§ 7 — Establishment or investment in corporations organized for the benefit of small businesses or to expand economic opportunities for low and moderate income people

[ Text of section effective until February 18, 2025. Repealed by 2024, 238, Sec. 174. See 2024, 238, Sec. 331.]Section 7. (a) The GCC may establish or invest in the capital stock of 1 or more corporations organized to increase capital available to small businesses or to engage local residents and businesses to work together to undertake programs, projects and activities which develop and improve urban, rural and suburban communities by creating and expanding economic opportunities for low and moderate income people. Without limitation, such a corporation may:(1) serve as a financial intermediary between entities undertaking projects and small businesses and public or private sources of capital including, without limitation, direct lenders, guarantors or grant makers. Any corporation so organized may accomplish its purposes by means of (i) investing in the equity capital of; (ii) making direct loans to; or (iii) issuing loan guarantees to entities undertaking projects or to small businesses; and(2) provide financial and managerial consulting services to entities undertaking projects, small businesses and minority-owned or women-owned contractors.(b) The GCC may have a controlling or a minority interest in such a corporation, as the directors of the GCC shall determine in the board's discretion; provided, however, that at least 1 director of the GCC shall sit on the board of directors of the corporation.(c) A corporation established under this section or in which the GCC has invested under this section shall, prior to making an investment in the capital stock of, or loans or loan guarantees to, entities undertaking projects or to small businesses, make the following findings:(1) that such action is consistent with the objectives of this section and may reasonably be expected to contribute to the redevelopment and economic well-being of the commonwealth, will create or retain jobs or will assist minority or women-owned businesses;(2) that the funds provided by the GCC will be used solely in connection with the costs of the project or the operation of the small business;(3) that the contract for participation in a project requires adequate reporting of financial data from the small business or project to such corporation, that the contract requires that a business receiving financial products shall participate in financial and managerial consulting services and that the contract includes a requirement for an annual or other periodic audit of the books of the project or the small business;(4) that its participation is necessary to the successful completion of the proposed project or to the success of the small business because funding for the project or small business is unavailable in the traditional capital markets or that credit has been offered on terms that would preclude the success of the project or the small business; and(d) Should the GCC desire to sell or otherwise dispose of stock received under a contract under this section, the small business or entity undertaking a project, or the small business or entity's nominee, shall within 120 days have the right of first refusal upon the sale and the right to meet a subsequent bona fide offer by a third party.(e) The GCC shall not, nor shall the GCC in combination with a corporation established or invested in by the GCC under this section, own more than 49 percent of the voting stock in a small business.(f) Upon the request of the GCC, the commissioner of banks shall examine the books of a corporation established or invested in by the GCC under this section if such examination is a condition of the particular investment, lending, loan guaranty or grant program administered by such corporation.