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By:  Armbrister                                                   S.B. No. 1262


A BILL TO BE ENTITLED

AN ACT

relating to the use of certain incentives by municipalities for 
certain economic development.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 380.002, Local Government Code, is 
amended by adding Subsection (d) to read as follows:
	(d)  A municipality may not provide a grant of public money 
pursuant to the provisions of this chapter for a business 
enterprise whose business consists primarily of purchasing taxable 
items using a resale certificate and then reselling those items to a 
related party.  For purposes of this section, a "related party" is 
one that owns at least 80 percent of the business enterprise to 
which the grant of public money would be made.
	SECTION 2.  This Act takes effect September 1, 2003, and 
applies only to an economic incentive offered on or after that date.  
An economic incentive offered before that date is governed by the 
law in effect when the incentive was offered, and that law is 
continued in effect for that purpose.