By: Alvarado S.B. No. 678
(In the Senate - Filed February 12, 2021; March 11, 2021,
read first time and referred to Committee on Finance;
April 14, 2021, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 14, Nays 1; April 14, 2021,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 678 By: Whitmire
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. The comptroller of public accounts and the Texas
Treasury Safekeeping Trust Company are required to implement a
provision of this Act only if the legislature appropriates money
specifically for that purpose. If the legislature does not
appropriate money specifically for that purpose, the comptroller
and the trust company may, but are not required to, implement a
provision of this Act using other appropriations that are available
for that purpose.
SECTION 3. This Act takes effect September 1, 2021.
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