Bill Text: AZ SB1685 | 2022 | Fifty-fifth Legislature 2nd Regular | Introduced
Bill Title: Microbusiness loans; commerce authority
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-02-03 - Senate read second time [SB1685 Detail]
Download: Arizona-2022-SB1685-Introduced.html
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REFERENCE TITLE: microbusiness loans; commerce authority |
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State of Arizona Senate Fifty-fifth Legislature Second Regular Session 2022
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SB 1685 |
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Introduced by Senator Gonzales
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AN ACT
amending Title 41, chapter 10, article 1, Arizona Revised Statutes, by adding section 41-1510; relating to the arizona commerce authority.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 41, chapter 10, article 1, Arizona Revised Statutes, is amended by adding section 41-1510, to read:
41-1510. Microbusiness revolving loan fund program; fund; report; definition
A. The microbusiness revolving loan fund program is established.
B. The microbusiness revolving loan fund is established consisting of legislative appropriations. The authority shall administer the fund. Monies in the fund are subject to legislative appropriation. Monies in the fund may be used to provide low-interest loans to community development financial institutions for funding microbusinesses that are located in this state, that generate economic growth and job creation in this state but that are unable to obtain adequate credit or adequate terms for credit. If the use of a community development financial institution is not practicable, the authority may provide low-interest loans to the following local community-based lending organizations:
1. Small business lending consortia.
2. Certified development companies.
3. United States department of agriculture business and industrial guaranteed loan providers.
4. United States small business administration loan providers.
5. Credit unions.
6. Community banks.
C. A lending organization must have sufficient expertise to analyze microbusiness applications for program loans, evaluate the creditworthiness of microbusinesses and regularly monitor program loans to be eligible to receive fund monies. The lending organization shall review every program loan application to determine, among other things, the feasibility of the proposed use of the requested financing by the microbusiness applicant, the likelihood of repayment and the potential that the loan will generate economic development and jobs in this state. The authority shall identify eligible lending organizations through one or more competitive statewide or local solicitations.
D. Program loans to microbusinesses must be targeted and marketed to minority-owned and women-owned enterprises and other microbusinesses that are having difficulty accessing traditional credit markets. Program loans to microbusinesses must be used for the creation and retention of jobs, as defined by the authority, including:
1. Working capital.
2. Acquiring or improving real property, or both.
3. Acquiring machinery and equipment, property or improvements.
4. refinancing debt obligations.
E. The authority shall establish a microloan that has a principal amount that is less than $25,000 and a regular loan that has a principal amount of at least $25,000. Before receiving fund monies, the lending organization must certify to the authority that the loan complies with this section and the rules adopted for the program and that the lending organization has performed its obligations pursuant to and is in compliance with this section, the program rules and all agreements entered into between the authority and the lending organization.
F. The fund monies amount used by the lending organization to fund a program applicant loan may not be more than twenty-five percent of the principal amount of the loan but the authority may set a higher cap by rule.
G. With respect to its program loans, the lending organization may charge application, commitment and loan guarantee fees pursuant to a schedule of fees adopted by the lending organization and approved by the authority. The lending organization may not charge an application fee for approved program loans that are $5,000 or less.
H. On or before January 1, 2023, the authority shall study the factors related to increasing the number of microfinance lenders in this state. On or before July 1, 2023, the authority shall submit a report of its findings and any recommendations to the governor, the president of the senate and the speaker of the house of representatives and provide a copy of this report to the secretary of state.
I. For the purposes of this section, "microbusiness" means a business that is resident in this state, that is independently owned and operated and that employs fifteen or fewer people.
