By:  Madla, et al.                                                S.B. No. 15 


A BILL TO BE ENTITLED

AN ACT

relating to the use of appropriations in the Smart Jobs Fund as 
business location incentives; making an appropriation.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  LEGISLATIVE FINDINGS.  The legislature finds 
that the use of public funds for the purpose of awarding grants as 
business location incentives for the diversification of the 
economy, the elimination of unemployment or underemployment, or the 
development or expansion of transportation or commerce is in the 
public interest and serves a public purpose of the state.
	SECTION 2.  BUSINESS LOCATION INCENTIVES.  (a)  The Texas 
Department of Economic Development is authorized to make grants to 
local governmental entities within Texas for the purpose of 
diversifying the economy, reducing unemployment or 
underemployment, or developing or expanding transportation or 
commerce.  The department must develop procedures or adopt rules to 
implement this Act.
	(b)  From the amounts appropriated by Chapter 637, Acts of 
the 77th Legislature, Regular Session, 2001, and Chapter 1515, Acts 
of the 77th Legislature, Regular Session, 2001 (the General 
Appropriations Act), from Smart Jobs Fund No. 891 to the Texas 
Department of Economic Development in connection with the smart 
jobs fund program, the department is authorized to expend the 
unencumbered amount of $15,000,000 during the remainder of the 
fiscal year ending August 31, 2003, for business location 
incentives.
	(c)  If the Texas Department of Economic Development is not 
abolished on September 1, 2003, by operation of Chapter 325, 
Government Code (Texas Sunset Act), the unexpended balance of funds 
described by Subsection (b) of this section remaining at the end of 
the fiscal year ending August 31, 2003, is appropriated from Smart 
Jobs Fund No. 891 to the Texas Department of Economic Development 
for the fiscal year beginning September 1, 2003, for business 
location incentives.  The total amount of funds appropriated from 
Smart Jobs Fund No. 891 under this subsection and Subsection (b) of 
this section may not exceed $15,000,000.
	(d)  A grant awarded under this section is contingent on the 
recipient meeting certain criteria relating to the purposes for 
which the grant is made.  Before awarding a grant under this 
section, the Texas Department of Economic Development must enter 
into a written agreement with the local governmental entity being 
awarded the grant specifying that:
		(1)  if all or any portion of the amount of the grant is 
used to build infrastructure or make any other type of capital 
improvement, the state must:
			(A)  retain a lien or other interest in the 
capital improvement in proportion to the percentage of the grant 
amount used to pay for the capital improvement; and
			(B)  ensure that if the capital improvement is 
sold, the grant recipient repays the department, with interest at 
the agreed rate and terms, any state money used to pay for the 
capital improvement and shares with this state a proportionate 
amount of any profit realized from the sale; and
		(2)  if, upon the expiration of a date provided in the 
agreement, the grant recipient fails to use an amount awarded under 
this section for any of the purposes for which the grant was 
intended, the recipient shall repay that amount and any related 
interest to the state at the agreed rate and terms.
	(e)  If the Texas Department of Economic Development is 
abolished on September 1, 2003, by operation of Chapter 325, 
Government Code (Texas Sunset Act), the unexpended balance of funds 
described by Subsection (b) of this section remaining at the end of 
the fiscal year ending August 31, 2003, shall be transferred to an 
appropriate state agency designated by the governor to be used for 
the purposes and in the manner described by this Act.  The total 
amount of funds appropriated from Smart Jobs Fund No. 891 under this 
subsection and Subsection (b) of this section may not exceed 
$15,000,000.
	SECTION 3.  EFFECTIVE DATE.  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.  If this Act does not receive the vote necessary for 
immediate effect, this Act takes effect September 1, 2003.