SRC-JFA S.B. 1265 75(R) BILL ANALYSIS Senate Research Center S.B. 1265 By: Armbrister Economic Development 4-2-97 As Filed DIGEST Currently, the Texas Department of Commerce (DOC) is the state's lead economic development organization. Numerous economic development functions and programs are spread across a variety of state agencies. This bill would abolish the DOC and consolidate a variety of existing and new economic development functions and programs into a public-private entity called "Partnership Texas." This bill would provide that the entity would be governed by a 23-member board chaired by the governor and would receive public funds to provide consolidated economic development functions and programs through a performance contract with the newly created Governor's Office of Economic Development and Tourism. PURPOSE As proposed, S.B. 1265 abolishes the Texas Department of Commerce (DOC) and consolidates the economic development and tourism activities of DOC and other agencies into the Office of Economic Development and Tourism and a public-private effort called "Partnership Texas." RULEMAKING AUTHORITY Rulemaking authority is granted to the Permit Office in SECTION 1 (Section 482.026(10), Government Code), the Office of Economic Development and Tourism in SECTION 1 (Sections 481.009(a)(1), 483.017(a), 485.023(b) and (j), 486.010(b), 486.029, 486.031(e), 486.033(b), 487.008(4), 488.010(a), 488.031(b), 488.0536, 488.058(f), 489.017, 492.002, 490.003(c), and 490.009(c), Government Code), the Texas Food and Fibers Commission in SECTION 1 (Sections 485.032(e) and 485.040(b), Government Code), the Small Business Administration Office in SECTION 1 (Sections 483.003(a), Government Code), the commissioner of insurance in SECTION 1 (Section 490.005(a), Government Code), and the Texas Commission on the Arts in SECTION 1 (Section 490.006(b), Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 4, Government Code, by adding Subtitle F, as follows: SUBTITLE F. ECONOMIC DEVELOPMENT AND TOURISM CHAPTER 481. OFFICE OF ECONOMIC DEVELOPMENT AND TOURISM SUBCHAPTER A. GENERAL PROVISIONS Sec. 481.001. DEFINITIONS. Defines "board," "bond," "border region," "office," and "partnership." Sec. 481.002. ESTABLISHMENT. Provides that the Office of Economic Development and Tourism (office) is established in the office of the governor. Sec. 481.003. DIRECTOR. Requires the governor to appoint a director of the office. Authorizes the director to employ other employees necessary to carry out the office's duties. Sec. 481.004. PURPOSE. Sets forth the purpose of the office. Sec. 481.005. GIFTS AND GRANTS. Authorizes the office to accept gifts, grants, and other funds specifically designed by the donor for economic development of Texas. Sec. 481.006. AUDIT; REPORT. Provides that the financial transactions of the office and Partnership Texas (partnership) are subject to audit by the state auditor. Sets forth the required contents of the audit report. Sec. 481.007. REVIEW OF BONDS. Prohibits bonds from being issued under this subtitle and proceeds of bonds issued under this subtitle from being used to finance a project, unless the issuance has been reviewed and approved by the Bond Review. Prohibits a member of the Bond Review Board from being held liable for damages resulting from the performance of the member's functions under this section. Sec. 481.008. FOREIGN OFFICES. Authorizes the office to contract with the partnership to maintain and operate offices in foreign countries for certain purposes. Requires the offices to be named "The State of Texas" offices. SUBCHAPTER B. GENERAL POWERS AND DUTIES OF THE OFFICE Sec. 481.009. GENERAL POWERS. Sets forth the authorized powers and duties of the office. Requires money paid to the office to be deposited in separate accounts in the general revenue fund. Sets forth provisions relating to the deposit and use of gifts, grants, and private contributions. Sec. 481.010. GENERAL DUTIES. Sets forth the required duties of the office. Sets forth the actions the office is required to take to carry out its duties. Sec. 481.011. PERFORMANCE STANDARDS. Requires the office to develop performance measures, standards, and sanctions for each program for which it contracts with another entity under this subtitle. Requires the approved performance measures, standards, and sanctions to be included and made a part of each contract entered into for delivery of programs authorized by this subtitle. Sec. 481.012. ADMINISTRATION OF OTHER STATUTES. Requires the office to perform the administrative duties formerly assigned to the Texas Economic Development Commission (EDC), and the Texas Department of Commerce (DOC). Requires the office to perform the administrative duties formerly assigned to EDC, the Enterprise Zone Board (EZB), and DOC. Requires the office to perform the administrative duties formerly assigned to the Department of Housing and Community Affairs (HCA), DOC, and the community development block grant program. Requires any business or industry seeking employee training, retraining, or manpower development services at public expense to request assistance from the office. Requires the office to seek advice from the Texas Higher Education Coordinating Board (THECB) in identifying the appropriate institution of higher education to provide such services. Provides that the rules of THECB concerning out-ofdistrict and off-campus courses developed to assist industrial start-up and employee upgrading apply in providing those services. Requires the office and THECB to ensure that appropriate rules are developed to apply to any entities involved in the delivery of education and training for industrial start-up and employee upgrading that are not currently covered. CHAPTER 482. PARTNERSHIP TEXAS SUBCHAPTER A. GENERAL PROVISIONS Sec. 482.001. OPEN MEETINGS. Provides that the partnership is subject ot Chapter 551, Government Code. Requires the governing board of Partnership Texas (board) to file notice of each meeting of the board as is required of a state governmental body under Chapter 551, Government Code. Sec. 482.002. OPEN RECORDS. Provides that the board is subject to Chapter 552, Government Code. Sec. 482.003. APPLICATION OF TEXAS NON-PROFIT CORPORATION ACT. Provides that the Texas Non-Profit Corporation Act (Article 1396-1.01, et seq., V.T.C.S., ) applies to the partnership. SUBCHAPTER B. CREATION OF PARTNERSHIP Sec. 482.004. PURPOSE OF THE PARTNERSHIP. Provides that the purpose of the partnership is to carry out the public purposes of this subtitle and is limited to the economic development of and promotion of tourism in Texas. Sec. 482.005. FORM OF PARTNERSHIP. Provides that the partnership is a nonmember, nonstock corporation. Provides that the partnership is nonprofit, and no part of its net earnings remaining after payment of its expenses may incur to any individual, firm, or corporation, except that if the board determines that sufficient provision has been made for the full payment of the expenses, bonds, and other obligations of the partnership, the additional net earnings of the partnership shall be deposited to the general revenue fund. Requires the partnership to be created as a perpetual corporation. Requires the partnership not to be dissolved by a vote of the board. Prohibits the partnership from having any provision for the regulation of the internal affairs of the corporation in its articles. Sec. 482.006. ARTICLE OF INCORPORATION. Sets forth the required articles of incorporation. Sec. 482.007. INDEMNIFICATION. Authorizes the partnership to indemnify a director or officer of the partnership for necessary expenses and costs. Sec. 482.008. EXEMPTION FROM TAXATION. Authorizes the partnership to engage exclusively in the performance of public charitable functions and is exempt from all taxation by this state or a municipality or other political subdivision of the state. SUBCHAPTER C. GENERAL POWERS AND DUTIES OF THE PARTNERSHIP Sec. 482.009. GENERAL POWERS. Provides that the partnership has the powers provided by this subtitle to promote economic development and tourism for Texas on behalf of the office and powers incidental to or necessary for the performance of that purpose. Authorizes the partnership to contract with the office, legal counsel, financial advisors, or underwriters as its board considers necessary. Sec. 482.010. BONDS AND NOTES. Authorizes the partnership to issue bonds and notes to carry out its purpose. Authorizes the bonds and notes to be issued under any power or authority available to the partnership. Requires a bond or note to state on its face that it is not an obligation of the State of Texas. Sec. 482.011. APPROVAL OF BONDS AND NOTES BY ATTORNEY GENERAL. Requires the partnership to submit a bond or note authorized under Section 482.010 and a contract supporting its issuance to the attorney general for examination. Requires the attorney general to approve the bond or note if the attorney general finds that the bond or note, and any supporting contract are authorized under this subtitle. Prohibits a bond, note, or contract from being contested for any reason after approval by the attorney general. Sec. 482.012. ASSETS ON DISSOLUTION. Requires the title to all assets to be transferred to the office upon the dissolution or liquidation of the partnership. Sec. 482.013. REPORT. Requires the partnership to file an annual report of the financial activity of the partnership with the office, the governor, lieutenant governor and speaker of the house. Requires the annual report to be filed consistent with the date specified in the General Appropriations Act and to be prepared in accordance with generally accepted accounting principles. Requires the report to include a statement of support, revenue, and expenses and change in fund balances, a statement of functional expenses, and balance sheets for all funds. Sec. 482.014. PERFORMANCE MEASURES. Provides that the board will develop key performance measures to be broadly communicated and monitored by the governor and the legislature. Provides that such performance measures could include jobs created and attracted, level of wages, attraction of new investments, exports, and other measures. Requires one key performance measure for the partnership and its employees to be the ability to raise new private funds in support of economic development. Provides that contributions of in-kind services and material would be an important component of this private funding. Sec. 482.015. FUNDS. Sets forth the guidelines for the deposit and use of money paid and contributed to the partnership. SUBCHAPTER D. BOARD OF DIRECTORS AND STAFF Sec. 482.016. BOARD. Sets forth the voting members of the board. Provides that the private sector, appointed members of the board consist of 12 members selected from a pool of nominees by a nominating committee. Sets forth the guidelines for appointment of these members. Requires the speaker of the house to serve on the board in an ex officio, nonvoting capacity. Sec. 482.017. BOARD OFFICERS. Provides that the chairman of the board is the governor. Requires all the vice-chairs to be appointed jointly by the governor and the lieutenant governor in three positions: business development, tourism, and funding and finance. Requires all vice-chairs to have the necessary skills appropriate to their selected positions. Sec. 482.018. CONFLICT OF INTEREST. Prohibits a person from serving as a privatesector member of the board or from being the executive director or an employee of the partnership if the person meets certain conditions. Prohibits a person from serving as a private-sector member of the board or from being the executive director or an employee of the partnership if the person's spouse meets certain conditions. Defines "trade association" and "business entity." Prohibits a person from being a member of the board or the executive director or an employee of the partnership if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a business entity that has an interest in a contract with the partnership or a profession related to the operation of the partnership. Sec. 482.019. OFFICERS; COMPENSATION; MEETINGS. Requires the board to elect from among its members a secretary. Requires the board to meet at least quarterly. Prohibits a member of the board from receiving compensation for service on the board. Entitles a member to receive reimbursement for actual and necessary expenses incurred in performing services as a member of the board. Requires the board to develop and implement policies that provide the public with a reasonable opportunity to appear before the board and to speak on any issue under the jurisdiction of the board. Sec. 482.020. EXECUTIVE DIRECTOR. Requires the board to employ an executive director to be chosen by a majority of the board members who shall manage the day-to-day operations and employ other employees necessary to carry out the board's duties. Sec. 482.021. ECONOMIC DEVELOPMENT PRACTITIONERS ADVISORY GROUP. Requires the board to establish an economic development practitioners advisory group to advise the executive director of the partnership on matters related to the officer's duties and programs under this subtitle. Sec. 482.022. ADMINISTRATION. Requires the executive director to establish certain functions within the partnership. SUBCHAPTER E. BUSINESS OMBUDSMAN Sec. 482.023. BUSINESS OMBUDSMAN. Requires the executive director to employ a business ombudsman approved by the board. Requires the business ombudsman to report directly to the executive director. Requires the business ombudsman to recommend changes in state regulation affecting business development and tourism and recommend changes to improve the Texas business climate. Requires the business ombudsman to consider the impact of agency rules on businesses, provide one-stop permit information and assistance, and to assist businesses in their dealings with state agencies. SUBCHAPTER F. BUSINESS PERMIT OFFICE Sec. 482.024. DEFINITIONS. Defines "applicant," "permit office," and "permit." Sec. 482.025. CREATION. Provides that the permit office is an office within the Office of Economic Development and Tourism. Requires the office to contract with the partnership to perform the duties of the office and the permit office, and exercise its powers and implement and administer the programs under this subchapter to the fullest extent permitted by the Texas Constitution. Sec. 482.026. DUTIES. Sets forth the required duties of the permit office. Sec. 482.027. COMPREHENSIVE PERMIT APPLICATION PROCEDURE. (a) Requires the permit office to develop a comprehensive application procedure to expedite the identification and processing of required permits. Requires the permit office to specify the permits to which the comprehensive application procedure applies. Requires a comprehensive application to be made on a form prescribed by the permit office. Requires the permit office to consult with affected agencies in designing the form to ensure that the form provides the necessary information to allow agencies to identify which permits may be needed by the applicant. Requires the form to be designed primarily for the convenience of an applicant who is required to obtain multiple permits and to provide for concise and specific information necessary to determine which permits are or may be required of the particular applicant. (b) Provides that use of the comprehensive application procedure by the applicant is optional. Requires the permit office to assist an applicant in preparing an application, describing the procedures, and providing appropriate information upon request. (c) Requires the permit office, on receipt of a comprehensive application from an applicant, to immediately notify in writing each state agency having a possible interest in the proposed business undertaking, project, or activity with respect to permits that are or may be required. (d) Requires the state agency to specify to the permit office each permit under its jurisdiction that is or may be required for the business undertaking, project, or activity described in the comprehensive application and to indicate each permit fee to be charged by a certain date. (e) Provides that if a notified state agency responds that it does not have an interest in the permit requirements of the business undertaking, project, or activity described in the comprehensive application or does not respond within the period specified by Subsection (d), no permit under the jurisdiction of that agency is required for the undertaking, project, or activity described in the comprehensive application. Provides that this subsection does not apply if the comprehensive application contains false, misleading, or deceptive information or fails to include pertinent information, the lack of which could reasonably lead a state agency to misjudge whether a permit under its jurisdiction is required. (f) Requires the permit office to provide the applicant with application forms and related information for all permits specified by the interested state agencies and to advise the applicant that the forms are to be completed and submitted to the appropriate state agencies. (g) Authorizes an applicant to withdraw a comprehensive application at any time without forfeiture of any permit approval applied for or obtained under the comprehensive application procedures. (h) Requires certain state agencies to designate an officer or employee to act as permit liaison officer to cooperate with the permit office in carrying out this subchapter. (i) Provides that this section does not apply to a permit or license issued under Title 2, Tax Code, and does not exempt any person from liability for a tax under that title. Sec. 482.028. COMPREHENSIVE PERMIT HANDBOOK. Requires the permit office to compile a comprehensive list of all state permits required by a person desiring to operate a business enterprise in the state. Requires the permit office to organize the list according to the types of business affected and to publish the list in a comprehensive permit handbook. Sets forth the required contents of the handbook. Requires the permit office to update the handbook. Requires the permit office to make the handbook available to persons interested in establishing a business enterprise, public libraries, educational institutions, and the state agencies listed in the handbook. Sec. 482.029. ASSISTANCE OF OTHER STATE AGENCIES. Requires each state agency to provide assistance, services facilities, and data to enable the permit office to carry out its duties. Provides that the agency is not required to provide information made confidential by a constitution, statute, or judicial decision. Sec. 482.030. COMPREHENSIVE PERMIT INFORMATION. Requires certain state agencies to report to the permit office in a form prescribed by the permit office on each type of review, approval, or permit administered by the agency. Requires the agency's report to include application forms, applicable agency rules, and the estimated period necessary to process permit applications. Requires the permit office to prepare an information file on state agency permit requirements and to develop methods for maintenance, revision, update, and ready access. Requires the permit office to provide comprehensive permit information based on that file. Authorizes the permit office to prepare and distribute publications, guides, and other materials to serve the convenience of permit applicants and explain permit requirements affecting business. Sec. 482.031. NO CHARGES FOR SERVICES. Requires the permit office to provide its services without charge. Sec. 482.032. ENVIRONMENTAL PERMITS. Requires the permit office to consult and cooperate with the Texas Natural Resource Conservation Commission (TNRCC) in conducting any studies on permits issued by TNRCC. Requires TNRCC to cooperate fully in the study and analysis of the procedures involving the issuance of permits by TNRCC and to evaluate all alternatives for improving the process pursuant to the permit office's responsibilities under Section 482.026. Requires the permit office and TNRCC to jointly submit any report required under Section 482.026. SUBCHAPTER G. STATE AND LOCAL PERMITS Sec. 482.033. LEGISLATIVE FINDING AND INTENT. Sets forth the legislative findings and intent of this Act. Sec. 482.034. DEFINITIONS. Defines "political subdivision," "permit," "project," and "regulatory agency." Sec. 482.035. UNIFORMITY OF REQUIREMENTS. (a) Requires the approval, disapproval, or conditional approval of an application for a permit to be considered by each regulatory agency solely on the basis of any orders, regulations, ordinances, rules, expiration dates, or other duly adopted requirements in effect at the time the original application for the permit it filed. Requires a certain first permit in a series of permits to be the sole basis for consideration of all subsequent permits required for the completion of the project, and all permits required for the project to be considered to be a single series of permits. Provides that preliminary plans and related subdivision plats, site plans, and all other development permits for land covered by such preliminary plans or subdivision plats are considered collectively to be one series of permits. Requires a regulatory agency not to shorten the duration of any permit required for the project once an application for a project has been filed. (b) Sets forth the scope of this subchapter. (c) Sets forth the permits, regulations, and construction standards that are not covered by this section. (d) Requires a permit holder to have the right to take advantage of procedural changes to the laws, rules, regulations, or ordinances of a regulatory agency which enhance or protect the project. (e) Provides that the provisions of this section relating to the expiration date of a permit or to the duration of a permit do not apply in the case of permit issued by the Texas Railroad Commission (RRC) which did not have an expiration date or a specific duration when originally issued. SUBCHAPTER H. STRATEGIC BUSINESS UNITS Sec. 482.036. STRATEGIC BUSINESS UNIT. Requires the board to create strategic business units. SUBCHAPTER I. PRIVATE FUNDING Sec. 482.037. PRIVATE FOUNDATIONS. Requires the partnership to initiate the establishment of private foundations as depositories for private contributions. Requires funds received pursuant to this section to be held in a local bank outside the state treasury. CHAPTER 483. INTERNATIONAL TRADE DEVELOPMENT SUBCHAPTER A. POWERS AND DUTIES RELATED TO INTERNATIONAL TRADE DEVELOPMENT Sec. 483.001. LEGISLATIVE FINDINGS. Sets forth the legislative findings relating to international trade development. Sec. 483.002. DEFINITIONS. Defines "export business," "lender," and "Texas product." Sec. 483.003. POWERS TO BE INTERPRETED BROADLY. Requires the powers of the office provided by this subchapter to be interpreted broadly to effect the purposes of this subchapter. Provides that the grant of powers under this subchapter is not a limitation of other powers of the office. Sec. 483.004. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter to the fullest extent permitted by the Texas Constitution. Sec. 483.005. INTERNATIONAL TRADE AND EXPORT DEVELOPMENT AND PROMOTION. Requires the office to assist, promote, encourage, develop, and advance economic prosperity and employment throughout this state by fostering the expansion of exports of manufactured goods and services to foreign purchases; to cooperate and act in conjunction with other public and private organizations to promote and advance export trade activities in the state; to design and implement programs to provide financial assistance to support export development; to formulate and develop programs to stimulate and encourage increased international trade along the entire border region; and to provide financial counseling to potential and existing exporters. Sets forth the activities the office may participate in to carry out its duties. Requires the office to give emphasis and priority to matters relating to trade with Mexico in carrying out its duties and powers. Sec. 483.006. POWERS AND DUTIES RELATING TO FINANCING. Requires the office to design and implement programs to provide financial assistance to enable export businesses to finance or refinance costs incurred in connection with the international export or reexport of Texas products. Provides that the office has the powers that are necessary and convenient to accomplish the purposes of this subchapter. Sec. 483.007. TAX EXEMPTION; EXEMPT SECURITIES. Provides that the office and the partnership are exempt from franchise, corporate, business, and all other taxes levied by this state. Provides that this section does not exempt from any taxes an export business participating in a program implemented under this section. Sets forth guidelines relating to bonds issued by the office under this subchapter. Authorizes the office to perform any act it considers necessary to qualify the bonds for offer and sale under the securities laws and regulations of the U.S. and of the states and other jurisdiction in the U.S. Sec. 483.008. CONFLICTS OF INTEREST. Prohibits the director of the office, an agent or employee of the office, a member of the board, the executive director, or an agent or employee of the partnership from holding an ownership interest of more than a certain amount in an association, trust, corporation, partnership, or other entity that is a party to a contract or agreement under this subchapter on which the director of the office, an agent or employee of the office, member of the board, executive director, or an agent or employee of the partnership may be called to act or vote. Sets forth the disclosure requirements with respect to certain conflicts of interest in a contract or agreement under this subchapter. Prohibits the director of the office, agent or employee of the office, member of the board, executive director, or agent or employee of the partnership who holds such a conflict of interest from being officially involved in regard to the contract or agreement, from voting on a matter relating to the contract or agreement, and from communicating with any other person who is a director of the office, agent or employee of the office, executive director, members of the board, or agents or employees of the partnership concerning the contract or agreement. Provides that a contract or agreement entered into in conformity with this subsection is not invalid because of an interest described by this subsection nor is a person who complies with this subsection guilty of an offense, and the person may not be removed from office or be subjected to other penalty because of the interest. Provides that a contract or agreement made in violation of this section is void and does not create an action against the office or the partnership. Sec. 483.009. PERSONAL LIABILITY OF MEMBERS OR PERSONS ACTING ON BEHALF OF THE OFFICE OR THE PARTNERSHIP. Provides that the director of the office, an agent or employee of the office, a member of the board, the executive director, or any other person acting on behalf of the partnership in executing a contract, commitment, or agreement under this subchapter is not personally liable on the contract, commitment, or agreement. Provides that the director of the office, an agent or employee of the office, a member of the board, the executive director, or any other person acting on behalf of the partnership is not personally liable for damage or injury resulting from the performance of duties under this subchapter. Sec. 483.010. REVENUE BONDS. Sets forth the guidelines relating to the issuing, selling, and providing for the retirement of bonds by the office to provide funds to implement the financial assistance programs authorized by this subchapter. Authorizes the office, in the resolution authorizing the bond, to provide for the bonds to meet certain conditions and characteristics. Provides that all the bonds issued by the office are subject to review and approval by the attorney general as is provided by Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, V.T.C.S.). Provides that the state pledges to and agrees with the owners of any bonds issued in accordance with this subchapter that the state will not limit or alter the rights vested in the office or the partnership to fulfill the terms of any agreements made with an owner or in any way impair the rights and remedies of an owner until the bonds, together with any premium and the interest on the bonds, with interest on any unpaid premium or installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the owners, are fully met and discharged. Authorizes the partnership and the office to provide for the inclusion of this pledge and agreement of the state in any agreement with the owners of bonds. Sec. 483.011. BOND SALE AND ISSUANCE. Authorizes the bonds to be sold at public or private sale at a price and in a manner and from time to time as the office provides. Authorizes the office to pay expenses, premiums, and insurance premiums that the office considers necessary or advantageous in connection with the authorization, sale, and issuance of the bonds from the proceeds of the sale of the bonds. Authorizes the office, in connection with the issuance of its bonds, to exercise the powers granted to the governing body of an issuer in connection with the issuance of obligations under Article 717q, V.T.C.S. Sec. 483.012. AGREEMENTS IN BONDS. Authorizes a security agreement to contain any agreements and provisions customarily contained in instruments securing bonds. Prohibits the officer from incurring a pecuniary liability or a charge on the general credit of the office, the partnership, this state or against the taxing powers of this state. Authorizes a security agreement securing the bonds to provide, in the event of default in payment of the principal of or interest on the bonds or in the performance of an agreement contained in the proceedings or security agreement, the payment and performance to be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect obligations and to apply revenues pledged according to the proceedings or the provisions of the security agreement. Authorizes the security agreement to provide that in the event of default or the violation of an agreement contained in the security agreement it may be foreclosed by proceedings at law or in equity and that a trustee under the security agreement or the holder of a bond it secures may become the purchaser at a foreclosure sale, if the trustee or holder is the highest bidder. Provides that a breach of a security agreement does not impose pecuniary liability on the state, the office, or the partnership or any charge on the general credit of the office, the partnership, or the state or against the taxing power of the state. Authorizes the trustee or trustees under a security agreement or a depository specified by the security agreement to be any person that the office designates. Sec. 483.013. REFUNDING BONDS. Sets forth the guidelines relating to refunding of bonds by the office in the amount that the office consider necessary to refund the principal of the refunded bonds. Sec. 483.014. BOND PROCEEDS; FUNDS. Authorizes the proceeds from the sale of bonds issued under Section 483.011 to be applied only for the purpose for which the bonds were issued, except that any premium or secured interest received in the sale shall be applied to the payment of the principal or interest on the bonds sold and, if a portion of the proceeds is not needed for the purpose for which the bonds were issued, that portion shall be applied to the payment of the principal of or interest on the bonds. Sets forth the guidelines relating to the depositing of funds, the establishment of certain accounts, the investment and reinvestment of the funds by the comptroller, and the use of deposited funds by the office. Sec. 483.015. TAX EXEMPTION. Provides that the bonds and the income from the bonds are exempt from taxation in this state, except for inheritance, estate, or transfer taxes. Sec. 483.016. OBLIGATIONS AS LEGAL INVESTMENTS FOR FIDUCIARIES. Provides that bonds, debentures, notes, or other evidences of indebtness of the office are securities in which certain entities may invest funds, including capital, in their control or belonging to them. Provides that the bonds, debentures, notes, or other evidence of indebtness of the office are also securities that may be deposited with and received by certain entities for any purpose for which the deposit of bonds or other obligations of the state are authorized. Sec. 483.017. PROGRAM GUIDELINES. Authorizes the office to establish rules for determining which export businesses may participate in programs established by the office. Requires the rules to state that the office's policy is to provide programs for providing to export businesses financial assistance that otherwise would not be made; the office considers to present a reasonable risk and have a sufficient likelihood of repayment; and will create or maintain employment in the state. Requires the office to adopt collateral or security requirements to ensure the full repayment of financial assistance and the solvency of any program implemented under this subchapter. Requires financial assistance under this subchapter to be approved by the office. Requires the office to establish criteria for lenders that may participate in the programs established under this subchapter. Requires a lender, as a condition of participation, to agree to conduct an investigation as it considers necessary to determine the export business's viability, the economic growth to be derived, the prospects for repayment, and other facts that it considers necessary to determine whether the participation by the export business is consistent with the purposes of this subchapter. Requires export businesses or lenders participating in the programs established under this subchapter to pay the costs of applying for, participating in, administering, and servicing the program in amounts that the office considers reasonable and necessary. Requires the office to establish a procedure to ensure prompt review of applications for financial assistance and to establish conditions under which review and approval of those transactions may be delegated to participating lenders or to insurers or guarantors of the office's bonds, programs, or loans. Sec. 483.018. TEXAS EXPORTERS LOAN FUND. Sets forth the definition of the Texas exporters loan fund and related guidelines for the fund. Authorizes the office to make guarantee loans or make loans with a term of one year or less made by private lenders to Texas businesses to finance activities of those businesses entering or expanding into export markets. Requires the office to give preference to Texas products having the highest percentage of their total value represented by Texas source components, labor, or intellectual property. Sets forth the parameters for the terms of a loan guarantee or loan under this section. Requires the office to assist Texas businesses in determining eligibility for participation in the program established by this section, preparing necessary paperwork, identifying potential lenders, and explaining the program to lenders. Requires the office to provide training to persons in small development centers and export assistance centers to disseminate information concerning the program established by this section throughout the state. Requires the costs of administering the program to be paid by interest earned on money in the fund and by fees collected in connection with the program. SUBCHAPTER B. ELECTRONIC DATE BASE Sec. 483.019. ELECTRONIC DATA BASE. Requires the office to develop an electronic data base to compile international trade information. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter. Requires the office to connect that data base with appropriate state, federal, and international communication networks. Sets forth the membership of the electronic data base advisory committee. Provides that if a member of the advisory committee who represents a university ceases to be employed by the university, the member's position on the advisory committee becomes vacant on the day employment ceases. Requires a vacancy to be filled by the president of the university that the member represents. Requires the advisory member to recommend to the office procedures for the dissemination of the data base. Authorizes the office to accept gifts, grants, and donations from any source for the operation of the data base. SUBCHAPTER C. SHARED FOREIGN SALES CORPORATIONS Sec. 483.020. DEFINITION. Defines "shared foreign sales corporation." Sec. 483.021. CREATION AND OPERATION OF SHARED FOREIGN SALES CORPORATIONS. Requires the office to encourage and assist in creation and operation of shared foreign sales corporations to benefit businesses in this state. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter to the fullest extent permitted by the Texas Constitution. Authorizes certain activities for the office to participate in to carry out this duty. Sec. 483.022. FEES. Authorizes the office and the partnership to collect fees for services provided under this subchapter in amounts determined by the office and the partnership to be necessary to cover the cost of administering this subchapter. SUBCHAPTER D. TEXAS-MEXICO AUTHORITY Sec. 483.023. ADVISORY BOARD. Provides that an advisory board named the TexasMexico Authority (authority) is created to study all Texas-Mexico issues and problems. Provides that the advisory board consists of six members appointed by the governor with the advice and consent of the senate. Provides that members of the advisory board serve staggered six-year terms with the terms of two members expiring February 1 of each oddnumbered year. Requires the governor to select a presiding officer from the board's members. Requires the advisory board to provide information and advice to the office, the governor, the legislature, and the partnership regarding the free-trade agreement between Mexico and the U.S. and the impact of a free-trade agreement on the state. Sets forth the people and entities the advisory board is required to report to annually on all aspects of the state's relations with Mexico. Sec. 483.024. COMPACT EXPLORATION WITH THE UNITED MEXICAN STATES. (a) Requires the authority to explore, develop, and negotiate interstate compacts relating to trade, infrastructure, and other matters with the appropriate officials of Mexico or any of its political subdivisions or any other foreign trading partners and to present any negotiated compacts to the Texas Legislature and the governing body of the appropriate foreign governmental entity. (b) Prohibits a member of the authority from receiving compensation for services under this section and from being reimbursed for actual and necessary expenses incurred in performing services under this section. (c) Requires the office to contract with the partnership to provide office space, supplies, expertise, the lead staff, and other necessities for the authority's work under this section. Authorizes the authority to receive assistance, expertise, and staffing from other state agencies as appropriate. (d) Authorizes the governor to make any initial inquiries and invitations that are necessary on behalf of the authority to officials of the Mexican government, a political subdivision of Mexico, a foreign government, and the U.S. government. Provides that it is the intent of the legislature that the governor invite the officials to appoint a body to explore, develop, and negotiate compacts with the authority that may be presented to the appropriate governmental bodies for consideration, adoption, or approval. (e) Authorizes the authority to develop issues related to trade, infrastructure, and other matters that are appropriate subjects for a compact and present those issues to its counterparts of foreign governmental entities for their consideration and for negotiation. Authorizes the authority to consider, negotiate, and report on issues proposed by its counterparts, the governor, and concurrent resolution of the legislature. (f) Authorizes the authority to make inquiries, gather information, and seek legal advice as necessary to ensure that its activities and any proposed compact conform to U.S. laws. (g) Authorizes the authority to give a written biennial report of its activities to certain entities during December of each even-numbered year. (h) Requires the authority to present to the legislature for consideration and possible adoption each proposed compact that has been agreed to by the authority and one of its counterparts. (i) Provides that this section does not affect any right of an agency or officer of the state to enter into discussions or any form of agreement with other states or nations under other law. SUBCHAPTER E. MISCELLANEOUS PROVISIONS Sec. 483.025. HONORARY COMMERCIAL ATTACHE PROGRAM. Authorizes the partnership to develop a network of foreign nationals to serve as contacts between the state and foreign business and investors. Sec. 483.026. CONFIDENTIALITY. Provides that the information collected by the partnership concerning certain commercially sensitive information of a lender or export business is confidential unless the lender or export business consents to disclosure of the information. CHAPTER 484. INDUSTRY RECRUITMENT Sec. 484.001. MAJOR EMPLOYER DEVELOPMENT PROGRAMS. Authorizes the office to develop and plan programs for the purpose of promoting and encouraging the location and expansion of certain enterprises within this state and to coordinate the activities of local governments related to the programs. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter. Provides that the Texas Major Employer Development Corporation (TMEDC) is created to assist the office and act on behalf of the office. Requires TMEDC to be incorporated. Requires TMEDC to be governed by a board of directors appointed by the board of the partnership. Sets forth the powers of TMEDC. Requires all revenue bonds issued by TMEDC to state on their face that the bonds are payable solely from the revenues pledged for that purpose and that the bonds do not and shall not constitute a legal or moral obligation of the state, the office, the partnership, or any other agency. Prohibits the bonds of TMEDC from being issued unless approved by certain entities. Requires TMEDC to make an effort to assist disadvantaged businesses to receive at least 10 percent of the total value of each construction contract award for construction and the purchase of supplies, materials, services, and equipment that the corporation expects to make in connection with the issuance of bonds and any lease, sale, and loan agreement made under this section by TMEDC. Requires TMEDC to annually report to the legislature and the governor on the level of disadvantaged business participation as it pertains to TMEDC's contracts. Sets forth the required contents of the report. Defines "disadvantaged business." CHAPTER 485. RURAL AND COMMUNITY DEVELOPMENT SUBCHAPTER A. TEXAS RURAL ECONOMIC DEVELOPMENT PROGRAM Sec. 485.001. SHORT TITLE: Texas Rural Economic Development Act. Sec. 485.002. PURPOSE. Sets forth the legislature's findings. Sets forth the purpose of this subchapter. Requires the office to give first preference to assistance to the food and fiber processing industries in administering this subchapter. Sec. 485.003. DEFINITIONS. Defines "equity," "federal agency," "fund," "private lender," "project," "qualified application," "rural area," "user," "institution of higher education," and "private institution of higher education." Sec. 485.004. RURAL AFFAIRS. Requires the office to contract with the partnership to maintain a business unit for rural and community development to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Requires the rural and community development business unit to address the special needs of rural communities and businesses and assist those communities and businesses. Sec. 485.005. LOAN GUARANTEES. Authorizes the office to guarantee not more than 90 percent of a loan made by a private lender or to make loans to fund a project. Requires the office to determine certain terms and conditions for each guarantee. Prohibits the office from making a loan guarantee of loan, except on approval of a qualified application submitted by a user or private lender for a project. Authorizes the office, on approval of a qualified application and the office's determination that the establishment of a project has accomplished or will accomplish the public purposes of this subchapter, to provide certain loan guarantee or make a certain loan under certain conditions. Requires the office, before making a loan guarantee or loan, to have determined that the user has obtained from other independent and responsible financial sources a firm commitment for all other funds in excess of the loan guaranteed or loan made by the office, and that the sum of those funds and the equity to be provided by the user are adequate for the completion and operation of the project. Provides that this subchapter does not prohibit the use of money in the Texas rural economic development fund for the purposes of this subchapter. Requires the office to report to the comptroller the name of any user who is in default on a loan guaranteed or loan made under this subchapter and with respect to which the office has been required to honor a guarantee. Prohibits the comptroller from issuing a warrant to the user while the user is in default. Sec. 485.006. PAYMENTS NOT TO BE MADE TO DEFAULTING USERS. Requires the office to report to the comptroller the name of any user who is in default on a loan guaranteed under this subchapter and with respect to which the office has been required to honor a guarantee. Prohibits the comptroller from issuing a warrant or initiating an electronic funds transfer to the user while the user is in default. Authorizes the comptroller to issue a warrant to the assignee of a user who is in default only if the assignment became effective before the user defaulted. Provides that this section does not prohibit the comptroller from issuing a warrant or initiating an electronic funds transfer to pay the compensation of a state officer or employee. Sets forth the application of this subsection. Prohibits a state agency from using funds inside or outside the state treasury to pay a user if the agency knows the user is in default on a loan guaranteed under this subchapter and with respect to which the office has been required to honor a guarantee. Provides that this subsection does not prohibit a state agency from paying the assignee of a user who is in default if the assignment became effective before the user defaulted. Provides that this subsection does not prohibit a state agency from paying the compensation of a state officer or employee. Prohibits the comptroller from reimbursing a state agency for a payment that is made in violation of this subsection. Defines "compensation," "state agency," and "state officer or employee." Sec. 485.007. GUARANTEE-TO-RESERVE RATIO. Authorizes the office to guarantee loans as provided by Section 485.005 in an amount that exceeds the amount available in the Texas rural economic development fund. Prohibits the loan guarantees from exceeding the guarantee-to-reserve ratio set by the office. Requires the office to adopt a guarantee-toreserve ratio that determines the amount of loan guarantees that may be made that exceed the amount available in the Texas rural economic development fund. Prohibits the ratio of guarantees to the amount of money available in the Texas rural economic development fund from exceeding two to one. Requires the office to review the guarantee-to-reserve ratio annually and adjust the ratio as appropriate. Requires the office to consider certain items in reviewing the guarantee-to-reserve ratio. Requires the state auditor to review the loan guarantee program and payment activity and make recommendations based on that review to the office about the program and the guarantee-to-reserve ratio. Requires a recommendation to the office to be made by September 1 of each year. Sec. 485.008. PENALTY FOR FALSE INFORMATION ON APPLICATION. Sets forth the penalties for an applicant who knowingly provides false information in application under this subchapter. Sec. 485.009. ADDITIONAL POWERS AND DUTIES. Sets forth additional required duties of the office. Authorizes the office to employ counsel, and engineering, financial, or other consultants as required in carrying out its functions under this subchapter. Authorizes the office to obtain professional services in cooperation with state agencies or independently. Prohibits the office and the partnership from borrowing money, incurring financial obligations, or pledging the credit or taxing power of the state, a municipality, or political subdivision of the state in the administration of this subchapter. Sec. 485.010. FUND. Provides that the Texas rural economic development fund is an account in the general revenue fund. Sets forth the contents of the Texas rural economic development fund. Authorizes the office to deposit funds issued under Chapter 488A in the Texas rural economic development fund. Sets forth the authorized uses of the Texas rural economic fund by the office. Sec. 485.011. DIRECTIVE. Requires the office to conduct a detailed, comprehensive analysis of the availability of federal, state, and local government and private sector rural economic development business outreach and data services in Texas. Requires the analysis to specifically examine the availability of certain data banks and certain business information outreach service offices or centers. Requires the office to contract with the partnership and to consult with the governor, economic development officials, economic development experts in the private sector, and the academic community in Texas in conducting the analysis required by this section. Authorizes the cost of the analysis and establishment of the rural economic development data base required by this section to be paid from funds in the Texas rural economic fund in an amount not to exceed $300,000. Sec. 485.012. CRITERIA. Requires the office, in assessing the availability of rural economic development data services in Texas, to determine the capability of the data banks to provide a socioeconomic profile of each trade area, region, or sector. Requires the office to determine the ability of a data bank to compile certain information. Sec. 485.013. BUSINESS SERVICE OUTREACH STUDY. Requires the office, in assessing the availability of business information outreach service offices in Texas, to determine the capability of federal, state, and local government and private sector programs in Texas. Sec. 485.014. REVIEW. Requires the comptroller to review the implementation of Sections 485.011-485.013 of this chapter and assist in carrying out the assessment of programs and activities authorized in those actions. Requires the comptroller to make periodic written reports to the appropriate committees of the legislature regarding the studies and analysis to be prepared by the partnership under a contract with the office. Sec. 485.015. GIFTS AND GRANTS. Authorizes the office and the partnership to accept gifts, grants, and donations from any source for the purpose of this subchapter. SUBCHAPTER B. AGRICULTURE MARKET EXPANSION Sec. 485.016. DEFINITIONS. Defines "small business incubator," "eligible lending institution," "eligible borrower," "alternative agricultural crops," "linked deposit," "microenterprise," and "rural area." Sec. 485.017. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sec. 485.018. CREATION OF PROGRAMS. Requires the office to create an agricultural diversification program to support commercial use of agricultural research and innovation; increase the capabilities of community and regional organization to train and assist new or expanding agricultural-based businesses; start small business incubators; and encourage private commercial loans for enhanced production, processing, and marketing of certain agricultural crops. Requires the office to create a microenterprise program to provide financial assistance to microenterprises in rural areas. Sec. 485.019. RESEARCH AND INNOVATION. Authorizes the office to administer an agricultural diversification grant program supporting research and innovation leading to organizational or marketing improvement in business based on agriculture or to the commercialization of new crops, new agricultural products, or new production processes. Requires a recipient of a grant to be a nonprofit organization. Requires a grant recipient to match the amount of the state grant with an equal amount of other money, with at least onehalf of the matching money coming from the private sector. Requires the office to review and evaluate each grant application submitted and award the grants. Prohibits a grant from exceeding $50,000. Sec. 485.020. MICROENTERPRISE SUPPORT PROGRAM LOANS. Authorizes the office to administer a loan program supporting established and proposed microenterprises in rural areas by providing loans to expand, modernize, or otherwise improve established microenterprises and to begin operation of proposed microenterprises. Authorizes a proposed microenterprise loan application to receive a loan of up to $15,000 to begin operation of the microenterprise. Authorizes an established microenterprise loan applicant to receive a loan of up to $30,000 to expand, modernize, or otherwise improve an established microenterprise. Authorizes the office to reserve a portion of the total rural microenterprise development fund for use in cooperative loan programs established with the participation of other public or private lenders. Prohibits a financial assistance in the form of a loan from being used to refinance an existing debt of a proposed or existing microenterprise. Sec. 485.021. BUSINESS ASSISTANCE. Requires the office to create an agricultural diversification grant program to increase the capabilities of community and regional organizations to provide training and assistance to new and expanding businesses based on agriculture. Requires a recipient of a grant to be a nonprofit community or regional organization. Requires a grant recipient to match the amount of the state grant with an equal amount of other money. Requires the office to evaluate each grant application submitted and award the grants. Prohibits a grant from exceeding $50,000. Sec. 485.022. SMALL BUSINESS INCUBATORS. Requires the office to create an agricultural diversification grant program to provide seed money for self-financing small business incubators. Requires the incubators to provide business services to small enterprises that process or market agricultural crops in this state or that produce alternative agricultural crops in this state. Requires a recipient of a grant to be a local nonprofit organization. Requires a grant under this section to match the amount of the state grant with assets valued at $3 for every $1 of the state grant. Requires the state grant to be used primarily for professional services. Authorizes the local matching share to be in the form of land, buildings, business assistance, and dedicated loan pools as well as cash contributions. Requires the office to evaluate each grant application and award the grants. Prohibits a grant from exceeding $100,000. SEc. 485.023. LINKED DEPOSIT PROGRAM. (a) Authorizes the office to establish a linked deposit program to encourage commercial lending for the enhanced production, processing, and marketing of certain agricultural crops and for the purchase of water conservation equipment for agricultural production purposes. (b) Requires the office to promulgate rules for the loan portion of the linked deposit program. Sets forth the required parameters of the rules. (c) Authorizes an eligible lending institution to solicit applications from eligible borrowers in order to participate in the linked deposit program. (d) Requires the eligible lending institution, after reviewing an application and determining that the applicant is eligible and creditworthy, to send the application for a linked deposit loan to the office. (e) Requires the eligible lending institution to certify the interest rate applicable to the specific eligible borrower and to attach it to the application sent to the office. (f) Requires the office to recommend to the state the acceptance or rejection of the application. (g) Requires the comptroller to place a linked deposit with the applicable eligible lending institution for the period the comptroller considers appropriate, after acceptance of the application. Prohibits the comptroller from placing a deposit of a period extending beyond the state fiscal biennium in which it is placed. Authorizes the comptroller to place time deposits at an interest rate described by Section 485.016(5)(A), Government Code. (h) Requires the eligible lending institution and the state to enter into a written deposit agreement containing the conditions on which the linked deposit is made prior to the placing of the linked deposit. (i) Authorizes the comptroller to withdraw the linked deposits if a lending institution holding linked deposits ceases to be a state depository. (j) Authorizes the office to adopt rules that create a procedure for determining priorities for loans granted under this subchapter. Requires each rule adopted to state the policy objective of the rule. Sets forth what may be included in the policy objectives. Sec. 485.024. COMPLIANCE. Requires an eligible lending institution to loan money to eligible borrowers in accordance with the deposit agreement and this subchapter upon accepting a linked deposit. Requires the eligible lending institution to forward a compliance report to the office. Requires the office to monitor compliance with this subchapter and inform the comptroller of noncompliance on the part of an eligible lending institution. Sec. 485.025. STATE LIABILITY PROHIBITED. Provides that a state is not liable to an eligible lending institution for payment of the principal, interest, or any late charges on a loan made to an eligible borrower. Provides that a delay in payment or default on a loan by an eligible borrower does not affect the validity of the deposit agreement. Provides that linked deposits are not an extension of the state's credit within the meaning of any state constitutional prohibition. Sec. 485.026. LIMITATIONS IN PROGRAM. Provides that at one time, not more than $5 million may be placed in linked deposits. Sets forth the maximum amount of certain loans authorized under this subchapter. Requires a loan to be applied to the purchase or lease of land, equipment, seed, fertilizer, direct marketing facilities, or processing facilities, or the payment for professional services. Sec. 485.027. CRITERIA FOR ALL GRANTS. Sets forth the factors the office is require to consider in evaluating applications for grants. Sec. 485.028. MONEY FOR GRANTS AND LOANS. Authorizes the office to accept gifts and grants of money from certain entities or other persons for use in making grants and loans under the agricultural diversification program and the rural microenterprise support program. Authorizes the legislature to appropriate money for grants and loans under the programs. Sec. 485.029. RURAL MICROENTERPRISE DEVELOPMENT FUND. Provides that the rural microenterprise development fund is an account in the general revenue fund. Sets forth the contents of the rural microenterprise development fund. Requires the rural microenterprise development fund to operate as a revolving fund, the contents of which shall be applied and reapplied for the purposes of the rural microenterprise support program. SUBCHAPTER C. FOOD AND FIBERS COMMISSION Sec. 485.030. POLICY. Sets forth the purpose of the Texas Food and Fibers Commission. Sec. 485.031. ORGANIZATION. Sets forth the composition of the Texas Food and Fibers Commission. Sec. 485.032. ADMINISTRATION. Requires each member of the Texas Food and Fibers Commission to serve a two-year term as chairman. Prohibits a person from serving as a member of the Texas Food and Fibers Commission or act as the general counsel if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the Texas Food and Fibers Commission. Requires the Texas Food and Fibers Commission to meet a least once each year. Requires each member of the Texas Food and Fibers Commission to designate a person on his or her staff as a liaison officer to work with commission committees, commission staff, and agencies contracting or consulting with the commission. Requires the executive director of the Texas Food and Fibers Commission to coordinate the operations of the committees and staff personal and to oversee the work done for the Texas Food and Fibers Commission by contracting or consulting agencies. Requires the Texas Food and Fibers Commission to adopt rules for commission and committee proceedings. Sec. 485.033. POWERS AND DUTIES. Requires the Texas Food and Fibers Commission to conduct certain surveys, research, and investigations. Sets forth requirements for rules adopted by the Texas Food and Fiber Commission. Requires the Texas Food and Fibers Commission to consider certain summaries and certain reports before awarding a contract for research. Authorizes the Texas Food and Fibers Commission to contract with the partnership, any state educational institution, state agency, or federal agricultural agency to perform services for the Texas Food and Fibers Commission or for the use of facilities. Authorizes the Texas Food and Fibers Commission to compensate the contracting agency or other entity from money appropriated for the purposes of this subchapter. Provides that the awarding of contracts by the Texas Food and Fibers Commission is restricted to certain contracts. Requires the Texas Food and Fibers Commission to give priority in the awarding of contracts under this subchapter to contracts for production research, but the Texas Food and Fibers Commission may award a research contract for marketing processes. Prohibits the Texas Food and Fibers Commission from awarding a contract for a direct marketing or other promotional program. Requires the Texas Food and Fibers Commission to develop and implement policies that provide the public with a reasonable opportunity to appear before the Texas Food and Fibers Commission and to speak on any issue under the jurisdiction of the Texas Food and Fibers Commission. Sec. 485.034. NATURAL FIBERS COMMITTEE. Requires the chairman of the Texas Food and Fibers Commission to appoint not more than 25 persons to a natural fibers committee. Requires persons appointed to be representative of the interests of persons in the natural fibers industry. Provides that the members of the committee serve for terms of two years expiring on the last day of the state fiscal year in odd-numbered calender years. Requires the committee to elect a chairman annually. Requires the committee to meet at least once each year at a time specified by the committee chairman for certain purposes. Sec. 485.035. FOOD PROTEIN COMMITTEE. Requires the chairman of the Texas Food and Fibers Commission to appoint not more than 25 persons to a food protein committee. Requires persons appointed to the committee to be representative of the interests of persons in the food protein industry. Sets forth the terms of the members. Requires the committee to elect a chairman annually. Requires the committee to meet at least once each year at a time specified by the committee chairman for a certain purpose. Sec. 485.036. EXECUTIVE ADVISORY COMMITTEE. Sets forth the composition of the executive advisory committee. Requires the chairman of the committee to appoint certain representatives in making appointments to the executive advisory committee from the industry advisory committees. Sets forth the terms of members of the executive advisory committee. Requires the executive advisory committee to elect a chairman annually. Requires the executive advisory committee to meet semiannually at times specified by the committee chairman. Authorizes the chairman of the Texas Food and Fibers Commission to call or authorized special meetings of the executive advisory committee. Requires the executive advisory committee to review the work of the Texas Food and Fibers Commission and advise the Texas Food and Fibers Commission on matters relating to the programs and Texas Food and Fibers Commission's budgets. Sec. 485.037. FINANCES. Authorizes the Texas Food and Fibers Commission to accept gifts and grants from the United States and from private sources. Requires the Texas Food and Fibers Commission to prepare annually a report accounting for all funds received and disbursed by the Texas Food and Fibers Commission during the preceding fiscal year. Requires the annual report to meet the reporting requirements applicable to financial reporting provided in the General Appropriations Act. Requires funds appropriated for the purposes of this subchapter to be expended at the direction of the Texas Food and Fibers Commission on claims approved by a majority of the Texas Food and Fibers Commission. Prohibits the total amount of appropriations expended or encumbered by the Texas Food and Fibers Commission for purposes of research during a fiscal biennium from exceeding the amount of private gifts or grants to the Texas Food and Fibers Commission expended or encumbered for research during the same period. Provides that all money paid to the Texas Food and Fibers Commission is subject to Chapter 404F, Government Code. Sec. 485.038. STAFF; ADMINISTRATION. Requires the Texas Food and Fibers Commission to contract with the partnership to provide necessary staffing and to administer the functions under this subchapter. Sec. 485.0389. RESTRICTIONS ON EMPLOYMENT. Prohibits certain persons associated with certain Texas trade associations from being members of the Texas Food and Fibers Commission. Prohibits certain spouses of certain persons associated with certain Texas trade associations from being a member of the Texas Food and Fibers Commission. Defines "Texas trade association." Sec. 485.040. PUBLIC INTEREST INFORMATION AND COMPLAINTS. Requires the Texas Food and Fibers Commission to prepare certain information of public interest and to make the information available to the public and appropriate state agencies. Requires the Texas Food and Fibers Commission, by rule, to establish methods by which consumers and service recipients are notified of certain information of the Texas Food and Fibers Commission for purposes of directing complaints to the Texas Food and Fibers Commission. Authorizes the Texas Food and Fibers Commission to provide for that notification on each registration form, application. or written contract for services of an individual or entity regulated under this chapter. Requires the Texas Food and Fibers Commission to keep a file about certain complaints. Requires the Texas Food and Fibers Commission to provide to certain persons and entities about the Texas Food and Fibers Commission's policies and procedures pertaining to complaint investigation and resolution. Requires the Texas Food and Fibers Commission to notify certain persons and entities of the status of the complaint unless written notice would jeopardize an undercover investigation. Requires the Texas Food and Fibers Commission to keep information about each complaint filed with the Texas Food and Fibers Commission. Sets forth the required information. Provides that the Texas Food and Fibers Commission is subject to the open meetings law, Chapter 551, Government Code, and the administrative procedure law, Chapter 2001, Government Code. CHAPTER 486. DIRECT BUSINESS SERVICES SUBCHAPTER A. SMALL BUSINESS ASSISTANCE Sec. 486.001. DEFINITIONS. Defines "historically underutilized business," "SBA office," and "small business." Sec. 486.002. OFFICE OF SMALL BUSINESS ASSISTANCE; CONTRACT WITH PARTNERSHIP. Provides that the office of small business assistance (SBA office) is within the office. Requires the SBA office to contract with the partnership to perform the SBA office's duties and exercise its powers and implement and administer the programs. Sec. 486.003. DUTIES. Sets forth the required duties of the SBA office. Authorizes the SBA office to provide community-based services to carry out its duties, including the creation of a pilot program. Provides that the pilot program will give first preference to serving economically distressed areas, rural areas, or disadvantaged business or assisting development of specific industries. Authorizes the SBA office to require areas served by certain personnel to provide certain contributions to support the personnel. Provides that a certain report will be submitted to the legislature. Sec. 486.004. RULES AFFECTING SMALL BUSINESSES. Sets forth the guidelines relating to notice of a proposed state agency rule affecting small businesses. Authorizes the SBA office to coordinate with the business ombudsman of the partnership agencies to consolidate and simplify rules and certain requirements that affect small businesses. Authorizes the SBA office to recommend the elimination, consolidation, or amendment of certain rules or laws. Sec. 486.005. ASSISTANCE FROM OTHER AGENCIES. Requires the office to obtain from agencies appropriate information needed by the SBA office to carry out its duties and those agencies are required to assist the office in furthering certain purposes. Authorizes the comptroller to assist the SBA office in furthering the purposes of this subtitle by entering into certain interagency agreements with the SBA office, other agencies or the partnership. Sec. 486.006. CONTRACTS AWARDED TO SMALL OR HISTORICALLY UNDERUTILIZED BUSINESSES. Requires each state agency to keep statistical data and other records on the number of contracts awarded by the agency to small or historically underutilized businesses. Sec. 486.007. LOANS TO ECONOMICALLY DISTRESSED COMMUNITIES. Authorizes the SBA office to create innovative loan programs to aid small businesses in communities experiencing defense-related layoffs or other severe economic problems. Authorizes these programs to be established in cooperation with community-based organizations and other private or public leaders. Authorizes the programs to include loans or loan guarantees to businesses that do not qualify for other sources of public or private credit. SUBCHAPTER B. SMALL BUSINESS LINKED DEPOSIT PROGRAM Sec. 486.008. DEFINITIONS. Defines "eligible borrower" and "eligible lending institution." Sec. 486.009. LINKED DEPOSIT. Provides that a linked deposit is a time deposit governed by a written agreement between the state and an eligible lending institution that provides certain terms and conditions. Sec. 486.010. LINKED DEPOSIT PROGRAM. Authorize the office to contract with the partnership to establish a linked deposit program to encourage commercial lending for the development of small businesses in distressed communities and historically underutilized businesses and to perform the office's duties and exercise its powers and implement and administer the program. Requires the office to adopt rules for the loan portion of the program. Authorizes an eligible lending institution to solicit loan applications from eligible borrowers. Requires the lending institution to send an application for a linked deposit loan to the office under certain conditions. Requires the eligible lending institution to certify the interest rate applicable to the specific eligible borrower and attach it to the application sent to the office. Requires the office to recommend to thc comptroller the acceptance or rejection of an application. Requires the eligible lending institution and the state to enter into a written deposit agreement containing the conditions on which the linked deposit is made prior to the placing of a linked deposit. Requires the deposit agreement to provide certain terms and conditions. Sec. 486.011. COMPLIANCE. Requires an eligible lending institution, on acceptance of its application to receive linked deposits, to loan money to an eligible borrower in accordance with the deposit agreement and this subchapter. Requires the eligible lending institution to forward a compliance report to the office. Requires the office to monitor compliance with this subchapter and to inform the state comptroller of noncompliance on the part of an eligible lending institution. Sec. 486.012. DESIGNATION AS DISTRESSED COMMUNITY. Authorizes a municipality to apply to the office for designation of a subarea of the municipality as a distressed community. Sets forth the required contents of the application. Requires the office to designate the subarea for which an application is filed as a distressed community if certain conditions are satisfied and certain evidence is sufficient. Sec. 486.013. STATE AND PARTNERSHIP LIABILITY PROHIBITED. Provides that the state, the office, and the partnership are not liable to an eligible lending institution for payment of the principal, interest, or any late charges on a loan made to an eligible borrower. Provides that linked deposits are not an extension of the state's credit within the meaning of any state constitutional prohibition. Sec. 486.014. LIMITATIONS IN PROGRAM. Provides that not more than $3 million may be placed in linked deposits. Sets forth the maximum amount of a loan. Requires the borrower to apply a loan granted to working capital or to the purchase, construction, or lease of capital assets. SUBCHAPTER C. SMART JOBS FUND PROGRAM Sec. 486.027. DEFINITIONS. Defines "business development," "demand occupation," "employee," "employer," "existing employer," "family wage job," "in-kind contribution," "job," "minority employer," "minority group members," "program," "project," "provider," "state average weekly wage," "targeted industry," "trainee," and "wages." Sec. 486.028. SMART JOBS FUND PROGRAM; ADMINISTRATION. Provides that the smarts jobs fund program (program) is created in the office as a work force development incentive program to enhance employment opportunities and to meet the needs of existing and new industries in this state. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the smart jobs program. Sets forth the priorities of the program. Requires at least 60 percent of the money spent under the program to be used for projects that assist existing employers. Sec. 486.029. RULES. Requires the office to adopt rules as necessary to implement the program. Sec. 486.030. FUNDING. Provides that the smart jobs fund is established as a special trust fund. Sets forth the composition of the smart jobs fund. Provides that the program is funded through the smart jobs fund. Sets forth the uses of the smart jobs fund. Prohibits the costs in any fiscal year from exceeding five percent of the total funds appropriated to the smart jobs fund in that year. Requires the office to immediately transfer the excess of the smart jobs fund under certain conditions to the unemployment compensation fund. Sec. 483.031. GRANTS. Authorizes the office to award grants from the smart jobs fund for certain projects. Requires the office to ensure that at least 20 percent of the total dollar amount of grants awarded under the program are awarded to minority employers. Provides that the program is job-driven. Prohibits a grant from being awarded unless each employer certifies certain conditions. Authorizes an employer to apply for a grant if the employer is required to reduce or eliminate the employer's work force because of reductions in overall employment within an industry or a substantial change in the skills required to continue the employer's business because of technological changes or other factors. Authorizes the office to modify the requirements of this section. Prohibits grants for which the office has modified the requirements of this section from, in any fiscal year, exceeding 10 percent of the total dollar amount of grants awarded under the program in that year. Prohibits grants, unless modified by the officer under rules adopted by the office, from being awarded for a project unless each employer certifies certain conditions. Prohibits a grant from being awarded for a project if the project will impair existing contracts for services or collective bargaining agreements. Sets forth an exception to such a prohibition. Requires the office to attempt to ensure that at least 50 percent of the total dollar amount of grants award is awarded to certain small businesses. Sets forth priorities for the awarding of grants. Sec. 486.032. GRANT APPLICATION. Sets forth who is authorized to apply for a grant. Requires a grant application to be filed with the office in a form approved by the office and to include a complete business and training plan. Authorizes the office to provide assistance to applicants in formulating the business and training plan required under Subsection (b). Requires the office to minimize the length of the application form and to act on a completed application by a certain date. Sec. 486.033. MATCHING REQUIREMENTS; EXEMPTIONS. Requires money provided under a grant for a project to be matched by private funds provided by the employer benefiting from the project in a certain amount. Requires the office to adopt rules modifying the requirements of Subsection (a) for certain employers and to adopt rules modifying the requirements of Subsection (a) for certain projects. Authorizes the employer matches to include documented in-kind contributions as well as wages paid to trainees during the training period. Sec. 486.034. TRAINEES. Requires the program to give priority to residents of this state. Sec. 486.035. CONTRACTS. Authorizes the office to approve any project that meets the requirements of this subchapter. Requires the office to enter into a contract with the grant applicant and with each employer participating in the project. Require the contract to specify those skills and competencies to be gained as a result of the project. Authorizes reimbursable costs to include only those expenses related to direct training in job-related skills. Prohibits total administrative costs for any particular project from exceeding 10 percent of the project's expenditures.. Requires each contract to provide a schedule for payment of smart jobs fund money. Sets forth the terms and conditions associated with the grant. Sec. 486.036. ANNUAL REPORT. Requires the office and the partnership to report to the governor and the legislature at the end of each fiscal year on the status of the program. Sets forth the required contents of the annual report. Sec. 486.037. EXPIRATION. Provides that this subchapter expires December 31, 1999. CHAPTER 487. TOURISM AND TRAVEL INDUSTRY DEVELOPMENT SUBCHAPTER A. TOURISM Sec. 487.001. LEGISLATIVE FINDINGS. Sets forth the legislative findings relating to tourism development and the marketing of this state as a travel destination. Sec. 487.002. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sec. 487.003. DUTIES. Sets forth the duties of the office relating to tourism development. Sec. 487.004. NAME AND PICTURE OF LIVING STATE OFFICIAL. Prohibits the name or the picture of a living state official from being used for advertising purposes under this subchapter. Sec. 487.005. ADVERTISEMENTS IN TOURISM PROMOTIONS. Authorizes the office to sell advertisements in travel promotions in any medium. Requires proceeds from the sale of advertisements to be deposited in the general revenue fund and may be used for advertising and marketing activities of the office as provided by Section 156.251, Tax Code. SUBCHAPTER B. DATE DEPOSITORY Sec. 487.006. DEFINITION. Defines "state agency." Sec. 487.007. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sec. 487.008. DUTIES. Sets forth the duties of the office under this subchapter. Sec. 487.009. AGENCY COOPERATION. Requires certain state agencies to execute a written agreement with the partnership providing for coordination of those activities with the partnership's activities under this subchapter. Provides that an agency is not required to supply information made confidential or the distribution of which is otherwise restricted by state law. Sec. 487.010. FEES. Requires the office to charge fees for services provided under this subchapter. Requires the fee to be in the amount necessary to cover the cost of providing the service. CHAPTER 488. ENTREPRENEURIAL AND CAPITAL DEVELOPMENT SUBCHAPTER A. DEVELOPMENT OF PRODUCTS Sec. 488.001. DEFINITIONS. Defines "director," "fund," "product," and "venture financing." Sec. 488.002. TEXAS PRODUCT DEVELOPMENT FUND; VENTURE FINANCING. Provides that the Texas product development fund is a revolving fund in the state treasury. Sets forth the contents of the Texas product development fund. Provides that money in the Texas product development fund is available for use by the office under this subchapter. Sets forth the guidelines for use of the Texas product development fund in venture financing projects. Requires the office, before approving the provision of venture financing to a person, to enter into an agreement with the person under which the office will obtain an appropriate portion of royalties, patent rights, equitable interests, or a combination of those royalties, rights, and interests from or in the product or proceeds of the product for which venture financing is requested. Requires contracts executed to include certain agreements. Sec. 488.003. POWERS AND DUTIES. Requires the office to contract with the partnership to perform the office's duties and its powers and implement and administer the programs under this subchapter. Gives the office to do certain powers and duties. Sec. 488.004. APPLICATION. Requires an application for venture financing to be delivered to the office, together with a reasonable application fee prescribed by the office. Requires the application to contain a business plan, containing certain information. Requires the office to determine certain conditions with respect to each application for venture financing. Requires the office to approve or deny the application for venture financing and promptly notify the applicant of its decision. Sec. 488.005. INFORMATION CONFIDENTIAL. Provides that certain information relating to a product, and the application or use of a product, and technological and scientific information is confidential and is not subject to disclosure under state law or otherwise. Requires that nothing in this subchapter to prevent or restrict the office or the partnership from obtaining information relating to a product or process from an applicant or recipient of a loan under this subchapter. Sec. 488.006. BONDS. Sets forth guidelines relating to the issuance of bonds, use of the proceeds from such bonds, and bond accounts to provide money for venture financing under this subchapter. Sets forth the guidelines relating to the terms and conditions of the bonds. Provides that all bonds issued by the office under this section are subject to review and approval by the attorney general. Sets forth the characteristics of the bonds, the permissible use of the bonds, and the taxation of bonds. Sec. 488.007. ELIGIBLE PROJECTS AND BORROWERS. Authorizes a bond to be made only to finance a project approved by the office. Requires the office, in determining eligible projects, to give special preference to projects that have the greatest likelihood of commercial success and have the greatest effect on job creation and retention in the state. Provides that the priority research area of agriculture will be funded according to the provisions of Chapter 58D, Agriculture Code. Requires the office to give consideration to certain persons and companies. Sec. 488.008. CONSIDERATION IN FINANCING. Sets forth the preferences relating to determining whether to provide financing under this subchapter by the office. Sec. 488.009. PROGRAM COORDINATION. Authorizes the office to coordinate the administration and funding of the programs established pursuant to Subchapter C and this subchapter. Sec. 488.010. RULES; IMMUNITY FROM LIABILITY. Requires the office to adopt rules establishing limits on the amount of each loan and otherwise governing the terms and conditions of the loans. Sets forth the immunity from liability provisions relating to certain persons. SUBCHAPTER B. SMALL BUSINESS INCUBATORS Sec. 488.011. DEFINITIONS. Defines "local sponsor," "small business," "small business incubator," and "tenant." Sec. 488.012. CREATION OF PROGRAM. Provides that the small business incubator program is established to foster and stimulate the development of new small businesses by providing low-interest loans and grants to local sponsors for the establishment and operation of small business incubators. Sec. 488.013. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter. Sec. 488.014. POWERS AND DUTIES. Sets forth the required powers and duties of the office under this subchapter. Authorizes the office to withdraw financial support from certain incubators. Requires the office and the partnership to work closely with designated local sponsors, offer advice and assistance, and promote through advertising and other appropriate means the concept, benefits, and availability of small business incubators. Sec. 488.015. DUTIES OF LOCAL SPONSOR. Sets forth the required duties of each local sponsor. Sec. 488.016. APPLICATION FOR LOAN OR GRANT. Authorizes a local sponsor to submit an application to the office to obtain a loan or grant to acquire, construct, or renovate real property to be used as a small business incubator or to acquire equipment to be used in the operations of a small business incubator. Requires the application to include certain information. Requires the office to review and approve or deny each application based on certain criteria. Sec. 488.017. APPLICATION TO BECOME TENANT. Requires an application to be submitted to a local sponsor in a form approved by the office and to include certain information. Requires the local sponsor to evaluate each applicant based on but not limited to certain criteria. Requires the local sponsor to notify each applicant for small business incubator space whose application it accepts of its decision to accept the applicant and whether space for the applicant in the small business incubator exists. Requires the local sponsor to notify each applicant it rejects of the rejection and to provide the reasons for the rejection. Sec. 488.018. DUTIES OF TENANT. Sets forth the required duties of a tenant within a small business incubator. Sec. 488.019. LOANS AND GRANTS. Authorizes a loan or grant provided to a local sponsor to be used only for the acquisition or lease of certain items. Prohibits a loan or grant to a local sponsor from exceeding the lesser of $250,000 or 50 percent of total eligible project costs. Authorizes a loan or grant for a facility that is currently leased for a small business incubator to be made only under certain conditions. Requires each loan to be adequately secured. Requires the office to determine the rate of interest on loans made under this subchapter. Sets forth the limitations on the terms of a loan. Sec. 488.020. CHALLENGE GRANTS. Authorizes the office to award a challenge grant to provide seed capital to a tenant to assist development of the business. Sets forth the requirements for each application for a challenge grant. Sets forth the prohibition of a challenge grant under certain conditions. Sec. 488.021. CONFIDENTIAL INFORMATION. Prohibits a local sponsor, the partnership, the office, or any other person from disclosing matters of a proprietary nature submitted by a person or business under this subchapter without the consent of the person or business submitting the information. Sec. 488.022. OFFICE REPORT. Requires the office to submit to the governor and legislature a report showing certain information on or before January 1 of each year. Requires the office in the report to attempt to identify the reasons that any businesses have left the state after starting a small business incubator. Sec. 488.023. SMALL BUSINESS INCUBATOR FUND. Provides that the small business incubator fund is a revolving fund in the state treasury. Sets forth the composition and uses of the small business incubator fund. Sec. 488.024. NONPROFIT STATUS. Requires the operation of the small business incubator for which a loan or grant is made under this subchapter to be conducted by a public or private nonprofit entity, and no part of its net earnings remaining after payment of its expenses may benefit any individual, firm, or corporation. Sec. 488.025. BONDS. Sets forth the guidelines for the issuance of bonds to carry out the small business incubator program. Sets forth the parameters of the terms and conditions of the bonds. Provides that all bonds issued by the office under this section are subject to review and approval by the attorney general. Sets forth the characteristics of the bonds, the permissible use of the bonds, and the taxation of bonds. Sec. 488.026. INVESTMENT POOLS. Authorizes the office to develop programs encouraging the creation of local investment pools to assist with the financing of businesses emerging from the incubator. Sec. 488.027. CONSIDERATIONS IN FINANCING. Sets forth the criteria the office is required to consider and give preference to in determining whether to provide financing under this chapter. SUBCHAPTER C. PRODUCT COMMERCIALIZATION Sec. 488.028. DEFINITION. Defines "advisory board" and "fund." Sec. 488.029. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sec. 488.030. FUND. Provides that the product commercialization fund is an account in the general revenue fund. Sets forth the contents of the product commercialization fund. Authorizes the product commercialization fund to accept funds from any source to carry out the purposes of this subchapter. Sets forth the uses of the product commercialization fund. Sec. 488.031. LOANS. Authorizes the office to make loans or loan guarantees to finance the commercialization of new or improved products or processes for which financing is not reasonably available from private sources. Requires the office to adopt rules establishing limits on the amount of each loan or loan guarantee and otherwise governing the terms and conditions of the loans and loan guarantees. Sets forth the requirement for such rules. Requires an application for a loan or loan guarantee to be in the form prescribed by the office. Authorizes the office to enter into certain agreements in connection with any loan or loan guarantee made subject to this subchapter. Sets forth the requirements for such agreements. Sec. 488.032. ELIGIBLE PROJECTS AND BORROWERS. Authorizes a loan or loan guarantee to be made under this subchapter only to finance a project approved by the Product Commercialization Advisory Board and the office. Sets forth the priorities to the office and the Product Commercialization Advisory Board in determining eligible projects. Authorizes the office and the Product Commercialization Advisory Board to make a loan or a loan guarantee to the governing body of certain enterprise zones. Sec. 488.033. INFORMATION CONFIDENTIAL. Provides that the information relating to a product or process and the application or use of a product or process, and technological and scientific information developed by an applicant for or recipient of a loan, is confidential and is not subject to disclosure under state law or otherwise. Requires nothing in this subchapter to prevent or restrict the office or the Product Commercialization Advisory Board from obtaining information relating to a product or process from an applicant or recipient of a loan under this subchapter. Provides that the Product Commercialization Advisory Board is not required to deliberate in an open meeting regarding certain matters. Provides that decisions or other actions as a result of the board's deliberations are not confidential and shall be made in an open meeting. Sec. 488.034. ADVISORY BOARD. Sets forth the composition of the Product Commercialization Advisory Board. Sets forth guidelines for appointments to the Product Commercialization Advisory Board by the governor. Sets forth the terms of the members of the Product Commercialization Advisory Board. Requires the governor to appoint the Product Commercialization Advisory Board's chairman from among its members. Provides that a member of the board, Product Commercialization Advisory Board, or other person acting on behalf of the partnership or the office in executing a contract, commitment, or agreement under this subchapter is not personally liable on the contract, commitment, or agreement. Sec. 488.035. PROGRAM COORDINATION. Authorizes the office to coordinate the administration and funding of the programs established pursuant to Subchapter A and this subchapter. SUBCHAPTER D. SMALL BUSINESS INNOVATION RESEARCH Sec. 488.036. DEFINITIONS. Defines "small business" and "small business innovation research program." Sec. 488.037. NOTICES RELATING TO PARTICIPATION. Sets forth the notification and acceptance requirements for the small business innovation research (SBIR) program Phase I award winners. Sec. 488.038. ELIGIBILITY. Sets forth the required conditions for a small business to be eligible for a state SBIR bridge award. Sec. 488.039. STATE SBIR BRIDGE AWARD. Requires the office, on certain findings, to notify a certain small business that it will award the business a state SBIR bridge award. Sets forth the total amount of the state SBIR bridge award made by the office. Sec. 488.040. DELIVERY OF STATE SBIR BRIDGE AWARD. Prohibits the office from disbursing money under this subchapter to a small business until certain conditions are met by the small business. Provides that the office has the right to refuse to make a state SBIR bridge award under certain conditions. Sec. 488.041. PROHIBITED USES. Prohibits the use of this money for travel, equipment, or facilities. Authorizes no more than one-third of the money awarded to a business under this subchapter to be used to contract for research or other related services. Sec. 488.042. PROPRIETARY INFORMATION. Prohibits the office and the partnership from disclosing proprietary information if confidentiality is requested by participants in this program. Sec. 488.043. REPORT. Requires the office to submit a report to high government officials detailing the results of the program. Sec. 488.044. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sec. 488.045. FUNDING. Authorizes the office to utilize royalties and equity interests derived under the provisions of Subchapter A to carry out the program established under this section. SUBCHAPTER E. CAPITAL DEVELOPMENT PROGRAM Sec. 488.046. LEGISLATIVE FINDINGS. Sets forth the legislative findings relating to the development and expansion of business, commerce, and industry in the state. Sec. 488.047. DEFINITIONS. Defines "cost," "Development Corporation Act," "project," and "user." Sec. 488.048. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this chapter. Sec. 488.049. POWERS AND DUTIES RELATING TO FINANCING. Requires the office to act on behalf of the state to carry out the public purposes of this subchapter and of the Development Corporation Act (DCA). Authorizes the office to issue bonds to finance the cost of projects. Authorizes the bonds to be secured as provided by Section 25(e) of the DCA. Provides that the office has the powers that are necessary to accomplish the purposes of this subchapter. Sets forth the offices authorized powers and duties. Sec. 488.050. BONDS. Provides that Sections 483.007-483.016 apply to the office's bonds issued under this subchapter. Authorizes bonds issued under this subchapter to mature serially or otherwise not more than 40 years after their date. Sec. 488.051. PROGRAM CRITERIA. Requires the office to establish criteria for determining which users may participate in programs established by the office under this subchapter. Requires the office to adopt collateral or security requirements to ensure the full repayment of any loan, lease, or installment sale and the solvency of any program implemented under this subchapter. Requires the office to approve all leases and sale and loan agreements made under this subchapter. Requires users participating in the programs established under this subchapter to pay the costs of applying for, participating in, and administrating and servicing the program in certain amounts. Sec. 488.052. STATEWIDE CERTIFIED DEVELOPMENT CORPORATION. Requires the office to create a statewide certified development corporation to carry out the purposes of the Small Business Investment Act of 1958 (15 U.S.C. Section 697). Sets forth the powers and rights of the statewide certified development corporation. Authorizes the statewide certified development corporation to contract with the office, partnership, counsel, and other advisors its board of directors considers necessary. Sets forth guidelines relating to the revenue and funds of the statewide certified development corporation and expenses incurred by the statewide certified development corporation. Requires the statewide certified development corporation to enter into a written agreement with the partnership for the provision of professional and management services. Sets forth the limited liability relating to certain person's actions associated with the statewide certified development corporation. SUBCHAPTER F. CAPITAL ACCESS PROGRAM Sec. 488.0530. CAPITAL ACCESS PROGRAM. Authorizes the office to contract with the partnership to develop, implement, and administer a capital access fund to provide a loan loss reserve for small business development. Sec. 488.0531. DEFINITIONS. Defines "capital access loan," "financial institution," "fund," "loan," "nonprofit organization," "participation financial institution," "program," "reserve account," and "small business." Sec. 488.0532. CAPITAL ACCESS FUND. Provides that the capital access fund is a special account in the general revenue fund. Sets forth the composition of the capital access fund. Sets forth the authorized uses of the capital access fund. Sec. 488.0533. TRANSFER OF MONEY FROM OTHER FUNDS TO THE CAPITAL ACCESS FUND. Sets forth the guidelines for the transfer of excess funds from the Texas exporters loan fund under Chapter 483, and the Texas rural economic development fund to the capital access fund at the beginning of each fiscal year. Sec. 488.0534. POWERS OF THE OFFICE IN ADMINISTRATING THE CAPITAL ACCESS FUND. Requires the office to have the powers necessary to carry out the purposes of this subchapter. Sec. 488.0535. CAPITAL ACCESS PROGRAM. Requires the office to establish a capital access program to assist a participating financial institution in making loans to small businesses and nonprofit organizations that face barriers in accessing capital. Requires the office to use money in the capital access fund to make a deposit in a participating financial institution's reserve account in an amount specified by this subchapter to be a source of money the institution may receive as reimbursement for losses attributable to loans in the program. Requires the office to determine the eligibility of a financial institution to participate in the program and may set a limit on the number of eligible financial institutions that may participate in the program. Sets forth the required condition for participation in the program by an eligible financial institution. Sets forth the required conditions of a loan in order for the loan to qualify as a capital access program. Sec. 488.0536. RULEMAKING AUTHORITY. Requires the office to adopt rules relating to the implementation of the capital access loan program and any other rules necessary to accomplish the purposes of this subchapter. Sets forth what the rules may be. Sets fort the required criteria for a line of credit to qualify for participation in the program. Sec. 488.0538. PROVISIONS RELATING TO CAPITAL ACCESS LOAN. Prohibits the office from determining the recipient, amount, or interest rate of a capital access loan (loan) or the fees or other requirements related to the loan. Provides that certain loans are not eligible to be enrolled under this subchapter. Requires the borrower of a capital access loan to apply the loan to working capital or to the purchase, construction or lease of capital assets. Sets forth the concept of working capital. Authorizes a loan to be sold on the secondary market. Sec. 488.0539. RESERVE ACCOUNT. Sets forth the guidelines relating to the establishment of a reserve account by the office for a participating financial institution in the capital access loan program. Sec. 488.0540. LIMITATIONS ON STATE CONTRIBUTION TO RESERVE ACCOUNT. Sets forth limitations on the amount deposited by the office into a participating financial institution's reserve account for the capital access loan program. Sec. 488.0541. RIGHTS OF STATE WITH RESPECT TO RESERVE ACCOUNT. Provides that all money in the reserve account established under this subchapter is the property of the state. Sets forth the guidelines relating to interest earned on the reserve account, excess reserves, and complete withdrawals of reserve accounts under certain conditions. Sec. 488.0542. ANNUAL REPORT. Requires a participating institution to submit an annual report to the office. Sets forth the required contents of the report. Sec. 488.0543. REPORTS AND AUDITS. Requires the office to submit to the legislature an annual status report on the activities of the program. Provides that the financial transactions of the capital access fund are subject to audit by the state auditor. Sec. 488.0544. STATE LIABILITY PROHIBITED. Provides that the state is not liable to a participating financial institution for payment of the principal, interest, or any late charges on a capital access loan. Sec. 488.0545. GIFTS AND GRANTS. Authorizes the office to accept gifts, grants, and donations from any source for the purposes of this subchapter. SUBCHAPTER G. TEXAS LEVERAGE PROGRAM Sec. 488.054. DEFINITIONS. Defines "fund," "loan recipient," and "program." Sec. 488.055. TEXAS BUSINESS ENHANCEMENT FUND; CREATION AND ADMINISTRATION. Requires the Texas business enhancement fund to be created as a special account in the general revenue fund and to operate as a guaranteed loan fund. Sets forth the contents of the Texas business enhancement fund and mandatory and permissible use of the Texas business enhancement fund. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the Texas business enhancement fund under this chapter. Sec. 488.056. POWERS OF OFFICE. Sets forth the powers the office has in administering the Texas business enhancement fund under this subchapter. Sec. 488.057. SUPPORT TO OFFICE BY OTHER STATE DEPARTMENTS AND AGENCIES. Requires each agency of state government to provide full cooperation to the office in the performance of its powers, duties, and responsibilities. Sec. 488.058. PROVISIONS RELATING TO LOAN GUARANTEES. Sets forth the guidelines in relation to a financial institution making a loan guarantee under this subchapter and establishing a corresponding reserve account. Sec. 488.059. REPORTS; AUDITS. Requires the office to submit to the legislature an annual status report on the Texas business enhancement program's activities. Provides that the financial institutions of the Texas enhancement business fund are subject to audit by the state auditor as provided by Chapter 321. SUBCHAPTER H. OFFICE POWERS AND DUTIES RELATING TO ZONES Sec. 488.060. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under Chapter 2303. CHAPTER 489. TECHNOLOGY AND CRUCIAL INDUSTRY DEVELOPMENT SUBCHAPTER A. SCIENCE AND TECHNOLOGY COUNCIL Sec. 489.001. PURPOSE. Requires the office to contract with the partnership to form the Council on Science and Technology and sets forth the purpose and goals of said council. Sets forth the composition of the Council on Science and Technology and the required duties of the Council on Science and Technology. SUBCHAPTER B. TEXAS MANUFACTURING INSTITUTE Sec. 489.002. ESTABLISHMENT. Sets forth the composition of the Texas Manufacturing Institute (institute). Sec. 489.003. DUTIES. Requires the office to contract with the partnership to manage and administer the institute. Requires the institute to perform the duties of the office under this chapter. Sets forth the duties of the office under this chapter. Sec. 489.004. POLICY BOARD. Provides that the institute is governed by a policy board composed of one member appointed by each member institution. Sets forth the guidelines relating to the policy board. Sec. 489.005. TECHNICAL ADVISORY COUNCIL. Requires the policy board to appoint a technical advisor council to develop recommendations on the educational and technical program priorities for the institute. Sets forth the guidelines relating to the technical advisory council. Sec. 489.006. PUBLIC AND PRIVATE FUNDS. Sets forth the use of public and private funds by the institute to assist with technology transfer to Texas and the development of programs within the scope of the institute. Sec. 489.007. DISBURSEMENT POLICY. Sets forth the guidelines relating to the disbursement of funds in accordance with policy determined by the policy board. SUBCHAPTER C. FILM AND MUSIC MARKETING Sec. 489.008. PROMOTION; DUTIES. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the programs under this subchapter. Sets forth the duties of the office under this subchapter. Requires state agencies and political subdivisions of this state to cooperate with the office to fully implement the goal of promoting the development of the music, film, television, and multimedia industries in this state. Sec. 489.009. GIFTS AND GRANTS. Authorizes the office to accept gifts, grants, and other funds specifically designated by the donor or grantor for use in developing the music, film, television, and multimedia industries of this state. Sec. 489.010. MUSIC, FILM, TELEVISION, AND MULTIMEDIA FUND. Provides that the music, film, television, and multimedia fund is in the state treasury. Sets forth the guidelines relating to the existence, composition, and use of the music, film, television, and multimedia fund. SUBCHAPTER D. TEXAS AEROSPACE COUNCIL Sec. 489.0110. PURPOSE. Requires the office to contract with the partnership to form the Texas Aerospace Council. Sets forth the purpose of the Texas Aerospace Council. Sec. 489.0111. COMPOSITION OF THE COUNCIL. Sets forth the composition of the Texas Aerospace Council, eligibility for the Texas Aerospace Council, and terms of members. Sec. 489.0112. DUTIES. Requires the Texas Aerospace Council to perform the duties of the office for the purposes of this subchapter. Sets forth the duties of the office under this chapter. Sets forth the use of funds collected by the office under this subchapter. SUBCHAPTER E. ENERGY AND ALTERNATIVE FUEL PROMOTION Sec. 489.0120. PURPOSE. Requires the office to contract with the partnership to promote alternative energy and the natural gas industry in the state. Provides that the office will promote the use of alternative fuels. Sec. 489.0021. DUTIES. Sets forth the duties of the office under this subchapter. Requires the General Land Office and the Railroad Commission to provide all necessary information to the office in order that the office and the partnership may carry out the purposes of this subchapter. Sets forth the use of funds collected by the office under this subchapter. SUBCHAPTER F. RECYCLING MARKET DEVELOPMENT Sec. 489.013. PURPOSE. Requires the office to contract with the partnership to develop and diversify the economy of this state and develop and expend commerce in this state through sustaining and promoting recycling enterprises. Sec. 489.014. DEFINITIONS. Defines "enterprise zone" and "governing body." Sec. 489.015. DESIGNATION AS RECYCLING MARKET DEVELOPMENT ZONE. Authorizes the office to designate an enterprise zone as a recycling market development zone. Sec. 489.016. RECYCLING MARKET DEVELOPMENT LOANS AND GRANTS. Sets forth the guidelines relating to the authorized issuance of certain grants or loans by the office to enterprise zones designated as recycling market development zones. Sec. 489.017. RULEMAKING. Requires the office to adopt necessary rules to implement and administer this subchapter in accordance with the purposes of this subchapter. CHAPTER 490. MISCELLANEOUS PROVISIONS SUBCHAPTER A. LITERACY Sec. 490.001. LITERACY. Defines "council." Sets forth the duties and powers of the Council on Workforce and Economic Competitiveness. Sets forth the guidelines for the awarding of literacy grants by the office. Sets forth the guidelines relating to the establishment of a Texas literacy trust fund for the purpose of collecting private funds for distribution to community literacy programs by the office. SUBCHAPTER B. INDEMNIFICATION IN CONNECTION WITH ART AND ARTIFACTS Sec. 490.002. AUTHORITY OF THE OFFICE TO INDEMNIFY. Authorizes the office to agree to indemnify against loss or damage in connection with eligible items borrowed from or loaned to a nonprofit corporation, foundation, individual, corporation, another business entity, or a governmental entity outside the state on the terms and conditions the office, by rule, prescribe to achieve the purposes of this subchapter and to protect the financial interest of this state. Sec. 490.003. ELIGIBLE ITEMS AND APPLICANTS. Sets forth the items that are eligible to be the subject of an indemnity agreement. Sets forth the conditions the items must meet to be eligible to be the subject of an indemnity agreement. Authorizes the office to enter an indemnity agreement to cover only applicants that the Texas Commission on the Arts (commission) has determined qualify for indemnity coverage under certain criteria determined by rule of the commission. Authorizes the commission to consult with private insurance and art experts to carry out Subsection (c). Sets forth the coverage of the indemnity agreement. Sec. 490.004. APPLICATION FOR INDEMNITY AGREEMENT. Sets forth the guidelines for the authorized application for an indemnity agreement by a nonprofit corporation, foundation, institution, or state or governmental body in the state. Sec. 490.005. CLAIMS. Requires the commissioner of insurance to adopt rules providing for prompt adjustment of valid claims for losses covered by an indemnity agreement under this subchapter. Sets forth the guidelines relating to the investigation and authorization of a claim. Sec. 490.006. TEXAS ART INDEMNITY FUND. Provides that the Texas art indemnity fund is a fund outside the state treasury. Requires the comptroller to be trustee of the Texas art indemnity fund. Sets forth the composition and authorized use of the Texas art indemnity fund. Requires the commission, by rule, to establish programs to provide for contributions and other participation to carry out the purposes of this chapter. Requires the rules to establish standards for participation in the programs. Sec. 490.007. ANNUAL REPORT TO LEGISLATURE. Requires the office to report to the legislature on or before December 31 of each year. Sets forth the required contents of the report. Sec. 490.008. CONTRACT WITH PARTNERSHIP. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter. SUBCHAPTER C. AT-RISK YOUTH AND DROPOUTS Sec. 490.009. GUIDELINES FOR ACCESS TO FUNDS FOR AT-RISK YOUTH AND DROPOUTS. Defines "funds" and "service delivery area." Requires the office to maintain guidelines for certain state agencies to facilitate access to funds for dropouts and youth who are at risk of becoming dropouts. Requires the guidelines to establish the procedures for the state agencies' county or regional representatives to follow to submit an application to the appropriate service delivery area for funds for youth-related projects. Sets forth the required duties of each agency. Requires the office and the agencies to review and update the guidelines no later than the last month of each fiscal year. SUBCHAPTER D. MAIN STREET PROGRAM Sec. 490.010. AGREEMENT WITH HISTORICAL COMMISSION. Requires the Texas Historical Commission (historical commission) to execute an agreement with the office providing for coordination and planning of and giving priority to loans made under the historical commission's Main Street program. Requires the office to contract with the partnership to perform the office's duties and exercise its powers and implement and administer the program under this subchapter. SECTION 2. Repealer: Title 4F, Government Code (Commerce and Industrial Development); and Chapters 42 and 44, Agriculture Code (Texas Food and Fibers Commission; Agricultural Diversification and Microenterprise Support Programs). SECTION 3. Provides that the partnership is abolished. Authorizes the partnership, if the partnership has been organized as a nonprofit corporation, to continue to exist after the effective date of this Act for certain purposes. Provides that if the partnership has not been organized as a nonprofit corporation, certain assets of the partnership are transferred to the Office of Economic Development and Tourism. SECTION 4. Provides that this Act does not revive a fund, account, or dedication that was abolished or consolidated in accordance with Section 403.094, Government Code, or in accordance with other law. SECTION 5. (a) Provides that Subtitle F, Government Code, as added by this Act, takes effect September 1, 1997, and on that date the powers, duties, and obligations of the Texas Department of Commerce (DOC) relating to the activities that are included in Subtitle F, as added by this Act, are transferred to the office. Requires DOC, as soon as possible after the effective date of Subtitle F, Government Code, as added by this Act, to transfer all property of DOC relating to the powers, duties, and obligations being transferred and all records relating to the powers, duties, and obligations being transferred in its custody to the office. (b) Provides that on the transfer of all property and records, a rule, form, or policy adopted by DOC relating to powers, duties, and obligations being transferred becomes a rule, form, or policy of the office; and a contract made by DOC relating to the powers, duties, and obligations being transferred becomes a contract made by the office. (c) Provides that after the effective date of Subtitle F, Government Code, as added by this Act, all funds appropriated to DOC for the power, duties, and obligations related to the powers, duties and obligations being transferred are transferred to the office and all other funds transferred or deposited pursuant to this Act are hereby appropriated as specified in the General Appropriations Act for the purposes specified in this Act. (d) Provides that after the effective date of Subtitle F, Government Code, as added by this Act, all personnel employed by DOC for the administration of the powers, duties, and obligations related to those being transferred are transferred to the office until the office contracts with Partnership Texas to carry out the administration related to the powers, duties, and obligations being transferred. SECTION 6. Requires the General Services Commission, if an entity that is abolished by this Act has property, records, or other assets and the article of this Act that abolishes the entity does not provide for their disposition, to take custody of the property, records, or other assets of the entity unless the governor designates another appropriate state agency to take custody of the entity's property, records, or other assets. SECTION 7. Effective date: September 1, 1997. SECTION 8. Emergency clause.