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BILL ANALYSIS |
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By: Lucio |
BACKGROUND AND PURPOSE
Although Texas has the largest rural population in the nation, approximately 3.6 million people,
it has fallen behind other states in terms of resources and programs for this target population.
Ongoing refinement of Texas' efforts to assist its rural citizens is needed. Since creation of the
Office of Rural Community Affairs (ORCA), 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. Allowing Texas to join similar efforts in other states would
help to provide greater economic and infrastructure development programs, and help Texas
sharpen its rural development efforts and bolster rural Texas' long term sustainability.
C.S.S.B. 684 establishes the Texas Rural Development Fund (fund). The bill requires ORCA 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 Texas Rural Youth Corps Program, and a Rural Wealth Creation and
Retention Program. The bill sets forth the nature and content of the programs and the eligibility
and selection criteria for participation in the programs, and provides for the establishment of
various grant programs and the provision of such grants.
RULEMAKING AUTHORITY
Rulemaking authority previously granted to the board of the Office of Rural Community Affairs
is modified in SECTION 4 of this bill.
ANALYSIS
SECTION 1. Amends Section 487.001, Government Code, by adding Subdivision (3), to define
"rural area."
SECTION 2. Amends Subchapter C, Chapter 487, Government Code, by adding Section
487.062, as follows:
Sec. 487.062. TRAINING. (a) Authorizes the Office of Rural Community Affairs
(ORCA) to develop and administer a training program related to the programs and
activities established under Subchapters S, T, U, V, W, and X.
(b) Authorizes ORCA to contract with a public or private entity to develop and
provide the training under this section.
SECTION 3. Amends Chapter 487, Government Code, by adding Subchapters R-X, as follows:
SUBCHAPTER R. TEXAS RURAL DEVELOPMENT FUND
Sec. 487.801 TEXAS RURAL DEVELOPMENT FUND. (a) Provides that the Texas
Rural Development Fund (fund) is an account in the general revenue fund. Provides that
the account is composed of legislative appropriations; gifts donations, grants, and
matching funds received under Subsection (b); and other money required by law to be
deposited in the account.
(b) Authorizes ORCA to solicit and accept gifts, donations, grants, and matching
funds of money from the federal government, local governments, private
SRC-KRK C.S.S.B. 684 81(R) Page 2 of 7
corporations, or other persons to be used for the purposes of Subchapters S
through X.
(c) Requires that income from money in the account be credited to the account.
(d) Authorizes that money in the fund be used only for the purpose of
implementing and maintaining the programs established under Subchapters S
through X.
SUBCHAPTER S. RURAL ENTREPRENEURSHIP AND BUSINESS INNOVATION
PROGRAM
Sec. 487.851. DEFINITIONS. Defines "microenterprise," "minimum wage,"
"program," and "small business."
Sec. 487.852. PROGRAM. Requires ORCA to create a rural entrepreneurship and
business innovation program to perform certain tasks.
Sec. 487.853. INCENTIVES; LOANS. (a) Requires the rural entrepreneurship and
business innovation program to offer incentives in the form of loans to entrepreneurs and
businesses for purposes of the creation or retention of jobs in rural areas.
(b) Authorizes an eligible business or entrepreneur to apply for a loan under the
rural entrepreneurship and business innovation program on an application form
prescribed by ORCA.
Sec. 487.854. ELIGIBLE BUSINESS OR ENTREPRENEUR; BORROWING
REQUIREMENTS. (a) Authorizes ORCA to make a loan under the rural
entrepreneurship and business innovation program to certain businesses or entrepreneurs.
(b) Requires an applicant, to be eligible to receive a loan under this subchapter, to
be in good standing under the laws of the state in which the entity was formed or
organized, as evidence by a certificate issued by the secretary of state or the state
official having custody of the records pertaining to the entities of other
organizations formed under the laws of that state and owe no delinquent taxes to a
taxing unit of this state.
(c) Authorizes ORCA to require a commercial bank letter of credit. Authorizes
ORCA to determine and require other terms and conditions, including insurance
or a bank guarantee, for the making of a loan und er the rural entrepreneurship and
business innovation program.
Sec. 487.855. MAXIMUM LOAN AMOUNT. (a) Provides that the maximum loan
amount to be made by the rural entrepreneurship and business innovation program is
$35,000 for each eligible emplo yee position retained or created.
(b) Authorizes that a loan made by the rural entrepreneurship and business
innovation program be based on a certain schedule.
Sec. 487.856. RESTRICTION ON USE OF LOAN. Prohibits a loan from being used to
attract a bus iness from another location in this state, unless ORCA determines that the
business would otherwise leave the state.
Sec. 487.857. LOAN TERMS. (a) Requires loan interest rates to be based on the
capacity of the borrower and the risk of the project as determined by ORCA.
(b) Authorizes loan interest rates to be as low as one percent.
Sec. 487.858. WRITTEN AGREEMENT. (a) Requires ORCA, before awarding a loan
under this subchapter, to enter into a written agreement with the entity to be awarded the
loan money specifying that:
(1) if ORCA finds that the loan recipient has not met each of the
performance targets specified in the agreement as of a date certain
provided in the agreement:
(A) the recipient is required to repay the loan and any related
interest to the state at the agreed rate and on the agreed terms;
(B) ORCA will not distribute to the recipient any loan money that
remains to be awarded under the agreement; and
(C) ORCA is authorized to assess specified penalties for
noncompliance against the recipient;
(2) if all of any portion of the amount of the loan is used to build a capital
improvement, the state is authorized to:
(A) retain a lien or other interest in the capital improvement in
proportion to the percentage of the loan amount used to pay for the
capital improvement; and
(B) require the recipient of the loan, if the capital improvement is
sold, to repay to the state the loan money used to pay for the
capital improvement, with the interest at the rate and according to
the other terms provided by the agreement, and share with the
state a proportionate amount of any profit realized from the sale;
and
(3) if, as of a date certain provided in the agreement, the loan recipient
has not used loan money awarded under this subchapter for the purposes
for which the loan was intended, the recipient is required to repay that
amount and any related interest to the state at the agreed rate and on the
agreed terms.
(b) Authorizes the loan agreement to include a provision providing that a
reasonable percentage of the total amount of the loan will be withheld until
specified performance targets are met by the entity as of the date described by
Subsection (a)(1).
(c) Requires ORCA to determine the performance targets and date required to be
contained in the loan agreement as provided by Subsection (a)(1), and if the loan
agreement includes the provision authorized by Subsection (b), the percentage of
loan money required to be withheld.
Sec. 487.859. ANNUAL PROGRESS REPORT. Requires an entity entering into a loan
agreement under Section 487.858 to submit to ORCA an annual progress report
containing the information compiled during the previous calendar year regarding the
attainment of each of the performance target specified in the agreeme nt.
Sec. 487.860. REPAYMENT OF LOAN. (a) Authorizes repayment of a loan under
Section 487.858(a)(1)(A) to be prorated to reflect a partial attainment of performance
targets.
(b) Authorizes ORCA, after repayment of a loan, to rebate to the borrower an
amount to cover fees associated with a commercial bank letter of credit and all, or
a portion of, the borrower's incidental borrowing costs.
(c) Authorizes ORCA to use interest earned on any loan to repay any
indebtedness related to the rural entrepreneurship and business innovation
program.
Sec. 487.861. SUPPORT SERVICES. Authorizes ORCA to contract to provide services
to entrepreneurs or businesses for purposes of implementing the rural entrepreneurship
and business innovation program.
Sec. 487.862. CHALLENGE GRANTS. Authorizes ORCA to award challenge grants
under the rural entrepreneurship and business innovation 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.
SUBCHAPTER T. RURAL AREA REGIONAL PLANNING AND IMPLEMENTATION
MATCHING GRANT PROGRAM
Sec. 487.901. DEFINITION. Defines "program."
Sec. 487.902. RURAL AREA REGIONAL PLANNING AND IMPLEMENTATION
MATCHING GRANT PROGRAM. (a) Requires ORCA to create the rural area regional
planning and implementation matching grant program to foster regional collaboration for
community and economic development in rural areas.
(b) Authorizes ORCA to award matching grants for the planning and
implementation of regionally identified objectives in a rural area.
Sec. 487.903. ELIGIBLE ENTITIES. (a) Requires an application, to be awarded a
matching grant under the rural area regional planning and implementation matching grant
program for a proposed project, including a description of the project proposal, to be
jointly submitted by two or more certain entities in the form prescribed by ORCA.
(b) Requires entities that jointly submit an application under Subsection (a) 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.
Sec. 487.904. GRANT AWARDS. Requires ORCA 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 rural area regional planning
and implementation matching grant program.
SUBCHAPTER U. RURAL CAPACITY AND LEADERSHIP ENHANCEMENT PROGRAM
Sec. 487.951. DEFINITION. Defines "program."
Sec. 487.952. PROGRAM. Requires ORCA to create the rural capacity and leadership
enhancement program to assist municipalities and unincorporated communities in rural
areas to perform certain tasks.
Sec. 487.953. RURAL LEADERSHIP CURRICULUM. Authorizes ORCA to
coordinate with an interested public junior college or public technical institute, as those
terms are defined by Section 61.003 (Definitions), Education Code, that is located in a
rural area of 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 rural capacity and leadership enhancement
program.
Sec. 487.954. LEADERSHIP TRAINING. Authorizes ORCA to award a stipend under
the rural capacity and leadership enhancement program to an individual who completes
training based on the curriculum developed under Section 487.953.
SUBCHAPTER V. RURAL COMMUNITY ASSET STUDY MATCHING GRANT
PROGRAM
Sec. 487.1001. DEFINITION. Defines "program."
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Sec. 487.1002. RURAL COMMUNITY ASSET STUDY MATCHING GRANT
PROGRAM. (a) Requires ORCA to create the rural community asset study matching
grant program to assist communities in rural areas in identifying community assets.
(b) Authorizes ORCA to issue matching grants to fund community asset studies in
accordance with criteria established by ORCA.
Sec. 487.1003. ELIGIBLE ENTITIES. (a) Requires that an application to be awarded a
matching grant under the rural community asset study matching grant program for a
proposed project, including a description of the project proposal, be jointly submitted by
two or more certain entities in the form prescribed by ORCA.
(b) Requires ORCA 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 rural community asset study matching
grant program.
(c) Requires ORCA to develop criteria for eligible projects and for the awarding
of matching grants under the rural community asset study matching grant
program.
SUBCHAPTER W. TEXAS RURAL YOUTH CORPS PROGRAM
Sec. 487.1051. DEFINITIONS. Defines "executive director" and "program."
Sec. 487.1052. TEXAS RURAL YOUTH CORPS PROGRAM. (a) Requires ORCA to
create the Texas rural youth corps program to encourage youth participation in civic
improvement activities in rural areas. Requires the Texas rural youth corps program to
provide youth in rural areas with opportunities to acquire job skills while participating in
community service activities and create opportunities for youth that allow rural
communities to enhance existing community resources and improve economic
conditions.
(b) Authorizes ORCA to designate personnel as necessary to administer the
Texas rural youth corps program.
Sec. 487.1053. GRANTS. Authorizes the executive director to award grants under the
Texas rural youth corps program to eligible entities for projects that meet the
requirements of this subchapter.
Sec. 487.1054. ELIGIBLE ENTITIES. (a) Provides that except as provided by
Subsection (b), certain entities are eligible to submit an application as provided by
Section 487.1056 to receive a grant for a proposed project under this subchapter.
(b) Requires each eligible applicant that submits an application under Subsection
(a) 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.
Sec. 487.1055. ELIGIBLE PROJECTS. Requires that, to receive a grant under the
Texas rural youth corps program a proposed project of an eligible applicant provide, by
using the services and skills of youth participants who are at least 12 years of age but
younger than 19 years of age, at least one of a list of certain services to the rural
community in which the project is located.
Sec. 487.1056. GRANT APPLICATION. Requires that a grant application for a
proposed project be filed with ORCA in a form prescribed by ORCA. Requires that each
application include certain information regarding the project.
Sec. 487.1057. PROJECT SELECTION; CRITERIA. (a) Requires ORCA to establish
criteria for selecting projects for the awarding of a grant under this subchapter.
(b) Requires ORCA, in establishing criteria under Subsection (a), 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 give preference to projects that
provide participants with an opportunity to earn scholarship awards toward
college tuition expenses.
(c) Authorizes ORCA, in establishing criteria under Subsection (a), to give
preference to an applicant who has experience in providing the services proposed
to be provided under the project and give preference to projects that assist certain
youths who are at least 12 years of age but younger than 19 years of age.
Sec. 487.1058. ADVISORY BOARD; PARTICIPANT COUNCIL. Requires the
successful grantees, on receipt of a grant under the Texas rural youth corps program, to
establish an advisory board that includes senior staff that manage and operate the project,
employers and business and community leaders of the community, and project
participants; and a project participant council to provide comments and suggestions
regarding project policies.
Sec. 487.1059. ASSISTANCE FOR GRANTEES. Requires ORCA to provide grantees
awarded a grant under the Texas rural youth corps program access to curriculum
materials created under Section 487.953, in particular materials that are designed to
develop certain qualities and skills.
Sec. 487.1060. OTHER FUNDING SOURCES REQUIRED. Requires that up to 50
percent of a proposed project's budget be derived from a source other than the award of a
grant or other incentive from ORCA, as determined by ORCA.
Sec. 487.1061. LIMIT ON ADMINISTRATIVE EXPENSES. Prohibits a grantee from
spending grant money for more than eight percent of a proposed project's administrative
costs.
Sec. 487.1062. REPORTING REQUIREMENT. Requires ORCA to include certain
information regarding grant money for the Texas rural youth corps program in its
biennial report to the legislature under Section 487.056 (Report to Legislature).
SUBCHAPTER X. RURAL WEALTH CREATION AND RETENTION PROGRAM
Sec. 487.1101. DEFINITION. Defines "program."
Sec. 487.1102. RURAL WEALTH CREATION AND RETENTION PROGRAM.
Requires ORCA to create a rural wealth creation and retention program to assist rural
communities in indentifying community wealth and 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 independence on
state and federal resources.
Sec. 487.1103. CONTRACT FOR SERVICES. (a) Authorizes ORCA to contract with
other entities to provide services under the rural wealth creation and retention program.
(b) Requires ORCA, in making a decision to contract with an entity under
Subsection (a), to give preference to an entity with a proven history of providing
assistance to community foundations.
Sec. 487.1104. SUPPORT SERVICES. Authorizes ORCA, or a contracting entity under
Section 487.1103, to provide support services for the implementation of the rural wealth
creation and retention program, including financial manageme nt, strategic development,
and education training.
Sec. 487.1105. FEE. Authorizes ORCA, or a contracting entity under Section 487.1103,
to charge a fee for services provided under the rural wealth creation and retention
program. Requires the amount of the fee to be determined by ORCA.
SECTION 4. Requires the board of ORCA, not later than March 1, 2010, to adopt any necessary
rules for the fund established under Subchapter R, Chapter 487, Government Code, as added by
this Act, and the programs established under Subchapters S through X, Chapter 487, Government
Code, as added by this Act.
SECTION 5. Provides that implementation of the programs established under Subchapters S
through X, Chapter 487, Government Code, as added by this Act, is contingent on appropriation
of funding by the legislature.
EFFECTIVE DATE
SECTION 6. Effective date: upon passage or September 1, 2009.