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A BILL TO BE ENTITLED
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AN ACT
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relating to establishing a program to assist micro-businesses by |
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increasing access to capital. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 481, Government Code, is amended by |
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adding Subchapter CC to read as follows: |
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SUBCHAPTER CC. MICRO-BUSINESS CAPITAL ACCESS PROGRAM |
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Sec. 481.451. DEFINITIONS. In this subchapter: |
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(1) "Capital access loan" has the meaning assigned by |
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Section 481.401. |
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(2) "Community development financial institution" has |
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the meaning assigned by 12 U.S.C. Section 4702. |
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(3) "Default rate" means the percentage of loans made |
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that did not meet the payment terms during a period specified by the |
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bank. |
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(4) "Micro-business" has the meaning assigned by |
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Section 481.405(f). |
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(5) "Program" means the micro-business capital access |
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program established under this subchapter. |
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Sec. 481.452. PROGRAM FUNDING; PURPOSE. (a) The program |
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shall be funded by direct appropriation. |
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(b) The program shall expand access to capital for |
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micro-businesses to create jobs in this state. |
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Sec. 481.453. PROGRAM ADMINISTRATION. The community |
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development financial institution administering the program shall |
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provide capital access loans to micro-businesses that face barriers |
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in accessing capital. The institution administering the program |
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shall give special emphasis to micro-businesses that have |
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difficulty in accessing capital. |
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Sec. 481.454. OVERSIGHT. (a) A community development |
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financial institution participating in the program shall report |
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quarterly to the bank: |
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(1) the names of micro-businesses that have received |
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capital access loans; |
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(2) the current balance of all outstanding loans made |
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under the program; |
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(3) the default rate on existing loans; and |
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(4) any other information the bank requires. |
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(b) A community development financial institution |
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participating in the program shall prepare a detailed financial |
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statement each quarter. |
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(c) A community development financial institution shall |
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allow the bank to inspect the institution's financial records on |
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request. |
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Sec. 481.455. PROGRAM REPORT. The bank shall issue an |
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annual status report on the program. The bank shall deliver its |
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report to the governor, the lieutenant governor, the speaker of the |
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house, and the standing committees of the legislature with primary |
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jurisdiction over micro-businesses and economic development. |
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SECTION 2. Section 481.405, Government Code, is amended by |
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amending Subsection (e) and adding Subsection (f) to read as |
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follows: |
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(e) To qualify as a capital access loan, a loan must: |
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(1) be made to a micro-business, small business, or |
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medium-sized business or to a nonprofit organization; |
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(2) be used by the business or nonprofit organization |
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for any project, activity, or enterprise in this state that fosters |
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economic development; and |
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(3) meet any other criteria provided by this |
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subchapter. |
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(f) In this section, "micro-business" means a corporation, |
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partnership, sole proprietorship, or other legal entity that: |
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(1) is domiciled in this state or has at least 51 |
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percent of its employees located in this state; |
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(2) is formed to make a profit; |
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(3) is independently owned and operated; and |
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(4) has not more than 20 employees. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2021. |