S.B. No. 1361 establishes a disaster recovery loan program specifically for small and micro-businesses in Texas. The bill amends various sections of the Government Code to create a dedicated "small- and micro-business recovery fund" and outlines the definitions and criteria for loans under this program. Key definitions are updated to include "small businesses" and "micro-businesses," with specific eligibility requirements for loans, including the need for businesses to be in good standing and to have suffered economic injury due to a disaster. The program aims to provide zero-interest loans to community development financial institutions, which in turn will offer loans to qualifying businesses that face challenges in accessing capital after a disaster.

Additionally, the bill mandates that participating financial institutions report quarterly on the status of loans, including the names of businesses that received funding and the default rates on these loans. It also specifies that loans can be used for payroll costs, including health care benefits for employees. The legislation repeals an existing subchapter related to small business loans, streamlining the process under the new program. The act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Government Code 481.451, Government Code 481.452, Government Code 481.453, Government Code 481.454, Government Code 481.455, Government Code 481.457, Government Code 489.107 (Government Code 489, Government Code 481)
Senate Committee Report: Government Code 481.451, Government Code 481.452, Government Code 481.453, Government Code 481.454, Government Code 481.455, Government Code 481.457, Government Code 489.107 (Government Code 489, Government Code 481)
Engrossed: Government Code 481.451, Government Code 481.452, Government Code 481.453, Government Code 481.454, Government Code 481.455, Government Code 481.457, Government Code 489.107 (Government Code 489, Government Code 481)
House Committee Report: Government Code 481.451, Government Code 481.452, Government Code 481.453, Government Code 481.454, Government Code 481.455, Government Code 481.457, Government Code 489.107 (Government Code 489, Government Code 481)