JKM S.B. 265 75(R)BILL ANALYSIS


ECONOMIC DEVELOPMENT
S.B. 265
By: Ellis (Giddings)
4-29-97
Committee Report (Unamended)



BACKGROUND 

Currently, the Texas Small Business Linked Deposit Program provides loans
to child care providers only if they are businesses located in an
economically distressed communities or historically underutilized
businesses. Child care providers face a number of barriers to raising
capital they need to build new facilities or enhance the quality of
existing facilities, staff, and child care, while keeping child care
affordable for working families. This bill provides a linked deposit
program, which encourages commercial lenders to lend for the purpose of
providing quality, affordable child care. 

PURPOSE

S.B. 265 provides for the promotion and expansion of the linked deposit
program to include child care providers. 

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.Amends the heading to Chapter 481N, Government Code, as follows:
SUBCHAPTER N. LINKED DEPOSIT PROGRAM

SECTION 2.Amends Section 481.191, Government Code, to define "child-care
provider," "nonprofit corporation," and to redefine "eligible borrower."
Makes conforming changes. 

SECTION 3.Amends Sections 481.193(a) and (g), Government Code, to provide
that the Texas Department of Commerce (department) encourages commercial
lending for the development of: small businesses in enterprise zones,
rather than distressed communities; child-care services provided by and
activities engaged in the this state by nonprofit organizations; and
quality, affordable child-care services in this state. Provides that after
the comptroller's acceptance of an application, the comptroller is
required to place a linked deposit with the applicable lending institution
for a period of the loan, rather than for the period the treasurer
considers appropriate, subject to Subsections (h) and (i). Provides that
the comptroller is not required to maintain the deposit with the lending
institution if the loan is extended, renewed, or renegotiated, unless the
comptroller accepts a new linked deposit loan application. Deletes a
provision prohibiting the state treasurer from placing a deposit for a
period extending  beyond the state fiscal biennium. Authorizes the
comptroller to modify the interest rate during the period of the loan.
Makes conforming changes. 

SECTION 4.Amends Section 481.197(b), Government Code, to provide that the
maximum amount of loan under the linked deposit program is $250,000,
rather than $100,000. 

SECTION 5.Amends Chapter 481N, Government Code, by adding Section 481.198
and 481.99, as follows: 

Sec. 481.198. MARKETING. Requires the department to promote the linked
deposit program established by this subchapter to eligible borrowers and
financial institutions that make commercial loans and are depositories of
state funds. Requires the department to prepare and deliver a report
describing the department's efforts to promote the program no later than
January 1 of each odd-numbered year to certain public officials. 

SECTION 6.Repealer: Section 481.195, Government Code (Designation as
distressed community). 

SECTION 7.Makes application of this Act prospective.

SECTION 8.Effective date: September 1, 1997.

SECTION 9.Emergency clause.