By: Ellis, et al. S.B. No. 265
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the linked deposit program.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. The heading to Subchapter N, Chapter 481,
1-4 Government Code, is amended to read as follows:
1-5 SUBCHAPTER N. [HISTORICALLY UNDERUTILIZED BUSINESS
1-6 AND SMALL BUSINESS] LINKED DEPOSIT PROGRAM
1-7 SECTION 2. Section 481.191, Government Code, is amended to
1-8 read as follows:
1-9 Sec. 481.191. DEFINITIONS. In this subchapter:
1-10 (1) "Child-care provider" means a small business that
1-11 operates or proposes to operate a day-care center or group day-care
1-12 home, as those terms are defined by Section 42.002, Human Resources
1-13 Code.
1-14 (2) "Eligible borrower" means:
1-15 (A) a person who proposes to begin operating a
1-16 small business in an enterprise zone, as defined by Section
1-17 2303.003, [a distressed community] or a historically underutilized
1-18 business;
1-19 (B) a nonprofit corporation; or
1-20 (C) a child-care provider.
1-21 (3) [(2)] "Eligible lending institution" means a
1-22 financial institution that makes commercial loans, is a depository
1-23 of state funds, and agrees to participate in the linked deposit
1-24 program established by this subchapter and to provide collateral
2-1 equal to the amount of linked deposits placed with it.
2-2 (4) [(3)] "Historically underutilized business" means:
2-3 (A) a corporation formed for the purpose of
2-4 making a profit in which at least 51 percent of all classes of the
2-5 shares of stock or other equitable securities is owned by one or
2-6 more persons who are members of certain groups, including black
2-7 Americans, Hispanic Americans, women, Asian Pacific Americans, and
2-8 American Indians;
2-9 (B) a sole proprietorship formed for the purpose
2-10 of making a profit that is 100 percent owned, operated, and
2-11 controlled by a person described by Paragraph (A) of this
2-12 subdivision;
2-13 (C) a partnership formed for the purpose of
2-14 making a profit in which 51 percent of the assets and interest in
2-15 the partnership is owned by one or more persons described by
2-16 Paragraph (A) of this subdivision. Those persons must have
2-17 proportionate interest and demonstrate active participation in the
2-18 control, operation, and management of the partnership's affairs; or
2-19 (D) a joint venture in which each entity in the
2-20 joint venture is a historically underutilized business under this
2-21 subdivision.
2-22 (5) "Nonprofit corporation" means a not for profit
2-23 corporation organized under the Texas Non-Profit Corporation Act
2-24 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).
2-25 (6) [(4)] "Small business" means a corporation,
2-26 partnership, sole proprietorship, or other legal entity that:
2-27 (A) is domiciled in this state;
3-1 (B) is formed to make a profit;
3-2 (C) is independently owned and operated; and
3-3 (D) employs fewer than 100 full-time employees.
3-4 SECTION 3. Subsections (a) and (g), Section 481.193,
3-5 Government Code, are amended to read as follows:
3-6 (a) The department shall establish a linked deposit program
3-7 to encourage commercial lending for the development of:
3-8 (1) small businesses in enterprise zones;
3-9 (2) [distressed communities and] historically
3-10 underutilized businesses;
3-11 (3) child-care services provided by and activities
3-12 engaged in this state by nonprofit organizations; and
3-13 (4) quality, affordable child-care services in this
3-14 state.
3-15 (g) After the comptroller's [state treasurer's] acceptance
3-16 of the application and the lending institution originates a loan to
3-17 an eligible borrower, the comptroller [state treasurer] shall place
3-18 a linked deposit with the applicable eligible lending institution
3-19 for the period of the loan, subject to Subsections (h) and (i).
3-20 The comptroller is not required to maintain the deposit with the
3-21 lending institution if the loan is extended, renewed, or
3-22 renegotiated unless the comptroller accepts a new linked deposit
3-23 loan application under this section for the loan as modified [the
3-24 treasurer considers appropriate. The state treasurer may not place
3-25 a deposit for a period extending beyond the state fiscal biennium
3-26 in which it is placed]. Subject to the limitation described by
3-27 Section 481.197, the comptroller [treasurer] may place a time
4-1 deposit [deposits] at an interest rate described by Section 481.192
4-2 and may modify the interest rate during the period of the loan,
4-3 notwithstanding any order of the State Depository Board to the
4-4 contrary.
4-5 SECTION 4. Subsection (b), Section 481.197, Government Code,
4-6 is amended to read as follows:
4-7 (b) The maximum amount of a loan under the linked deposit
4-8 program is $250,000 [$100,000].
4-9 SECTION 5. Subchapter N, Chapter 481, Government Code, is
4-10 amended by adding Section 481.198 to read as follows:
4-11 Sec. 481.198. MARKETING. (a) The department shall promote
4-12 the linked deposit program established by this subchapter to
4-13 eligible borrowers and financial institutions that make commercial
4-14 loans and are depositories of state funds.
4-15 (b) Not later than January 1 of each odd-numbered year, the
4-16 department shall prepare and deliver to the governor, lieutenant
4-17 governor, speaker of the house of representatives, and clerks of
4-18 the standing committees of the senate and house of representatives
4-19 with primary jurisdiction over commerce and economic development a
4-20 report concerning the department's efforts in promoting the linked
4-21 deposit program during the preceding two years.
4-22 SECTION 6. Section 481.195, Government Code, is repealed.
4-23 SECTION 7. This Act does not apply to a linked deposit
4-24 governed by a written deposit agreement executed before the
4-25 effective date of this Act. A linked deposit governed by a written
4-26 deposit agreement executed before the effective date of this Act is
4-27 governed by the law in effect at the time the agreement was
5-1 executed, and that law is continued in effect for that purpose.
5-2 SECTION 8. This Act takes effect September 1, 1997.
5-3 SECTION 9. The importance of this legislation and the
5-4 crowded condition of the calendars in both houses create an
5-5 emergency and an imperative public necessity that the
5-6 constitutional rule requiring bills to be read on three several
5-7 days in each house be suspended, and this rule is hereby suspended.