Bill Text: TX SB949 | 2023-2024 | 88th Legislature | Introduced


Bill Title: Relating to the creation of a revolving loan program to fund the purchase by historically underutilized businesses of certain bonds required for public work contracts.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2023-03-22 - Co-author authorized [SB949 Detail]

Download: Texas-2023-SB949-Introduced.html
  88R2836 MCK-D
 
  By: West S.B. No. 949
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of a revolving loan program to fund the
  purchase by historically underutilized businesses of certain bonds
  required for public work contracts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 2253, Government Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E. REVOLVING LOAN PROGRAM FOR BOND ASSISTANCE
         Sec. 2253.101.  DEFINITIONS. In this subchapter:
               (1)  "Historically underutilized business" has the
  meaning assigned by Section 2161.001.
               (2)  "Revolving loan program" means the program
  established by the comptroller under this subchapter.
         Sec. 2253.102.  REVOLVING LOAN PROGRAM. (a)  The
  comptroller by rule shall establish a revolving loan program to
  provide loans to historically underutilized businesses to assist
  the businesses in the purchase of performance and payment bonds
  required by this chapter for public work contracts with a
  governmental entity. The comptroller may not charge interest on a
  loan provided under the program.
         (b)  The comptroller by rule shall set the terms and other
  requirements for a loan made under the revolving loan program,
  including guidelines for the repayment of the loans.
         (c)  The comptroller may not contract with another entity to
  manage the revolving loan program.
         Sec. 2253.103.  ELIGIBILITY FOR LOANS. (a)  To be eligible
  for a loan under the revolving loan program, an applicant must:
               (1)  be a historically underutilized business
  operating in the construction business or a building trade;
               (2)  have been in business at least one year before
  applying for the loan;
               (3)  have its principal place of business in this
  state; and
               (4)  demonstrate the ability to meet all experience and
  financial standards required for the contract for which the
  business is seeking the bond assistance.
         (b)  A historically underutilized business that has not
  previously replied to a solicitation for a public work contract as a
  prime contractor or subcontractor may apply for a loan under the
  revolving loan program. A historically underutilized business that
  has previously entered into a public work contract with a
  governmental entity and paid for its own bonds required under the
  contract is not precluded from applying for a loan under the
  revolving loan program.
         (c)  The comptroller may by rule adopt additional
  eligibility requirements for participation in the revolving loan
  program.
         Sec. 2253.104.  INELIGIBILITY FOR LOAN. (a)  A historically
  underutilized business that has defaulted on a performance or
  payment bond required under a public work contract is not eligible
  to receive a loan under the revolving loan program before the fifth
  anniversary of the date the historically underutilized business
  defaulted on the bond.
         (b)  A historically underutilized business that has filed
  for bankruptcy is not eligible to receive a loan under the revolving
  loan program before the seventh anniversary of the date the
  historically underutilized business filed for bankruptcy.
         Sec. 2253.105.  SUBCONTRACTING. A historically
  underutilized business that receives a loan under the revolving
  loan program for bond assistance for a public work contract with a
  governmental entity and who is a prime contractor:
               (1)  may not subcontract more than 75 percent of the
  contract; and
               (2)  shall use the historically underutilized business
  guidelines under Chapter 2161, the governmental entity's
  guidelines, or the guidelines specified in the contract in awarding
  any subcontracts under the contract.
         Sec. 2253.106.  LOAN AMOUNTS. (a) A historically
  underutilized business that has not previously entered into a
  public work contract with a governmental entity may receive a loan
  under the revolving loan program in an amount up to $100,000.
         (b)  A historically underutilized business that has
  completed at least one public work contract with a governmental
  entity may receive a loan under the revolving loan program in an
  amount up to $200,000.
         (c)  A historically underutilized business that has
  completed two or more public work contracts with a governmental
  entity may receive a loan under the revolving loan program in an
  amount up to:
               (1)  $250,000 if the business is a subcontractor except
  as provided by Subdivision (2)(B); or
               (2)  $500,000 if the business is:
                     (A)  a prime contractor; or
                     (B)  a subcontractor:
                           (i)  on a public work contract in which the
  value of the subcontract is greater than $10 million; or
                           (ii)  that can demonstrate an inability to
  secure a bond under normal market conditions.
         Sec. 2253.107.  PAYMENT TO SURETY. The comptroller shall
  pay the proceeds of a loan made under the revolving loan program
  under this subchapter directly to the surety company issuing the
  bond.
         Sec. 2253.108.  DEFAULT. (a)  If a historically
  underutilized business that receives a loan under the revolving
  loan program defaults on a performance or payment bond for which the
  loan was provided, the comptroller and the attorney general shall
  institute appropriate proceedings for any available legal remedy to
  recover the amount of the loan.
         (b)  The comptroller may withhold any state money owed to a
  historically underutilized business described by Subsection (a)
  for other contracts or business with the state conducted by the
  historically underutilized business.
         (c)  A historically underutilized business described by
  Subsection (a) may not contract with a governmental entity until
  the business has repaid at least one-half of the loan amount
  received by the business under the revolving loan program for
  purchase of the performance or payment bond subject to the default.
         Sec. 2253.109.  TEXAS HISTORICALLY UNDERUTILIZED BUSINESS
  BOND ASSISTANCE REVOLVING LOAN ACCOUNT. (a)  The Texas
  historically underutilized business bond assistance revolving loan
  account is an account in the general revenue fund administered by
  the comptroller.
         (b)  Money in the account may be used only for loans made
  under this subchapter.
         (c)  The comptroller shall deposit to the credit of the
  account:
               (1)  money appropriated to the comptroller for the
  purpose of this subchapter;
               (2)  money the comptroller receives as a gift, grant,
  or donation for the purpose of this subchapter;
               (3)  money received by the comptroller for the
  repayment of a loan made under the revolving loan program, and any
  fee charged to make the loan; and
               (4)  notwithstanding Section 404.071, all interest
  attributable to money held in the account.
         (d)  Money in the account may be appropriated only to the
  comptroller for the purposes of administering the account.
         (e)  The comptroller may not contract with another entity to
  administer the account.
         Sec. 2253.110.  GIFTS AND GRANTS. The comptroller may
  solicit and accept gifts and grants from any public or private
  source for the purposes of this subchapter.
         Sec. 2253.111.  RULEMAKING AUTHORITY. The comptroller shall
  adopt rules to implement this subchapter.
         Sec. 2253.112.  REPORTING REQUIREMENTS. Not later than
  January 15 of each year, the comptroller shall report to the
  legislature:
               (1)  the total dollar amount of assistance provided in
  the preceding year;
               (2)  the total number of businesses to which assistance
  was provided in the preceding year;
               (3)  the total number of state contracts secured by
  businesses to which assistance was provided in the preceding year;
               (4)  the total number of applications for assistance in
  the preceding year; and
               (5)  the remaining dollar balance in the Texas
  historically underutilized business bond assistance revolving loan
  account as of December 31 of the preceding year.
         Sec. 2253.113.  AUDIT BY STATE AUDITOR. (a) The state
  auditor shall conduct a biennial financial audit and effectiveness
  audit of the revolving loan program to evaluate the program's
  performance.
         (b)  The state auditor shall report the results of the audits
  to the legislature not later than January 8 of each odd-numbered
  year.
         SECTION 2.  This Act takes effect September 1, 2023.
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