79R2828 CLG-D

By:  Barrientos                                                   S.B. No. 638


A BILL TO BE ENTITLED
AN ACT
relating to the award of a grant and reporting requirements under the Texas Enterprise Fund. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 481.078, Government Code, is amended by adding Subsection (e-1) to read as follows: (e-1) In making a grant of money from the fund, the governor shall develop a mechanism that gives greater consideration to potential recipients who commit to using grant money to purchase goods and services that result in the creation or retention of jobs in this state. SECTION 2. Section 481.078, Government Code, is amended by amending Subsection (f) and adding Subsections (g)-(h) to read as follows: (f) Before awarding a grant under this section, the governor shall [may] enter into a written agreement with the entity to be awarded the grant money specifying that: (1) if the governor finds that the grant recipient has not met each of the job creation targets, wage level targets, and other performance targets specified in the agreement as of a date certain provided in the agreement: (A) the recipient shall repay the grant and any related interest to the state at the agreed rate and on the agreed terms; and (B) the governor will not distribute to the recipient any grant money that remains to be awarded under the agreement; (2) if all or any portion of the amount of the grant is used to build a capital improvement: (A) the state retains a lien or other interest in the capital improvement in proportion to the percentage of the grant amount used to pay for the capital improvement; and (B) the recipient of the grant shall, if the capital improvement is sold: (i) repay to the state the grant money used to pay for the capital improvement, with interest at the rate and according to the other terms provided by the agreement; and (ii) share with the state a proportionate amount of any profit realized from the sale; and (3) [(2)] if, as of a date certain provided in the agreement, the grant recipient has not used grant money awarded under this section for the purposes for which the grant was intended, the recipient shall repay that amount and any related interest to the state at the agreed rate and on the agreed terms. (g) The grant agreement may include a provision providing that a reasonable percentage of the total amount of the grant will be withheld until specified job creation targets, wage level targets, and other performance targets are met by the entity as of the date described by Subsection (f)(1). (h) The governor, after consultation with the speaker of the house of representatives and the lieutenant governor, shall determine: (1) the date required to be contained in the grant agreement as provided by Subsection (f)(1); (2) the job creation targets, wage level targets, and other performance targets required to be contained in the grant agreement as provided by Subsection (f)(1); and (3) if the grant agreement includes the provision authorized by Subsection (g), the percentage of grant money required to be withheld. SECTION 3. Subchapter E, Chapter 481, Government Code, is amended by adding Sections 481.079 and 481.080 to read as follows: Sec. 481.079. ECONOMIC AND FISCAL IMPACT STATEMENT FOR CERTAIN GRANT PROPOSALS. (a) Before the governor awards a grant under Section 481.078 to an entity for a proposed initiative, the office shall prepare a statement that, specifically and in detail, assesses the direct and indirect economic impact that approval of the grant will have on the residents of this state. (b) The statement must include: (1) for the period covered by the grant: (A) the estimated number of jobs to be created in this state by the potential recipient each biennium; and (B) the estimated median wage of the jobs to be created in this state by the potential recipient each biennium; (2) the additional amount of ad valorem taxes, sales and use taxes, and fee revenues projected to be generated each year by governmental entities of this state; (3) the projected earnings of the potential recipient resulting from the proposed initiative or initiatives; (4) the amount of any franchise tax revenue projected to be generated by this state; (5) the total amount of tax credits, local incentives, and other money or credits estimated to be distributed to the proposed grant recipient by governmental entities of this state; and (6) any other information the office considers necessary to include in the statement. Sec. 481.080. ANNUAL REPORT ON TEXAS ENTERPRISE FUND. (a) Not later than September 1 of each year, the governor shall submit to the lieutenant governor, speaker of the house of representatives, and each other member of the legislature a report on grants made under Section 481.078 that: (1) states the total number of jobs each recipient has created in this state; (2) describes the tax credits, local incentives, and other money or credits distributed to each recipient by governmental entities of this state; (3) states the total amount of tax credits, local incentives, and other money or credits distributed to each recipient by governmental entities of this state; (4) states the geographical distribution of grants by county; (5) includes the most recent audited consolidated annual financial statement of each recipient; and (6) includes a summary of the statement prepared for each grant proposal under Section 481.079. (b) The report may not include information that is made confidential by law. (c) The governor may require a recipient of a grant under Section 481.078 to submit, on a form the governor provides, any information necessary for completion of the report. SECTION 4. The changes in law made by this Act to Section 481.078, Government Code, apply only to an agreement that is entered into on or after the effective date of this Act. An agreement that is entered into before the effective date of this Act is governed by the law in effect on the date the agreement was entered into, and the former law is continued in effect for that purpose. SECTION 5. This Act takes effect September 1, 2005.