85R24682 GRM-F
By: Johnson of Dallas, Rodriguez of Bexar H.B. No. 4195
Substitute the following for H.B. No. 4195:
By: Button C.S.H.B. No. 4195
A BILL TO BE ENTITLED
AN ACT
relating to establishing a program to assist small businesses in
job creation by increasing access to capital.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 481, Government Code, is amended by
adding Subchapter CC to read as follows:
SUBCHAPTER CC. REINVESTMENT IN SUPPORT FOR EMPLOYMENT
Sec. 481.451. DEFINITIONS. In this subchapter:
(1) "Capital investment loan" means a loan given to
small businesses to create jobs under the program.
(2) "Community development financial institution" has
the meaning assigned by 12 U.S.C. Section 4702.
(3) "Default rate" means the percentage of loans made
that did not meet the payment terms during a period specified by the
bank.
(4) "Financial capacity" means the ability of a
community development financial institution to service a dollar
amount to be specified by the bank.
(5) "Historical disbursement" means the number and
amount of loans a community development financial institution made
during a defined period.
(6) "Program" means the Reinvestment in Support for
Employment program established under this subchapter.
(7) "Revolving loan account" means an account allowing
for loan amounts to be withdrawn, repaid, and redrawn until the
program expires.
(8) "Small business" has the meaning assigned by
Section 481.401.
Sec. 481.452. PROGRAM FUNDING; PURPOSE. (a) The program
shall be funded by direct appropriation.
(b) The program shall expand access to capital for small
businesses to create jobs in this state.
Sec. 481.453. PROGRAM ELIGIBILITY; ADMINISTRATION. (a) To
participate in the program, an eligible community development
financial institution must enter into a participation agreement
with the bank that sets out the terms under which the bank will make
contributions to the community development financial institution's
revolving loan account.
(b) The bank shall specify the criteria for a loan to be
eligible for a revolving loan from the program. In establishing
criteria, the bank shall consider reasonable criteria relating to a
community development financial institution, including the
community development financial institution's:
(1) financial capacity;
(2) historical disbursements;
(3) loan loss reserve capacity; and
(4) default rates.
(c) The bank shall determine the eligibility of a community
development financial institution to participate in the program.
(d) The bank may limit the total number of community
development financial institutions eligible to participate in the
program.
(e) To qualify as a capital investment loan, a loan must:
(1) be made to a small business entrepreneur;
(2) be used by the business for a project, activity, or
enterprise in this state that fosters job creation and economic
development; and
(3) meet all criteria provided by this subchapter.
(f) Money from a revolving loan account shall be disbursed
quarterly to participating community development financial
institutions.
(g) The state is not liable for money disbursed under this
subchapter.
(h) The community development financial institution is
solely responsible for loan losses under the program.
Sec. 481.454. OVERSIGHT. (a) A community development
financial institution participating in the program shall report
quarterly to the bank:
(1) the names of businesses that have received capital
investment loans;
(2) the current balance of all outstanding loans made
under the program;
(3) the default rate on existing loans; and
(4) any other information the bank requires.
(b) A community development financial institution
participating in the program shall prepare a detailed financial
statement each quarter.
(c) A community development financial institution shall
allow the bank to inspect the institution's financial records on
request.
Sec. 481.455. PROGRAM REPORT. The bank shall issue an
annual status report on the program. The bank shall deliver its
report to the governor, the lieutenant governor, the speaker of the
house, and the standing committees of the legislature with primary
jurisdiction for small business and economic development.
SECTION 2. 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, 2017.