SB 1185

This bill enacts the "Small Business Growth and Empowerment Act, "" which (i) establishes t he small business growth and empowerment fund (""fund"") as a separate account in the general fund to be used by the department of economic and community development (""department"") to be used to facilitate economic development activities for minority-owned and women-owned businesses in underserved areas or in a manner that directly impacts minority-owned a nd women-owned businesses in underserved areas, and (ii) establishes a business tax credit for small businesses. COMPOSITION OF THE FUND This bill provides that t he fund is to be composed of ( i ) f unds appropriated by the general assembly and ( ii ) g ifts, grants, and other donations received by the department for the fund. New commitments made by the commissioner of economic and community developmen t for grants from the fund must not exceed the appropriations made for the purposes of the program. Additio nally, expenses for administration, marketing, and program evaluation must not exceed 5% of appropriations in a fiscal year for the fund. In each fiscal year, the fund must be managed so that actual expenditures and obligations to be recognized at the end of the fiscal year do not exceed any available reserves and appropriations of the programs. REPORTING At least quarterly, this bill requires the commissioner of economic and community development to report to the commissioner of finance and administrat ion the status of the commitments from the fund. The report must include, at a minimum, (i) t he amount of each commitment accepted since the previous report, ( ii ) t he applicant receiving the benefit of each commitment, ( iii ) t he total outstanding commitme nts, and ( iv ) t he total unobligated balance. A copy of the report must be transmitted to the chief clerks of the senate and the house of representatives, the state treasurer, the state comptroller, the office of legislative budget analysis, and the secret ary of state. Additionally, the department must post on its website, at least quarterly, t he name of each small business growth and empowerment fund grant recipient, t he amount of each fund grant, and a description of the project to be funded by each fund grant. DISTRIBUTION OF GRANTS This bill authorizes g rants from the fund to be made in all counties where the commissioner of economic and community development determines that the grants will have a direct impact on employment and investment opportunit ies for minority-owned and women-owned businesses in underserved areas. However, t o the extent practicable, moneys from the fund must be spent in all three grand divisions of the state. Grants from the fund may only be made to local governments or their economic development organizations, other political subdivisions of the state, any subdivision of state government, or to not-for-profit organizations. USE OF THE GRANTS This bill requires g rants from the fund to be used to facilitate economic developme nt activities for minority-owned and women-owned businesses in underserved areas or in a manner that directly impacts minority-owned and women-owned businesses in underserved areas. These activities include s ite development activities, i nfrastructure acti vities, t ourism-related activities, p lanning activities, t raining and mentoring activities, e ntrepreneurship activities, s ignificant technological improvements, or o ther economic development activities determined by the commissioner of economic and communi ty development to have a beneficial impact on the economy of this state. BUSINESS TAX CREDIT Present law authorizes the commissioner of revenue to collect business taxes. As of January 1, 2026, this bill authorizes a qualifying small business that files and pays the business tax to take a credit equal to 50% of the taxpayer's liability for such tax . A small business qualifies for the credit if the business meets all of the following criteria:  The business either (i) c omplies with a local and targeted hiring policy that the business develops and implements in which at least 50% of the persons employed reside in the community, municipality, or county in which the business operates; or (ii) p rovides workforce training approved by the department of economic and community development to its employees .  The business applies for and receives certification from the department of economic and community development that the business meets the qualifications described in this bill for each year in which the credit is sought.  The business submits proof of its certification from the department of economic and community development to the department of revenue when it files and pays the business tax. As used in this bill, a ""small business"" means a business t hat is a continuing, independent, for-profit business that performs a commercially useful function with residence in this state and has total gross receipts of not more than $1, 500, 000 averaged over a three-year period or employs no more than 15 persons on a full-time basis."