JKM S.B. 1877 75(R)BILL ANALYSIS


ECONOMIC DEVELOPMENT
S.B. 1877
By: Wentworth (Greenberg)
4-29-97
Committee Report (Unamended)



BACKGROUND 

Currently, there is no law providing for multi-bank community 
development corporations to invest 
in or loan funds to businesses that employ low- and 
moderate-income persons located in distressed 
areas. This bill creates the Texas Community Investment Program 
to create multi-bank community 
development corporations to invest in or loan funds to businesses 
that employ low- and moderate-
income persons located in distressed areas.

PURPOSE

As proposed, S.B. 1877 creates the Texas Community Investment 
Program to create multi-bank 
community development corporations to invest in or loan funds to 
businesses that employ low-and 
moderate-income persons located in distressed areas.

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Texas Department of 
Housing and Community Affairs in 
SECTION 1 (Section 2306.623, Government Code) and to the 
governing board of the Texas 
Department of Housing and Community Affairs in SECTION 1 (Section 
2306.633, Government 
Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1.Amends Chapter 2306, Government Code, by adding 
Subchapter AA, as follows:

SUBCHAPTER AA. TEXAS COMMUNITY INVESTMENT PROGRAM

Sec. 2306.621. DEFINITIONS. Defines "multi-bank community 
development corporation" 
and "program."

Sec. 2306.622. COMMUNITY INVESTMENT PROGRAM. Creates the 
community 
investment program (program), notwithstanding any other law. Sets 
forth the eligibility of 
the program.

Sec. 2306.623. RULE-MAKING AUTHORITY. Requires the Texas 
Department of Housing 
and Community Affairs (department) to adopt rules relating to the 
implementation of the 
program and any other rules necessary to accomplish the purposes 
of this subchapter.

Sec. 2306.624. GRANT APPLICATION. Authorizes an eligible 
multi-bank community 
development corporation to file a grant application. Sets forth 
the requirements of a grant
application. Provides that the application should be acted upon 
in a certain period of time 
after being filed.

Sec. 2306.625. PROVISIONS RELATING TO GRANTS. Sets forth 
requirements of grants 
under the program.

Sec. 2306.626. ELIGIBLE LOANS. Sets forth requirements for loan 
requests made by 
businesses to an investment committee. Sets forth the 
constituency of the investment 
committee.

Sec. 2306.627. LIMITATION ON USE OF GRANT. Requires a multi-bank 
community 
development corporation to invest at least 60 percent of the 
amounts received under the 
program in businesses that have been in existence for at least 
one year before the investment 
is made.

Sec. 2306.628. COLLABORATIVE EFFORT. Authorizes a multi-bank 
community 
development corporation to make a loan or investment under the 
program through 
partnerships or joint investments.

Sec. 2306.629. PROVISIONS RELATING TO LOANS. Sets forth 
requirements of loans 
made by a multi-bank community development corporation.

Sec. 2306.630. PROVISIONS RELATING TO EQUITY INVESTMENTS. Sets 
forth 
requirements of an equity investment made by a multi-bank 
community development 
corporation.

Sec. 2306.631. INTEREST INCOME. Provides that all income on an 
investment or loan 
made under the program is property of the multi-bank community 
development corporation 
that makes the loan or investment.

Sec. 2306. SEMI-ANNUAL REPORT. Sets forth requirements for a 
semi-annual report to 
be submitted by a multi-bank community development corporation.

Sec. 2306.633. ANNUAL AUDIT. Sets forth requirements of an annual 
audit of amounts 
awarded to the multi-bank community development corporation under 
the program. Requires 
the governing board of the department to adopt rules relating to 
the format of the audit.

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.