§ 16-t. Small business revolving loan fund. 1. The small business
revolving loan fund program is hereby created. The corporation is
authorized, within available appropriations, to provide low interest
loans to community development financial institutions, in order to
provide funding for those lending organizations' loans to small
businesses, and micro-businesses located within New York state, that
generate economic growth and job creation within New York state but that
are unable to obtain adequate credit or adequate terms for such credit.
If in the discretion of the corporation the use of a community
development financial institution is not practicable based upon the
application of rules and regulations developed by the corporation,
including, but not limited to, assessments of geographic and
administrative capacity, then the corporation is authorized, within
available appropriations, to provide low interest loans to the following
other local community based lending organizations: small business
lending consortia, certified development companies, providers of United
States department of agriculture business and industrial guaranteed
loans, United States small business administration loan providers,
credit unions and community banks. As used in this section "small
business" means a business that is resident in New York state,
independently owned and operated, not dominant in its field, and employs
one hundred or fewer persons. As used in this section "micro-business"
means a business that is resident in New York state, independently owned
and operated, and employs less than five people.

2. In order for a lending organization to be eligible to receive
program funds, it must have established sufficient expertise to analyze
small business and micro-businesses applications for program loans,
evaluate the creditworthiness of small businesses, and micro-businesses
and regularly monitor program loans. The lending organization shall
review every program loan application in order to determine, among other
things, the feasibility of the proposed use of the requested financing
by the small business or micro-business applicant, the likelihood of
repayment and the potential that the loan will generate economic
development and jobs within New York state. The corporation shall
identify eligible lending organizations through one or more competitive
statewide or local solicitations. The corporation shall show preference
in awarding program funds to lending organizations who serve
micro-businesses and micro-loans.

3. Program loans to small businesses and micro-businesses shall be
targeted and marketed to minority and women-owned enterprises,
veteran-owned enterprises as set forth in 15 U.S.C. section 632(Q)(3),
as amended from time to time, and service-disabled veteran-owned
enterprises as set forth in article three of the veterans' services law,
and other small businesses and micro-businesses that are having
difficulty accessing traditional credit markets. Program loans to small
businesses and micro-businesses shall be used for the creation and
retention of jobs, as defined by the corporation, including: (a) working
capital; (b) the acquisition and/or improvement of real property; (c)
the acquisition of machinery and equipment, property or improvement; or
(d) the refinancing of debt obligations. There shall be two categories
of loans to small businesses and micro-businesses: a micro loan that
shall have a principal amount that is less than twenty-five thousand
dollars and a regular loan that shall have a principal amount not less
than twenty-five thousand dollars. Prior to receiving program funds, the
lending organization must certify to the corporation that such loan
complies with this section and rules and regulations promulgated for the
program and that the lending organization has performed its obligations
pursuant to and is in compliance with this section, the program rules
and regulations and all agreements entered into between the corporation
and the lending organization. The program funds amount used by the
lending organization to fund a program applicant loan shall not be more
than fifty percent of the principal amount of such loan. The program
funds amount used by the lending organization to fund a program
applicant loan shall not be greater than one hundred and twenty-five
thousand dollars. Minority- and women-owned business enterprises,
veteran-owned enterprises as set forth in 15 U.S.C. section 632(Q)(3),
as amended from time to time, and service-disabled veteran-owned
enterprises as set forth in article three of the veterans' services law,
and other small businesses or micro-businesses who access such program
loans under this subdivision shall not be precluded from accessing such
short-term financing loans provided under subdivision eleven of this
section.

4. Program funds shall not be used for: (a) projects that would result
in the relocation of any business operation from one municipality within
the state to another, except under one of the following conditions: (i)
when a business is relocating within a municipality with a population of
at least one million where the governing body of such municipality
approves such relocation; or (ii) the lending organization notifies each
municipality from which such business operation will be relocated and
each municipality agrees to such relocation; (b) projects of newspapers,
broadcasting or other news media; medical facilities, libraries,
community or civic centers; or public infrastructure improvements; and
(c) providing funds, directly or indirectly, for payment, distribution,
or as a loan, to owners, members, partners or shareholders of the
applicant business, except as ordinary income for services rendered.

5. With respect to its program loans, the lending organization may
charge application, commitment and loan guarantee fees pursuant to a
schedule of fees adopted by the lending organization and approved by the
corporation. Approved micro-loans for five thousand dollars or less
shall have applications fees waived.

6. Program funds shall be disbursed to a lending organization by the
corporation in the form of a loan to the lending organization. The term
of the loan shall commence upon disbursement of the program funds by the
corporation to the lending organization. The loan shall carry a low
interest rate determined by the corporation based on then prevailing
interest rates and the circumstances of the lending organization.
Notwithstanding the performance of the loans made by the lending
organization using program funds, the lending organization shall remain
liable to the corporation with respect to any unpaid amounts due from
the lending organization pursuant to the terms of the corporation's
loans to the lending organization. In addition, a portion of program
funds may be disbursed to a lending organization in the form of a grant
or forgivable loan, provided those funds are used by the lending
organization for administrative expenses associated with the fund,
loan-loss reserves, or other eligible expenses as determined by the
corporation.

7. Notwithstanding anything to the contrary in this section, the
corporation shall provide at least five hundred thousand dollars in
program funds pursuant to this section to lending organizations for the
purpose of making loans to small business located in Niagara county.

8. Notwithstanding anything to the contrary in this section, the
corporation shall provide at least five hundred thousand dollars in
program funds pursuant to this section to lending organizations for the
purpose of making loans to small business located in St. Lawrence
county.

9. Notwithstanding anything to the contrary in this section, the
corporation shall provide at least five hundred thousand dollars in
program funds pursuant to this section to lending organizations for the
purpose of making loans to small business located in Erie county.

10. Notwithstanding anything to the contrary in this section, the
corporation shall provide at least five hundred thousand dollars in
program funds pursuant to this section to lending organizations for the
purpose of making loans to small business located in Jefferson county.

11. Notwithstanding anything to the contrary in this section, the
corporation may provide at least five hundred thousand dollars in
program funds pursuant to this section to lending organizations for the
purpose of making short-term financing available to minority- and
women-owned business enterprises and other small businesses performing
contracts to provide construction or professional services for state
procurement purposes. Such loans shall be used to underwrite the cost of
labor, materials, and equipment directly associated with (1) the
contract being financed or (2) a contract that has been satisfied for
which the business is awaiting payment from the state. The program funds
amount used by the lending organization to fund a program applicant loan
shall not be more than eighty percent of the principal amount of such
loan. The program funds amount used by the lending organization to fund
a program applicant loan shall not be greater than one hundred
twenty-five thousand dollars. Minority- and women-owned business
enterprises and other small businesses who access such short-term
financing loans under this subdivision shall not be precluded from
accessing such program loans provided under subdivision three of this
section.

12. Notwithstanding any provision of law to the contrary, the
corporation may establish a program fund for program use and pay into
such fund any funds available to the corporation from any source that
are eligible for program use, including moneys appropriated by the
state.

13. With respect to a lending organization program loan applicants, no
person who is a member of the board or other governing body, officer,
employee, or member of a loan committee, or a family member of any such
lending organization shall participate in any decision on such
application if such person is a party to or has a financial or personal
interest in such loan. Any person who cannot participate in a loan
application decision for such reasons shall not be counted as a member
of the loan committee, board or other governing body for purposes of
determining the number of members required for approval of such
application.

14. The lending organization shall submit to the corporation annual
reports stating: the number of program loans made; the amount of program
funding used for loans; the use of loan proceeds by the borrower; the
number of jobs created or retained; the status of each outstanding
program loan, including fund balance; and such other information as the
corporation may require.

14-a. Beginning April 1, 2019, the corporation shall publish on its
website the information contained in the annual reports required under
subdivision fourteen of this section in aggregate form omitting borrower
identifiable information.

15. The corporation may conduct audits of the lending organization in
order to ensure compliance with the provisions of this section, any
regulations promulgated with respect thereto and agreements between the
lending organization and the corporation of all aspects of the use of
program funds and program loan transactions. In the event that the
corporation finds substantive noncompliance, the corporation may
terminate the lending organization's participation in the program.

16. Upon termination of a lending organization's participation in the
program, the lending organization shall return to the corporation,
promptly after its demand therefor, all program fund proceeds held by
the lending organization; and provide to the corporation, promptly after
its demand therefor, an accounting of all program funds received by the
lending organization, including all currently outstanding loans that
were made using program funds. Notwithstanding such termination, the
lending organization shall remain liable to the corporation with respect
to any unpaid amounts due from the lending organization pursuant to the
terms of the corporation's loans to the lending organization.