(1) (a) The division of local government shall administer the justice reinvestment crime prevention initiative to expand small business lending and provide grants aimed at reducing crime and promoting community development in the target communities of north Aurora and southeast Colorado Springs.

(b) Subject to available appropriations, on and after August 10, 2017, the division shall develop and implement an initiative in accordance with policies developed by the executive director specifically designed to expand small business lending in the target communities described in this subsection (1). An initiative developed and implemented pursuant to subsection (1)(a) of this section shall include, but need not be limited to, the following components:

(I) On or before September 10, 2017, the division shall issue a request for participation and select one or more nondepository community development financial institution loan funds to participate in the small business lending program described in this subsection (1);

(II) The division shall execute a contract and develop an operating agreement with each participating nondepository community development financial institution loan fund that provides comprehensive guidance regarding the procedures and program requirements and lending standards to include, but not be limited to, the following specifics:

(A) Any small business loan must be made at a fixed and reasonable interest rate, for a term not to exceed sixty months, with no prepayment penalty, and a maximum loan value of fifty thousand dollars;

(B) The procedures and timelines for a nondepository community development financial institution loan fund to draw down funding and any deposit account requirements;

(C) The terms and timeline for repayment by the nondepository community development financial institution loan fund to the division, including a reasonable grace period prior to commencement of repayment, and authority for the community development financial institution loan funds to retain interest paid by the borrower;

(D) Permission for the nondepository community development financial institution loan fund to request funding, subject to limitations established by the director, to provide or contract for services to increase the skills of prospective borrowers including, but not limited to, business and financial education, mentorship, or community outreach for marketing purposes; and

(E) Data collection requirements and performance and outcome metrics that include, but are not limited to, the number of loans made and capital disbursed and loan details including amount, rate and term, nature of business and number of jobs created, repayment collected, and delinquency or aging report;

(III) The division may retain up to fifteen percent of funding received for small business lending in a loan loss reserve fund if it believes that such reserve fund would incentivize additional lenders to expand small business lending in the two target communities; and

(IV) Any unexpended funds are not subject to reversion to the state and may be allocated in the subsequent fiscal year.

(2) (a) Subject to available appropriations, on and after August 10, 2017, the division shall develop and implement a grant program to provide funding to eligible entities for programs, projects, or direct services aimed at reducing crime in the target communities described in subsection (1) of this section. The division shall administer the grant program in accordance with policies developed by the executive director that include, but are not limited to, the specifics in subsection (2)(b) of this section.

(b) On or before September 10, 2017, the executive director shall issue a request for participation and select a community foundation or foundations to manage the grant program. To be eligible, the community foundation must be registered in the state of Colorado and have a history of grant-making in the target community in areas consistent with the permissible uses of funding described in subsection (2)(e) of this section. The division may select one community foundation to serve both target communities or may select one community foundation for each target community.

(c) The division shall execute a written agreement with the selected community foundation or community foundations that outlines the roles and responsibilities of the community foundation. The roles and responsibilities must include:

(I) Developing a nomination process and governance policy for the local crime prevention planning team, subject to approval by the appropriate city council. The community foundation shall ensure that the proposed local planning team members represent a diverse cross-section with expertise in areas like education, business, youth, families, nonprofit direct service, law enforcement, local government, community, and residents of the target communities, including those that have been directly impacted by crime and involvement in the criminal justice system.

(II) Providing facilitation to the local crime prevention planning team in both Aurora and Colorado Springs;

(III) Developing the grant guidelines, application and review process, data collection, and reporting requirements for grantees;

(IV) Reviewing proposals submitted by the local planning team and making grant awards subject to approval by the division and the office of state planning and budgeting and consistent with the permissible uses described in subsection (2)(e) of this section;

(V) Contracting with a third-party evaluator to assist each local planning team to establish best practices with regard to data collection and identifying appropriate performance and outcome measures that measure outcome and impact of any funded crime prevention projects, programs, or initiatives;

(VI) Collaborating with the office of state planning and budgeting to provide information and research to local planning teams regarding best practices and effective programs for community development and crime prevention.

(d) The division shall develop the procedures and timelines by which the selected community foundation or community foundations will be provided funding from the division for disbursement for the grant program.

(e) The permissible uses of any funding provided to the community foundation shall include programs, projects, or initiatives that are aimed at:

(I) Improving academic achievement including, but not limited to, school readiness, reducing expulsions and suspensions in schools, increasing high school graduation, college enrollment and retention rates, and promoting school-parent-student engagement;

(II) Providing community-based services to strengthen families, promote recovery from trauma, provide support to crime survivors, increase employment, and reduce recidivism, or other similar community direct service needs identified by the local planning team;

(III) Facilitating neighborhood connections, community engagement, and local leadership development;

(IV) Increasing the safety and usability of common outdoor spaces; and

(V) Developing technical assistance related to data collection, data analysis, and evaluation.

(f) The division shall transfer to the community foundation within thirty days after execution of the agreement described in subsection (2)(c) of this section the administrative costs of the community foundation related to the performance of the roles and responsibilities for managing the grant program, which costs must not exceed four percent of the appropriation.

(g) To be eligible to receive grant funding an entity must be a nonprofit organization in good standing and registered with the internal revenue service and the Colorado secretary of state's office, a school, a unit of local government, or a private contractor hired to provide technical assistance to the local planning teams.

(h) Any unexpended funds are not subject to reversion to the state and may be allocated in the subsequent fiscal year.

(3) Subsection (2) of this section and this subsection (3) are repealed, effective September 1, 2020. Before such repeal, the department of regulatory agencies shall review the justice reinvestment crime prevention initiative pursuant to section 24-34-104.

(4) On and after December 1, 2017, during its annual presentation before the joint judiciary committee of the general assembly, or any successor joint committee, pursuant to section 2-7-203 , the division shall include a status report regarding the progress and outcomes of the initiatives developed and implemented by the division pursuant to this section during the preceding year.

(5) Repealed.