81R6590 KFF-D
By: Shapleigh S.B. No. 1602
A BILL TO BE ENTITLED
AN ACT
relating to creating a microloan guarantee program using funds
appropriated to the Texas Enterprise Fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 481.078(c), Government Code, is amended
to read as follows:
(c) Except as provided by Subsection (d) and subject to
Section 481.0781, the fund may be used only for economic
development, infrastructure development, community development,
job training programs, and business incentives.
SECTION 2. Subchapter E, Chapter 481, Government Code, is
amended by adding Section 481.0781 to read as follows:
Sec. 481.0781. TEXAS ENTERPRISE FUND MICROLOAN GUARANTEE
PROGRAM. (a) In this section:
(1) "Financial institution" has the meaning assigned
by Section 31.002, Finance Code.
(2) "Microloan" means a business loan of not more than
$10,000.
(3) "Microloan guarantee program" means the Texas
Enterprise Fund microloan guarantee program established under this
section.
(b) At least one percent of the funds appropriated by the
legislature to the Texas Enterprise Fund must be used to administer
and fund the microloan guarantee program established under this
section.
(c) In accordance with this section, the office shall
establish and administer the Texas Enterprise Fund microloan
guarantee program to assist in the creation and expansion of
businesses and jobs in this state by guaranteeing microloans to
eligible businesses by financial institutions that participate in
the program.
(d) To be eligible to receive a loan guarantee under the
microloan guarantee program, a business must:
(1) apply to the office on a form prescribed by the
office;
(2) be unable to obtain a loan from a participating
financial institution without a loan guarantee; and
(3) meet the eligibility requirements established by
the office.
(e) An application for a microloan under this section must
contain:
(1) a plan for the applicant's proposed use of
microloan proceeds, including a description of how the microloan
proceeds will be used to promote business or job growth; and
(2) a signed statement from a loan officer of the
financial institution that states that a loan guarantee is required
for approval of the loan application.
(f) The office may charge a reasonable fee for processing an
application filed under this section.
(g) The office shall consider the following factors in
determining whether to approve an application for a microloan
guarantee:
(1) the anticipated benefits from granting a microloan
guarantee, including the potential to promote business or job
growth;
(2) the applicant's qualifications;
(3) the feasibility of the applicant's plan; and
(4) other repayment sources available to the
applicant.
(h) If a recipient of a loan guarantee defaults on a loan
that is guaranteed under this section and the office is required to
honor its guarantee, the office may bring suit against the
defaulting party.
(i) The office shall adopt rules necessary to implement this
section, including rules regarding the participation of financial
institutions in the microloan guarantee program.
SECTION 3. This Act takes effect September 1, 2009.