By Villarreal                                         H.B. No. 3614
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                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 301, Labor Code, is amended by adding
 1-7     Section 301.069 to read as follows:
 1-8           Sec. 301.069.  SHORT TITLE. This Act may be cited as the
 1-9     Texas Community Development Investment Act.
1-10           Sec. 301.0691.  DEFINITIONS. In this subchapter:
1-11                 (1)  "Community development financial institution" has
1-12     the meaning assigned by 12 U.S.C. Section 4702, as amended.
1-13                 (2)  "Community development investment" means a loan or
1-14     grant made to a community development financial institution for the
1-15     purpose of enhancing the provision of basic consumer financial
1-16     services.
1-17                 (3)  "Community development loan" means a loan from a
1-18     community development financial institution to a low-income
1-19     business or nonprofit organization for the purpose of revitalizing
1-20     a distressed community.
1-21                 (4)  "Eligible institution" means a community
1-22     development financial institution meeting the minimum selection
1-23     criteria described by 12 U.S.C. Section 4704, as amended.
 2-1                 (5)  "Program" means the community investment program
 2-2     established under this subchapter.
 2-3           Sec. 301.0692.  COMMUNITY INVESTMENT PROGRAM. Notwithstanding
 2-4     any other law, the commission shall establish a community
 2-5     investment program in which the commission makes grants or
 2-6     interest-free loans to eligible institutions that use the money to
 2-7     make community development loans in distressed areas of the state
 2-8     or to assist low-income areas by providing basic consumer financial
 2-9     services.
2-10           Sec. 301.0693.  ELIGIBILITY. (a)  The commission shall
2-11     determine the eligibility of an institution by verifying that the
2-12     institution meets the minimum selection criteria described by 12
2-13     U.S.C. Section 4704, as amended.
2-14           (b)  The commission may set a limit on the number of eligible
2-15     institutions that may participate in the program.
2-16           (c)  To participate in the program, an eligible institution
2-17     must enter into a participation agreement with the commission that
2-18     sets out the terms and conditions under which the commission will
2-19     make a grant or loan to the eligible institution.
2-20           Sec. 301.0694.  CAPACITY BUILDING. (a)  The commission may
2-21     make a grant to an institution or nonprofit organization to assist
2-22     the institution or organization to:
2-23                 (1)  meet the minimum selection criteria described by
2-24     12 U.S.C. Section 4704, as amended, or to otherwise obtain
2-25     assistance under 12 U.S.C. 4701 et seq., as amended; and
2-26                 (2)  become an eligible institution and participate in
 3-1     the program.
 3-2           (b)  The commission may make a grant to a nonprofit
 3-3     organization the commission determines is performing activities
 3-4     consistent with the goals of this subchapter to provide the
 3-5     organization operating support, technical assistance, and training
 3-6     assistance.
 3-7           Sec. 301.0695.  RULEMAKING AUTHORITY. The commission shall
 3-8     adopt rules relating to the implementation of the program and any
 3-9     other rules necessary to accomplish the purposes of this
3-10     subchapter.
3-11           Sec. 301.0696.  APPLICATION. (a)  An eligible institution may
3-12     file a grant or loan application with the commission.  The
3-13     application must be in a form approved by the commission and
3-14     include a plan of investment that includes the type and number of
3-15     community development loans or investments that the institution
3-16     plans to make using money from the program.
3-17           (b)  The commission shall act on a completed application not
3-18     later than the 30th day after the date on which the application is
3-19     filed with the commission.
3-20           Sec. 301.0697.  OWNERSHIP OF INCOME. All income received on a
3-21     loan or investment made with money received under the program is
3-22     the property of the eligible institution that makes the loan or
3-23     investment.
3-24           Sec. 301.0698.  SEMIANNUAL REPORT. (a)  Not later than the
3-25     30th day after the expiration of each six-month period for which
3-26     there is a participation agreement in effect between the commission
 4-1     and an eligible institution, the eligible institution shall submit
 4-2     a report to the commission that states in detail the status of each
 4-3     investment or loan made under the program.
 4-4           (b)  The report must be in a form prescribed by the
 4-5     commission and must contain all information required by the
 4-6     commission as part of the institution's participation agreement.
 4-7           Sec. 301.0699.  ANNUAL AUDIT. The participation agreement
 4-8     entered into between the eligible institution and the commission
 4-9     must provide for an annual audit.  The commission shall adopt rules
4-10     relating to the format of the audit, including rules allowing not
4-11     more than $5,000 of the amount received by the eligible institution
4-12     under the program to be used to finance the audit.
4-13           SECTION 2.  This Act takes effect September 1, 2001.