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A BILL TO BE ENTITLED
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AN ACT
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relating to creating a microloan guarantee program using funds |
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appropriated to the Texas Enterprise Fund. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 481.078(c), Government Code, is amended |
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to read as follows: |
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(c) Except as provided by Subsection (d) and subject to |
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Section 481.0781, the fund may be used only for economic |
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development, infrastructure development, community development, |
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job training programs, and business incentives. |
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SECTION 2. Subchapter E, Chapter 481, Government Code, is |
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amended by adding Section 481.0781 to read as follows: |
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Sec. 481.0781. TEXAS ENTERPRISE FUND MICROLOAN GUARANTEE |
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PROGRAM. (a) In this section: |
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(1) "Financial institution" has the meaning assigned |
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by Section 31.002, Finance Code. |
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(2) "Microloan" means a business loan of not more than |
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$10,000. |
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(3) "Microloan guarantee program" means the Texas |
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Enterprise Fund microloan guarantee program established under this |
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section. |
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(b) At least one percent of the funds appropriated by the |
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legislature to the Texas Enterprise Fund must be used to administer |
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and fund the microloan guarantee program established under this |
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section. |
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(c) In accordance with this section, the office shall |
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establish and administer the Texas Enterprise Fund microloan |
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guarantee program to assist in the creation and expansion of |
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businesses and jobs in this state by guaranteeing microloans to |
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eligible businesses by financial institutions that participate in |
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the program. |
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(d) To be eligible to receive a loan guarantee under the |
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microloan guarantee program, a business must: |
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(1) apply to the office on a form prescribed by the |
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office; |
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(2) be unable to obtain a loan from a participating |
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financial institution without a loan guarantee; and |
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(3) meet the eligibility requirements established by |
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the office. |
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(e) An application for a microloan under this section must |
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contain: |
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(1) a plan for the applicant's proposed use of |
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microloan proceeds, including a description of how the microloan |
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proceeds will be used to promote business or job growth; and |
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(2) a signed statement from a loan officer of the |
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financial institution that states that a loan guarantee is required |
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for approval of the loan application. |
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(f) The office may charge a reasonable fee for processing an |
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application filed under this section. |
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(g) The office shall consider the following factors in |
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determining whether to approve an application for a microloan |
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guarantee: |
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(1) the anticipated benefits from granting a microloan |
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guarantee, including the potential to promote business or job |
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growth; |
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(2) the applicant's qualifications; |
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(3) the feasibility of the applicant's plan; and |
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(4) other repayment sources available to the |
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applicant. |
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(h) If a recipient of a loan guarantee defaults on a loan |
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that is guaranteed under this section and the office is required to |
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honor its guarantee, the office may bring suit against the |
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defaulting party. |
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(i) The office shall adopt rules necessary to implement this |
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section, including rules regarding the participation of financial |
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institutions in the microloan guarantee program. |
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SECTION 3. This Act takes effect September 1, 2009. |