Bill Text: TX HB4418 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to the creation of a revolving loan program to fund the purchase by historically underutilized businesses of certain bonds required for public work contracts.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2023-03-21 - Referred to State Affairs [HB4418 Detail]
Download: Texas-2023-HB4418-Introduced.html
| 88R2836 MCK-D | ||
| By: Anchía | H.B. No. 4418 | |
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| relating to the creation of a revolving loan program to fund the | ||
| purchase by historically underutilized businesses of certain bonds | ||
| required for public work contracts. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 2253, Government Code, is amended by | ||
| adding Subchapter E to read as follows: | ||
| SUBCHAPTER E. REVOLVING LOAN PROGRAM FOR BOND ASSISTANCE | ||
| Sec. 2253.101. DEFINITIONS. In this subchapter: | ||
| (1) "Historically underutilized business" has the | ||
| meaning assigned by Section 2161.001. | ||
| (2) "Revolving loan program" means the program | ||
| established by the comptroller under this subchapter. | ||
| Sec. 2253.102. REVOLVING LOAN PROGRAM. (a) The | ||
| comptroller by rule shall establish a revolving loan program to | ||
| provide loans to historically underutilized businesses to assist | ||
| the businesses in the purchase of performance and payment bonds | ||
| required by this chapter for public work contracts with a | ||
| governmental entity. The comptroller may not charge interest on a | ||
| loan provided under the program. | ||
| (b) The comptroller by rule shall set the terms and other | ||
| requirements for a loan made under the revolving loan program, | ||
| including guidelines for the repayment of the loans. | ||
| (c) The comptroller may not contract with another entity to | ||
| manage the revolving loan program. | ||
| Sec. 2253.103. ELIGIBILITY FOR LOANS. (a) To be eligible | ||
| for a loan under the revolving loan program, an applicant must: | ||
| (1) be a historically underutilized business | ||
| operating in the construction business or a building trade; | ||
| (2) have been in business at least one year before | ||
| applying for the loan; | ||
| (3) have its principal place of business in this | ||
| state; and | ||
| (4) demonstrate the ability to meet all experience and | ||
| financial standards required for the contract for which the | ||
| business is seeking the bond assistance. | ||
| (b) A historically underutilized business that has not | ||
| previously replied to a solicitation for a public work contract as a | ||
| prime contractor or subcontractor may apply for a loan under the | ||
| revolving loan program. A historically underutilized business that | ||
| has previously entered into a public work contract with a | ||
| governmental entity and paid for its own bonds required under the | ||
| contract is not precluded from applying for a loan under the | ||
| revolving loan program. | ||
| (c) The comptroller may by rule adopt additional | ||
| eligibility requirements for participation in the revolving loan | ||
| program. | ||
| Sec. 2253.104. INELIGIBILITY FOR LOAN. (a) A historically | ||
| underutilized business that has defaulted on a performance or | ||
| payment bond required under a public work contract is not eligible | ||
| to receive a loan under the revolving loan program before the fifth | ||
| anniversary of the date the historically underutilized business | ||
| defaulted on the bond. | ||
| (b) A historically underutilized business that has filed | ||
| for bankruptcy is not eligible to receive a loan under the revolving | ||
| loan program before the seventh anniversary of the date the | ||
| historically underutilized business filed for bankruptcy. | ||
| Sec. 2253.105. SUBCONTRACTING. A historically | ||
| underutilized business that receives a loan under the revolving | ||
| loan program for bond assistance for a public work contract with a | ||
| governmental entity and who is a prime contractor: | ||
| (1) may not subcontract more than 75 percent of the | ||
| contract; and | ||
| (2) shall use the historically underutilized business | ||
| guidelines under Chapter 2161, the governmental entity's | ||
| guidelines, or the guidelines specified in the contract in awarding | ||
| any subcontracts under the contract. | ||
| Sec. 2253.106. LOAN AMOUNTS. (a) A historically | ||
| underutilized business that has not previously entered into a | ||
| public work contract with a governmental entity may receive a loan | ||
| under the revolving loan program in an amount up to $100,000. | ||
| (b) A historically underutilized business that has | ||
| completed at least one public work contract with a governmental | ||
| entity may receive a loan under the revolving loan program in an | ||
| amount up to $200,000. | ||
| (c) A historically underutilized business that has | ||
| completed two or more public work contracts with a governmental | ||
| entity may receive a loan under the revolving loan program in an | ||
| amount up to: | ||
| (1) $250,000 if the business is a subcontractor except | ||
| as provided by Subdivision (2)(B); or | ||
| (2) $500,000 if the business is: | ||
| (A) a prime contractor; or | ||
| (B) a subcontractor: | ||
| (i) on a public work contract in which the | ||
| value of the subcontract is greater than $10 million; or | ||
| (ii) that can demonstrate an inability to | ||
| secure a bond under normal market conditions. | ||
| Sec. 2253.107. PAYMENT TO SURETY. The comptroller shall | ||
| pay the proceeds of a loan made under the revolving loan program | ||
| under this subchapter directly to the surety company issuing the | ||
| bond. | ||
| Sec. 2253.108. DEFAULT. (a) If a historically | ||
| underutilized business that receives a loan under the revolving | ||
| loan program defaults on a performance or payment bond for which the | ||
| loan was provided, the comptroller and the attorney general shall | ||
| institute appropriate proceedings for any available legal remedy to | ||
| recover the amount of the loan. | ||
| (b) The comptroller may withhold any state money owed to a | ||
| historically underutilized business described by Subsection (a) | ||
| for other contracts or business with the state conducted by the | ||
| historically underutilized business. | ||
| (c) A historically underutilized business described by | ||
| Subsection (a) may not contract with a governmental entity until | ||
| the business has repaid at least one-half of the loan amount | ||
| received by the business under the revolving loan program for | ||
| purchase of the performance or payment bond subject to the default. | ||
| Sec. 2253.109. TEXAS HISTORICALLY UNDERUTILIZED BUSINESS | ||
| BOND ASSISTANCE REVOLVING LOAN ACCOUNT. (a) The Texas | ||
| historically underutilized business bond assistance revolving loan | ||
| account is an account in the general revenue fund administered by | ||
| the comptroller. | ||
| (b) Money in the account may be used only for loans made | ||
| under this subchapter. | ||
| (c) The comptroller shall deposit to the credit of the | ||
| account: | ||
| (1) money appropriated to the comptroller for the | ||
| purpose of this subchapter; | ||
| (2) money the comptroller receives as a gift, grant, | ||
| or donation for the purpose of this subchapter; | ||
| (3) money received by the comptroller for the | ||
| repayment of a loan made under the revolving loan program, and any | ||
| fee charged to make the loan; and | ||
| (4) notwithstanding Section 404.071, all interest | ||
| attributable to money held in the account. | ||
| (d) Money in the account may be appropriated only to the | ||
| comptroller for the purposes of administering the account. | ||
| (e) The comptroller may not contract with another entity to | ||
| administer the account. | ||
| Sec. 2253.110. GIFTS AND GRANTS. The comptroller may | ||
| solicit and accept gifts and grants from any public or private | ||
| source for the purposes of this subchapter. | ||
| Sec. 2253.111. RULEMAKING AUTHORITY. The comptroller shall | ||
| adopt rules to implement this subchapter. | ||
| Sec. 2253.112. REPORTING REQUIREMENTS. Not later than | ||
| January 15 of each year, the comptroller shall report to the | ||
| legislature: | ||
| (1) the total dollar amount of assistance provided in | ||
| the preceding year; | ||
| (2) the total number of businesses to which assistance | ||
| was provided in the preceding year; | ||
| (3) the total number of state contracts secured by | ||
| businesses to which assistance was provided in the preceding year; | ||
| (4) the total number of applications for assistance in | ||
| the preceding year; and | ||
| (5) the remaining dollar balance in the Texas | ||
| historically underutilized business bond assistance revolving loan | ||
| account as of December 31 of the preceding year. | ||
| Sec. 2253.113. AUDIT BY STATE AUDITOR. (a) The state | ||
| auditor shall conduct a biennial financial audit and effectiveness | ||
| audit of the revolving loan program to evaluate the program's | ||
| performance. | ||
| (b) The state auditor shall report the results of the audits | ||
| to the legislature not later than January 8 of each odd-numbered | ||
| year. | ||
| SECTION 2. This Act takes effect September 1, 2023. | ||
