| TO: | Honorable Burt R. Solomons, Chair, House Committee on State Affairs |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB4133 by Swinford (Relating to the creation of the Texas Export Financial Assistance Guarantee Program.), Committee Report 1st House, Substituted |
A portion of this cost would be offset by the 25-basis-point fee applied to the outstanding balance of the state's guaranteed portion of loans made by the financial institution under this program but this amount would be indeterminate.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | ($25,000,000) |
| 2011 | ($25,000,000) |
| 2012 | ($25,000,000) |
| 2013 | ($25,000,000) |
| 2014 | ($25,000,000) |
| Fiscal Year | Probable Savings/(Cost) from General Revenue Fund 1 |
Probable Revenue Gain from New General Revenue Dedicated |
Probable (Cost) from New General Revenue Dedicated |
|---|---|---|---|
| 2010 | ($25,000,000) | $25,000,000 | ($25,000,000) |
| 2011 | ($25,000,000) | $25,000,000 | ($25,000,000) |
| 2012 | ($25,000,000) | $25,000,000 | ($25,000,000) |
| 2013 | ($25,000,000) | $25,000,000 | ($25,000,000) |
| 2014 | ($25,000,000) | $25,000,000 | ($25,000,000) |
The bill would create the Texas Export Financial Assistance Guarantee Program within the Texas Economic Development and Tourism Office at the Trusteed Programs Within the Office of the Governor. The program would guarantee a portion of loans made by participating financial institutions to certain manufacturers to facilitate the manufacture of certain products in
In order to obtain a loan guarantee, a manufacturer would have to meet experience and financial requirements and conditions specified in the bill. A manufacturer could use the funding only to finance the costs of manufacturing in this state a product for international export. Under the program, a participating financial institution would apply for a loan guarantee with the Office for an eligible loan. The bill would allow the state to guarantee up to 50 percent of the amount of an eligible loan, or in special circumstances up to 80 percent.
Every six months, a participating financial institution would pay to the Office a 25-basis-point fee applied to the outstanding balance of the state's guaranteed portion of loans made by the financial institution under the program.
The bill would require the Office to determine criteria for a financial institution to apply for loan guarantees. The office would also be required to perform an annual audit and submit biennial reports to the legislature.
The bill would be effective immediately if it receives a vote of two-thirds or on September 1, 2009.
This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
The General Revenue – Dedicated account would consists of appropriations by the legislature, gifts, grants, and other donations, and income and interest earned and could only be used to guarantee loans and administer the program. It is assumed that appropriations would be $25 million per fiscal year.
In addition, every six months, a participating financial institution would pay to the Office a 25-basis-point fee applied to the outstanding balance of the state's guaranteed portion of loans made by the financial institution under the program. The amount this fee would generate cannot be determined.
| Source Agencies: | 301 Office of the Governor, 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, KJG, MS, BTA
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