45-8-202 - Purpose Construction. - Tennessee Statutes

45-8-202. Purpose Construction.

(a)  It is determined and declared as a matter of legislative finding by the general assembly that:

     (1)  The availability of financial and management assistance is an important resource to small and medium size businesses to locate, remain and expand in the state, which, in time, will result in increased employment opportunities in the state;

     (2)  There is a need for financial and management resource alternatives to small and medium size businesses in the state due to a lack of bank financing in situations, including, but not limited to, start-ups, under-collateralization, management problems, and above-average risk projects;

     (3)  Many small and medium size businesses, although in a growth mode, do not meet the investment criteria of venture capital firms; and

     (4)  In order to increase employment opportunities and commercial transactions in the state, there is a need to encourage the development of resources directed at small and medium size businesses, which will help the businesses locate, remain and expand in the state.

(b)  It is further determined and declared that the purposes of this part shall be to:

     (1)  Promote economic development by encouraging the formation of private financial institutions known as BIDCOs to help meet the financing assistance and management assistance needs of growth-oriented small and medium size businesses in the state; and

     (2)  Provide for the licensing and regulation of BIDCOs to prevent fraud, conflict of interest, and mismanagement, in order to encourage:

          (A)  Private equity investments in BIDCOs; and

          (B)  Pension funds, insurance companies, foundations, utilities and other institutions to lend funds to BIDCOs.

(c)  This part shall be liberally construed to accomplish its purpose.

[Acts 1989, ch. 124, § 2.]