Texas 2015 - 84th Regular

Texas House Bill HB3617 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R10938 KLA-D
2	2	By: Capriglione H.B. No. 3617
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment of a business investment fund in this
8	8	state.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle F, Title 4, Government Code, is amended
11	11	by adding Chapter 486 to read as follows:
12	12	CHAPTER 486. BUSINESS INVESTMENT FUND
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 486.001. DEFINITIONS. In this chapter:
15	15	(1) "Fund" means the business investment fund
16	16	established under Subchapter C.
17	17	(2) "Investment manager" means the private equity fund
18	18	manager with which the comptroller contracts under Subchapter B.
19	19	(3) "Investor" means a person, including this state,
20	20	who makes an investment in the fund.
21	21	(4) "Qualified business" means a business entity that
22	22	meets the requirements of Section 486.002.
23	23	Sec. 486.002. REQUIREMENTS OF QUALIFIED BUSINESS. For
24	24	purposes of this chapter, a business entity is a qualified business
25	25	if the entity:
26	26	(1) engages in business in this state at the time the
27	27	investment manager makes an investment of fund money in the entity;
28	28	(2) intends to continue engaging in business in this
29	29	state following the investment described by Subdivision (1); and
30	30	(3) agrees to use money from the investment described
31	31	by Subdivision (1) only to support the entity's business operations
32	32	in this state.
33	33	Sec. 486.003. RULES. The comptroller shall adopt rules to
34	34	implement this chapter, including rules regarding the selection of
35	35	an investment manager.
36	36	SUBCHAPTER B. INVESTMENT MANAGER
37	37	Sec. 486.051. SELECTION OF INVESTMENT MANAGER. The
38	38	comptroller shall select a private equity fund manager to act as an
39	39	investment manager to administer the fund.
40	40	Sec. 486.052. REQUEST FOR PROPOSALS; NOTICE. (a) The
41	41	comptroller shall select a private equity fund manager to act as the
42	42	fund's administrator only after soliciting and evaluating requests
43	43	for proposals as prescribed by this section.
44	44	(b) The comptroller shall publish a notice of a request for
45	45	proposals in newspapers of general circulation in this state once
46	46	each week for two consecutive weeks before a date specified by the
47	47	comptroller as the date by which the comptroller will begin
48	48	accepting proposals. The notice must contain:
49	49	(1) a general description of the subject of the
50	50	proposed contract; and
51	51	(2) the location where the request for proposals may
52	52	be obtained.
53	53	(c) The request for proposals must include:
54	54	(1) instructions and information to a respondent
55	55	concerning the submission of a proposal, including the name and
56	56	address of the office where a proposal is to be submitted;
57	57	(2) instructions regarding the manner in which a
58	58	respondent may communicate with the comptroller, including the
59	59	names, titles, and telephone numbers of the individuals to whom the
60	60	communications shall be directed;
61	61	(3) a description of the factors and criteria the
62	62	comptroller will consider in evaluating proposals and the relative
63	63	importance of each factor or criterion;
64	64	(4) a description of the comptroller's evaluation
65	65	procedure; and
66	66	(5) a description of any documents that may be
67	67	incorporated by reference into the request for proposals, if the
68	68	request specifies where to obtain the documents and the documents
69	69	are readily available to all interested parties.
70	70	Sec. 486.053. EVALUATION OF SUBMITTED PROPOSALS. (a)
71	71	After the date specified for receiving requests for proposals, the
72	72	comptroller shall evaluate submitted proposals. The comptroller
73	73	may discuss a respondent's proposal with the respondent to clarify
74	74	or revise the proposal or the terms of the proposed contract.
75	75	(b) The comptroller may cancel a request for proposals at
76	76	any time before entering into a contract with a respondent.
77	77	Sec. 486.054. CONTRACT. (a) The comptroller shall select a
78	78	respondent to the request for proposals to act as the investment
79	79	manager for the fund and enter into a contract with the selected
80	80	respondent.
81	81	(b) The contract must specify:
82	82	(1) any standards or general limitations applicable to
83	83	investments of fund money; and
84	84	(2) the terms under which the comptroller or
85	85	investment manager may terminate the contract.
86	86	SUBCHAPTER C. ESTABLISHMENT AND OPERATION OF BUSINESS INVESTMENT
87	87	FUND
88	88	Sec. 486.101. FUND AS TRUST FUND. (a) In this section,
89	89	"financial institution" has the meaning assigned by Section
90	90	201.101, Finance Code.
91	91	(b) The business investment fund is a trust fund outside the
92	92	state treasury that is:
93	93	(1) held in a financial institution by the comptroller
94	94	as trustee on behalf of the investors; and
95	95	(2) administered by the comptroller through a contract
96	96	with the investment manager.
97	97	(c) The fund consists of:
98	98	(1) money of this state that is appropriated to the
99	99	comptroller for deposit in the fund and subsequent investment;
100	100	(2) money provided by other investors for deposit in
101	101	the fund and subsequent investment; and
102	102	(3) earnings on investments of fund money.
103	103	Sec. 486.102. PURPOSE OF FUND. The fund is established to
104	104	facilitate job creation and retention by businesses in this state.
105	105	Sec. 486.103. USES OF FUND MONEY. The investment manager
106	106	may use fund money only to:
107	107	(1) make investments in one or more qualified
108	108	businesses based on market terms;
109	109	(2) make other investments described by Section
110	110	486.153(b); and
111	111	(3) repay the principal of and pay interest on
112	112	investments made in the fund.
113	113	SUBCHAPTER D. INVESTMENTS IN FUND AND INVESTMENTS OF FUND MONEY
114	114	Sec. 486.151. INVESTMENTS. The investment manager shall
115	115	seek private equity funds to be investors in the fund.
116	116	Sec. 486.152. REPAYMENT OF INVESTMENT; RETURN. The
117	117	investment manager shall use fund money to repay an investor's
118	118	investment in the fund, including this state's investment, and pay
119	119	any interest on that investment.
120	120	Sec. 486.153. INVESTMENT REQUIREMENTS. (a) The investment
121	121	manager may invest fund money only in qualified businesses that the
122	122	investment manager anticipates will assist in achieving the purpose
123	123	of the fund specified by Section 486.102.
124	124	(b) The investment manager also may invest fund money for
125	125	limited periods in:
126	126	(1) cash deposited with a federally insured financial
127	127	institution;
128	128	(2) certificates of deposit in a federally insured
129	129	financial institution;
130	130	(3) investment securities that are:
131	131	(A) obligations of the United States or agencies
132	132	or instrumentalities of the United States; or
133	133	(B) obligations that are guaranteed fully as to
134	134	principal and interest by the United States;
135	135	(4) debt instruments that are:
136	136	(A) rated at least "A" or the equivalent by a
137	137	nationally recognized credit rating organization; or
138	138	(B) issued or guaranteed by an entity the
139	139	unsecured indebtedness of which is rated at least "A" or the
140	140	equivalent by a nationally recognized credit rating organization,
141	141	provided that the debt instruments in which the manager invests are
142	142	not subordinated to other unsecured indebtedness of the issuer or
143	143	guarantor; and
144	144	(5) obligations of this state or a municipality or
145	145	political subdivision of this state.
146	146	SECTION 2. Not later than January 1, 2016, the comptroller
147	147	of public accounts shall enter into a contract with the investment
148	148	manager selected to administer the business investment fund as
149	149	required by Chapter 486, Government Code, as added by this Act.
150	150	SECTION 3. This Act takes effect immediately if it receives
151	151	a vote of two-thirds of all the members elected to each house, as
152	152	provided by Section 39, Article III, Texas Constitution. If this
153	153	Act does not receive the vote necessary for immediate effect, this
154	154	Act takes effect September 1, 2015.