By: Rodriguez H.B. No. 3298
A BILL TO BE ENTITLED
AN ACT
relating to the operation of the Capital Access Program: Reserve
Account
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 481.408 of the Government Code is
amended to read as follows:
(A) On approval by the department and after entering into a
participation agreement with the department, a participating
financial institution making a capital access loan shall establish
a reserve account. The reserve account shall be used by the
institution only to cover any losses arising from a default of a
capital access loan made by the institution under this subchapter
or as otherwise provided by this subchapter.
(B) When a participating financial institution makes a loan
enrolled in the program, the institution shall require the borrower
to pay the institution a fee in an amount that is not less than two
percent but not more than three percent of the principal amount of
the loan, which the financial institution shall deposit in the
reserve account. The institution shall also deposit in the reserve
account an amount equal to the amount of the fee received by the
institution from the borrower under this subsection. The
institution may recover from the borrower all or part of the amount
the institution is required to pay under this subsection in any
manner agreed to by the institution and borrower.
(C) For each capital access loan made by a financial
institution, the institution shall certify to the department,
within the period prescribed by the department, that the
institution has made a capital access loan, the amount the
institution has deposited in the reserve account, including the
amount of fees received from the borrower, and, if applicable, that
the borrower is located in or financing a project, activity, or
enterprise in an area designated as an enterprise zone under
Chapter 2303.
(D) On receipt of a certification made under Subsection (c)
and subject to Section 481.409, the department shall deposit in the
institution's reserve account for each capital access loan made by
the institution:
(1) an amount equal to the amount deposited by the
institution for each loan if the institution:
(a) has assets of more than $1 billion; or
(b) [has previously enrolled loans in the program
that in the aggregate are more than $2 million]
(2) an amount equal to 150 percent of the total amount
deposited under Subsection (b) for each loan if the institution is
not described by Subdivision (1); or
(3) notwithstanding Subdivisions (1) and (2), an
amount equal to 200 percent of the total amount deposited under
Subsection (b) for each loan if:
(a) the borrower is located in or financing a
project, activity, or enterprise in an area designated as an
enterprise zone under Chapter 2303; or
(b) the borrower is a small or medium-size
business or a nonprofit organization that operates or proposes to
operate a day-care center or a group day-care home, as those terms
are defined by Section 42.002, Human Resources Code.
(c) the participating financial institution is a
federally certified Community Development Financial Institution as
assigned by 12 U.S.C. Section 4702, as amended.
SECTION 2, Section 481.409 of the Government Code is amended
to read as follows:
(A) The amount deposited by the department into a
participating financial institution's reserve account for any
single loan recipient may not exceed $150,000 during a three-year
period.
(B) The maximum amount the department may deposit into a
reserve account for each capital access loan made under this
subchapter is the lesser of $35,000 or an amount equal to:
(1) eight percent of the loan amount if:
(a) the borrower is located in or financing a
project, activity, or enterprise in an area designate as an
enterprise zone under Chapter 2303; or
(b) the borrower is a small or medium-size
business or a nonprofit organization that operates or proposes to
operate a day-care center or a group day-care home, as those terms
are defined by Section 42.002, Human Resources Code; or
(c) the participating financial institution is a
federally certified Community Development Financial Institution as
assigned by 12 U.S.C. Section 4702, as amended; or
(2) six percent of the loan amount for any other
borrower.
SECTION 3. This Act takes effect September 1, 2003.