By: Workman H.B. No. 3039
A BILL TO BE ENTITLED
AN ACT
relating to financing programs and activities related to rural
economic development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 58.032, Agriculture Code, is amended by
amending Subsection (a) and adding Subsection (i) to read as
follows:
(a) The Texas agricultural fund is a fund in the state
treasury that may be appropriated for the purposes of this chapter
or for rural development programs administered by the Texas
Economic Development Bank as authorized by Chapter 489, Government
Code.
(i) Notwithstanding Subsections (b), (c), (d), (e), (f),
(g), and (h), the Texas Economic Development Bank may establish and
maintain accounts in the Texas agricultural fund.
SECTION 2. Section 489.101(a), Government Code, is amended
to read as follows:
(a) The office shall establish the Texas Economic
Development Bank for the purpose of:
(1) providing globally competitive, cost-effective
state incentives to expanding businesses operating in this state
and businesses relocating to this state; [and]
(2) ensuring that communities and businesses in this
state have access to capital for economic development purposes; and
(3) providing financial assistance for economic
development projects, including projects for rural areas of this
state under Subchapter E.
SECTION 3. Section 489.105(b), Government Code, is amended
to read as follows:
(b) The fund consists of:
(1) appropriations for the implementation and
administration of this chapter;
(2) investment earnings under the capital access fund
established under Section 481.402;
(3) fees charged under Subchapter BB, Chapter 481;
(4) interest earned on the investment of money in the
fund;
(5) fees charged under this chapter;
(6) investment earnings from the programs
administered by the bank;
(7) amounts transferred under Section 2303.504(b)[,
as amended by Article 2, Chapter 1134, Acts of the 77th Legislature,
Regular Session, 2001];
(8) investment earnings under the Texas product
development fund under Section 489.211;
(9) investment earnings under the Texas small business
incubator fund under Section 489.212; [and]
(10) investment earnings under the rural development
account in the Texas agriculture fund under Subchapter E; and
(11) any other amounts received by the state under
this chapter.
SECTION 4. Section 489.106, Government Code, is amended to
read as follows:
Sec. 489.106. ADMINISTRATION OF FUND, ACCOUNT, AND CHAPTER.
The office shall administer the fund and the rural development
account in the Texas agriculture fund. In administering the fund,
the rural development account in the Texas agriculture fund, and
this chapter, the office has the powers necessary to carry out the
purposes of this chapter, including the power to:
(1) make, execute, and deliver contracts,
conveyances, and other instruments;
(2) impose and collect fees and charges in connection
with any transaction and provide for reasonable penalties for
delinquent payments or performance; [and]
(3) issue bonds for financial assistance to stimulate
the economy in rural areas of this state under Subchapter E; and
(4) issue bonds for other economic development
projects, as [that term is] defined by Section 501.101, Local
Government Code, or Section 505.151, 505.152, 505.153, 505.154,
505.155, or 505.156, Local Government Code.
SECTION 5. Section 489.108, Government Code, is amended to
read as follows:
Sec. 489.108. PROGRAMS, SERVICES, ACCOUNTS, AND FUNDS UNDER
BANK'S DIRECTION. Notwithstanding any other law, the bank shall
perform the duties and functions of the office with respect to the
following programs, services, accounts, and funds:
(1) the Texas Small Business Industrial Development
Corporation established under Chapter 503, Local Government Code;
(2) the capital access program established under
Section 481.405;
(3) the Texas leverage fund;
(4) the linked deposit program established under
Section 481.193;
(5) the enterprise zone program established under
Chapter 2303;
(6) the industrial revenue bond program;
(7) the defense economic readjustment zone program
established under Chapter 2310;
(8) the Empowerment Zone and Enterprise Community
grant program established under Section 481.025; [and]
(9) the renewal community program; and
(10) the rural development account in the Texas
agriculture fund.
SECTION 6. Chapter 489, Government Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. RURAL DEVELOPMENT ACCOUNT
Sec. 489.251. PURPOSE. Financial assistance is a
commitment made by the bank for the purpose of stimulating economic
development in rural areas of this state.
Sec. 489.252. DEFINITIONS. In this subchapter:
(1) "Anticipation note" means a note issued by an
eligible issuer and purchased by the bank under Section 1431.014.
(2) "Financial assistance" means a loan, loan
guarantee, or equity investment from the rural development account
to an applicant under this subchapter.
(3) "Rural area" has the meaning assigned by Section
58.002, Agriculture Code.
Sec. 489.253. RURAL DEVELOPMENT ACCOUNT. The rural
development account is a dedicated account in the Texas agriculture
fund for the purpose of financing rural economic development
projects authorized by Section 49-f(g), Article III, Texas
Constitution.
Sec. 489.254. BONDS. (a) The bank may issue general
obligation bonds, up to the amounts authorized by Section 49-f(g),
Article III, Texas Constitution, to fund rural economic development
projects under this subchapter.
(b) An amount of not more than five percent of the total
amount of bonds issued may be used to pay administrative fees
involved in selling the bonds.
Sec. 489.255. MANAGEMENT OF RURAL DEVELOPMENT ACCOUNT. (a)
Repayments of financial assistance under any program funded wholly
or partly with the proceeds of general obligation bonds issued in
accordance with Section 489.254 shall be deposited first in the
interest and sinking account as prescribed by the bank's
resolutions authorizing the bonds, and second in the reserve
account for the bonds until that account is fully funded as
prescribed by the bank's resolutions. The rural development
account and all accounts within that account shall be kept and
maintained at the direction of the bank and held in trust by the
comptroller for and on behalf of the bank and the owners of the
bonds issued in accordance with Section 489.254, and may be used
only as provided by this subchapter. Pending its use, money in the
rural development account shall be invested as prescribed by the
resolution by which the bonds were issued.
(b) If during the time any general obligation bonds are
payable from the rural development account the bank determines that
there will not be sufficient money in the interest and sinking
account for the bonds during the following fiscal year to pay the
principal of or interest on the bonds that is to come due during the
following fiscal year, the comptroller shall transfer to the fund
the first money coming into the state treasury not otherwise
appropriated by the constitution in an amount sufficient to pay the
obligations.
(c) The bank may receive, and shall deposit in the rural
development account appropriations, grants, donations, earned
federal funds, and the proceeds of any investment pools operated by
the comptroller that are related to rural economic development
projects under this subchapter.
(d) The rural development account includes grants and
donations made for the purposes of rural economic development
projects administered by the bank and any other money received
under this subchapter. Notwithstanding Section 404.071, income and
interest earned on money in the rural development account shall be
deposited to the credit of the account. The fund is exempt from the
application of Section 403.095.
(e) The bank shall attempt to administer the rural
development account in a manner that makes private donations to the
account an eligible itemized deduction for federal income taxation
purposes.
Sec. 489.256. FINANCIAL ASSISTANCE FOR RURAL ECONOMIC
DEVELOPMENT PROJECTS. (a) The bank may provide financial
assistance from available funds held in the rural development
account to an applicant for a rural economic development project.
(b) The bank may purchase anticipation notes from an
eligible issuer for the purpose of securing a financial commitment
made by the bank for a rural economic development project.
Sec. 489.257. APPLICATION FOR FINANCIAL ASSISTANCE. (a)
The office by rule shall adopt applicant eligibility standards and
prescribe the application process, including the creation of any
forms and the setting of necessary fees to cover the implementation
of this subchapter.
(b) An applicant for financial assistance under this
subchapter must submit to the office with the application:
(1) project financial information required by the
office;
(2) any applicable feasibility or economic impact
statements;
(3) a statement of the applicant's employment or
managerial history;
(4) security to be pledged by the applicant for
financial commitments made by the bank from the rural development
account;
(5) documentation of other forms of equity or other
financial assistance from state, federal, or private resources that
will be committed to the project; and
(6) a statement regarding how the commitment of the
bank is projected to induce capital investment, create or preserve
jobs, or provide other economic development benefits in a rural
area.
(c) The bank may consider only applications that
demonstrate reasonable assurance that the projected revenues will
be sufficient to repay any financial assistance approved by the
bank.
(d) After considering the application and all other
information the bank considers relevant, the bank shall approve or
deny the application and promptly notify the applicant of the
decision.
Sec. 489.258. RULES. The office may adopt rules, policies,
and procedures necessary or reasonable to implement this
subchapter.
SECTION 7. Section 1431.014(a), Government Code, is amended
to read as follows:
(a) Notwithstanding any other provision of this chapter, an
issuer participating in a rural economic development program
established by the Texas Economic Development Bank [Agricultural
Finance Authority] may sell to the Texas Economic Development Bank
[authority] an anticipation note issued for a purpose described by
Section 1431.004(a)(1), provided that the note matures before the
30th anniversary of the date the note is issued.
SECTION 8. This Act takes effect September 1, 2013.