82R5893 CLG-F
By: Lozano H.B. No. 951
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Rural Development Fund
and to the establishment, operation, and funding of certain
programs for rural economic development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 487.001, Government Code, is amended by
adding Subdivision (3) to read as follows:
(3) "Rural area" means an area that is predominately
rural in character as defined by the department.
SECTION 2. Subchapter C, Chapter 487, Government Code, is
amended by adding Section 487.062 to read as follows:
Sec. 487.062. TRAINING. (a) The department may develop and
administer a training program related to the programs and
activities established under Subchapters S, T, U, V, W, and X.
(b) The department may contract with a public or private
entity to develop and provide the training under this section.
SECTION 3. Chapter 487, Government Code, is amended by
adding Subchapters R, S, T, U, V, W, and X to read as follows:
SUBCHAPTER R. TEXAS RURAL DEVELOPMENT FUND
Sec. 487.761. TEXAS RURAL DEVELOPMENT FUND. (a) The Texas
Rural Development Fund is an account in the general revenue fund.
The account is composed of:
(1) legislative appropriations;
(2) gifts, donations, grants, and matching funds
received under Subsection (b); and
(3) other money required by law to be deposited in the
account.
(b) The department may solicit and accept gifts, donations,
grants, and matching funds of money from the federal government,
local governments, private corporations, or other persons to be
used for the purposes of Subchapters S, T, U, V, W, and X.
(c) Income from money in the account shall be credited to
the account.
(d) Money in the development fund may be used only for the
purpose of implementing and maintaining the programs established
under Subchapters S, T, U, V, W, and X.
SUBCHAPTER S. RURAL ENTREPRENEURSHIP AND BUSINESS INNOVATION
PROGRAM
Sec. 487.771. DEFINITIONS. In this subchapter:
(1) "Microenterprise" means a business in a rural area
with not more than five employees.
(2) "Minimum wage" means the minimum wage set by
federal law as of January 1, 2011.
(3) "Program" means the rural entrepreneurship and
business innovation program established under this subchapter.
(4) "Small business" means a business in a rural area
with not more than 200 employees.
Sec. 487.772. PROGRAM. The department shall create a rural
entrepreneurship and business innovation program to:
(1) assist in the development and expansion of
businesses in rural areas;
(2) assist entrepreneurs in rural areas; and
(3) recruit out-of-state businesses to locate and
transact business in rural areas.
Sec. 487.773. INCENTIVES; LOANS. (a) The program shall
offer incentives in the form of loans to entrepreneurs and
businesses for purposes of the creation or retention of jobs in
rural areas.
(b) An eligible business or entrepreneur may apply for a
loan under the program on an application form prescribed by the
department.
Sec. 487.774. ELIGIBLE BUSINESS OR ENTREPRENEUR; BORROWING
REQUIREMENTS. (a) The department may make a loan under the program
to any of the following eligible businesses or entrepreneurs:
(1) microenterprises;
(2) small businesses;
(3) businesses dependent on natural resources in
developing value-added products;
(4) tourism or recreation businesses;
(5) entrepreneurs and small businesses that provide
broadband service access to underserved rural areas; and
(6) projects to develop infrastructure for the benefit
of entrepreneurs and businesses in rural areas.
(b) To be eligible to receive a loan under this subchapter,
the applicant must:
(1) be in good standing under the laws of the state in
which the entity was formed or organized, as evidenced by a
certificate issued by the secretary of state or the state official
having custody of the records pertaining to entities or other
organizations formed under the laws of that state; and
(2) owe no delinquent taxes to a taxing unit of this
state.
(c) The department may require a commercial bank letter of
credit. The department may determine and require other terms and
conditions, including insurance or a bank guarantee, for the making
of a loan under the program.
Sec. 487.775. MAXIMUM LOAN AMOUNT. (a) The maximum loan
amount to be made by the program is $35,000 for each eligible
employee position retained or created.
(b) A loan made by the program may be based on the following
schedule:
(1) up to $14,000 for each eligible employee position
retained or created with wages greater than or equal to 170 percent
and less than 200 percent of the minimum wage;
(2) up to $21,000 for each eligible employee position
retained or created with wages greater than or equal to 200 percent
and less than 250 percent of the minimum wage;
(3) up to $28,000 for each eligible employee position
retained or created with wages greater than or equal to 250 percent
and less than 300 percent of the minimum wage; and
(4) up to $35,000 for each eligible employee position
retained or created with wages greater than or equal to 300 percent
of the minimum wage.
Sec. 487.776. RESTRICTION ON USE OF LOAN. A loan may not be
used to attract a business from another location in this state,
unless the department determines that the business would otherwise
leave the state.
Sec. 487.777. LOAN TERMS. (a) Loan interest rates must be
based on the capacity of the borrower and the risk of the project,
as determined by the department.
(b) Loan interest rates may be as low as one percent.
Sec. 487.778. WRITTEN AGREEMENT. (a) Before awarding a
loan under this subchapter, the department shall enter into a
written agreement with the entity to be awarded the loan money
specifying that:
(1) if the department finds that the loan recipient
has not met each of the performance targets specified in the
agreement as of a date certain provided in the agreement:
(A) the recipient shall repay the loan and any
related interest to the state at the agreed rate and on the agreed
terms;
(B) the department will not distribute to the
recipient any loan money that remains to be awarded under the
agreement; and
(C) the department may assess specified
penalties for noncompliance against the recipient;
(2) if all or any portion of the amount of the loan is
used to build a capital improvement, the state may:
(A) retain a lien or other interest in the
capital improvement in proportion to the percentage of the loan
amount used to pay for the capital improvement; and
(B) require the recipient of the loan, if the
capital improvement is sold, to:
(i) repay to the state the loan money used
to pay for the capital improvement, with interest at the rate and
according to the other terms provided by the agreement; and
(ii) share with the state a proportionate
amount of any profit realized from the sale; and
(3) if, as of a date certain provided in the agreement,
the loan recipient has not used loan money awarded under this
subchapter for the purposes for which the loan was intended, the
recipient shall repay that amount and any related interest to the
state at the agreed rate and on the agreed terms.
(b) The loan agreement may include a provision providing
that a reasonable percentage of the total amount of the loan will be
withheld until specified performance targets are met by the entity
as of the date described by Subsection (a)(1).
(c) The department shall determine:
(1) the performance targets and date required to be
contained in the loan agreement as provided by Subsection (a)(1);
and
(2) if the loan agreement includes the provision
authorized by Subsection (b), the percentage of loan money required
to be withheld.
Sec. 487.779. ANNUAL PROGRESS REPORT. An entity entering
into a loan agreement under Section 487.778 shall submit to the
department an annual progress report containing the information
compiled during the previous calendar year regarding the attainment
of each of the performance targets specified in the agreement.
Sec. 487.780. REPAYMENT OF LOAN. (a) Repayment of a loan
under Section 487.778(a)(1)(A) may be prorated to reflect a partial
attainment of performance targets.
(b) After repayment of a loan, the department may rebate to
the borrower an amount to cover fees associated with a commercial
bank letter of credit and all, or a portion of, the borrower's
incidental borrowing costs.
(c) The department may use interest earned on any loans to
repay any indebtedness related to the program.
Sec. 487.781. SUPPORT SERVICES. The department may
contract to provide services to entrepreneurs or businesses for
purposes of implementing the program.
Sec. 487.782. CHALLENGE GRANTS. The department may award
challenge grants under the program to promote the establishment of
community-based organizations to work in partnership with
communities in rural areas to assist entrepreneurs through economic
development efforts in existence at the time of the organization's
establishment.
SUBCHAPTER T. RURAL AREA REGIONAL PLANNING AND IMPLEMENTATION
MATCHING GRANT PROGRAM
Sec. 487.801. DEFINITION. In this subchapter, "program"
means the rural area regional planning and implementation matching
grant program established under this subchapter.
Sec. 487.802. RURAL AREA REGIONAL PLANNING AND
IMPLEMENTATION MATCHING GRANT PROGRAM. (a) The department shall
create the rural area regional planning and implementation matching
grant program to foster regional collaboration for community and
economic development in rural areas.
(b) The department may award matching grants for the
planning and implementation of regionally identified objectives in
a rural area.
Sec. 487.803. ELIGIBLE ENTITIES. (a) To be awarded a
matching grant under the program for a proposed project, an
application, including a description of the project proposal, must
be jointly submitted by two or more of the following entities in the
form prescribed by the department:
(1) a municipality;
(2) a county;
(3) an economic development corporation;
(4) a community foundation;
(5) a faith-based organization;
(6) a hospital or clinic;
(7) an institution of higher education, as defined by
Section 61.003, Education Code; or
(8) a commission, as defined by Section 391.002, Local
Government Code.
(b) Entities that jointly submit an application under
Subsection (a) must be physically located in at least:
(1) two or more adjacent rural counties; or
(2) two or more municipalities or census-designated
places in a rural county.
Sec. 487.804. GRANT AWARDS. The department shall give
preference to eligible applicants that demonstrate an inclusive
planning and implementation process over other eligible applicants
for an award of a matching grant under the program.
SUBCHAPTER U. RURAL CAPACITY AND LEADERSHIP ENHANCEMENT PROGRAM
Sec. 487.821. DEFINITION. In this subchapter, "program"
means the rural capacity and leadership enhancement program.
Sec. 487.822. PROGRAM. The department shall create the
rural capacity and leadership enhancement program to assist
municipalities and unincorporated communities in rural areas to:
(1) develop leadership capacity;
(2) improve the business practices of municipal
government;
(3) increase awareness of the benefits of renewable
energy;
(4) identify community assets that can be used to
enhance community and economic development; and
(5) provide assistance for emergency services
districts.
Sec. 487.823. RURAL LEADERSHIP CURRICULUM. The department
may coordinate with an interested public junior college or public
technical institute, as those terms are defined by Section 61.003,
Education Code, that is located in a rural area or a consortium of
those colleges or institutes, the Texas Rural Leadership Program,
or another appropriate leadership program to develop and maintain a
rural leadership curriculum to implement the program.
Sec. 487.824. LEADERSHIP TRAINING. The department may
award a stipend under the program to an individual who completes
training based on the curriculum developed under Section 487.823.
SUBCHAPTER V. RURAL COMMUNITY ASSET STUDY MATCHING GRANT PROGRAM
Sec. 487.841. DEFINITION. In this subchapter, "program"
means the rural community asset study matching grant program.
Sec. 487.842. RURAL COMMUNITY ASSET STUDY MATCHING GRANT
PROGRAM. (a) The department shall create the rural community asset
study matching grant program to assist communities in rural areas
in identifying community assets.
(b) The department may issue matching grants to fund
community asset studies in accordance with criteria established by
the department.
Sec. 487.843. ELIGIBLE ENTITIES. (a) To be awarded a
matching grant under the program for a proposed project, an
application, including a description of the project proposal, must
be jointly submitted by two or more of the following entities in the
form prescribed by the department:
(1) a municipality;
(2) a county;
(3) an economic development corporation;
(4) a community foundation;
(5) a faith-based organization;
(6) a hospital or clinic;
(7) an institution of higher education, as defined by
Section 61.003, Education Code; or
(8) a commission, as defined by Section 391.002, Local
Government Code.
(b) The department shall give preference to eligible
applicants that demonstrate an inclusive planning and
implementation process over other eligible applicants for an award
of a matching grant under the program.
(c) The department shall develop criteria for eligible
projects and for the awarding of matching grants under the program.
SUBCHAPTER W. TEXAS RURAL YOUTH CORPS PROGRAM
Sec. 487.851. DEFINITIONS. In this subchapter:
(1) "Executive director" means the executive director
of the department.
(2) "Program" means the Texas rural youth corps
program.
Sec. 487.852. TEXAS RURAL YOUTH CORPS PROGRAM. (a) The
department shall create the Texas rural youth corps program to
encourage youth participation in civic improvement activities in
rural areas. The program shall:
(1) provide youth in rural areas with opportunities to
acquire job skills while participating in community service
activities; and
(2) create opportunities for youth that allow rural
communities to enhance existing community resources and improve
economic conditions.
(b) The department may designate personnel as necessary to
administer the program.
Sec. 487.853. GRANTS. The executive director may award
grants under the program to eligible entities for projects that
meet the requirements of this subchapter.
Sec. 487.854. ELIGIBLE ENTITIES. (a) Except as provided by
Subsection (b), the following entities are eligible to submit an
application as provided by Section 487.856 to receive a grant for a
proposed project under this subchapter:
(1) a nonprofit organization;
(2) a public agency that operates a community-based
youth employment training program;
(3) a community housing development organization
certified by this state;
(4) a youth organization;
(5) a corps-based community service organization; or
(6) another entity authorized by the department.
(b) Each eligible applicant that submits an application
under Subsection (a) must demonstrate that the applicant has at
least three years of successful experience operating programs for
the benefit of youth, in particular disadvantaged or at-risk youth
populations.
Sec. 487.855. ELIGIBLE PROJECTS. To receive a grant under
the program, a proposed project of an eligible applicant must
provide, by using the services and skills of youth participants who
are at least 12 years of age but younger than 19 years of age, at
least one of the following services to the rural community in which
the project is located:
(1) rehabilitation or construction of
energy-efficient, affordable housing for:
(A) elderly individuals;
(B) veterans of the United States armed forces;
or
(C) low-income individuals and families;
(2) sustainable construction or rehabilitation of:
(A) historic properties;
(B) community facilities;
(C) business incubators;
(D) health care facilities;
(E) cultural districts; or
(F) parks or cemeteries owned or supported by
funds of public or nonprofit entities;
(3) increased access to information on new technology
and technological advances, including communications or renewable
energy technologies;
(4) documentation of community history;
(5) identification and analysis of community assets
through a community asset study; and
(6) marketing services of community assets,
amenities, and history identified in a community history
documentation or community asset study.
Sec. 487.856. GRANT APPLICATION. A grant application for a
proposed project must be filed with the department in a form
prescribed by the department. Each application must include:
(1) the amount of grant money requested;
(2) a description of the proposed project;
(3) a description of the applicant's qualifications,
including the applicant's experience with youth, educational
groups, and community groups;
(4) a list of proposed sites for construction or
rehabilitation of housing or other buildings, if applicable;
(5) a description of proposed sustainable
construction or rehabilitation activities, including an
implementation schedule, if applicable;
(6) a description of the applicant's proposed
procedures for recruiting and selecting participants in the
project;
(7) a proposed budget;
(8) a description of proposed financing, if
applicable;
(9) a list of relevant contracts or other arrangements
between the applicant and public agencies to facilitate project
implementation;
(10) a list of prospective donations, grants, or
in-kind contributions that will supplement grant money received
under the program; and
(11) other criteria as considered necessary by the
department.
Sec. 487.857. PROJECT SELECTION; CRITERIA. (a) The
department shall establish criteria for selecting projects for the
awarding of a grant under this subchapter.
(b) In establishing criteria under Subsection (a), the
department shall:
(1) give preference to an applicant who can document
the existence of matching contributions from other sources and
support from local organizations, community leaders, and elected
officials; and
(2) give preference to projects that provide
participants with an opportunity to earn scholarship awards toward
college tuition expenses.
(c) In establishing criteria under Subsection (a), the
department may:
(1) give preference to an applicant who has experience
in providing the services proposed to be provided under the
project; and
(2) give preference to projects that assist youths who
are at least 12 years of age but younger than 19 years of age who:
(A) are not attending high school and have not
received a high school diploma or high school equivalency
certificate; or
(B) attend high school or a program leading to a
high school equivalency certificate, but have been identified as
being at risk of dropping out of high school or the program leading
to a high school equivalency certificate.
Sec. 487.858. ADVISORY BOARD; PARTICIPANT COUNCIL. On
receipt of a grant under the program, the successful grantees shall
establish:
(1) an advisory board for the project that includes:
(A) senior staff that manage and operate the
project;
(B) employers and business and community leaders
of the community; and
(C) project participants; and
(2) a project participant council to provide comments
and suggestions regarding project policies.
Sec. 487.859. ASSISTANCE FOR GRANTEES. The department
shall provide grantees awarded a grant under the program access to
curriculum materials created under Section 487.823, in particular
materials that are designed to develop:
(1) leadership ethics;
(2) active citizenship;
(3) a sense of personal responsibility;
(4) critical thinking skills;
(5) decision-making skills;
(6) problem-solving skills; and
(7) negotiation skills.
Sec. 487.860. OTHER FUNDING SOURCES REQUIRED. Up to 50
percent of a proposed project's budget must be derived from a source
other than the award of a grant or other incentive from the
department, as determined by the department.
Sec. 487.861. LIMIT ON ADMINISTRATIVE EXPENSES. A grantee
may not spend grant money for more than eight percent of a proposed
project's administrative costs.
Sec. 487.862. REPORTING REQUIREMENT. The department must
include the following information regarding the program in its
biennial report to the legislature under Section 487.056:
(1) the total number of grants and the total amount of
grant money awarded under the program;
(2) the geographical distribution of grants awarded;
and
(3) the number of youth and other persons
participating in program-funded projects.
SUBCHAPTER X. RURAL WEALTH CREATION AND RETENTION PROGRAM
Sec. 487.871. DEFINITION. In this subchapter, "program"
means the rural wealth creation and retention program.
Sec. 487.872. RURAL WEALTH CREATION AND RETENTION PROGRAM.
The department shall create a rural wealth creation and retention
program to assist rural communities in:
(1) identifying community wealth;
(2) educating residents about the benefits of
charitable giving; and
(3) encouraging the creation of community foundations
in those areas to build sustainable local wealth and decrease
long-term dependence on state and federal resources.
Sec. 487.873. CONTRACT FOR SERVICES. (a) The department
may contract with other entities to provide services under the
program.
(b) In making a decision to contract with an entity under
Subsection (a), the department shall give preference to an entity
with a proven history of providing assistance to community
foundations.
Sec. 487.874. SUPPORT SERVICES. The department, or a
contracting entity under Section 487.873, may provide support
services for the implementation of the program, including financial
management, strategic development, and education training.
Sec. 487.875. FEE. The department, or a contracting entity
under Section 487.873, may charge a fee for services provided under
the program. The amount of the fee shall be determined by the
department.
SECTION 4. Not later than March 1, 2012, the board of the
Texas Department of Rural Affairs shall adopt any necessary rules
for the fund established under Subchapter R, Chapter 487,
Government Code, as added by this Act, and the programs established
under Subchapters S through X, Chapter 487, Government Code, as
added by this Act.
SECTION 5. Implementation of the programs established under
Subchapters S through X, Chapter 487, Government Code, as added by
this Act, is contingent on appropriation of funding by the
legislature.
SECTION 6. 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, 2011.