1-1     relating to a grant for a local area adversely affected by a

 1-2     reduction in defense-related activity.


 1-4           SECTION 1.  Subtitle F, Title 4, Government Code, is amended

 1-5     by adding Chapter 486 to read as follows:


 1-7                              DEFENSE REDUCTION

 1-8           Sec. 486.001.  DEFINITIONS.  In this chapter:

 1-9                 (1)  "Defense worker" means:

1-10                       (A)  an employee of the United States Department

1-11     of Defense, including a member of the armed forces and a government

1-12     civilian worker;

1-13                       (B)  an employee of a government agency or

1-14     private business, or entity providing a department of defense

1-15     related function, who is employed on a defense facility;

1-16                       (C)  an employee of a business that provides

1-17     direct services or products to the department of defense and whose

1-18     job is directly dependent on defense expenditures; or

1-19                       (D)  an employee or private contractor employed

1-20     by the United States Department of Energy working on a defense or

1-21     department of energy facility in support of a department of defense

1-22     related project.

1-23                 (2)  "Defense worker job" means a department of defense

 2-1     authorized permanent position or a position held or occupied by one

 2-2     or more defense workers for more than 12 months.

 2-3                 (3)  "Department" means the Texas Department of

 2-4     Commerce.

 2-5                 (4)  "Panel" means the Defense Economic Adjustment

 2-6     Assistance Panel.

 2-7           Sec. 486.002.  GENERAL POWERS AND DUTIES.  (a)  The

 2-8     department shall administer and monitor the implementation of this

 2-9     chapter.

2-10           (b)  The department shall establish criteria and procedures

2-11     for evaluations and awarding grants.  The department shall award

2-12     grants equitably based on evaluations so as to not

2-13     disproportionally favor one adversely affected defense-dependent

2-14     community over another.

2-15           (c)  The department may use an amount equal to not more than

2-16     two percent of the total amount of grants authorized during each

2-17     biennium to administer this chapter and other law relating to

2-18     readjustment of defense-dependent communities.

2-19           (d)  The department shall adopt rules necessary to carry out

2-20     the purposes of this chapter.

2-21           Sec. 486.003.  ELIGIBILITY FOR GRANT.  (a)  A local

2-22     governmental entity is eligible for a grant under this chapter if

2-23     it is:

2-24                 (1)  a municipality or county that is  an adversely

2-25     affected defense-dependent community; or

 3-1                 (2)  a regional planning commission that has an

 3-2     adversely affected defense-dependent community within its

 3-3     boundaries.

 3-4           (b)  A municipality or county is an adversely affected

 3-5     defense-dependent community if the department determines that:

 3-6                 (1)  the municipality or county requires assistance

 3-7     because of:

 3-8                       (A)  the proposed or actual establishment,

 3-9     realignment, or closure of a defense facility;

3-10                       (B)  the cancellation or termination of a United

3-11     States Department of Defense contract or the failure of the

3-12     department of defense to proceed with an approved major weapon

3-13     system program;

3-14                       (C)  a publicly announced planned major reduction

3-15     in department of defense spending that would directly and adversely

3-16     affect the municipality or county; or

3-17                       (D)  the closure or a significant reduction of

3-18     the operations of a defense facility as the result of a merger,

3-19     acquisition, or consolidation of a defense contractor operating the

3-20     facility; and

3-21                 (2)  the municipality or county is expected to

3-22     experience, during the period between the beginning of the federal

3-23     fiscal year during which an event described by Subdivision (1) is

3-24     finally approved and the date that the event is to be substantially

3-25     completed, a direct loss of:

 4-1                       (A)  2,500 or more defense worker jobs in any

 4-2     area of the  municipality or county that is located in an urbanized

 4-3     area of a metropolitan statistical area;

 4-4                       (B)  1,000 or more defense worker jobs in any

 4-5     area of the municipality or county that is not located in an

 4-6     urbanized area of a metropolitan statistical area; or

 4-7                       (C)  defense worker jobs representing one percent

 4-8     of the jobs in the municipality or county.

 4-9           Sec. 486.004.  GRANT CRITERIA.  (a)  From money appropriated

4-10     for this purpose, the department may make a grant to an eligible

4-11     local governmental entity to allow the entity to meet a matching

4-12     money or investment requirement in order to receive from the United

4-13     States assistance that is provided to allow the local governmental

4-14     entity to respond to or recover from an event described by Section

4-15     486.003(b)(1).  In addition, a grant may be made to an eligible

4-16     local governmental entity to match the entity's contribution for a

4-17     purpose described in Section 486.005 on a closed or realigned

4-18     defense facility.

4-19           (b)  A grant may not be less than $50,000 or more than the

4-20     least of:

4-21                 (1)  50 percent of the amount of matching money or

4-22     investment that the local governmental entity is required to

4-23     provide, subject to Subsection (c);

4-24                 (2)  50 percent of the local governmental entity's

4-25     investment for purposes described in Section 486.005, in cases

 5-1     where United States assistance is not available; or

 5-2                 (3)  $2 million.

 5-3           (c)  If the local governmental entity demonstrates to the

 5-4     department that, because of a limited budget, resources are not

 5-5     available to provide 50 percent of the amount of matching money or

 5-6     investment that the local governmental entity is required to

 5-7     provide, the grant may be not more than 80 percent of the amount of

 5-8     that matching money or investment requirement, but may not be more

 5-9     than $2 million.

5-10           Sec. 486.005.  USE OF PROCEEDS.  (a)  The local governmental

5-11     entity may use the proceeds of the grant for purchase of property

5-12     from the department of defense or its designated agent, new

5-13     construction, rehabilitation, or renovation of facilities or

5-14     infrastructure, or purchase of capital equipment or insurance.

5-15           (b)  The local governmental entity may deliver the money to a

5-16     special district, development corporation, or other instrumentality

5-17     of the state or the local governmental entity for use as provided

5-18     by this chapter and other applicable law.


5-20     The department shall establish a defense economic adjustment

5-21     assistance panel within the department.  The panel consists of at

5-22     least three and not more than five professional full-time employees

5-23     of the department appointed by the executive director of the

5-24     department.

5-25           Sec. 486.007.  APPLICATION FOR GRANT.  A local governmental

 6-1     entity may apply for a grant under this chapter to the department

 6-2     on a form prescribed by the department.  The department shall

 6-3     establish periodic application cycles to enable the panel and

 6-4     department to evaluate groups of applicants in relation to each

 6-5     other.

 6-6           Sec. 486.008.  EVALUATION OF APPLICATION.  The panel shall

 6-7     evaluate each application and assign the applicant a score based

 6-8     on:

 6-9                 (1)  the significance of the adverse effect within the

6-10     local governmental entity, including the number of jobs lost  in

6-11     relation to the workforce in the local governmental entity's

6-12     jurisdiction and the effect on the area's economy and tax revenue;

6-13                 (2)  the extent to which the local governmental entity

6-14     has used its existing resources to promote local economic

6-15     development;

6-16                 (3)  the amount of any grant that the local

6-17     governmental entity has previously received under this chapter;

6-18                 (4)  the anticipated number of jobs to be created in

6-19     relation to the amount of the grant sought; and

6-20                 (5)  the extent to which the grant will affect the

6-21     region in which the local governmental entity is located.

6-22           Sec. 486.009.  MAKING OF GRANT.  The panel shall submit its

6-23     scores to the department's governing body.  The governing body

6-24     shall use the scores to determine whether to make a grant to an

6-25     applicant.  The governing body may not make a grant unless the

 7-1     legislature has appropriated the money for the grant.

 7-2           SECTION 2.  The importance of this legislation and the

 7-3     crowded condition of the calendars in both houses create an

 7-4     emergency and an imperative public necessity that the

 7-5     constitutional rule requiring bills to be read on three several

 7-6     days in each house be suspended, and this rule is hereby suspended,

 7-7     and that this Act take effect and be in force from and after its

 7-8     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 227 passed the Senate on

         April 16, 1997, by the following vote:  Yeas 31, Nays 0.


                                                 Secretary of the Senate

               I hereby certify that S.B. No. 227 passed the House on

         May 23, 1997, by the following vote:  Yeas 119, Nays 0, one present

         not voting.


                                                 Chief Clerk of the House