Bill Text: TX HB4195 | 2017-2018 | 85th Legislature | Comm Sub
Bill Title: Relating to establishing a program to assist small businesses in job creation by increasing access to capital.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2017-05-08 - Committee report sent to Calendars [HB4195 Detail]
Download: Texas-2017-HB4195-Comm_Sub.html
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 |
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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for loan amounts to be withdrawn, repaid, and redrawn until the | ||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. |