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.