C.S.H.B. 3298 78(R)    BILL ANALYSIS


C.S.H.B. 3298
By: Rodriguez
Economic Development
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Community Development Financial Institutions (CDFI) are private-sector
financial intermediaries with an emphasis on community development.  Many
CDFIs are federally certified small business lenders and utilize the Texas
Department of Economic Development's Capital Access Program (CAP) that
creates a loan loss reserve fund for small business lenders.  Currently,
the state provides a 150 percent match to the contributions to the Capital
Access Program from participating small business lenders.  HB 3298 allows
federally certified CDFIs to receive a greater match and build their loan
loss reserves more rapidly. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

CSHB 3298 amends the Government Code to require the Department of Economic
Development to deposit, in the reserve account, an amount equal to 200
percent of amount deposited by the lender into the reserve account, if the
lender is a federally certified community development financial
institution.  

CSHB 3298 amends the Government Code to authorize the Department of
Economic Development to deposit, in the reserve account, up to eight
percent of the amount of the loan, if the lender is a federally certified
community development financial institution.  

EFFECTIVE DATE

September 1, 2003.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute is written in Legislative Council style and format.

The substitute restores the provision that the Department of Economic
Development deposit, in the lender's reserve account, an amount equal to
the lender's contribution if the lender has already enrolled loans in an
amount greater than $2million in the Capitol Access Program.