By Coleman H.B. No. 1054 77R3483 DWS-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a program of grants and loans to provide capital for 1-3 community development and economic development institutions in 1-4 economically distressed and low-income areas. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 12, Finance Code, is amended by adding 1-7 Subchapter C to read as follows: 1-8 SUBCHAPTER C. TEXAS COMMUNITY DEVELOPMENT INVESTMENT PROGRAM 1-9 Sec. 12.201. DEFINITIONS. In this subchapter: 1-10 (1) "Community development financial institution" has 1-11 the meaning assigned by 12 U.S.C. Section 4702, as amended. 1-12 (2) "Community development investment" means a loan or 1-13 grant made to a community development financial institution for the 1-14 purpose of enhancing the provision of basic consumer financial 1-15 services. 1-16 (3) "Community development loan" means a loan from a 1-17 community development financial institution to a low-income 1-18 business or nonprofit organization for the purpose of revitalizing 1-19 a distressed community. 1-20 (4) "Eligible institution" means a community 1-21 development financial institution meeting the minimum selection 1-22 criteria described by 12 U.S.C. Section 4704, as amended. 1-23 (5) "Program" means the community investment program 1-24 established under this subchapter. 2-1 Sec. 12.202. COMMUNITY INVESTMENT PROGRAM. Notwithstanding 2-2 any other law, the department shall establish a community 2-3 investment program in which the department makes grants or 2-4 interest-free loans to eligible institutions that use the money to 2-5 make community development loans in distressed areas of the state 2-6 or to assist low-income areas by providing basic consumer financial 2-7 services. 2-8 Sec. 12.203. ELIGIBILITY. (a) The department shall 2-9 determine the eligibility of an institution by verifying that the 2-10 institution meets the minimum selection criteria described by 12 2-11 U.S.C. Section 4704, as amended. 2-12 (b) The department may set a limit on the number of eligible 2-13 institutions that may participate in the program. 2-14 (c) To participate in the program, an eligible institution 2-15 must enter into a participation agreement with the department that 2-16 sets out the terms and conditions under which the department will 2-17 make a grant or loan to the eligible institution. 2-18 Sec. 12.204. CAPACITY BUILDING. (a) The department may 2-19 make a grant to an institution or nonprofit organization to assist 2-20 the institution or organization to: 2-21 (1) meet the minimum selection criteria described by 2-22 12 U.S.C. Section 4704, as amended, or to otherwise obtain 2-23 assistance under 12 U.S.C. 4701 et seq., as amended; and 2-24 (2) become an eligible institution and participate in 2-25 the program. 2-26 (b) The department may make a grant to a nonprofit 2-27 organization the department determines is performing activities 3-1 consistent with the goals of this subchapter to provide the 3-2 organization operating support, technical assistance, and training 3-3 assistance. 3-4 Sec. 12.205. RULEMAKING AUTHORITY. The finance commission 3-5 shall adopt rules relating to the implementation of the program and 3-6 any other rules necessary to accomplish the purposes of this 3-7 subchapter. 3-8 Sec. 12.206. APPLICATION. (a) An eligible institution may 3-9 file a grant or loan application with the department. The 3-10 application must be in a form approved by the department and 3-11 include a plan of investment that includes the type and number of 3-12 community development loans or investments that the institution 3-13 plans to make using money from the program. 3-14 (b) The department shall act on a completed application not 3-15 later than the 30th day after the date on which the application is 3-16 filed with the department. 3-17 Sec. 12.207. OWNERSHIP OF INCOME. All income received on a 3-18 loan or investment made with money received under the program is 3-19 the property of the eligible institution that makes the loan or 3-20 investment. 3-21 Sec. 12.208. SEMIANNUAL REPORT. (a) Not later than the 3-22 30th day after the expiration of each six-month period for which 3-23 there is a participation agreement in effect between the department 3-24 and an eligible institution, the eligible institution shall submit 3-25 a report to the department that states in detail the status of each 3-26 investment or loan made under the program. 3-27 (b) The report must be in a form prescribed by the 4-1 department and must contain all information required by the 4-2 department as part of the institution's participation agreement. 4-3 Sec. 12.209. ANNUAL AUDIT. The participation agreement 4-4 entered into between the eligible institution and the department 4-5 must provide for an annual audit. The finance commission shall 4-6 adopt rules relating to the format of the audit, including rules 4-7 allowing not more than $5,000 of the amount received by the 4-8 eligible institution under the program to be used to finance the 4-9 audit. 4-10 SECTION 2. This Act takes effect September 1, 2001.