BILL ANALYSIS

Senate Research Center	H.B. 2765
89R21423 SCF-F	By: Guillen (Zaffirini)
	Economic Development
	5/16/2025
	Engrossed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Current eligibility and funding structures do not fully accommodate the needs of larger rural counties or entities engaged in infrastructure and economic development efforts. The Rural Economic Development and Investment Program needs expansion and modernization to better meet the growing economic development needs of rural areas in Texas. Areas facing infrastructure gaps and limited access to capital for economic growth projects require financial assistance to support projects that attract private investment, develop infrastructure, and create jobs.

H.B. 2765 would expand eligibility for financial assistance under the Rural Economic Development and Investment Program. This expansion would:

� raise the maximum population threshold of an eligible county from 75,000 to 200,000;

� include the following as eligible entities:

o a public utility owned by an eligible municipality; and

o a political subdivision other than an eligible county or municipality, including a special district, that is wholly or partly located in an eligible county; and

� extend eligibility to any lender that primarily represents an eligible county or municipality, in addition to economic development corporations and community development financial institutions that provide such representation, which are eligible under current law.

H.B. 2765 would expand access to financial assistance and economic development opportunities for a broader range of rural communities and entities.

H.B. 2765 amends current law relating to the Rural Economic Development and Investment Program and the Texas economic development fund.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Department of Agriculture in SECTION 3 (Section 12.0273, Agriculture Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 12.0271(a) and (b), Agriculture Code, as follows:

(a) Authorizes financial assistance under the Rural Economic Development and Investment Program to encourage private economic development in rural areas to be provided only to:

(1) a county with a population of not more than 200,000, rather than not more than 75,000;

(2) makes a nonsubstantive change to this subdivision;

(3) a public utility owned by a municipality described by Subdivision (2) (relating to a municipality with a population of not more than 50,000);

(4) a political subdivision not described by Subdivision (1) or (2), including a special district, that is wholly or partly located in a county described by Subdivision (1); or

(5) an economic development corporation, community development financial institution, or other lender that primarily represents a county or municipality described by this subsection.

Makes a nonsubstantive change to this subsection.

(b) Authorizes financial assistance under Subsection (a) to be used only for a project relating to certain purposes, including attracting new private enterprises to the county or municipality, including mineral extraction activities, as defined by Section 2270.0051 (Definitions), Government Code. Makes nonsubstantive changes.

SECTION 2. Amends Section 12.0272(b), Agriculture Code, as follows:

(b) Provides that money in the Texas economic development fund is dedicated to and authorized to be appropriated only to the Texas Department of Agriculture (TDA) for the purposes of administering, continuing, implementing, or maintaining an economic development program originally established as part of TDA's implementation of the State Small Business Credit Initiative or, rather than and, one or more of TDA's economic development programs established for certain purposes.

SECTION 3. Amends Section 12.0273, Agriculture Code, by amending Subsections (c), (d), and (e) and adding Subsections (e-1) and (h), as follows:

(c) Deletes existing text requiring that a loan require monthly payments of principal and interest beginning not later than the 90th day after the date the loan is made.

(d) Authorizes TDA, subject to Subsection (f) (relating to requiring TDA to retain in the fund in the state treasury a certain amount of money), to use any money in the fund to make additional loans and grants.

(e) Prohibits the cumulative amount of grants, rather than loans and grants, to any person using money from the fund from exceeding $1 million.

(e-1) Prohibits the maximum aggregate amount of outstanding loans to any one person at any time using money from the fund from exceeding $1 million.

(h) Authorizes TDA to adopt rules for the repayment of a loan or grant made under Section 12.0273 (Limitations on Loans and Grants From Texas Economic Development Fund).

SECTION 4. Makes application of Section 12.0273, Agriculture Code, as amended by this Act, prospective.

SECTION 5. Effective date: September 1, 2025.