MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Banking and Financial Services; Appropriations
By: Representatives Turner, Jackson, Faulkner, Hulum, Sanders
AN ACT TO ESTABLISH THE RENAISSANCE ASSISTANCE PROGRAM TO INITIATE DEVELOPMENT TO PROVIDE FINANCING FOR THE STARTUP OR EXPANSION OF SMALL BUSINESSES, IN CONJUNCTION WITH TRADITIONAL COMMERCIAL BANK LENDING; TO CREATE A SPECIAL FUND TO BE KNOWN AS THE RENAISSANCE ASSISTANCE PROGRAM TO INITIATE DEVELOPMENT REVOLVING LOAN FUND, WHICH SHALL BE ADMINISTERED BY A QUALIFIED NONDEPOSITORY, NONPROFIT COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION DOMICILED IN THE STATE OF MISSISSIPPI, UNDER THE OVERSIGHT OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION, AND EXPENDED FOR THE PURPOSE OF PROVIDING LOANS TO SMALL BUSINESSES UNDER THE PROVISIONS OF THIS ACT; TO PROVIDE THAT THE DEPARTMENT SHALL DETERMINE THE TERMS AND CONDITIONS OF THE LOANS AND SPECIFY CERTAIN REQUIREMENTS FOR THE LOANS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) As used in this act, the following terms have the meanings as defined in this section, unless the context clearly indicates otherwise:
(a) "Department" means the Mississippi Department of Finance and Administration; and
(b) "Fund" means the Renaissance Assistance Program to Initiate Development (RAPID) Revolving Loan Fund.
(2) The Renaissance Assistance Program to Initiate Development (RAPID) is established to provide financing for the startup or expansion of a small business, in conjunction with traditional commercial bank lending.
(3) (a) There is created in the State Treasury a special fund to be known as the Renaissance Assistance Program to Initiate Development (RAPID) Revolving Loan Fund, which shall be administered by a qualified nondepository, nonprofit community development financial institution (CDFI) domiciled in the State of Mississippi under the oversight of the department.
The fund shall consist of legislative appropriations, federal funds, contributions, donations, gifts and monies from any other source that are made available for deposit into the fund. Monies in the fund shall be expended by the department upon appropriation of the Legislature for the sole purpose of providing loans to small businesses under the provisions of this section. Monies remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned from the investment of monies in the fund shall be deposited to the credit of the fund.
(b) The State Fiscal Officer shall transfer from the Capital Expense Fund to the Renaissance Assistance Program to Initiate Development Revolving Loan Fund, as created in subsection (3)(a) of this section, the sum of Ten Million Dollars ($10,000,000.00) during fiscal year 2024.
(4) The proceeds of such loans authorized under this act shall be used by small businesses only for the following purposes:
(a) Permanent working capital;
(b) Building purchases;
(c) Land acquisition and construction;
(d) Facility expansion;
(e) Machinery and equipment purchases;
(f) Leasehold improvements;
(g) Closing costs;
(h) Business acquisitions.
(5) The department shall determine the terms and conditions of each loan, including the repayment of the loan, which shall be subject to the following provisions:
(a) To be eligible, a small business must meet the Small Business Administration (SBA) guidelines for small businesses;
(b) The borrower must be qualified as a small business based on SBA standards;
(c) The primary bank must provide not less than fifty percent (50%) of the total financing to the small business;
(d) The maximum RAPID loan amount shall be not more than fifty percent (50%) of the primary loan to the small business;
(e) At least one (1) job must be created or retained for every Twenty-five Thousand Dollars ($25,000.00) in RAPID funding;
(f) A small business may obtain only one (1) RAPID loan;
(g) If such deal involves real estate, no less than fifty-one percent (51%) of such real estate shall be occupied by the small business;
(h) The RAPID loan shall require no collateral, and shall require only a personal guarantee from the borrower;
(i) Repayments of such loan shall be collected by member institutions, including, but not limited to, a bank, credit union, or planning and development district;
(j) A small business shall not be penalized for prepayment of a RAPID loan.
(6) The program administrator shall offer technical assistance to all RAPID loan borrowers, and shall manage not less than sixty percent (60%) of the portfolio to meet CDFI requirements.
(7) At the time of enactment of the RAPID program, the administrator shall receive a five percent (5%) administration fee or grant, and a three percent (3%) technical assistance grant to provide business coaching to all RAPID loan borrowers.
(8) Beginning in the third year, three percent (3%) of the interest on the loan from the borrower's repayments shall be disbursed as follows:
(a) One and one-half percent (1.5%) to be reinvested into the revolving loan fund; and
(b) One and one-half percent (1.5%) to be reinvested into the RCLF technical assistance account.
SECTION 2. This act shall take effect and be in force from and after July 1, 2023, and shall stand repealed on June 30, 2023.