§ 16-DD — Community development revolving loan program

§ 16-dd. Community development revolving loan program. 1. Definitions.\nAs used in this section, the following terms shall have the following\nmeanings:\n (a) "Community development financial institution" means an\norganization whose principal office is located in this state, which has\nbeen certified as a community development financial institution by the\nfederal community development financial institutions fund, as\nestablished pursuant to 12 U.S.C. § 4701, et seq.\n (b) "Investment area" means a geographic area which:\n (i) Is economically distressed as defined in section sixteen-d of this\nact; and\n (ii) Has significant unmet needs for loans or is located in a\nfederally designated empowerment zone or enterprise community as\nestablished pursuant to title XIII of the federal omnibus budget\nreconciliation act of 1993 (Public Law 103-66).\n (c) "Low income" means having an income, adjusted for family size, of\nnot more than:\n (i) For metropolitan areas, eighty percent of the area median income;\nor\n (ii) For non-metropolitan areas, the greater of eighty percent of the\narea median income or the statewide non-metropolitan area median income.\n (d) "Targeted population" means low-income individuals, minority and\nwomen-owned business enterprises, small businesses, microbusinesses,\nsmall farm businesses, community-based not-for-profit corporations, and\nsuch other individuals and entities that otherwise lack adequate access\nto loans as the corporation shall establish through guidelines.\n (e) "Target market" means a defined service area which serves one or\nmore investment areas or targeted population.\n 2. The community development revolving loan program is hereby created\nto provide low interest loans or loan guarantees to a target market,\nwhere it is underserved and otherwise difficult to obtain regular bank\nfinancing. Such loans or loan guarantees shall be made by a community\ndevelopment financial institution and shall be made in target markets to\nmembers of a targeted population for purposes including, but not limited\nto, working capital, the acquisition and/or improvement of real\nproperty, the acquisition of machinery and equipment, property or\nimprovements thereto, residential mortgages, commercial mortgages,\nhousing rehabilitation, home improvement, and for such other purposes as\nthe corporation shall establish through guidelines.\n 3. A community development financial institution desiring to\nparticipate in the program shall execute an agreement in such form as\nthe corporation may prescribe and shall contain such terms and\nprovisions as the corporation or its agent may deem as necessary and\nappropriate.\n 4. (a) The corporation is hereby authorized to administer the program\ncreated in subdivision two of this section or, alternatively, to do the\nfollowing:\n (i) enter into a contract with a third party to act as the agent of\nthe corporation with respect to the administration of such program,\npursuant to a competitive process;\n (ii) conduct an annual review and assessment of the performance of the\nthird party in its capacity as agent for the corporation to determine\nwhether the contract referenced in subparagraph (i) of this paragraph\nshould be renewed for an additional two year period. The review shall be\nbased on whether the third party agent has satisfactorily met the terms\nand conditions of the contract; and\n (iii) promulgate rules and regulations with respect to the\nimplementation of the community development revolving loan program\nestablished by this section and any other rules and regulations\nnecessary to fulfill the purposes of this section, in accordance with\nthe state administrative procedure act.\n (b) Any contract entered into pursuant to subparagraph (i) of\nparagraph (a) of this subdivision shall:\n (i) be for a period of two years and shall be renewed for an\nadditional two year period subject to requirements of subparagraph (ii)\nof paragraph (a) of this subdivision; and\n (ii) provide for compensation for expenses incurred by the third party\nagent in connection with its services as agent and for such other\nservices as the corporation may deem appropriate including, but not\nlimited to the use of the premises, personnel and personal property of\nthe third party agent.\n 5. The corporation is authorized to establish a revolving loan fund\naccount into which funds may be received from any source, including but\nnot limited to, the corporation, financial institutions, insurance\ncompanies, business corporations and from settlements of civil actions\nby the department of financial services, and from which funds may be\nexpended for the aforementioned purposes.\n 6. With respect to loans pursuant to this program, a community\ndevelopment financial institution may charge application, commitment and\nloan guarantee fees subject to a schedule of fees approved by the\ncorporation.\n 7. A community development financial institution participating in the\nprogram shall submit to the corporation, an annual report detailing the\nfollowing:\n (a) the number of program loans made;\n (b) the amount of program funding used for loans;\n (c) the use of loan proceeds by the borrower;\n (d) the number of jobs created or retained;\n (e) a description of the economic development generated;\n (f) the status of outstanding program loans; and\n (g) such other information as the corporation or its agent shall\nrequire.\n 8. The corporation may directly or through a third party conduct\naudits of a community development financial institution's compliance\nwith the provisions of this section and any regulations promulgated. In\nthe event of substantive noncompliance, the corporation may terminate\nthe participation of such community development financial institution in\nthe program.\n