Section 85.25. Disadvantaged business mobilization assistance program.

 

(1)   Findings and purpose. The legislature finds that the lack of working capital is a major barrier to the participation of certain businesses in construction contracts with the department. This problem is most acute for newer, less experienced businesses, and, in particular, for disadvantaged businesses, many of which lack the assets necessary to obtain financing under normal business lending standards. The disadvantaged business mobilization assistance program is created to assist disadvantaged businesses in obtaining working capital in order to participate in construction contracts with the department and to increase the representation of disadvantaged businesses among contractors performing on construction projects for the department.

(2)   Definitions. In this section:

(a) “Business development organization" means the Wisconsin Housing and Economic Development Authority under s. 234.02 or any private organization that prepares business and loan plans for and provides other financial, management, and technical assistance to disadvantaged businesses.

(b) “Deficiency" means the unpaid principal amount of a defaulted mobilization loan guaranteed under sub. (4) . “Deficiency" does not include any interest, any origination fees or other charges relating to the guaranteed loan or any expenses incurred by the lender in enforcing the security interest taken in the capital equipment or other asset resulting from the proceeds of the guaranteed loan.

(c) “Disadvantaged business" means any of the following:

1m. A sole proprietorship, partnership, limited liability company, joint venture or corporation that fulfills all of the following requirements:

a. It is at least 51 percent owned, controlled and actively managed by a disadvantaged individual, as defined in s. 84.076 (1) (a) .

b. It is currently performing a useful business function as defined in s. 16.287 (1) (h) .

2m. A disabled veteran-owned business, as defined in s. 84.075 (1c) (a) .

(d) “Guaranteed loan" means a mobilization loan which is guaranteed by a business development organization under a grant under sub. (3) .

(e) “Mobilization loan" means a short-term loan, as specified by the department by rule, to a disadvantaged business to provide working capital in order to finance the purchase of capital equipment, insurance or any other service or consumable good necessary to enable the disadvantaged business to participate in transportation-related construction contracts with the department.

(f) “Participating lender" means a bank, credit union, savings bank, savings and loan association or other person who makes mobilization loans.

(3)   Administration. The department shall administer the disadvantaged business mobilization assistance program. Subject to sub. (4) , the department may make grants for the purpose specified in sub. (1) to a business development organization in order to provide funding for the guarantee by the business development organization of a mobilization loan made by a participating lender to a disadvantaged business certified by the department.

(4)   Rule making. The department shall promulgate rules to implement the disadvantaged business mobilization assistance program. The rules shall specify all of the following:

(a) Conditions for eligibility of a business development organization for a grant under sub. (3) .

(b) Conditions for eligibility of a disadvantaged business for a guaranteed loan. The conditions may include requirements relating to certification of a disadvantaged business by the department.

(c) Conditions for the guarantee of a mobilization loan by a business development organization applying for a grant under sub. (3) . The conditions shall include requirements relating to the term of a mobilization loan. The conditions may include a requirement for execution of a guarantee agreement between the business development organization and the participating lender and review of such an agreement by the department. The conditions may specify a percentage of principal of any mobilization loan which must be guaranteed by a business development organization applying for a grant under sub. (3) . The conditions may include requirements relating to the rate of a mobilization loan. The conditions may include requirements relating to defaulted mobilization loans and deficiencies.

(d) Conditions relating to the total principal amounts of all mobilization loans which may be guaranteed by business development organizations at one time, not to exceed $1,500,000.

(e) Conditions under which a business development organization may not guarantee additional mobilization loans. The conditions shall include a prohibition on the guarantee of additional mobilization loans by a business development organization if the amount of the grant to the business development organization not yet expended under the disadvantaged business mobilization assistance program is equal to or less than $100,000.

(f) Conditions under which a grant made under sub. (3) to a business development organization may be required to be repaid.

(5)   Moral obligation. Recognizing its moral obligation to do so, the legislature expresses its expectation and aspiration that, if ever called upon to do so, it shall make an appropriation from the transportation fund to meet all demands for funds relating to defaulted mobilization loans and deficiencies under this section.

1987 a. 399 ; 1989 a. 31 ; 1991 a. 221 ; 1993 a. 112 ; 2001 a. 104 ; 2009 a. 299 ; 2011 a. 32 . Cross-reference: See also ch. Trans 404 , Wis. adm. code.