Relating to a disaster recovery loan program for small and micro-businesses.
Impact
With the passage of SB26, the state aims to mitigate the challenges small and micro-businesses encounter during recovery from disasters, thereby stabilizing local economies. It mandates that loans be offered to qualifying businesses that are in good standing and have not defaulted on previous financial obligations. The inclusion of features such as prioritizing micro-businesses in funding allocation reflects an understanding of the unique pressures these smaller entities face, as they often lack resources that larger businesses can utilize for recovery.
Summary
Senate Bill 26 (SB26) introduces a disaster recovery loan program aimed specifically at supporting small and micro-businesses impacted by declared disasters. This bill amends various sections of the Government Code to establish guidelines for a small- and micro-business disaster recovery fund, emphasizing the goal of facilitating economic recovery and job creation within these sectors. The program is designed to provide accessible financial support in the form of zero-interest loans distributed through community development financial institutions, targeting businesses that face challenges in obtaining traditional funding after a disaster.
Contention
Some notable points of contention surrounding SB26 may involve the definitions and criteria for what constitutes a small and micro-business, as well as the oversight and administration of the recovery fund. Critics could argue that the bill may unintentionally exclude certain businesses or that the criteria might not be broad enough to encompass diverse business situations post-disaster. Additionally, discussions around the potential default rates associated with these loans and the impact of such financial instruments on the long-term viability of businesses could arise among stakeholders concerned with economic policy and support mechanisms.
Texas Constitutional Statutes Affected
Government Code
Chapter 481. Texas Economic Development And Tourism Office
Relating to small business recovery funds and insurance tax credits for certain investments in those funds; imposing a monetary penalty; authorizing fees.
Relating to the creation of a revolving loan program to fund the purchase by historically underutilized businesses of certain bonds required for public work contracts.
Relating to the creation of a revolving loan program to fund the purchase by historically underutilized businesses of certain bonds required for public work contracts.
Relating to the creation of a revolving loan program to fund the purchase by historically underutilized businesses of certain bonds required for public work contracts.
Relating to the creation of a grant matching program for the federal small business innovation research and small business technology transfer programs.
Establishes Student Tuition Recovery Fund in Office of the Secretary of Higher Education to compensate students impacted by failing or fraudulent proprietary institutions.