By: Workman H.B. No. 3039
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
 
  relating to financing programs and activities related to rural
  economic development.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 58.032, Agriculture Code, is amended by
  amending Subsection (a) and adding Subsection (i) to read as
  follows:
         (a)  The Texas agricultural fund is a fund in the state
  treasury that may be appropriated for the purposes of this chapter
  or for rural development programs administered by the Texas
  Economic Development Bank as authorized by Chapter 489, Government
  Code.
         (i)  Notwithstanding Subsections (b), (c), (d), (e), (f),
  (g), and (h), the Texas Economic Development Bank may establish and
  maintain accounts in the Texas agricultural fund.
         SECTION 2.  Section 489.101(a), Government Code, is amended
  to read as follows:
         (a)  The office shall establish the Texas Economic
  Development Bank for the purpose of:
               (1)  providing globally competitive, cost-effective
  state incentives to expanding businesses operating in this state
  and businesses relocating to this state; [and]
               (2)  ensuring that communities and businesses in this
  state have access to capital for economic development purposes; and
               (3)  providing financial assistance for economic
  development projects, including projects for rural areas of this
  state under Subchapter E.
         SECTION 3.  Section 489.105(b), Government Code, is amended
  to read as follows:
         (b)  The fund consists of:
               (1)  appropriations for the implementation and
  administration of this chapter;
               (2)  investment earnings under the capital access fund
  established under Section 481.402;
               (3)  fees charged under Subchapter BB, Chapter 481;
               (4)  interest earned on the investment of money in the
  fund;
               (5)  fees charged under this chapter;
               (6)  investment earnings from the programs
  administered by the bank;
               (7)  amounts transferred under Section 2303.504(b)[,
  as amended by Article 2, Chapter 1134, Acts of the 77th Legislature,
  Regular Session, 2001];
               (8)  investment earnings under the Texas product
  development fund under Section 489.211;
               (9)  investment earnings under the Texas small business
  incubator fund under Section 489.212; [and]
               (10)  investment earnings under the rural development
  account in the Texas agriculture fund under Subchapter E; and
               (11)  any other amounts received by the state under
  this chapter.
         SECTION 4.  Section 489.106, Government Code, is amended to
  read as follows:
         Sec. 489.106.  ADMINISTRATION OF FUND, ACCOUNT, AND CHAPTER.
  The office shall administer the fund and the rural development
  account in the Texas agriculture fund.  In administering the fund,
  the rural development account in the Texas agriculture fund, and
  this chapter, the office has the powers necessary to carry out the
  purposes of this chapter, including the power to:
               (1)  make, execute, and deliver  contracts,
  conveyances, and other instruments;
               (2)  impose and collect fees and charges in connection
  with any transaction and provide for reasonable penalties for
  delinquent payments or performance; [and]
               (3)  issue bonds for financial assistance to stimulate
  the economy in rural areas of this state under Subchapter E; and
               (4)  issue bonds for other economic development
  projects, as [that term is] defined by Section 501.101, Local
  Government Code, or Section 505.151, 505.152, 505.153, 505.154,
  505.155, or 505.156, Local Government Code.
         SECTION 5.  Section 489.108, Government Code, is amended to
  read as follows:
         Sec. 489.108.  PROGRAMS, SERVICES, ACCOUNTS, AND FUNDS UNDER
  BANK'S DIRECTION. Notwithstanding any other law, the bank shall
  perform the duties and functions of the office with respect to the
  following programs, services, accounts, and funds:
               (1)  the Texas Small Business Industrial Development
  Corporation established under Chapter 503, Local Government Code;
               (2)  the capital access program established under
  Section 481.405;
               (3)  the Texas leverage fund;
               (4)  the linked deposit program established under
  Section 481.193;
               (5)  the enterprise zone program established under
  Chapter 2303;
               (6)  the industrial revenue bond program;
               (7)  the defense economic readjustment zone program
  established under Chapter 2310;
               (8)  the Empowerment Zone and Enterprise Community
  grant program established under Section 481.025; [and]
               (9)  the renewal community program; and
               (10)  the rural development account in the Texas
  agriculture fund.
         SECTION 6.  Chapter 489, Government Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E. RURAL DEVELOPMENT ACCOUNT
         Sec. 489.251.  PURPOSE. Financial assistance is a
  commitment made by the bank for the purpose of stimulating economic
  development in rural areas of this state.
         Sec. 489.252.  DEFINITIONS. In this subchapter:
               (1)  "Anticipation note" means a note issued by an
  eligible issuer and purchased by the bank under Section 1431.014.
               (2)  "Financial assistance" means a loan, loan
  guarantee, or equity investment from the rural development account
  to an applicant under this subchapter.
               (3)  "Rural area" has the meaning assigned by Section
  58.002, Agriculture Code.
         Sec. 489.253.  RURAL DEVELOPMENT ACCOUNT. The rural
  development account is a dedicated account in the Texas agriculture
  fund for the purpose of financing rural economic development
  projects authorized by Section 49-f(g), Article III, Texas
  Constitution.
         Sec. 489.254.  BONDS. (a) The bank may issue general
  obligation bonds, up to the amounts authorized by Section 49-f(g),
  Article III, Texas Constitution, to fund rural economic development
  projects under this subchapter.
         (b)  An amount of not more than five percent of the total
  amount of bonds issued may be used to pay administrative fees
  involved in selling the bonds.
         Sec. 489.255.  MANAGEMENT OF RURAL DEVELOPMENT ACCOUNT. (a)
  Repayments of financial assistance under any program funded wholly
  or partly with the proceeds of general obligation bonds issued in
  accordance with Section 489.254 shall be deposited first in the
  interest and sinking account as prescribed by the bank's
  resolutions authorizing the bonds, and second in the reserve
  account for the bonds until that account is fully funded as
  prescribed by the bank's resolutions. The rural development
  account and all accounts within that account shall be kept and
  maintained at the direction of the bank and held in trust by the
  comptroller for and on behalf of the bank and the owners of the
  bonds issued in accordance with Section 489.254, and may be used
  only as provided by this subchapter. Pending its use, money in the
  rural development account shall be invested as prescribed by the
  resolution by which the bonds were issued.
         (b)  If during the time any general obligation bonds are
  payable from the rural development account the bank determines that
  there will not be sufficient money in the interest and sinking
  account for the bonds during the following fiscal year to pay the
  principal of or interest on the bonds that is to come due during the
  following fiscal year, the comptroller shall transfer to the fund
  the first money coming into the state treasury not otherwise
  appropriated by the constitution in an amount sufficient to pay the
  obligations.
         (c)  The bank may receive, and shall deposit in the rural
  development account appropriations, grants, donations, earned
  federal funds, and the proceeds of any investment pools operated by
  the comptroller that are related to rural economic development
  projects under this subchapter.
         (d)  The rural development account includes grants and
  donations made for the purposes of rural economic development
  projects administered by the bank and any other money received
  under this subchapter. Notwithstanding Section 404.071, income and
  interest earned on money in the rural development account shall be
  deposited to the credit of the account. The fund is exempt from the
  application of Section 403.095.
         (e)  The bank shall attempt to administer the rural
  development account in a manner that makes private donations to the
  account an eligible itemized deduction for federal income taxation
  purposes.
         Sec. 489.256.  FINANCIAL ASSISTANCE FOR RURAL ECONOMIC
  DEVELOPMENT PROJECTS. (a) The bank may provide financial
  assistance from available funds held in the rural development
  account to an applicant for a rural economic development project.
         (b)  The bank may purchase anticipation notes from an
  eligible issuer for the purpose of securing a financial commitment
  made by the bank for a rural economic development project.
         Sec. 489.257.  APPLICATION FOR FINANCIAL ASSISTANCE. (a)
  The office by rule shall adopt applicant eligibility standards and
  prescribe the application process, including the creation of any
  forms and the setting of necessary fees to cover the implementation
  of this subchapter.
         (b)  An applicant for financial assistance under this
  subchapter must submit to the office with the application:
               (1)  project financial information required by the
  office;
               (2)  any applicable feasibility or economic impact
  statements;
               (3)  a statement of the applicant's employment or
  managerial history;
               (4)  security to be pledged by the applicant for
  financial commitments made by the bank from the rural development
  account;
               (5)  documentation of other forms of equity or other
  financial assistance from state, federal, or private resources that
  will be committed to the project; and
               (6)  a statement regarding how the commitment of the
  bank is projected to induce capital investment, create or preserve
  jobs, or provide other economic development benefits in a rural
  area.
         (c)  The bank may consider only applications that
  demonstrate reasonable assurance that the projected revenues will
  be sufficient to repay any financial assistance approved by the
  bank.
         (d)  After considering the application and all other
  information the bank considers relevant, the bank shall approve or
  deny the application and promptly notify the applicant of the
  decision.
         Sec. 489.258.  RULES. The office may adopt rules, policies,
  and procedures necessary or reasonable to implement this
  subchapter.
         SECTION 7.  Section 1431.014(a), Government Code, is amended
  to read as follows:
         (a)  Notwithstanding any other provision of this chapter, an
  issuer participating in a rural economic development program
  established by the Texas Economic Development Bank [Agricultural
  Finance Authority] may sell to the Texas Economic Development Bank
  [authority] an anticipation note issued for a purpose described by
  Section 1431.004(a)(1), provided that the note matures before the
  30th anniversary of the date the note is issued.
         SECTION 8.  This Act takes effect September 1, 2013.