Texas 2021 - 87th Regular

Texas House Bill HB3271 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 3271
	1	+	By: Ordaz Perez, et al. (Senate Sponsor - Blanco) H.B. No. 3271
	2	+	(In the Senate - Received from the House April 28, 2021;
	3	+	May 14, 2021, read first time and referred to Committee on Business &
	4	+	Commerce; May 21, 2021, reported favorably by the following vote:
	5	+	Yeas 6, Nays 0; May 21, 2021, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to establishing loan programs to assist certain
6	12		micro-businesses by increasing access to capital; authorizing
7	13		fees.
8	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	15		SECTION 1. Chapter 481, Government Code, is amended by
10		-	adding ~~Subchapter~~ CC to read as follows:
	16	+	adding Subchapters CC and EE to read as follows:
11	17		SUBCHAPTER CC. MICRO-BUSINESS DISASTER RECOVERY PROGRAM
12	18		Sec. 481.451. DEFINITIONS. In this subchapter:
13	19		(1) "Community development financial institution" has
14	20		the meaning assigned by 12 U.S.C. Section 4702.
15		-	(2) "Declared disaster" means:
16		-	(A) a declaration of a state of disaster under
17		-	Section 418.014 or 418.108; or
18		-	(B) a disaster declared by the president of the
19		-	United States, if any part of this state is named in the federally
20		-	designated disaster area.
	21	+	(2) "Declared disaster" has the meaning assigned by
	22	+	Section 481.551.
21	23		(3) "Default rate" means the percentage of
22	24		micro-business disaster recovery loans made that did not meet the
23	25		payment terms during a period specified by the bank.
24	26		(4) "Fund" means the micro-business recovery fund
25	27		established under Section 481.452.
26	28		(5) "Micro-business" means a corporation,
27	29		partnership, sole proprietorship, or other legal entity that:
28	30		(A) is domiciled in this state and has at least 95
29	31		percent of its employees located in this state;
30	32		(B) is formed to make a profit; and
31	33		(C) employs not more than 20 employees.
32	34		(6) "Micro-business disaster recovery loan" or
33	35		"disaster recovery loan" means a loan made by a participating
34	36		community development financial institution to micro-businesses
35	37		under the program.
36	38		(7) "Program" means the micro-business disaster
37	39		recovery loan program established under this subchapter.
38	40		Sec. 481.452. MICRO-BUSINESS RECOVERY FUND. (a) The
39	41		micro-business recovery fund is a dedicated account in the general
40	42		revenue fund.
41	43		(b) Appropriations for the implementation and
42		-	administration of this subchapter and any other ~~amounts, including~~
43		-	~~federal allocations,~~ received by the bank or state under this
44		-	subchapter shall be deposited in the fund.
	44	+	administration of this subchapter and Subchapter EE and any other
	45	+	amounts received by the bank or state under this subchapter or
	46	+	Subchapter EE shall be deposited in the fund.
45	47		(c) Money in the fund may be appropriated only to the bank
46		-	for use in carrying out the purposes of this subchapter.
	48	+	for use in carrying out the purposes of this subchapter and
	49	+	Subchapter EE.
	50	+	(d) The financial transactions of the fund are subject to
	51	+	audit by the state auditor as provided by Chapter 321.
47	52		Sec. 481.453. POWERS OF BANK IN ADMINISTERING
48	53		MICRO-BUSINESS RECOVERY FUND. In administering the fund, the bank
49	54		has the powers necessary to carry out the purposes of this
50		-	subchapter, including the power to:
	55	+	subchapter and Subchapter EE, including the power to:
51	56		(1) make, execute, and deliver contracts,
52	57		conveyances, and other instruments necessary to the exercise of its
53	58		powers;
54	59		(2) invest money at the bank's discretion in
55	60		obligations determined proper by the bank, and select and use
56	61		depositories for its money;
57	62		(3) employ personnel and counsel and pay those persons
58	63		from money in the fund legally available for that purpose; and
59	64		(4) impose and collect fees and charges in connection
60	65		with any transaction and provide for reasonable penalties for
61	66		delinquent payment of fees or charges.
62	67		Sec. 481.454. ESTABLISHMENT OF LOAN PROGRAM; PURPOSE. (a)
63	68		The bank shall establish and administer a revolving loan program as
64	69		provided by this subchapter.
65	70		(b) The program shall expand access to capital for
66		-	qualifying micro-businesses to create jobs in this state and
67		-	constitutes a capital access program under Subchapter BB.
	71	+	qualifying micro-businesses to create jobs in this state.
68	72		Sec. 481.455. PROGRAM ADMINISTRATION. (a) The bank, under
69	73		the program, shall provide zero interest loans to eligible
70	74		community development financial institutions for purposes of
71	75		making interest-bearing loans to qualifying micro-businesses that
72	76		have difficulty in accessing capital following a declared disaster.
73	77		(b) A loan made by an eligible community development
74	78		financial institution under the program:
75	79		(1) must be made to a micro-business that:
76	80		(A) is in good standing under the laws of this
77	81		state; and
78	82		(B) did not owe delinquent taxes to a taxing unit
79	83		of this state before the date of the initial issuance of the
80	84		disaster declaration;
81	85		(2) may not be made to a micro-business that:
82	86		(A) has total revenue that exceeds the amount for
83	87		which no franchise tax is due under Section 171.002(d)(2), Tax
84	88		Code;
85	89		(B) is a franchise;
86	90		(C) is a national chain with operations in this
87	91		state;
88	92		(D) is a lobbying firm; or
89	93		(E) is a private equity firm or backed by a
90	94		private equity firm; and
91	95		(3) must meet any other criteria provided by this
92	96		subchapter.
93	97		(c) Payments on micro-business disaster recovery loans
94	98		shall be made directly to the lending community development
95		-	financial institutions.
	99	+	financial institutions. The financial institutions shall use the
	100	+	loan payment money received from borrowers to make new loans as
	101	+	provided by this subchapter.
	102	+	(c-1) In awarding loans under the program, a community
	103	+	development financial institution participating in the program
	104	+	shall give preference to applicant micro-businesses that did not
	105	+	receive a loan or grant under the Coronavirus Aid, Relief, and
	106	+	Economic Security Act (15 U.S.C. Section 9001 et seq.), as amended
	107	+	by the Paycheck Protection Program Flexibility Act of 2020 (Pub. L.
	108	+	No. 116-142) and the Consolidated Appropriations Act, 2021 (Pub. L.
	109	+	No. 116-260).
96	110		(d) All income received on a loan made by a community
97	111		development financial institution participating in the program is
98	112		the property of the financial institution. Income received on a
99	113		loan includes the payment of interest by a borrower micro-business
100	114		and the administrative fees assessed by the community development
101	115		financial institution.
102	116		(e) A community development financial institution
103		-	participating in the program shall ~~make payments to~~ the bank ~~on the~~
104		-	~~zero interest~~ loans borrowed by the financial institution under the
105		-	~~program~~ quarterly, and the bank or this state is not responsible or
106		-	~~liable~~ for any defaults in micro-business disaster recovery loans
107		-	~~made by~~ the community ~~development~~ financial institution.
	117	+	participating in the program shall repay the bank the zero interest
	118	+	loans borrowed by the financial institution under the program
	119	+	quarterly, and the bank or this state is not responsible or liable
	120	+	for any defaults in micro-business disaster recovery loans made by
	121	+	the community financial institution.
108	122		Sec. 481.456. RULEMAKING. The executive director shall
109		-	adopt rules relating to the implementation of the program and any
110		-	other rules necessary to accomplish the purposes of this
111		-	subchapter, including rules that provide criteria under which
112		-	community development financial institutions may qualify for the
113		-	program.
	123	+	adopt rules relating to the implementation of the program,
	124	+	including:
	125	+	(1) rules establishing eligibility criteria for
	126	+	community development financial institutions that want to
	127	+	participate in the program; and
	128	+	(2) any other rules necessary to accomplish the
	129	+	purposes of this subchapter.
114	130		Sec. 481.457. OVERSIGHT. (a) A community development
115	131		financial institution participating in the program shall report
116	132		quarterly to the bank:
117	133		(1) the names of micro-businesses that have received a
118	134		disaster recovery loan;
119	135		(2) the current balance of all outstanding disaster
120	136		recovery loans;
121	137		(3) the default rate on existing disaster recovery
122	138		loans; and
123	139		(4) any other information the bank requires.
124	140		(b) A community development financial institution
125	141		participating in the program shall prepare a detailed financial
126		-	statement each quarter ~~and provide a copy to the bank~~.
	142	+	statement each quarter.
127	143		(c) A community development financial institution shall
128	144		allow the bank to inspect the institution's financial records on
129		-	request ~~for purposes that relate to loans under the program~~.
	145	+	request.
130	146		Sec. 481.458. PROGRAM ANNUAL STATUS REPORT. The bank shall
131		-	prepare an annual status report on the program. The office shall
132		-	include a summary of the report in the report to the legislature
133		-	required by Section 489.107.
134		-	SECTION 2. The heading to Subchapter BB, Chapter 481,
135		-	Government Code, is amended to read as follows:
136		-	SUBCHAPTER BB. ACCESS TO CAPITAL PROGRAMS [ACCESS PROGRAM]
137		-	SECTION 3. Section 481.401, Government Code, is amended by
138		-	amending Subdivisions (3), (7), (8), and (9) and adding Subdivision
139		-	(6-a) to read as follows:
140		-	(3) "Fund" means the original capital access fund.
141		-	(6-a) "Original capital access program" means the
142		-	program established under Section 481.405.
143		-	(7) "Participating financial institution" means a
144		-	financial institution participating in a [the] program.
145		-	(8) "Program" means an [the capital] access to capital
146		-	program established by the bank under this subchapter.
147		-	(9) "Reserve account" means an account established in
	147	+	issue an annual status report on the program. The bank shall
	148	+	deliver its report to the governor, the lieutenant governor, the
	149	+	speaker of the house of representatives, and the standing
	150	+	committees of the legislature with primary jurisdiction over
	151	+	micro-businesses and economic development.
	152	+	SUBCHAPTER EE. MICRO-BUSINESS ACCESS TO CAPITAL PROGRAM
	153	+	Sec. 481.551. DEFINITIONS. In this subchapter:
	154	+	(1) "Community development financial institution" has
	155	+	the meaning assigned by 12 U.S.C. Section 4702.
	156	+	(2) "Declared disaster" means:
	157	+	(A) a declaration of a state of disaster under
	158	+	Section 418.014 or 418.108; or
	159	+	(B) a disaster declared by the president of the
	160	+	United States, if any part of this state is named in the federally
	161	+	designated disaster area.
	162	+	(3) "Fund" means the micro-business recovery fund
	163	+	established under Section 481.452.
	164	+	(4) "Micro-business" has the meaning assigned by
	165	+	Section 481.451.
	166	+	(5) "Micro-business access to capital loan" means a
	167	+	loan that is entitled to be secured by the fund as provided by this
	168	+	subchapter.
	169	+	(6) "Participating financial institution" means a
	170	+	community development financial institution participating in the
	171	+	program.
	172	+	(7) "Program" means the micro-business access to
	173	+	capital program established under this subchapter.
	174	+	(8) "Reserve account" means an account established in
148	175		a participating financial institution on approval of the bank in
149	176		which money is deposited to serve as a source of additional revenue
150	177		to reimburse the financial institution for losses on loans enrolled
151		-	in a [the] program.
152		-	SECTION 4. Section 481.402, Government Code, is amended to
153		-	read as follows:
154		-	Sec. 481.402. ORIGINAL CAPITAL ACCESS FUND. (a) The
155		-	original capital access fund is a dedicated account in the general
156		-	revenue fund.
157		-	(b) Appropriations for the implementation and
158		-	administration of the original capital access program [this
159		-	subchapter] and any other amounts received by the state for the
160		-	original capital access program [under this subchapter] shall be
161		-	deposited in the fund.
162		-	(c) Money in the fund may be appropriated only to the bank
163		-	for use in carrying out the purposes of the original capital access
164		-	program [this subchapter].
165		-	SECTION 5. Subchapter BB, Chapter 481, Government Code, is
166		-	amended by adding Section 481.403 to read as follows:
167		-	Sec. 481.403. ACCESS TO CAPITAL PROGRAMS. The bank may
168		-	establish access to capital loan-related programs of the following
169		-	types to promote private access to capital to certain businesses
170		-	with fewer than 500 full-time employees:
171		-	(1) capital access programs;
172		-	(2) collateral support programs;
173		-	(3) loan guarantee programs; and
174		-	(4) loan participation programs.
175		-	SECTION 6. The heading to Section 481.404, Government Code,
176		-	is amended to read as follows:
177		-	Sec. 481.404. POWERS OF BANK IN ADMINISTERING ORIGINAL
178		-	CAPITAL ACCESS FUND.
179		-	SECTION 7. Section 481.405, Government Code, is amended to
180		-	read as follows:
181		-	Sec. 481.405. ORIGINAL CAPITAL ACCESS PROGRAM. (a) The
182		-	original [bank shall establish a] capital access program has been
183		-	established by the bank to assist a participating financial
184		-	institution in making loans to businesses and nonprofit
185		-	organizations that face barriers in accessing capital.
	178	+	in the program.
	179	+	Sec. 481.552. MICRO-BUSINESS ACCESS TO CAPITAL PROGRAM.
	180	+	(a) The bank shall establish a micro-business access to capital
	181	+	program to assist a participating financial institution in making
	182	+	loans to micro-businesses that have suffered economic injury as a
	183	+	result of a declared disaster and that face barriers in accessing
	184	+	capital.
186	185		(b) The bank shall use money in the fund to make a deposit in
187	186		a participating financial institution's reserve account in an
188	187		amount specified by this subchapter to be a source of money the
189	188		institution may receive as reimbursement for losses attributable to
190		-	loans in the original capital access program.
191		-	(c) The bank shall determine the eligibility of a financial
192		-	institution to participate in the original capital access program
193		-	and may set a limit on the number of eligible financial institutions
194		-	that may participate in the original capital access program.
195		-	(d) To participate in the original capital access program,
196		-	an eligible financial institution must enter into a participation
	189	+	loans in the program.
	190	+	(c) To participate in the program, a financial institution
	191	+	must be an eligible community development financial institution.
	192	+	The bank shall determine the eligibility of a community development
	193	+	financial institution to participate in the program and may set a
	194	+	limit on the number of eligible community development financial
	195	+	institutions that may participate in the program.
	196	+	(d) To participate in the program, an eligible community
	197	+	development financial institution must enter into a participation
197	198		agreement with the bank that sets out the terms and conditions under
198	199		which the bank will make contributions to the institution's reserve
199	200		account and specifies the criteria for a loan to qualify as a
200		-	capital access loan under the original capital access program.
201		-	(e) To qualify as a capital access loan under the original
202		-	capital access program, a loan must:
203		-	(1) be made to a small or medium-sized business or to a
204		-	nonprofit organization;
205		-	(2) be used by the business or nonprofit organization
206		-	for any project, activity, or enterprise in this state that fosters
207		-	economic development; and
208		-	(3) meet any other criteria provided by this
	201	+	micro-business access to capital loan, including criteria that
	202	+	ensures that a micro-business access to capital loan is not unfair
	203	+	or abusive to the borrower.
	204	+	(e) To qualify as a micro-business access to capital loan, a
	205	+	loan:
	206	+	(1) must be made to a micro-business that:
	207	+	(A) is in good standing under the laws of this
	208	+	state; and
	209	+	(B) did not owe delinquent taxes to a taxing unit
	210	+	of this state before the date of the initial issuance of the
	211	+	disaster declaration;
	212	+	(2) may not be made to a micro-business that:
	213	+	(A) has total revenue that exceeds the amount for
	214	+	which no franchise tax is due under Section 171.002(d)(2), Tax
	215	+	Code;
	216	+	(B) is a franchise;
	217	+	(C) is a national chain with operations in this
	218	+	state;
	219	+	(D) is a lobbying firm; or
	220	+	(E) is a private equity firm or backed by a
	221	+	private equity firm; and
	222	+	(3) must meet any other criteria provided by this
209	223		subchapter.
210		-	SECTION 8. Section 481.406, Government Code, is amended to
211		-	read as follows:
212		-	Sec. 481.406. RULEMAKING AUTHORITY. (a) The executive
213		-	director may [shall] adopt rules relating to the implementation of
214		-	any [the] program established under this subchapter and any other
215		-	rules necessary to accomplish the purposes of this subchapter.
216		-	(b) The rules for the original capital access program may:
217		-	(1) provide for criteria under which a certain line of
218		-	credit issued by an eligible financial institution to a small or
219		-	medium-sized business or nonprofit organization qualifies to
220		-	participate in the original capital access program; and
221		-	(2) authorize a consortium of financial institutions
222		-	to participate in the original capital access program subject to
223		-	common underwriting guidelines.
224		-	(c) [(b)] To qualify for participation in the original
225		-	capital access program, a line of credit must:
226		-	(1) be an account at a financial institution under
227		-	which the financial institution agrees to lend money to a person
228		-	from time to time to finance one or more projects, activities, or
229		-	enterprises that are authorized by this subchapter; and
230		-	(2) contain the same restrictions, to the extent
231		-	possible, that are placed on a capital access loan under the
232		-	original capital access program that is not a line of credit.
233		-	SECTION 9. Section 481.407, Government Code, is amended to
234		-	read as follows:
235		-	Sec. 481.407. PROVISIONS RELATING TO CAPITAL ACCESS LOAN
236		-	UNDER ORIGINAL CAPITAL ACCESS PROGRAM. (a) Except as otherwise
237		-	provided by this subchapter, the bank may not determine the
238		-	recipient, amount, or interest rate of a capital access loan under
239		-	the original capital access program or the fees or other
240		-	requirements related to the loan.
241		-	(b) A loan under the original capital access program is not
242		-	eligible to be enrolled under this subchapter if the loan is for:
	224	+	(f) In awarding micro-business access to capital loans
	225	+	under the program, a participating financial institution shall give
	226	+	preference to applicant micro-businesses that did not receive a
	227	+	loan or grant under the Coronavirus Aid, Relief, and Economic
	228	+	Security Act (15 U.S.C. Section 9001 et seq.), as amended by the
	229	+	Paycheck Protection Program Flexibility Act of 2020 (Pub. L.
	230	+	No. 116-142) and the Consolidated Appropriations Act, 2021 (Pub. L.
	231	+	No. 116-260).
	232	+	Sec. 481.553. RULEMAKING AUTHORITY. The executive director
	233	+	shall adopt rules relating to the implementation of the program and
	234	+	any other rules necessary to accomplish the purposes of this
	235	+	subchapter.
	236	+	Sec. 481.554. PROVISIONS RELATING TO MICRO-BUSINESS ACCESS
	237	+	TO CAPITAL LOAN. (a) Except as otherwise provided by this
	238	+	subchapter, the bank may not determine the recipient, amount, or
	239	+	interest rate of a micro-business access to capital loan or the fees
	240	+	or other requirements related to the loan.
	241	+	(b) A loan is not eligible to be enrolled under this
	242	+	subchapter if the loan is for:
243	243		(1) construction or purchase of residential housing;
244	244		(2) simple real estate investments, excluding the
245	245		development or improvement of commercial real estate occupied by
246		-	the borrower's business or organization; or
247		-	(3) inside bank transactions, as defined by the policy
248		-	board.
249		-	(c) The borrower of a capital access loan under the original
250		-	capital access program must apply the loan to working capital or to
251		-	the purchase, construction, or lease of capital assets, including
252		-	buildings and equipment used by the business or nonprofit
253		-	organization. Working capital uses include the cost of exporting,
254		-	accounts receivable, payroll, inventory, and other financing needs
255		-	of the business or organization.
256		-	(d) A capital access loan under the original capital access
257		-	program may be sold on the secondary market with no recourse to the
258		-	bank or to the loan loss reserve correspondent to the loan and under
259		-	conditions as may be determined by the bank.
260		-	(e) When enrolling a loan in the original capital access
261		-	program, a participating financial institution may specify an
262		-	amount to be covered under the original capital access program that
263		-	is less than the total amount of the loan.
264		-	SECTION 10. Section 481.408, Government Code, is amended to
265		-	read as follows:
266		-	Sec. 481.408. ORIGINAL CAPITAL ACCESS PROGRAM RESERVE
267		-	ACCOUNT. (a) On approval by the bank and after entering into a
268		-	participation agreement with the bank, a participating financial
269		-	institution making a capital access loan under the original capital
270		-	access program shall establish a reserve account. The reserve
271		-	account shall be used by the institution only to cover any losses
272		-	arising from a default of a capital access loan under the original
273		-	capital access program made by the institution under this
	246	+	the borrower's business; or
	247	+	(3) inside bank transactions.
	248	+	(c) The borrower of a micro-business access to capital loan
	249	+	shall apply the loan to working capital or to the purchase,
	250	+	construction, or lease of capital assets, including buildings and
	251	+	equipment used by the business. Working capital uses include the
	252	+	cost of exporting, accounts receivable, payroll, inventory, and
	253	+	other financing needs of the business.
	254	+	(d) A micro-business access to capital loan may be sold on
	255	+	the secondary market with no recourse to the bank or to the loan
	256	+	loss reserve correspondent to the loan and under conditions as may
	257	+	be determined by the bank.
	258	+	(e) When enrolling a loan in the program, a participating
	259	+	community development financial institution may specify an amount
	260	+	to be covered under the program that is less than the total amount
	261	+	of the loan.
	262	+	Sec. 481.555. RESERVE ACCOUNT. (a) On approval by the bank
	263	+	and after entering into a participation agreement with the bank, a
	264	+	participating community development financial institution making a
	265	+	micro-business access to capital loan shall establish a reserve
	266	+	account. The reserve account shall be used by the institution only
	267	+	to cover any losses arising from a default of a micro-business
	268	+	access to capital loan made by the institution under this
274	269		subchapter or as otherwise provided by this subchapter.
275		-	(b) When a participating financial institution makes a loan
276		-	enrolled in the original capital access program, the institution
277		-	shall require the borrower to pay to the institution a fee in an
278		-	amount that is not less than two percent but not more than three
279		-	percent of the principal amount of the loan, which the financial
280		-	institution shall deposit in the reserve account. The institution
281		-	shall also deposit in the reserve account an amount equal to the
282		-	amount of the fee received by the institution from the borrower
283		-	under this subsection. The institution may recover from the
284		-	borrower all or part of the amount the institution is required to
285		-	pay under this subsection in any manner agreed to by the institution
286		-	and borrower.
287		-	(c) For each capital access loan under the original capital
288		-	access program made by a financial institution, the institution
289		-	shall certify to the bank, within the period prescribed by the bank,
290		-	that the institution has made a capital access loan, the amount the
291		-	institution has deposited in the reserve account, including the
292		-	amount of fees received from the borrower, and, if applicable, that
293		-	the borrower is financing an enterprise project or is located in or
294		-	financing a project, activity, or enterprise in an area designated
295		-	as an enterprise zone under Chapter 2303.
	270	+	(b) A participating community development financial
	271	+	institution that makes a loan enrolled in the program shall require
	272	+	the borrower to pay to the institution a fee in an amount that is not
	273	+	less than two percent but not more than three percent of the
	274	+	principal amount of the loan, which the financial institution shall
	275	+	deposit in the reserve account. The institution shall also deposit
	276	+	in the reserve account an amount equal to the amount of the fee
	277	+	received by the institution from the borrower under this
	278	+	subsection. The institution may recover from the borrower all or
	279	+	part of the amount the institution is required to pay under this
	280	+	subsection in any manner agreed to by the institution and borrower.
	281	+	(c) For each micro-business access to capital loan made by a
	282	+	community development financial institution, the institution shall
	283	+	certify to the bank, within the period prescribed by the bank, that
	284	+	the institution has made a micro-business access to capital loan
	285	+	and the amount the institution has deposited in the reserve
	286	+	account, including the amount of fees received from the borrower.
296	287		(d) On receipt of a certification made under Subsection (c)
297		-	and subject to Section 481.409, the bank shall deposit in the
298		-	institution's reserve account for each capital access loan made by
299		-	the institution under the original capital access program:
300		-	(1) an amount equal to the amount deposited by the
301		-	institution for each loan if the institution:
302		-	(A) has assets of more than $1 billion; or
303		-	(B) has previously enrolled loans in the original
304		-	capital access program that in the aggregate are more than $2
305		-	million;
306		-	(2) an amount equal to 150 percent of the total amount
307		-	deposited under Subsection (b) for each loan if the institution is
308		-	not described by Subdivision (1); or
309		-	(3) notwithstanding Subdivisions (1) and (2), an
310		-	amount equal to 200 percent of the total amount deposited under
311		-	Subsection (b) for each loan if:
312		-	(A) the borrower is financing an enterprise
313		-	project or is located in or financing a project, activity, or
314		-	enterprise in an area designated as an enterprise zone under
315		-	Chapter 2303;
316		-	(B) the borrower is a small or medium-sized
317		-	business or a nonprofit organization that operates or proposes to
318		-	operate a day-care center or a group day-care home, as those terms
319		-	are defined by Section 42.002, Human Resources Code; or
320		-	(C) the participating financial institution is a
321		-	community development financial institution, as that term is
322		-	defined by 12 U.S.C. Section 4702, as amended.
323		-	(e) A participating financial institution must obtain
324		-	approval from the bank to withdraw funds from the reserve account.
325		-	SECTION 11. Section 481.409, Government Code, is amended to
326		-	read as follows:
327		-	Sec. 481.409. LIMITATIONS ON STATE CONTRIBUTION TO ORIGINAL
328		-	CAPITAL ACCESS PROGRAM RESERVE ACCOUNT. (a) The amount deposited
329		-	by the bank into a participating financial institution's reserve
330		-	account for any single loan recipient under the original capital
331		-	access program may not exceed $150,000 during a three-year period.
	288	+	and subject to Section 481.556, the bank shall deposit in the
	289	+	institution's reserve account for each micro-business access to
	290	+	capital loan made by the institution an amount equal to 200 percent
	291	+	of the total amount deposited under Subsection (b) for each loan.
	292	+	(e) A participating community development financial
	293	+	institution must obtain approval from the bank to withdraw funds
	294	+	from the reserve account.
	295	+	Sec. 481.556. LIMITATIONS ON STATE CONTRIBUTION TO RESERVE
	296	+	ACCOUNT. (a) The amount deposited by the bank into a participating
	297	+	community development financial institution's reserve account for
	298	+	any single loan recipient may not exceed $150,000 during a
	299	+	three-year period.
332	300		(b) The maximum amount the bank may deposit into a reserve
333		-	account for each capital access loan under the original capital
334		-	access program made under this subchapter is the lesser of $35,000
335		-	or an amount equal to:
336		-	(1) eight percent of the loan amount if:
337		-	(A) the borrower is financing an enterprise
338		-	project or is located in or financing a project, activity, or
339		-	enterprise in an area designated as an enterprise zone under
340		-	Chapter 2303;
341		-	(B) the borrower is a small or medium-sized
342		-	business or a nonprofit organization that operates or proposes to
343		-	operate a day-care center or a group day-care home, as those terms
344		-	are defined by Section 42.002, Human Resources Code; or
345		-	(C) the participating financial institution is a
346		-	community development financial institution, as that term is
347		-	defined by 12 U.S.C. Section 4702, as amended; or
348		-	(2) six percent of the loan amount for any other
349		-	borrower.
350		-	SECTION 12. Section 481.410, Government Code, is amended to
351		-	read as follows:
352		-	Sec. 481.410. STATE'S RIGHTS WITH RESPECT TO ORIGINAL
353		-	CAPITAL ACCESS PROGRAM RESERVE ACCOUNT. (a) All of the money in a
354		-	reserve account established under this subchapter for the original
355		-	capital access program is property of the state.
	301	+	account for each micro-business access to capital loan made under
	302	+	this subchapter is the lesser of $35,000 or an amount equal to eight
	303	+	percent of the loan amount.
	304	+	Sec. 481.557. RIGHTS OF STATE WITH RESPECT TO RESERVE
	305	+	ACCOUNT. (a) All of the money in a reserve account established
	306	+	under this subchapter is property of the state.
356	307		(b) The state is entitled to earn interest on the amount of
357	308		contributions made by the bank, borrower, and institution to a
358		-	reserve account under this subchapter for the original capital
359		-	access program. The bank shall withdraw monthly or quarterly from a
360		-	reserve account for the original capital access program the amount
361		-	of the interest earned by the state. The bank shall deposit the
362		-	amount withdrawn under this subsection into the fund.
363		-	(c) If the amount in a reserve account for the original
364		-	capital access program exceeds an amount equal to 33 percent of the
365		-	balance of the financial institution's outstanding capital access
366		-	loans under the original capital access program, the bank may
367		-	withdraw the excess amount and deposit the amount in the fund. A
368		-	withdrawal of money authorized under this subsection may not reduce
369		-	an active reserve account for the original capital access program
370		-	to an amount that is less than $200,000.
	309	+	reserve account under this subchapter. The bank shall withdraw
	310	+	monthly or quarterly from a reserve account the amount of the
	311	+	interest earned by the state. The bank shall deposit the amount
	312	+	withdrawn under this subsection into the fund.
	313	+	(c) If the amount in a reserve account exceeds an amount
	314	+	equal to 33 percent of the balance of the community development
	315	+	financial institution's outstanding micro-business access to
	316	+	capital loans, the bank may withdraw the excess amount and deposit
	317	+	the amount in the fund. A withdrawal of money authorized under this
	318	+	subsection may not reduce an active reserve account to an amount
	319	+	that is less than $200,000.
371	320		(d) The bank shall withdraw from the institution's reserve
372		-	account under the original capital access program the total amount
373		-	in the account and any interest earned on the account and deposit
374		-	the amount in the fund when:
375		-	(1) a financial institution is no longer eligible to
376		-	participate in the original capital access program or a
377		-	participation agreement entered into under this subchapter for the
378		-	original capital access program expires without renewal by the bank
379		-	or institution;
380		-	(2) the financial institution has no outstanding
381		-	capital access loans under the original capital access program;
382		-	(3) the financial institution has not made a capital
383		-	access loan under the original capital access program within the
	321	+	account the total amount in the account and any interest earned on
	322	+	the account and deposit the amount in the fund when:
	323	+	(1) a community development financial institution is
	324	+	no longer eligible to participate in the program or a participation
	325	+	agreement entered into under this subchapter expires without
	326	+	renewal by the bank or institution;
	327	+	(2) the community development financial institution
	328	+	has no outstanding micro-business access to capital loans;
	329	+	(3) the community development financial institution
	330	+	has not made a micro-business access to capital loan within the
384	331		preceding 24 months; or
385		-	(4) the financial institution fails to submit a report
386		-	or other document requested by the bank for the original capital
387		-	access program within the time or in the manner prescribed.
388		-	SECTION 13. Section 481.411, Government Code, is amended to
389		-	read as follows:
390		-	Sec. 481.411. ANNUAL REPORT. A participating financial
391		-	institution shall submit an annual report to the bank. The report
392		-	must, at a minimum:
	332	+	(4) the community development financial institution
	333	+	fails to submit a report or other document requested by the bank
	334	+	within the time or in the manner prescribed.
	335	+	Sec. 481.558. ANNUAL REPORT. A participating community
	336	+	development financial institution shall submit an annual report to
	337	+	the bank. The report must:
393	338		(1) provide information regarding outstanding
394		-	[capital access] loans, [capital access] loan losses, and any other
395		-	information related to participation in a program established under
396		-	this subchapter [on capital access loans] the bank considers
397		-	appropriate;
	339	+	micro-business access to capital loans, micro-business access to
	340	+	capital loan losses, and any other information on micro-business
	341	+	access to capital loans that the bank considers appropriate;
398	342		(2) state the total amount of loans for which the bank
399	343		has made a contribution from the fund under this subchapter;
400	344		(3) include a copy of the institution's most recent
401	345		financial statement; and
402		-	(4) include information regarding the type and size of
403		-	businesses and nonprofit organizations with [capital access] loans
404		-	under this subchapter.
405		-	SECTION 14. Section 481.412(a), Government Code, is amended
406		-	to read as follows:
407		-	(a) The office shall submit to the legislature an annual
408		-	status report on the [program's] activities of all programs
409		-	established under this subchapter.
410		-	SECTION 15. The heading to Section 481.415, Government
411		-	Code, is amended to read as follows:
412		-	Sec. 481.415. ALLOCATION AND TRANSFER OF MONEY FROM
413		-	ORIGINAL CAPITAL ACCESS FUND.
414		-	SECTION 16. Section 481.415(a), Government Code, is amended
415		-	to read as follows:
416		-	(a) Notwithstanding any other provision of this subchapter,
417		-	the bank may allocate money held in or due to the original capital
418		-	access fund to programs administered by the bank under Section
419		-	489.108 or Subchapter D, Chapter 489. The bank may transfer money
420		-	from the original capital access fund to the Texas product
421		-	development fund or the Texas small business incubator fund.
422		-	SECTION 17. Section 489.105(b), Government Code, is amended
423		-	to read as follows:
424		-	(b) The fund consists of:
425		-	(1) appropriations for the implementation and
426		-	administration of this chapter;
427		-	(2) investment earnings under the original capital
428		-	access fund established under Section 481.402;
429		-	(3) fees charged under Subchapter BB, Chapter 481;
430		-	(4) interest earned on the investment of money in the
431		-	fund;
432		-	(5) fees charged under this chapter;
433		-	(6) investment earnings from the programs
434		-	administered by the bank;
435		-	(7) amounts transferred under Section 2303.504(b), as
436		-	amended by Article 2, Chapter 1134, Acts of the 77th Legislature,
437		-	Regular Session, 2001;
438		-	(8) investment earnings under the Texas product
439		-	development fund under Section 489.211;
440		-	(9) investment earnings under the Texas small business
441		-	incubator fund under Section 489.212; and
442		-	(10) any other amounts received by the state under
443		-	this chapter.
444		-	SECTION 18. Section 489.108, Government Code, is amended to
445		-	read as follows:
446		-	Sec. 489.108. PROGRAMS, SERVICES, AND FUNDS UNDER BANK'S
447		-	DIRECTION. Notwithstanding any other law, the bank shall perform
448		-	the duties and functions of the office with respect to the following
449		-	programs, services, and funds:
450		-	(1) the original capital access program established
451		-	under Section 481.405;
452		-	(2) the Texas leverage fund;
453		-	(3) the enterprise zone program established under
454		-	Chapter 2303;
455		-	(4) the industrial revenue bond program;
456		-	(5) the defense economic readjustment zone program
457		-	established under Chapter 2310;
458		-	(6) the Empowerment Zone and Enterprise Community
459		-	grant program established under Section 481.025; and
460		-	(7) the renewal community program.
461		-	SECTION 19. Section 489.211(b), Government Code, is amended
462		-	to read as follows:
463		-	(b) The product fund is composed of proceeds of bonds issued
464		-	under this subchapter, financing application fees, loan
465		-	repayments, guarantee fees, royalty receipts, dividend income,
466		-	money appropriated by the legislature for authorized purposes of
467		-	the product fund, amounts received by the state from loans, loan
468		-	guarantees, and equity investments made under this subchapter,
469		-	amounts received by the state from federal grants or other sources,
470		-	amounts transferred from the original capital access fund under
471		-	Section 481.415, and any other amounts received under this
472		-	subchapter and required by the bank to be deposited in the product
473		-	fund. The product fund contains a program account, an interest and
474		-	sinking account, and other accounts that the bank authorizes to be
475		-	created and maintained. Money in the product fund is available for
476		-	use by the board under this subchapter. Investment earnings under
477		-	the product fund must be transferred to the fund created under
478		-	Section 489.105. Notwithstanding any other provision of this
479		-	subchapter, any money in the product fund may be used for debt
480		-	service.
481		-	SECTION 20. Section 489.212(b), Government Code, is amended
482		-	to read as follows:
483		-	(b) The small business fund is composed of proceeds of bonds
484		-	issued under this subchapter, financing application fees, loan
485		-	repayments, guarantee fees, royalty receipts, dividend income,
486		-	money appropriated by the legislature for authorized purposes of
487		-	the small business fund, amounts received by the state from loans,
488		-	loan guarantees, and equity investments made under this subchapter,
489		-	amounts received by the state from federal grants or other sources,
490		-	amounts transferred from the original capital access fund under
491		-	Section 481.415, and any other amounts received under this
492		-	subchapter and required by the bank to be deposited in the small
493		-	business fund. The small business fund contains a project account,
494		-	an interest and sinking account, and other accounts that the bank
495		-	authorizes to be created and maintained. Money in the small
496		-	business fund is available for use by the board under this
497		-	subchapter. Investment earnings under the small business fund must
498		-	be transferred to the fund created under Section 489.105.
499		-	Notwithstanding any other provision of this subchapter, any money
500		-	in the small business fund may be used for debt service.
501		-	SECTION 21. This Act takes effect immediately if it
502		-	receives a vote of two-thirds of all the members elected to each
503		-	house, as provided by Section 39, Article III, Texas Constitution.
504		-	If this Act does not receive the vote necessary for immediate
505		-	effect, this Act takes effect September 1, 2021.
506		-	______________________________ ______________________________
507		-	President of the Senate Speaker of the House
508		-	I certify that H.B. No. 3271 was passed by the House on April
509		-	28, 2021, by the following vote: Yeas 97, Nays 43, 2 present, not
510		-	voting; and that the House concurred in Senate amendments to H.B.
511		-	No. 3271 on May 28, 2021, by the following vote: Yeas 101, Nays 44,
512		-	1 present, not voting.
513		-	______________________________
514		-	Chief Clerk of the House
515		-	I certify that H.B. No. 3271 was passed by the Senate, with
516		-	amendments, on May 24, 2021, by the following vote: Yeas 23, Nays
517		-	6, 1 present, not voting.
518		-	______________________________
519		-	Secretary of the Senate
520		-	APPROVED: __________________
521		-	Date
522		-	__________________
523		-	Governor
	346	+	(4) include information regarding the type of
	347	+	micro-businesses with loans under this subchapter.
	348	+	Sec. 481.559. STATUS REPORT. The office shall submit to the
	349	+	legislature an annual status report on the program's activities.
	350	+	Sec. 481.560. STATE LIABILITY PROHIBITED. The state is not
	351	+	liable to a participating financial institution for payment of the
	352	+	principal, the interest, or any late charges on a micro-business
	353	+	access to capital loan made under this subchapter.
	354	+	SECTION 2. This Act takes effect immediately if it receives
	355	+	a vote of two-thirds of all the members elected to each house, as
	356	+	provided by Section 39, Article III, Texas Constitution. If this
	357	+	Act does not receive the vote necessary for immediate effect, this
	358	+	Act takes effect September 1, 2021.
	359	+	* * * * *