HOUSE BILL 148
55th legislature - STATE OF NEW MEXICO - second session, 2022
INTRODUCED BY
Rebecca Dow and Javier Martínez
AN ACT
RELATING TO BUSINESS; EXTENDING THE DATE APPLICATIONS FOR LOANS PURSUANT TO THE SMALL BUSINESS RECOVERY AND STIMULUS ACT MUST BE RECEIVED; EXTENDING THE REVERSION DATE OF UNENCUMBERED MONEY IN THE SMALL BUSINESS RECOVERY LOAN FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 6-32-3 NMSA 1978 (being Laws 2020 (1st S.S.), Chapter 6, Section 3, as amended) is amended to read:
"6-32-3. SMALL BUSINESS RECOVERY LOAN FUND--CREATED--FUNDING SCHEDULE.--
A. The "small business recovery loan fund" is created in the authority. The fund consists of appropriations, gifts, grants, deposits, transfers and donations to the fund. Money in the fund is appropriated to the authority to administer the provisions of the Small Business Recovery and Stimulus Act. The authority shall administer the fund. Balances remaining in the fund as of December 31, [2022] 2023 and not identified by the authority as necessary to administer the Small Business Recovery and Stimulus Act over the life of the loans provided pursuant to that act shall revert to the severance tax permanent fund. The authority may expend no more than two percent of the state investment council's commitment pursuant to Section 7-27-5.15 NMSA 1978 for administering the Small Business Recovery and Stimulus Act.
B. [Upon the effective date of this 2021 act] On March 3, 2021, the authority and the state investment council shall coordinate to develop a funding schedule to ensure that sufficient funding, as provided for in Section 7-27-5.15 NMSA 1978, is made available to the authority to carry out the provisions of the Small Business Recovery and Stimulus Act."
SECTION 2. Section 6-32-4 NMSA 1978 (being Laws 2020 (1st S.S.), Chapter 6, Section 4, as amended) is amended to read:
"6-32-4. LOANS--TERMS.--
A. The authority shall receive and review applications for small business recovery loans pursuant to the Small Business Recovery and Stimulus Act. The authority may designate one or more application periods and shall review small business recovery loan applications received in each application period in the order in which the completed applications were received and shall provide a determination to the applicant within a reasonable time period after review. The authority shall make loans to qualifying small businesses; provided that funds are available and the qualifying small business satisfies credit and identification criteria, as determined by the authority. The authority shall adopt rules to govern the application procedures and requirements for disbursing loans under the Small Business Recovery and Stimulus Act, including requirements consistent with the purpose of that act for determining the eligibility of qualifying small businesses for loans; provided that the authority may issue rules to permit a business that does not have a record of actual losses, but can otherwise satisfy the requirements of the Small Business Recovery and Stimulus Act, to apply for a small business recovery loan.
B. The authority shall evaluate an application based on information received from the applicant as well as third-party credit and identification reports.
C. The authority shall make small business recovery loans in accordance with the following:
(1) the loan amount shall be in an amount not to exceed three hundred percent of the qualifying small business's average monthly business expenses as determined by the authority; provided that the maximum loan amount shall be no greater than one hundred fifty thousand dollars ($150,000);
(2) the terms of the loan shall require that:
(a) for a loan recipient that is not a non-employer business, the recipient shall use a minimum of eighty percent of the proceeds of the loan for: 1) ordinary and necessary business expenses, including capital expenses, other than compensation for an individual who owns equity in the business; 2) making adaptations or improvements to assets, including real property, that are necessary due to the coronavirus disease 2019 public health emergency to protect the public health; and 3) purchasing or improving any assets for the purpose of developing and growing the qualifying small business's e-commerce production and sales capacity;
(b) for a loan recipient that is a non-employer business, the recipient shall use a minimum of fifty percent of the proceeds of the loan for: 1) ordinary and necessary business expenses, including capital expenses, other than compensation for an individual who owns equity in the business; 2) making adaptations or improvements to assets, including real property, that are necessary due to the coronavirus disease 2019 public health emergency to protect the public health; and 3) purchasing or improving any assets for the purpose of developing and growing the qualifying small business's e-commerce production and sales capacity;
(c) the loan recipient provide a written certification signed by an appropriate officer of the qualifying small business that certifies that: 1) the officer understands that the business is receiving a loan under the Small Business Recovery and Stimulus Act that must be repaid by the business with interest under the terms of the loan agreement; 2) all documents submitted in support of the loan application and all statements and certifications made in the loan application are true and accurate to the best of the officer's knowledge; 3) prior to the issuance of the public health order issued by the secretary of health on March 23, 2020, the business was current on all obligations pursuant to the Income Tax Act, the Corporate Income and Franchise Tax Act, the Withholding Tax Act, the Gross Receipts and Compensating Tax Act and the Unemployment Compensation Law applicable to the business's operations; and 4) all loan proceeds will be used for purposes as provided in the Small Business Recovery and Stimulus Act, including that no more than twenty percent of the proceeds may be used as compensation for employees who own equity in the business; and
(d) the loan recipient provide the authority with ongoing information relevant to the reporting requirements of the authority provided in Section 6-32-7 NMSA 1978;
(3) the terms of the loan shall not require that the qualifying small business provide a personal guarantee or collateral to secure a loan in the amount of seventy-five thousand dollars ($75,000) or less. For a loan in an amount greater than seventy-five thousand dollars ($75,000), the authority may require a personal guarantee or collateral to secure the amount of the loan greater than seventy-five thousand dollars ($75,000); provided that the authority shall define specific guidelines related to personal guarantees or collateral; and
(4) the application for a loan must be received no later than [May] December 31, 2022.
D. The authority may exercise any power provided to the authority in the New Mexico Finance Authority Act to assist in the administration of the Small Business Recovery and Stimulus Act; provided that the power is consistent with the provisions of that act."
- 6 -