AN ACT ESTABLISHING A MICRO-LOAN PROGRAM FOR VETERANS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2011 ) As used in sections 1 to 3, inclusive, of this act:
(1) "Commissioner" means the Commissioner of Economic and Community Development;
(2) "Veteran-owned business" means any business (A) of which fifty-one per cent or more of the capital stock, if any, or assets are owned by a veteran of the armed forces in service in time of war, as defined in section 27-103 of the general statutes, who is active in the daily affairs of the business and has the power to direct the management and policies of the business, and (B) that is a small business having fifty or fewer employees;
(3) "Financial institution" means any trust company, bank, savings bank, credit union, savings and loan association, insurance company, investment company, mortgage banker, trustee, executor, pension fund, retirement fund or other fiduciary or private financial institution; and
(4) "Quasi-public agency" means the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Educational Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Capital City Economic Development Authority, Connecticut Lottery Corporation and Health Information Technology Exchange of Connecticut.
Sec. 2. (NEW) (Effective July 1, 2011 ) (a) (1) There is established a micro-loan program for veteran-owned businesses. The commissioner may enter into a contract with a quasi-public agency, financial institution or nonprofit corporation to provide for the administration and state-wide promotion of the program. On or before July 1, 2012, the program shall be a self-sustaining revolving loan fund. No loan or loan guarantee that is not in accordance with the provisions of such contract shall be made from the fund established under subdivision (2) of this subsection.
(2) There is established a fund to be known as the "Micro-Loan Revolving Fund for Veteran-Owned Businesses". The fund shall contain (A) any moneys allocated pursuant to subdivision (3) of this subsection, and (B) any moneys required by law to be deposited into the fund, including, but not limited to, any moneys appropriated by the state and interest payments and principal payments on loans. Any balance remaining in the fund at the end of any fiscal year shall be carried forward in the fund for the next succeeding fiscal year. The fund shall be used to make loans and loan guarantees pursuant to subsection (b) of this section and to pay reasonable and necessary expenses incurred in administering such loans and loan guarantees and the program established under this subsection.
(3) The commissioner may allocate moneys from the Economic Assistance Revolving Fund, established under section 32-231 of the general statutes, to the fund established under subdivision (2) of this subsection.
(b) The state, acting by and in the discretion of the commissioner, may, pursuant to a contract entered into under subdivision (1) of subsection (a) of this section, provide funds to a quasi-public agency, financial institution or nonprofit corporation to be used by such quasi-public agency, financial institution or nonprofit corporation to make interest-free, deferred or other loans, or loan guarantees, to veteran-owned businesses. Any such loan or loan guarantee shall be used by a veteran-owned business for business start-up costs or the day-to-day operation of the business. The proceeds from any loan made pursuant to this subsection shall not be used for the refinancing of existing loans.
(c) The amount of any loan made pursuant to subsection (b) of this section shall not exceed fifty thousand dollars. The amount of any loan guarantee made pursuant to subsection (b) of this section shall not exceed thirty per cent of the principal amount of a loan.
(d) Each veteran-owned business applying for a loan or loan guarantee under subsection (b) of this section shall submit an application in such information as the commissioner shall require. Security for such loan may include a security interest, an assignment of a lease or the subordination of a mortgage. In addition to any other conditions of default under such loan or loan guarantee, the veteran-owned business shall be in default if such loan or loan guarantee is not used for the purposes set forth in subsection (b) of this section or if the veteran-owned business fails to participate in the business management training program required under section 3 of this act.
(e) Payments of principal and any interest on loans made pursuant to subsection (b) of this section shall be deposited into the Micro-Loan Revolving Fund for Veteran-Owned Businesses established under subdivision (2) of subsection (a) of this section.
(f) The commissioner may adopt regulations, in accordance with chapter 54 of the general statutes, to carry out the provisions of this section. Such regulations may provide for loan procedures, repayment terms, interest and security requirements, default and remedy provisions, and such other terms and conditions as the commissioner deems appropriate.
Sec. 3. (NEW) (Effective July 1, 2011 ) Each veteran-owned business that receives a loan or loan guarantee pursuant to section 2 of this act shall participate in a business management training program as designated by the commissioner. The commissioner may establish a business management training program to be administered by either the Office of Small Business Affairs or a nonprofit corporation, as determined by the commissioner, and may arrange for the participation of such other programs as the commissioner deems appropriate in implementing the business management training program. The commissioner may enter into a contract with a nonprofit corporation to provide for the administration of the business management training program pursuant to this section.
Category: Payday loans