By Hirschi H.B. No. 3204
75R7134 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the development of small businesses through the
1-3 adoption of the Microenterprise Development Act.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 481, Government Code, is amended by
1-6 adding Subchapter W to read as follows:
1-7 SUBCHAPTER W. MICROENTERPRISE DEVELOPMENT
1-8 Sec. 481.311. DEFINITIONS. In this subchapter:
1-9 (1) "Microenterprise" means a business, whether new or
1-10 existing, with five or fewer employees and includes startup,
1-11 home-based, and self-employed businesses.
1-12 (2) "Microloan delivery organization" means a
1-13 community-based or nonprofit program that has developed a viable
1-14 plan for providing training, access to financing, and technical
1-15 assistance for microenterprises and that meets the criteria and
1-16 qualifications established by this subchapter.
1-17 (3) "Microloan" means a business loan of not more than
1-18 $25,000.
1-19 (4) "Operating costs" means the costs associated with
1-20 administering a loan or a loan guaranty, administering a revolving
1-21 loan program, or providing for business training and technical
1-22 assistance to a microloan recipient.
1-23 (5) "Program" means the Microenterprise Partnership
1-24 Program.
2-1 (6) "Statewide microlending support organization"
2-2 means a community-based or nonprofit organization that has a
2-3 demonstrated capacity and a plan for providing and administering
2-4 grants or loans to microloan delivery organizations.
2-5 Sec. 481.312. MICROENTERPRISE PARTNERSHIP PROGRAM. The
2-6 department shall establish the Microenterprise Partnership Program.
2-7 In order to implement the program, the department may:
2-8 (1) provide grants of not more than $25,000 to
2-9 microloan delivery organizations for the purposes specified by this
2-10 subchapter;
2-11 (2) contract with statewide mircolending support
2-12 organizations that will serve as agents for the department to
2-13 effect the purposes and fulfill the requirements of this
2-14 subchapter; and
2-15 (3) identify and coordinate other state and federal
2-16 sources of funds that may be available to the department to enhance
2-17 the state's ability to facilitate program grants.
2-18 Sec. 481.313. CRITERIA FOR GRANTS. To establish the
2-19 criteria for making a grant to a microloan delivery organization,
2-20 the department shall consider:
2-21 (1) the plan for providing business development
2-22 services and microloans to microenterprises;
2-23 (2) the scope of services to be provided by the
2-24 microloan delivery organization;
2-25 (3) the plan for coordinating the services and loans
2-26 provided by the microloan delivery organization with financial
2-27 institutions;
3-1 (4) the geographic representation of all regions of
3-2 the state, including both urban and rural communities and
3-3 neighborhoods;
3-4 (5) the ability of the microloan delivery organization
3-5 to provide for business development in areas of chronic economic
3-6 distress and low-income regions of the state;
3-7 (6) the ability of the microloan delivery organization
3-8 to provide business training and technical assistance to
3-9 microenterprise clients;
3-10 (7) the ability of the microloan delivery organization
3-11 to monitor and provide financial oversight of recipients of
3-12 microloans; and
3-13 (8) sources and sufficiency of operating funds for the
3-14 microenterprise development organization.
3-15 Sec. 481.314. USE OF GRANTS. Grants made by the department
3-16 or agent to a microloan delivery organization may be used to:
3-17 (1) satisfy matching fund requirements for other
3-18 federal or private grants;
3-19 (2) establish a revolving loan fund from which the
3-20 microloan delivery organization may make loans to microenterprises;
3-21 (3) establish a guaranty fund from which the microloan
3-22 delivery organization may guarantee loans made by financial
3-23 institutions to microenterprises; and
3-24 (4) provide funding for the operating costs of a
3-25 microloan delivery organization.
3-26 Sec. 481.315. QUALIFICATIONS FOR GRANTS OF STATE FUNDS. (a)
3-27 The granting of any appropriated funds to a microloan delivery
4-1 organization must satisfy this section.
4-2 (b) Granted funds must be matched, in money or in kind, $1
4-3 for each $1 of the grant funds requested by nonstate funds from any
4-4 nonstate source, including private foundations, federal or local
4-5 government sources, quasi-governmental entities or commercial
4-6 lending institutions, or any other funds the source of which does
4-7 not include funds appropriated from the legislature.
4-8 (c) At least 50 percent of the program funds must be
4-9 disbursed by the microloan delivery organizations in microloans
4-10 that do not exceed $10,000.
4-11 Sec. 481.316. CONTRACT REQUIREMENTS. A contract between the
4-12 department and a statewide microlending support organization must:
4-13 (1) require the organization to make and administer
4-14 grants as specified by this subchapter; and
4-15 (2) require that not more than 10 percent of the funds
4-16 provided under the contract may be used for operating or
4-17 administering the grant program.
4-18 Sec. 481.317. REPORT. (a) The department shall submit a
4-19 report to the governor and the legislature before January 1 of each
4-20 year.
4-21 (b) The report must include:
4-22 (1) a description of the demand for the program from
4-23 microenterprises and grant recipients in this state;
4-24 (2) a listing of the recipients and amounts of grants
4-25 made under this subchapter in the previous fiscal year;
4-26 (3) the impact of the grants;
4-27 (4) a description of the partnerships between
5-1 commercial lenders and microloan delivery organizations that have
5-2 resulted from grants made by the program; and
5-3 (5) an evaluation of the program's performance based
5-4 on the documented goals of the recipients.
5-5 (c) The department may require program recipients to provide
5-6 periodic performance reports to enable the department to fulfill
5-7 the requirements of this section.
5-8 Sec. 481.318. RULES. The policy board shall adopt rules as
5-9 necessary to carry out this subchapter.
5-10 SECTION 2. This Act takes effect September 1, 1997.
5-11 SECTION 3. The importance of this legislation and the
5-12 crowded condition of the calendars in both houses create an
5-13 emergency and an imperative public necessity that the
5-14 constitutional rule requiring bills to be read on three several
5-15 days in each house be suspended, and this rule is hereby suspended.