BILL ANALYSIS

H.B. 1715

By: Gonzalez Toureilles

Agriculture & Livestock

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Although Texas has the largest rural population in the nation, at approximately 3.6 million, the state has fallen behind other states in terms of resources and programs for that target population. Since the creation of the Office of Rural Community Affairs, best practices for sustainable rural development have continued to be refined across the nation. Current law does not provide for state level coordination of these best practices. Ongoing refinement of Texas' efforts to assist its rural citizens is needed.

H.B. 1715 establishes the Texas Rural Development Fund. The bill requires the office to establish a rural entrepreneurship and business innovation program, a rural area regional planning and implementation matching grant program, a rural capacity and leadership enhancement program, a rural community asset study matching grant program, a Texas rural youth corps program, and a rural wealth creation and retention program. The bill sets forth the nature and content of these programs and the eligibility and selection criteria for participation in them. The bill provides for the establishment of various grant programs and the provisions of such grants.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Office of Rural Community Affairs in SECTION 4 of this bill.

ANALYSIS

H.B. 1715 amends the Government Code to create the Texas Rural Development Fund, the rural entrepreneurship and business innovation program, the rural area regional planning and implementation matching grant program, the rural capacity and leadership enhancement program, the rural community asset study matching grant program, the Texas rural youth corps program, and the rural wealth creation and retention program. The bill defines "rural area" to mean an area that is predominately rural in character as defined by the Office of Rural Community Affairs.

H.B. 1715 authorizes the office to develop and administer a training program related to the programs and activities established under the bill's provisions. The bill authorizes the office to contract with a public or private entity to develop and provide such training.

H.B. 1715 requires the office, not later than March 1, 2010, to adopt any necessary rules for the Texas Rural Development Fund and the programs established under the bill's provisions.

H.B. 1715 provides that implementation of the programs established by the bill's provisions is contingent on appropriation of funding by the legislature.

Texas Rural Development Fund

H.B. 1715 establishes the Texas Rural Development Fund as an account in the general revenue fund. The bill provides that the account is composed of legislative appropriations, gifts, donations, grants, matching funds, and other money required by law to be deposited in the account. The bill authorizes the office to solicit and accept gifts, donations, grants, and matching funds of money from the federal government, local governments, private corporations, or other persons to be used for the purposes of the several programs created under the bill's provisions. The bill requires income from money in the account to be credited to the account. The bill allows the money in the development fund to be used only for the purpose of implementing and maintaining the programs established under the bill's provisions.

Rural Entrepreneurship and Business Innovation Program

H.B. 1715 requires the office to create a rural entrepreneurship and business innovation program to assist in the development and expansion of businesses in rural areas, assist entrepreneurs in rural areas, and recruit out-of-state businesses to locate and transact business in rural areas. The bill, for the purposes of the program, defines "microenterprise" to mean a business in a rural area with not more than five employees. The bill defines "small business" to mean a business in a rural area with not more than 250 employees. The bill defines "minimum wage" and "program."

H.B. 1715 requires the program to offer incentives in the form of loans to entrepreneurs and businesses for the creation or retention of jobs in rural areas. The bill authorizes an eligible business or entrepreneur to apply for a loan under the program on an application form prescribed by the office. The bill requires a loan applicant, to be eligible for a loan, to provide at least five percent of the equity for each project. The bill authorizes the office to consider the amount of equity provided by an applicant in scoring a loan application. The bill provides that an eligible business or entrepreneur is not eligible for more than one loan for each created or retained job.

H.B. 1715 authorizes the office to make a loan under the program to microenterprises, small businesses, businesses dependent on natural resources in developing value-added products, tourism or recreation businesses, entrepreneurs and businesses that expand broadband service access for rural areas, and projects to develop infrastructure for the benefit of entrepreneurs and businesses in rural areas.

H.B. 1715 establishes that the maximum loan amount to be made by the program is $35,000 for each eligible employee position retained or created. The bill authorizes a loan made by the program to be based on a specified schedule of each eligible employee position retained or created and the wages for that position. The bill authorizes the office, after job creation, to forgive up to 25 percent of the total amount of a loan made under the program, and prohibits a loan from being used to attract a business from another location in Texas, unless the office determines that the business would otherwise leave the state. The bill requires loan interest rates to be based on the capacity of the borrower and the risk of the project, as determined by the office, and authorizes loan interest rates to be as low as zero percent.

H.B. 1715 authorizes the office to contract to provide support services to entrepreneurs or businesses for purposes of implementing the program.

H.B. 1715 authorizes the office to award challenge grants under the program to promote the establishment of community-based organizations to work in partnership with communities in rural areas to assist entrepreneurs through economic development efforts in existence at the time of the organization's establishment.

Rural Area Regional Planning and Implementation Matching Grant Program

H.B. 1715 requires the office to create the rural area regional planning and implementation matching grant program to foster regional collaboration for community and economic development in rural areas and defines "program" accordingly. The bill authorizes the office to award matching grants for the planning and implementation of regionally identified objectives in a rural area.

H.B. 1715 requires an application, including a description of the project proposal, to be jointly submitted by two or more specified entities in the form prescribed by the office, for purposes of awarding a matching grant under the program for a proposed project. The bill specifies those entities as a municipality, county, economic development corporation, community foundation, faith-based organization, hospital or clinic, institution of higher education, or a regional planning commission, council of governments, or similar regional planning agency. The bill requires entities that jointly submit an application under the program to be physically located in at least two or more adjacent rural counties, or two or more municipalities or census-designated places in a rural county.

H.B. 1715 authorizes the office to give preference to eligible applicants that demonstrate an inclusive planning and implementation process over other eligible applicants for an award of a matching grant under the program.

Rural Capacity and Leadership Enhancement Program

H.B. 1715 requires the office to create the rural capacity and leadership enhancement program to assist municipalities and unincorporated communities in rural areas to develop leadership capacity, improve the business practices of municipal government, increase awareness of the benefits of renewable energy, identify community assets that can be used to enhance community and economic development, and provide assistance for emergency services districts. The bill defines "program" accordingly.

H.B. 1715 authorizes the office to coordinate with an interested public junior college or public technical institute that is located in a rural area, or a consortium of those colleges or institutes, the Texas Rural Leadership Program, or another appropriate leadership program, to develop and maintain a rural leadership curriculum to implement the program. The bill authorizes the office to award a stipend under the program to an individual who completes training based on such a curriculum.

Rural Community Asset Study Matching Grant Program

H.B. 1715 requires the office to create the rural community asset study matching grant program to assist communities in rural areas in identifying community assets. The bill defines "program" accordingly. The bill authorizes the office to issue matching grants to fund community asset studies in accordance with criteria established by the office.

H.B. 1715 requires the office to give preference to eligible applicants that demonstrate an inclusive planning and implementation process over other eligible applicants for an award of a matching grant. The bill requires the office to develop criteria for eligible projects and for the awarding of matching grants under the program.

Texas Rural Youth Corps Program

H.B. 1715 requires the office to create the Texas rural youth corps program to encourage youth participation in civic improvement activities in rural areas. The bill defines "program" accordingly, and defines "executive director" to mean the executive director of the office. The bill requires the program to provide youth in rural areas with opportunities to acquire job skills while participating in community service activities and to create opportunities for youth that allow rural communities to enhance existing community resources and improve economic conditions. The bill authorizes the office to designate personnel as necessary to administer the program.

H.B. 1715 authorizes the executive director to award grants under the program, on application, to eligible entities for projects that meet the requirements of the program. The bill specifies such eligible entities as a nonprofit organization, public agency that operates a community-based youth employment training program, community housing development organization certified by the state, youth organization, corps-based community service organization, or another entity authorized by the office. The bill requires each applicant to demonstrate that the applicant has at least three years of successful experience operating programs for the benefit of youth, in particular disadvantaged or at-risk youth populations.

H.B. 1715 requires a proposed project to provide at least one of several specified services to the rural community in which the project is located, by using the services and skills of youth participants who are at least 12 years of age but younger than 19 years of age. The bill specifies those services as rehabilitation or construction of energy-efficient, affordable housing for elderly individuals, low-income individuals and families, or veterans of the U.S. armed forces; sustainable construction or rehabilitation of historic properties, community facilities, business incubators, health care facilities, cultural districts, or certain public or nonprofit parks or cemeteries; increased access to information on new technology and technological advances, including communications or renewable energy technologies; documentation of community history; identification and analysis of community assets through a community asset study; and marketing services of community assets, amenities, and history identified in a community history documentation or community asset study. The bill requires a grant application to be filed with the office in a form prescribed by the office. The bill specifies the required contents of the application.

H.B. 1715 requires the office to establish criteria for selecting projects for grant awards. The bill requires the office, in establishing those criteria, to give preference to: an applicant who can document the existence of matching contributions from other sources and support from local organizations, community leaders, and elected officials; and projects that provide participants with an opportunity to earn scholarship awards toward college tuition expenses. The bill authorizes the office, in establishing the criteria, to give preference to: an applicant who has experience in providing the services proposed to be provided under the project; and projects that assist youths who are at least 12 years of age but younger than 19 years of age who are not attending high school and have not received a high school diploma or high school equivalency certificate or who attend high school or a program leading to a high school equivalency certificate but have been identified as being at risk of dropping out of high school or out of such a program.

H.B. 1715 requires successful grant recipients, on receipt of a grant, to establish an advisory board for the project, as well as a project participant council to provide comments and suggestions regarding project policies. The bill requires an advisory board to include senior staff that manage and operate the project, employers and business and community leaders, and project participants.

H.B. 1715 requires the office to provide grant recipients access to curriculum materials created under the rural capacity and leadership enhancement program, in particular materials that are designed to develop leadership ethics, active citizenship, a sense of personal responsibility, critical thinking skills, decision-making skills, problem-solving skills, and negotiation skills.

H.B. 1715 requires up to 50 percent of a proposed project's budget to be derived from a source other than the grant award or other incentive from the office, as determined by the office. The bill prohibits a grant recipient from spending grant money for more than 15 percent of a proposed project's administrative costs.

H.B. 1715 requires the office to include information regarding the program in its biennial report to the legislature. The bill requires the report to include the total number of grants and the total amount of grant money awarded under the program, the geographical distribution of grants awarded, and the number of youth and other persons participating in program-funded projects.

Rural Wealth Creation and Retention Program

H.B. 1715 requires the office to create a rural wealth creation and retention program to assist rural communities in identifying community wealth, educating residents about the benefits of charitable giving, and encouraging the creation of community foundations in those areas to build sustainable local wealth and decrease long-term dependence on state and federal resources. The bill defines "program" accordingly. The bill authorizes the office to contract with other entities to provide services under the program. The bill requires the office, in making a decision to contract with an entity, to give preference to an entity with a proven history of providing assistance to community foundations.

H.B. 1715 authorizes the office or a contracting entity to provide support services for the implementation of the program, including financial management, strategic development, and education training.

H.B. 1715 authorizes the office, or a contracting entity, to charge a fee for services provided under the program. The bill requires the amount of the fee to be determined by the office.

EFFECTIVE DATE

On passage, or, if the act does not receive the necessary vote, the act takes effect September 1, 2009.