Texas 2023 - 88th Regular

Texas House Bill HB4418 Compare Versions

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1	1	88R2836 MCK-D
2	2	By: Anchía H.B. No. 4418
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of a revolving loan program to fund the
8	8	purchase by historically underutilized businesses of certain bonds
9	9	required for public work contracts.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 2253, Government Code, is amended by
12	12	adding Subchapter E to read as follows:
13	13	SUBCHAPTER E. REVOLVING LOAN PROGRAM FOR BOND ASSISTANCE
14	14	Sec. 2253.101. DEFINITIONS. In this subchapter:
15	15	(1) "Historically underutilized business" has the
16	16	meaning assigned by Section 2161.001.
17	17	(2) "Revolving loan program" means the program
18	18	established by the comptroller under this subchapter.
19	19	Sec. 2253.102. REVOLVING LOAN PROGRAM. (a) The
20	20	comptroller by rule shall establish a revolving loan program to
21	21	provide loans to historically underutilized businesses to assist
22	22	the businesses in the purchase of performance and payment bonds
23	23	required by this chapter for public work contracts with a
24	24	governmental entity. The comptroller may not charge interest on a
25	25	loan provided under the program.
26	26	(b) The comptroller by rule shall set the terms and other
27	27	requirements for a loan made under the revolving loan program,
28	28	including guidelines for the repayment of the loans.
29	29	(c) The comptroller may not contract with another entity to
30	30	manage the revolving loan program.
31	31	Sec. 2253.103. ELIGIBILITY FOR LOANS. (a) To be eligible
32	32	for a loan under the revolving loan program, an applicant must:
33	33	(1) be a historically underutilized business
34	34	operating in the construction business or a building trade;
35	35	(2) have been in business at least one year before
36	36	applying for the loan;
37	37	(3) have its principal place of business in this
38	38	state; and
39	39	(4) demonstrate the ability to meet all experience and
40	40	financial standards required for the contract for which the
41	41	business is seeking the bond assistance.
42	42	(b) A historically underutilized business that has not
43	43	previously replied to a solicitation for a public work contract as a
44	44	prime contractor or subcontractor may apply for a loan under the
45	45	revolving loan program. A historically underutilized business that
46	46	has previously entered into a public work contract with a
47	47	governmental entity and paid for its own bonds required under the
48	48	contract is not precluded from applying for a loan under the
49	49	revolving loan program.
50	50	(c) The comptroller may by rule adopt additional
51	51	eligibility requirements for participation in the revolving loan
52	52	program.
53	53	Sec. 2253.104. INELIGIBILITY FOR LOAN. (a) A historically
54	54	underutilized business that has defaulted on a performance or
55	55	payment bond required under a public work contract is not eligible
56	56	to receive a loan under the revolving loan program before the fifth
57	57	anniversary of the date the historically underutilized business
58	58	defaulted on the bond.
59	59	(b) A historically underutilized business that has filed
60	60	for bankruptcy is not eligible to receive a loan under the revolving
61	61	loan program before the seventh anniversary of the date the
62	62	historically underutilized business filed for bankruptcy.
63	63	Sec. 2253.105. SUBCONTRACTING. A historically
64	64	underutilized business that receives a loan under the revolving
65	65	loan program for bond assistance for a public work contract with a
66	66	governmental entity and who is a prime contractor:
67	67	(1) may not subcontract more than 75 percent of the
68	68	contract; and
69	69	(2) shall use the historically underutilized business
70	70	guidelines under Chapter 2161, the governmental entity's
71	71	guidelines, or the guidelines specified in the contract in awarding
72	72	any subcontracts under the contract.
73	73	Sec. 2253.106. LOAN AMOUNTS. (a) A historically
74	74	underutilized business that has not previously entered into a
75	75	public work contract with a governmental entity may receive a loan
76	76	under the revolving loan program in an amount up to $100,000.
77	77	(b) A historically underutilized business that has
78	78	completed at least one public work contract with a governmental
79	79	entity may receive a loan under the revolving loan program in an
80	80	amount up to $200,000.
81	81	(c) A historically underutilized business that has
82	82	completed two or more public work contracts with a governmental
83	83	entity may receive a loan under the revolving loan program in an
84	84	amount up to:
85	85	(1) $250,000 if the business is a subcontractor except
86	86	as provided by Subdivision (2)(B); or
87	87	(2) $500,000 if the business is:
88	88	(A) a prime contractor; or
89	89	(B) a subcontractor:
90	90	(i) on a public work contract in which the
91	91	value of the subcontract is greater than $10 million; or
92	92	(ii) that can demonstrate an inability to
93	93	secure a bond under normal market conditions.
94	94	Sec. 2253.107. PAYMENT TO SURETY. The comptroller shall
95	95	pay the proceeds of a loan made under the revolving loan program
96	96	under this subchapter directly to the surety company issuing the
97	97	bond.
98	98	Sec. 2253.108. DEFAULT. (a) If a historically
99	99	underutilized business that receives a loan under the revolving
100	100	loan program defaults on a performance or payment bond for which the
101	101	loan was provided, the comptroller and the attorney general shall
102	102	institute appropriate proceedings for any available legal remedy to
103	103	recover the amount of the loan.
104	104	(b) The comptroller may withhold any state money owed to a
105	105	historically underutilized business described by Subsection (a)
106	106	for other contracts or business with the state conducted by the
107	107	historically underutilized business.
108	108	(c) A historically underutilized business described by
109	109	Subsection (a) may not contract with a governmental entity until
110	110	the business has repaid at least one-half of the loan amount
111	111	received by the business under the revolving loan program for
112	112	purchase of the performance or payment bond subject to the default.
113	113	Sec. 2253.109. TEXAS HISTORICALLY UNDERUTILIZED BUSINESS
114	114	BOND ASSISTANCE REVOLVING LOAN ACCOUNT. (a) The Texas
115	115	historically underutilized business bond assistance revolving loan
116	116	account is an account in the general revenue fund administered by
117	117	the comptroller.
118	118	(b) Money in the account may be used only for loans made
119	119	under this subchapter.
120	120	(c) The comptroller shall deposit to the credit of the
121	121	account:
122	122	(1) money appropriated to the comptroller for the
123	123	purpose of this subchapter;
124	124	(2) money the comptroller receives as a gift, grant,
125	125	or donation for the purpose of this subchapter;
126	126	(3) money received by the comptroller for the
127	127	repayment of a loan made under the revolving loan program, and any
128	128	fee charged to make the loan; and
129	129	(4) notwithstanding Section 404.071, all interest
130	130	attributable to money held in the account.
131	131	(d) Money in the account may be appropriated only to the
132	132	comptroller for the purposes of administering the account.
133	133	(e) The comptroller may not contract with another entity to
134	134	administer the account.
135	135	Sec. 2253.110. GIFTS AND GRANTS. The comptroller may
136	136	solicit and accept gifts and grants from any public or private
137	137	source for the purposes of this subchapter.
138	138	Sec. 2253.111. RULEMAKING AUTHORITY. The comptroller shall
139	139	adopt rules to implement this subchapter.
140	140	Sec. 2253.112. REPORTING REQUIREMENTS. Not later than
141	141	January 15 of each year, the comptroller shall report to the
142	142	legislature:
143	143	(1) the total dollar amount of assistance provided in
144	144	the preceding year;
145	145	(2) the total number of businesses to which assistance
146	146	was provided in the preceding year;
147	147	(3) the total number of state contracts secured by
148	148	businesses to which assistance was provided in the preceding year;
149	149	(4) the total number of applications for assistance in
150	150	the preceding year; and
151	151	(5) the remaining dollar balance in the Texas
152	152	historically underutilized business bond assistance revolving loan
153	153	account as of December 31 of the preceding year.
154	154	Sec. 2253.113. AUDIT BY STATE AUDITOR. (a) The state
155	155	auditor shall conduct a biennial financial audit and effectiveness
156	156	audit of the revolving loan program to evaluate the program's
157	157	performance.
158	158	(b) The state auditor shall report the results of the audits
159	159	to the legislature not later than January 8 of each odd-numbered
160	160	year.
161	161	SECTION 2. This Act takes effect September 1, 2023.