| 1 | 1 | | 85R12094 GRM-D |
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| 2 | 2 | | By: Menéndez S.B. No. 1410 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to establishing a pilot program to assist small business |
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| 8 | 8 | | in obtaining capital. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 481, Government Code, is amended by |
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| 11 | 11 | | adding Subchapter CC to read as follows: |
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| 12 | 12 | | SUBCHAPTER CC. SMALL BUSINESS CAPITAL ACCESS PILOT PROGRAM |
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| 13 | 13 | | Sec. 481.451. DEFINITIONS. In this subchapter: |
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| 14 | 14 | | (1) "Capital access fund" means the fund described by |
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| 15 | 15 | | Section 481.402. |
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| 16 | 16 | | (2) "Capital access loan," "loan," and "small |
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| 17 | 17 | | business" have the meanings assigned by Section 481.401. |
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| 18 | 18 | | (3) "Community development financial institution" has |
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| 19 | 19 | | the meaning assigned by 12 U.S.C. Section 4702. |
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| 20 | 20 | | (4) "Disadvantaged individual" means a person whose |
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| 21 | 21 | | annual income is equal to or less than $37,000. |
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| 22 | 22 | | (5) "Program" means the small business capital access |
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| 23 | 23 | | pilot program established under this subchapter. |
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| 24 | 24 | | (6) "Rural" means a community located in a county with |
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| 25 | 25 | | a population of 50,000 or less. |
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| 26 | 26 | | Sec. 481.452. REQUEST FOR PROPOSALS. Not later than |
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| 27 | 27 | | October 1, 2017, the bank shall issue a request for proposals from |
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| 28 | 28 | | community development financial institutions based in this state to |
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| 29 | 29 | | administer the program. The bank shall select a community |
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| 30 | 30 | | development financial institution to administer the program not |
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| 31 | 31 | | later than December 1, 2018. |
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| 32 | 32 | | Sec. 481.453. PROGRAM FUNDING; PURPOSE. (a) The program |
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| 33 | 33 | | shall be funded by allocating not more than 20 percent of the |
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| 34 | 34 | | balance of the capital access fund for the purposes of the program. |
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| 35 | 35 | | (b) The program shall expand access to capital for small |
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| 36 | 36 | | businesses located in this state. |
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| 37 | 37 | | Sec. 481.454. PROGRAM ADMINISTRATION. (a) The community |
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| 38 | 38 | | development financial institution administering the program shall |
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| 39 | 39 | | provide capital access loans to small businesses that face barriers |
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| 40 | 40 | | in accessing capital. The institution administering the program |
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| 41 | 41 | | shall give special emphasis to small businesses that are owned by: |
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| 42 | 42 | | (1) disadvantaged individuals; |
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| 43 | 43 | | (2) minorities; |
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| 44 | 44 | | (3) persons who reside in rural areas; |
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| 45 | 45 | | (4) veterans; or |
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| 46 | 46 | | (5) women. |
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| 47 | 47 | | (b) The maximum forgiveness rate is 30 percent for loans |
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| 48 | 48 | | less than or equal to $50,000. |
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| 49 | 49 | | Sec. 481.455. OVERSIGHT. (a) The community development |
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| 50 | 50 | | financial institution administering the program shall report |
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| 51 | 51 | | monthly to the bank: |
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| 52 | 52 | | (1) the names of businesses that have received capital |
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| 53 | 53 | | access loans; |
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| 54 | 54 | | (2) the current balance of all outstanding loans made |
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| 55 | 55 | | under the program; and |
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| 56 | 56 | | (3) any other information the bank requires. |
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| 57 | 57 | | (b) The community development financial institution |
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| 58 | 58 | | administering the program shall prepare a detailed financial |
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| 59 | 59 | | statement each quarter. |
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| 60 | 60 | | (c) The community development financial institution shall |
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| 61 | 61 | | allow the bank to inspect the institution's financial records on |
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| 62 | 62 | | request. |
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| 63 | 63 | | Sec. 481.456. PROGRAM REPORT. The bank shall issue an |
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| 64 | 64 | | annual status report on the program, including preliminary or final |
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| 65 | 65 | | findings concerning the program's effectiveness. The bank shall |
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| 66 | 66 | | deliver its report to the governor, the lieutenant governor, the |
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| 67 | 67 | | speaker of the house, and the standing committees of the |
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| 68 | 68 | | legislature with primary jurisdiction for small business and |
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| 69 | 69 | | economic development. |
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| 70 | 70 | | Sec. 481.457. EXPIRATION. This subchapter expires |
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| 71 | 71 | | September 1, 2020. |
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| 72 | 72 | | SECTION 2. Section 481.402, Government Code, is amended by |
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| 73 | 73 | | adding Subsection (d) to read as follows: |
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| 74 | 74 | | (d) To carry out the purposes of this subchapter, money in |
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| 75 | 75 | | the fund may be appropriated for a loan made under Subchapter CC, as |
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| 76 | 76 | | provided by Section 481.453. This subsection expires September 1, |
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| 77 | 77 | | 2020. |
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| 78 | 78 | | SECTION 3. This Act takes effect immediately if it receives |
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| 79 | 79 | | a vote of two-thirds of all the members elected to each house, as |
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| 80 | 80 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 81 | 81 | | Act does not receive the vote necessary for immediate effect, this |
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| 82 | 82 | | Act takes effect September 1, 2017. |
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