By Gallego, Solis, McCall, Chisum, Luna,              H.B. No. 3452
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the continuation and functions of the Texas Department
 1-3     of Economic Development and the operation, funding, and
 1-4     administration of economic development programs.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6         ARTICLE 1.  CONTINUATION AND FUNCTIONS OF TEXAS DEPARTMENT
 1-7                           OF ECONOMIC DEVELOPMENT
 1-8           SECTION 1.01. Section 481.001, Government Code, is amended by
 1-9     adding Subdivision (5) to read as follows:
1-10                 (5)  "Council" means the Texas Tourism Coordinating
1-11     Council.
1-12           SECTION 1.02. Section 481.003, Government Code, is amended to
1-13     read as follows:
1-14           Sec. 481.003.  SUNSET PROVISION. The Texas Department of
1-15     Economic Development is subject to Chapter 325 (Texas Sunset Act).
1-16     Unless continued in existence as provided by that chapter, the
1-17     department is abolished and this chapter expires September 1, 2003
1-18     [2001].
1-19           SECTION 1.03.  Subchapter A, Chapter 481, Government Code, is
1-20     amended by adding Section 481.0031 to read as follows:
1-21           Sec. 481.0031.  OVERSIGHT OF DEPARTMENT.  (a)  The following
1-22     criteria shall be used to determine if the department has
1-23     successfully implemented the proper management and oversight
1-24     controls of the state's economic development efforts:
1-25                 (1)  effective development and implementation of a
 2-1     strategic plan that:
 2-2                       (A)  ensures a clear focus and direction for the
 2-3     department, including a proper needs assessment that incorporates
 2-4     information from local economic development entities;
 2-5                       (B)  focuses activities based on the policy
 2-6     directives of the governing board;
 2-7                       (C)  details the methodology of how the
 2-8     department plans to implement the strategies in the strategic plan;
 2-9     and
2-10                       (D)  explains how individual division actions
2-11     contribute to the department's desired results;
2-12                 (2)  establishment of subcommittees relating to the key
2-13     administrative and programmatic functions of the department to
2-14     allow governing board members to develop the expertise necessary to
2-15     make informed decisions about and ensure accountability to the
2-16     department and its programs;
2-17                 (3)  establishment of effective, department-wide
2-18     contracting standards and methodologies;
2-19                 (4)  effective development and implementation of
2-20     consistent, department-wide policies, procedures, and controls over
2-21     daily operations, including budgeting, contracting, and travel;
2-22                 (5)  effective development and implementation of a
2-23     centralized information and accounting system that will provide
2-24     single management reports for key areas so that management can
2-25     determine a true financial position of the department; and
2-26                 (6)  effective use of the department's internal audit
2-27     function that ensures management responses to internal audit
 3-1     reports are actually implemented.
 3-2           (b)  The department shall report to the Sunset Advisory
 3-3     Commission by September 1, 2002, on the status of the criteria set
 3-4     out in Subsection (a) as part of the reevaluation of the
 3-5     department.
 3-6           (c)  This section expires September 1, 2003.
 3-7           SECTION 1.04.  Section 481.004, Government Code, is amended
 3-8     to read as follows:
 3-9           Sec. 481.004.  GOVERNING BOARD. (a)  The governing board is
3-10     composed of five [nine] public members appointed by the governor
3-11     with the advice and consent of the senate, which members shall be
3-12     appointed to give geographical representation on the governing
3-13     board to all regions of the state.
3-14           (b)  Members of the governing board serve for staggered
3-15     six-year terms with the terms of either one or two [three] members
3-16     expiring February 1 of each odd-numbered year in accordance with
3-17     Section 30a, Article XVI, Texas Constitution.
3-18           (c)  Appointments to the governing board shall be made
3-19     without regard to the race, color, handicap, sex, religion, age, or
3-20     national origin of the appointees.
3-21           (d)  In making appointments under this section, the governor
3-22     shall attempt to include members of different minority groups
3-23     including females, African Americans, Hispanic Americans, Native
3-24     Americans, Asian Americans, and persons who are disabled.
3-25           [(e)  At least one member of the governing board must be a
3-26     resident of a county with a population of less than 30,000, at
3-27     least one other member must have experience in international trade,
 4-1     at least one other member must have experience in tourism, and at
 4-2     least one other member must be an economic development
 4-3     practitioner.]
 4-4           SECTION 1.05. Section 481.024, Government Code, is amended by
 4-5     adding new Subsections (c) and (d) and relettering current
 4-6     Subsections (c), (d), (e), and (f) as Subsections (e), (f), (g),
 4-7     and (h), respectively, to read as follows:
 4-8           (c)  The corporation may engage in fund-raising activities
 4-9     for the market Texas program only and may raise no more than $2
4-10     million per biennium in those fund-raising activities.
4-11           (d)  The office of the governor may use all money raised by
4-12     the corporation as discretionary funds only for the purposes stated
4-13     in the rules of the market Texas program to promote exceptional
4-14     economic development projects in the state.  The office of the
4-15     governor may not use general revenue funds appropriated by the
4-16     legislature for the market Texas program to promote exceptional
4-17     economic development projects under this subsection.
4-18           (e)  The corporation is a nonprofit corporation, and no part
4-19     of its net earnings remaining after payment of its expenses may
4-20     inure to any individual, firm, or corporation, except that if the
4-21     board of directors determines that sufficient provision has been
4-22     made for the full payment of the expenses, bonds, and other
4-23     obligations of the corporation, the additional net earnings of the
4-24     corporation shall be deposited to the credit of the general revenue
4-25     fund.
4-26           (f) [(d)]  At any time the board of directors by written
4-27     resolution may alter the structure, organization, programs, or
 5-1     activities of the corporation or terminate and dissolve the
 5-2     corporation, subject only to any limitation provided by the law of
 5-3     the state on the impairment of contracts of the corporation.
 5-4           (g) [(e)]  If the board of directors by resolution determines
 5-5     that the purposes for which the corporation was formed have been
 5-6     substantially complied with and that all bonds issued by the
 5-7     corporation have been fully paid, the board of directors shall
 5-8     dissolve the corporation.  On dissolution, the title to all funds
 5-9     and properties then owned by the corporation shall be transferred
5-10     to the department.
5-11           (h) [(f)]  The Texas Economic Development Corporation and any
5-12     other corporation whose charter specifically dedicates the
5-13     corporation's activities to the benefit of the Texas Department of
5-14     Economic Development or its predecessor agency shall file an annual
5-15     report of the financial activity of the corporation.  The annual
5-16     report shall be filed prior to the 90th day after the last day for
5-17     the corporation's fiscal year and shall be prepared in accordance
5-18     with generally accepted accounting principles.  The report must
5-19     include a statement of support, revenue, and expenses and change in
5-20     fund balances, a statement of functional expenses, and balance
5-21     sheets for all funds.
5-22           SECTION 1.06. Section 481.0041(c), Government Code, is
5-23     amended to read as follows:
5-24           (c)  If the executive director has knowledge that a potential
5-25     ground for removal exists, the executive director shall notify the
5-26     presiding officer of the governing board of the ground.  The
5-27     presiding officer shall then notify the governor that a potential
 6-1     ground for removal exists.  If the potential ground for removal
 6-2     involves the presiding officer, the executive director shall notify
 6-3     the next highest ranking officer of the governing board, who shall
 6-4     then notify the governor and the attorney general that a potential
 6-5     ground for removal exists.
 6-6           SECTION 1.07. Section 481.0044, Government Code, is amended
 6-7     by adding Subsection (e) to read as follows:
 6-8           (e)  The governing board shall develop and implement policies
 6-9     that clearly separate the policy-making responsibilities of the
6-10     governing board and the management responsibilities of the
6-11     executive director and staff of the department.
6-12           SECTION 1.08. Subchapter A, Chapter 481, Government Code, is
6-13     amended by adding Section 481.0045 to read as follows:
6-14           Sec. 481.0045.  TRAINING. (a)  A person who is appointed to
6-15     and qualifies for office as a member of the governing board may not
6-16     vote, deliberate, or be counted as a member in attendance at a
6-17     meeting of the governing board until the person completes a
6-18     training program that complies with this section.
6-19           (b)  The training program must provide the person with
6-20     information regarding:
6-21                 (1)  the legislation that created the department and
6-22     the governing board;
6-23                 (2)  the programs operated by the department;
6-24                 (3)  the role and functions of the department;
6-25                 (4)  the rules of the department, with an emphasis on
6-26     the rules that relate to disciplinary and investigatory authority;
6-27                 (5)  the current budget for the department;
 7-1                 (6)  the results of the most recent formal audit of the
 7-2     department;
 7-3                 (7)  the requirements of:
 7-4                       (A)  the open meetings law, Chapter 551;
 7-5                       (B)  the public information law, Chapter 552;
 7-6                       (C)  the administrative procedure law, Chapter
 7-7     2001; and
 7-8                       (D)  other laws relating to public officials,
 7-9     including conflict-of-interest laws; and
7-10                 (8)  any applicable ethics policies adopted by the
7-11     department or the Texas Ethics Commission.
7-12           (c)  A person appointed to the governing board is entitled to
7-13     reimbursement, as provided by the General Appropriations Act, for
7-14     the travel expenses incurred in attending the training program
7-15     regardless of whether the attendance at the program occurs before
7-16     or after the person qualifies for office.
7-17           SECTION 1.09. Section 481.0065, Government Code, is amended
7-18     to read as follows:
7-19           Sec. 481.0065.  OFFICE OF DEFENSE AFFAIRS. (a)  The
7-20     department shall:
7-21                 (1)  establish and maintain an Office of Defense
7-22     Affairs; and
7-23                 (2)  appoint a director to manage the Office of Defense
7-24     Affairs.
7-25           (b)  The Office of Defense Affairs shall:
7-26                 (1)  provide information to defense-dependent
7-27     communities, the legislature, the Texas congressional delegation,
 8-1     and state agencies regarding federal actions affecting military
 8-2     installations and missions;
 8-3                 (2)  serve as a clearinghouse for:
 8-4                       (A)  defense economic adjustment and transition
 8-5     information and activities [along with the Texas Business and
 8-6     Community Economic Development Clearinghouse]; and
 8-7                       (B)  information about:
 8-8                             (i)  issues related to the operating costs
 8-9     and strategic value of federal military installations located in
8-10     the state; [and]
8-11                             (ii)  the loss of jobs in defense-dependent
8-12     communities and defense-related businesses; and
8-13                             (iii)  interstate competition relative to
8-14     defense strategies and incentive programs that other states are
8-15     utilizing to maintain, expand, and attract new defense contractors;
8-16                 (3)  provide assistance to defense-dependent
8-17     communities that have experienced a defense-related closure or
8-18     realignment, including the administration and oversight for
8-19     implementing the programs established under Chapter 486, Government
8-20     Code, and Chapter 2310, Government Code;
8-21                 (4)  assist defense-dependent communities in the design
8-22     and execution of programs that enhance a community's relationship
8-23     with military installations and defense-related businesses; [and]
8-24                 (5)  assist communities in the retention, expansion,
8-25     and recruiting of defense-related businesses; and
8-26                 (6)  assist with the development of state strategies
8-27     and programs to protect the state's existing military missions and
 9-1     position Texas to be competitive for new or expanded military
 9-2     missions; and
 9-3                 (7)  serve as the state's focal point for the
 9-4     coordination of all issues and policies that would affect active,
 9-5     closed, or realigned military installations and defense-related
 9-6     businesses.
 9-7           (c)  The Office of Defense Affairs shall prepare an annual
 9-8     report about the active military installations, defense-dependent
 9-9     communities, and defense-related businesses in this state.  The
9-10     report must include:
9-11                 (1)  an economic impact statement describing in detail
9-12     the effect of the military on the economy of this state;
9-13                 (2)  a statewide assessment of active military
9-14     installations and current missions;
9-15                 (3)  a statewide strategy to attract defense-related
9-16     business and prevent future defense closures and realignments;
9-17                 (4)  a list of state and federal activities that have
9-18     significant impact on active military installations and current
9-19     missions;
9-20                 (5)  a statement identifying:
9-21                       (A)  the state and federal programs and services
9-22     that assist defense-dependent communities impacted by military base
9-23     closures or realignments and the efforts to coordinate those
9-24     programs; and
9-25                       (B)  the efforts to coordinate state agency
9-26     programs and services that assist defense-dependent communities in
9-27     retaining active military installations and current missions;
 10-1                (6)  an evaluation of initiatives to retain existing
 10-2    defense-related businesses; and
 10-3                (7)  a list of agencies with regulations, policies,
 10-4    programs, or services that impact the operating costs or strategic
 10-5    value of federal military installations and activities in the
 10-6    state.
 10-7          (d)  State agencies shall cooperate with and assist the
 10-8    Office of Defense Affairs in the preparation of the report required
 10-9    under Subsection (c) including providing information about
10-10    regulations, policies, programs, and services that may impact
10-11    defense-dependent communities, defense-related businesses, and the
10-12    viability of existing Texas military missions.  The Office of
10-13    Defense Affairs shall submit its report to the governor and the
10-14    legislature not later than July 1 of each year.
10-15          (e)  The Office of Defense Affairs shall coordinate an annual
10-16    meeting with the head of each state agency, members of the Texas
10-17    Strategic Military Planning Commission, and members of the
10-18    legislature whose districts contain active, closed, or realigned
10-19    military installations to discuss the implementation of the
10-20    recommendations outlined in the report required under Subsection
10-21    (c).
10-22          (f) [(d)]  The Office of Defense Affairs shall develop and
10-23    maintain a database of the names and public business information of
10-24    all prime contractors and subcontractors operating in this state
10-25    who perform defense-related work.
10-26          [(f)  The Office of Defense Affairs may enter into an
10-27    agreement with a consulting firm to provide information and
 11-1    assistance on a pending decision of the United States Department of
 11-2    Defense or other federal agency regarding the status of military
 11-3    installations and defense-related businesses located in this
 11-4    state.]
 11-5          (g)  In this section, "state agency" has the meaning assigned
 11-6    by Section 2151.002.
 11-7          SECTION 1.10. Section 481.0066, Government Code, is amended
 11-8    by adding Subsection (i) to read as follows:
 11-9          (i)  In carrying out its duties, the commission may not
11-10    deliberate the purchase, exchange, lease, or value of real
11-11    property, deliberate the appointment, employment, evaluation,
11-12    reassignment, duties, discipline, or dismissal of an officer or
11-13    employee of the department, or hear a complaint or charge against
11-14    an officer or employee of the department.
11-15          SECTION 1.11. Section 481.007, Government Code, is amended to
11-16    read as follows:
11-17          Sec. 481.007.  ADVISORY COMMITTEES. (a)  The executive
11-18    director or the governing board may appoint advisory committees to
11-19    assist the executive director or the governing board in the
11-20    performance of their duties.  A member of an advisory committee
11-21    appointed by the executive director or the governing board may not
11-22    receive compensation for service on the advisory committee.  A
11-23    member appointed under this section is entitled to receive
11-24    reimbursement, subject to any applicable limitation on
11-25    reimbursement provided by the General Appropriations Act, for
11-26    actual and necessary expenses included in performing service as a
11-27    member of the advisory committee.
 12-1          (b)  An advisory committee:
 12-2                (1)  must provide independent, external expertise on
 12-3    department functions;
 12-4                (2)  may not be involved in setting department policy
 12-5    or managing the department's actual operations; and
 12-6                (3)  may not include a board member as a member of the
 12-7    advisory committee.
 12-8          SECTION 1.12. Section 481.010, Government Code, is amended by
 12-9    adding Subsection (i) to read as follows:
12-10          (i)  The executive director or the executive director's
12-11    designee shall provide to department employees information and
12-12    training on the benefits and methods of participation in the state
12-13    employee incentive program.
12-14          SECTION 1.13. Section 481.012, Government Code, is amended by
12-15    amending Subsection (b), adding a new Subsection (c), and
12-16    redesignating current Subsections (c) and (d) as Subsections (d)
12-17    and (e), respectively, to read as follows:
12-18          (b)  The department shall keep an information file about each
12-19    complaint filed with the department that the department has
12-20    authority to resolve.  If a written complaint is filed with the
12-21    department that the department has authority to resolve, the
12-22    department, at least quarterly and until final disposition of the
12-23    complaint, shall notify the parties to the complaint of the status
12-24    of the complaint unless the notice would jeopardize an undercover
12-25    investigation.  The file must include:
12-26                (1)  the name of the person who filed the complaint;
12-27                (2)  the date the complaint is received by the
 13-1    department;
 13-2                (3)  the subject matter of the complaint;
 13-3                (4)  the name of each person contacted in relation to
 13-4    the complaint;
 13-5                (5)  a summary of the results of the review or
 13-6    investigation of the complaint; and
 13-7                (6)  an explanation of the reason the file was closed,
 13-8    if the department closed the file without taking action other than
 13-9    to investigate the complaint.
13-10          (c)  The department shall provide to the person filing the
13-11    complaint and to each person who is a subject of the complaint a
13-12    copy of the department's policies and procedures relating to
13-13    complaint investigation and resolution.
13-14          (d) [(c)]  The governing board shall prepare and maintain a
13-15    written plan that describes how a person who does not speak English
13-16    can be provided reasonable access to the department's programs. The
13-17    governing board shall also comply with federal and state laws for
13-18    program and facility accessibility.
13-19          (e) [(d)]  The governing board by rule shall establish
13-20    methods by which consumers and service recipients are notified of
13-21    the name, mailing address, and telephone number of the department
13-22    for the purpose of directing complaints to the department.
13-23          SECTION 1.14. Section 481.021(c), Government Code, is amended
13-24    to read as follows:
13-25          (c)  The department shall deposit contributions from private
13-26    sources in a separate fund kept and held in escrow and in trust by
13-27    the comptroller for and on behalf of the department as funds held
 14-1    outside the treasury under Section 404.073, and the money
 14-2    contributed shall be used to carry out the purposes of the
 14-3    department and, to the extent possible, the purposes specified by
 14-4    the donors.  The comptroller may invest and reinvest the money,
 14-5    pending its use, in the fund in investments authorized by law for
 14-6    state funds that the comptroller considers appropriate. The
 14-7    department shall adopt rules that:
 14-8                (1)  require the department to account for all general
 14-9    revenue money contributed to projects supported by money held
14-10    outside the treasury and provide that the department shall be fully
14-11    reimbursed for those contributions as money becomes available; and
14-12                (2)  require the department to account for all staff
14-13    time spent on fund-raising activities associated with private
14-14    donations.
14-15          SECTION 1.15.  Section 481.154, Government Code, is amended
14-16    to read as follows:
14-17          Sec. 481.154. FUNDING[; RAINY DAY FUND]. (a)  The smart jobs
14-18    fund is established as a dedicated account in the general revenue
14-19    [special trust] fund [in the custody of the comptroller separate
14-20    and apart from all public money or funds of this state].  The fund
14-21    is composed of:
14-22                (1)  money transferred into the fund under Section
14-23    204.123, Labor Code;
14-24                (2)  gifts, grants, and other donations received by the
14-25    department for the fund; and
14-26                (3)  any amounts appropriated by the legislature for
14-27    the program from the general revenue fund.
 15-1          (b)  The program is funded through the smart jobs fund.
 15-2          (c)  Money in the smart jobs fund may be used for program
 15-3    administration, marketing expenses, and evaluation of the program.
 15-4    These costs of the department in any fiscal year may not exceed the
 15-5    lesser of:
 15-6                (1)  five percent of the total amount appropriated for
 15-7    the program for that fiscal year; or
 15-8                (2)  $1.5 million.
 15-9          (d)  If money in the unemployment insurance holding fund is
15-10    insufficient to prevent the unemployment insurance trust fund from
15-11    incurring a deficit tax,  the Texas Workforce Commission may
15-12    request an emergency transfer of money from the smart jobs fund for
15-13    that purpose, and upon approval of the Legislative Budget Board and
15-14    the governor, money from the smart jobs fund shall be transferred
15-15    to the Texas Workforce Commission for that purpose.
15-16          (e)  Notwithstanding any other provision of this section, the
15-17    total combined amount spent in any fiscal year from the smart jobs
15-18    fund may not exceed the amount appropriated by the legislature for
15-19    that fiscal year for the operation of the smart jobs fund program.
15-20          (f)  If, during any three consecutive months, the balance in
15-21    the smart jobs fund exceeds 0.15 percent of the total taxable wages
15-22    for the four calendar quarters ending the preceding June 30, as
15-23    computed under Section 204.062(c), Labor Code, the executive
15-24    director shall immediately transfer the excess from the fund to the
15-25    Unemployment Compensation Fund created under Section 203.021, Labor
15-26    Code.  [The smart jobs rainy day fund is established as a special
15-27    trust fund in the custody of the comptroller separate and apart
 16-1    from all public money or funds of this state.  The smart jobs rainy
 16-2    day fund is composed of:]
 16-3                [(1)  money transferred to that fund as provided by
 16-4    Section 204.123, Labor Code;]
 16-5                [(2)  money returned by employers or recouped by the
 16-6    program under Section 481.159(d); and]
 16-7                [(3)  any other money received by the governing board
 16-8    for deposit in that fund.]
 16-9          [(e)  The governing board may authorize the executive
16-10    director to use money in the smart jobs rainy day fund if:]
16-11                [(1)  the governing board determines, after consulting
16-12    with the comptroller, that the smart jobs fund contains
16-13    insufficient money to cover the amounts appropriated by the
16-14    legislature to operate the program; and]
16-15                [(2)  the Texas Workforce Commission has determined
16-16    that:]
16-17                      [(A)  the unemployment rate in this state is 125
16-18    percent of the average unemployment rate in this state during the
16-19    preceding three years; or]
16-20                      [(B)  a severe economic dislocation is occurring
16-21    in a specific region of this state.]
16-22          [(f)  The Texas Workforce Commission by rule shall define
16-23    "severe economic dislocation" for purposes of Subsection (e).  In
16-24    adopting a definition, the commission shall consider
16-25    employment-related factors, including:]
16-26                [(1)  massive layoffs in a region of this state caused
16-27    by:]
 17-1                      [(A)  the closure of military bases;]
 17-2                      [(B)  the effect of the implementation of the
 17-3    North American Free Trade Agreement;]
 17-4                      [(C)  employer relocations; or]
 17-5                      [(D)  other analogous situations; and]
 17-6                [(2)  the number of jobs lost in a region compared to
 17-7    the region's usual rates of employment.]
 17-8          [(g)  If the governing board approves the use of money from
 17-9    the smart jobs rainy day fund because of a severe economic
17-10    dislocation occurring in a specific region of the state, the
17-11    executive director may use the money allocated from the smart jobs
17-12    rainy day fund solely for projects located in the affected region.]
17-13          [(h)  Notwithstanding any other provision of this section,
17-14    the total combined amount spent in any fiscal year from the smart
17-15    jobs fund and the smart jobs rainy day fund may not exceed the
17-16    amount appropriated by the legislature for that fiscal year for the
17-17    operation of the smart jobs fund program.]
17-18          [(i)  If, during any three consecutive months, the balance in
17-19    the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
17-20    percent of the total taxable wages for the four calendar quarters
17-21    ending the preceding June 30, as computed under Section 204.062(c),
17-22    Labor Code, the executive director shall immediately transfer the
17-23    excess from the applicable fund to the Unemployment Compensation
17-24    Fund created under Section 203.021, Labor Code.]
17-25          SECTION 1.16. Section 481.161, Government Code, is amended to
17-26    read as follows:
17-27          Sec. 481.161.  EXPIRATION. Sections 481.151, 481.152,
 18-1    481.153, 481.155, 481.156, 481.1565, 481.157, 481.158, 481.159, and
 18-2    481.160, and this section expire [This subchapter expires] December
 18-3    31, 2001.
 18-4          SECTION 1.17. Subchapter L, Chapter 481, Government Code, is
 18-5    amended by adding Sections 481.175, 481.176, 481.177, and 481.178
 18-6    to read as follows:
 18-7          Sec. 481.175.  TEXAS TOURISM COORDINATING COUNCIL. (a)  The
 18-8    Texas Tourism Coordinating Council consists of one appointee of the
 18-9    governor and one representative from each of the following:
18-10                (1)  the department;
18-11                (2)  the Texas Department of Transportation;
18-12                (3)  the Parks and Wildlife Department;
18-13                (4)  the Texas Commission on the Arts;
18-14                (5)  the Texas Historical Commission;
18-15                (6)  the General Land Office;
18-16                (7)  the Texas Department of Public Safety;
18-17                (8)  the Department of Agriculture;
18-18                (9)  The Texas A&M University System;
18-19                (10)  the Music, Film, Television, and Multimedia
18-20    Office; and
18-21                (11)  the State Preservation Board.
18-22          (b)  The appointee of the governor shall serve as the
18-23    presiding officer of the council.
18-24          (c)  The council shall receive administrative support from
18-25    the entities the members represent.
18-26          (d)  The council members shall develop, maintain, and enter
18-27    into a memorandum of understanding for the administration of this
 19-1    subchapter.
 19-2          Sec. 481.176.  MEETINGS. (a)  The council shall meet
 19-3    quarterly and as often as necessary to perform its duties.
 19-4          (b)  Eight members of the council, including the presiding
 19-5    officer, constitute a quorum.  If a quorum is present, the council
 19-6    may act on any matter that is within its jurisdiction by a majority
 19-7    vote.
 19-8          (c)  The council shall keep complete minutes of each meeting.
 19-9          Sec. 481.177.  POWERS AND DUTIES. The council shall:
19-10                (1)  identify and address tourism coordination
19-11    problems;
19-12                (2)  ensure that council members comply with the
19-13    required memorandum of understanding;
19-14                (3)  coordinate a marketing plan that promotes Texas,
19-15    that includes input from all council members, and that includes the
19-16    creation and adoption of a cooperative regional marketing plan
19-17    regarding the use of promotional funds by convention and visitors
19-18    bureaus in coordination with the department's tourism functions
19-19    prescribed by Sections 481.171, 481.172, and 481.174;
19-20                (4)  work with the department's Tourism Advisory
19-21    Committee, as necessary, to ensure comment and recommendations from
19-22    the other state agencies responsible for specific tourism areas
19-23    such as recreational, nature, heritage, and cultural tourism; and
19-24                (5)  report to the legislature biennially on all
19-25    agencies' progress and actions taken to coordinate tourism efforts
19-26    in this state, including the state resources dedicated to and the
19-27    outcomes of recreational, cultural, historical, nature, and other
 20-1    types of tourism.
 20-2          Sec. 481.178.  TOURISM PERFORMANCE MEASURES. (a)  The
 20-3    department, in consultation with the council and the Legislative
 20-4    Budget Board, shall develop performance measures that measure the
 20-5    outputs, outcomes, and efficiencies resulting from the department's
 20-6    tourism activities.
 20-7          (b)  When measuring the performance of the department's
 20-8    tourism activities, the department shall:
 20-9                (1)  clearly distinguish between leisure travelers and
20-10    business travelers; and
20-11                (2)  separate the resources dedicated to and the
20-12    outcomes of the department's tourism activities from those of all
20-13    other state agencies involved in tourism efforts.
20-14          (c)  If resources from more than one state agency are used to
20-15    achieve any of the department's tourism activities, the department
20-16    shall clearly indicate that when reporting on those activities.
20-17          (d)  The department shall compute and report the return on
20-18    investment from state funding for tourism.  The return on
20-19    investment shall be based on the total amount of tourism funding
20-20    from all state agencies involved in tourism advertising and
20-21    marketing and the tourism generated by those activities.  The
20-22    department shall differentiate between tourism generated by state
20-23    advertising and marketing and tourism generated by other factors
20-24    that influence tourism.
20-25          SECTION 1.18. (a)  This section governs the transition from a
20-26    nine-member governing board of the Texas Department of Economic
20-27    Development to a governing board composed of five members in
 21-1    accordance with the changes in law made by this Act.
 21-2          (b)  The nine members of the governing board of the Texas
 21-3    Department of Economic Development who are serving immediately
 21-4    before September 1, 2001, continue to serve as the governing board
 21-5    of the department on and after that date. However, the positions of
 21-6    those nine members are abolished on the date on which a majority of
 21-7    the five board membership positions that are created under Section
 21-8    481.004, Government Code, as amended by this Act, are filled by
 21-9    appointment by the governor and the appointees qualify for office.
21-10          (c)  The governor shall make the five appointments to the
21-11    board under Section 481.004, Government Code, as amended by this
21-12    Act, as soon as possible on or after September 1, 2001. In making
21-13    the initial appointments, the governor shall designate two members
21-14    for terms expiring February 1, 2003, one member for a term expiring
21-15    February 1, 2005, and two members for terms expiring February 1,
21-16    2007.
21-17          SECTION 1.19. (a)  The changes in law made by this Act in the
21-18    prohibitions and qualifications applying to members of the
21-19    governing board of the Texas Department of Economic Development
21-20    apply only to a member appointed on or after September 1, 2001.
21-21          (b)  The Texas Department of Economic Development shall adopt
21-22    the rules required by Section 481.021(c), Government Code, as
21-23    amended by this Act, on or before December 1, 2001.
21-24          SECTION 1.20. The Texas Department of Economic Development
21-25    may not award a grant under the smart jobs fund program on or after
21-26    the effective date of this Act. The Texas Department of Economic
21-27    Development shall perform its duties  under  all  smart  jobs  fund
 22-1    program  contracts  in existence on the effective date of this Act.
 22-2          SECTION 1.21. On the effective date of this Act, the Texas
 22-3    Workforce Commission shall transfer any money remaining in the
 22-4    holding fund created under Section 204.122, Labor Code, to the
 22-5    unemployment compensation fund.  The Texas Workforce Commission
 22-6    shall deposit any money collected by the employment training
 22-7    investment assessment after the effective date of this Act directly
 22-8    into the unemployment compensation fund.
 22-9       ARTICLE 2.  ADMINISTRATION OF FOREIGN OFFICES, INTERNATIONAL
22-10                   TRADE, AND TEXAS EXPORTERS LOAN FUND
22-11          SECTION 2.01. Section 481.027, Government Code, is
22-12    transferred to Subchapter B, Chapter 405, Government Code,
22-13    redesignated as Section 405.020, and amended to read as follows:
22-14          Sec. 405.020 [481.027].  FOREIGN OFFICES. (a)  The secretary
22-15    of state [department] shall maintain and operate offices in foreign
22-16    countries for the purposes of promoting investment that generates
22-17    jobs in Texas, exporting of Texas products, tourism, and
22-18    international relations for Texas.  The offices shall be named "The
22-19    State of Texas" offices.  To the extent permitted by law, other
22-20    state agencies that conduct business in foreign countries may place
22-21    staff in the offices established by the secretary of state
22-22    [department] and share the overhead and operating expenses of the
22-23    offices.  Other state agencies and the secretary of state
22-24    [department] may enter interagency contracts for this purpose.
22-25    Chapter 771 does not apply to those contracts.  Any purchase for
22-26    local procurement or contract in excess of $5,000 shall be approved
22-27    by the secretary of state [executive director] prior to its
 23-1    execution.
 23-2          (b)  The offices shall be accessible to Texas-based
 23-3    institutions of higher education and their nonprofit affiliates for
 23-4    the purposes of fostering Texas science, technology, and research
 23-5    development, international trade and investment, and cultural
 23-6    exchange.  The secretary of state [department] and the institutions
 23-7    may enter contracts for this purpose.  Chapter 771 does not apply
 23-8    to those contracts.
 23-9          (c)  The secretary of state [department] shall maintain
23-10    regional offices in locations specified in the General
23-11    Appropriations Act.
23-12          (d)  The secretary of state [department] may collect fees for
23-13    the use of the offices from public and private entities except that
23-14    any payments by a state agency are governed by any interagency
23-15    contract under Subsection (a).  The fees may be used only to
23-16    expand, develop, and operate offices under this section.
23-17          (e)  Chapter 2175 applies to the operation and maintenance of
23-18    the offices.  No other provisions of Subtitle D, Title 10, apply to
23-19    the operation and maintenance of the offices, or to transactions of
23-20    the secretary of state [department] that are authorized by this
23-21    section.
23-22          (f)  The General Services Commission may, at the request of a
23-23    state agency, provide to the agency services exempted from the
23-24    application of Subtitle D, Title 10 under Subsection (e).  Chapter
23-25    771 does not apply to services provided under this subsection.  The
23-26    commission shall establish a system of charges and billings that
23-27    ensures recovery of the cost of providing the services and shall
 24-1    submit a purchase voucher or a journal voucher, after the close of
 24-2    each month, to the agency for which services were performed.
 24-3          SECTION 2.02. Subchapter D, Chapter 481, Government Code, is
 24-4    transferred to Chapter 405, Government Code, redesignated as
 24-5    Subchapter D, Chapter 405, and amended to read as follows:
 24-6                    SUBCHAPTER D.  INTERNATIONAL TRADE
 24-7          Sec. 405.041 [481.041].  LEGISLATIVE FINDINGS. The
 24-8    legislature finds that:
 24-9                (1)  the development and expansion of international
24-10    trade and the export of products and services from this state to
24-11    foreign purchasers are essential to the economic growth of the
24-12    state and to the full employment, welfare, and prosperity of its
24-13    citizens; and
24-14                (2)  the measures authorized and the assistance
24-15    provided by this subchapter, especially with respect to financing,
24-16    are in the public interest and serve a public purpose of the state
24-17    in promoting the economic welfare of the citizens of the state.
24-18          Sec. 405.042 [481.043].  GENERAL POWERS AND DUTIES RELATING
24-19    TO INTERNATIONAL TRADE. The secretary of state [department] shall:
24-20                (1)  provide businesses in the state with technical
24-21    assistance, information, and referrals related to the export of
24-22    products and services, including export finance and international
24-23    business practices;
24-24                (2)  coordinate the representation of exporters in the
24-25    state at international trade shows, missions, marts, seminars, and
24-26    other appropriate promotional venues;
24-27                (3)  cooperate and act in conjunction with other public
 25-1    and private organizations to promote and advance export trade
 25-2    activities in this state; and
 25-3                (4)  disseminate trade leads to exporters in the state
 25-4    through the use of the Internet and other available media.
 25-5          Sec. 405.043 [481.045].  POWERS TO BE INTERPRETED BROADLY.
 25-6    The powers of the secretary of state [department] provided by this
 25-7    subchapter shall be interpreted broadly to effect the purposes of
 25-8    this subchapter.  The grant of powers under this subchapter is not
 25-9    a limitation of other powers of the secretary of state
25-10    [department].
25-11          Sec. 405.044 [481.047].  CONFIDENTIALITY. Information
25-12    collected by the secretary of state [department] concerning the
25-13    identity, background, finance, marketing plans, trade secrets, or
25-14    other commercially sensitive information of a lender or export
25-15    business is confidential unless the lender or export business
25-16    consents to disclosure of the information.
25-17          Sec. 405.045 [481.059].  TEXAS EXPORTERS LOAN FUND. (a)  The
25-18    Texas exporters loan fund is a fund in the state treasury.  The
25-19    fund consists of appropriations or transfers made to the fund,
25-20    fees, other money received from operation of the program
25-21    established by this section, and interest paid on money in the
25-22    fund. Money in the fund may be used to establish a reserve fund in
25-23    an amount determined by the secretary of state [department] and to
25-24    carry out the purposes of this section.  If any appropriations are
25-25    made to the secretary of state [department] from the general
25-26    revenue fund to carry out this section for a fiscal year, at the
25-27    end of that fiscal year the unexpended balance of those
 26-1    appropriations shall be transferred to the Texas exporters loan
 26-2    fund.
 26-3          (b)  The secretary of state [department] may guarantee loans
 26-4    or make loans with a term of one year or less made by private
 26-5    lenders to Texas businesses to finance activities of those
 26-6    businesses entering or expanding into export markets, including
 26-7    activities related to the purchase of inventory, equipment, and raw
 26-8    materials, manufacture, and marketing.
 26-9          (c)  In making guarantees or loans under this section, the
26-10    secretary of state [department] shall give preference to Texas
26-11    products having the highest percentage of their total value
26-12    represented by Texas source components, labor, or intellectual
26-13    property.
26-14          (d)  A loan guarantee or loan under this section may not be
26-15    for less than $10,000 or a lesser amount prescribed by a
26-16    [department] rule of the secretary of state or more than $1
26-17    million.  The secretary of state [department] may not guarantee
26-18    more than 90 percent of a loan by a private lender.  The secretary
26-19    of state [department] may not provide a guarantee or make a loan
26-20    for a project unless the business involved provides at least 10
26-21    percent of the total cost of the project.  The secretary of state
26-22    [department] shall require each loan guaranteed under this section
26-23    to be secured by appropriate collateral and may require the
26-24    acquisition of insurance from the Export-Import Bank of the United
26-25    States.
26-26          (e)  The secretary of state [department] shall assist Texas
26-27    businesses in determining eligibility for participation in the
 27-1    program established by this section, preparing necessary paperwork,
 27-2    identifying potential lenders, and explaining the program to
 27-3    lenders.
 27-4          (f)  The secretary of state [department] shall provide
 27-5    training to persons in small business development centers and
 27-6    export assistance centers to disseminate information concerning the
 27-7    program established by this section throughout the state.
 27-8          (g)  [The department shall administer the program established
 27-9    by this section in the same manner as its other programs under this
27-10    chapter, except as provided otherwise by this section.]  The costs
27-11    of administering the program must be paid by interest earned on
27-12    money in the fund and by fees collected in connection with the
27-13    program.
27-14          (h)  The secretary of state [department] may not guarantee or
27-15    make a loan under this section after August 31, 1997.
27-16          Sec. 405.046.  TRANSFER OF MONEY FROM TEXAS EXPORTERS LOAN
27-17    FUND TO CAPITAL ACCESS FUND. (a)  At the beginning of each fiscal
27-18    year, the secretary of state shall compute for the Texas exporters
27-19    loan fund established under Section 405.045:
27-20                (1)  the amount sufficient for that fiscal year to
27-21    cover loan guarantees made under Section 405.045;
27-22                (2)  the amount sufficient for that fiscal year to
27-23    repay bonds issued under Section 405.045, to carry out the purposes
27-24    of Section 405.045; and
27-25                (3)  the amount of loan repayments for loans made under
27-26    Section 405.045 that will be expected to be received during the
27-27    fiscal year.
 28-1          (b)  At the beginning of each fiscal year, the comptroller
 28-2    for the Texas exporters loan fund shall subtract the sum of the
 28-3    amount computed by the secretary of state under Subsections (a)(1)
 28-4    and (a)(2) from the amount in the fund at the beginning of the
 28-5    fiscal year.
 28-6          (c)  If a positive amount results from a computation made
 28-7    under Subsection (b), the comptroller shall transfer an amount
 28-8    equal to the computed amount from the  Texas exporters loan fund to
 28-9    the capital access fund.
28-10          (d)  As loan repayments are received for the  Texas exporters
28-11    loan fund, the comptroller shall transfer the payments to the
28-12    capital access fund.
28-13          SECTION 2.03. Section 481.087(c), Government Code, is amended
28-14    to read as follows:
28-15          (c)  Appropriated money in the fund may be used and reused
28-16    for the purposes of this subchapter. Available funds in the fund in
28-17    an amount not to exceed $700,000 may be used for the Texas-Mexico
28-18    Development Fund program or the electronic data base established
28-19    under Subchapter D, Chapter 405.
28-20          SECTION 2.04. Section 481.403, Government Code, is amended to
28-21    read as follows:
28-22          Sec. 481.403.  TRANSFER OF MONEY FROM TEXAS RURAL ECONOMIC
28-23    DEVELOPMENT FUND [OTHER FUNDS] TO [THE] CAPITAL ACCESS FUND. (a)
28-24    At the beginning of each fiscal year, the department shall compute
28-25    for [the Texas exporters loan fund established under Subchapter D
28-26    and] the Texas rural economic development fund established under
28-27    Subchapter F:
 29-1                (1)  the amount sufficient for that fiscal year to
 29-2    cover loan guarantees made under Subchapter [D or] F[, as
 29-3    applicable to each fund];
 29-4                (2)  the amount sufficient [for the fiscal year to
 29-5    repay bonds issued under Subchapter D, to carry out the purposes of
 29-6    Section 481.059, or] for projects that are eligible under
 29-7    Subchapter F[, as applicable to each fund]; and
 29-8                (3)  the amount of loan repayments for loans made under
 29-9    Subchapter [D or] F that will be expected to be received during the
29-10    fiscal year[, as applicable to each fund].
29-11          (b)  At the beginning of each fiscal year, the comptroller
29-12    for the Texas rural economic development fund [each fund described
29-13    by Subsection (a)] shall subtract the sum of the amount computed by
29-14    the department under Subsections (a)(1) and (a)(2) [for the
29-15    respective fund] from the amount in the fund at the beginning of
29-16    the fiscal year.
29-17          (c)  If a positive amount results from a computation made
29-18    under Subsection (b), the comptroller shall transfer an amount
29-19    equal to the computed amount from the Texas rural economic
29-20    development fund [to which the computation relates] to the capital
29-21    access fund.
29-22          (d)  As loan repayments are received for the Texas rural
29-23    economic development fund [each fund described by Subsection (a)],
29-24    the comptroller shall transfer the payments to the capital access
29-25    fund.
29-26          SECTION 2.05. (a)  On the effective date of this Act, all
29-27    powers, duties, obligations, rights, contracts, records, employees,
 30-1    property, and unspent  and  unobligated  appropriations  and  other
 30-2    funds of the Texas Department of Economic Development that were
 30-3    used by that agency immediately before the effective date of this
 30-4    Act to administer foreign offices, the international trade program,
 30-5    and the border affairs program are transferred to the secretary of
 30-6    state.
 30-7          (b)  All rules, policies, procedures, and decisions that
 30-8    affect the foreign offices, the international trade program, and
 30-9    the border affairs program are continued in effect until superseded
30-10    by a rule or other appropriate action of the secretary of state.
30-11      ARTICLE 3.  ADMINISTRATION OF THE TEXAS BUSINESS AND COMMUNITY
30-12                ECONOMIC DEVELOPMENT CLEARINGHOUSE AND THE
30-13                       COMMUNITY INVESTMENT PROGRAM
30-14          SECTION 3.01. Subchapter K, Chapter 481, Government Code, is
30-15    transferred to Chapter 403, Government Code, designated as
30-16    Subchapter O, and amended to read as follows:
30-17                SUBCHAPTER O [K].  INFORMATION AND REFERRAL
30-18          Sec. 403.361 [481.166].  LEGISLATIVE FINDINGS. The
30-19    legislature finds that:
30-20                (1)  economic development programs and services are
30-21    located in a number of state agencies;
30-22                (2)  businesses and communities need a single point of
30-23    contact on business and community economic development programs and
30-24    services; and
30-25                (3)  state agencies need to work together to provide
30-26    outreach and assistance to local governments and businesses.
30-27          Sec. 403.362 [481.1665].  INFORMATION ON PROGRAMS AND
 31-1    SERVICES FOR CERTAIN COMMUNITIES AND ENTITIES. (a)  At least once
 31-2    each two-year period, the Texas Business and Community Economic
 31-3    Development Clearinghouse shall provide written notice in English
 31-4    and in Spanish regarding those programs and services described by
 31-5    Section 403.363(b) [481.167(b)] that will benefit and assist
 31-6    communities and entities that have experienced significant job
 31-7    losses associated with the implementation of the North American
 31-8    Free Trade Agreement (NAFTA).  The clearinghouse shall provide the
 31-9    notice to each of the governing bodies of the municipalities and
31-10    counties, chambers of commerce, small business development centers,
31-11    and economic development centers located in the border region.  The
31-12    clearinghouse shall also provide the information contained in the
31-13    notice on the comptroller's [department's] Internet website.
31-14          (b)  The notice required by Subsection (a) must contain:
31-15                (1)  the Internet address of the comptroller's
31-16    [department's] website; and
31-17                (2)  the toll-free telephone number of the
31-18    clearinghouse.
31-19          Sec. 403.363 [481.167].  TEXAS BUSINESS AND COMMUNITY
31-20    ECONOMIC DEVELOPMENT CLEARINGHOUSE. (a)  The comptroller
31-21    [department] shall establish the Texas Business and Community
31-22    Economic Development Clearinghouse to provide information and
31-23    assistance to businesses and communities in the state through the
31-24    use of a statewide toll-free telephone service.
31-25          (b)  The clearinghouse shall collect and disseminate
31-26    information on federal, state, local, and private:
31-27                (1)  business development programs, including financial
 32-1    assistance and business incentive programs;
 32-2                (2)  business development services, including technical
 32-3    assistance, workshops, business incubators, training, and useful
 32-4    publications;
 32-5                (3)  rural and urban community economic development
 32-6    programs, including loans, grants, and other funding sources;
 32-7                (4)  rural and urban community economic development
 32-8    services, including technical assistance, workshops, training, and
 32-9    useful publications;
32-10                (5)  small business programs and services and useful
32-11    publications;
32-12                (6)  in cooperation with the Governor's Committee on
32-13    People with Disabilities, the Texas Department of Economic
32-14    Development Office of Small Business, the United States Small
32-15    Business Administration, and the Texas Council for Developmental
32-16    Disabilities, business development services, including technical
32-17    assistance, workshops, training, and useful publications for people
32-18    with disabilities;
32-19                (7) [(6)]  defense economic adjustment programs and
32-20    services and useful publications; and
32-21                (8) [(7)]  international trade programs, services, and
32-22    useful publications.
32-23          (c)  The clearinghouse shall provide access to the
32-24    information compiled under this subchapter in a user-friendly
32-25    format through the use of the Internet.
32-26          (d)  The comptroller [department] shall obtain from other
32-27    state agencies appropriate information needed by the department to
 33-1    carry out its duties under this subchapter.
 33-2          (e)  The comptroller shall further [assist the department in
 33-3    furthering] the purposes of this subchapter by allowing the Texas
 33-4    Department of Economic Development [department] to use the field
 33-5    offices and personnel of the comptroller to disseminate brochures,
 33-6    documents, and other information useful to businesses in the state.
 33-7          SECTION 3.02. Subchapter BB, Chapter 481, Government Code, is
 33-8    amended by adding Section 481.415 to read as follows:
 33-9          Sec. 481.415.  COMMUNITY INVESTMENT PROGRAM. (a)  In this
33-10    section:
33-11                (1)  "Community development financial institution" has
33-12    the meaning assigned by 12 U.S.C. Section 4702, as amended.
33-13                (2)  "Community development investment" means a loan or
33-14    grant made to a community development financial institution for the
33-15    purpose of enhancing the provision of basic consumer financial
33-16    services.
33-17                (3)  "Community development loan" means a loan from a
33-18    community development financial institution to a low-income
33-19    business or nonprofit organization for the purpose of revitalizing
33-20    a distressed community.
33-21                (4)  "Eligible institution" means a community
33-22    development financial institution meeting the minimum selection
33-23    criteria described by 12 U.S.C. Section 4704, as amended.
33-24          (b)  Notwithstanding any other law, the department shall
33-25    establish a community investment program in which the department
33-26    makes grants or interest-free loans, using money in the fund, to
33-27    eligible institutions that use the money to make community
 34-1    development loans in distressed areas of the state or to assist
 34-2    low-income areas by providing basic consumer financial services.
 34-3          (c)  The department shall determine the eligibility of an
 34-4    institution by verifying that the institution meets the minimum
 34-5    selection criteria described by 12 U.S.C. Section 4704, as amended.
 34-6    The department may set a limit on the number of eligible
 34-7    institutions that may participate in the community investment
 34-8    program.  To participate in the community investment program, an
 34-9    eligible institution must enter into a participation agreement with
34-10    the department that sets out the terms and conditions under which
34-11    the department will make a grant or loan to the eligible
34-12    institution.
34-13          (d)  The department may make a grant to an institution or
34-14    nonprofit organization to assist the institution or organization
34-15    to:
34-16                (1)  meet the minimum selection criteria described by
34-17    12 U.S.C. Section 4704, as amended, or to otherwise obtain
34-18    assistance under 12 U.S.C. Section 4701 et seq., as amended; and
34-19                (2)  become an eligible institution and participate in
34-20    the community investment program.
34-21          (e)  The department may make a grant to a nonprofit
34-22    organization the department determines is performing activities
34-23    consistent with the goals of this section to provide the
34-24    organization operating support, technical assistance, and training
34-25    assistance.
34-26          (f)  The department shall adopt rules relating to the
34-27    implementation of the community investment program and any other
 35-1    rules necessary to accomplish the purposes of this section.
 35-2          (g)  An eligible institution may file a grant or loan
 35-3    application with the department.  The application must be in a form
 35-4    approved by the department and include a plan of investment that
 35-5    includes the type and number of community development loans or
 35-6    investments that the institution plans to make using money from the
 35-7    community investment program.  The department shall act on a
 35-8    completed application not later than the 30th day after the date on
 35-9    which the application is filed with the department.
35-10          (h)  All income received on a loan or investment made with
35-11    money received under the community investment program is the
35-12    property of the eligible institution that makes the loan or
35-13    investment.
35-14          (i)  Not later than the 30th day after the expiration of each
35-15    six-month period for which there is a participation agreement in
35-16    effect between the department and an eligible institution, the
35-17    eligible institution shall submit a report to the department that
35-18    states in detail the status of each investment or loan made under
35-19    the community investment program.  The report must be in a form
35-20    prescribed by the department and must contain all information
35-21    required by the department as part of the institution's
35-22    participation agreement.
35-23          (j)  The participation agreement entered into between the
35-24    eligible institution and the department must provide for an annual
35-25    audit.  The department shall adopt rules relating to the format of
35-26    the audit, including rules allowing not more than $5,000 of the
35-27    amount received by the eligible institution under the community
 36-1    investment program to be used to finance the audit.
 36-2          SECTION 3.03. On the effective date of this Act, all powers,
 36-3    duties, obligations, rights, contracts, records, employees,
 36-4    property, and unspent and  unobligated appropriations and other
 36-5    funds of the Texas Department of Economic Development that were
 36-6    used by that agency immediately before the effective date of this
 36-7    Act to administer the Texas Business and Community Economic
 36-8    Development Clearinghouse are transferred to the comptroller of
 36-9    public accounts.
36-10                        ARTICLE 4.  EFFECTIVE DATE
36-11          SECTION 4.01. This Act takes effect September 1, 2001, except
36-12    that SECTION 1.20 of this Act takes effect immediately if it
36-13    receives a vote of two-thirds of all the members elected to each
36-14    house, as provided by Section 39, Article III, Texas Constitution,
36-15    and for the purposes of application of SECTION 1.20 of this Act
36-16    only, the effective date of this Act is considered to be the date
36-17    that SECTION 1.20 of this Act takes effect.  If SECTION 1.20 of
36-18    this Act does not receive the vote necessary for immediate effect,
36-19    SECTION 1.20 of this Act takes effect September 1, 2001.