MISSISSIPPI LEGISLATURE
2005 5th Extraordinary Session
To: Finance
By: Senator(s) Robertson, Little, Albritton, Brown, Browning, Burton, Butler, Carmichael, Chaney, Clarke, Davis, Dawkins, Dearing, Doxey, Flowers, Frazier, Gollott, Hewes, Horhn, Hyde-Smith, Jackson (11th), Jackson (15th), Jackson (32nd), Jordan, King, Kirby, Lee (35th), Lee (47th), Mettetal, Moffatt, Morgan, Pickering, Ross, Simmons, Thomas, Walls, White, Harden, Cuevas
AN ACT TO ESTABLISH THE HURRICANE KATRINA DISASTER SMALL BUSINESS BRIDGE LOAN ACT TO PROVIDE SHORT-TERM LOANS FOR SMALL BUSINESSES THAT SUFFERED PHYSICAL DAMAGE AS A RESULT OF HURRICANE KATRINA TO ASSIST SMALL BUSINESSES IN RETURNING TO BUSINESS AS SOON AS POSSIBLE; TO PROVIDE THAT THE MISSISSIPPI DEVELOPMENT AUTHORITY SHALL ADMINISTER THE LOAN PROGRAM AND SHALL HAVE THE AUTHORITY TO ESTABLISH THE DISASTER LOAN PROGRAM WITH FEDERALLY INSURED FINANCIAL INSTITUTIONS; TO PROVIDE THE MINIMUM AND MAXIMUM AMOUNT OF LOANS AUTHORIZED UNDER THIS ACT; TO PROVIDE THE TERM OF SUCH LOANS; TO ESTABLISH CERTAIN ELIGIBILITY REQUIREMENTS FOR THE RECEIPT OF SUCH LOANS; TO PROVIDE THAT UPON A DETERMINATION OF NEED BY THE MISSISSIPPI DEVELOPMENT AUTHORITY, THE STATE BOND COMMISSION IS AUTHORIZED TO OBTAIN A LINE OF CREDIT IN AN AMOUNT NOT TO EXCEED $25,000,000.00 FROM A COMMERCIAL LENDER, INVESTMENT BANKING GROUP OR A CONSORTIUM OF EITHER OR BOTH, FOR THE PURPOSE OF FUNDING THE LOAN PROGRAM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Hurricane Katrina Disaster Small Business Bridge Loan Act."
SECTION 2. (1) It is the intent of the Legislature, and declared to be the policy of the State of Mississippi, that short-term loan funds should be made available quickly to assist small businesses physically harmed by Hurricane Katrina.
(2) The loan program established by this act is intended to provide short-term financial assistance to small businesses until the owners of the business are able to obtain other financing or obtain insurance proceeds.
SECTION 3. (1) The Mississippi Development Authority (hereinafter referred to as the "authority") is authorized and empowered to utilize any funds acquired pursuant to Section 5 of this act and any funds otherwise provided for the purposes expressed in this act from any source, to establish a disaster loan program with federally insured financial institutions to provide short-term bridge loans to small business owners whose businesses were physically damaged by Hurricane Katrina in this state for the purpose of assisting such small businesses in returning to business as quickly as possible.
(2) The amount of any loan granted under this act shall be not less than One Thousand Dollars ($1,000.00) nor more than Twenty-five Thousand Dollars ($25,000.00). The term of any loan made under this section shall be ninety (90) days or one hundred eighty (180) days as determined by the authority based upon the circumstances of the business applying for the loan; however, upon request of a financial institution assisting in the program, the authority may extend the term of any loan made under this act an additional one hundred eighty (180) days. The proceeds of the loans authorized under this act shall be used only for the purpose of maintaining or restarting the business in the area for which the disaster declaration by the Governor for Hurricane Katrina was issued.
(3) To be eligible for the loans authorized under this act, small businesses shall:
(a) Be located in the area for which the disaster declaration for Hurricane Katrina was issued by the Governor;
(b) Have been established in the area for which the disaster declaration of the Governor for Hurricane Katrina was issued for not less than one (1) year prior to the declaration;
(c) Have employed not less than two (2) nor more than one hundred (100) persons immediately prior to the disaster declaration;
(d) Have suffered physical damage as a direct result of the disaster; and
(e) Be at least fifty-one percent (51%) owned by Mississippi residents, or, in the case of a Mississippi nonprofit corporation, controlled by Mississippi residents.
(4) Using assessments of the disaster impacted areas, the authority shall designate the area, and the counties in the area, in which a small business must be located to be eligible to participate in the program. The authority shall develop, adopt and publish reasonable rules and regulations for the operation of the loan program established under this act. The rules and regulations shall govern the use of loan proceeds, terms of loans, loan interest rates and fees, the loan approval process and any other matters the authority considers appropriate. For purposes of the program established by this act, the authority shall be exempt from the Mississippi Administrative Procedures Law.
SECTION 4. The authority shall be the sole administrator of the funds that become available to implement the provisions of this act. The authority is authorized to utilize any of its general powers to operate the loan program established under this act.
SECTION 5. (1) The authority shall determine the need to implement the loan program authorized by this act. Upon making such determination, the authority shall notify the State Bond Commission and request funds be provided to the authority to implement the program. Not more than Twenty-five Million Dollars ($25,000,000.00) may be provided.
(2) (a) Upon receipt of the notification provided for in subsection (1) of this section, the State Bond Commission is authorized to obtain a line of credit, in an amount not to exceed Twenty-five Million Dollars ($25,000,000.00), from a commercial lender, investment banking group or a consortium of either or both. The length of indebtedness under this provision shall not carry past three (3) years following the origination of the line of credit. The State Bond Commission shall select a lender. The line of credit shall be authorized and approved by the State Bond Commission and shall have such terms and details as may be provided by resolution of the State Bond Commission. Loan proceeds shall be received by the authority and shall be used to implement the loan program authorized by this act. The authority shall accumulate loan repayments to repay the line of credit; however, the authority may use repayments received while the program is being made available to small businesses to fund additional loans. The authority shall seek legislation for funding to repay loan defaults and interest costs on the line of credit.
(b) As security for the repayment of the principal and interest on the line of credit provided for in paragraph (a) of this subsection, the full faith, credit and resources of the State of Mississippi are hereby irrevocably pledged.
(3) This subsection shall be complete authority for the borrowing authorized hereunder and shall not be subject to any other limitations under state law.
SECTION 6. This act shall take effect and be in force from and after its passage.