78R12860 ATP-D


By:  Nelson                                                       S.B. No. 275

Substitute the following for S.B. No. 275:                                    

By:  Keffer of Eastland                                       C.S.S.B. No. 275


A BILL TO BE ENTITLED
AN ACT
relating to the abolition of the Texas Department of Economic Development and the transfer of certain of its functions and the functions of the Texas Aerospace Commission to the Texas Economic Development and Tourism Office; to the establishment, operation, and funding of the Texas Economic Development Bank; and to the administration and operation of certain economic development programs. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. ABOLITION OF TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT; TRANSFER OF CERTAIN FUNCTIONS TO TEXAS ECONOMIC DEVELOPMENT AND TOURISM OFFICE
SECTION 1.01. The heading to Chapter 481, Government Code, is amended to read as follows:
CHAPTER 481. TEXAS [DEPARTMENT OF] ECONOMIC DEVELOPMENT AND TOURISM OFFICE
SECTION 1.02. Section 481.001, Government Code, is amended by adding Subdivisions (5)-(7) to read as follows: (5) "Bank" means the Texas Economic Development Bank. (6) "Industry cluster" means a concentration of businesses and industries in a geographic region that are interconnected by the markets they serve, the products they produce, their suppliers, the trade associations to which their employees belong, and the educational institutions from which their employees or prospective employees receive training. (7) "Office" means the Texas Economic Development and Tourism Office. SECTION 1.03. Section 481.002, Government Code, is amended to read as follows: Sec. 481.002. OFFICE [DEPARTMENT]. The Texas [Department of] Economic Development and Tourism Office is an office within the office of the governor [agency of the state]. SECTION 1.04. Section 481.003, Government Code, is amended to read as follows: Sec. 481.003. SUNSET PROVISION. The Texas [Department of] Economic Development and Tourism Office is subject to Chapter 325 (Texas Sunset Act). Unless continued in existence as provided by that chapter, the office [department] is abolished and this chapter expires September 1, 2015 [2003]. SECTION 1.05. Section 481.0042, Government Code, is amended by amending Subsections (a), (b), (c), and (e) and adding Subsection (f) to read as follows: (a) A person may not [serve as a public member of the governing board or] be the executive director or an employee of the office employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), and its subsequent amendments, [department] if the person: (1) is employed by, participates in the management of, or is a paid consultant of a business entity that contracts with the office [department]; (2) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization that contracts with the office [department]; (3) uses or receives a substantial amount of tangible goods, services, or funds from the office [department], other than compensation or reimbursement authorized by law for employee salaries and benefits [or for governing board membership, attendance, and expenses]; or (4) is an officer, employee, or paid consultant of a trade association of businesses in the field of economic development or tourism or that contracts with the office [department]. (b) A person may not [serve as a public member of the governing board or] be the executive director or an employee of the office [department] if the person's spouse: (1) is employed by, participates in the management of, or is a paid consultant of a business entity that contracts with the office [department]; (2) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization that contracts with the office [department]; (3) uses or receives a substantial amount of tangible goods, services, or funds from the office [department]; or (4) is an officer, manager, or paid consultant of a trade association of businesses in the field of economic development or tourism or that contracts with the office [department]. (c) For the purposes of this section, a trade association is a nonprofit, cooperative, and voluntarily joined association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest. (e) A person may not be [a member of the governing board or] the executive director or an employee of the office [department] if the person is required to register as a lobbyist under Chapter 305 because of the person's activities for compensation on behalf of a business entity that has an interest in a contract with the office [department] or a profession related to the operation of the office [department]. (f) A person may not act as the general counsel to the office if the person is required to register as a lobbyist under Chapter 305 because of the person's activities for compensation on behalf of a profession related to the operation of the office. SECTION 1.06. Subchapter A, Chapter 481, Government Code, is amended by adding Section 481.0045 to read as follows: Sec. 481.0045. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION POLICY. (a) The office shall develop and implement a policy to encourage the use of: (1) negotiated rulemaking procedures under Chapter 2008 for the adoption of office rules; and (2) appropriate alternative dispute resolution procedures under Chapter 2009 to assist in the resolution of internal and external disputes under the office's jurisdiction. (b) The office's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies. (c) The office shall designate a trained person to: (1) coordinate the implementation of the policy adopted under Subsection (a); (2) serve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and (3) collect data concerning the effectiveness of those procedures, as implemented by the office. SECTION 1.07. The heading to Section 481.005, Government Code, is amended to read as follows: Sec. 481.005. EXECUTIVE DIRECTOR; [GOVERNING BOARD] DUTIES. SECTION 1.08. Sections 481.005(a), (c), and (d), Government Code, are amended to read as follows: (a) The governor [governing board] shall appoint [employ] an executive director of the office [department] who serves at the pleasure of the governor [governing board]. (c) The executive director shall manage the affairs of the office [department] under the direction of the governor [governing board. The executive director shall provide administrative support to the members of the governing board that is necessary for the performance of the functions of the members]. (d) The executive director [members of the governing board] shall direct the activities of the office [department] and, in performing that duty, shall establish policy, adopt rules, evaluate the implementation of new legislation that affects the office's [department's] duties, review and comment on the office's [department's] budget, prepare an annual report of the office's [department's] activities, conduct investigations and studies, and develop long-range plans for the future goals and needs of the office [department. The members of the policy board may not be involved in the daily operation of the department]. SECTION 1.09. Section 481.0065(a), Government Code, is amended to read as follows: (a) The office [department] shall: (1) establish and maintain an Office of Defense Affairs; and (2) appoint a director to manage the Office of Defense Affairs. SECTION 1.10. Subchapter A, Chapter 481, Government Code, is amended by adding Section 481.0066 to read as follows: Sec. 481.0066. AEROSPACE AND AVIATION OFFICE. (a) The office shall establish and maintain an aerospace and aviation office. (b) The office may hire a director of the aerospace and aviation office and staff as necessary to perform the duties of the aerospace and aviation office under this section. (c) The aerospace and aviation office shall encourage economic development in this state by fostering the growth and development of aerospace and aviation industries in Texas. (d) The aerospace and aviation office shall: (1) analyze space-related and aviation-related research currently conducted in this state and may conduct activities designed to further that research; (2) analyze the state's economic position in the aerospace and aviation industries; (3) develop short-term and long-term business strategies to promote the retention, development, and expansion of aerospace and aviation industry facilities in the state; (4) make specific recommendations to the legislature and the governor regarding the promotion of those industries; (5) act as a liaison with other state and federal entities with related economic, educational, and defense responsibilities to support the marketing of the state's aerospace and aviation capabilities; and (6) provide technical support and expertise to the state and to local spaceport authorities regarding aerospace and aviation business matters. SECTION 1.11. Subchapter A, Chapter 481, Government Code, is amended by adding Section 481.0067 to read as follows: Sec. 481.0067. SMALL BUSINESS ADVOCATE. (a) The executive director shall designate an individual as the small business advocate. (b) To be eligible to serve as the small business advocate, a person must have demonstrated a strong commitment to and involvement in small business efforts. (c) The small business advocate shall: (1) serve as the principal focal point in this state for assisting small and historically underutilized businesses; (2) assist small and historically underutilized businesses by identifying: (A) conflicting state policy goals and state agency rules that may inhibit small and historically underutilized business development; (B) financial barriers for those businesses; and (C) sources of financial assistance for those businesses; (3) provide assistance to small and historically underutilized businesses in complying with federal, state, and local laws; and (4) perform research, studies, and analyses of matters affecting the interests of small and historically underutilized businesses. SECTION 1.12. Section 481.008, Government Code, is amended to read as follows: Sec. 481.008. AUDIT. (a) The financial transactions of the office [department] are subject to audit by: (1) the state auditor in accordance with Chapter 321; or (2) a private auditing firm. (b) The state auditor shall inform the executive director [presiding officer of the governing board] when a financial audit of the office [department] is not included in the audit plan for the state for a fiscal year. The executive director [governing board] shall ensure that the office [department] is audited under Subsection (a)(2) during those fiscal years. SECTION 1.13. Section 481.010, Government Code, is amended by amending Subsections (a), (b), (e), and (f) and adding Subsection (i) to read as follows: (a) The executive director shall employ personnel necessary for the performance of office [department] functions. The equal employment opportunity officer and the internal auditor of the office of the governor shall serve the same functions for the office as they serve for the office of the governor. [In addition to other personnel, the executive director shall employ a human rights officer and an internal auditor.] The internal auditor shall report directly to the governor [governing board] and may consult with the executive director or the executive director's designee. (b) The executive director or the executive director's designee shall provide to office [governing board members and department] employees, as often as necessary, information regarding their qualifications for [office or] employment under this chapter and their responsibilities under applicable laws relating to standards of conduct for state [officers or] employees. (e) The executive director or the executive director's designee shall develop a system of annual performance evaluations. All merit pay for office [department] employees must be based on the system established under this subsection. (f) The executive director or the executive director's designee shall prepare and maintain a written policy statement to assure implementation of a program of equal employment opportunity under which all personnel transactions are made without regard to race, color, disability, sex, religion, age, or national origin. The policy statement must include: (1) personnel policies, including policies relating to recruitment, evaluation, selection, appointment, training, and promotion of personnel that are in compliance with requirements of the Commission on Human Rights; (2) a comprehensive analysis of the office [department] work force that meets federal and state guidelines; (3) procedures by which a determination can be made of significant underuse in the office [department] work force of all persons for whom federal or state guidelines encourage a more equitable balance; and (4) reasonable methods to appropriately address those areas of significant underuse. (i) The executive director or the executive director's designee shall provide to office employees information and training on the benefits and methods of participation in the state employee incentive program. SECTION 1.14. Section 481.011, Government Code, is amended to read as follows: Sec. 481.011. FISCAL REPORT. The executive director shall file annually with the governor and the presiding officer of each house of the legislature a complete and detailed written report accounting for all funds received and disbursed by the office [department] during the preceding fiscal year. The annual report must be in the form and reported in the time provided by the General Appropriations Act. SECTION 1.15. Section 481.012, Government Code, is amended to read as follows: Sec. 481.012. PUBLIC INTEREST INFORMATION AND COMPLAINTS. (a) The office [department] shall prepare information of public interest describing the functions of the office [department] and the office's [department's] procedures by which complaints are filed with and resolved by the office [department]. The office [department] shall make the information available to the public and appropriate state agencies. The office shall provide to the person filing the complaint and to each person who is a subject of the complaint a copy of the office's policies and procedures relating to complaint investigation and resolution. (b) The office [department] shall keep an information file about each complaint filed with the office [department] that the office [department] has authority to resolve. The file must include: (1) the name of the person who filed the complaint; (2) the date the complaint is received by the office; (3) the subject matter of the complaint; (4) the name of each person contacted in relation to the complaint; (5) a summary of the results of the review or investigation of the complaint; and (6) an explanation of the reason the file was closed, if the office closed the file without taking action other than to investigate the complaint. (c) If a written complaint is filed with the office [department] that the office [department] has authority to resolve, the office [department], at least quarterly and until final disposition of the complaint, shall notify the parties to the complaint of the status of the complaint unless the notice would jeopardize an undercover investigation. (d) [(c)] The office [governing board] shall prepare and maintain a written plan that describes how a person who does not speak English can be provided reasonable access to the office's [department's] programs. The office [governing board] shall also comply with federal and state laws for program and facility accessibility. (e) [(d)] The executive director [governing board] by rule shall establish methods by which consumers and service recipients are notified of the name, mailing address, and telephone number of the office [department] for the purpose of directing complaints to the office [department]. SECTION 1.16. The heading to Subchapter B, Chapter 481, Government Code, is amended to read as follows:
SUBCHAPTER B. GENERAL POWERS AND DUTIES OF OFFICE [DEPARTMENT]
SECTION 1.17. Section 481.021, Government Code, is amended to read as follows: Sec. 481.021. GENERAL POWERS OF OFFICE [DEPARTMENT]. (a) The office [department] may: (1) adopt and enforce rules necessary to carry out this chapter; (2) adopt and use an official seal; (3) accept gifts, grants, or loans from and contract with any entity; (4) [sue and be sued; [(5)] acquire and convey property or an interest in property; (5) [(6)] procure insurance and pay premiums on insurance of any type, in accounts, and from insurers as the office [department] considers necessary and advisable to accomplish any of the office's [department's] purposes; (6) [(7)] hold patents, copyrights, trademarks, or other evidence of protection or exclusivity issued under the laws of the United States, any state, or any nation and may enter into license agreements with any third parties for the receipt of fees, royalties, or other monetary or nonmonetary value; (7) [(8)] sell advertisements in any medium; and (8) [(9)] exercise any other power necessary to carry out this chapter. (b) Except as otherwise provided by this chapter, money paid to the office [department] under this chapter shall be deposited in the state treasury. (c) The office [department] shall deposit contributions from private sources in a separate fund kept and held in escrow and in trust by the comptroller for and on behalf of the office [department] as funds held outside the treasury under Section 404.073, and the money contributed shall be used to carry out the purposes of the office [department] and, to the extent possible, the purposes specified by the donors. The comptroller may invest and reinvest the money, pending its use, in the fund in investments authorized by law for state funds that the comptroller considers appropriate. SECTION 1.18. Section 481.022, Government Code, is amended to read as follows: Sec. 481.022. GENERAL DUTIES OF OFFICE [DEPARTMENT]. The office [department] shall: (1) market and promote the state as a premier business location and tourist destination; (2) facilitate the location, expansion, and retention of domestic and international business investment to the state; [(2) provide statewide toll-free information and referrals for business and community economic development;] (3) promote and administer business and community economic development programs and services in the state, including business incentive programs; (4) provide to businesses and communities in the state assistance with exporting products and services to international markets; (5) serve as a central source of economic research and information [promote the state as a premier tourist and business travel destination]; and (6) establish a statewide strategy to address economic growth and quality of life issues, a component of which is based on the identification and development of industry clusters [provide businesses and local communities with timely and useful research and data services; [(7) aggressively market and promote the business climate in the state and the state economic development business assistance programs and services through the use of available media and resources, including the Internet; and [(8) seek funding of the department programs and activities from federal, state, and private sources]. SECTION 1.19. Section 481.023(a), Government Code, is amended to read as follows: (a) The office [department] shall perform the administrative duties prescribed under: (1) Chapter 1433; and (2) the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes). SECTION 1.20. Sections 481.024(a), (e), and (f), Government Code, are amended to read as follows: (a) The Texas Economic Development Corporation on behalf of the state shall carry out the public purposes of this chapter. The creation of the corporation does not limit or impair the rights, powers, and duties of the office [department] provided by this chapter. The corporate existence of the Texas Economic Development Corporation begins on the issuance of a certificate of incorporation by the secretary of state. The governor shall appoint [members of the governing board serve ex officio as] the board of directors of the corporation. The governor or the governor's designee and the executive director serve as nonvoting, ex officio members of the board. The corporation has the powers and is subject to the limitations provided for the office [department] by this chapter in carrying out the public purposes of this chapter. The corporation has the rights and powers of a nonprofit corporation incorporated under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) except to the extent inconsistent with this section. The corporation may contract with the office [department] and with bond counsel, financial advisors, or underwriters as its board of directors considers necessary. (e) If the board of directors by resolution determines that the purposes for which the corporation was formed have been substantially complied with and that all bonds issued by the corporation have been fully paid, the board of directors shall dissolve the corporation. On dissolution, the title to all funds and properties then owned by the corporation shall be transferred to the office [department]. (f) The Texas Economic Development Corporation and any other corporation whose charter specifically dedicates the corporation's activities to the benefit of the office or the Texas Department of Economic Development or its predecessor agency shall file an annual report of the financial activity of the corporation. The annual report shall be filed prior to the 90th day after the last day for the corporation's fiscal year and shall be prepared in accordance with generally accepted accounting principles. The report must include a statement of support, revenue, and expenses and change in fund balances, a statement of functional expenses, and balance sheets for all funds. SECTION 1.21. Section 481.025, Government Code, is amended to read as follows: Sec. 481.025. EMPOWERMENT ZONE AND ENTERPRISE COMMUNITY PROGRAM. The office [department] is the agency of this state responsible for administering the Empowerment Zone and Enterprise Community grant program in this state. The bank [department] shall cooperate with appropriate federal and local agencies as necessary to administer the grant program. SECTION 1.22. Subchapter B, Chapter 481, Government Code, is amended by adding Section 481.026 to read as follows: Sec. 481.026. TECHNOLOGICAL SOLUTIONS. The office shall develop and implement a policy that requires the executive director and the staff of the office to research and propose appropriate technological solutions to improve the ability of the office to perform its mission. The technological solutions must include measures to ensure that the public is able to easily find information about the office through the Internet and that persons who have a reason to use the office's services are able to use the Internet to interact with the office and to access any service that can be provided effectively through the Internet. The policy shall also ensure that the proposed technological solutions are cost-effective and developed through the office's planning processes. SECTION 1.23. Sections 481.027(a)-(e), Government Code, are amended to read as follows: (a) The office [department] shall maintain and operate offices in foreign countries for the purposes of promoting investment that generates jobs in Texas, exporting of Texas products, tourism, and international relations for Texas. The foreign offices shall be named "The State of Texas" offices. To the extent permitted by law, other state agencies that conduct business in foreign countries may place staff in the foreign offices established by the office [department] and share the overhead and operating expenses of the foreign offices. Other state agencies and the office [department] may enter interagency contracts for this purpose. Chapter 771 does not apply to those contracts. Any purchase for local procurement or contract in excess of $5,000 shall be approved by the executive director prior to its execution. (b) The foreign offices shall be accessible to Texas-based institutions of higher education and their nonprofit affiliates for the purposes of fostering Texas science, technology, and research development, international trade and investment, and cultural exchange. The office [department] and the institutions may enter contracts for this purpose. Chapter 771 does not apply to those contracts. (c) The office [department] shall maintain regional offices in locations specified in the General Appropriations Act. (d) The office [department] may collect fees for the use of the foreign offices from public and private entities except that any payments by a state agency are governed by any interagency contract under Subsection (a). The fees may be used only to expand, develop, and operate foreign offices under this section. (e) Chapter 2175 applies to the operation and maintenance of the foreign offices. No other provisions of Subtitle D, Title 10, apply to the operation and maintenance of the foreign offices, or to transactions of the office [department] that are authorized by this section. SECTION 1.24. Section 481.029, Government Code, is amended to read as follows: Sec. 481.029. COST RECOVERY. The office [department] shall recover the cost of providing direct technical assistance, management training services, and other services to businesses and communities when reasonable and practical. SECTION 1.25. Subchapter B, Chapter 481, Government Code, is amended by adding Sections 481.0295 and 481.0296 to read as follows: Sec. 481.0295. IDENTIFICATION OF INDUSTRY CLUSTERS. (a) The office shall work with industry associations and organizations to identify regional and statewide industry clusters. (b) The activities of the office in identifying industry clusters may include: (1) conducting focus group discussions, facilitating meetings, and conducting studies to identify: (A) members of an industry cluster; (B) the general economic state of the industry cluster; and (C) issues of common concern in the industry cluster; (2) supporting the formation of industry cluster associations, publishing industry cluster association directories, and encouraging the entry of new members into the industry cluster; and (3) providing methods for electronic communication and information dissemination among members of the industry clusters. (c) The office shall identify an industry cluster as a targeted sector if the office determines that the development of the industry cluster is a high priority. (d) The office shall work with targeted sectors, private sector organizations, local governments, local economic development organizations, and higher education and training institutions to develop strategies to strengthen the competitiveness of industry clusters. The strategies shall be designed to: (1) diversify the economy; (2) facilitate technology transfer; and (3) increase value-added production. (e) The activities of the office to assist the development of a targeted sector may include: (1) conducting focus group discussions, facilitating meetings, and conducting studies to identify: (A) members of a targeted sector; (B) the general economic state of the sector; and (C) issues of common concern in the sector; (2) supporting the formation of industry associations, publishing industry association directories, and creating or expanding the activities of the industry associations; (3) assisting in the formation of flexible networks between persons interested in the development of the targeted sector by providing: (A) employees of the office or private sector consultants trained to organize and implement flexible networks; and (B) funding for potential flexible network participants to organize and implement a flexible network; (4) helping to establish research consortia; (5) facilitating training and education programs conducted jointly by sector members; (6) promoting cooperative market development activities; (7) analyzing the need for, feasibility of, and cost of establishing product certification and testing facilities and services; and (8) providing for methods of electronic communication and information dissemination among sector members to facilitate network or industry cluster activity. (f) The office shall, on a continuing basis as determined by the office, evaluate: (1) the effectiveness of the services provided to industry clusters, using information gathered at regional and statewide levels; and (2) the potential return to the state from devoting additional resources to the economic development of a targeted sector and devoting resources to additional targeted sectors. (g) The office shall use information gathered in each region for which the office identifies industry clusters to: (1) formulate strategies to promote the economic development of targeted sectors; and (2) designate new targeted sectors. Sec. 481.0296. ADVANCED TECHNOLOGY INDUSTRIES. (a) The office shall coordinate state efforts to attract, develop, or retain technology industries in this state in certain sectors, including: (1) the semiconductor industry; (2) information and computer technology; (3) microelectromechanical systems; (4) manufactured energy systems; (5) nanotechnology; and (6) biotechnology. (b) The office shall: (1) recommend to the governor actions to promote economic development in the area of advanced technology; (2) identify and assess specific economic development opportunities; and (3) engage in outreach to advanced technology industries, including a joint venture created under the National Cooperative Research and Production Act of 1993 (15 U.S.C. Section 4301 et seq.), as amended, that is exempt from federal taxation as an organization described by Section 501(c)(6), Internal Revenue Code of 1986, as amended. SECTION 1.26. Section 481.043, Government Code, is amended to read as follows: Sec. 481.043. GENERAL POWERS AND DUTIES RELATING TO INTERNATIONAL TRADE. The office [department] shall: (1) provide businesses in the state with technical assistance, information, and referrals related to the export of products and services, including export finance and international business practices; (2) coordinate the representation of exporters in the state at international trade shows, missions, marts, seminars, and other appropriate promotional venues; (3) cooperate and act in conjunction with other public and private organizations to promote and advance export trade activities in this state; and (4) disseminate trade leads to exporters in the state through the use of the Internet and other available media. SECTION 1.27. Section 481.047, Government Code, is amended to read as follows: Sec. 481.047. CONFIDENTIALITY. Information collected by the office [department] concerning the identity, background, finance, marketing plans, trade secrets, or other commercially sensitive information of a lender or export business is confidential unless the lender or export business consents to disclosure of the information. SECTION 1.28. Section 481.0725, Government Code, is amended to read as follows: Sec. 481.0725. GENERAL POWERS AND DUTIES. The office [department] shall: (1) [focus business recruitment, expansion, and retention efforts on industry sectors with the highest potential for creating high-wage, high-skill jobs; [(2)] provide businesses with site selection assistance and communities with investment leads; (2) [(3)] develop a comprehensive business recruitment marketing plan; (3) [(4)] participate in international and domestic trade shows, trade missions, marketing trips, and seminars; and (4) [(5)] produce and disseminate information through the use of available media and resources, including the Internet, to promote business assistance programs and the overall business climate in the state. SECTION 1.29. Section 481.073(c), Government Code, is amended to read as follows: (c) The office [department] may: (1) purchase, discount, sell, assign, negotiate, and otherwise dispose of notes, bonds, and other evidences of indebtedness incurred to finance or refinance projects whether secured or unsecured; (2) administer or participate in programs established by another person to finance or refinance projects; and (3) acquire, hold, invest, use, and dispose of the office's [department's] revenues, funds, and money received from any source under this subchapter and the proceedings authorizing the bonds issued under this subchapter, subject only to the provisions of the Texas Constitution, this subchapter, and any covenants relating to the office's [department's] bonds in classes of investments that the executive director [board] determines. SECTION 1.30. Section 481.075, Government Code, is amended to read as follows: Sec. 481.075. PROGRAM RULES. (a) The executive director [department] shall adopt rules to establish criteria for determining which users may participate in programs established by the office [department] under this subchapter. The office [department] shall adopt collateral or security requirements to ensure the full repayment of any loan, lease, or installment sale and the solvency of any program implemented under this subchapter. The executive director [governing board] must approve all leases and sale and loan agreements made under this subchapter [except that the governing board may delegate this approval authority to the executive director]. (b) Users participating in the programs established under this subchapter shall pay the costs of applying for, participating in, and administering and servicing the program in amounts that the office [department] considers reasonable and necessary. SECTION 1.31. Section 481.121(2), Government Code, is amended to read as follows: (2) "Permit office [Office]" means the Texas Economic Development and Tourism Office's [department's] business permit office. SECTION 1.32. Section 481.122, Government Code, is amended to read as follows: Sec. 481.122. CREATION. The business permit office is an office within the Texas Economic Development and Tourism Office [department]. SECTION 1.33. Section 481.123, Government Code, is amended to read as follows: Sec. 481.123. DUTIES. The permit office shall: (1) provide comprehensive information on permits required for business enterprises in the state and make that information available to applicants and other persons; (2) assist applicants in obtaining timely and efficient permit review and in resolving issues arising from the review; (3) facilitate contacts between applicants and state agencies responsible for processing and reviewing permit applications; (4) assist applicants in the resolution of outstanding issues identified by state agencies, including delays experienced in permit review; (5) develop comprehensive application procedures to expedite the permit process; (6) compile a comprehensive list of all permits required of a person desiring to establish, operate, or expand a business enterprise in the state; (7) encourage and facilitate the participation of federal and local government agencies in permit coordination; (8) make recommendations for eliminating, consolidating, simplifying, expediting, or otherwise improving permit procedures affecting business enterprises by requesting that the state auditor, with the advice and support of the permit office, initiate a business permit reengineering review process involving all state agencies; (9) develop and implement an outreach program to publicize and make small business entrepreneurs and others aware of services provided by the permit office; (10) adopt rules, procedures, instructions, and forms required to carry out the functions, powers, and duties of the permit office under this subchapter; and (11) except as provided in Section 481.129, complete the implementation of the business permit review process on or before September 1, 1994, and provide all recommended statutory changes as needed to the legislature on or before January 1, 1995. SECTION 1.34. Sections 481.124(a), (b), (c), (d), (f), and (h), Government Code, are amended to read as follows: (a) The permit office shall develop and by rule implement a comprehensive application procedure to expedite the identification and processing of required permits. The permit office shall specify the permits to which the comprehensive application procedure applies. A comprehensive application must be made on a form prescribed by the permit office. The permit office shall consult with affected agencies in designing the form to ensure that the form provides the necessary information to allow agencies to identify which permits may be needed by the applicant. The form must be designed primarily for the convenience of an applicant who is required to obtain multiple permits and must provide for concise and specific information necessary to determine which permits are or may be required of the particular applicant. (b) Use of the comprehensive application procedure by the applicant is optional. On request the permit office shall assist an applicant in preparing a comprehensive application, describe the procedures involved, and provide other appropriate information from the comprehensive permit information file. (c) On receipt of a comprehensive application from an applicant, the permit office shall immediately notify in writing each state agency having a possible interest in the proposed business undertaking, project, or activity with respect to permits that are or may be required. (d) Not later than the 25th day after the date of receipt of the notice, the state agency shall specify to the permit office each permit under its jurisdiction that is or may be required for the business undertaking, project, or activity described in the comprehensive application and shall indicate each permit fee to be charged. (f) The permit office shall promptly provide the applicant with application forms and related information for all permits specified by the interested state agencies and shall advise the applicant that the forms are to be completed and submitted to the appropriate state agencies. (h) Each state agency having jurisdiction over a permit to which the comprehensive application procedure applies shall designate an officer or employee to act as permit liaison officer to cooperate with the permit office in carrying out this subchapter. SECTION 1.35. Sections 481.125(a), (b), (d), and (e), Government Code, are amended to read as follows: (a) The permit office shall compile a comprehensive list of all state permits required of a person desiring to operate a business enterprise in the state. (b) To the extent possible, the permit office shall organize the list according to the types of businesses affected and shall publish the list in a comprehensive permit handbook. (d) The permit office shall periodically update the handbook. (e) The permit office shall make the handbook available to persons interested in establishing a business enterprise, public libraries, educational institutions, and the state agencies listed in the handbook. SECTION 1.36. Section 481.126, Government Code, is amended to read as follows: Sec. 481.126. ASSISTANCE OF OTHER STATE AGENCIES. Each state agency, on request of the permit office, shall provide assistance, services, facilities, and data to enable the permit office to carry out its duties. An agency is not required to provide information made confidential by a constitution, statute, or judicial decision. SECTION 1.37. Sections 481.127(a), (c), and (d), Government Code, are amended to read as follows: (a) Each state agency required to review, approve, or grant permits for business undertakings, projects, or activities shall report to the permit office in a form prescribed by the permit office on each type of review, approval, or permit administered by the agency. (c) The permit office shall prepare an information file on state agency permit requirements and shall develop methods for maintenance, revision, update, and ready access. The permit office shall provide comprehensive permit information based on that file. (d) The permit office may prepare and distribute publications, guides, and other materials to serve the convenience of permit applicants and explain permit requirements affecting business, including requirements involving multiple permits or regulation by more than one state agency. SECTION 1.38. Section 481.128, Government Code, is amended to read as follows: Sec. 481.128. NO CHARGES FOR SERVICES. The permit office shall provide its services without charge. SECTION 1.39. Section 481.129, Government Code, is amended to read as follows: Sec. 481.129. ENVIRONMENTAL PERMITS. The permit office shall consult and cooperate with the Natural Resource Conservation Commission in conducting any studies on permits issued by the Natural Resource Conservation Commission. The Natural Resource Conservation Commission shall cooperate fully in the study and analysis of the procedures involving the issuance of permits by that commission and shall, in any report issued, evaluate all alternatives for improving the process pursuant to the permit office's responsibilities under Section 481.123. The permit office and the Natural Resource Conservation Commission shall jointly submit any report required under Section 481.123. SECTION 1.40. Sections 481.167(a), (d), and (e), Government Code, are amended to read as follows: (a) The office [department] shall establish the Texas Business and Community Economic Development Clearinghouse to provide information and assistance to businesses and communities in the state through the use of a statewide toll-free telephone service. (d) The office [department] shall obtain from other state agencies appropriate information needed by the office [department] to carry out its duties under this subchapter. (e) The comptroller shall assist the office [department] in furthering the purposes of this subchapter by allowing the office [department] to use the field offices and personnel of the comptroller to disseminate brochures, documents, and other information useful to businesses in the state. SECTION 1.41. Section 481.172, Government Code, as amended by Chapters 1041 and 1275, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows: Sec. 481.172. DUTIES. (a) The office [department] shall: (1) as the sole state governmental entity responsible for out-of-state tourism marketing and promotion efforts, promote and advertise within the United States and in foreign countries, by radio, television, newspaper, the Internet, and other means considered appropriate, tourism in this state by non-Texans, including persons from foreign countries, and distribute promotional materials through appropriate distribution channels; (2) represent the state in domestic and international travel trade shows, trade missions, and seminars; (3) encourage travel by Texans to this state's scenic, historical, natural, agricultural, educational, recreational, and other attractions; (4) conduct a public relations campaign to create a responsible and accurate national and international image of this state; (5) use current market research to develop a tourism marketing plan to increase travel to the state by domestic and international visitors; (6) develop methods to attract tourist attractions to the state; (7) assist communities to develop tourist attractions; [and] (8) enter into a memorandum of understanding [cooperate fully] with the Parks and Wildlife Department, the Texas Department of Transportation, the Texas Historical Commission, and the Texas Commission on the Arts to direct the efforts of those agencies in all matters relating to [promotion of] tourism; and[.] (9) [(8)] promote and encourage the horse racing and greyhound racing industry, if funds are appropriated for the promotion or encouragement. (b) A memorandum of understanding entered into under Subsection (a)(8) shall provide that the office may: (1) strategically direct and redirect each agency's tourism priorities and activities to: (A) most effectively meet consumer demands and emerging travel trends, as established by the latest market research; and (B) minimize duplication of efforts and realize cost savings through economies of scale; (2) require each agency to submit to the office for advance approval: (A) resources, activities, and materials related to the promotion of tourism proposed to be provided by the agency; (B) a plan of action for the agency's proposed tourism activities, not later than June 1 of each year, that includes: (i) priorities identified by the agency; (ii) the agency's proposed budget for tourism activities; and (iii) measurable goals and objectives of the agency related to the promotion of tourism; and (C) any proposed marketing message, material, logo, slogan, or other communication to be used by the agency in its tourism-related efforts, to assist the office in coordinating tourism-related efforts conducted in this state by the agency and the office and conducted outside of this state by the office; (3) direct the development of an annual strategic marketing plan to increase travel to this state, that: (A) provides the most effective and efficient expenditure of state funds, for in-state marketing activities conducted by the agencies and the office and out-of-state marketing activities conducted by the office; and (B) establishes goals, objectives, and performance measures, including the measurement of the return on the investment made by an agency or the office, for the tourism-related efforts of all state agencies; and (4) direct the agencies to share costs related to administrative support for the state's tourism activities. SECTION 1.42. Section 481.174, Government Code, is amended to read as follows: Sec. 481.174. ADVERTISEMENTS IN TOURISM PROMOTIONS. (a) The office [department] may sell advertisements in travel promotions in any medium. (b) The executive director [governing board] shall adopt rules to implement the sale of advertisements under Subsection (a), including rules regulating: (1) the cost of advertisements; (2) the type of products or services that may be advertised; (3) the size of advertisements; and (4) refunds on advertisements that are not run. (c) Proceeds from the sale of advertisements shall be deposited in the special account in the general revenue fund that may be used for advertising and marketing activities of the office [department] as provided by Section 156.251, Tax Code. SECTION 1.43. Section 481.191, Government Code, is amended by amending Subdivision (2) and adding Subdivision (4-a) to read as follows: (2) "Eligible borrower" means: (A) a person who proposes to begin operating a small or medium-sized business in an enterprise zone, as defined by Section 2303.003, or a historically underutilized business; (B) a nonprofit corporation; or (C) a child-care provider. (4-a) "Medium-sized business" means a corporation, partnership, sole proprietorship, or other legal entity that: (A) is domiciled in this state or has at least 51 percent of its employees located in this state; (B) is formed to make a profit; and (C) employs 100 or more but fewer than 500 full-time employees. SECTION 1.44. Sections 481.193(a), (b), (d), (e), (f), (h), and (i), Government Code, are amended to read as follows: (a) The bank [department] shall establish a linked deposit program to encourage commercial lending for the development of: (1) small businesses in enterprise zones; (2) historically underutilized businesses; (3) medium-sized businesses; (4) child-care services provided by and activities engaged in in this state by nonprofit organizations; and (5) [(4)] quality, affordable child-care services in this state. (b) The executive director [policy board] shall adopt rules for the loan portion of the linked deposit program. (d) After reviewing an application and determining that the applicant is an eligible borrower and is creditworthy, the eligible lending institution shall send the application for a linked deposit loan to the bank [department]. (e) The eligible lending institution shall certify the interest rate applicable to the specific eligible borrower and attach it to the application sent to the bank [department]. (f) After reviewing each linked deposit loan application, the executive director [of the department] shall approve or deny [recommend to the comptroller the acceptance or rejection of] the application. (h) Before the placing of a linked deposit, the eligible lending institution and the state, represented by the bank [comptroller and the department], shall enter into a written deposit agreement containing the conditions on which the linked deposit is made. The deposit agreement must provide that: (1) the comptroller will place the linked deposit not later than the 10th business day after the date on which the agreement is executed; (2) the lending institution will notify the bank [comptroller] if the borrower to which the deposit is linked defaults on the loan; and (3) [(2)] in the event of a default the comptroller may withdraw the linked deposit at the direction of the bank. (i) If a lending institution holding linked deposits ceases to be a state depository, the comptroller must [may] withdraw the linked deposits at the direction of the bank. SECTION 1.45. Section 481.193(g), Government Code, as amended by Chapters 891, 1162, and 1423, Acts of the 75th Legislature, Regular Session, 1997, is reenacted and amended to read as follows: (g) After the executive director's approval [comptroller's acceptance] of the application and after the lending institution originates a loan to an eligible borrower, the bank shall authorize the comptroller to [shall] place a linked deposit with the applicable [eligible] lending institution for the period of the loan, subject to Subsections (h) and (i). The bank [comptroller] is not required to maintain the deposit with the lending institution if the loan is extended, renewed, or renegotiated unless the bank approves [comptroller accepts] a new linked deposit loan application under this section for the loan as modified. Subject to the limitation described by Section 481.197, the comptroller shall [may] place, at the direction of the bank, a time deposit at an interest rate described by Section 481.192 and may modify the interest rate during the period of the loan, notwithstanding any order of the State Depository Board to the contrary. SECTION 1.46. Section 481.194(a), Government Code, is amended to read as follows: (a) On acceptance of its application to receive linked deposits, an eligible lending institution shall loan money to an eligible borrower in accordance with the deposit agreement and this subchapter. The eligible lending institution shall forward a compliance report to the office [department]. SECTION 1.47. Section 481.198, Government Code, is amended to read as follows: Sec. 481.198. MARKETING. (a) The bank [department] shall promote the linked deposit program established by this subchapter to eligible borrowers and financial institutions that make commercial loans and are depositories of state funds. (b) Not later than January 1 of each odd-numbered year, the office [department] shall prepare and deliver to the governor, lieutenant governor, speaker of the house of representatives, and clerks of the standing committees of the senate and house of representatives with primary jurisdiction over commerce and economic development a report concerning the bank's [department's] efforts in promoting the linked deposit program during the preceding two years. SECTION 1.48. Subchapter N, Chapter 481, Government Code, is amended by adding Section 481.199 to read as follows: Sec. 481.199. REPORTS; AUDITS. (a) The office shall submit to the comptroller a quarterly report regarding the linked deposit program. (b) The financial transactions of a linked deposit are subject to audit by the state auditor as provided by Chapter 321. SECTION 1.49. Section 481.211, Government Code, is amended to read as follows: Sec. 481.211. POWERS AND DUTIES. The office [department] shall: (1) compile and update demographic and economic information on the state; (2) develop and update information products for local communities on community economic development issues and practices that encourage regional cooperation; and (3) compile and disseminate information on economic and industrial development trends and issues, including NAFTA, emerging industries, and patterns of international trade and investment. SECTION 1.50. Section 481.212, Government Code, is amended to read as follows: Sec. 481.212. COMPILATION AND DISTRIBUTION OF DATA AND RESEARCH. (a) To serve as a one-stop center for business-related information, the office [department] shall obtain from other state agencies and organizations, including the comptroller and the Texas Workforce Commission, business-related statistics and data. (b) To maximize the accessibility of business-related data, the office [department] shall create a web site to publish business-related information on the Internet. The web site must provide connections to other business-related web sites. (c) The office [department] may charge a reasonable access fee in connection with this subchapter. SECTION 1.51. Section 481.401(9), Government Code, is amended to read as follows: (9) "Reserve account" means an account established in a participating financial institution on approval of the bank [department] in which money is deposited to serve as a source of additional revenue to reimburse the financial institution for losses on loans enrolled in the program. SECTION 1.52. Sections 481.402(b) and (c), Government Code, are amended to read as follows: (b) Appropriations for the implementation and administration of this subchapter[, investment earnings, fees charged under this subchapter,] and any other amounts received by the state under this subchapter shall be deposited in the fund. (c) Money in the fund may be appropriated only to the bank [department] for use in carrying out the purposes of this subchapter. SECTION 1.53. Section 481.404, Government Code, is amended to read as follows: Sec. 481.404. POWERS OF BANK [DEPARTMENT] IN ADMINISTERING CAPITAL ACCESS FUND. In administering the fund, the bank [department] has the powers necessary to carry out the purposes of this subchapter, including the power to: (1) make, execute, and deliver contracts, conveyances, and other instruments necessary to the exercise of its powers; (2) invest money at the bank's [department's] discretion in obligations determined proper by the bank [department], and select and use depositories for its money; (3) employ personnel and counsel and pay the persons from money in the fund legally available for that purpose; and (4) impose and collect fees and charges in connection with any transaction and provide for reasonable penalties for delinquent payment of fees or charges. SECTION 1.54. Sections 481.405(a)-(d), Government Code, are amended to read as follows: (a) The bank [department] shall establish a capital access program to assist a participating financial institution in making loans to businesses and nonprofit organizations that face barriers in accessing capital. (b) The bank [department] shall use money in the fund to make a deposit in a participating financial institution's reserve account in an amount specified by this subchapter to be a source of money the institution may receive as reimbursement for losses attributable to loans in the program. (c) The bank [department] shall determine the eligibility of a financial institution to participate in the program and may set a limit on the number of eligible financial institutions that may participate in the program. (d) To participate in the program, an eligible financial institution must enter into a participation agreement with the bank [department] that sets out the terms and conditions under which the bank [department] will make contributions to the institution's reserve account and specifies the criteria for a loan to qualify as a capital access loan. SECTION 1.55. Section 481.406(a), Government Code, is amended to read as follows: (a) The executive director [policy board] shall adopt rules relating to the implementation of the program and any other rules necessary to accomplish the purposes of this subchapter. The rules may: (1) provide for criteria under which a certain line of credit issued by an eligible financial institution to a small or medium-sized business or nonprofit organization qualifies to participate in the program; and (2) authorize a consortium of financial institutions to participate in the program subject to common underwriting guidelines. SECTION 1.56. Sections 481.407(a), (b), and (d), Government Code, are amended to read as follows: (a) Except as otherwise provided by this subchapter, the bank [department] may not determine the recipient, amount, or interest rate of a capital access loan or the fees or other requirements related to the loan. (b) A loan is not eligible to be enrolled under this subchapter if the loan is for: (1) construction or purchase of residential housing; (2) simple real estate investments, excluding the development or improvement of commercial real estate occupied by the borrower's business or organization; or (3) [refinancing of existing loans not originally enrolled under this subchapter; or [(4)] inside bank transactions, as defined by the policy board. (d) A capital access loan may be sold on the secondary market with no recourse to the bank or to the loan loss reserve correspondent to the loan and under conditions as may be determined by the bank [department]. SECTION 1.57. Section 481.408, Government Code, is amended by amending Subsections (a), (c), and (d) and adding Subsection (e) to read as follows: (a) On approval by the bank [department] and after entering into a participation agreement with the bank [department], a participating financial institution making a capital access loan shall establish a reserve account. The reserve account shall be used by the institution only to cover any losses arising from a default of a capital access loan made by the institution under this subchapter or as otherwise provided by this subchapter. (c) For each capital access loan made by a financial institution, the institution shall certify to the bank [department], within the period prescribed by the bank [department], that the institution has made a capital access loan, the amount the institution has deposited in the reserve account, including the amount of fees received from the borrower, and, if applicable, that the borrower is financing an enterprise project or is located in or financing a project, activity, or enterprise in an area designated as an enterprise zone under Chapter 2303. (d) On receipt of a certification made under Subsection (c) and subject to Section 481.409, the bank [department] shall deposit in the institution's reserve account for each capital access loan made by the institution: (1) an amount equal to the amount deposited by the institution for each loan if the institution: (A) has assets of more than $1 billion; or (B) has previously enrolled loans in the program that in the aggregate are more than $2 million; (2) an amount equal to 150 percent of the total amount deposited under Subsection (b) for each loan if the institution is not described by Subdivision (1); or (3) notwithstanding Subdivisions (1) and (2), an amount equal to 200 percent of the total amount deposited under Subsection (b) for each loan if: (A) the borrower is financing an enterprise project or is located in or financing a project, activity, or enterprise in an area designated as an enterprise zone under Chapter 2303; or (B) the borrower is a small or medium-sized [medium-size] business or a nonprofit organization that operates or proposes to operate a day-care center or a group day-care home, as those terms are defined by Section 42.002, Human Resources Code. (e) A participating financial institution must obtain approval from the bank to withdraw funds from the reserve account. SECTION 1.58. Section 481.409, Government Code, is amended to read as follows: Sec. 481.409. LIMITATIONS ON STATE CONTRIBUTION TO RESERVE ACCOUNT. (a) The amount deposited by the bank [department] into a participating financial institution's reserve account for any single loan recipient may not exceed $150,000 during a three-year period. (b) The maximum amount the bank [department] may deposit into a reserve account for each capital access loan made under this subchapter is the lesser of $35,000 or an amount equal to: (1) eight percent of the loan amount if: (A) the borrower is financing an enterprise project or is located in or financing a project, activity, or enterprise in an area designated as an enterprise zone under Chapter 2303; or (B) the borrower is a small or medium-sized [medium-size] business or a nonprofit organization that operates or proposes to operate a day-care center or a group day-care home, as those terms are defined by Section 42.002, Human Resources Code; or (2) six percent of the loan amount for any other borrower. SECTION 1.59. Sections 481.410(b)-(d), Government Code, are amended to read as follows: (b) The state is entitled to earn interest on the amount of contributions made by the bank [department], borrower, and institution to a reserve account under this subchapter. The bank [department] shall withdraw monthly or quarterly from a reserve account the amount of the interest earned by the state. The bank [department] shall deposit the amount withdrawn under this subsection into the fund. (c) If the amount in a reserve account exceeds an amount equal to 33 percent of the balance of the financial institution's outstanding capital access loans, the bank [department] may withdraw the excess amount and deposit the amount in the fund. A withdrawal of money authorized under this subsection may not reduce an active reserve account to an amount that is less than $200,000. (d) The bank [department] shall withdraw from the institution's reserve account the total amount in the account and any interest earned on the account and deposit the amount in the fund when: (1) a financial institution is no longer eligible to participate in the program or a participation agreement entered into under this subchapter expires without renewal by the bank [department] or institution; (2) the financial institution has no outstanding capital access loans; [and] (3) the financial institution has not made a capital access loan within the preceding 24 months; or (4) the financial institution fails to submit a report or other document requested by the bank within the time or in the manner prescribed. SECTION 1.60. Section 481.411, Government Code, is amended to read as follows: Sec. 481.411. ANNUAL REPORT. A participating financial institution shall submit an annual report to the bank [department]. The report must: (1) provide information regarding outstanding capital access loans, capital access loan losses, and any other information on capital access loans the bank [department] considers appropriate; (2) state the total amount of loans for which the bank [department] has made a contribution from the fund under this subchapter; (3) include a copy of the institution's most recent financial statement; and (4) include information regarding the type and size of businesses and nonprofit organizations with capital access loans. SECTION 1.61. Section 481.412(a), Government Code, is amended to read as follows: (a) The office [department] shall submit to the legislature an annual status report on the program's activities. SECTION 1.62. Section 481.414, Government Code, is amended to read as follows: Sec. 481.414. GIFTS AND GRANTS. The bank [department] may accept gifts, grants, and donations from any source for the purposes of this subchapter. SECTION 1.63. (a) The Texas Department of Economic Development is abolished and the offices of the members of the governing board of the department serving on the effective date of this Act are abolished. (b) The validity of an action taken by the Texas Department of Economic Development or its governing board before it is abolished under Subsection (a) of this section is not affected by the abolishment. SECTION 1.64. On September 1, 2003: (1) a rule, standard, or form adopted by the Texas Department of Economic Development or the department's governing board is a rule, standard, or form of the Texas Economic Development and Tourism Office and remains in effect until changed by the executive director of the office; (2) a reference in law to the Texas Department of Economic Development or its governing board means the Texas Economic Development and Tourism Office; (3) a proceeding involving the Texas Department of Economic Development is transferred without change in status to the Texas Economic Development and Tourism Office, and the Texas Economic Development and Tourism Office assumes, without a change in status, the position of the Texas Department of Economic Development in a proceeding to which the Texas Department of Economic Development is a party; (4) all money, contracts, leases, rights, and obligations of the Texas Department of Economic Development are transferred to the Texas Economic Development and Tourism Office; (5) all property, including records, in the custody of the Texas Department of Economic Development becomes the property of the Texas Economic Development and Tourism Office; and (6) all funds appropriated by the legislature to the Texas Department of Economic Development are transferred to the Texas Economic Development and Tourism Office. SECTION 1.65. (a) The executive director of the Texas Department of Economic Development serving on the effective date of this Act does not automatically become the executive director of the Texas Economic Development and Tourism Office. To become the executive director of the Texas Economic Development and Tourism Office, a person must apply for the position and the person's employment in that capacity must be approved by the governor. (b) An employee of the Texas Department of Economic Development employed on the effective date of this Act does not automatically become an employee of the Texas Economic Development and Tourism Office. To become an employee of the Texas Economic Development and Tourism Office, a person must apply for a position at the Texas Economic Development and Tourism Office and the person's employment in that capacity must be approved by the governor or the executive director of the office. SECTION 1.66. A function or activity performed by the Texas Department of Economic Development is transferred to the Texas Economic Development and Tourism Office as provided by this Act. SECTION 1.67. The Texas Department of Economic Development or the Texas Economic Development and Tourism Office, as applicable, shall establish a transition plan for the transfer described in Section 1.64 of this Act. The plan must include a reasonable timetable for the effective reconstruction of the department's mission, strategies, performance measures, functions, and staff, as they relate to key economic clusters in this state. SECTION 1.68. (a) On September 1, 2003: (1) the functions performed by the Texas Aerospace Commission are transferred to the aerospace and aviation office of the Texas Economic Development and Tourism Office; and (2) the executive director of the Texas Aerospace Commission becomes the director of the aerospace and aviation office of the Texas Economic Development and Tourism Office. (b) The governor shall determine the manner in which employees of the Texas Aerospace Commission, if any, are transferred to the aerospace and aviation office of the Texas Economic Development and Tourism Office.
ARTICLE 2. CREATION OF TEXAS ECONOMIC DEVELOPMENT BANK
SECTION 2.01. Subtitle F, Title 4, Government Code, is amended by adding Chapter 489 to read as follows:
CHAPTER 489. TEXAS ECONOMIC DEVELOPMENT BANK
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 489.001. DEFINITIONS. In this chapter: (1) "Bank" means the Texas Economic Development Bank established under Section 489.101. (2) "Fund" means the Texas economic development bank fund. (3) "Office" means the Texas Economic Development and Tourism Office. Sec. 489.002. RULES. The office shall adopt rules necessary to carry out the purposes of this chapter.
[Sections 489.003-489.100 reserved for expansion]
SUBCHAPTER B. CREATION AND OPERATION OF BANK; TEXAS ECONOMIC DEVELOPMENT BANK FUND
Sec. 489.101. CREATION OF BANK. (a) The office shall establish the Texas Economic Development Bank for the purpose of: (1) providing globally competitive, cost-effective state incentives to expanding businesses operating in this state and businesses relocating to this state; and (2) ensuring that communities and businesses in this state have access to capital for economic development purposes. (b) The bank's effectiveness shall be measured on the basis of the number of jobs created and retained and the total amount of nonstate funds leveraged as a result of the bank's efforts. Sec. 489.102. POWERS AND DUTIES OF BANK. (a) The bank shall offer a variety of financial incentives to help communities and businesses in this state compete and succeed in the global marketplace. The bank shall assist communities in accessing financing with which to fund their economic development efforts. (b) The bank may: (1) provide, as provided under the programs the bank administers under Section 489.108 or otherwise as provided by law: (A) qualifying communities with tax incentives for expanding businesses or businesses relocating to this state; (B) incentives to lenders to: (i) make loans to near-bankable businesses in the lender's community; and (ii) make low-interest loans to qualifying businesses; and (C) bond-based long-term debt financing for capital investment in public entities, in large commercial and industrial projects, and for other economic development purposes; (2) act as a link between businesses searching for investment capital and potential investors; (3) inform institutional lenders of economic development plans and strategies for each region of this state and encourage institutional lenders to support those plans in their marketing and investment strategies; (4) offer communities a one-stop source of financing for their economic development efforts; (5) provide communities with technical assistance in the development of their incentive programs to attract and retain businesses and in the design of incentive packages for specific proposals; and (6) provide expanding businesses or businesses relocating to this state with a single source of information concerning financial incentives offered by this state to those businesses. Sec. 489.103. FEES. The bank shall charge fees to the beneficiaries of its services as the bank determines necessary. Amounts collected under this section may be used to support the administration of the bank's programs and implementation of the bank's strategies. Sec. 489.104. ALLOCATION OF RESOURCES. The bank may allocate its resources as necessary to efficiently meet the level of demand experienced by each program or service described by Section 489.108. Sec. 489.105. TEXAS ECONOMIC DEVELOPMENT BANK FUND. (a) The Texas economic development bank fund is a dedicated account in the general revenue fund. (b) The fund consists of: (1) appropriations for the implementation and administration of this chapter; (2) investment earnings under the capital access fund established under Section 481.402; (3) fees charged under Subchapter BB, Chapter 481; (4) interest earned on the investment of money in the fund; (5) fees charged under this chapter; (6) investment earnings from the programs administered by the bank; (7) amounts transferred under Section 2303.504(b), as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001; (8) investment earnings under the Texas product development fund under Section 489.211; (9) investment earnings under the Texas small business incubator fund under Section 489.212; and (10) any other amounts received by the state under this chapter. (c) Money in the fund may be used only to carry out the purposes of this chapter. (d) The financial transactions of the fund are subject to audit by the state auditor as provided by Chapter 321. Sec. 489.106. ADMINISTRATION OF FUND AND CHAPTER. The office shall administer the fund. In administering the fund and this chapter, the office has the powers necessary to carry out the purposes of this chapter, including the power to: (1) make, execute, and deliver contracts, conveyances, and other instruments; (2) impose and collect fees and charges in connection with any transaction and provide for reasonable penalties for delinquent payments or performance; and (3) issue bonds for economic development projects as that term is defined by Section 2(11)(A) or 4B(a)(2), Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes). Sec. 489.107. ANNUAL REPORT. On or before January 1 of each year, the office shall submit to the legislature an annual status report on the activities of the bank. Sec. 489.108. PROGRAMS, SERVICES, AND FUNDS UNDER BANK'S DIRECTION. Notwithstanding any other law, the bank shall perform the duties and functions of the office with respect to the following programs, services, and funds: (1) the Texas Small Business Industrial Development Corporation established under Section 4, Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes); (2) the capital access program established under Section 481.405; (3) the Texas leverage fund; (4) the linked deposit program established under Section 481.193; (5) the enterprise zone program established under Chapter 2303; (6) the industrial revenue bond program; (7) the defense economic readjustment zone program established under Chapter 2310; (8) the Empowerment Zone and Enterprise Community grant program established under Section 481.025; and (9) the renewal community program.
[Sections 489.109-489.150 reserved for expansion]
SUBCHAPTER C. MISCELLANEOUS PROVISIONS
Sec. 489.151. STATE LIABILITY PROHIBITED. The state and state officers or employees are not liable to participants for grants, loans, or other transactions under this chapter except as specifically provided by law. Sec. 489.152. GIFTS, GRANTS, AND DONATIONS. The office may accept gifts, grants, and donations from any source for the purposes of this chapter.
[Sections 489.153-489.200 reserved for expansion]
SUBCHAPTER D. PRODUCT DEVELOPMENT AND SMALL
BUSINESS INCUBATORS
Sec. 489.201. DEFINITIONS. In this subchapter: (1) "Board" means the Product Development and Small Business Incubator Board. (2) "Financing" means a loan, loan guarantee, or equity investment from the product fund to a person for use in the development and production of a product in this state, or a grant, loan, or loan guarantee from the small business fund to a person for use in the development of a small business in this state. (3) "Office" includes the designee of the office. (4) "Product" includes an invention, device, technique, or process, without regard to whether a patent has been or could be granted, that has advanced beyond the theoretical stage and has or is readily capable of having a commercial application. The term does not include pure research. (5) "Product fund" means the Texas product development fund. (6) "Program" means the product development program or the small business incubator program. (7) "Small business fund" means the Texas small business incubator fund. Sec. 489.202. PRODUCT DEVELOPMENT AND SMALL BUSINESS INCUBATOR BOARD. (a) The Product Development and Small Business Incubator Board is created in the office. (b) The bank administers the programs, the product fund, and the small business fund. Sec. 489.203. BOARD MEMBERS; APPOINTMENT; TERMS OF OFFICE. (a) The board consists of nine persons appointed by the governor. (b) In appointing members of the board, the governor shall appoint: (1) three persons having significant business leadership experience in technology, particularly experience with the transfer of research results into commercial applications; (2) two persons employed by institutions of higher education of this state who have experience in technological research and its commercial applications; (3) two persons experienced and knowledgeable in structuring and providing financing for technological products or businesses; and (4) two persons who reside in a county of this state with above state average unemployment and below state average per capita income and who have experience and knowledge in technology-related business growth. (c) Appointed members of the board serve two-year staggered terms, with the terms of three members expiring February 1 of each odd-numbered year. (d) The governor shall appoint the presiding officer of the board. (e) The board shall appoint a secretary of the board whose duties may be prescribed by law and by the board. (f) Appointed members of the board serve without pay but are entitled to reimbursement for their actual expenses incurred in attending meetings of the board or in performing other work of the board if that work is approved by the governor or the governor's designee. Sec. 489.204. REMOVAL OF BOARD MEMBER. (a) It is a ground for removal from the board if an appointed member: (1) cannot because of illness or disability discharge the member's duties for a substantial part of the term for which the member is appointed; or (2) is absent from more than half of the regularly scheduled board meetings that the member is eligible to attend during a calendar year unless the absence is excused by majority vote of the board. (b) The validity of an action of the board is not affected by the fact that the action was taken when a ground for removal of a board member existed. Sec. 489.205. TRAINING OF BOARD MEMBERS. (a) Before an appointed member of the board may assume the member's duties, the member must complete at least one course of the training program established under this section. (b) A training program established under this section shall provide information to the member regarding: (1) the enabling legislation that created the board; (2) the programs operated by the board; (3) the role and functions of the board; (4) the rules of the board, with an emphasis on the rules that relate to disciplinary and investigatory authority; (5) the current budget for the board; (6) the results of the most recent formal audit of the board; (7) the requirements of the: (A) open meetings law, Chapter 551; (B) open records law, Chapter 552; and (C) administrative procedure law, Chapter 2001; (8) the requirements of the conflict of interest laws and other laws relating to public officials; and (9) any applicable ethics policies adopted by the board or the Texas Ethics Commission. Sec. 489.206. MEETINGS. (a) The board shall hold regular meetings in Austin and other meetings at places and times scheduled by the board in formal sessions and called by the bank. (b) The board shall develop and implement policies that provide the public with a reasonable opportunity to appear before the board and to speak on any issue under the jurisdiction of the board. (c) The board shall make minutes of all meetings available in the board's office for public inspection. Sec. 489.207. APPLICABILITY OF OPEN MEETINGS LAW AND ADMINISTRATIVE PROCEDURE LAW. The board is subject to the open meetings law, Chapter 551, and the administrative procedure law, Chapter 2001. Sec. 489.208. STAFF. (a) The employees of the office selected by the executive director of the office for that purpose serve as the staff of the board. (b) The executive director of the office shall select and supervise the staff of the board and perform other duties delegated to the office by the board. (c) The executive director of the office shall provide to members of the board and to board staff, as often as necessary, information regarding their qualifications for office or employment under this subchapter and their responsibilities under applicable laws relating to standards of conduct for state officers or employees. (d) The board shall develop and implement policies that clearly separate the policy-making responsibilities of the board and the management responsibilities of the office, the bank, and the executive director of the office. Sec. 489.209. PROGRAM AND FACILITY ACCESSIBILITY. (a) The board shall comply with federal and state laws related to program and facility accessibility. (b) The board shall prepare and maintain a written plan that describes how a person who does not speak English can be provided reasonable access to the board's programs and services. Sec. 489.210. POWERS OF BOARD AND BANK; BONDS. (a) The board and bank have the powers necessary and reasonable to carry out this subchapter and the board may adopt rules, policies, and procedures necessary or reasonable to implement this subchapter. (b) The bank may issue general obligation bonds, up to the amounts authorized and as provided by Section 71, Article XVI, Texas Constitution, to fund the program. (c) Not more than an amount equal to five percent of the total amount of bonds issued may be used to pay administrative fees involved in selling the bonds. Sec. 489.211. TEXAS PRODUCT DEVELOPMENT FUND. (a) The Texas product development fund is a revolving fund in the state treasury. (b) The product fund is composed of proceeds of bonds issued under this subchapter, financing application fees, loan repayments, guarantee fees, royalty receipts, dividend income, money appropriated by the legislature for authorized purposes of the product fund, amounts received by the state from loans, loan guarantees, and equity investments made under this subchapter, amounts received by the state from federal grants or other sources, and any other amounts received under this subchapter and required by the bank to be deposited in the product fund. The product fund contains a program account, an interest and sinking account, and other accounts that the bank authorizes to be created and maintained. Money in the product fund is available for use by the board under this subchapter. Investment earnings under the product fund must be transferred to the fund created under Section 489.105. Notwithstanding any other provision of this subchapter, any money in the product fund may be used for debt service. (c) Money in the program account of the product fund, minus the costs of issuance of bonds under this subchapter and necessary costs of administering the product fund, may be used only to provide financing to aid in the development and production, including the commercialization, of new or improved products in this state. The bank shall provide financing from the product fund on the terms and conditions that the bank determines to be reasonable, appropriate, and consistent with the purposes and objectives of the product fund and this subchapter, for the purpose of aiding in the development and production of new or improved products in this state. Sec. 489.212. SMALL BUSINESS INCUBATOR FUND. (a) The Texas small business incubator fund is a revolving fund in the state treasury. (b) The small business fund is composed of proceeds of bonds issued under this subchapter, financing application fees, loan repayments, guarantee fees, royalty receipts, dividend income, money appropriated by the legislature for authorized purposes of the small business fund, amounts received by the state from loans, loan guarantees, and equity investments made under this subchapter, amounts received by the state from federal grants or other sources, and any other amounts received under this subchapter and required by the bank to be deposited in the small business fund. The small business fund contains a project account, an interest and sinking account, and other accounts that the bank authorizes to be created and maintained. Money in the small business fund is available for use by the board under this subchapter. Investment earnings under the small business fund must be transferred to the fund created under Section 489.105. Notwithstanding any other provision of this subchapter, any money in the small business fund may be used for debt service. (c) Money in the project account of the small business fund, minus the costs of issuance of bonds under this subchapter and necessary costs of administering the small business fund, may be used only to provide financing to foster and stimulate the development of small businesses in this state. The bank shall provide financing from the small business fund on the terms and conditions that the bank determines to be reasonable, appropriate, and consistent with the purposes and objectives of the small business fund and this subchapter, for the purpose of fostering and stimulating the development of new or existing small businesses in this state. Sec. 489.213. ELIGIBLE PRODUCTS AND BUSINESSES; FINANCING. (a) Financing may be made under this subchapter only for a product or small business approved by the bank. (b) In determining eligible products and small businesses, the bank shall give special preference to products or businesses in the areas of biotechnology and biomedicine that have the greatest likelihood of commercial success, job creation, and job retention in this state. The bank shall give further preference to providing financing to projects or businesses that are: (1) grantees under the small business innovation research program established under 15 U.S.C. Section 638, as amended; (2) companies formed in this state to commercialize research funded at least in part with state funds; (3) applicants that have acquired other sources of financing; (4) companies formed in this state and receiving assistance from designated state small business development centers; or (5) applicants who are residents of this state doing business in this state and performing financed activities predominantly in this state. (c) The board shall adopt rules governing the terms and conditions of the financing, specifically including requirements for appropriate security or collateral, equity interest, and the rights and remedies of the board and bank in the event of a default on the loan. The rules must include a requirement that applicants report to the bank on the use of money distributed through either fund. (d) Before approving the provision of financing to a person, the bank shall enter into an agreement with the person under which the bank will obtain an appropriate portion of royalties, patent rights, equitable interests, or a combination of those royalties, rights, and interests from or in the product or proceeds of the product for which financing is requested. Contracts executed under this subchapter must include agreements to ensure proper use of funds and the receipt of royalties, patent rights, or equity interest, as appropriate. (e) The board may appoint an advisory committee of experts in the areas of biotechnology and biomedicine to review projects and businesses seeking financing from the bank. (f) The amount of financing provided to a single recipient may not exceed 10 percent of the total amount of bonds issued. (g) A claim of the state for a payment owed to the state under this subchapter by a person who has been provided financing has priority over all other claims against the person. Sec. 489.214. APPLICATION PROCESS. (a) To apply for financing from the bank, an applicant shall submit to the bank: (1) an application for financing on a form prescribed by the bank; and (2) a reasonable application fee set by the bank. (b) The application must include a business plan containing the information required by the bank, including at a minimum: (1) information regarding: (A) the history and financial condition of the applicant, including the applicant's income statement; (B) the applicant's present markets and market prospects; and (C) the integrity of the applicant's management; (2) a statement of the feasibility of the product for which financing is requested, including the state of development of any product to be developed and the proposed schedule of its commercialization; and (3) if applicable, documentation of attempts to obtain private financing. (c) The bank shall determine, with respect to each application for financing, whether: (1) the product or business for which financing is requested is economically sound; (2) there is a reasonable expectation that the product or business will be successful; (3) the product or business will create or preserve jobs and otherwise benefit the economy of the state; (4) the applicant has the management resources and other funding to complete the project; (5) financing is necessary because full financing is unavailable in traditional capital markets or credit has been offered on terms that would preclude the success of the project; and (6) there is reasonable assurance that the potential revenues to be derived from the sale of the product will be sufficient to repay any financing approved by the bank. (d) After considering the application and all other information it considers relevant, the bank shall approve or deny the application and promptly notify the applicant of its decision. Sec. 489.215. INFORMATION CONFIDENTIAL. (a) Information described by Subsection (b) collected, assembled, or maintained by or for the bank is confidential and may not be disclosed by the bank, the board, the office, or the executive director of the office. (b) This section applies to information in any form provided by or on behalf of an applicant for financing or a recipient of financing under this subchapter, including information contained in, accompanying, or derived from any application or report, that relates to a product, to the development, application, manufacture, or use of a product, or to the markets, market prospects, or marketing of a product, and that is proprietary information of actual or potential commercial value to the applicant or recipient that has not been disclosed to the public. Confidential information includes scientific and technological information, including computer programs and software, and marketing and business operation information, regardless of whether the product to which the information relates is patentable or capable of being registered under copyright or trademark laws or has a potential for being sold, traded, or licensed for a fee. This section does not make confidential information in an account, voucher, or contract relating to the receipt or expenditure of public funds by the bank, board, or the department or its successor under this subchapter. (c) Any application for financing that is withdrawn by the applicant before approval or funding or that is denied by the bank shall be returned to the applicant promptly on request, together with all materials submitted by or on behalf of the applicant that relate to the application, except that the bank may retain a record of the submission and disposition of the application that does not include any information described by Subsection (b). Sec. 489.216. PROGRAM COORDINATION. The bank and the office shall coordinate the administration and funding of the programs. Sec. 489.217. EXPENDITURES. All expenditures of the program must be approved on behalf of the state by the bank. Expenses incurred by the program in the operation and administration of its programs and affairs, including expenditures for employees and program assistance or development, shall be paid out of fees collected or revenues generated under this subchapter. SECTION 2.02. On September 1, 2003: (1) all functions and activities performed by the comptroller relating to the small business incubator program, the Texas small business incubator fund, and the Texas product development fund immediately before that date are transferred to the Texas Economic Development and Tourism Office or the Texas Economic Development Bank, as provided by this Act; (2) a rule adopted by the Product Development and Small Business Incubator Board under Subchapter P, Chapter 403, Government Code, as that law existed immediately before the effective date of this Act, with respect to the small business incubator program, the Texas small business incubator fund, and the Texas product development fund remains in effect until rules are adopted by the Product Development and Small Business Incubator Board established under Subchapter D, Chapter 489, Government Code, as added by this Act; (3) all money, contracts, leases, rights, and obligations of the comptroller related to functions and activities performed by the comptroller relating to the small business incubator program, the Texas small business incubator fund, and the Texas product development fund are transferred to the Texas Economic Development and Tourism Office or the Texas Economic Development Bank, as provided by this Act; (4) all funds appropriated by the legislature to the comptroller for purposes related to the small business incubator program, the Texas small business incubator fund, and the Texas product development fund are transferred to the Texas Economic Development and Tourism Office or the Texas Economic Development Bank, as provided by this Act; and (5) all property, including records, in the custody of the comptroller related to functions and activities performed by the comptroller relating to the small business incubator program, the Texas small business incubator fund, and the Texas product development fund becomes property of the Texas Economic Development and Tourism Office or the Texas Economic Development Bank, as provided by this Act. SECTION 2.03. (a) As soon as possible on or after the effective date of this Act, the governor shall appoint nine new members to the Product Development and Small Business Incubator Board in accordance with Subchapter D, Chapter 489, Government Code, as added by this Act. In making the appointments, the governor shall designate three members for terms expiring February 1, 2005, three members for terms expiring February 1, 2007, and three members for terms expiring February 1, 2009. The members appointed under this subsection may not perform the functions of the board until the day after the date a majority of the new members take office. (b) Until the date the new members of the Product Development and Small Business Incubator Board may begin performing the functions of the board under Subsection (a) of this section, the members serving on the board immediately before the effective date of this Act shall continue to carry out the functions of the board. On the date the new members may begin performing the functions of the board, the offices of the members serving immediately before the effective date of this Act are abolished. (c) The changes in law made by this Act in the qualifications of, and the prohibitions applying to, members of the Product Development and Small Business Incubator Board do not affect the entitlement of a member serving on the board immediately before the effective date of this Act to continue to carry out the functions of the board for the period prescribed by Subsection (b) of this section. The changes in law apply only to a member appointed on or after the effective date of this Act. This Act does not prohibit a person who is a member of the board on the effective date of this Act from being reappointed to the board if the person has the qualifications required for a member under Subchapter D, Chapter 489, Government Code, as added by this Act. SECTION 2.04. On the effective date of this Act, unobligated and unexpended money in the capital access fund created under Section 481.402, Government Code, as amended by this Act, and in the Texas leverage fund shall be transferred to the Texas economic development bank fund created under Section 489.105, Government Code, as added by this Act.
ARTICLE 3. ENTERPRISE ZONES; CERTAIN OTHER ECONOMIC
DEVELOPMENT PROGRAMS ADMINISTERED BY TEXAS ECONOMIC
DEVELOPMENT BANK
SECTION 3.01. Section 2303.003, Government Code, is amended by amending Subdivisions (1) and (5) and adding Subdivisions (1-a), (1-b), (3-a), (5-a), and (6-a) to read as follows: (1) "Bank" means the Texas Economic Development Bank established under Chapter 489. (1-a) "Block group" has the meaning assigned by the Bureau of the Census of the United States Department of Commerce. (1-b) "Day" means the period between 8 a.m. and 5 p.m. of a day other than a Saturday, Sunday, or state or federal holiday. (3-a) "Governing body of an enterprise zone" means the governing body of a municipality or county in which an enterprise zone is located. (5) "Nominating body" means the governing body of a municipality or county[, or a combination of the governing bodies of municipalities or counties,] that nominates a project or activity of a qualified business [and applies] for designation [of an area] as an enterprise project [zone]. (5-a) "Office" means the Texas Economic Development and Tourism Office. (6-a) "Qualified business site" means the specific business site of an enterprise project. SECTION 3.02. Sections 2303.051, 2303.052, 2303.053, and 2303.054, Government Code, are amended to read as follows: Sec. 2303.051. GENERAL POWERS AND DUTIES. (a) The bank [department] shall administer and monitor the implementation of this chapter. (a-1) The bank shall compile data identifying the block groups in this state that qualify for enterprise zone designation using the poverty data available from the most recent federal decennial census. The bank shall update the block group information as soon as practicable after the date on which the next federal decennial census is released. The bank shall make the information and updates available in an electronic format on the office's Internet website. (b) The bank [department] shall establish criteria and procedures for designating a project or activity of a qualified business [area] as an [enterprise zone and for designating an] enterprise project. (c) The office [department] shall adopt rules necessary to carry out the purposes of this chapter. Sec. 2303.052. EVALUATION; REPORT. (a) The bank [department] shall conduct a continuing evaluation of the [programs of] enterprise zone program [zones]. (b) The bank [department] shall develop data from available information demonstrating the relationship between the incentives provided under this chapter and the economy. (c) The bank [department] biennially shall review local incentives. (d) On or before January 1 [December 15] of each year the bank [department] shall submit to the governor, the legislature, and the Legislative Budget Board a report that: (1) evaluates the effectiveness of the enterprise zone program; (2) describes the use of state and local incentives under this chapter and their effect on revenue; and (3) suggests legislation. Sec. 2303.053. ASSISTANCE. (a) The bank [department] shall assist: (1) a qualified business in obtaining the benefits of any incentive or inducement program provided by law; (2) a unit of local government in obtaining status as a federal [enterprise] zone designation that furthers the purpose of this chapter; (3) a nominating [the governing] body [of an enterprise zone] in obtaining assistance from another state agency, including training and technical assistance to qualified businesses in an enterprise [a] zone; and (4) a nominating [the governing] body [of an enterprise zone] in developing small business incubators. (b) The bank [department] shall provide to persons desiring to locate and engage in business in an enterprise zone information and appropriate assistance relating to the required legal authorization, including a state license, permit, certificate, approval, registration, or charter, to engage in business in this state. (c) The bank [department] shall publicize existing tax incentives and economic development programs in enterprise zones. (d) On request the bank [department] shall offer to a unit of local government having an enterprise zone within its jurisdiction technical assistance relating to tax abatement and the development of alternative revenue sources. Sec. 2303.054. COORDINATION WITH OTHER GOVERNMENTAL ENTITIES. (a) In cooperation with the appropriate units of local government and other state agencies, the bank [department] shall coordinate and streamline state business assistance programs and permit or license application procedures for businesses in enterprise zones. (b) The bank [department] shall: (1) work with the responsible state and federal agencies to coordinate enterprise zone programs with other programs carried out in an enterprise zone, including housing, community and economic development, small business, banking, financial assistance, transportation, and employment training programs; (2) work to expedite, to the greatest extent possible, the consideration of applications for those programs by consolidating forms or by other means; and (3) work, when possible, for the consolidation of periodic reports required under those programs into one summary report. (c) The bank [department] shall encourage other state agencies in awarding grants, loans, or services to give priority to businesses in enterprise zones. SECTION 3.03. Section 2303.101, Government Code, is amended to read as follows: Sec. 2303.101. QUALIFICATION [CRITERIA] FOR ENTERPRISE ZONE DESIGNATION. [(a)] To qualify for designation [be designated] as an enterprise zone, an area must: (1) be a block group, as defined by the most recent federal decennial census available at the time of designation, in which at least 20 percent of the residents of the block group have an income at or below 100 percent of the federal poverty level [have a continuous boundary]; or (2) be an area designated as a renewal community, federal empowerment zone, or federal enterprise community, including any developable area [at least one square mile but not larger than the greater of: [(A) 10 square miles, excluding lakes, waterways, and transportation arteries; or [(B) an area, not to exceed 20 square miles, that is equal to five percent of the area, excluding lakes, waterways, and transportation arteries, of the municipality, county, or combination of municipalities or counties nominating the area as an enterprise zone; [(3) be an area of pervasive poverty, unemployment, and economic distress; and [(4) be nominated as an enterprise zone by an ordinance or order adopted by the nominating body]. [(b) The department may not designate an area as an enterprise zone if three enterprise zones are located in the jurisdiction of and were nominated as enterprise zones by the governing body of the municipality or county nominating the area as an enterprise zone.] SECTION 3.04. Section 2303.109, Government Code, is amended to read as follows: Sec. 2303.109. PERIOD OF DESIGNATION. (a) [An area may be designated as an enterprise zone for a maximum of seven years.] An enterprise zone [A] designation remains in effect indefinitely so long as the area continues to qualify for designation as an enterprise zone under this chapter. If an area no longer qualifies for enterprise zone designation following the release of a subsequent federal decennial census, the area's designation remains in effect until the date on which the bank makes the updated information for that subsequent census available to the public as required by Section 2303.051 [until September 1 of the final year of the designation]. (b) Notwithstanding Subsection (a), an area designated as a federal enterprise zone, federal empowerment zone, federal renewal community, or federal enterprise community may be designated as an enterprise zone without further qualification for [longer than seven years but] not longer than the period permitted for the respective designation by federal law. SECTION 3.05. The heading to Subchapter D, Chapter 2303, Government Code, is amended to read as follows:
SUBCHAPTER D. ADMINISTRATION [OF ENTERPRISE ZONE]
SECTION 3.06. Section 2303.201, Government Code, is amended to read as follows: Sec. 2303.201. ADMINISTRATION BY GOVERNING BODY. The governing body of an enterprise zone is the governing body of the municipality or county with jurisdiction over[, or the governing bodies of the combination of municipalities or counties, that applied to have] the area designated as an enterprise zone. SECTION 3.07. Section 2303.204, Government Code, is amended to read as follows: Sec. 2303.204. LIAISON. A nominating [The governing] body [of an enterprise zone] shall designate a liaison to oversee enterprise projects it has nominated under this chapter and to communicate and negotiate with: (1) the bank or the office [department]; (2) [the administrative authority, if one exists; [(3)] an enterprise project; and (3) [(4)] other entities in an enterprise zone or affected by an [the] enterprise project, including a qualified business, within the jurisdiction of the nominating governmental entity [zone]. SECTION 3.08. Sections 2303.205(a) and (c), Government Code, are amended to read as follows: (a) Not later than October 1 of each year, the nominating [the governing] body of a project or activity designated as an enterprise project [zone] shall submit to the bank [department] a report in the form required by the bank [department]. (c) The report must include for the year preceding the date of the report: (1) a list of local incentives for community development available in the jurisdiction of the governmental entity nominating the enterprise project [zone]; (2) the use of local incentives described by [for which] the nominating [governing] body [provided] in the ordinance or order nominating the enterprise project [zone] and the effect of those incentives on revenue; (3) the number of businesses assisted, located, and retained in the jurisdiction of the governmental entity nominating the enterprise project [zone since its designation] due to the existence of the enterprise zone program; and (4) a summary of all industrial revenue bonds issued to finance enterprise projects located in the jurisdiction of the governmental entity nominating the enterprise project [zone; and [(5) a description of all efforts made to attain revitalization goals for the zone]. SECTION 3.09. Section 2303.401, Government Code, is amended to read as follows: Sec. 2303.401. DEFINITIONS [DEFINITION]. In this subchapter: (1) "New permanent job" means a new employment position created by a qualified business as described by Section 2303.402 that: (A) has provided at least 1,820 hours of employment a year to a qualified employee; and (B) is intended to exist at [during the period that] the qualified business site for at least three years after the date on which a state benefit is received as authorized by this chapter [is designated as an enterprise project under Section 2303.406]. (2) "Retained job" means a job that existed with a qualified business before designation of the business's project or activity as an enterprise project that: (A) has provided employment to a qualified employee of at least 1,820 hours annually; and (B) is intended to be an employment position for at least three years after the date on which a state benefit is received as authorized by this chapter [during the period the business is designated as an enterprise project in accordance with Chapter 151, Tax Code]. SECTION 3.10. Section 2303.402(a), Government Code, is amended to read as follows: (a) A person is a qualified business if the bank [department], for the purpose of state benefits under this chapter, or the nominating [governing] body of a project or activity of the person under this chapter [an enterprise zone], for the purpose of local incentives [benefits], certifies that: (1) the person is engaged in or has provided substantial commitment to initiate the active conduct of a trade or business in an [the] enterprise zone,[;] and [(2)] at least 25 percent of the person's new employees in the enterprise zone are: (A) residents of any enterprise zone in this state [the jurisdiction of the governing body of the enterprise zone]; or (B) economically disadvantaged individuals; or (2) the person is engaged in or has provided substantial commitment to initiate the active conduct of a trade or business in an area of this state that does not qualify as an enterprise zone, and at least 35 percent of the person's new employees at the qualified business site are: (A) residents of any enterprise zone in this state; or (B) individuals who are economically disadvantaged. SECTION 3.11. Sections 2303.403 and 2303.404, Government Code, are amended to read as follows: Sec. 2303.403. PROHIBITION ON QUALIFIED BUSINESS CERTIFICATION. If the bank [department] determines that the governing body eligible to nominate [of] an enterprise project [zone] is not complying with this chapter, the bank [department] shall prohibit the certification of a qualified business [in the zone] until the bank [department] determines that the governing body is complying with this chapter. The bank [department] may not designate more than 85 businesses as enterprise projects during any biennium. Sec. 2303.404. REQUEST FOR APPLICATION FOR ENTERPRISE PROJECT DESIGNATION. (a) A qualified business [in an enterprise zone described by Subsection (b)] may request that the governing body of a municipality or county in which the qualified business is located [of the enterprise zone] apply to the bank [department] for designation of a project or activity of the business as an enterprise project. [The request must also be made to the enterprise zone's administrative authority, if one exists.] (b) The enterprise project designation must be for: (1) an expansion or relocation from out-of-state, an expansion, renovation, or new construction, or other property to be undertaken by a qualified business; and (2) a predetermined designation period approved by the bank, with beginning and ending dates for each proposed project or activity [A request may be made under this section only to the governing body of an enterprise zone that has: [(1) an unemployment rate that is at least one and one-half times the state average; or [(2) a population loss of at least: [(A) 12 percent during the most recent six-year period; or [(B) four percent during the most recent three-year period]. (c) The designation period for an enterprise project may not exceed five years from the date on which the designation is made. (d) If an enterprise project designation is for a franchise or subsidiary, separate books and records must be maintained for the business activity conducted at the qualified business site. SECTION 3.12. Section 2303.405, Government Code, is amended by amending Subsections (a), (b), and (c) and adding Subsection (f) to read as follows: (a) If the governing body approves [of an enterprise zone or the governing body and administrative authority of an enterprise zone, as appropriate, approve] a request made under Section 2303.404, the governing body may apply to the bank [department] for the designation of the qualified business as an enterprise project, only after it submits to the bank the order or ordinance and other information that complies with the requirements of Sections 2303.4051 and 2303.4052. (b) An application must[: [(1) describe completely the conditions in the enterprise zone that constitute pervasive poverty, unemployment, and economic distress for purposes of Section 2303.101; [(2) describe the procedures and efforts of the governmental entity or entities that applied to have the area designated as an enterprise zone to facilitate and encourage participation by and negotiation among all affected entities in the zone in which the qualified business is located; [(3)] contain an economic analysis of the plans of the qualified business for expansion, revitalization, or other activity with regard to the enterprise project [in the enterprise zone], including: (1) [(A)] the number of anticipated new permanent jobs the enterprise project [business] will create during the designation period; (2) [(B)] the anticipated number of permanent jobs the enterprise project [business] will retain during the designation period; (3) [(C)] the amount of investment to be made by the enterprise project [in the zone]; [and] (4) a complete description of the projected schedule for completion of the specific activity described by Section 2303.404(b) to be undertaken by the enterprise project; (5) [(D)] other information the bank [department] requires; [and] (6) a description of [(4) describe] the local effort made by the nominating body [governmental entity or entities that applied to have the area designated as an enterprise zone, the administrative authority, if one exists], the qualified business, and other affected entities to develop and revitalize the jurisdiction of the governmental entity nominating the project or activity; and (7) if the nominating body is applying for a double or triple jumbo enterprise project, as defined by Section 2303.407, an indication of which of those types of designations is being sought [zone]. (c) For the purposes of this section, local effort to develop and revitalize a municipality or county [an enterprise zone] is: (1) the willingness of public entities in the municipality or county [zone] to provide services, incentives, and regulatory relief authorized by this chapter and to negotiate with the qualified business for which application is made and with [neighborhood enterprise associations and] other local groups or businesses to achieve the public purposes of this chapter; and (2) the effort of the qualified business and other affected entities to cooperate in achieving those public purposes. (f) A nominating body may submit an application for a project or activity that during the application process loses its eligibility for designation as an enterprise project solely because the project or activity is no longer located in an enterprise zone if the bank receives the application not later than the 30th day after the date on which the bank makes the updated block group data used to make the eligibility determination available as required by Section 2303.051. SECTION 3.13. Subchapter D, Chapter 2303, is amended by adding Sections 2303.4051 and 2303.4052 to read as follows: Sec. 2303.4051. ORDINANCE OR ORDER FOR IDENTIFICATION OF LOCAL INCENTIVES. (a) In this section, "local incentive" means each tax incentive, grant, other financial incentive or benefit, or program to be provided by the governing body to business enterprises in the block group and any other local incentive listed in Section 2303.511. (b) Before nominating the project or activity of a qualified business for designation as an enterprise project, the governing body of the municipality or county in which the business is located, by ordinance or order, as appropriate, must identify and summarize briefly any local incentives available: (1) in each of the block groups or other areas within its jurisdiction that qualify as an enterprise zone under Section 2303.101, if any; and (2) in any area within its jurisdiction that does not qualify as an enterprise zone. (c) The ordinance or order must: (1) state whether the project or activity to be nominated as an enterprise project is located in an area designated as an enterprise zone under this chapter; (2) summarize briefly the local incentives, including tax incentives, that, at the election of the governing body, are or will be made available to the nominated project or activity of the qualified business; and (3) nominate a project or activity as an enterprise project. (d) At least one of the local incentives summarized under Subsection (b)(1) must not apply throughout the nominating governmental entity. (e) Unless the nominating body holds a public hearing before adopting an ordinance or order under this section, the ordinance or order is not valid. (f) If the nominating body has previously nominated a project or activity for designation as an enterprise project, the nominating body, instead of issuing a new ordinance or order under this section for a nominated project or activity, may by resolution make a reference to a previously issued ordinance or order that met the requirements of this section if: (1) the resolution nominates the project or activity for designation as an enterprise project and states whether the nominated project or activity is located in an area designated as an enterprise zone; (2) the local incentives described in the previously issued ordinance or order for the areas described by Subsections (b)(1) and (2) are substantially the same on the date the resolution is issued; and (3) the local incentives to be made available to the nominated project or activity are the same as those made available to the project or activity that are the subject of the previously issued ordinance or order. (g) This section does not prohibit a municipality or county from extending additional incentives, including tax incentives, for business enterprises in an enterprise zone by a separate order or ordinance. Sec. 2303.4052. REQUIRED INFORMATION FROM NOMINATING BODY. Before nominating the project or activity of a qualified business for designation as an enterprise project, the nominating body must submit to the bank: (1) a certified copy of the ordinance or order, as appropriate, or reference to an ordinance or order as required by Section 2303.4051; (2) a transcript of all public hearings conducted with respect to local incentives available to business enterprises within the jurisdiction of the governmental entity nominating the project or activity, regardless of whether those business enterprises are located in an enterprise zone; (3) the name, title, address, telephone number, and electronic mail address of the nominating body's liaison designated under Section 2303.204; and (4) any additional information the bank may require. SECTION 3.14. Section 2303.406, Government Code, is amended to read as follows: Sec. 2303.406. ENTERPRISE PROJECT DESIGNATION. (a) The bank [department] may designate a project or activity of a business as an enterprise project only if the bank receives all of the information required by Section 2303.4052 and [department] determines that: (1) the business is a qualified business under Section 2303.402 that is located in or has made a substantial commitment to locate in an enterprise zone or at a qualified business site [described by Section 2303.404(b)]; (2) the nominating [governing] body [of the enterprise zone] making the application has demonstrated that a high level of cooperation exists among public, private, and neighborhood entities within the jurisdiction of the governmental entity nominating the project or activity [in the zone]; (3) the designation will contribute significantly to the achievement of the plans of the nominating [governing] body making the application for development and revitalization of the area in which the enterprise project will be located [zone]; and (4) if the business is seeking job retention benefits: (A) the permanent employees of the business will be permanently laid off; (B) the business will close down permanently; (C) the business will relocate out-of-state; (D) a 10 percent increase in the production capacity of the business will occur; (E) a 10 percent decrease in overall cost per unit produced will occur; [or] (F) the business facility has been legitimately destroyed or impaired because of fire, flood, tornado, hurricane, or any other natural disaster; or (G) the business facility is both adding a new business line or product and deleting or decreasing an existing business line or product, and the designation will prevent the facility's net production capacity from decreasing. (b) This subsection does not apply to a qualified business located in a federally designated zone, which will receive priority designation in allocating the number of enterprise projects allowed statewide per biennium as provided by Section 2303.403. The bank [department] shall designate qualified businesses as enterprise projects on a competitive basis. The bank [department] shall [establish a minimum scoring threshold that must be met by the qualified business applying for a project designation and] make its designation decisions using a weighted scale in which: (1) 40 [50] percent of the evaluation depends on the economic distress of[: [(A)] the block group [enterprise zone] in which a proposed enterprise project is located; [and [(B) the area within the enterprise zone where the project is located;] (2) 25 percent of the evaluation depends on the local effort to achieve development and revitalization of the block group in which a proposed enterprise project is located [enterprise zone]; and (3) 35 [25] percent of the evaluation depends on the evaluation criteria as determined by the bank [department], which must include: (A) the level of cooperation and support the project applicant commits to the revitalization goals of all of the enterprise zone block groups within the jurisdiction of the nominating governmental entity [zone]; and (B) the type and wage level of the jobs to be created or retained by the business. (c) The bank [department] may remove an enterprise project designation if it determines that the business is not complying with a requirement for its designation. (d) The maximum number of qualified businesses that the bank [department] may designate as enterprise projects for each nominating body during any biennium is: (1) four, plus two additional bonus projects the bank [department] may award in a municipality or county with a population of less than 250,000; or (2) six, if the nominating [governing] body [of the enterprise zone] is the governing body of a municipality or county with a population of 250,000 or more. (e) The office may designate multiple concurrent enterprise projects to a qualified business during any biennium. (f) An approved designation as a double jumbo enterprise project, as defined by Section 2303.407, counts as two project designations against both the nominating body for purposes of Subsection (d) and the number of enterprise project designations allowed statewide per biennium under Section 2303.403. An approved designation as a triple jumbo enterprise project, as defined by Section 2303.407, counts as three project designations against both the nominating body for purposes of Subsection (d) and the number of enterprise project designations allowed statewide per biennium under Section 2303.403. SECTION 3.15. Section 2303.407, Government Code, as amended by Article 1, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2303.407. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND. (a) The bank [When the department designates a business as an enterprise project, the department] shall allocate to an enterprise [the] project the maximum number of new permanent jobs or retained jobs eligible based on the amount of capital investment made in the project and the refund per job with a maximum refund to be included in a computation of a tax refund for the project[. The number may not exceed 250 or a number equal to 110 percent of the number of anticipated new permanent jobs or retained jobs specified in the application for designation of the business as an enterprise project under Section 2303.405, whichever is less]. (b) A capital investment in a project of: (1) $40,000 to $399,999 will result in a refund of up to $2,500 per job with a maximum refund of $25,000 for the creation or retention of 10 jobs; (2) $400,000 to $999,999 will result in a refund of up to $2,500 per job with a maximum refund of $62,500 for the creation or retention of 25 jobs; (3) $1,000,000 to $4,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $312,500 for the creation or retention of 125 jobs; (4) $5,000,000 to $149,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $1,250,000 for the creation or retention of 250 jobs; (5) $150,000,000 to $249,999,999 will result in a refund of up to $5,000 per job with a maximum refund of $2,500,000 for the creation or retention of 500 jobs; or (6) $250,000,000 or more will result in a refund of up to $7,500 per job with a maximum refund of $3,750,000 for the creation or retention of 500 jobs. (c) A capital investment in the range amount and the creation or retention of the number of jobs described by Subsection (b)(5) is considered a double jumbo enterprise project. (d) A capital investment in the range amount and the creation or retention of the number of jobs described by Subsection (b)(6) is considered a triple jumbo enterprise project. SECTION 3.16. Section 2303.407, Government Code, as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2303.407. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND. (a) The bank [When the department designates a business as an enterprise project, the department] shall allocate to an enterprise [the] project the maximum number of new permanent jobs or retained jobs eligible based on the amount of capital investment made in the project and the refund per job with a maximum refund to be included in a computation of a tax refund for the project[. The number may not exceed 625 or a number equal to 110 percent of the number of anticipated new permanent jobs or retained jobs specified in the application for designation of the business as an enterprise project under Section 2303.405, whichever is less]. (b) A capital investment in a project of: (1) $40,000 to $399,999 will result in a refund of up to $2,500 per job with a maximum refund of $25,000 for the creation or retention of 10 jobs; (2) $400,000 to $999,999 will result in a refund of up to $2,500 per job with a maximum refund of $62,500 for the creation or retention of 25 jobs; (3) $1,000,000 to $4,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $312,500 for the creation or retention of 125 jobs; (4) $5,000,000 to $149,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $1,250,000 for the creation or retention of 250 jobs; (5) $150,000,000 to $249,999,999 will result in a refund of up to $5,000 per job with a maximum refund of $2,500,000 for the creation or retention of 500 jobs; or (6) $250,000,000 or more will result in a refund of up to $7,500 per job with a maximum refund of $3,750,000 for the creation or retention of 500 jobs. (c) A capital investment in the range amount and the creation or retention of the number of jobs described by Subsection (b)(5) is considered a double jumbo enterprise project. (d) A capital investment in the range amount and the creation or retention of the number of jobs described by Subsection (b)(6) is considered a triple jumbo enterprise project. SECTION 3.17. Subchapter F, Chapter 2303, Government Code, is amended by adding Sections 2303.4071 and 2303.4072 to read as follows: Sec. 2303.4071. MAXIMUM TAX REFUND. (a) In this section, "double jumbo enterprise project" and "triple jumbo enterprise project" have the meanings assigned by Section 2303.407. (b) An enterprise project is eligible for a maximum refund of $250,000 in each state fiscal year. (c) A double jumbo enterprise project is eligible for a maximum refund of $500,000 in each state fiscal year. (d) A triple jumbo enterprise project is eligible for a maximum refund of $750,000 in each state fiscal year. Sec. 2303.4072. ENTERPRISE PROJECT CLAIM FOR STATE BENEFIT. A person must make a claim to the comptroller for a state benefit as prescribed under this chapter and Chapters 151 and 171, Tax Code, not later than 18 months after the date on which the term of the enterprise project designation expires as provided by Section 2303.404. SECTION 3.18. Section 2303.408, Government Code, is amended to read as follows: Sec. 2303.408. DURATION OF CERTAIN DESIGNATIONS. The bank's [department's] designation of the project or activity of a qualified business as an enterprise project is effective until the period approved by the bank under Section 2303.404 [the fifth anniversary of the date on which the designation is made] regardless of whether the enterprise zone in which the project is located, if any, fails to qualify as an enterprise zone [expires] before the expiration [fifth anniversary] of the project. SECTION 3.19. Section 2303.501(a), Government Code, is amended to read as follows: (a) A state agency may exempt from its regulation a qualified business, qualified employee, or qualified property[, or neighborhood enterprise association] in an enterprise zone if the exemption is consistent with: (1) the purposes of this chapter; and (2) the protection and promotion of the general health and welfare. SECTION 3.20. Sections 2303.502(b) and (c), Government Code, are amended to read as follows: (b) Annually each state agency shall: (1) review the rules it administers that: (A) may adversely affect: (i) the renovation, improvement, or new construction of housing in enterprise zones; or (ii) the economic viability and profitability of business and commerce in enterprise zones; or (B) may otherwise affect the implementation of this chapter; and (2) report the results of the review to the bank [department]. (c) The bank [department] shall disseminate the reports to the governing bodies of enterprise zones and others as necessary to advance the purposes of this chapter. SECTION 3.21. Section 2303.503(d), Government Code, is amended to read as follows: (d) The office [department] may give preference to enterprise zones in granting economic development money or other benefits. SECTION 3.22. Sections 2303.504(b) and (c), Government Code, as amended by Article 1, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, are amended to read as follows: (b) At the time of receipt of any tax benefit available as a result of participating in the enterprise zone program, including a state sales and use tax refund or franchise tax credit, three percent of the amount of the tax benefit shall be transferred to the Texas economic development bank fund under Subchapter B, Chapter 489, to defray the cost of administering this chapter [Subject to Section 2303.516, a qualified business is entitled to a refund of state taxes under Sections 151.431 and 171.501, Tax Code]. (c) Not later than the 60th day after the last day of each fiscal year, the comptroller shall report to the bank [department] the statewide total of actual jobs created, actual jobs retained, and the tax refunds and credits made under this section during that fiscal year. SECTION 3.23. Sections 2303.504(b) and (c), Government Code, as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, are amended to read as follows: (b) At the time of receipt of any tax benefit available as a result of participating in the enterprise zone program, including a state sales and use tax refund or franchise tax credit, three percent of the amount of the tax benefit shall be transferred to the Texas economic development bank fund under Subchapter B, Chapter 489, to defray the cost of administering this chapter [Subject to Section 2303.516, a qualified business is entitled to a refund of state taxes under Sections 151.431 and 171.501, Tax Code]. (c) Not later than the 60th day after the last day of each fiscal year, the comptroller shall report to the bank [department] the statewide total of actual jobs created, actual jobs retained, and the tax refunds made under this section during that fiscal year. SECTION 3.24. Sections 2303.513(a) and (b), Government Code, are amended to read as follows: (a) After an area is designated as an enterprise zone, the state, a municipality, or a county that owns a surplus building or vacant land in the zone may dispose of the building or land by: (1) selling the building or land at a public auction; or (2) [selling the land to a neighborhood enterprise association; or [(3)] establishing an urban homestead program described by Subsection (c). (b) A municipality or county may sell a surplus building or vacant land in the enterprise zone at less than fair market value if the governing body of the municipality or county by ordinance or order, as appropriate, adopts criteria that specify the conditions and circumstances under which the sale may occur and the public purpose to be achieved by the sale. The building or land may be sold to a buyer who is not the highest bidder if the criteria and public purpose specified in the ordinance or order are satisfied. A copy of the ordinance or order must be filed with the bank [department] not later than the day on which the sale occurs. SECTION 3.25. Section 2303.516, Government Code, is amended to read as follows: Sec. 2303.516. MONITORING QUALIFIED BUSINESS OR ENTERPRISE PROJECT COMMITMENTS. (a) The bank [department] may monitor a qualified business or enterprise project to determine whether and to what extent the business or project has followed through on any commitments made by it or on its behalf under this chapter. (b) The bank [department] may determine that the business or project is not entitled to a refund or credit of state taxes under Section 2303.504 if the bank [department] finds that: (1) the business or project is not willing to cooperate with the bank [department] in providing the bank [department] with the information the bank [department] needs to make the determination under Subsection (a); or (2) the business or project has substantially failed to follow through on any commitments made by it or on its behalf under this chapter. (c) On the date on which a certificate of occupancy is issued with respect to an enterprise project, the nominating body shall audit the qualified business to determine whether the business or project has followed through on any commitments or goals made by it or on its behalf in the designation application. On completion, the nominating body shall submit a certified copy of the audit findings to the bank and comptroller. (d) A qualified business may obtain a state benefit, earned through a specific enterprise project designation, on completion of an audit performed by the comptroller that will certify hiring commitments and eligible purchases made by or on behalf of a qualified business under this chapter. SECTION 3.26. Subchapter G, Chapter 2303, Government Code, is amended by adding Section 2303.517 to read as follows: Sec. 2303.517. REPORT. Before obtaining a state benefit, the qualified business must submit to the bank a certified report of the actual number of jobs created or retained and the capital investment made at or committed to the qualified business site. SECTION 3.27. Section 2310.001, Government Code, is amended by amending Subdivision (1) and adding Subdivisions (1-a) and (4-a) to read as follows: (1) "Bank" means the Texas Economic Development Bank established under Chapter 489. (1-a) "Defense worker" means: (A) an employee of the United States Department of Defense, including a member of the armed forces and a government civilian worker; (B) an employee of a government agency or private business, or an entity providing a department of defense related function, who is employed on a defense facility; (C) an employee of a business that provides direct services or products to the department of defense and whose job is directly dependent on defense expenditures; or (D) an employee or private contractor employed by the United States Department of Energy working on a defense or department of energy facility in support of a department of defense related project. (4-a) "Office" means the Texas Economic Development and Tourism Office. SECTION 3.28. Section 2310.051, Government Code, is amended to read as follows: Sec. 2310.051. GENERAL POWERS AND DUTIES. (a) The bank [department] shall administer and monitor the implementation of this chapter. (b) The bank [department] shall establish criteria and procedures for designating a qualified area as a readjustment zone and for designating a defense readjustment project. (c) The office [department] shall adopt rules necessary to carry out the purposes of this chapter. SECTION 3.29. Section 2310.052, Government Code, is amended to read as follows: Sec. 2310.052. EVALUATION; REPORT. (a) The bank [department] shall conduct a continuing evaluation of the programs of readjustment zones. (b) On or before December 1 of each year, the office [department] shall submit to the governor, the legislature, and the Legislative Budget Board a report that: (1) evaluates the effectiveness of the readjustment zone program; (2) describes the use of state and local incentives under this chapter and their effect on revenue; and (3) suggests legislation, as appropriate. SECTION 3.30. Section 2310.053, Government Code, is amended to read as follows: Sec. 2310.053. ASSISTANCE. (a) The bank [department] shall assist: (1) a qualified business in obtaining the benefits of any state incentive or inducement program provided by law; (2) the governing body of a readjustment zone in obtaining assistance from another state agency, including job training and technical assistance to qualified businesses in a zone; and (3) the governing body of a readjustment zone in encouraging small business development. (b) The bank [department] shall provide to persons desiring to locate and engage in business in a readjustment zone information and appropriate assistance relating to the required legal authorization, including a state license, permit, certificate, approval, registration, or charter, to engage in business in this state. (c) The bank [department] shall publicize existing tax incentives and economic development programs in readjustment zones. (d) On request the bank [department] shall offer to a unit of local government having a readjustment zone within its jurisdiction technical assistance relating to tax abatement and the development of alternative revenue sources. SECTION 3.31. Section 2310.054, Government Code, is amended to read as follows: Sec. 2310.054. COORDINATION WITH OTHER GOVERNMENTAL ENTITIES. (a) In cooperation with the appropriate units of local government and other state agencies, the bank [department] shall coordinate and streamline state business assistance programs and permit or license application procedures for businesses in readjustment zones. (b) The bank [department] shall work with the responsible state and federal agencies to coordinate readjustment zone programs with other programs carried out in a readjustment zone, including housing, community and economic development, small business, banking, financial assistance, transportation, and employment training programs. (c) The bank [department] shall encourage other state agencies in awarding grants, loans, or services to give priority to businesses in readjustment zones. SECTION 3.32. Section 2310.102, Government Code, is amended to read as follows: Sec. 2310.102. ADVERSELY AFFECTED DEFENSE-DEPENDENT COMMUNITY. A municipality or county is an adversely affected defense-dependent community if the bank [department] determines that: (1) the municipality or county requires assistance because of: (A) the proposed or actual establishment, realignment, or closure of a defense facility; (B) the cancellation or termination of a United States Department of Defense contract or the failure of the department of defense to proceed with an approved major weapon system program; (C) a publicly announced planned major reduction in department of defense spending that would directly and adversely affect the municipality or county; or (D) the closure or a significant reduction of the operations of a defense facility as the result of a merger, acquisition, or consolidation of a defense contractor operating the facility; and (2) the municipality or county is expected to experience, during the period between the beginning of the federal fiscal year during which an event described by Subdivision (1) is finally approved and the date that the event is to be substantially completed, a direct loss of: (A) 2,500 or more defense worker jobs in any area of the municipality or county that is located in an urbanized area of a metropolitan statistical area; (B) 1,000 or more defense worker jobs in any area of the municipality or county that is not located in an urbanized area of a metropolitan statistical area; or (C) one percent of the civilian jobs in the municipality or county. SECTION 3.33. Sections 2310.105(a) and (b), Government Code, are amended to read as follows: (a) For an area to be designated as a readjustment zone, the nominating body, after nominating the area as a readjustment zone, must send to the bank [department] a written application for designation of the area as a readjustment zone. (b) The application must include: (1) a certified copy of the ordinance or order, as appropriate, nominating the area as a readjustment zone; (2) a map of the area showing existing streets and highways; (3) an analysis and appropriate supporting documents and statistics demonstrating that the area qualifies for designation as a readjustment zone; (4) a statement that specifies each tax incentive, grant, other financial incentive or benefit, or program to be provided by the nominating body to business enterprises in the area that is not to be provided throughout the governmental entity or entities nominating the area as a readjustment zone; (5) a statement of the economic development and planning objectives for the area; (6) an estimate of the economic impact of the designation of the area as a readjustment zone on the revenues of the governmental entity or entities nominating the area as a readjustment zone, considering all the financial incentives and benefits and the programs contemplated; (7) a transcript or tape recording of all public hearings on the proposed zone; (8) if the application is a joint application, a description and copy of the agreement between the applicants; (9) the procedures for negotiating with residents, community groups, and other entities affected by the designation of the area as a readjustment zone and with qualified businesses in the area; (10) a description of the administrative authority, if one is to be appointed for the readjustment zone under Section 2310.202; and (11) any additional information the bank [department] requires. SECTION 3.34. Section 2310.106, Government Code, is amended to read as follows: Sec. 2310.106. REVIEW OF APPLICATION. (a) On receipt of an application for the designation of a readjustment zone, the bank [department] shall review the application to determine if the nominated area qualifies for designation as a readjustment zone under this chapter. (b) The bank [department] shall allow an applicant to correct any omission or clerical error in the application and to return the application to the bank [department] on or before the 15th day after the date on which the bank [department] receives the application. SECTION 3.35. Sections 2310.107(a), (c), and (d), Government Code, are amended to read as follows: (a) If the bank [department] determines that a nominated area for which a designation application has been received satisfies the criteria under Section 2310.101, the bank [department] shall negotiate with the nominating body for a designation agreement. (c) The bank [department] shall complete the negotiations and sign the agreement not later than the 60th day after the date on which the application is received unless the bank [department] extends that period to the 90th day after the date on which the application was received. (d) If an agreement is not completed within the 60-day period provided by Subsection (c), the bank [department] shall provide to the nominating body the specific areas of concern and a final proposal for the agreement. SECTION 3.36. Section 2310.108, Government Code, is amended to read as follows: Sec. 2310.108. DENIAL OF APPLICATION; NOTICE. (a) The bank [department] may deny an application for the designation of a readjustment zone only if the bank [department] determines that the nominated area does not satisfy the criteria under Section 2310.101. (b) The bank [department] shall inform the nominating body of the specific reasons for denial of an application, including denial under Section 2310.107(e). SECTION 3.37. Section 2310.110(e), Government Code, is amended to read as follows: (e) For each amendment of a readjustment zone boundary, the nominating body shall pay the bank [department] a reasonable fee, in an amount specified by the bank [department], not to exceed $500. The bank [department] may use fees collected under this subsection to administer this chapter and for other purposes to advance this chapter. SECTION 3.38. Section 2310.111(a), Government Code, is amended to read as follows: (a) The bank [department] may remove the designation of an area as a readjustment zone if: (1) the area no longer meets the criteria for designation under this chapter or by [department] rule of the office adopted under this chapter; or (2) the bank [department] determines that the governing body of the readjustment zone has not complied with commitments made in the ordinance or order nominating the area as a readjustment zone. SECTION 3.39. Section 2310.203, Government Code, is amended to read as follows: Sec. 2310.203. LIAISON. The governing body of a readjustment zone shall designate a liaison to communicate and negotiate with: (1) the bank [department]; (2) the administrative authority, if one exists; (3) a defense readjustment project; and (4) other entities in or affected by the readjustment zone. SECTION 3.40. Section 2310.204(a), Government Code, is amended to read as follows: (a) Not later than October 1 of each year, the governing body of a readjustment zone shall submit to the bank [department] a report in the form required by the bank [department]. SECTION 3.41. Section 2310.302(a), Government Code, is amended to read as follows: (a) A person is a qualified business if the bank [department], for the purpose of state benefits under this chapter, or the governing body of a readjustment zone, for the purpose of local benefits, certifies that: (1) the person is engaged in or has provided substantial commitment to initiate the active conduct of a trade or business in the readjustment zone; and (2) at least 25 percent of the person's new employees in the readjustment zone are: (A) residents of the governing jurisdiction; (B) economically disadvantaged individuals, as defined by Section 2303.402(c); or (C) dislocated defense workers. SECTION 3.42. Sections 2310.303 and 2310.304, Government Code, are amended to read as follows: Sec. 2310.303. PROHIBITION ON QUALIFIED BUSINESS CERTIFICATION. If the bank [department] determines that the governing body of a readjustment zone is not complying with this chapter, the bank [department] shall prohibit the certification of a qualified business in the zone until the bank [department] determines that the governing body is complying with this chapter. The bank [department] may not designate more than two businesses in a single readjustment zone as defense readjustment projects. Sec. 2310.304. REQUEST FOR APPLICATION FOR DEFENSE READJUSTMENT PROJECT DESIGNATION. A qualified business in a readjustment zone may request that the governing body of the readjustment zone apply to the bank [department] for designation of the business as a defense readjustment project. The request must also be made to the readjustment zone's administrative authority, if one exists. SECTION 3.43. Sections 2310.305(a) and (b), Government Code, are amended to read as follows: (a) If the governing body of a readjustment zone or the governing body and administrative authority of a readjustment zone, as appropriate, approve a request made under Section 2310.304, the governing body may apply to the bank [department] for the designation of the qualified business as a defense readjustment project. (b) An application must: (1) describe the procedures and efforts of the governmental entity or entities that applied to have the area designated as a readjustment zone to facilitate and encourage participation by and negotiation among affected entities in the zone in which the qualified business is located; (2) contain an economic analysis of the plans of the qualified business for expansion, revitalization, or other activity in the readjustment zone, including: (A) the number of anticipated new permanent jobs the business will create; (B) the anticipated number of permanent jobs the business will retain; (C) the amount of investment to be made in the zone; and (D) other information the bank [department] requires; and (3) describe the local effort made by the governmental entity or entities that applied to have the area designated as a readjustment zone, the administrative authority, if one exists, the qualified business, and other affected entities to develop and revitalize the zone. SECTION 3.44. Sections 2310.306, 2310.307, and 2310.308, Government Code, are amended to read as follows: Sec. 2310.306. DEFENSE READJUSTMENT PROJECT DESIGNATION. (a) The bank [department] may designate a qualified business as a defense readjustment project only if the bank [department] determines that: (1) the business is a qualified business under Section 2310.302 that is located in or has made a substantial commitment to locate in a defense readjustment zone; (2) the governing body of the readjustment zone making the application has demonstrated that a high level of cooperation exists among public, private, and neighborhood entities in the zone; and (3) the designation will contribute significantly to the achievement of the plans of the governing body making the application for development and revitalization of the zone. (b) The bank [department] shall designate qualified businesses as defense readjustment projects on a competitive basis. The bank [department] shall make its designation decisions using a weighted scale in which: (1) 50 percent of the evaluation is based on the effect of the loss of defense expenditures and employment on the community; (2) 25 percent of the evaluation depends on the local effort to achieve development and revitalization of the readjustment zone; and (3) 25 percent of the evaluation depends on the evaluation criteria as determined by the bank [department], which must include: (A) the level of cooperation and support the project applicant commits to the revitalization goals of the zone; and (B) the type and wage level of the jobs to be created or retained by the business. (c) The bank [department] may remove a defense readjustment project designation if it determines that the business is not complying with a requirement for its designation. Sec. 2310.307. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND. When the bank [department] designates a business as a defense readjustment project, the bank [department] shall allocate to the project the maximum number of new permanent jobs or retained jobs eligible to be included in a computation of a tax refund for the project. The number may not exceed 500 or a number equal to 110 percent of the number of anticipated new permanent jobs or retained jobs specified in the application for designation of the business as a defense readjustment project under Section 2310.305, whichever is less. Sec. 2310.308. DURATION OF CERTAIN DESIGNATIONS. The bank's [department's] designation of a qualified business as a defense readjustment project is effective until the fifth anniversary of the date on which the designation is made regardless of whether the readjustment zone in which the project is located expires before the fifth anniversary of the project. SECTION 3.45. Section 2310.402(b), Government Code, is amended to read as follows: (b) The bank [department] shall disseminate the reports to the governing bodies of readjustment zones and others as necessary to advance the purposes of this chapter. SECTION 3.46. Section 2310.403(d), Government Code, is amended to read as follows: (d) The office [department] or another state agency may give preference to readjustment zones in granting economic development money or other benefits. SECTION 3.47. Section 2310.404(b), Government Code, as amended by Article 1, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (b) Not later than the 60th day after the last day of each fiscal year, the comptroller shall report to the bank [department] the statewide total of the tax refunds or credits made under this section during that fiscal year. SECTION 3.48. Section 2310.404(b), Government Code, as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (b) Not later than the 60th day after the last day of each fiscal year, the comptroller shall report to the bank [department] the statewide total of the tax refunds made under this section during that fiscal year. SECTION 3.49. Section 2310.410(b), Government Code, is amended to read as follows: (b) A municipality or county may sell a surplus building or vacant land in the readjustment zone at less than fair market value if the governing body of the municipality or county by ordinance or order, as appropriate, adopts criteria that specify the conditions and circumstances under which the sale may occur and the public purpose to be achieved by the sale. A copy of the ordinance or order must be filed with the bank [department] not later than the day on which the sale occurs. SECTION 3.50. Section 2310.413, Government Code, is amended to read as follows: Sec. 2310.413. MONITORING DEFENSE READJUSTMENT PROJECT COMMITMENTS. (a) The bank [department] may monitor a defense readjustment project to determine whether and to what extent the project has followed through on any commitments made by it or on its behalf under this chapter. (b) The bank [department] may determine that the defense readjustment project is not eligible for state tax refunds and credits under Section 2310.404 if the bank [department] finds that: (1) the project is not willing to cooperate with the bank [department] in providing the bank [department] with the information the bank [department] needs to make the determination under Subsection (a); or (2) the project has substantially failed to follow through on its commitments made by it or on its behalf under this chapter. SECTION 3.51. Sections 151.429(a) and (b), Tax Code, as amended by Article 1, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, are amended to read as follows: (a) An enterprise project is eligible for a refund in the amount provided by this section of the taxes imposed by this chapter on purchases of: (1) equipment or machinery sold to an enterprise project for use at the qualified business site [in an enterprise zone]; (2) building materials sold to an enterprise project for use in remodeling, rehabilitating, or constructing a structure at the qualified business site [in an enterprise zone]; (3) labor for remodeling, rehabilitating, or constructing a structure by an enterprise project at the qualified business site [in an enterprise zone]; (4) electricity and natural gas purchased and consumed in the normal course of business at the qualified business site [in the enterprise zone]; (5) tangible personal property purchased and consumed in the normal course of business at the qualified business site [in the enterprise zone]; and (6) taxable services. (b) Subject to the limitations provided by Subsection (c) of this section, an enterprise project qualifies for a refund of taxes under this section based on the amount of capital investment made at the qualified business site and the refund per job with a maximum refund to be included in a computation of a tax refund for the project. A capital investment at the qualified business site of: (1) $40,000 to $399,999 will result in a refund of up to $2,500 per job with a maximum refund of $25,000 for the creation or retention of 10 jobs; (2) $400,000 to $999,999 will result in a refund of up to $2,500 per job with a maximum refund of $62,500 for the creation or retention of 25 jobs; (3) $1,000,000 to $4,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $312,500 for the creation or retention of 125 jobs; (4) $5,000,000 to $149,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $1,250,000 for the creation or retention of 250 jobs; (5) $150,000,000 to $249,999,999 will result in a refund of up to $5,000 per job with a maximum refund of $2,500,000 for the creation or retention of 500 jobs; or (6) $250,000,000 or more will result in a refund of up to $7,500 per job with a maximum refund of $3,750,000 for the creation or retention of 500 jobs [of $5,000 for each new permanent job or job that has been retained by the enterprise project for a qualified employee]. SECTION 3.52. Sections 151.429(a) and (b), Tax Code, as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, are amended to read as follows: (a) An enterprise project is eligible for a refund in the amount provided by this section of the taxes imposed by this chapter on purchases of: (1) equipment or machinery sold to an enterprise project for use at the qualified business site [in an enterprise zone]; (2) building materials sold to an enterprise project for use in remodeling, rehabilitating, or constructing a structure at the qualified business site [in an enterprise zone]; (3) labor for remodeling, rehabilitating, or constructing a structure by an enterprise project at the qualified business site [in an enterprise zone]; and (4) electricity and natural gas purchased and consumed in the normal course of business at the qualified business site [in the enterprise zone]. (b) Subject to the limitations provided by Subsection (c) of this section, an enterprise project qualifies for a refund of taxes under this section based on the amount of capital investment made at the qualified business site and refund per job with a maximum refund to be included in a computation of a tax refund for the project. A capital investment at the qualified business site of: (1) $40,000 to $399,999 will result in a refund of up to $2,500 per job with a maximum refund of $25,000 for the creation or retention of 10 jobs; (2) $400,000 to $999,999 will result in a refund of up to $2,500 per job with a maximum refund of $62,500 for the creation or retention of 25 jobs; (3) $1,000,000 to $4,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $312,500 for the creation or retention of 125 jobs; (4) $5,000,000 to $149,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $1,250,000 for the creation or retention of 250 jobs; (5) $150,000,000 to $249,999,999 will result in a refund of up to $5,000 per job with a maximum refund of $2,500,000 for the creation or retention of 500 jobs; or (6) $250,000,000 or more will result in a refund of up to $7,500 per job with a maximum refund of $3,750,000 for the creation or retention of 500 jobs [of $2,000 for each new permanent job or job that has been retained by the enterprise project for a qualified employee]. SECTION 3.53. Section 151.429, Tax Code, is amended by amending Subsections (c), (d), (e), and (g) and adding Subsections (i) and (j) to read as follows: (c) The total amount of tax refund that an enterprise project may apply for in a state fiscal year may not exceed $250,000. If an enterprise project qualifies in a state fiscal year for a refund of taxes in an amount in excess of the limitation provided by this subsection, it may apply for a refund of those taxes in a subsequent year, subject to the $250,000 limitation for each year. [However, an enterprise project may not apply for a refund under this section after the end of the state fiscal year immediately following the state fiscal year in which the enterprise project's designation as an enterprise project expires or is removed.] The total amount that may be refunded to an enterprise project under this section may not exceed the amount determined by multiplying $250,000 by the number of state fiscal years during which the enterprise project created one or more jobs for qualified employees. (d) To receive a refund under this section, an enterprise project must apply to the comptroller for the refund. The Texas [Department of] Economic Development Bank established under Chapter 489, Government Code, shall provide the comptroller with the assistance that the comptroller requires in administering this section. (e) In this section: (1) "Enterprise project" means a person designated by the Texas [Department of] Economic Development Bank as an enterprise project under Chapter 2303, Government Code. (2) "Enterprise zone[,]" and "qualified employee[,]" [and "qualified hotel project"] have the meanings assigned to those terms by Section 2303.003, Government Code. (3) "New permanent job" means a new employment position created by a qualified business as described by Section 2303.402, Government Code, that: (A) has provided at least 1,820 hours of employment a year to a qualified employee; and (B) is intended to exist for at least three years after a state benefit is received [during the period that the qualified business is designated as an enterprise project] under Chapter 2303, Government Code. (4) "Retained job" has the meaning assigned by Section 2303.401, Government Code. (5) "Double jumbo enterprise project" and "triple jumbo enterprise project" have the meanings assigned by Section 2303.407, Government Code. (g) The refund provided by this section is conditioned on the enterprise project maintaining at least the same level of employment of qualified employees as existed at the time it qualified for a refund for a period of three years from that date. The comptroller [Texas Department of Economic Development] shall annually certify [to the comptroller] whether that level of employment of qualified employees has been maintained. On [the Texas Department of Economic Development] certifying that such a level has not been maintained, the comptroller shall assess that portion of the refund attributable to any such decrease in employment, including penalty and interest from the date of the refund. (i) As provided by Subsection (c), a double jumbo enterprise project is eligible for a maximum refund of $500,000 and a triple jumbo enterprise project is eligible for a maximum refund of $750,000 in each state fiscal year. (j) An enterprise project approved by the Texas Economic Development Bank after September 1, 2003, may not receive a refund before September 1, 2005. SECTION 3.54. Sections 151.4291(d) and (g), Tax Code, are amended to read as follows: (d) To receive a refund under this section, a defense readjustment project must apply to the comptroller for the refund. The Texas [Department of] Economic Development Bank shall provide the comptroller with the assistance that the comptroller requires in administering this section. (g) The refund provided by this section is conditioned on the defense readjustment project maintaining at least the same level of employment of qualified employees as existed at the time it qualified for a refund for a period of three years from that date. The comptroller [Texas Department of Economic Development] shall annually certify to [the comptroller and] the Legislative Budget Board whether that level of employment of qualified employees has been maintained. On [the Texas Department of Economic Development] certifying that such a level has not been maintained, the comptroller shall assess that portion of the refund attributable to any such decrease in employment, including penalty and interest from the date of the refund. SECTION 3.55. Section 151.4291(e)(1), Tax Code, is amended to read as follows: (1) "Defense readjustment project" means a person designated by the Texas [Department of] Economic Development Bank as a defense readjustment project under Chapter 2310, Government Code. SECTION 3.56. Sections 151.431(a) and (b), Tax Code, are amended to read as follows: (a) A qualified business operating in the [enterprise zone's] jurisdiction of the nominating governmental entity for at least three consecutive years may apply for and be granted a onetime refund of sales and use tax paid by the qualified business after certification of the qualified business as provided by Subsection (b) of this section to a vendor or directly to the state for the purchase of equipment or machinery sold to the business for use in an enterprise project [zone] if the governing body or bodies certify to the comptroller [Texas Department of Economic Development] that the business is retaining 10 or more jobs held by qualified employees during the year. For the purposes of this subsection "job" means an existing employment position of a qualified business that has provided employment to a qualified employee of at least 1,820 hours annually. (b) Only qualified businesses that have been certified as eligible for a refund under this section by the governing body or bodies to the [department and by the department to the] comptroller, including certification of the number of jobs retained, are entitled to the refund. [During each calendar year, no more than three eligible qualified businesses may be certified to the department by a municipality or county, subject to Subsection (c).] SECTION 3.57. Section 151.431(e)(2), Tax Code, is amended to read as follows: (2) "Governing body" means the governing body of a municipality or county that applied to have the project or activity of a qualified business [area] designated as an enterprise project [zone] under Section 2303.405 [2303.105], Government Code. SECTION 3.58. Sections 171.501(a) and (b), Tax Code, are amended to read as follows: (a) A corporation that has been certified a qualified business as provided by Chapter 2303, Government Code, may apply for and be granted a refund of franchise tax paid with an initial or annual report if the governing body certifies [or bodies certify] to the comptroller [Texas Department of Economic Development] that the business has created 10 or more new jobs [in its enterprise zone] held by qualified employees during the calendar year that contains the end of the accounting period on which the report is based. [The Texas Department of Economic Development shall certify eligibility for any refund to the comptroller.] (b) Only qualified businesses that have been certified as eligible for a refund under this section by the governing body [or bodies] to the [department and by the department to the] comptroller are entitled to the refund. [During each calendar year, no more than three eligible qualified businesses may be certified to the department by a municipality or county, subject to Subsection (c).] SECTION 3.59. Section 171.501(e)(2), Tax Code, is amended to read as follows: (2) "Governing body" means the governing body of a municipality or county that applied to have the project or activity of a qualified business [area] designated as an enterprise project [zone] under Section 2303.405 [2303.105], Government Code. SECTION 3.60. Sections 171.751(13) and (14), Tax Code, as amended by Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, effective September 1, 2003, are amended to read as follows: (13) "Defense readjustment project" means: (A) a person designated by the Texas Department of Economic Development as a defense readjustment project under Chapter 2310, Government Code, on or after September 1, 2001, but before September 1, 2003; and (B) a person designated by the Texas Economic Development Bank as a defense readjustment project under Chapter 2310, Government Code, on or after September 1, 2003. (14) "Enterprise project" means: (A) a person designated by the Texas Department of Economic Development as an enterprise project under Chapter 2303, Government Code, on or after September 1, 2001, but before September 1, 2003; and (B) a person designated by the Texas Economic Development Bank as an enterprise project under Chapter 2303, Government Code, on or after September 1, 2003. SECTION 3.61. Article 21.49B, Insurance Code, is amended to read as follows: Art. 21.49B. PROPERTY AND CASUALTY INSURANCE INITIATIVES TASK FORCE. The commissioner may establish a task force to study the utility and feasibility of instituting various property and casualty insurance initiatives in this state. The initiatives to be studied may include, but are not limited to: (1) possible coordination with the Texas Economic Development Bank [Department of Commerce] to make certain property and casualty insurance an enterprise zone program pursuant to Chapter 2303, Government Code; (2) possible coordination with Neighborhood Housing Service (NHS) Programs to establish voluntary NHS-Insurance Industry Partnerships; (3) possible insurance agent programs to increase minority agency access to standard insurance companies, including minority intern programs with insurance companies; (4) possible tax incentives for insurance written in underserved areas; and (5) a consumer education program designed to increase the ability of consumers to differentiate among different products and providers in the property and casualty market. SECTION 3.62. Sections 4(b), (d), (f), and (g), Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are amended to read as follows: (b) There is hereby created the Texas Small Business Industrial Development Corporation which shall act on behalf of the state to carry out the public purposes of this Act. The Texas Small Business Industrial Development Corporation shall be considered to be a corporation within the meaning of this Act, shall be organized and governed in accordance with the provisions of this Act, and shall have all of the powers, and shall be subject to all of the limitations, provided for corporations by this Act, except as otherwise provided by this section. For purposes of this Act, the state shall be considered to be the unit under whose auspices the Texas Small Business Industrial Development Corporation is created [and the department shall be considered to be the governing body]. To the extent that the provisions of this section are inconsistent with other provisions of this Act, the provisions of this section shall control as to the existence, powers, limitations, organization, administration, operation, and affairs of the Texas Small Business Industrial Development Corporation. (d) The governor shall appoint [members of the board of the department shall serve ex officio as] the board of directors of the Texas Small Business Industrial Development Corporation. The governor or the governor's designee and the executive director of the Texas Economic Development and Tourism Office serve as nonvoting ex officio members of the board. (f) All programs and expenditures of the Texas Small Business Industrial Development Corporation must be approved on behalf of the state by the bank [department]. Expenses incurred by the Texas Small Business Industrial Development Corporation in the operation and administration of its programs and affairs, including expenditures for employees and program assistance or development, shall be paid out of fees collected or revenues generated under this Act. (g) The revenues and funds of the Texas Small Business Industrial Development Corporation shall be deposited with one or more financial institutions chosen for that purpose by the board of directors. Funds of the Texas Small Business Industrial Development Corporation may not be used or made available for use by the bank [department] except to reimburse the bank [department] for expenses it incurs in its official capacity on behalf of the Texas Small Business Industrial Development Corporation. SECTION 3.63. The changes in law made by this Act to Chapter 2303, Government Code, and Chapters 151 and 171, Tax Code, apply only to an application for a designation under the enterprise zone program under Chapter 2303, Government Code, as amended by this Act, that is filed on or after the effective date of this Act. An application for designation under the enterprise zone program that is filed before the effective date of this Act is governed by the law in effect on the date the application was filed, and the former law is continued in effect for that purpose.
ARTICLE 4. REPEALER
SECTION 4.01. The following provisions are repealed: (1) Chapter 146, Education Code; (2) Subchapter P, Chapter 403, Government Code; (3) Sections 481.001(1), (3), and (4), 481.004, 481.0041, 481.0043, 481.0044, 481.005(b), 481.006, 481.0068, 481.007, 481.010(c), 481.023(b) and (c), 481.0231, 481.028, 481.041, 481.045, 481.059, 481.071, 481.073(a) and (b), 481.077, 481.084, 481.087, 481.1665, 481.168, 481.171, 481.194(b), 481.197(a), 481.201, and 481.403, Government Code; (4) Subchapters G and CC, Chapter 481, Government Code; (5) Chapters 482 and 484, Government Code; (6) Sections 2303.003(2), (4), and (8), 2303.102-2303.108, 2303.110-2303.112, 2303.202, 2303.203, 2303.205(b), 2303.402(b), 2303.5055, 2303.508, and 2303.512, Government Code; (7) Subchapter E, Chapter 2303, Government Code; (8) Section 2310.001(3), Government Code; (9) Section 386.031(d), Local Government Code; (10) Sections 151.431(c) and 171.501(c), Tax Code; and (11) Section 39, Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes).
ARTICLE 5. EFFECTIVE DATE
SECTION 5.01. This Act takes effect September 1, 2003.