1-1     By:  Madla, et al.                                     S.B. No. 227

 1-2           (In the Senate - Filed January 16, 1997; January 22, 1997,

 1-3     read first time and referred to Committee on Veteran Affairs and

 1-4     Military Installations; April 9, 1997, reported adversely, with

 1-5     favorable Committee Substitute by the following vote:  Yeas 4, Nays

 1-6     0; April 9, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 227                    By:  Brown

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to a grant for a local area adversely affected by a

1-11     reduction in defense-related activity.


1-13           SECTION 1.  Subtitle F, Title 4, Government Code, is amended

1-14     by adding Chapter 486 to read as follows:


1-16                              DEFENSE REDUCTION

1-17           Sec. 486.001.  DEFINITIONS.  In this chapter:

1-18                 (1)  "Defense worker" means:

1-19                       (A)  an employee of the United States Department

1-20     of Defense, including a member of the armed forces and a government

1-21     civilian worker;

1-22                       (B)  an employee of a government agency or

1-23     private business, or entity providing a department of defense

1-24     related function, who is employed on a defense facility;

1-25                       (C)  an employee of a business that provides

1-26     direct services or products to the department of defense and whose

1-27     job is directly dependent on defense expenditures; or

1-28                       (D)  an employee or private contractor employed

1-29     by the United States Department of Energy working on a defense or

1-30     department of energy facility in support of a department of defense

1-31     related project.

1-32                 (2)  "Defense worker job" means a department of defense

1-33     authorized permanent position or a position held or occupied by one

1-34     or more defense workers for more than 12 months.

1-35                 (3)  "Department" means the Texas Department of

1-36     Commerce.

1-37                 (4)  "Panel" means the Defense Economic Adjustment

1-38     Assistance Panel.

1-39           Sec. 486.002.  GENERAL POWERS AND DUTIES.  (a)  The

1-40     department shall administer and monitor the implementation of this

1-41     chapter.

1-42           (b)  The department shall establish criteria and procedures

1-43     for evaluations and awarding grants.  The department shall award

1-44     grants equitably based on evaluations so as to not

1-45     disproportionally favor one adversely affected defense-dependent

1-46     community over another.

1-47           (c)  The department may use an amount equal to not more than

1-48     two percent of the total amount of grants authorized during each

1-49     biennium to administer this chapter and other law relating to

1-50     readjustment of defense-dependent communities.

1-51           (d)  The department shall adopt rules necessary to carry out

1-52     the purposes of this chapter.

1-53           Sec. 486.003.  ELIGIBILITY FOR GRANT.  (a)  A local

1-54     governmental entity is eligible for a grant under this chapter if

1-55     it is:

1-56                 (1)  a municipality or county that is  an adversely

1-57     affected defense-dependent community; or

1-58                 (2)  a regional planning commission that has an

1-59     adversely affected defense-dependent community within its

1-60     boundaries.

1-61           (b)  A municipality or county is an adversely affected

1-62     defense-dependent community if the department determines that:

1-63                 (1)  the municipality or county requires assistance

1-64     because of:

 2-1                       (A)  the proposed or actual establishment,

 2-2     realignment, or closure of a defense facility;

 2-3                       (B)  the cancellation or termination of a United

 2-4     States Department of Defense contract or the failure of the

 2-5     department of defense to proceed with an approved major weapon

 2-6     system program;

 2-7                       (C)  a publicly announced planned major reduction

 2-8     in department of defense spending that would directly and adversely

 2-9     affect the municipality or county; or

2-10                       (D)  the closure or a significant reduction of

2-11     the operations of a defense facility as the result of a merger,

2-12     acquisition, or consolidation of a defense contractor operating the

2-13     facility; and

2-14                 (2)  the municipality or county is expected to

2-15     experience, during the period between the beginning of the federal

2-16     fiscal year during which an event described by Subdivision (1) is

2-17     finally approved and the date that the event is to be substantially

2-18     completed, a direct loss of:

2-19                       (A)  2,500 or more defense worker jobs in any

2-20     area of the  municipality or county that is located in an urbanized

2-21     area of a metropolitan statistical area;

2-22                       (B)  1,000 or more defense worker jobs in any

2-23     area of the municipality or county that is not located in an

2-24     urbanized area of a metropolitan statistical area; or

2-25                       (C)  one percent of the civilian jobs in the

2-26     municipality or county.

2-27           Sec. 486.004.  GRANT CRITERIA.  (a)  From money appropriated

2-28     for this purpose, the department may make a grant to an eligible

2-29     local governmental entity to allow the entity to meet a matching

2-30     money or investment requirement in order to receive from the United

2-31     States assistance that is provided to allow the local governmental

2-32     entity to respond to or recover from an event described by Section

2-33     486.003(b)(1).  In addition, a grant may be made to an eligible

2-34     local governmental entity to match the entity's contribution for a

2-35     purpose described in Section 486.005 on a closed or realigned

2-36     defense facility.

2-37           (b)  A grant may not be less than $50,000 or more than the

2-38     least of:

2-39                 (1)  50 percent of the amount of matching money or

2-40     investment that the local governmental entity is required to

2-41     provide, subject to Subsection (c);

2-42                 (2)  50 percent of the local governmental entity's

2-43     investment for purposes described in Section 486.005, in cases

2-44     where United States assistance is not available; or

2-45                 (3)  $2 million.

2-46           (c)  If the local governmental entity demonstrates to the

2-47     department that, because of a limited budget, resources are not

2-48     available to provide 50 percent of the amount of matching money or

2-49     investment that the local governmental entity is required to

2-50     provide, the grant may be not more than 80 percent of the amount of

2-51     that matching money or investment requirement, but may not be more

2-52     than $2 million.

2-53           Sec. 486.005.  USE OF PROCEEDS.  (a)  The local governmental

2-54     entity may use the proceeds of the grant for purchase of property

2-55     from the department of defense or its designated agent, new

2-56     construction, rehabilitation, or renovation of facilities or

2-57     infrastructure, or purchase of capital equipment or insurance.

2-58           (b)  The local governmental entity may deliver the money to a

2-59     special district, development corporation, or other instrumentality

2-60     of the state or the local governmental entity for use as provided

2-61     by this chapter and other applicable law.


2-63     The department shall establish a defense economic adjustment

2-64     assistance panel within the department.  The panel consists of at

2-65     least three and not more than five professional full-time employees

2-66     of the department appointed by the executive director of the

2-67     department.

2-68           Sec. 486.007.  APPLICATION FOR GRANT.  A local governmental

2-69     entity may apply for a grant under this chapter to the department

 3-1     on a form prescribed by the department.  The department shall

 3-2     establish periodic application cycles to enable the panel and

 3-3     department to evaluate groups of applicants in relation to each

 3-4     other.

 3-5           Sec. 486.008.  EVALUATION OF APPLICATION.  The panel shall

 3-6     evaluate each application and assign the applicant a score based

 3-7     on:

 3-8                 (1)  the significance of the adverse effect within the

 3-9     local governmental entity, including the number of jobs lost  in

3-10     relation to the workforce in the local governmental entity's

3-11     jurisdiction and the effect on the area's economy and tax revenue;

3-12                 (2)  the extent to which the local governmental entity

3-13     has used its existing resources to promote local economic

3-14     development;

3-15                 (3)  the amount of any grant that the local

3-16     governmental entity has previously received under this chapter;

3-17                 (4)  the anticipated number of jobs to be created in

3-18     relation to the amount of the grant sought; and

3-19                 (5)  the extent to which the grant will affect the

3-20     region in which the local governmental entity is located.

3-21           Sec. 486.009.  MAKING OF GRANT.  The panel shall submit its

3-22     scores to the department's governing body.  The governing body

3-23     shall use the scores to determine whether to make a grant to an

3-24     applicant.  The governing body may not make a grant unless the

3-25     legislature has appropriated the money for the grant.

3-26           SECTION 2.  The importance of this legislation and the

3-27     crowded condition of the calendars in both houses create an

3-28     emergency and an imperative public necessity that the

3-29     constitutional rule requiring bills to be read on three several

3-30     days in each house be suspended, and this rule is hereby suspended,

3-31     and that this Act take effect and be in force from and after its

3-32     passage, and it is so enacted.

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