81R30100 ATP-D
By: Swinford H.B. No. 4133
Substitute the following for H.B. No. 4133:
By: Solomons C.S.H.B. No. 4133
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Texas Export Financial Assistance
Guarantee Program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 482 to read as follows:
CHAPTER 482. TEXAS EXPORT FINANCIAL ASSISTANCE GUARANTEE PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 482.001. DEFINITIONS. In this chapter:
(1) "Financial institution" has the meaning assigned
by Section 31.002, Finance Code.
(2) "Fund" means the Texas export financial assistance
guarantee program fund.
(3) "Office" means the Texas Economic Development and
Tourism Office.
(4) "Participating financial institution" means an
eligible financial institution that makes loans guaranteed under
the program.
(5) "Program" means the Texas Export Financial
Assistance Guarantee Program established under this chapter.
(6) "Qualified export product" means a product
described by Section 482.051.
Sec. 482.002. PURPOSES; ESTABLISHMENT OF PROGRAM. (a) The
purposes of the program include:
(1) promoting Texas as an exporter in the
international arena;
(2) accelerating delivery of products manufactured in
Texas to international markets; and
(3) stimulating the economy of this state by creating
manufacturing jobs and tax bases.
(b) To accomplish the purposes described by Subsection (a),
the office shall establish the Texas Export Financial Assistance
Guarantee Program to guarantee a portion of loans made to eligible
manufacturers by participating financial institutions to
facilitate the manufacture of qualified products in Texas for
international export.
Sec. 482.003. ADMINISTRATION BY OFFICE OF ECONOMIC
DEVELOPMENT AND TOURISM; RULES. The office shall administer the
program under this chapter and shall adopt rules as necessary for
the administration of the program, including rules regarding the
use of money in the fund for administrative costs.
[Sections 482.004-482.050 reserved for expansion]
SUBCHAPTER B. MANUFACTURERS OF QUALIFIED EXPORT PRODUCTS
Sec. 482.051. QUALIFIED EXPORT PRODUCTS. A person may
obtain a loan guarantee under the program with respect to the
manufacture of a product if the product:
(1) is manufactured in Texas;
(2) will be exported to an international market; and
(3) relates to one or more of the following preferred
manufacturing industries:
(A) alternative energies;
(B) medical goods;
(C) green technologies;
(D) high fuel efficiency vehicles;
(E) water conservation and purification
technologies; or
(F) scientific goods.
Sec. 482.052. MANUFACTURER EXPERIENCE. A manufacturer may
obtain a loan guarantee under the program for costs associated with
the manufacture of a qualified export product only after the
manufacturer has been in the business of manufacturing the same or a
substantially similar product for at least two years.
Sec. 482.053. LETTER OF CREDIT AND OTHER FINANCIAL
REQUIREMENTS. (a) To obtain a loan guarantee under the program, a
manufacturer must provide to a participating financial institution
a letter of credit or other documentation evidencing a creditworthy
customer's undertaking to pay for the manufacturer's products.
(b) A financial institution may impose other requirements
on the manufacturer as the financial institution considers
necessary to conform to prudent lending practices.
Sec. 482.054. MAXIMUM AMOUNT TO BE FINANCED. (a) A loan to
be guaranteed under the program may finance an amount not to exceed
80 percent of the costs to be incurred in manufacturing the products
to be purchased under the letter of credit or other documentation
described by Section 482.053(a). A financial institution may
require that a manufacturer demonstrate that the manufacturer has
the ability to finance the remaining 20 percent of the products'
manufacturing costs.
(b) A participating financial institution may not lend any
single manufacturer more than $5 million for purposes of this
chapter.
Sec. 482.055. USE OF LOAN PROCEEDS. A manufacturer must use
the proceeds of a loan guaranteed under the program only to finance
the costs of manufacturing in this state a product for
international export.
Sec. 482.056. DURATION; REAPPLICATION. A manufacturer may
not receive any portion of the proceeds of a loan guaranteed under
the program after the fifth anniversary of the date on which the
manufacturer first received loan proceeds under the program unless
the manufacturer and financial institution reapply for the loan
guarantee in the same manner as a person who has not previously
applied for a loan guarantee under the program.
[Sections 482.057-482.100 reserved for expansion]
SUBCHAPTER C. LOAN GUARANTEE PROGRAM
Sec. 482.101. FINANCIAL INSTITUTION PARTICIPATION. (a)
The office shall by rule determine criteria for a financial
institution to apply for loan guarantees under the program.
(b) If multiple financial institutions are used by a single
manufacturer that applies to participate in the program, the office
shall designate one financial institution as the lead financial
institution that shall solely hold the state's guarantee.
Sec. 482.102. TERMS OF LOAN. A participating financial
institution shall set the terms of a loan to be guaranteed under the
program. The terms must conform to prudent banking practices.
Sec. 482.103. PERFORMANCE OF DUE DILIGENCE. A
participating financial institution shall perform due diligence
before making a loan to be guaranteed under the program. This state
is not required to perform due diligence before guaranteeing a loan
under the program.
Sec. 482.104. LOAN GUARANTEE APPROVAL; SUBMISSION TO
OFFICE. (a) Not later than the 30th day after the date on which a
participating financial institution receives a complete
application for a loan to be guaranteed under the program and all
necessary supporting documentation, including the letter of credit
or other documentation described by Section 482.053(a), the
financial institution must perform due diligence and approve or
deny the loan.
(b) As soon as practicable after approving a loan to be
guaranteed under the program, a participating financial
institution shall submit an application for a loan guarantee to the
office. The application for the loan guarantee must include the
completed loan application approved by the financial institution,
all supporting documentation, including the letter of credit or
other documentation described by Section 482.053(a), and any other
information or documentation required by office rule.
(c) Not later than the 10th business day after the date the
office receives a complete application for a loan guarantee, the
office shall determine whether to guarantee the loan.
Sec. 482.105. AMOUNT OF STATE GUARANTEE. (a) This state
may guarantee up to 50 percent of the amount of a loan made by a
participating financial institution under this chapter, except
that this state may guarantee a greater amount as provided by
Subsection (b).
(b) This state may guarantee a percentage of the amount of a
loan made by a participating financial institution under this
chapter that is equal to the percentage of raw materials obtained
from Texas sources used to manufacture the product, except that the
percentage of the loan amount guaranteed under this subsection may
not exceed 80 percent.
Sec. 482.106. SERVICE OF LOAN. A participating financial
institution shall service any loan made by the institution under
the program, collect payments on the loan, and pay this state
accordingly.
Sec. 482.107. FEE FOR GUARANTEE OF LOAN. (a) Every six
months, a participating financial institution shall pay to the
office a 25-basis-point fee applied to the outstanding balance of
the state's guaranteed portion of loans made by the financial
institution under the program.
(b) The office shall by rule prescribe the manner in which a
financial institution must pay the fee required under this section.
[Sections 482.108-482.150 reserved for expansion]
SUBCHAPTER D. ADMINISTRATION BY AND DUTIES OF OFFICE
Sec. 482.151. OFFICE REQUIREMENTS FOR PARTICIPATING
FINANCIAL INSTITUTIONS. The office shall:
(1) have final approval of any financial institutions
that apply for participation in the program;
(2) establish a structured application process for a
financial institution to apply for a guarantee under the program of
a loan made by the financial institution; and
(3) establish eligibility criteria for a financial
institution to participate in the program.
Sec. 482.152. ANNUAL AUDIT. The office shall perform an
annual audit of the program.
Sec. 482.153. BIENNIAL REPORT TO LEGISLATURE. Not later
than January 1 of each odd-numbered year, the office shall submit a
report on the program to the legislature. The report must include:
(1) the amounts of loans guaranteed under the program;
(2) the uses of loans guaranteed under the program;
(3) an assessment of whether the program has
accomplished the stated purposes of this chapter;
(4) the number of jobs created as a result of the
program; and
(5) the income, including tax revenue, received by
this state as a result of the program.
[Sections 482.154-482.200 reserved for expansion]
SUBCHAPTER E. TEXAS EXPORT FINANCIAL ASSISTANCE GUARANTEE PROGRAM
FUND
Sec. 482.201. ESTABLISHMENT OF FUND. (a) The Texas export
financial assistance guarantee program fund is a dedicated account
in the general revenue fund.
(b) The following amounts shall be deposited in the fund:
(1) any amounts appropriated by the legislature for
the fund;
(2) gifts, grants, and other donations received for
the fund; and
(3) income and interest earned on the investment of
money in the fund.
(c) The fund may be used only:
(1) to guarantee loans made as provided by this
chapter; and
(2) for the administration of the program.
SECTION 2. Section 481.078, Government Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) The fund may be used to support the Texas Export
Financial Assistance Guarantee Program to the extent that
sufficient amounts are unavailable in the Texas export financial
assistance guarantee program fund to make payments as required by a
guarantee made under Chapter 482 for a defaulted loan, the full
repayment of which is unrecoverable under the letter of credit or
other documentation described by Section 482.053(a) or from the
borrower's assets.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.