74R10664 E
By Giddings H.B. No. 1997
Substitute the following for H.B. No. 1997:
By Oliveira C.S.H.B. No. 1997
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the guarantee of certain loans under the linked deposit
1-3 program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 481.196, Government Code, is amended to
1-6 read as follows:
1-7 Sec. 481.196. State Liability Prohibited. Except as
1-8 provided by Section 481.198, the <The> state is not liable to an
1-9 eligible lending institution for payment of the principal,
1-10 interest, or any late charges on a loan made to an eligible
1-11 borrower. <Linked deposits are not an extension of the state's
1-12 credit within the meaning of any state constitutional prohibition.>
1-13 SECTION 2. Subchapter N, Government Code, is amended by
1-14 adding Sections 481.198-481.202 to read as follows:
1-15 Sec. 481.198. LOAN GUARANTEES. (a) Subject to the
1-16 availability of appropriations, the department may guarantee not
1-17 more than 50 percent of a loan made by an eligible lending
1-18 institution under this subchapter. For each guarantee the
1-19 department shall determine:
1-20 (1) the amount of equity the eligible borrower must
1-21 pledge to construct or purchase the capital assets;
1-22 (2) the fees charged by the department, including
1-23 guarantee fees, application fees, annual fees, and any other costs
2-1 associated with the loan guarantee, as necessary to fund the
2-2 administration of this section;
2-3 (3) the maximum and minimum guarantee amounts; and
2-4 (4) any other terms or conditions relating to a
2-5 guarantee.
2-6 (b) The department may not make a loan guarantee, except on
2-7 approval of a qualified application submitted by a borrower or
2-8 eligible lending institution.
2-9 (c) On approval of a qualified application, the department
2-10 may provide a loan guarantee of not more than 50 percent of the
2-11 cost of the capital assets the eligible borrower is to purchase or
2-12 construct with the proceeds of the loan to an eligible lending
2-13 institution, if the eligible borrower holds funds or property in an
2-14 amount or value equal to not less than 10 percent of the cost of
2-15 those capital assets and those funds or property are then available
2-16 for and are pledged to be applied to the purchase or construction
2-17 of those capital assets.
2-18 (d) Before making a loan guarantee, the department must have
2-19 determined that the eligible borrower has obtained from other
2-20 independent and responsible financial sources a firm commitment for
2-21 all other funds in excess of the loan guaranteed by the department,
2-22 and that the sum of those funds and the equity to be provided by
2-23 the eligible borrower are adequate for the purchase or construction
2-24 of capital assets.
2-25 Sec. 481.199. PAYMENTS NOT TO BE MADE TO DEFAULTING USERS.
3-1 (a) The department shall report to the comptroller the name of any
3-2 eligible borrower who is in default on a loan guaranteed under this
3-3 subchapter and with respect to which the department has been
3-4 required to honor a guarantee. The comptroller may not issue a
3-5 warrant or initiate an electronic funds transfer to the eligible
3-6 borrower while the eligible borrower is in default.
3-7 (b) The comptroller may issue a warrant to the assignee of
3-8 an eligible borrower who is in default only if the assignment
3-9 became effective before the eligible borrower defaulted.
3-10 (c) This section does not prohibit the comptroller from
3-11 issuing a warrant or initiating an electronic funds transfer to pay
3-12 the compensation of a state officer or employee.
3-13 (d)(1) This subsection applies if a payment is made to an
3-14 eligible borrower other than through the comptroller's issuance of
3-15 a warrant or the comptroller's use of an electronic funds transfer
3-16 system.
3-17 (2) A state agency may not use funds inside or outside
3-18 the state treasury to pay an eligible borrower if the agency knows
3-19 that the eligible borrower is in default on a loan guaranteed under
3-20 this subchapter and with respect to which the department has been
3-21 required to honor a guarantee.
3-22 (3) This subsection does not prohibit a state agency
3-23 from paying the assignee of an eligible borrower who is in default
3-24 if the assignment became effective before the eligible borrower
3-25 defaulted.
4-1 (4) This subsection does not prohibit a state agency
4-2 from paying the compensation of a state officer or employee.
4-3 (5) The comptroller may not reimburse a state agency
4-4 for a payment that is made in violation of this subsection.
4-5 (e) In this section:
4-6 (1) "Compensation" includes wages, salaries, longevity
4-7 pay, hazardous duty pay, and emoluments that are provided in lieu
4-8 of wages or salaries. The term does not include expense
4-9 reimbursements.
4-10 (2) "State agency" means a board, commission, council,
4-11 committee, department, office, agency, or other governmental entity
4-12 in the executive, legislative, or judicial branch of state
4-13 government. The term includes an institution of higher education
4-14 as defined by Section 61.008, Education Code.
4-15 (3) "State officer or employee" means an officer or
4-16 employee of a state agency.
4-17 Sec. 481.200. GUARANTEE-TO-RESERVE RATIO. (a) The
4-18 department may guarantee loans as provided by Section 481.198 in an
4-19 amount that exceeds the amount available in the program. Loan
4-20 guarantees may not exceed the guarantee-to-reserve ratio set by
4-21 the policy board under Subsection (b).
4-22 (b) The policy board by rule shall adopt a
4-23 guarantee-to-reserve ratio that determines the amount of loan
4-24 guarantees that may be made that exceed the amount available in the
4-25 program. The ratio of guarantees to the amount of money available
5-1 may not exceed five to one.
5-2 (c) The policy board shall review the guarantee-to-reserve
5-3 ratio annually and adjust the ratio as appropriate. In reviewing
5-4 the guarantee-to-reserve ratio, the policy board shall consider the
5-5 payment experience of the loans and any recommendations of the
5-6 state auditor as provided by Subsection (d).
5-7 (d) The state auditor shall review the loan guarantee
5-8 program and payment activity and make recommendations based on that
5-9 review to the policy board about the program and the
5-10 guarantee-to-reserve ratio. A recommendation to the policy board
5-11 shall be made not later than September 1 of each year.
5-12 Sec. 481.201. PENALTY FOR FALSE INFORMATION ON APPLICATION.
5-13 An applicant who knowingly provides false information in an
5-14 application under this subchapter:
5-15 (1) may not submit another application under this
5-16 subchapter; and
5-17 (2) is liable to the state and any eligible lending
5-18 institution involved for any expense incurred by the state or
5-19 eligible lending institution that would have not been incurred if
5-20 the applicant had not provided the false information.
5-21 Sec. 481.202. GIFTS AND GRANTS. The department may accept
5-22 gifts, grants, and donations from any source for the purposes of
5-23 this subchapter.
5-24 SECTION 3. This Act takes effect September 1, 1995.
5-25 SECTION 4. The importance of this legislation and the
6-1 crowded condition of the calendars in both houses create an
6-2 emergency and an imperative public necessity that the
6-3 constitutional rule requiring bills to be read on three several
6-4 days in each house be suspended, and this rule is hereby suspended.