S.B. No. 678
  relating to the creation of the small business disaster recovery
  loan program.
         SECTION 1.  Chapter 481, Government Code, is amended by
  adding Subchapter CC to read as follows:
         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.
  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
         (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
         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.
  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
               (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
               (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