JKM H.B. 1414 75(R)    BILL ANALYSIS


ECONOMIC DEVELOPMENT
H.B. 1414
By: Van de Putte
3-21-97
Committee Report (Amended)



BACKGROUND 

The Federal Community Reinvestment Act (CRA) requires banking institutions
"to meet the credit needs of the local communities in which they are
chartered."  CRA was designed to encourage innovative efforts to meet
communities' credit needs.  Nationally, CRA has generated over $100
billion in investments in low- and moderate-income communities since its
inception in 1977. Community reinvestment in Texas is currently somewhat
lower than in other large states, while bank liquidity-- the amount of
capital that banks have available to invest-- is relatively high.  By
working with the banking industry to develop mutually beneficial
investment programs, the state could gain capital for projects such as
housing and economic development while assisting banks to meet CRA
requirements in Texas. 

PURPOSE

H.B. 1414 will create a community reinvestment work group to develop
strategies to meet the investment needs of low- and moderate-income
communities statewide in conjunction with the CRA. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS


SECTION 1.  Adds Article 352 to Title 16 of Revised Statutes.

ART.  352.  COMMUNITY REINVESTMENT WORK GROUP.

Sec. 1.  COMMUNITY REINVESTMENT WORK GROUP. (a)  Creates the Community
Reinvestment work group to work in conjunction with the banking community
to develop a statewide strategies for investment development in pools,
capital, and other financial vehicles to increase community development.
The Community Reinvestment work group is to consult and coordinate with
representatives from federal regulatory agencies, and monitor and evaluate
the strategies developed under this section. 

(b)  The workgroup includes members or representatives from the
Comptroller's Office, Texas Department of Housing and Community Affairs,
Texas Department of Commerce, Texas Department of Banking, and The Texas
Department of  Insurance. 
 
(c)  The member representing the Comptroller's Office is the presiding
officer of the workgroup. 

(d)  The group shall meet at least quarterly.

(e)  The members serve two years, at will of the appointing authority.

(f)  The appointing authority is responsible for the expenses for their
members service.  There is no additional compensation for serving as a
member. 

(g)  The groups shall use innovative qualified investment strategies,
shall encourage investment in low to moderate income families and
communities, coordinate efforts to attract capital through the Community
Reinvestment Act of 1977 as defined in 12 U.S.C. Section 2901 et seq., and
shall ensure cooperation with local community development corporations. 

Sec. 2.  REPORT TO THE LEGISLATURE.  The workgroup shall report to the
legislature each biennium on the effectiveness of those strategies
developed by the requirements of this Article. 

SECTION 2.  The first report shall be submitted to the legislature not
later than February 1, 1999. 

SECTION 3.  EFFECTIVE DATE.  September 1, 1997.

SECTION 4.  EMERGENCY CLAUSE.

EXPLANATION OF AMENDMENTS

Amendment #1, in SECTION 1 of the bill, adds a requirement that the group
consult and coordintate with a list of agencies.  Renumbers subsequent
subsection which requires the group to monitor and evalutate strategies
developed under this subsection.