House Bill 26-1003 Introduced

A Bill for an Act

• Page 1, Line 101Concerning modifications to the small business recovery and

• Page 1, Line 102resiliency loan program.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)

Currently, the purpose of the small business recovery and resiliency loan program (program) is to support the state's recovery from the economic crisis caused by COVID-19 by supporting Colorado small businesses recovering from COVID-19. The bill modifies the purpose of the program to supporting Colorado's small businesses through the program.

Currently, money in the small business recovery and resiliency fund (fund) may be used for specified purposes if the money from the fund is matched by money provided by other sources at a ratio of $1 of money from the fund to $4 of money from other sources. The bill changes this ratio to $1 from the fund to $1 from other sources. Once the money from the fund is matched by other sources and comprises a tranche, the bill specifies that the money from the tranche may be used for loans or to purchase participation interest in loans for businesses as determined by the program oversight board (board), including working capital and the purchase of equipment.

Currently, principal and interest payments on a loan may be deferred for up to one year for circumstances of hardship created by the COVID-19 pandemic or based on ongoing economic conditions. The bill allows a deferral for circumstances of hardship and repeals the requirement that the hardship must be caused by the COVID-19 pandemic or ongoing economic conditions.

Currently, each tranche is subject to an initial period of time, as determined by the board, in which a portion of the money from the fund is allocated to each county, as determined by the board, based on specified criteria or a statutory formula. Currently, the money allocated to each county must be reserved for applications from eligible borrowers located in that county for the initial period of time. The bill repeals the requirement that the money is reserved for the initial period of time and that the money is allocated to a county. The bill requires each tranche of loan funding to be used to fund businesses across the state over the duration of the program. The program will track the distribution of capital to counties.

The bill requires the state treasurer to transfer $5 million from the fund to the Colorado startup loan program fund on June 30, 2026.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 24-48.5-605, amend

• Page 2, Line 3(1)(b), (4)(a), (4)(b) introductory portion, (4)(b)(IV), and (4)(c) as

• Page 2, Line 4follows:

• Page 2, Line 524-48.5-605.  Small business recovery and resiliency loan

• Page 2, Line 6program - creation - requirements - oversight.

• Page 2, Line 7(1) (b)  The purpose of the loan program is to support the state's

• Page 2, Line 8recovery from the economic crisis caused by COVID-19 through

• Page 3, Line 1leveraging private investment to support Colorado small businesses

• Page 3, Line 2recovering from the crisis caused by COVID-19 by making loans,

• Page 3, Line 3acquiring participation interest in loans, leveraging private small business

• Page 3, Line 4lending through the Colorado credit reserve program, or other activities

• Page 3, Line 5that accomplish the same purpose. The loan program is also designed to

• Page 3, Line 6support resiliency for small businesses as new challenges emerge. The

• Page 3, Line 7loan program may only make loans directly if federal or state bank

• Page 3, Line 8regulators prohibit the banking industry from originating loans for the

• Page 3, Line 9loan program.

• Page 3, Line 10(4)  Any contract for the administration of a loan program must

• Page 3, Line 11include the following terms in order to receive money provided by the

• Page 3, Line 12office pursuant to subsection (3) of this section:

• Page 3, Line 13(a)  Except for money contributed to the Colorado credit reserve,

• Page 3, Line 14the money from the small business recovery and resiliency fund provided

• Page 3, Line 15by the office in a single tranche may not be committed pursuant to a

• Page 3, Line 16contract relating to a loan program until money is committed pursuant to

• Page 3, Line 17a contract relating to a loan program from other sources at a ratio of at

• Page 3, Line 18least four dollars one dollar from other sources for each one dollar

• Page 3, Line 19provided by the state from the small business recovery and resiliency

• Page 3, Line 20fund. If a loan program manager does not secure sufficient investments

• Page 3, Line 21from other sources to meet this requirement within the time allowed by

• Page 3, Line 22a contract, the money provided by the state must be returned to the small

• Page 3, Line 23business recovery and resiliency fund.

• Page 3, Line 24(b)  Except for money contributed to the Colorado credit reserve,

• Page 3, Line 25once the money in a tranche is matched in accordance with subsection

• Page 3, Line 26(4)(a) of this section, it must be used to make loans or purchase

• Page 3, Line 27participation interest in loans for businesses as determined by the

• Page 4, Line 1oversight board, including working capital including and the

• Page 4, Line 2purchase of equipment. to eligible borrowers, or other activities that

• Page 4, Line 3accomplish the same purpose The oversight board shall consult with

• Page 4, Line 4lending industry leaders and representatives of small businesses with

• Page 4, Line 5regard to subsections (4)(b)(I) to (4)(b)(VI) of this section. Each loan

• Page 4, Line 6must be subject to the following terms:

• Page 4, Line 7(IV)  Principal and interest payments may be deferred for up to one

• Page 4, Line 8year, as determined by the oversight board, with the unpaid interest being

• Page 4, Line 9capitalized. Deferrals must be limited to circumstances of hardship.

• Page 4, Line 10created by the COVID-19 pandemic or based on ongoing economic

• Page 4, Line 11conditions

• Page 4, Line 12(c) (I)  To ensure geographic equity, each tranche of loan funding

• Page 4, Line 13must be subject to an initial period of time in which a portion of the

• Page 4, Line 14money is allocated to each county on a basis proportional to the county's

• Page 4, Line 15share of small businesses relative to the state, the county's share of small

• Page 4, Line 16business employees relative to the state, the county's share of small

• Page 4, Line 17business personal property relative to the state, or other similar metrics as

• Page 4, Line 18determined by the oversight board, or based on a formula established

• Page 4, Line 19under subsection (4)(c)(IV) of this section. The money allocated to each

• Page 4, Line 20county must be reserved for applications from eligible borrowers located

• Page 4, Line 21in that county for the initial period of time. For the purposes of this

• Page 4, Line 22subsection (4)(c), an eligible borrower is considered to be located in the

• Page 4, Line 23county in which it has its principal place of business, as reflected in its

• Page 4, Line 24most recent filing with the secretary of state or subject to such other

• Page 4, Line 25documentation as the oversight board establishes. The oversight board

• Page 4, Line 26shall determine the amount of time in which the money in each tranche

• Page 4, Line 27is subject to a geographic restriction under this subsection (4)(c)(I) Each

• Page 5, Line 1tranche of loan funding shall be used to fund businesses across

• Page 5, Line 2the state over the duration of the program. The program shall

• Page 5, Line 3track the distribution of capital to counties.

• Page 5, Line 4(II)  Once the time period established by the oversight board under

• Page 5, Line 5subsection (4)(c)(I) of this section has passed, all money remaining in the

• Page 5, Line 6tranche is available to eligible borrowers on a statewide basis.

• Page 5, Line 7(III)  For money contributed to the Colorado credit reserve, the

• Page 5, Line 8oversight board may waive the requirements of this subsection (4)(c) or

• Page 5, Line 9establish alternative geographic distribution requirements or targets.

• Page 5, Line 10(IV)  For any tranche of loan funding, the oversight board may, in

• Page 5, Line 11its discretion, establish an alternative formula for the allocation of money

• Page 5, Line 12to counties for purposes of subsection (4)(c)(I) of this section that

• Page 5, Line 13accounts for how affected each county has been by the COVID-19

• Page 5, Line 14pandemic and its impacts or based on ongoing economic conditions.

• Page 5, Line 15SECTION 2.  In Colorado Revised Statutes, 24-48.5-608, add

• Page 5, Line 16(2)(d) as follows:

• Page 5, Line 1724-48.5-608.  Small business recovery and resiliency fund -

• Page 5, Line 18repeal.

• Page 5, Line 19(2) (d) (I)  On June 30, 2026, the state treasurer shall

• Page 5, Line 20transfer five million dollars from the small business recovery

• Page 5, Line 21and resiliency fund to the Colorado startup loan program fund

• Page 5, Line 22established in section 24-48.5-131 (9).

• Page 5, Line 23(II)  This subsection (2)(d) is repealed, effective July 1, 2027.

• Page 5, Line 24SECTION 3.  Safety clause. The general assembly finds,

• Page 5, Line 25determines, and declares that this act is necessary for the immediate

• Page 5, Line 26preservation of the public peace, health, or safety or for appropriations for

• Page 6, Line 1the support and maintenance of the departments of the state and state

• Page 6, Line 2institutions.