SRC-SEW H.B. 3452 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 3452
By: Gallego (Sibley)
Business & Commerce
5/10/2001
Engrossed


DIGEST AND PURPOSE 

In 1997, the Texas Department of Commerce was abolished and its functions
were transferred to the Texas Department of Economic Development (TDED).
TDED helps develop and promote the Texas economy by funding job training
for Texas businesses, promoting Texas as a tourist destination, providing
assistance to Texas businesses and communities, and serving as a central
source of economic development information. TDED is subject to the Texas
Sunset Act and will be abolished on September 1, 2001, unless continued by
the legislature. As a result of its review of TDED, the Sunset Advisory
Commission has recommended a two-year continuation of TDED along with
several modifications in TDED's practices and procedures. H.B. 3452
continues TDED until September 1, 2003, modifies TDED's enabling statutes,
and transfers funds used to administer the smart jobs fund program to the
unemployment insurance trust fund administered by the Texas Workforce
Commission.  

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Department of
Economic Development in SECTION 1.14 (Section 481.021, Government Code) and
SECTION 3.02 (Section 481.415, Government Code) of this bill. 

Rulemaking authority is expressly granted to the secretary of state in
SECTION 2.02 (Section 405.045, Government Code) of this bill. 

SECTION BY SECTION ANALYSIS


ARTICLE 1.  CONTINUATION AND FUNCTIONS OF TEXAS DEPARTMENT
OF ECONOMIC DEVELOPMENT

SECTION 1.01.  Amends Section 481.001, Government Code, by adding
Subdivision (5) to define "council." 

SECTION 1.02.  Amends Section 481.003, Government Code, to provide that the
Texas Department of Economic Development (department) is subject to Chapter
325 (Texas Sunset Act) and, unless continued in existence as provided by
that chapter, the department is abolished and this chapter expires
September 1, 2003. 
 
SECTION 1.03.  Amends Chapter 481A, Government Code, by adding Section
481.0031, as follows: 

Sec. 481.0031.  OVERSIGHT OF DEPARTMENT.  Requires certain criteria to be
used to determine if the department has successfully implemented the proper
management and oversight controls of the state's economic development
efforts Requires the department to report to the Sunset Advisory Commission
by September 1, 2002, on the status of the criteria set out in this section
as part of the reevaluation of the department.  Provides that this section
expires September 1, 2003. 
  
SECTION 1.04.  Amends Section 481.004, Government Code, to provide that the
department's governing board is composed of five (rather than nine) public
members appointed by the governor with the advice and consent of the
senate.  Provides that members of the governing board serve for staggered
six-year terms with the terms of either one or two (rather than three)
members expiring February 1 of each odd-numbered year in accordance with
Section 30a, Article XVI, Texas Constitution.  Deletes existing Subsection
(c).   
 
SECTION 1.05.  Amends Section 481.024, Government Code, by adding new
Subsections (c) and (d) and relettering current Subsections (c), (d), (e),
and (f) as Subsections (e), (f), (g), and (h), respectively, as follows: 

(c)  Authorizes the corporation to engage in fund-raising activities for
the market Texas program only and to raise no more than $2 million per
biennium in those fund-raising activities. 

(d)  Authorizes the office of the governor to use all money raised by the
corporation as discretionary funds only for the purposes stated in the
rules of the market Texas program to promote exceptional economic
development projects in the state.  Prohibits the office of the governor
from using general revenue funds appropriated by the legislature for the
market Texas program to promote exceptional economic development projects
under this subsection. 

SECTION 1.06.  Amends Section 481.0041(c), Government Code, to require the
executive director, if a potential ground for removal involves the
presiding officer, to notify the next highest ranking officer of the
governing board, who is then required to notify the governor and the
attorney general that a potential ground for removal exists. 
 
SECTION 1.07.  Amends Section 481.0044, Government Code,  by adding
Subsection (e) to require the governing board to develop and implement
policies that clearly separate the policy-making responsibilities of the
governing board and the management responsibilities of the executive
director and staff of the department. 
 
SECTION 1.08.  Amends Chapter 481A, Government Code, by adding Section
481.0045, as follows: 

Sec. 481.0045.  TRAINING. Prohibits a person who is appointed to and
qualifies for office as a member of the governing board from voting,
deliberating, or being counted as a member in attendance at a meeting of
the governing board until the person completes a training program that
complies with this section.  Sets forth requirements for the training
program.  Provides that a person appointed to the governing board is
entitled to reimbursement, as provided by the General Appropriations Act,
for the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before or after
the person qualifies for office. 
 
SECTION 1.09.  Amends Section 481.0065, Government Code, to require the
Office of Defense Affairs to perform certain functions.  Deletes existing
Subsection (f) and makes a nonsubstantive change.   
 
SECTION 1.10.  Amends Section 481.0066, Government Code, by adding
Subsection (i) to prohibit the Texas Strategic Military Planning Commission
(commission), in carrying out its duties, from deliberating the purchase,
exchange, lease, or value of real property, deliberating the appointment,
employment, evaluation, reassignment, duties, discipline, or dismissal of
an officer or employee of the department, or hearing a complaint or charge
against an officer or employee of the department. 
 
 SECTION 1.11.  Amends Section 481.007, Government Code, to set forth
guidelines regarding advisory committees. 

SECTION 1.12.  Amends Section 481.010, Government Code, by adding
Subsection (i) to require the executive director or the executive
director's designee to provide to department employees information and
training on the benefits and methods of participation in the state employee
incentive program. 
 
SECTION 1.13.  Amends Section 481.012, Government Code, by amending
Subsection (b), adding a new Subsection (c), and redesignating current
Subsections (c) and (d) as Subsections (d) and (e), respectively, as
follows: 

 (b) Requires a complaint file to include certain information. 

(c)  Requires the department to provide to the person filing the complaint
and to each person who is a subject of the complaint a copy of the
department's policies and procedures relating to complaint investigation
and resolution. 

SECTION 1.14.  Amends Section 481.021(c), Government Code, to require the
department to adopt certain rules. 
 
SECTION 1.15.  Amends Section 481.154, Government Code, regarding
department funding.   

SECTION 1.16.  Amends Section 481.161, Government Code, to provide that
Sections 481.151, 481.152, 481.153, 481.155, 481.156, 481.1565, 481.157,
481.158, 481.159, and 481.160, and this section expire December 31, 2001. 
 
SECTION 1.17.  Amends Chapter 481L, Government Code, by adding Sections
481.175, 481.176, 481.177, and 481.178, regarding the Texas Tourism
Coordinating Council and tourism performance measures.   
 
SECTION 1.18. (a) Provides that this section governs the transition from a
nine-member governing board of the Texas Department of Economic Development
to a governing board composed of five members in accordance with the
changes in law made by this Act. 
 
(b)  Provides that the nine members of the governing board of the Texas
Department of Economic Development who are serving immediately before
September 1, 2001, continue to serve as the governing board of the
department on and after that date.  Provides, however, that the positions
of those nine members are abolished on the date on which a majority of the
five board membership positions that are created under Section 481.004,
Government Code, as amended by this Act, are filled by appointment by the
governor and the appointees qualify for office. 
 
(c)  Requires the governor to make the five appointments to the board under
Section 481.004, Government Code, as amended by this Act, as soon as
possible on or after September 1, 2001.  Requires the governor, in making
the initial appointments, to designate two members for terms expiring
February 1, 2003, one member for a term expiring February 1, 2005, and two
members for terms expiring February 1, 2007. 
 
SECTION 1.19. (a) Provides that the changes in law made by this Act in the
prohibitions and qualifications applying to members of the governing board
of the Texas Department of Economic Development apply only to a member
appointed on or after September 1, 2001. 
 
(b)  Requires the Texas Department of Economic Development to adopt the
rules required by Section 481.021(c), Government Code, as amended by this
Act, on or before December 1,  2001. 
 
SECTION 1.20.  Prohibits the Texas Department of Economic Development from
awarding a grant under the smart jobs fund program on or after the
effective date of this Act.  Requires the Texas Department of Economic
Development to perform its duties  under  all  smart  jobs  fund program
contracts  in existence on the effective date of this Act. 
 
SECTION 1.21.  Requires the Texas Workforce Commission, on the effective
date of this Act, to transfer any money remaining in the holding fund
created under Section 204.122, Labor Code, to the unemployment compensation
fund.  Requires the Texas Workforce Commission to deposit any money
collected by the employment training investment assessment after the
effective date of this Act directly into the unemployment compensation
fund. 

ARTICLE 2.  ADMINISTRATION OF FOREIGN OFFICES, INTERNATIONAL
TRADE, AND TEXAS EXPORTERS LOAN FUND

SECTION 2.01.  Transfers Section 481.027, Government Code, to Subchapter B,
Chapter 405, Government Code, redesignates it Section 405.020, and amends
the provisions relating to the department's foreign offices. 

SECTION 2.02.  Transfers Subchapter D, Chapter 481, Government Code, to
Chapter 405, Government Code, redesignates it as Subchapter D, Chapter 405,
and amends the provisions relating to international trade.   

SECTION 2.03.  Amends Section 481.087(c), Government Code, to make a
conforming change. 
 
SECTION 2.04.  Amends Section 481.403, Government Code.  
  
SECTION 2.05. (a) Provides that, on the effective date of this Act, all
powers, duties, obligations, rights, contracts, records, employees,
property, and unspent  and  unobligated  appropriations  and other funds of
the Texas Department of Economic Development that were used by that agency
immediately before the effective date of this Act to administer foreign
offices, the international trade program,  and the border affairs program
are transferred to the secretary of state. 

(b)  Provides that all rules, policies, procedures, and decisions that
affect the foreign offices, the international trade program, and the border
affairs program are continued in effect until superseded by a rule or other
appropriate action of the secretary of state. 

ARTICLE 3.  ADMINISTRATION OF THE TEXAS BUSINESS AND COMMUNITY
ECONOMIC DEVELOPMENT CLEARINGHOUSE AND THE
COMMUNITY INVESTMENT PROGRAM

SECTION 3.01.  Transfers Subchapter K, Chapter 481, Government Code, to
Chapter 403, Government Code, designates it as Subchapter O, and amends it. 
 
SECTION 3.02.  Amends Subchapter BB, Chapter 481, Government Code, by
adding Section 481.415, relating to a community investment program.   
 
SECTION 3.03.  Provides that, on the effective date of this Act, all
powers, duties, obligations, rights, contracts, records, employees,
property, and unspent and  unobligated appropriations and other funds of
the Texas Department of Economic Development that were used by that agency
immediately before the effective date of this Act to administer the Texas
Business and Community Economic Development Clearinghouse are transferred
to the comptroller of public accounts. 

ARTICLE 4.  EFFECTIVE DATE
 
SECTION 4.01.  Provides that this Act takes effect September 1, 2001,
except that SECTION 1.20 of this Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution, and for the
purposes of application of SECTION 1.20 of this Act only, the effective
date of this Act is considered to be the date that SECTION 1.20 of this Act
takes effect.  Provides that, if SECTION 1.20 of this Act does not receive
the vote necessary for immediate effect, SECTION 1.20 of this Act takes
effect September 1, 2001.