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The House Joint Committee on State Loans and Grants was created
to review the loan and grant programs sponsored by the state and
its agencies and to assess the merits of administrative consolidation
of selected programs. The review should focus on programs involving
loans to individuals, businesses, farms and ranches, or nonprofit
organizations, but may consider other programs similar in nature.
Over the past two to three decades, the state has attempted to
address certain needs related to economic development by creating
loan and loan guarantee programs, grant programs, and information
services designed to assist individuals, businesses, farmers,
ranchers, nonprofit organizations, and communities. Financing
for these programs has come from an amalgamation of debt (both
general obligation and revenue), federal grants, general revenue,
The number of loan and grant programs and the amount of money
needed to fund them has increased substantially. Loan and loan
guarantee programs, debt-issuing authority, grant-making ability,
and community development research and technical assistance have
been spread throughout state government among numerous agencies.
This approach essentially has created banks and grant shops within
those agencies, many with significant debt-issuing authority.
Critics of the present system say banks are reluctant to participate
in guarantee loan programs for several reasons: the array of differing
agency requirements; the duplicative efforts of agency marketing
programs; the failure of agencies to coordinate their activities;
and the failure of agencies to inform clients of additional programs
within the state.
During the 74th Legislature, an effort was made to consolidate
loan and grant programs, but due to the complexities of the issue
and the late completion of research, the measure was put aside
to be addressed during the interim.