an investigation by Urban, the state finally conducted an audit, seized the ship in the summer of 2014 and sold it to Discovering Amistad for $315,000. The state then provided $957,000 to Discovering Amistad so it could purchase and repair the ship.

j.wojtas@theday.com