1-1 By: Ellis, et al. S.B. No. 265
1-2 (In the Senate - Filed January 22, 1997; January 23, 1997,
1-3 read first time and referred to Committee on Economic Development;
1-4 April 11, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 11, Nays 0; April 11, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 265 By: Harris
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the linked deposit program.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. The heading to Subchapter N, Chapter 481,
1-13 Government Code, is amended to read as follows:
1-14 SUBCHAPTER N. [HISTORICALLY UNDERUTILIZED BUSINESS
1-15 AND SMALL BUSINESS] LINKED DEPOSIT PROGRAM
1-16 SECTION 2. Section 481.191, Government Code, is amended to
1-17 read as follows:
1-18 Sec. 481.191. DEFINITIONS. In this subchapter:
1-19 (1) "Child-care provider" means a small business that
1-20 operates or proposes to operate a day-care center or group day-care
1-21 home, as those terms are defined by Section 42.002, Human Resources
1-22 Code.
1-23 (2) "Eligible borrower" means:
1-24 (A) a person who proposes to begin operating a
1-25 small business in an enterprise zone, as defined by Section
1-26 2303.003, [a distressed community] or a historically underutilized
1-27 business; or
1-28 (B) a child-care provider.
1-29 (3) [(2)] "Eligible lending institution" means a
1-30 financial institution that makes commercial loans, is a depository
1-31 of state funds, and agrees to participate in the linked deposit
1-32 program established by this subchapter and to provide collateral
1-33 equal to the amount of linked deposits placed with it.
1-34 (4) [(3)] "Historically underutilized business" means:
1-35 (A) a corporation formed for the purpose of
1-36 making a profit in which at least 51 percent of all classes of the
1-37 shares of stock or other equitable securities is owned by one or
1-38 more persons who are members of certain groups, including black
1-39 Americans, Hispanic Americans, women, Asian Pacific Americans, and
1-40 American Indians;
1-41 (B) a sole proprietorship formed for the purpose
1-42 of making a profit that is 100 percent owned, operated, and
1-43 controlled by a person described by Paragraph (A) of this
1-44 subdivision;
1-45 (C) a partnership formed for the purpose of
1-46 making a profit in which 51 percent of the assets and interest in
1-47 the partnership is owned by one or more persons described by
1-48 Paragraph (A) of this subdivision. Those persons must have
1-49 proportionate interest and demonstrate active participation in the
1-50 control, operation, and management of the partnership's affairs; or
1-51 (D) a joint venture in which each entity in the
1-52 joint venture is a historically underutilized business under this
1-53 subdivision.
1-54 (5) [(4)] "Small business" means a corporation,
1-55 partnership, sole proprietorship, or other legal entity that:
1-56 (A) is domiciled in this state;
1-57 (B) is formed to make a profit;
1-58 (C) is independently owned and operated; and
1-59 (D) employs fewer than 100 full-time employees.
1-60 SECTION 3. Subsections (a) and (g), Section 481.193,
1-61 Government Code, are amended to read as follows:
1-62 (a) The department shall establish a linked deposit program
1-63 to encourage commercial lending for the development of:
1-64 (1) small businesses in enterprise zones;
2-1 (2) [distressed communities and] historically
2-2 underutilized businesses; and
2-3 (3) quality, affordable child-care services in this
2-4 state.
2-5 (g) After the comptroller's [state treasurer's] acceptance
2-6 of the application and the lending institution originates a loan to
2-7 an eligible borrower, the comptroller [state treasurer] shall place
2-8 a linked deposit with the applicable eligible lending institution
2-9 for the period of the loan, subject to Subsections (h) and (i).
2-10 The comptroller is not required to maintain the deposit with the
2-11 lending institution if the loan is extended, renewed, or
2-12 renegotiated unless the comptroller accepts a new linked deposit
2-13 loan application under this section for the loan as modified [the
2-14 treasurer considers appropriate. The state treasurer may not place
2-15 a deposit for a period extending beyond the state fiscal biennium
2-16 in which it is placed]. Subject to the limitation described by
2-17 Section 481.197, the comptroller [treasurer] may place a time
2-18 deposit [deposits] at an interest rate described by Section 481.192
2-19 and may modify the interest rate during the period of the loan,
2-20 notwithstanding any order of the State Depository Board to the
2-21 contrary.
2-22 SECTION 4. Subsection (b), Section 481.197, Government Code,
2-23 is amended to read as follows:
2-24 (b) The maximum amount of a loan under the linked deposit
2-25 program is $250,000 [$100,000].
2-26 SECTION 5. Subchapter N, Chapter 481, Government Code, is
2-27 amended by adding Section 481.198 to read as follows:
2-28 Sec. 481.198. MARKETING. (a) The department shall promote
2-29 the linked deposit program established by this subchapter to
2-30 eligible borrowers and financial institutions that make commercial
2-31 loans and are depositories of state funds.
2-32 (b) Not later than January 1 of each odd-numbered year, the
2-33 department shall prepare and deliver to the governor, lieutenant
2-34 governor, speaker of the house of representatives, and clerks of
2-35 the standing committees of the senate and house of representatives
2-36 with primary jurisdiction over commerce and economic development a
2-37 report concerning the department's efforts in promoting the linked
2-38 deposit program during the preceding two years.
2-39 SECTION 6. Section 481.195, Government Code, is repealed.
2-40 SECTION 7. This Act does not apply to a linked deposit
2-41 governed by a written deposit agreement executed before the
2-42 effective date of this Act. A linked deposit governed by a written
2-43 deposit agreement executed before the effective date of this Act is
2-44 governed by the law in effect at the time the agreement was
2-45 executed, and that law is continued in effect for that purpose.
2-46 SECTION 8. This Act takes effect September 1, 1997.
2-47 SECTION 9. The importance of this legislation and the
2-48 crowded condition of the calendars in both houses create an
2-49 emergency and an imperative public necessity that the
2-50 constitutional rule requiring bills to be read on three several
2-51 days in each house be suspended, and this rule is hereby suspended.
2-52 * * * * *