SB 315 — Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act; certain state matching capital loans authorized, subject to appropriation

SB315 INTRODUCEDENROLLED SB315 MF9KWW1-1MF9KWW1-2 By Senator Singleton RFD:

09-Apr-24 Page 0 MF9KWW1-1SB315 04/09/2024Enrolled PMGEnrolled, (L)tgwAn 2024-1405Act, 23 4Relating SYNOPSIS:to the Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act;

The Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act, enacted in 2021, created a procedure for the certification of growth funds by the Alabama Innovation Corporation and authorized the Alabama Innovation Corporation to accept federal funds from the American Rescue Plan Act of 2021 and issue state matching capital to taxpayers who make investor contributions to a certified growth fund to make capital accessible to rural and minority owned businesses.

This bill would authorize the Alabama Innovation Corporation to issue state matching capital to certified growth funds, contingent upon a legislative appropriation of additional funds.

A BILL TO BE ENTITLED AN ACT Relating to the Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act;

to authorize the issuance of state matching capital to certified growth funds Page 1 SB315 INTRODUCED to make capital accessible to rural and minority owned businesses;

A business that earns a majority of Page 1 SB315 Enrolled its revenues from either farming, forestry, biotechnology, fisheries, or biofuels and the processing, manufacturing, packaging, storage, distribution, marketing, and sales of those products or commodities, or the design, creation, manufacture, marketing, or sales of technology, equipment, or supplies related to those businesses.

The date the department and the Page 2 SB315 INTRODUCED growth fund execute the SSBCI loan agreement.

Fifty percent multiplied by a fraction, the numerator of which is the aggregate follow-on capital reported to the department in reports submitted pursuant to subsection (b) of Section Page 2 SB315 Enrolled 40-9H-6 and the denominator of which is 10 times the amount of the SSBCI loan.

Has its principal business operations in one or more Page 3 SB315 INTRODUCED growth zones in the state.

An entity certified by the 95 department under subsection (g) of Section 40-9H-3.

Fifty percent of a growth investment shall be comprised Page 3 SB315 Enrolled of a draw on the SSBCI loan with the remaining 50 percent funded with the growth fund's matching capital.

§ 1400Z-1 with a poverty rate of at least 20 percent, or otherwise meeting the definition of Page 4 SB315 INTRODUCED low-income community in 26 U.S.C.

An employment position that is filled, pays a wage of at least 110 percent 95 of the county average as noted in the most recent quarterly County Employment and Wages report by the Bureau of Labor Statistics of the United States Department of Labor, and requires at least 35 hours of work per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.

The reported number of retained jobs may not exceed the number reported on the Page 4 SB315 Enrolled initial report required under subsection (a) of Section 40-9H-6.

Page 5 SB315 INTRODUCED (15)(18) MATCHING CAPITAL.

The number of high wage employment positions at the Page 5 SB315 Enrolled growth business on the date of the initial growth investment.

Fifty percent multiplied by a fraction, the numerator of which is the number of new annual jobs and jobs retained reported in annual reports submitted to the department pursuant to Page 6 SB315 INTRODUCED subsection (b) of Section 40-9H-6 and the denominator of which is the number of new annual jobs and jobs retained set forth in the growth fund's certification provided pursuant to subsection (g) of Section 40-9H-3.

Page 6 SB315 Enrolled (22)(7) SSBCI FUND.

An amount equal to twenty-five million dollars ($25,000,000) of the State of Alabama's allocation of funds pursuant to Subtitle C of Title III of the American Rescue Page 7 SB315 INTRODUCED Plan Act of 2021 which shall be deposited in the SSBCI fund.

Draws in connection with growth investments in accordance with subsection (c) of Section 40-9H-4." Page 7 SB315 Enrolled "§40-9H-3 (a) Upon receipt of an allocation of funds pursuant to Subtitle C of Title III of the American Rescue Plan Act of 2021, the department shall cause the SSBCI funding to be deposited in the SSBCI fund.

(b) Within 30 days of the approval of the state's application for federal funds pursuant to Subtitle C of Title Page 8 SB315 INTRODUCED III of the American Rescue Plan Act of 2021,(a) Within 90 days of receiving an appropriation of funds, the department shall accept applications for certification as a growth fund on a form prescribed by the department.

(3) Evidence that as of the date the application is Page 8 SB315 Enrolled submitted, the applicant or affiliates of the applicant have invested at least fifty million dollars ($50,000,000) in, or lent at least fifty million dollars ($50,000,000) to, nonpublic companies located in nonmetropolitan counties, as defined by the Office of Management and Budget within the Office of the President of the United States, on the basis of county or county-equivalent units and invested at least Page 9 SB315 INTRODUCED twenty-five million dollars ($25,000,000) in, or lent at least twenty-five million dollars ($25,000,000) to, minority owned businesses.

Page 9 SB315 Enrolled (8) An education and marketing plan to educate growth businesses regarding the availability of funds and requirements for participation pursuant to this chapter.

The department shall deem applications received on the same Page 10 SB315 INTRODUCED day to have been received simultaneously.

(4) The department has already approved the maximum Page 10 SB315 Enrolled amount of investment authority and SSBCI loans allowed under subsection (c)(b).

(e)(d) If the department denies an application, the applicant may provide additional information to the department to complete, clarify, or cure defects in the application identified by the department, except for failure to comply with subdivision (b)(a)(6), within 15 days of the notice of Page 11 SB315 INTRODUCED denial for reconsideration and determination.

(h)(g) An approved growth fund may apply for additional investment authority and SSBCI loans once it has invested 100 percent of its outstanding investment authority." "§40-9H-4 Page 11 SB315 Enrolled (a) Within 30 days of certification of a growth fund, the department shall enter into the SSBCI loan agreement with the growth fund and segregate for draws by the growth fund in the SSBCI fund an amount of SSBCI funding equal to the SSBCI loan awarded to such growth fund.

(b) A growth fund, before making a growth investment, shall request from the department a written opinion as to Page 12 SB315 INTRODUCED whether the business in which it proposes to invest satisfies the definition of a growth business.

The growth fund shall return the proceeds of the draw if the growth investment is not made within the three business days of Page 12 SB315 Enrolled receipt of the draw unless the return is waived by the department." "§40-9H-5 (a) A growth fund shall forfeit its management fee, the SSBCI loan shall be immediately due and its subordination immediately revoked, and remaining draws on the SSBCI loan shall be forfeited if:

Page 13 SB315 INTRODUCED (1) Within 12 months of the closing date:

For the purposes of this subdivision, a Page 13 SB315 Enrolled growth investment is maintained even if it is sold or repaid so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of the capital.

Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the Page 14 SB315 INTRODUCED amounts are reinvested in one or more growth investments by the end of the following calendar year.

For purposes of this subdivision, a growth fund shall not be considered an affiliate of a growth business solely because of its growth Page 14 SB315 Enrolled investment.

(b) The maximum amount of growth investments in a growth business, including amounts invested in affiliates of the growth business, that may be counted towards its satisfaction of the requirements of subdivisions (a)(1) and (2) is the greater of three million dollars ($3,000,000) or 20 percent of its total investment authority, exclusive of repaid Page 15 SB315 INTRODUCED or redeemed growth investments.

The application shall include a calculation of the follow-on percentage and the new jobs and Page 15 SB315 Enrolled retained jobs percentage.

The department may not unreasonably deny an Page 16 SB315 INTRODUCED application submitted under this subsection.

Section 40-9H-9, Code of Alabama 1975, providing legislative intent for use of certain federal funds Page 16 SB315 Enrolled under the American Rescue Plan Act of 2021, is repealed.

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law, but only shall become operative upon the appropriation by the Legislature of a minimum of twelve million five hundred thousand dollars ($12,500,000) appropriated to the Alabama Rural, Agribusiness, Page 17 SB315 INTRODUCED and Opportunity Zone Jobs Act Account for the fiscal year 2024-2025.

Page 1817 SB315 Enrolled ________________________________________________ President and Presiding Officer of the Senate ________________________________________________ Speaker of the House of Representatives SB315 Senate 23-Apr-24 I hereby certify that the within Act originated in and passed the Senate.