79(R) HB 727 - House Committee Report version


                                                                                
79R9483 DWS-D


By:  Villarreal, Chavez                                           H.B. No. 727

Substitute the following for H.B. No. 727:                                    

By:  Solomons                                                 C.S.H.B. No. 727



A BILL TO BE ENTITLED

AN ACT

relating to a program of grants and loans to provide capital for 
community development and economic development institutions 
serving economically distressed areas and low-income persons.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.   Chapter 481, Government Code, is amended by 
adding Subchapter G to read as follows:

SUBCHAPTER G. TEXAS COMMUNITY DEVELOPMENT INVESTMENT PROGRAM
	Sec. 481.101.  DEFINITIONS.  In this subchapter:                        
		(1)  "Community development financial institution" has 
the meaning assigned by 12 U.S.C. Section 4702.
		(2)  "Community development investment" means a loan or 
grant made to a community development financial institution for the 
purpose of enhancing access to credit, capital, and consumer 
financial services.
		(3)  "Community development loan" means a loan from a 
community development financial institution to a business owned by 
a low-income person or nonprofit organization for the purpose of 
revitalizing a distressed community.
		(4)  "Eligible institution" means a certified 
community development financial institution or other organization 
meeting the minimum selection criteria described by 12 U.S.C. 
Section 4704.
		(5)  "Program" means the community investment program 
established under this subchapter.
	Sec. 481.102.  COMMUNITY INVESTMENT PROGRAM. 
Notwithstanding any other law, the office shall establish a 
community investment program in which the office makes grants or 
interest-free loans to eligible institutions that use the money to 
make community development loans in distressed areas of the state 
or to assist low-income persons by enhancing access to credit, 
capital, and consumer financial services.
	Sec. 481.103.  ELIGIBILITY.  (a)  The office 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.
	(b)  The office may set a limit on the number of eligible 
institutions that may participate in the program.
	(c)  To participate in the program, an eligible institution 
must enter into a participation agreement with the office that sets 
out the terms and conditions under which the office will make a 
grant or loan to the eligible institution.
	Sec. 481.104.  CAPACITY BUILDING. (a)  The office 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 or to otherwise obtain assistance under 12 
U.S.C. Section 4701 et seq.; and
		(2)  become an eligible institution and participate in 
the program.  
	(b)  The office may make a grant to a nonprofit organization 
the office determines is performing activities consistent with the 
goals of this subchapter to provide the organization operating 
support, technical assistance, and training assistance.
	Sec. 481.105.  RULEMAKING AUTHORITY. The office shall adopt 
rules relating to the implementation of the program and any other 
rules necessary to accomplish the purposes of this subchapter.
	Sec. 481.106.  APPLICATION.  (a)  An eligible institution 
may file a grant or loan application with the office.  The 
application must be in a form approved by the office 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 program.
	(b)  The office shall act on a completed application not 
later than the 30th day after the date on which the application is 
filed with the office.
	Sec. 481.107.  OWNERSHIP OF INCOME.  All income received on a 
loan or investment made with money received under the program is the 
property of the eligible institution that makes the loan or 
investment.
	Sec. 481.108.  SEMIANNUAL REPORT.  (a)  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 office and 
an eligible institution, the eligible institution shall submit a 
report to the office that states in detail the status of each 
investment or loan made under the program.
	(b)  The report must be in a form prescribed by the office and 
must contain all information required by the office as part of the 
institution's participation agreement.
	Sec. 481.109.  ANNUAL AUDIT.  The participation agreement 
entered into between the eligible institution and the office must 
provide for an annual audit.  The office 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 
program to be used to finance the audit.
	SECTION 2.  This Act takes effect September 1, 2005.