87R2097 JES-D
 
  By: Alvarado S.B. No. 678
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of the small business disaster recovery
  loan program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 403, Government Code, is amended by
  adding Subchapter R to read as follows:
  SUBCHAPTER R. SMALL BUSINESS DISASTER RECOVERY LOAN PROGRAM
         Sec. 403.501.  DEFINITIONS. In this subchapter:
               (1)  "Disaster declaration" means a declaration by the
  governor of a state of disaster under Section 418.014.
               (2)  "Fund" means the small business disaster recovery
  revolving fund created under Section 403.506.
               (3)  "Small business" has the meaning assigned by
  Section 481.401.
               (4)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
         Sec. 403.502.  SMALL BUSINESS DISASTER RECOVERY LOAN
  PROGRAM. (a) The comptroller by rule shall establish a loan
  program to use money from the fund established under this
  subchapter to provide financial assistance to small businesses
  affected by a disaster. 
         (b)  The comptroller may provide financial assistance from
  the fund only:
               (1)  in the form of a loan to an eligible small business
  that is located in an area under a disaster declaration; and
               (2)  during the period for which the disaster
  declaration is in effect.
         (c)  The comptroller shall credit to the fund all principal
  and interest payments on a loan from the fund.
         Sec. 403.503.  ELIGIBILITY FOR LOAN. The comptroller by
  rule shall establish the eligibility requirements for a loan to a
  small business under this subchapter. The requirements must include
  that the small business:
               (1)  is in good standing under the laws of this state;
               (2)  does not owe delinquent taxes to a taxing unit of
  this state;
               (3)  has suffered physical damage or economic injury as
  a result of the event leading to the disaster declaration; and
               (4)  has paid in full any previous loans received under
  this subchapter.
         Sec. 403.504.  USES OF LOAN. An eligible small business may
  only use a loan received under this subchapter to pay the small
  business's payroll costs, including  costs related to the
  continuation of health care benefits for the small business's
  employees.
         Sec. 403.505.  APPLICATION FOR LOAN. The comptroller shall
  develop and implement an application process for an eligible small
  business to receive a loan under this subchapter.
         Sec. 403.506.  SMALL BUSINESS DISASTER RECOVERY REVOLVING
  FUND. (a) The small business disaster recovery revolving fund is a
  special fund outside the state treasury to be used by the
  comptroller, without further legislative appropriation, for the
  purpose of providing financial assistance to small businesses in
  response to a disaster declaration as provided by this subchapter.
  The comptroller shall administer the fund. The comptroller may
  establish separate accounts in the fund. The fund and the fund's
  accounts are kept and held by the trust company in escrow and in
  trust for and in the name of the comptroller. The comptroller has
  legal title to money and investments in the fund until money is
  disbursed from the fund as provided by this subchapter and
  comptroller rules.
         (b)  Money deposited to the credit of the fund may be used
  only as provided by this subchapter.
         (c)  The fund consists of:
               (1)  money transferred or deposited to the credit of
  the fund by law, including money from any source transferred or
  deposited to the credit of the fund at the comptroller's discretion
  as authorized by law;
               (2)  the proceeds of any fee or tax imposed by this
  state that by statute is dedicated for deposit to the credit of the
  fund;
               (3)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the fund; and
               (4)  investment earnings and interest earned on amounts
  credited to the fund.
         Sec. 403.507.  MANAGEMENT AND INVESTMENT OF FUND. (a) The
  trust company shall hold and invest the fund, and any accounts
  established in the fund, for and in the name of the comptroller,
  taking into account the purposes for which money in the fund may be
  used. The fund may be co-invested with the state treasury pool.
         (b)  The overall objective for the investment of the fund is
  to maintain sufficient liquidity to meet the needs of the fund while
  striving to preserve the purchasing power of the fund. It is the
  intent of the legislature that the fund remain available in
  perpetuity for the purposes of this subchapter.
         (c)  The trust company has any power necessary to accomplish
  the purposes of managing and investing the assets of the fund. In
  managing the assets of the fund, through procedures and subject to
  restrictions the trust company considers appropriate, the trust
  company may acquire, exchange, sell, supervise, manage, or retain
  any kind of investment that a prudent investor, exercising
  reasonable care, skill, and caution, would acquire or retain in
  light of the purposes, terms, distribution requirements, and other
  circumstances of the fund then prevailing, taking into
  consideration the investment of all the assets of the fund rather
  than a single investment.
         (d)  The trust company may recover the costs incurred in
  managing and investing the fund only from the earnings of the fund.
         (e)  The trust company annually shall report to the
  comptroller with respect to the investment of the fund. The trust
  company shall contract with a certified public accountant to
  conduct an independent audit of the fund annually and shall present
  the results of each annual audit to the comptroller. This
  subsection does not affect the state auditor's authority to conduct
  an audit of the fund under Chapter 321.
         (f)  The trust company shall adopt an investment policy that
  is appropriate for the fund. The trust company shall present the
  investment policy to the investment advisory board established
  under Section 404.028. The investment advisory board shall submit
  to the trust company recommendations regarding the policy.
         (g)  The comptroller annually shall provide to the trust
  company a forecast of the cash flows into and out of the fund. The
  comptroller shall provide updates to the forecasts as appropriate
  to ensure that the trust company is able to achieve the objective
  specified by Subsection (b).
         (h)  The trust company shall disburse money from the fund as
  directed by the comptroller.
         Sec. 403.508.  RULES. The comptroller shall adopt rules
  necessary to implement this subchapter.
         Sec. 403.509.  REPORT. Not later than December 1 of each
  even-numbered year, the comptroller shall prepare and submit to the
  governor, the lieutenant governor, and each member of the
  legislature a report that includes:
               (1)  the balance of the fund as of the date of the
  report;
               (2)  the total dollar amount of disbursements from the
  fund during the two-year period preceding that date; and
               (3)  a general description of each small business for
  which an applicant was awarded a loan from the fund during the
  two-year period preceding that date.
         SECTION 2.  This Act takes effect September 1, 2021.