By: Shapleigh S.B. No. 654
A BILL TO BE ENTITLED
AN ACT
relating to access to capital and other funds by individuals and new
businesses in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 278 to read as follows:
CHAPTER 278. ACCESS TO FINANCIAL CAPITAL
Sec. 278.001. DUTY OF CERTAIN AGENCIES TO PREPARE STRATEGIC
PLAN CONCERNING ACCESS TO FINANCIAL CAPITAL. The Finance
Commission of Texas, the Texas Department of Economic Development,
and the Texas Department of Housing and Community Affairs shall
jointly prepare a biennial strategic plan relating to access to
capital in unserved and underserved areas of the state.
Sec. 278.002. SUBMISSION OF PLAN AND RECOMMENDATIONS. Not
later than November 1 of each even-numbered year, the agencies
shall jointly:
(1) submit the strategic plan required by this chapter
to the lieutenant governor, the speaker of the house of
representatives, and the presiding officers of the senate business
and commerce and house business and industry committees; and
(2) make recommendations on actions that the
legislature may take to improve access to capital in unserved and
underserved areas of the state.
Sec. 278.003. CONTENTS OF PLAN. The strategic plan must:
(1) define and identify unserved and underserved areas
in the state with regard to housing ownership, small business
loans, availability of venture capital, lending options, and other
relevant financial capital issues;
(2) quantify community investment and lending
resources available by location in the state;
(3) develop specific targets and plans for increasing
investment in unserved and underserved areas; and
(4) enlist private financial institutions to use the
strategic plan to set institutional targets.
Sec. 278.004. FINANCIAL CAPITAL INFORMATION AVAILABLE ON
INTERNET. The agencies shall create and maintain an Internet site
through the Texas Online government portal or any successor to that
portal that includes:
(1) a list of traditional and nontraditional sources
for loans that can be searched by a borrower based on the borrower's
financial characteristics;
(2) advice to small businesses on how to develop a
business plan;
(3) advice on how to enhance credit scores;
(4) advice on how to establish a relationship with a
financial institution;
(5) information on interest rates available in the
state;
(6) information on the cost of loans available to
borrowers of varied risk levels in the state;
(7) information on how to compare mortgage loans
available in the state;
(8) information regarding lending practices of
specific lenders in the state; and
(9) links to relevant consumer financial websites.
Sec. 278.005. INTEGRATED BUDGET. The agencies shall work
together to determine whether an integrated budget is appropriate
and necessary for purposes of creating the strategic plan required
by this chapter. If the agencies determine that an integrated
budget is appropriate and necessary, the agencies shall present to
the Legislative Budget Board recommendations concerning the
distribution of funds to each of the agencies.
SECTION 2. (a) Subtitle Z, Title 3, Finance Code, is
amended by adding Chapter 279 to read as follows:
CHAPTER 279. COMMUNITY REINVESTMENT PLANS
Sec. 279.001. DEFINITIONS. In this chapter:
(1) "Community development financial institution" has
the meaning assigned by Section 103(5) of the Community Development
Banking and Financial Institutions Act of 1994 (12 U.S.C. Section
4702), as amended.
(2) "Community reinvestment plan" means an annual
community reinvestment strategic plan developed and implemented by
a lender under this chapter.
(3) "Finance commission" means the Finance Commission
of Texas.
(4) "Underserved area" means an investment area as
defined by Section 103(16), of the Community Development Banking
and Financial Institutions Act of 1994 (12 U.S.C. Section 4702), as
amended.
Sec. 279.002. APPLICABILITY. This chapter applies only to
a lender that is subject to a corporate franchise tax.
Sec. 279.003. COMMUNITY REINVESTMENT STRATEGIC PLAN. A
lender, in accordance with rules adopted by the finance commission
under Section 279.005, may develop and implement an annual
community reinvestment strategic plan in order to be eligible to
receive a tax credit as provided by Section 279.004. A lender's
plan must include the lender's specific targets for the expenditure
of funds for community reinvestment purposes, including:
(1) lending money to borrowers in underserved areas in
the state;
(2) investing in or with nonprofit lending
institutions for lending activities in underserved areas in the
state; and
(3) investing in or with community development
financial institutions.
Sec. 279.004. TAX CREDIT. A lender must meet each of the
targets set by the lender's community reinvestment plan, as
certified by rule of the finance commission, in order to be eligible
for a tax credit as provided by Subchapter V, Chapter 171, Tax Code.
Sec. 279.005. DUTIES OF FINANCE COMMISSION; RULEMAKING
AUTHORITY. (a) The finance commission, in consultation with the
Texas Department of Economic Development and the Texas Department
of Housing and Community Affairs, shall assist lenders in
identifying and setting community reinvestment targets for the
submission of community reinvestment plans.
(b) The finance commission shall adopt policies and rules as
necessary to implement this chapter, including policies and rules
that:
(1) provide lenders with specific guidelines and
procedures for the adoption and submission to the commission of
community reinvestment plans, including a reasonable time frame for
implementation of the plan; and
(2) create a certification process for lenders that
meets each of the targets set under their respective plan.
(c) The finance commission may consult with and request
information relevant to this chapter from the Texas Department of
Economic Development and the Texas Department of Housing and
Community Affairs. In developing rules and policies under this
section, the commission shall consider any information obtained
under this subsection.
Sec. 279.006. INTERNET POSTING. (a) A lender may post the
lender's community reinvestment plan on any Internet website
maintained by the lender. The plan must be posted in a format that
is readily accessible to and understandable by a member of the
public. The lender shall notify the finance commission if it posts
a plan.
(b) The finance commission shall maintain on the
commission's Internet website a link to each lender's community
reinvestment plan that is posted on the Internet.
(b) Chapter 171, Tax Code, is amended by adding Subchapter V
to read as follows:
SUBCHAPTER V. TAX CREDIT FOR ACHIEVING COMMUNITY REINVESTMENT
TARGETS
Sec. 171.901. APPLICATION OF SUBCHAPTER. This subchapter
applies only to a corporation that is certified by the Finance
Commission of Texas as having met the targets of a community
reinvestment plan submitted by the corporation under Chapter 279,
Finance Code.
Sec. 171.902. CREDIT. A corporation that meets the
eligibility requirements under this subchapter is entitled to a
credit in the amount allowed by this subchapter against the tax
imposed under this chapter.
Sec. 171.903. CREDIT FOR EXPENDITURE. A corporation may
claim a credit under this subchapter only for a qualifying
expenditure relating to the implementation of the corporation's
community reinvestment plan. A qualifying expenditure includes an
expenditure of funds described by Section 279.003, Finance Code.
Sec. 171.904. LIMITATION. (a) The total credit claimed
under this subchapter for a period may not exceed 15 percent of the
amount of franchise tax due for the report after any other
applicable tax credits.
(b) A corporation may claim a credit under this subchapter
for a contribution made during an accounting period only against
the tax owed for the corresponding reporting period.
Sec. 171.905. APPLICATION FOR CREDIT. (a) A corporation
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall adopt a form for the application
for the credit. A corporation must use this form in applying for
the credit.
Sec. 171.906. ASSIGNMENT PROHIBITED. A corporation may not
convey, assign, or transfer the credit allowed under this
subchapter to another entity unless all of the assets of the
corporation are conveyed, assigned, or transferred in the same
transaction.
(c) Subchapter V, Chapter 171, Tax Code, as added by this
section, applies only to a report due on or after January 1, 2004.
(d) A corporation may claim a credit under Subchapter V,
Chapter 171, Tax Code, as added by this section, only for a
qualified expenditure made on or after January 1, 2004.
(e) Not later than November 1, 2003, the Finance Commission
of Texas shall adopt rules under Chapter 279, Finance Code, as added
by this section.
SECTION 3. (a) Section 393.001, Finance Code, is amended by
amending Subdivisions (1) and (3) and adding Subdivision (5) to
read as follows:
(1) "Consumer" means an individual who is solicited to
purchase or who purchases the services, including debt-pooling
services, of a credit services organization.
(3) "Credit services organization" means a person who:
(A) provides, or represents that the person can
or will provide, for the payment of valuable consideration any of
the following services with respect to the extension of consumer
credit by others:
(i) [(A)] improving a consumer's credit
history or rating;
(ii) [(B)] obtaining an extension of
consumer credit for a consumer; or
(iii) [(C)] providing advice or assistance
to a consumer with regard to Subparagraph (i) or (ii); or
(B) enters into a valid debt-pooling contract
with a consumer under Subchapter B, Chapter 394 [Paragraph (A) or
(B)].
(5) "Office" means the Office of Consumer Credit
Commissioner.
(b) Section 393.002, Finance Code, is amended by amending
Subsection (a) and adding Subsection (c) to read as follows:
(a) Except as provided by Subsection (c), this [This]
chapter does not apply to:
(1) a person:
(A) authorized to make a loan or grant an
extension of consumer credit under the laws of this state or the
United States; and
(B) subject to regulation and supervision by this
state or the United States;
(2) a lender approved by the United States secretary
of housing and urban development for participation in a mortgage
insurance program under the National Housing Act (12 U.S.C. Section
1701 et seq.);
(3) a bank or savings association the deposits or
accounts of which are eligible to be insured by the Federal Deposit
Insurance Corporation or a subsidiary of the bank or association;
(4) a credit union doing business in this state;
(5) a nonprofit organization exempt from taxation
under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
Section 501(c)(3));
(6) a real estate broker or salesman licensed under
The Real Estate License Act (Article 6573a, Vernon's Texas Civil
Statutes) who is acting within the course and scope of that license;
(7) an individual licensed to practice law in this
state who is acting within the course and scope of the individual's
practice as an attorney;
(8) a broker-dealer registered with the Securities and
Exchange Commission or the Commodity Futures Trading Commission
acting within the course and scope of that regulation;
(9) a consumer reporting agency;
(10) a person whose primary business is making loans
secured by liens on real property; or
(11) a mortgage broker or loan officer licensed under
Chapter 156 [, Finance Code,] who is acting within the course and
scope of that license.
(c) This chapter applies to any person, including a person
listed in Subsection (a), who enters into a valid debt-pooling
contract with a consumer under Subchapter B, Chapter 394.
(c) Sections 393.101(a), (c), and (d), Finance Code, are
amended to read as follows:
(a) Before conducting business in this state, a credit
services organization shall register with the office [secretary of
state] by filing a statement that:
(1) contains the name and address of:
(A) the organization; and
(B) each person who directly or indirectly owns
or controls at least 10 percent of the outstanding shares of stock
in the organization; and
(2) fully discloses any litigation or unresolved
complaint relating to the operation of the organization filed with
a governmental authority of this state or contains a notarized
statement that there has been no litigation or unresolved complaint
of that type.
(c) The office [secretary of state] may not require an
organization to provide information other than information
contained in the registration statement.
(d) A registration certificate expires on the first
anniversary of its date of issuance. A registered credit services
organization may renew a registration certificate by filing a
renewal application, in the form prescribed by the office
[secretary of state], and paying the renewal fee.
(d) Section 393.104, Finance Code, is amended to read as
follows:
Sec. 393.104. FILING FEE. The office [secretary of state]
may charge a credit services organization a reasonable fee to cover
the cost of filing a registration statement or renewal application
in an amount not to exceed $100.
(e) Section 393.401(b), Finance Code, is amended to read as
follows:
(b) A copy of the bond shall be filed with the office
[secretary of state].
(f) Section 393.402(b), Finance Code, is amended to read as
follows:
(b) The name of the depository and the trustee and the
account number of the surety account must be filed with the office
[secretary of state].
(g) Section 393.407, Finance Code, is amended to read as
follows:
Sec. 393.407. PAYMENT OF MONEY IN SURETY ACCOUNT TO CREDIT
SERVICES ORGANIZATION. (a) A depository may not pay money in a
surety account to the credit services organization that established
the account or a representative of the organization unless the
organization or representative presents a statement issued by the
office [secretary of state] indicating that the requirement of
Section 393.406 has been satisfied in relation to the account.
(b) The office [secretary of state] may conduct an
investigation and require information to be submitted as necessary
to enforce this section.
(h) On September 1, 2003:
(1) all functions and activities performed by the
secretary of state that relate to the registration of credit
services organizations under Chapter 393, Finance Code,
immediately before that date are transferred to the Office of
Consumer Credit Commissioner;
(2) a rule or form adopted by the secretary of state
that relates to the registration of credit services organizations
under Chapter 393, Finance Code, is a rule or form of the Office of
Consumer Credit Commissioner and remains in effect until altered by
the Office of Consumer Credit Commissioner;
(3) a reference in law to the secretary of state that
relates to the registration of credit services organizations under
Chapter 393, Finance Code, means the Office of Consumer Credit
Commissioner;
(4) a proceeding involving the secretary of state that
relates to the registration of credit services organizations under
Chapter 393, Finance Code, is transferred without change in status
to the Office of Consumer Credit Commissioner, and the office
assumes without a change in status the position of the secretary of
state in a proceeding relating to the registration of credit
services organizations to which the secretary of state is a party;
(5) all money, contracts, leases, rights, and
obligations of the secretary of state that relate to the
registration of credit services organizations under Chapter 393,
Finance Code, are transferred to the Office of Consumer Credit
Commissioner;
(6) all property, including records, in the custody of
the secretary of state that relates to the registration of credit
services organizations under Chapter 393, Finance Code, becomes
property of the Office of Consumer Credit Commissioner; and
(7) all funds appropriated by the legislature to the
secretary of state that relate to the registration of credit
services organizations under Chapter 393, Finance Code, are
transferred to the Office of Consumer Credit Commissioner.
(i) Money collected by the secretary of state for fees
related to registration statements and renewal applications
pending before the secretary of state on September 1, 2003, are
transferred to the Office of Consumer Credit Commissioner on that
date. The fees may not be assessed again for the same statement or
application.
SECTION 4. (a) Title 5, Finance Code, is amended by adding
Chapter 397 to read as follows:
CHAPTER 397. DISCLOSURE OF INFORMATION TO CONSUMERS IN
CERTAIN HOME LOAN CONTRACTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 397.001. DEFINITIONS. In this chapter:
(1) "Consumer reporting agency" and "credit score"
have the meanings assigned by Section 20.01, Business & Commerce
Code.
(2) "Enterprise" means the Federal National Mortgage
Association or the Federal Home Loan Corporation or an affiliate of
the association or corporation.
(3) "Residential mortgage loan" means a loan,
including a home equity loan, to or for the benefit of one or more
individuals made primarily for personal, family, or household use
and primarily secured by a mortgage on residential real property.
(4) "Residential real property" means real property
that consists of at least one but not more than four residential
units.
[Sections 397.002-397.050 reserved for expansion]
SUBCHAPTER B. CREDIT SCORE DISCLOSURE
Sec. 397.051. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a person other than an enterprise who:
(1) is engaged in the business of making or arranging a
residential mortgage loan; and
(2) uses a credit score in connection with an
application initiated by a prospective borrower.
Sec. 397.052. DISCLOSURE OF CREDIT SCORE AND OTHER
INFORMATION. (a) As soon as reasonably practicable, a lender
shall provide to a prospective borrower:
(1) the borrower's credit score that the lender:
(A) used or will use in determining whether to
make the loan; or
(B) obtained from a consumer reporting agency,
regardless of whether the lender uses that score to make the loan;
and
(2) the following notice in type that is boldfaced,
capitalized, underlined, or otherwise set out from surrounding
material so as to be conspicuous:
NOTICE TO HOME LOAN APPLICANT
In connection with your application for a loan, the
lender must disclose to you the credit score that a
lender used or a credit bureau may have distributed to
the lender for use in connection with your loan, and
the key factors affecting your credit score, if any.
The credit score is a summary computed at the time of
the loan request and based on information a credit
bureau or lender has on file regarding your credit
history and payment patterns. A credit score is
important because it is used by the lender to determine
whether you will obtain a loan and may be used to
determine what interest rate you may be offered on the
loan. Because your credit score can change over time,
it is very important that you review the
credit-related information that is being furnished to
you to make sure it is accurate. Your credit record
may vary from one company to another. If you have a
question regarding your credit score or other credit
information that is furnished to you, you should
contact the credit bureau at the address and telephone
number provided with this notice, or contact the
lender directly, if the lender developed the credit
score. A credit bureau does not participate directly
in the decision to make a loan and is not able to
provide you with the specific reasons for the granting
or denial of a loan. If you have a question regarding
this disclosure statement or the terms of the loan, you
should contact the lender.
(b) The notice required by Subsection (a)(2) must include
the name, address, and telephone number of each consumer reporting
agency that submitted the customer's credit score that was used by
the lender to comply with Subsection (a).
(c) The lender shall disclose to a prospective borrower any
numerical credit score that is generated by an automated
underwriting system used by an enterprise if that score is
disclosed to the lender.
(d) A prospective borrower's credit score disclosed under
Subsection (a)(1)(B) must include any key factors, not to exceed
four, that may have adversely affected that credit score if the
lender used another credit score in its determination to make the
loan to the borrower or uses an automated underwriting system to
underwrite the loan. For purposes of this subsection, "key
factors" has the meaning assigned by Section 20.035, Business &
Commerce Code.
Sec. 397.053. EXEMPTION FROM DISCLOSURE REQUIREMENT. The
lender is not required to provide the disclosure and other
information required by this chapter if the prospective borrower
has received the same information for that loan transaction from
another person.
Sec. 397.054. DUTY OF PROSPECTIVE BORROWER. At the time a
loan transaction is initiated, a prospective borrower shall
disclose to the lender, at the lender's request, whether the
borrower has received or is in the process of receiving the
disclosure and other information required by this chapter from a
consumer reporting agency or another person.
Sec. 397.055. DUTIES OF LENDER. A lender is not required
to:
(1) explain the information disclosed under Section
397.052(a)(1);
(2) disclose a credit score or related information
obtained by the lender after the date on which the loan is closed;
or
(3) provide more than one disclosure for each loan
transaction.
Sec. 397.056. LIABILITY OF LENDER. (a) A lender may not
be held liable under this subchapter for:
(1) the content of any information the lender obtains
from a consumer reporting agency or any other person about a
prospective borrower; or
(2) the omission of any information from a credit file
provided by a consumer reporting agency to the lender or a
prospective borrower under this subchapter.
(b) A lender may not be held liable under a contractual
provision for disclosure of a credit score.
Sec. 397.057. WAIVER PROHIBITED. A provision in a contract
that prohibits a lender from disclosing a credit score as required
by this subchapter is void.
Sec. 397.058. VIOLATION OF SUBCHAPTER. A person who
violates this subchapter commits an offense. An offense under this
section is a Class C misdemeanor.
(b) Section 20.01, Business & Commerce Code, is amended by
adding Subdivision (5-1) to read as follows:
(5-1) "Credit score" means a numerical value or
category derived from a statistical measure or model used by a
person who makes or arranges a loan to evaluate a prospective
borrower's creditworthiness to predict the likelihood of negative
performance under a contract for credit, including default. The
term does not include:
(A) a mortgage score or rating of an automated
underwriting system in which a factor other than credit
information, such as the loan-to-value ratio, the amount of a down
payment, or a consumer's financial assets, is considered in
computing the score or rating; or
(B) another element of the underwriting process
or decision.
(c) The heading to Section 20.03, Business & Commerce Code,
is amended to read as follows:
Sec. 20.03. DISCLOSURE OF [DISCLOSURES TO] CONSUMER FILE.
(d) Section 20.03, Business & Commerce Code, is amended by
adding Subsection (d) to read as follows:
(d) If a consumer requests a consumer file without
requesting a consumer score, the consumer reporting agency shall
provide to the consumer a statement indicating that the consumer is
entitled to receive a credit score as provided by Section 20.035.
(e) Chapter 20, Business & Commerce Code, is amended by
adding Section 20.035 to read as follows:
Sec. 20.035. DISCLOSURE OF CREDIT SCORE. (a) This section
applies only to a consumer reporting agency that:
(1) distributes a credit score that is used in
connection with a residential real property loan; or
(2) develops a credit score that assists a credit
provider in evaluating a consumer's general creditworthiness and
predicting the consumer's future credit standing.
(b) On request for a credit score and presentation of proper
identification provided by a consumer, a consumer reporting agency
shall provide:
(1) the consumer's current credit score or the
consumer's most recent credit score that was previously computed by
the agency for a purpose related to the extension of credit;
(2) the range of possible credit scores under the
measure or model used;
(3) the four most important key factors, if any;
(4) the date on which the credit score was created;
(5) the name of the person or entity that provided the
credit score or credit file on which the credit score was based; and
(6) a statement indicating that the information and
credit scoring model may be different than the credit score that may
be used by the lender.
(c) In complying with Subsection (b)(1), a consumer
reporting agency shall provide to the consumer a credit score that:
(1) is derived from a model that is widely distributed
to users by the agency in connection with residential real property
loans; or
(2) assists a consumer in understanding the credit
score assessment of the consumer's creditworthiness and
predictions about the consumer's future credit standing.
(d) The information required by this section must be
disclosed within the same time and in the same manner as a
consumer's credit file is required to be disclosed under this
chapter.
(e) A consumer reporting agency that distributes a credit
score developed by another person or entity is not required to
provide a further explanation of that score. The agency shall
provide the consumer with the name, the address, and any electronic
mail address for contacting the person or entity who developed the
credit score or the credit score's methodology.
(f) This section may not be construed to require a consumer
reporting agency to maintain a credit score in a consumer's credit
file.
(g) In this section, "key factors" means all relevant
reasons adversely affecting an individual's credit score that are
listed in the order of importance based on their effect on the
credit score.
(f) Section 20.04, Business & Commerce Code, is amended by
adding Subsection (c) to read as follows:
(c) A consumer reporting agency may impose a reasonable
charge for the disclosure of a credit score. The amount of the
charge may not exceed the amount of a charge imposed under
Subsection (a).
SECTION 5. (a) Subchapter B, Government Code, is amended
by adding Section 481.030 to read as follows:
Sec. 481.030. REDISTRIBUTION OF CERTAIN COMMUNITY
DEVELOPMENT OR REINVESTMENT FUNDS. (a) The department, not
earlier than the 90th day before the end of each fiscal year, shall
determine the amount of each appropriation or other funds of the
department intended for the administration of community
reinvestment or community development programs or activities that
will remain unexpended or unobligated at the end of the fiscal year.
(b) Before the end of the fiscal year, the department shall
distribute each amount determined under Subsection (a), if any, to
a community development center, community development financial
institution, or other similar entity that agrees to use the amount
under the direction of the department for any purpose for which the
appropriation was made or the funds were intended.
(b) Subchapter E, Chapter 2306, Government Code, is amended
by adding Section 2306.101 to read as follows:
Sec. 2306.101. REDISTRIBUTION OF CERTAIN COMMUNITY
DEVELOPMENT OR REINVESTMENT FUNDS. (a) The department, not
earlier than the 90th day before the end of each fiscal year, shall
determine the amount of each appropriation or other funds of the
department intended for the administration of community
reinvestment or community development programs or activities that
will remain unexpended or unobligated at the end of the fiscal year.
(b) Before the end of the fiscal year, the department shall
distribute each amount determined under Subsection (a), if any, to
a community development center, community development financial
institution, or other similar entity that agrees to use the amount
under the direction of the department for any purpose for which the
appropriation was made or the funds were intended.
SECTION 6. Section 481.198, Government Code, is amended to
read as follows:
Sec. 481.198. MARKETING. (a) The department shall
aggressively promote the linked deposit program established by this
subchapter to eligible borrowers and financial institutions that
make commercial loans and are depositories of state funds. The
department's promotion efforts shall be designed to maximize use of
the program.
(a-1) The department shall provide information on the linked
deposit program in English and in Spanish on the department's
Internet website.
(b) Not later than January 1 of each odd-numbered year, the
department shall prepare and deliver to the governor, lieutenant
governor, speaker of the house of representatives, and clerks of
the standing committees of the senate and house of representatives
with primary jurisdiction over commerce and economic development a
report concerning the department's efforts in promoting the linked
deposit program during the preceding two years.
(c) The report required by Subsection (b) must include:
(1) any factors identified by the department that may
inhibit the use of the linked deposit program; and
(2) any recommended action for increasing the use of
the linked deposit program.
SECTION 7. Subchapter BB, Chapter 481, Government Code, is
amended by adding Section 481.415 to read as follows:
Sec. 481.415. COMMUNITY INVESTMENT PROGRAM. (a) In this
section:
(1) "Community development financial institution" has
the meaning assigned by 12 U.S.C. Section 4702, as amended.
(2) "Community development investment" means a loan or
grant made to a community development financial institution for the
purpose of enhancing the provision of basic consumer financial
services.
(3) "Community development loan" means a loan from a
community development financial institution to a low-income
business or nonprofit organization for the purpose of revitalizing
a distressed community.
(4) "Eligible institution" means a community
development financial institution meeting the minimum selection
criteria described by 12 U.S.C. Section 4704, as amended.
(b) Notwithstanding any other law, the department shall
establish a community investment program in which the department
makes grants or interest-free loans, using money in the fund, to
eligible institutions that use the money to make community
development loans in distressed areas of the state or to assist
low-income areas by providing basic consumer financial services.
(c) The department shall determine the eligibility of an
institution by verifying that the institution meets the minimum
selection criteria described by 12 U.S.C. Section 4704, as amended.
The department may set a limit on the number of eligible
institutions that may participate in the community investment
program. To participate in the community investment program, an
eligible institution must enter into a participation agreement with
the department that sets out the terms and conditions under which
the department will make a grant or loan to the eligible
institution.
(d) The department may make a grant to an institution or
nonprofit organization to assist the institution or organization
to:
(1) meet the minimum selection criteria described by
12 U.S.C. Section 4704, as amended, or to otherwise obtain
assistance under 12 U.S.C. Section 4701 et seq., as amended; and
(2) become an eligible institution and participate in
the community investment program.
(e) The department may make a grant to a nonprofit
organization the department determines is performing activities
consistent with the goals of this section to provide the
organization operating support, technical assistance, and training
assistance.
(f) The department shall adopt rules relating to the
implementation of the community investment program and any other
rules necessary to accomplish the purposes of this section.
(g) An eligible institution may file a grant or loan
application with the department. The application must be in a form
approved by the department and include a plan of investment that
includes the type and number of community development loans or
investments that the institution plans to make using money from the
community investment program. The department shall act on a
completed application not later than the 30th day after the date on
which the application is filed with the department.
(h) All income received on a loan or investment made with
money received under the community investment program is the
property of the eligible institution that makes the loan or
investment.
(i) Not later than the 30th day after the expiration of each
six-month period for which there is a participation agreement in
effect between the department and an eligible institution, the
eligible institution shall submit a report to the department that
states in detail the status of each investment or loan made under
the community investment program. The report must be in a form
prescribed by the department and must contain all information
required by the department as part of the institution's
participation agreement.
(j) The participation agreement between the eligible
institution and the department must provide for an annual audit.
The department shall adopt rules relating to the format of the
audit, including rules allowing not more than $5,000 of the amount
received by the eligible institution under the community investment
program to be used to finance the audit.
SECTION 8. (a) Subchapter B, Chapter 531, Government Code,
is amended by adding Section 531.063 to read as follows:
Sec. 531.063. ELIGIBILITY FOR PUBLIC ASSISTANCE: EXCLUSION
OF CERTAIN INCOME AND RESOURCES. (a) In this section, "individual
development account" has the meaning assigned by 42 U.S.C. Section
604(h)(2), as amended.
(b) To the extent authorized by federal law, the commission
and each health and human services agency may not consider money
contributed to an individual development account established for a
recipient of public assistance benefits as income or the balance of
the account as a resource in determining whether the recipient
meets household income and resource requirements for eligibility
for public assistance benefits.
(c) This section applies to an individual development
account established for certain low-income individuals under the
pilot program required by Section 301.068, Labor Code.
(b) If before implementing any provision of Section
531.063, Government Code, as added by this section, a state agency
determines that a waiver or authorization from a federal agency is
necessary for implementation of that provision, the agency affected
by the provision shall request the waiver or authorization and may
delay implementing that provision until the waiver or authorization
is granted.
(c) Section 531.063, Government Code, as added by this
section, applies to a person receiving public assistance benefits
on or after that date, regardless of the date on which eligibility
for those benefits was determined.
SECTION 9. (a) Subchapter B, Chapter 1372, Government
Code, is amended by adding Section 1372.0262 to read as follows:
Sec. 1372.0262. RECOMMENDED ALLOCATION FOR HOUSING FINANCE
CORPORATIONS. (a) In this section, "economic submarket" and
"geographic submarket" have the meanings assigned by Section
2306.004.
(b) In the state fiscal year beginning on September 1, 2004,
and in each subsequent state fiscal year, a housing finance
corporation shall attempt to allocate not less than 40 percent of
its total single-family mortgage revenue bond loan volume to meet
the credit needs of borrowers in underserved economic and
geographic submarkets in the state, as indicated by the market
study results provided to the Bond Review Board under Section
2306.142.
(c) The housing finance corporation annually shall report
to the Bond Review Board and to the Texas Department of Housing and
Community Affairs on the extent to which the corporation achieves
the goals of this section in a state fiscal year. If, in any state
fiscal year, the housing finance corporation fails to achieve the
goals of this section, the corporation shall include in its report
the reasons why the loan volume was not allocated as recommended by
this section, including reasons regarding unfeasibility, adverse
financial effect, and low market volume demand, if applicable.
(b) Section 394.027(b), Local Government Code, is amended
to read as follows:
(b) The report must include:
(1) for each single-family home mortgage loan made by
the housing finance corporation during the preceding 12 months
ending June 30 of the year the report is filed, the data reported by
originating lenders under the Federal Home Mortgage Disclosure Act;
and
(2) information regarding the corporation's
allocation of single-family mortgage revenue bond loan volume to
underserved economic and geographic submarkets in the state, as
described by Section 1372.0262, Government Code.
SECTION 10. (a) Articles 4.74(a), (c), and (d), Insurance
Code, are amended to read as follows:
(a) Notwithstanding any other provision of this subchapter,
the comptroller may implement this subchapter only if the
comptroller determines, on the basis of a revenue estimate made
under this article [after the adjournment sine die of the regular
session of the 77th Legislature], that revenues are anticipated in
amounts sufficient to finance all appropriations made by the
legislature [during the regular session of the 77th Legislature],
after making deductions for all reductions in taxes, including the
reduction in premium tax through premium tax credits authorized
under this subchapter. Until the comptroller implements this
subchapter as required by this article, the comptroller shall
review the revenue estimate as required by this subsection after
adjournment sine die of each legislative session during which the
legislature enacts a General Appropriations Act that becomes law.
(c) On a determination by the comptroller to implement this
subchapter under Subsection (a) or (b) of this article, the
comptroller shall specify a date, not later than the 90th day after
the date of adjournment sine die of the appropriate legislative
session, as the implementation date. Rules adopted under
Subsection (b)(2) of this article may adjust any deadline or other
date established by this subchapter as necessary to implement this
subchapter in accordance with Subsection (b) of [as limited by]
this article.
(d) After each legislative session during which the
legislature enacts a General Appropriations Act that becomes law,
the [The] comptroller shall notify the governor, lieutenant
governor, and speaker of the house of representatives of the
determination made under [Subsection (a) of] this article.
(b) Article 4.52, Insurance Code, is amended to read as
follows:
Art. 4.52. DUTIES OF COMPTROLLER; RULES. The comptroller
shall administer this subchapter. The comptroller shall [and may]
adopt rules and forms as necessary to implement this subchapter not
later than the 90th day after the implementation date established
under Article 4.74 of this code.
(c) Article 4.53, Insurance Code, is amended by adding
Subsection (f) to read as follows:
(f) The comptroller shall begin accepting applications for
certification under this article not later than the 120th day after
the implementation date established under Article 4.74 of this
code.
(d) Article 4.65, Insurance Code, is amended by adding
Subsection (d) to read as follows:
(d) A certified investor may not make an investment with a
certified capital company before the 225th day after the
implementation date established under Article 4.74 of this code.
(e) Article 4.66(a), Insurance Code, is amended to read as
follows:
(a) A premium tax credit allocation claim must be prepared
and executed by a certified investor on a form provided by the
comptroller. The certified capital company must file the claim
with the comptroller not later than the 225th day after the
implementation date established under Article 4.74 of this code
[February 15, 2002]. The premium tax credit allocation claim form
must include an affidavit of the certified investor under which the
certified investor becomes legally bound and irrevocably committed
to make an investment of certified capital in a certified capital
company in the amount allocated even if the amount allocated is less
than the amount of the claim, subject only to the receipt of an
allocation under Article 4.68 of this code.
(f) Article 4.68(c), Insurance Code, is amended to read as
follows:
(c) Not later than the 240th day after the implementation
date established under Article 4.74 of this code [March 1, 2002],
the comptroller shall notify each certified capital company of the
amount of tax credits allocated to each certified investor. Each
certified capital company shall notify each certified investor of
their premium tax credit allocation.
(g) Article 4.73(a), Insurance Code, is amended to read as
follows:
(a) After implementation of this subchapter under Article
4.74 of this code, the [The] comptroller shall prepare a biennial
report with respect to results of the implementation of this
subchapter. The report must include:
(1) the number of certified capital companies holding
certified capital;
(2) the amount of certified capital invested in each
certified capital company;
(3) the amount of certified capital the certified
capital company has invested in qualified businesses as of the
first anniversary of the implementation date [January 1, 2004,] and
the cumulative total for each subsequent year;
(4) the total amount of tax credits granted under this
subchapter for each year that credits have been granted;
(5) the performance of each certified capital company
with respect to renewal and reporting requirements imposed under
this subchapter;
(6) with respect to the qualified businesses in which
certified capital companies have invested:
(A) the classification of the qualified
businesses according to the industrial sector and the size of the
business;
(B) the total number of jobs created by the
investment and the average wages paid for the jobs; and
(C) the total number of jobs retained as a result
of the investment and the average wages paid for the jobs; and
(7) the certified capital companies that have been
decertified or that have failed to renew the certification and the
reason for any decertification.
SECTION 11. (a) The comptroller shall conduct a study of
the availability of venture capital in this state and shall compare
the availability of venture capital in this state to its
availability in the other states. The comptroller may recommend
actions that the legislature may take to improve the availability
of venture capital in this state.
(b) Before November 1, 2005, the comptroller shall report
the comptroller's findings of the study conducted under Section
11(a) of this Act to the speaker of the house of representatives,
the lieutenant governor, and the presiding officers of the senate
business and commerce and house business and industry committees.
SECTION 12. This Act takes effect September 1, 2003.