S.B. No. 678         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 481, Government Code, is amended by   adding Subchapter CC to read as follows:   SUBCHAPTER CC.  SMALL BUSINESS DISASTER RECOVERY LOAN PROGRAM          Sec. 481.601.  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 481.606.                (3)  "Small business" has the meaning assigned by   Section 481.401.                (4)  "Trust company" means the Texas Treasury   Safekeeping Trust Company.          Sec. 481.602.  SMALL BUSINESS DISASTER RECOVERY LOAN   PROGRAM. (a) The office 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 office 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 office shall credit to the fund all principal and   interest payments on a loan from the fund.          Sec. 481.603.  ELIGIBILITY FOR LOAN. The office 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. 481.604.  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. 481.605.  APPLICATION FOR LOAN. The office shall   develop and implement an application process for an eligible small   business to receive a loan under this subchapter.          Sec. 481.606.  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 office,   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 office   shall administer the fund. The office 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 office. The office has legal title to money and investments   in the fund until money is disbursed from the fund as provided by   this subchapter and office 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 office'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. 481.607.  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 office, 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 office   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 office. 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 office annually shall provide to the trust company a   forecast of the cash flows into and out of the fund. The office   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 office.          Sec. 481.608.  RULES. The office shall adopt rules   necessary to implement this subchapter.          Sec. 481.609.  REPORT. Not later than December 1 of each   even-numbered year, the office 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 Texas Economic Development and Tourism   Office 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 office 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.             ______________________________ ______________________________      President of the Senate Speaker of the House                 I hereby certify that S.B. No. 678 passed the Senate on   April 28, 2021, by the following vote:  Yeas 24, Nays 7.       ______________________________   Secretary of the Senate                I hereby certify that S.B. No. 678 passed the House on   May 25, 2021, by the following vote:  Yeas 109, Nays 37, one   present not voting.       ______________________________   Chief Clerk of the House            Approved:     ______________________________                Date       ______________________________              Governor