By Patterson H.B. No. 2344
74R6658 LJR-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to state loans provided to certain businesses.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 481.044, Government Code, is amended to
1-5 read as follows:
1-6 Sec. 481.044. POWERS AND DUTIES RELATING TO FINANCING. (a)
1-7 The department shall design and implement programs to provide
1-8 financial assistance to enable export businesses to finance or
1-9 refinance costs incurred in connection with the international
1-10 export or preexport of Texas products, including programs for:
1-11 (1) <making or> acquiring loans to export businesses;
1-12 (2) making or acquiring loans to lenders to enable the
1-13 lenders to make loans to export businesses;
1-14 (3) guaranteeing in whole or in part loans to export
1-15 businesses;
1-16 (4) insuring, coinsuring, and reinsuring in whole or
1-17 in part loans to export businesses; and
1-18 (5) administering or participating in programs
1-19 established by another entity to provide financial assistance to
1-20 export businesses.
1-21 (b) The department has the powers that are necessary and
1-22 convenient to accomplish the purposes of this subchapter, including
1-23 the power to:
1-24 (1) borrow money and otherwise incur debt and to issue
2-1 bonds, and provide for the rights of the owners of the bonds, in
2-2 the manner and to the extent permitted by this chapter and the
2-3 Texas Constitution and to purchase, hold, cancel, or resell or
2-4 otherwise dispose of its bonds, subject to the restrictions in a
2-5 resolution authorizing the issuance of its bonds;
2-6 (2) purchase, discount, sell, and negotiate with or
2-7 without guaranty notes, bonds, debentures, and other evidences of
2-8 indebtedness of export businesses or portions or portfolios of or
2-9 participations in those evidences of indebtedness;
2-10 (3) sell securities as the department considers
2-11 necessary and advisable to accomplish any of the purposes of this
2-12 subchapter;
2-13 (4) procure and pay premiums on insurance of any type
2-14 in amounts and from insurers that the department considers
2-15 necessary and advisable to accomplish any of the purposes of this
2-16 subchapter;
2-17 (5) provide financial counseling services to export
2-18 businesses;
2-19 (6) <make secured or unsecured loans for export
2-20 businesses to provide financing or refinancing of the costs
2-21 incurred in connection with the international export or preexport
2-22 of Texas products authorized by this subchapter, including the
2-23 refunding of outstanding obligations, mortgages, or advances issued
2-24 for those purposes, and charge and collect, on terms and conditions
2-25 that the policy board considers advisable and not in conflict with
2-26 this subchapter, interest on those loans for loan payments;>
2-27 <(7)> secure the payment by the state or the
3-1 department on guarantees and pay claims from money in the
3-2 department's funds under any guarantee or insurance program
3-3 implemented by the department; and
3-4 (7) <(8)> acquire, hold, invest, use, and dispose of
3-5 the receipts, funds, and money, subject only to the Texas
3-6 Constitution, this subchapter, and any covenants relating to the
3-7 department's bonds in classes of investments that the policy board
3-8 determines.
3-9 SECTION 2. Sections 481.059(b), (c), and (d), Government
3-10 Code, are amended to read as follows:
3-11 (b) The department may guarantee loans <or make loans> with
3-12 a term of one year or less made by private lenders to Texas
3-13 businesses to finance activities of those businesses entering or
3-14 expanding into export markets, including activities related to the
3-15 purchase of inventory, equipment, and raw materials, manufacture,
3-16 and marketing.
3-17 (c) In making guarantees <or loans> under this section, the
3-18 department shall give preference to Texas products having the
3-19 highest percentage of their total value represented by Texas source
3-20 components, labor, or intellectual property.
3-21 (d) A loan guarantee <or loan> under this section may not be
3-22 for less than $10,000 or a lesser amount prescribed by department
3-23 rule or more than $1 million. The department may not guarantee
3-24 more than 90 percent of a loan by a private lender. The department
3-25 may not provide a guarantee <or make a loan> for a project unless
3-26 the business involved provides at least 10 percent of the total
3-27 cost of the project. The department shall require each loan
4-1 guaranteed under this section to be secured by appropriate
4-2 collateral and may require the acquisition of insurance from the
4-3 Export-Import Bank of the United States.
4-4 SECTION 3. Section 481.084, Government Code, is amended to
4-5 read as follows:
4-6 Sec. 481.084. LOAN GUARANTEES. (a) The department may
4-7 guarantee not more than 90 percent of a loan made by a private
4-8 lender <or to make loans> to fund a project. For each guarantee
4-9 the department shall determine:
4-10 (1) that the project is located in a rural area;
4-11 (2) the amount of equity the user must pledge or apply
4-12 to the establishment of the project;
4-13 (3) the fees charged by the department, including
4-14 guarantee <or loan> fees, application fees, annual fees, and any
4-15 other costs associated with the loan guarantee <or loan>, as
4-16 necessary to fund the administration of this subchapter;
4-17 (4) the maximum and minimum guarantee <or loan>
4-18 amounts, if applicable;
4-19 (5) the permissible interest rates and amortization
4-20 requirements for a guaranteed loan <or loan>, as agreed on by the
4-21 private lender, the user, and the department;
4-22 (6) the acceptable security for the department's
4-23 participation in a project; and
4-24 (7) any other terms or conditions relating to a
4-25 guarantee <or loan>.
4-26 (b) The department may not make a loan guarantee <or loan,>
4-27 except on approval of a qualified application submitted by a user
5-1 or private lender for a project.
5-2 (c) On approval of a qualified application and the
5-3 department's determination that the establishment of a project has
5-4 accomplished or will accomplish the public purposes of this
5-5 subchapter, the department may provide a loan guarantee <or make a
5-6 loan> of not more than 90 percent of the cost of the project to a
5-7 participating lender, if the user holds funds or property in an
5-8 amount or value equal to not less than 10 percent of the cost of
5-9 the project and those funds or property are then available for and
5-10 are pledged to be applied to the establishment of the project.
5-11 (d) Before making a loan guarantee <or loan>, the department
5-12 must have determined that the user has obtained from other
5-13 independent and responsible financial sources a firm commitment for
5-14 all other funds in excess of the loan guaranteed <or loan> made by
5-15 the department, and that the sum of those funds and the equity to
5-16 be provided by the user are adequate for the completion and
5-17 operation of the project.
5-18 (e) This chapter does not prohibit the use of money in the
5-19 Texas rural economic development fund in conjunction with any other
5-20 money available for the purposes of this chapter.
5-21 (f) The department shall report to the comptroller the name
5-22 of any user who is in default on a loan guaranteed <or loan made>
5-23 under this subchapter and with respect to which the department has
5-24 been required to honor a guarantee. The comptroller may not issue
5-25 a warrant to the user while the user is in default.
5-26 SECTION 4. The importance of this legislation and the
5-27 crowded condition of the calendars in both houses create an
6-1 emergency and an imperative public necessity that the
6-2 constitutional rule requiring bills to be read on three several
6-3 days in each house be suspended, and this rule is hereby suspended,
6-4 and that this Act take effect and be in force from and after its
6-5 passage, and it is so enacted.