Enrolled Bill Summary

            Senate Bill 1877 amends the Government Code to direct the Texas Department of Housing and Community Affairs to establish, with specifically appropriated funds, the Texas community investment program. Under the program the department awards grants to, or purchases stock of, certain multi-bank community development corporations (CDC) making loans in distressed areas. The act sets eligibility criteria for CDCs, time limitations for using the department grant, and maximum allowable losses from loans and investments using the grant. It requires participating CDCs to establish an investment committee with specified membership to make the grant-lending decisions, permits loans in the form of debt, subordinated debt, and equity investment, and sets maximum amounts and term limits for each loan category. Sixty percent of the grant must be invested in businesses that have existed for one year or more and the department must annually audit all amounts awarded to each CDC.