SRC-AAA C.S.S.B. 1877 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1877
By: Wentworth
Jurisprudence
4-10-97
Committee Report (Substituted)


DIGEST 

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 moderateincome persons located in distressed areas. 

PURPOSE

As proposed, C.S.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.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends SECTION 1 to make nonsubstantive changes.