SRC-AAA C.S.S.B. 265 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 265
By: Ellis 
Economic Development
4-10-97
Committee Report (Substituted)


DIGEST 

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

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

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

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" 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.  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. 

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 481.191, Government Code, to redefine "eligible borrower"
to include an enterprise zone as defined by Section 2303.003, rather than,
a distressed community. 

SECTION 3.

Amends Sections 481.193(a) and (g), Government Code, regarding enterprise
zones and modification of interest rates during the period of the loan. 

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.  Redesignates SECTION 4 as SECTION 5. 

SECTION 5. 

Deletes proposed Section 481.99 regarding administrative fees.

SECTION 6.

Adds SECTION 6, repealer.

SECTIONS 7-9.

Redesignates proposed SECTIONS 5-7 as SECTIONS 7-9.