TX
Texas House Bill HB4195

Texas 2017 - 85th Regular

Texas House Bill HB4195 Compare Versions

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1-85R24682 GRM-F
2- By: Johnson of Dallas, Rodriguez of Bexar H.B. No. 4195
3- Substitute the following for H.B. No. 4195:
4- By: Button C.S.H.B. No. 4195
1+85R12094 GRM-D
2+ By: Johnson of Dallas H.B. No. 4195
53
64
75 A BILL TO BE ENTITLED
86 AN ACT
9- relating to establishing a program to assist small businesses in
10- job creation by increasing access to capital.
7+ relating to establishing a pilot program to assist small business
8+ in obtaining capital.
119 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1210 SECTION 1. Chapter 481, Government Code, is amended by
1311 adding Subchapter CC to read as follows:
14- SUBCHAPTER CC. REINVESTMENT IN SUPPORT FOR EMPLOYMENT
12+ SUBCHAPTER CC. SMALL BUSINESS CAPITAL ACCESS PILOT PROGRAM
1513 Sec. 481.451. DEFINITIONS. In this subchapter:
16- (1) "Capital investment loan" means a loan given to
17- small businesses to create jobs under the program.
18- (2) "Community development financial institution" has
14+ (1) "Capital access fund" means the fund described by
15+ Section 481.402.
16+ (2) "Capital access loan," "loan," and "small
17+ business" have the meanings assigned by Section 481.401.
18+ (3) "Community development financial institution" has
1919 the meaning assigned by 12 U.S.C. Section 4702.
20- (3) "Default rate" means the percentage of loans made
21- that did not meet the payment terms during a period specified by the
22- bank.
23- (4) "Financial capacity" means the ability of a
24- community development financial institution to service a dollar
25- amount to be specified by the bank.
26- (5) "Historical disbursement" means the number and
27- amount of loans a community development financial institution made
28- during a defined period.
29- (6) "Program" means the Reinvestment in Support for
30- Employment program established under this subchapter.
31- (7) "Revolving loan account" means an account allowing
32- for loan amounts to be withdrawn, repaid, and redrawn until the
33- program expires.
34- (8) "Small business" has the meaning assigned by
35- Section 481.401.
36- Sec. 481.452. PROGRAM FUNDING; PURPOSE. (a) The program
37- shall be funded by direct appropriation.
20+ (4) "Disadvantaged individual" means a person whose
21+ annual income is equal to or less than $37,000.
22+ (5) "Program" means the small business capital access
23+ pilot program established under this subchapter.
24+ (6) "Rural" means a community located in a county with
25+ a population of 50,000 or less.
26+ Sec. 481.452. REQUEST FOR PROPOSALS. Not later than
27+ October 1, 2017, the bank shall issue a request for proposals from
28+ community development financial institutions based in this state to
29+ administer the program. The bank shall select a community
30+ development financial institution to administer the program not
31+ later than December 1, 2018.
32+ Sec. 481.453. PROGRAM FUNDING; PURPOSE. (a) The program
33+ shall be funded by allocating not more than 20 percent of the
34+ balance of the capital access fund for the purposes of the program.
3835 (b) The program shall expand access to capital for small
39- businesses to create jobs in this state.
40- Sec. 481.453. PROGRAM ELIGIBILITY; ADMINISTRATION. (a) To
41- participate in the program, an eligible community development
42- financial institution must enter into a participation agreement
43- with the bank that sets out the terms under which the bank will make
44- contributions to the community development financial institution's
45- revolving loan account.
46- (b) The bank shall specify the criteria for a loan to be
47- eligible for a revolving loan from the program. In establishing
48- criteria, the bank shall consider reasonable criteria relating to a
49- community development financial institution, including the
50- community development financial institution's:
51- (1) financial capacity;
52- (2) historical disbursements;
53- (3) loan loss reserve capacity; and
54- (4) default rates.
55- (c) The bank shall determine the eligibility of a community
56- development financial institution to participate in the program.
57- (d) The bank may limit the total number of community
58- development financial institutions eligible to participate in the
59- program.
60- (e) To qualify as a capital investment loan, a loan must:
61- (1) be made to a small business entrepreneur;
62- (2) be used by the business for a project, activity, or
63- enterprise in this state that fosters job creation and economic
64- development; and
65- (3) meet all criteria provided by this subchapter.
66- (f) Money from a revolving loan account shall be disbursed
67- quarterly to participating community development financial
68- institutions.
69- (g) The state is not liable for money disbursed under this
70- subchapter.
71- (h) The community development financial institution is
72- solely responsible for loan losses under the program.
73- Sec. 481.454. OVERSIGHT. (a) A community development
74- financial institution participating in the program shall report
75- quarterly to the bank:
36+ businesses located in this state.
37+ Sec. 481.454. PROGRAM ADMINISTRATION. (a) The community
38+ development financial institution administering the program shall
39+ provide capital access loans to small businesses that face barriers
40+ in accessing capital. The institution administering the program
41+ shall give special emphasis to small businesses that are owned by:
42+ (1) disadvantaged individuals;
43+ (2) minorities;
44+ (3) persons who reside in rural areas;
45+ (4) veterans; or
46+ (5) women.
47+ (b) The maximum forgiveness rate is 30 percent for loans
48+ less than or equal to $50,000.
49+ Sec. 481.455. OVERSIGHT. (a) The community development
50+ financial institution administering the program shall report
51+ monthly to the bank:
7652 (1) the names of businesses that have received capital
77- investment loans;
53+ access loans;
7854 (2) the current balance of all outstanding loans made
79- under the program;
80- (3) the default rate on existing loans; and
81- (4) any other information the bank requires.
82- (b) A community development financial institution
83- participating in the program shall prepare a detailed financial
55+ under the program; and
56+ (3) any other information the bank requires.
57+ (b) The community development financial institution
58+ administering the program shall prepare a detailed financial
8459 statement each quarter.
85- (c) A community development financial institution shall
60+ (c) The community development financial institution shall
8661 allow the bank to inspect the institution's financial records on
8762 request.
88- Sec. 481.455. PROGRAM REPORT. The bank shall issue an
89- annual status report on the program. The bank shall deliver its
90- report to the governor, the lieutenant governor, the speaker of the
91- house, and the standing committees of the legislature with primary
92- jurisdiction for small business and economic development.
93- SECTION 2. This Act takes effect immediately if it receives
63+ Sec. 481.456. PROGRAM REPORT. The bank shall issue an
64+ annual status report on the program, including preliminary or final
65+ findings concerning the program's effectiveness. The bank shall
66+ deliver its report to the governor, the lieutenant governor, the
67+ speaker of the house, and the standing committees of the
68+ legislature with primary jurisdiction for small business and
69+ economic development.
70+ Sec. 481.457. EXPIRATION. This subchapter expires
71+ September 1, 2020.
72+ SECTION 2. Section 481.402, Government Code, is amended by
73+ adding Subsection (d) to read as follows:
74+ (d) To carry out the purposes of this subchapter, money in
75+ the fund may be appropriated for a loan made under Subchapter CC, as
76+ provided by Section 481.453. This subsection expires September 1,
77+ 2020.
78+ SECTION 3. This Act takes effect immediately if it receives
9479 a vote of two-thirds of all the members elected to each house, as
9580 provided by Section 39, Article III, Texas Constitution. If this
9681 Act does not receive the vote necessary for immediate effect, this
9782 Act takes effect September 1, 2017.