85R24682 GRM-F     By: Johnson of Dallas, Rodriguez of Bexar H.B. No. 4195     Substitute the following for H.B. No. 4195:     By:  Button C.S.H.B. No. 4195       A BILL TO BE ENTITLED   AN ACT   relating to establishing a program to assist small businesses in   job creation by increasing access to capital.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 481, Government Code, is amended by   adding Subchapter CC to read as follows:   SUBCHAPTER CC. REINVESTMENT IN SUPPORT FOR EMPLOYMENT          Sec. 481.451.  DEFINITIONS. In this subchapter:                (1)  "Capital investment loan" means a loan given to   small businesses to create jobs under the program.                (2)  "Community development financial institution" has   the meaning assigned by 12 U.S.C. Section 4702.                (3)  "Default rate" means the percentage of loans made   that did not meet the payment terms during a period specified by the   bank.                (4)  "Financial capacity" means the ability of a   community development financial institution to service a dollar   amount to be specified by the bank.                (5)  "Historical disbursement" means the number and   amount of loans a community development financial institution made   during a defined period.                (6)  "Program" means the Reinvestment in Support for   Employment program established under this subchapter.                (7)  "Revolving loan account" means an account allowing   for loan amounts to be withdrawn, repaid, and redrawn until the   program expires.                (8)  "Small business" has the meaning assigned by   Section 481.401.          Sec. 481.452.  PROGRAM FUNDING; PURPOSE. (a) The program   shall be funded by direct appropriation.          (b)  The program shall expand access to capital for small   businesses to create jobs in this state.          Sec. 481.453.  PROGRAM ELIGIBILITY; ADMINISTRATION. (a) To   participate in the program, an eligible community development   financial institution must enter into a participation agreement   with the bank that sets out the terms under which the bank will make   contributions to the community development financial institution's   revolving loan account.           (b)  The bank shall specify the criteria for a loan to be   eligible for a revolving loan from the program. In establishing   criteria, the bank shall consider reasonable criteria relating to a   community development financial institution, including the   community development financial institution's:                (1)  financial capacity;                (2)  historical disbursements;                (3)  loan loss reserve capacity; and                (4)  default rates.          (c)  The bank shall determine the eligibility of a community   development financial institution to participate in the program.          (d)  The bank may limit the total number of community   development financial institutions eligible to participate in the   program.          (e)  To qualify as a capital investment loan, a loan must:                (1)  be made to a small business entrepreneur;                (2)  be used by the business for a project, activity, or   enterprise in this state that fosters job creation and economic   development; and                (3)  meet all criteria provided by this subchapter.          (f)  Money from a revolving loan account shall be disbursed   quarterly to participating community development financial   institutions.           (g)  The state is not liable for money disbursed under this   subchapter.          (h)  The community development financial institution is   solely responsible for loan losses under the program.          Sec. 481.454.  OVERSIGHT. (a) A community development   financial institution participating in the program shall report   quarterly to the bank:                (1)  the names of businesses that have received capital   investment loans;                (2)  the current balance of all outstanding loans made   under the program;                (3)  the default rate on existing loans; and                (4)  any other information the bank requires.          (b)  A community development financial institution   participating in the program shall prepare a detailed financial   statement each quarter.          (c)  A community development financial institution shall   allow the bank to inspect the institution's financial records on   request.          Sec. 481.455.  PROGRAM REPORT. The bank shall issue an   annual status report on the program. The bank shall deliver its   report to the governor, the lieutenant governor, the speaker of the   house, and the standing committees of the legislature with primary   jurisdiction for small business and economic development.          SECTION 2.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2017.