84R3560 CLG-D

By: Button H.B. No. 26

A BILL TO BE ENTITLED

AN ACT

relating to state economic development measures, including administration of the Texas Enterprise Fund, creation of the Economic Incentive Oversight Board, abolishment of the Texas emerging technology fund and certain programs and funds administered by the Texas Economic Development Bank, renaming the Major Events trust fund to the Major Events Reimbursement Program, and disposition of balances from the Texas emerging technology fund.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. TRUSTEED PROGRAMS WITHIN OFFICE OF GOVERNOR

SECTION 1.01. Section 481.078, Government Code, is amended by amending Subsections (c), (d-1), (e), (e-1), (f), and (k) and adding Subsections (e-2), (e-3), and (m) to read as follows:

(c) Except as provided by Subsections (d) and (d-1), the fund may be used only for:

(1) economic development, infrastructure development, community development, job training programs, and business incentives; and

(2) projects for commercialization of property derived from research developed at or through public or private institutions of higher education as provided by Section 481.081.

(d-1) The fund may be used for the Texas homeless housing and services program administered by the Texas Department of Housing and Community Affairs under Section 2306.2585. The governor may transfer appropriations from the fund to the Texas Department of Housing and Community Affairs to fund the Texas homeless housing and services program. Subsections (e-3) [(e-1)], (f), (f-1), (f-2), (g), (h), (h-1), (i), and (j) and Section 481.080 do not apply to a grant awarded for a purpose specified by this subsection.

(e) The administration of the fund is considered to be a trusteed program within the office of the governor. The governor may negotiate on behalf of the state regarding awarding, by grant, money appropriated from the fund.

(e-1) Of the amount of money available in each state fiscal year for distribution from the fund for awarding grants:

(1) 20 percent may be used only for grants to small businesses as provided by Subsection (k);

(2) 15 percent may be used only for grants to public or private institutions of higher education for projects involving commercialization of property as provided by Section 481.081; and

(3) 65 percent may be used only for the other purposes for which money from the fund may be used.

(e-2) The governor may award money appropriated from the fund only with the prior approval of the lieutenant governor and speaker of the house of representatives. For purposes of this subsection, an award of money appropriated from the fund is considered disapproved by the lieutenant governor or speaker of the house of representatives if that officer does not approve the proposal to award the grant before the 91st day after the date of receipt of the proposal from the governor. The lieutenant governor or the speaker of the house of representatives may extend the review deadline applicable to that officer for an additional 14 days by submitting a written notice to that effect to the governor before the expiration of the initial review period.

(e-3) [(e-1)] To be eligible to receive a grant under this section, the entity must:

(1) be in good standing under the laws of the state in which the entity was formed or organized, as evidenced by a certificate issued by the secretary of state or the state official having custody of the records pertaining to entities or other organizations formed under the laws of that state; and

(2) owe no delinquent taxes to a taxing unit of this state.

(f) Before awarding a grant from the fund [under this section], the governor shall enter into a written agreement with the entity to be awarded the grant money. If the entity is awarded a grant for a purpose described by Subsection (c)(1), the agreement must specify [specifying] that:

(1) if the governor finds that the grant recipient has not met each of the 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;

(B) the governor will not distribute to the recipient any grant money that remains to be awarded under the agreement; and

(C) the governor may assess specified penalties for noncompliance against the recipient;

(2) if all or any portion of the amount of the grant is used to build a capital improvement, the state may:

(A) retain a lien or other interest in the capital improvement in proportion to the percentage of the grant amount used to pay for the capital improvement; and

(B) require the recipient of the grant, if the capital improvement is sold, to:

(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) 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.

(k) To encourage the development and location of small businesses in this state, the governor shall make [consider making] grants from the fund:

(1) to recipients that are small businesses in this state that commit to using the grants to create additional jobs;

(2) to recipients that are small businesses from outside the state that commit to relocate to this state; or

(3) for individual projects that create 100 or fewer additional jobs.

(m) The office of the governor shall adopt rules for the operation of the trusteed program established under this section. The rules must include:

(1) forms and procedures for applications for and the award of grants;

(2) procedures for evaluating grant applications;

(3) provisions governing the grant agreement process;

(4) methods and procedures for monitoring grant recipients and projects or activities for which a grant is awarded from the fund to determine whether and to what extent the grant recipients comply with job creation performance targets, capital investment commitments, or other specified performance targets in the grant agreement, including requirements that grant recipients provide to the office periodic compliance updates;

(5) document retention requirements for grant recipients that are consistent with applicable state law; and

(6) conflict of interest provisions to ensure that persons involved in the operation of the program, including persons involved in evaluating applications for or awarding grants from the fund or in monitoring grant recipients or determining compliance with the terms of grant agreements, do not have a substantial interest in any grant recipient or grant awarded from the fund.

SECTION 1.02. Section 481.079(a-1), Government Code, is amended to read as follows:

(a-1) For grants awarded for a purpose specified by Section 481.078(d-1) or 481.081, the report must include only the amount and purpose of each grant.

SECTION 1.03. Subchapter E, Chapter 481, Government Code, is amended by adding Section 481.081 to read as follows:

Sec. 481.081. TEXAS ENTERPRISE FUND: GRANT FOR UNIVERSITY RESEARCH DEVELOPMENT WITH PRIVATE SPONSORSHIP. (a) In this section:

(1) "Fund" means the Texas Enterprise Fund under Section 481.078.

(2) "Public or private institution of higher education" means an institution of higher education or a private or independent institution of higher education as those terms are defined by Section 61.003, Education Code.

(b) The governor shall provide grants from the fund to supplement other funding for projects involving the commercialization of intellectual property or other property derived from research developed at or through a public or private institution of higher education. To be eligible for a grant under this section, a project must be supported by funding provided by one or more private entities participating in the project, in addition to any funding provided by the public or private institution of higher education.

(c) The amount of a grant awarded under this section may not exceed 50 percent of the total amount of investment in the project provided by the applicable public or private institution of higher education and the participating private entity or entities.

SECTION 1.04. Subchapter G, Chapter 404, Government Code, is amended by adding Section 404.1031 to read as follows:

Sec. 404.1031. MANAGEMENT OF INVESTMENT PORTFOLIO FROM FORMER TEXAS EMERGING TECHNOLOGY FUND. (a) In this section, "state's emerging technology investment portfolio" means:

(1) the equity positions in the form of stock or other security the governor took, on behalf of the state, in companies that received awards under the former Texas emerging technology fund; and

(2) any other investments made by the governor, on behalf of the state, in connection with an award made under the former Texas emerging technology fund.

(b) The trust company shall manage the state's emerging technology investment portfolio in a manner that a prudent investor would employ exercising reasonable care, skill, and caution, taking into consideration the investment of all assets of the portfolio. The trust company may recover its reasonable and necessary costs incurred in the management of the portfolio from the earnings on the investments in the portfolio.

(c) Any proceeds or other earnings from the sale of stock or other investments in the state's emerging technology investment portfolio, less the amount permitted to be retained for payment of its costs for managing the portfolio as provided by Subsection (b), shall be remitted by the trust company to the comptroller for deposit in the general revenue fund.

SECTION 1.05. Effective September 1, 2016, Subchapter G, Chapter 404, Government Code, is amended by adding Section 404.1032 to read as follows:

Sec. 404.1032. VALUATION OF INVESTMENTS FROM FORMER FUND; ANNUAL REPORT. (a) To the maximum extent practicable, the trust company annually shall perform a valuation of the equity positions the governor took, on behalf of the state, in companies that received awards under the former Texas emerging technology fund and of other investments made by the governor, on behalf of the state, in connection with an award under that fund. The valuation must be based on a methodology that is consistent with generally accepted accounting principles.

(b) Not later than January 31 of each year, the trust company shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing committee of each house of the legislature with primary jurisdiction over economic development matters and post on the trust company's Internet website a report of any valuation performed under this section during the preceding state fiscal year.

SECTION 1.06. The heading to Chapter 490, Government Code, is amended to read as follows:

CHAPTER 490. PROVISIONS RELATING TO FORMER TEXAS [FUNDING FOR]

EMERGING TECHNOLOGY FUND

SECTION 1.07. Sections 490.001(2) and (4), Government Code, are amended to read as follows:

(2) "Fund" means the former Texas emerging technology fund.

(4) "Award" means:

(A) for purposes of former Subchapter D, an investment in the form of equity or a convertible note;

(B) for purposes of former Subchapter E, an investment in the form of a debt instrument;

(C) for purposes of former Subchapter F, a grant; or

(D) other forms of contribution or investment as recommended by the former Texas Emerging Technology Advisory Committee [committee] and approved by the governor, lieutenant governor, and speaker of the house of representatives before amendment of this chapter by the 84th Legislature, Regular Session, 2015.

SECTION 1.08. The heading to Section 490.005, Government Code, is amended to read as follows:

Sec. 490.005. REPORT ON AWARDS FROM FORMER FUND [ANNUAL REPORT].

SECTION 1.09. Section 490.005, Government Code, is amended by amending Subsections (a) and (b) and adding Subsection (d) to read as follows:

(a) Not later than January 31, 2016 [of each year], the governor shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing committee of each house of the legislature with primary jurisdiction over economic development matters and post on the office of the governor's Internet website a report that includes for each preceding state fiscal year the following information regarding awards made under the fund [during each preceding state fiscal year]:

(1) the total number and amount of awards made;

(2) the number and amount of awards made under former Subchapters D, E, and F;

(3) the aggregate total of private sector investment, federal government funding, and contributions from other sources obtained in connection with awards made under each of the subchapters listed in Subdivision (2);

(4) the name of each award recipient and the amount of the award made to the recipient; and

(5) a brief description of the equity position that the governor, on behalf of the state, has taken [may take] in companies that received [receiving] awards and the names of the companies in which the state has taken an equity position.

(b) The [annual] report must also contain:

(1) the total number of jobs actually created by each project that received an award from the fund [receiving funding under this chapter];

(2) an analysis of the number of jobs actually created by each project that received an award from the fund [receiving funding under this chapter]; and

(3) a brief description regarding:

(A) the methodology used to determine the information provided under Subdivisions (1) and (2), which may be developed in consultation with the comptroller's office;

(B) the intended outcomes of projects funded under former Subchapter D [during each preceding state fiscal year]; and

(C) the actual outcomes of all projects funded under former Subchapter D [during each preceding state fiscal year], including any financial impact on the state resulting from a liquidity event involving a company whose project was funded under that subchapter.

(d) This section expires September 1, 2017.

SECTION 1.10. Effective September 1, 2016, Subchapter A, Chapter 490, Government Code, is amended by adding Section 490.0051 to read as follows:

Sec. 490.0051. ANNUAL REPORT ON PROJECTS FUNDED; JOB CREATION AND OUTCOMES. (a) Not later than January 31 of each year, the governor shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing committee of each house of the legislature with primary jurisdiction over economic development matters and post on the office of the governor's Internet website a report that contains for each preceding state fiscal year the following information regarding awards made under the fund:

(1) the total number of jobs actually created by each project that received an award from the fund;

(2) an analysis of the number of jobs actually created by each project that received an award from the fund; and

(3) a brief description regarding:

(A) the methodology used to determine the information provided under Subdivisions (1) and (2), which may be developed in consultation with the comptroller's office;

(B) the intended outcomes of all projects funded under former Subchapter D; and

(C) the actual outcomes of all projects funded under former Subchapter D, including any financial impact on the state resulting from a liquidity event involving a company whose project was funded under that subchapter.

(b) The governor shall exclude from the report information that is made confidential by law.

(c) This section expires September 1, 2030.

SECTION 1.11. Section 490.006, Government Code, is amended to read as follows:

Sec. 490.006. VALUATION OF INVESTMENTS; [INCLUSION IN] ANNUAL REPORT. (a) To the maximum extent practicable, the office of the governor shall annually perform a valuation of the equity positions taken by the governor, on behalf of the state, in companies that received [receiving] awards under the fund and of other investments made by the governor, on behalf of the state, in connection with an award under the fund. The valuation must[:

[(1)] be based on a methodology that:

(1) [(A)] may be developed in consultation with the comptroller's office; and

(2) [(B)] is consistent with generally accepted accounting principles[; and

[(2) be included with the annual report required under Section 490.005].

(b) Except as provided by Subsection (c), not later than January 31, 2016, the governor shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing committee of each house of the legislature with primary jurisdiction over economic development matters and post on the office of the governor's Internet website a report of any valuation performed under this section during the preceding state fiscal year.

(c) A valuation performed for the state fiscal year ending August 31, 2015, must be included with the report required under Section 490.005.

(d) This section expires September 1, 2016.

SECTION 1.12. The heading to Subchapter B, Chapter 490, Government Code, is amended to read as follows:

SUBCHAPTER B. MISCELLANEOUS PROVISIONS [TEXAS EMERGING TECHNOLOGY

ADVISORY COMMITTEE]

SECTION 1.13. Section 490.057, Government Code, is amended to read as follows:

Sec. 490.057. CONFIDENTIALITY. (a) Except as provided by Subsection (b), information collected by the governor's office, the former Texas Emerging Technology Advisory Committee [committee], or the committee's advisory panels concerning the identity, background, finance, marketing plans, trade secrets, or other commercially or academically sensitive information of an individual or entity that was [being] considered for or [, receiving, or having] received an award from the fund is confidential unless the individual or entity consents to disclosure of the information.

(b) The following information collected by the governor's office, the former Texas Emerging Technology Advisory Committee [committee], or the committee's advisory panels under this chapter is public information and may be disclosed under Chapter 552:

(1) the name and address of an individual or entity that [receiving or having] received an award from the fund;

(2) the amount of funding received by an award recipient;

(3) a brief description of the project [that is] funded under this chapter;

(4) if applicable, a brief description of the equity position that the governor, on behalf of the state, has taken in an entity that [has] received an award from the fund; and

(5) any other information designated by the committee with the consent of:

(A) the individual or entity that [receiving or having] received an award from the fund[, as applicable];

(B) the governor;

(C) the lieutenant governor; and

(D) the speaker of the house of representatives.

SECTION 1.14. Section 50D.013(a), Agriculture Code, is amended to read as follows:

(a) The policy council shall:

(1) provide a vision for unifying this state's agricultural, energy, and research strengths in a successful launch of a cellulosic biofuel and bioenergy industry;

(2) foster development of cellulosic-based and bio-based fuels and build on the former Texas emerging technology fund's investments in leading-edge energy research and efforts to commercialize the production of bioenergy;

(3) pursue the creation of a next-generation biofuels energy research program at a university in this state;

(4) work to procure federal and other funding to aid this state in becoming a bioenergy leader;

(5) study the feasibility and economic development effect of a blending requirement for biodiesel or cellulosic fuels;

(6) pursue the development and use of thermochemical process technologies to produce alternative chemical feedstocks;

(7) study the feasibility and economic development of the requirements for pipeline-quality, renewable natural gas; and

(8) perform other advisory duties as requested by the commissioner regarding the responsible development of bioenergy resources in this state.

SECTION 1.15. Section 203.021(e), Labor Code, is amended to read as follows:

(e) Money in the compensation fund may not be transferred to the[:

[(1)] Texas Enterprise Fund created under Section 481.078, Government Code[; or

[(2) Texas emerging technology fund established under Section 490.101, Government Code].

SECTION 1.16. The following laws are repealed:

(1) Sections 490.001(1), (3), and (5), Government Code;

(2) Sections 490.002 and 490.003, Government Code;

(3) Sections 490.051, 490.052, 490.0521, 490.053, 490.054, 490.055, and 490.056, Government Code; and

(4) Subchapters C, D, E, F, and G, Chapter 490, Government Code.

SECTION 1.17. (a) On September 1, 2015, the Texas emerging technology fund is abolished and, except as provided by Subsections (c) and (d) of this section, the comptroller shall transfer the unencumbered balance of the fund as follows:

(1) 50 percent of the balance to the credit of the Texas Research Incentive Program (TRIP) under Subchapter F, Chapter 62, Education Code; and

(2) 50 percent of the balance to the credit of the skills development fund program under Chapter 303, Labor Code.

(b) The abolishment by this article of the Texas emerging technology fund and the repeal of provisions of Chapter 490, Government Code, relating to that fund do not affect the validity of an agreement between the governor and an award recipient or a person to be awarded money that is entered into under Chapter 490 before September 1, 2015.

(c) Money that was deposited in the Texas emerging technology fund as a gift, grant, or donation under Chapter 490, Government Code, and that is encumbered by the specific terms of the gift, grant, or donation may be spent only in accordance with the terms of the gift, grant, or donation.

(d) Money from the Texas emerging technology fund that is encumbered because the money is awarded or otherwise obligated by agreement before September 1, 2015, but under the terms of the award or agreement will not be distributed until a later date shall be distributed in accordance with the terms of the award or agreement. If the governor determines that the money will not be distributed in accordance with the terms of the award or agreement, the governor shall certify that fact to the comptroller. On that certification, the comptroller shall make that money available in the general revenue fund to be used in accordance with legislative appropriation.

(e) On or after the effective date of this Act, subject to any amounts used to recover costs under Section 404.1031(b), Government Code, as added by this article, the following payments or other amounts shall be sent to the comptroller for deposit to the general revenue fund:

(1) any royalties, revenues, and other financial benefits realized from a project undertaken with money from the Texas emerging technology fund, as provided by a contract described by former Section 490.103, Government Code;

(2) any interest or proceeds received as a result of a transaction authorized by former Section 490.101(h), Government Code;

(3) any money returned or repaid to the state by an award recipient pursuant to an agreement entered into under former Section 490.101, Government Code;

(4) any money derived from an interest the state retained in a capital improvement pursuant to an agreement entered into under former Section 490.101, Government Code; and

(5) any fund money returned by an entity that fails to perform an action guaranteed by a contract entered into under former Section 490.154 or 490.203, Government Code.

SECTION 1.18. A regional center of innovation and commercialization established under Section 490.152, Government Code, is abolished on the effective date of this Act. Each center shall transfer to the office of the governor a copy of any meeting minutes required to be retained under Section 490.1521, Government Code, as that section existed immediately before that section's repeal by this article, and the office shall retain the minutes for the period prescribed by that section.

SECTION 1.19. On September 1, 2015, the Texas Emerging Technology Advisory Committee established under Subchapter B, Chapter 490, Government Code, is abolished.

SECTION 1.20. Except as provided by this Act, on September 1, 2015, the following powers, duties, functions, and activities performed by the office of the governor immediately before that date are transferred to the Texas Treasury Safekeeping Trust Company:

(1) all powers, duties, functions, and activities related to equity positions in the form of stock or other security the governor has taken, on behalf of the state, in companies that received awards under the Texas emerging technology fund before September 1, 2015; and

(2) all powers, duties, functions, and activities related to other investments made by the governor, on behalf of the state, in connection with an award made under the Texas emerging technology fund before September 1, 2015.

SECTION 1.21. If a conflict exists between this Act and another Act of the 84th Legislature, Regular Session, 2015, that relates to the Texas emerging technology fund, this Act controls without regard to the relative dates of enactment.

ARTICLE 2. ECONOMIC INCENTIVE OVERSIGHT BOARD

SECTION 2.01. Subtitle F, Title 4, Government Code, is amended by adding Chapter 490G to read as follows:

CHAPTER 490G. ECONOMIC INCENTIVE OVERSIGHT BOARD

Sec. 490G.001. DEFINITIONS. In this chapter:

(1) "Board" means the Economic Incentive Oversight Board.

(2) "Monetary incentive" means a grant, loan, or other form of monetary incentive paid from state revenues, including a state trust fund, that a business entity or other person may receive in exchange for or as a result of conducting an activity with an economic development purpose.

(3) "Tax incentive" means any exemption, deduction, credit, exclusion, waiver, rebate, discount, deferral, or other abatement or reduction of state tax liability of a business entity or other person that the person may receive in exchange for or as a result of conducting an activity with an economic development purpose.

Sec. 490G.002. ESTABLISHMENT AND COMPOSITION. (a) The Economic Incentive Oversight Board is an advisory body composed of nine members as follows:

(1) three public members appointed by the speaker of the house of representatives, one of whom must be from a rural county;

(2) three public members appointed by the lieutenant governor, one of whom must be from a rural county;

(3) two public members appointed by the comptroller; and

(4) one public member appointed by the governor.

(b) A member of the board serves at the pleasure of the appointing officer.

(c) The board members are entitled to reimbursement for actual and necessary expenses incurred by the members in serving on the board as provided by Chapter 660 and the General Appropriations Act.

(d) The office of the governor shall provide administrative support and staff to the board.

Sec. 490G.003. PRESIDING OFFICER. The governor shall appoint the presiding officer of the board.

Sec. 490G.004. MEETINGS. The board shall meet at least quarterly at the call of the presiding officer.

Sec. 490G.005. EVALUATION AND RECOMMENDATION FOR APPROVAL OR DISAPPROVAL OF CERTAIN INCENTIVES. (a) The board shall:

(1) evaluate each application for a state monetary or tax incentive of more than $4 million to be awarded from a program or fund administered by the office of the governor or the comptroller;

(2) determine whether the board will recommend the approval or disapproval of the award of the incentive to the applicant; and

(3) submit a written recommendation for the approval or disapproval of the award of the incentive to the governor, lieutenant governor, or speaker of the house of representatives and, if the application is for an incentive from a program or fund administered by the comptroller, to the comptroller.

(b) Notwithstanding any other law, before awarding a monetary or tax incentive under an application described by Subsection (a)(1), the governor or comptroller shall:

(1) make the application available to the board for purposes of this section; and

(2) consider the board's recommendation concerning approval of the award.

Sec. 490G.006. REVIEW OF CERTAIN STATE INCENTIVE PROGRAMS; PERFORMANCE MATRIX. (a) The board shall examine the effectiveness of programs and funds administered by the office of the governor or the comptroller that provide state monetary or tax incentives to business entities and other persons.

(b) The board shall develop a performance matrix that clearly establishes the economic performance indicators, measures, and metrics that will guide the board's evaluations of those programs and funds.

(c) The performance matrix must be designed to evaluate, in relation to each business entity or other person that receives a monetary or tax incentive under a program or from a fund described by Subsection (a), the benefits and costs to this state, local governments, and residents of this state that result directly from the economic development activity for which the person received the incentive and indirectly from activities ancillary to that economic development activity.

Sec. 490G.007. SCHEDULE OF REVIEW. The board shall develop a schedule for the periodic review of each state incentive program described by Section 490G.006 for the purposes of making recommendations on whether to continue the program or whether to improve program effectiveness. The board shall review and make recommendations to the legislature regarding each program according to the review schedule.

Sec. 490G.008. CONFLICTS OF INTEREST. (a) A member of the board who has a substantial interest in a business entity or other person that applies for or receives a state monetary or tax incentive from a program or fund subject to review by the board shall disclose that interest in writing to the board.

(b) A board member who has a business, commercial, or other relationship, other than an interest described by Subsection (a), that could reasonably be expected to diminish the person's independence of judgment in the performance of the person's responsibilities in relation to the board shall disclose the relationship in writing to the board.

(c) A member of the board may not make a political contribution to the governor, the comptroller, the lieutenant governor, or the speaker of the house of representatives or to a candidate for election or selection to any of those offices.

Sec. 490G.009. CONFIDENTIALITY OF INFORMATION. The provision of information that is confidential by law to the board does not affect the confidentiality of the information.

SECTION 2.02. As soon as practicable after the effective date of this Act, the appointing officials shall appoint members to the Economic Incentive Oversight Board established under Chapter 490G, Government Code, as added by this article.

ARTICLE 3. AUDIT OF ECONOMIC DEVELOPMENT PROGRAMS

SECTION 3.01. Chapter 321, Government Code, is amended by adding Section 321.0139 to read as follows:

Sec. 321.0139. AUDIT OF CERTAIN ECONOMIC DEVELOPMENT PROGRAMS AND FUNDS. (a) Beginning September 1, 2015, once every 12 years the state auditor shall conduct an audit of each of the following:

(1) the rural economic development and investment program established under Section 12.0271, Agriculture Code; and

(2) the young farmer grant program under Subchapter G, Chapter 58, Agriculture Code.

(b) Beginning September 1, 2017, once every 12 years the state auditor shall conduct an audit of each of the following:

(1) the agricultural biomass and landfill diversion incentive program established under Chapter 22, Agriculture Code;

(2) the defense economic adjustment assistance grant program;

(3) the agricultural loan guarantee program established under Subchapter E, Chapter 58, Agriculture Code;

(4) the young farmer interest rate reduction program established under Subchapter F, Chapter 58, Agriculture Code; and

(5) the interest rate reduction program established under Section 44.007, Agriculture Code.

(c) Beginning September 1, 2019, once every 12 years the state auditor shall conduct an audit of each of the following:

(1) the rural investment fund program under Section 12.046, Agriculture Code;

(2) the moving image industry incentive program under Subchapter B, Chapter 485; and

(3) the certified capital company program established under Chapter 228, Insurance Code.

(d) Beginning September 1, 2021, once every 12 years the state auditor shall conduct an audit of each of the following:

(1) the program to provide grants of money from the Texas Enterprise Fund under Section 481.078;

(2) the program to provide disbursements from events trust funds established under Section 5C, Chapter 1507 (S.B. 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), for event support contracts; and

(3) the program to provide disbursements from Major Events reimbursement program funds established under Section 5A, Chapter 1507 (S.B. 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), for game support contracts or event support contracts.

(e) Beginning September 1, 2023, once every 12 years the state auditor shall conduct an audit of each of the following:

(1) the program to provide disbursements from motor sports racing trust funds established under Section 5B, Chapter 1507 (S.B. 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), for motor sports racing events support contracts or event support contracts;

(2) the program to provide disbursements from special event trust funds established under Section 398.007, Local Government Code; and

(3) the skills development fund program established under Chapter 303, Labor Code.

(f) The state auditor may establish the scope of an audit and the objectives for an audit conducted under this section that are consistent with generally accepted government auditing standards and with other audits conducted by the state auditor under this chapter.

(g) To the extent practicable, the state auditor may assess the efficiency and effectiveness of the program or fund subject to an audit under this section.

(h) The state auditor shall prepare a report of each audit conducted under this section. Not later than the second anniversary of the date on which an audit required to be conducted under this section is scheduled to begin, the state auditor shall file the report with the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each standing committee of the senate and house of representatives with primary jurisdiction over economic development.

(i) The scheduling of the audits specified by this section is subject to a risk assessment in accordance with Chapter 321 and to inclusion in the annual audit plan under Section 321.013(c). If the state auditor determines that an exception to the schedule specified by this section is warranted, the state auditor shall notify the Legislative Audit Committee and each standing committee of the senate and house of representatives with primary jurisdiction over economic development of the reasons for the exception.

ARTICLE 4. ONLINE INFORMATION AND APPLICATION SYSTEM FOR

STATE INCENTIVES

SECTION 4.01. Subtitle G, Title 10, Government Code, is amended by adding Chapter 2301 to read as follows:

CHAPTER 2301. ELECTRONIC ECONOMIC DEVELOPMENT INCENTIVES

INFORMATION AND APPLICATION SYSTEM

Sec. 2301.001. DEFINITIONS. In this chapter:

(1) "Department," "electronic government project," and "state electronic Internet portal" have the meanings assigned by Section 2054.003.

(2) "Monetary incentive" means a grant, loan, or other form of monetary incentive paid from state revenues, including a state trust fund, that a business entity or other person may receive in exchange for or as a result of conducting an activity with an economic development purpose.

(3) "State agency" means a department, commission, board, office, council, authority, or other state agency in the executive branch of state government.

(4) "Tax incentive" means any exemption, deduction, credit, exclusion, waiver, rebate, discount, deferral, or other abatement or reduction of state tax liability of a business entity or other person that the person may receive in exchange for or as a result of conducting an activity with an economic development purpose.

Sec. 2301.002. ESTABLISHMENT OF PROJECT. The department shall establish an electronic government project to develop an Internet website accessible through the state electronic Internet portal that:

(1) provides a single location that a business entity considering relocating to or expanding in this state may use to receive information relating to state monetary and tax incentives for which the entity may be qualified;

(2) includes an interactive tool that allows a business entity to:

(A) determine whether the entity may be eligible for any state monetary or tax incentive in this state; and

(B) receive an estimate of the state monetary and tax incentives for which the entity may be eligible;

(3) allows, when feasible, the business entity to fill out one application for all state monetary and tax incentives for which the entity may be eligible; and

(4) allows, when feasible, for the application to be submitted to each state agency that offers the monetary or tax incentive for which the business entity may be eligible.

Sec. 2301.003. ESTABLISHING AND OPERATING PROJECT; COORDINATION. In establishing and operating the electronic government project under this chapter, the department, in coordination with the Texas Economic Development and Tourism Office and the comptroller, shall direct, coordinate, and assist state agencies in establishing and using:

(1) a common electronic application and reporting system, including:

(A) a standard format for announcing monetary and tax incentive opportunities;

(B) standard data elements for use in creating monetary and tax incentive opportunity announcement summaries, including existing monetary and tax incentives and search functions; and

(C) a common application form for a person to use in applying for a monetary or tax incentive from multiple state agencies; and

(2) a process for:

(A) improving interagency coordination of information collection and sharing of data relating to monetary and tax incentives; and

(B) improving the timeliness, completeness, and quality of applications received by a state agency for monetary and tax incentives.

ARTICLE 5. PROGRAMS AND FUNDS ADMINISTERED BY TEXAS ECONOMIC

DEVELOPMENT BANK

SECTION 5.01. The following laws are repealed:

(1) Subchapter N, Chapter 481, Government Code;

(2) Subchapter BB, Chapter 481, Government Code;

(3) Subchapter D, Chapter 489, Government Code; and

(4) Chapter 503, Local Government Code.

SECTION 5.02. Section 447.013(i), Government Code, is amended to read as follows:

(i) A recipient of a grant or loan under this section is encouraged to purchase goods and services from small businesses and historically underutilized businesses, as those terms are defined by former Section 481.191, as that section existed on January 1, 2015 [Government Code].

SECTION 5.03. Section 489.105(b), Government Code, is amended to read as follows:

(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;

(3) [(5)] fees charged under this chapter;

(4) [(6)] investment earnings from the programs administered by the bank;

(5) [(7)] amounts transferred under Section 2303.504(b), as amended by Article 2, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001; and

(6) [(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.

SECTION 5.04. Section 489.108, Government Code, is amended to read as follows:

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 Chapter 503, Local Government Code;

[(2) the capital access program established under Section 481.405;

[(3)] the Texas leverage fund;

(2) [(4) the linked deposit program established under Section 481.193;

[(5)] the enterprise zone program established under Chapter 2303;

(3) [(6)] the industrial revenue bond program;

(4) [(7)] the defense economic readjustment zone program established under Chapter 2310;

(5) [(8)] the Empowerment Zone and Enterprise Community grant program established under Section 481.025; and

(6) [(9)] the renewal community program.

SECTION 5.05. Section 39.909(a), Utilities Code, is amended to read as follows:

(a) In this section, "small business" and "historically underutilized business" have the meanings assigned by former Section 481.191, Government Code, as that section existed on January 1, 2015.

SECTION 5.06. Section 52.256(a), Utilities Code, is amended to read as follows:

(a) In this section, "small business" and "historically underutilized business" have the meanings assigned by former Section 481.191, Government Code, as that section existed on January 1, 2015.

SECTION 5.07. (a) The Texas Economic Development Bank shall reject any application for a linked deposit loan submitted to the bank before the effective date of this Act for which a linked deposit has not been made in accordance with Subchapter N, Chapter 481, Government Code, as that subchapter existed immediately before being repealed by this article.

(b) Notwithstanding the repeal by this article of Subchapter N, Chapter 481, Government Code, Subchapter N is continued in effect for the limited purpose of allowing the Texas Economic Development Bank to administer linked deposits made before the effective date of this Act and to pursue the bank's remedies under that subchapter if:

(1) a recipient of a loan to which a deposit is linked defaults on the loan; or

(2) a lending institution that makes a loan for which a linked deposit is made fails to comply with that subchapter.

SECTION 5.08. On the effective date of this Act the Texas Economic Development Bank shall allocate any unencumbered balance of the capital access fund to programs administered by the bank under Section 489.108, Government Code, as amended by this article.

SECTION 5.09. (a) Notwithstanding the repeal by this article of Subchapter D, Chapter 489, Government Code, Subchapter D is continued in effect for the limited purpose of allowing the Texas Economic Development Bank to:

(1) administer any outstanding loans entered into under that subchapter before the effective date of this Act; and

(2) satisfy any bond obligations or pay any other obligations, contractual or otherwise, incurred under that subchapter before the effective date of this Act.

(b) After all the obligations described by Subsection (a)(2) of this section have been paid or satisfied, the Texas Economic Development Bank shall allocate any remaining balances of the Texas product development fund and the Texas small business incubator fund to programs administered by the bank under Section 489.108, Government Code, as amended by this article.

SECTION 5.10. As soon as practicable after the effective date of this Act, the Texas Economic Development Bank shall send to the comptroller for deposit in the general revenue fund any revenue or other money of the Texas Small Business Industrial Development Corporation held in financial institutions as provided by Section 503.055, Local Government Code, as that section existed immediately before that section's repeal by this article.

ARTICLE 6. RENAMING OF MAJOR EVENTS TRUST FUND

SECTION 6.01. The heading to Section 5A, Chapter 1507 (S.B. 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), is amended to read as follows:

Sec. 5A. PAYMENT OF STATE AND MUNICIPAL OR COUNTY OBLIGATIONS UNDER[;] MAJOR EVENTS REIMBURSEMENT PROGRAM [TRUST FUND].

SECTION 6.02. Sections 5A(a-1), (d), (d-1), (e), (f), (g), (h), (j), (k), (l), (m), (w), and (y), Chapter 1507 (S.B. 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), are amended to read as follows:

(a-1) An event not listed in Subsection (a)(4) of this section is ineligible for funding under this section. A listed event may receive funding through the Major Events Reimbursement Program under this section only if:

(1) a site selection organization selects a site located in this state for the event to be held one time or, for an event scheduled to be held each year for a period of years under an event contract, or an event support contract, one time each year for the period of years, after considering, through a highly competitive selection process, one or more sites that are not located in this state;

(2) a site selection organization selects a site in this state as:

(A) the sole site for the event; or

(B) the sole site for the event in a region composed of this state and one or more adjoining states;

(3) the event is held not more than one time in any year; and

(4) the amount of the incremental increase in tax receipts determined by the comptroller under Subsection (b) of this section equals or exceeds $1 million, provided that for an event scheduled to be held each year for a period of years under an event contract or event support contract, the incremental increase in tax receipts shall be calculated as if the event did not occur in the prior year.

(d) Each endorsing municipality or endorsing county participating in the Major Events Reimbursement Program shall remit to the comptroller and the comptroller shall deposit into a trust fund created by the comptroller and designated as the Major Events reimbursement program [trust] fund the amount of the municipality's or county's hotel occupancy tax revenue determined under Subsection (b)(4) or (b)(5) of this section, less any amount of the revenue that the municipality or county determines is necessary to meet the obligations of the municipality or county. The comptroller shall retain the amount of sales and use tax revenue and mixed beverage tax revenue determined under Subsection (b)(2) or (b)(3) of this section from the amounts otherwise required to be sent to the municipality under Sections 321.502 and 183.051(b), Tax Code, or to the county under Sections 323.502 and 183.051(b), Tax Code, and deposit into the [trust] fund the tax revenues, less any amount of the revenue that the municipality or county determines is necessary to meet the obligations of the municipality or county. The comptroller shall begin retaining and depositing the local tax revenues with the first distribution of that tax revenue that occurs after the first day of the one-year period described by Subsection (b) of this section or at a time otherwise determined to be practicable by the comptroller and shall discontinue retaining the local tax revenues under this subsection when the amount of the applicable tax revenue determined under Subsection (b)(2) or (b)(3) of this section has been retained. The Major Events reimbursement program [trust] fund is established outside the state treasury and is held in trust by the comptroller for administration of this Act. Money in the [trust] fund may be disbursed by the comptroller without appropriation only as provided by this section.

(d-1) Not later than the 90th day after the last day of an event eligible for funding under the Major Events Reimbursement Program and in lieu of the local tax revenues remitted to or retained by the comptroller under Subsection (d) of this section, a municipality or county may remit to the comptroller for deposit in the Major Events reimbursement program [trust] fund other local funds in an amount equal to the total amount of local tax revenue determined under Subsections (b)(2) through (5) of this section. The amount deposited by the comptroller into the Major Events reimbursement program [trust] fund under this subsection is subject to Subsection (f) of this section.

(e) In addition to the tax revenue deposited in the Major Events reimbursement program [trust] fund under Subsection (d) of this section, an endorsing municipality or endorsing county may guarantee its obligations under an event support contract and this section by pledging surcharges from user fees, including parking or ticket fees, charged in connection with the event. An endorsing municipality or endorsing county may collect and remit to the comptroller surcharges and user fees attributable to the event for deposit into the Major Events reimbursement program [trust] fund.

(f) The comptroller shall deposit into the Major Events reimbursement program [trust] fund a portion of the state tax revenue not to exceed the amount determined under Subsection (b)(1) of this section in an amount equal to 6.25 times the amount of the local revenue retained or remitted under this section, including:

(1) local sales and use tax revenue;

(2) mixed beverage tax revenue;

(3) hotel occupancy tax revenue; and

(4) surcharge and user fee revenue.

(g) To meet its obligations under a game support contract or event support contract to improve, construct, renovate, or acquire facilities or to acquire equipment, an endorsing municipality by ordinance or an endorsing county by order may authorize the issuance of notes. An endorsing municipality or endorsing county may provide that the notes be paid from and secured by amounts on deposit or amounts to be deposited into the Major Events reimbursement program [trust] fund or surcharges from user fees, including parking or ticket fees, charged in connection with the event. Any note issued must mature not later than seven years from its date of issuance.

(h) The funds in the Major Events reimbursement program [trust] fund may be used to pay the principal of and interest on notes issued by an endorsing municipality or endorsing county under Subsection (g) of this section and to fulfill obligations of the state or an endorsing municipality or endorsing county to a site selection organization under a game support contract or event support contract. Subject to Subsection (k) of this section, the obligations may include the payment of costs relating to the preparations necessary or desirable for the conduct of the event and the payment of costs of conducting the event, including improvements or renovations to existing facilities or other facilities and costs of acquisition or construction of new facilities or other facilities.

(j) Not later than the 30th day after the date a request of a local organizing committee, endorsing municipality, or endorsing county is submitted to the comptroller under Subsection (b-1) of this section, the comptroller shall provide an estimate of the total amount of tax revenue that would be deposited in the Major Events reimbursement program [trust] fund under this section in connection with that event, if the event were to be held in this state at a site selected pursuant to an application by a local organizing committee, endorsing municipality, or endorsing county. A local organizing committee, endorsing municipality, or endorsing county may submit the comptroller's estimate to a site selection organization.

(k) The comptroller may make a disbursement from the Major Events reimbursement program [trust] fund on the prior approval of each contributing endorsing municipality or endorsing county for a purpose for which a local organizing committee, an endorsing municipality, or an endorsing county or the state is obligated under a game support contract or event support contract. If an obligation is incurred under a games support contract or event support contract to make a structural improvement to the site or to add a fixture to the site for purposes of an event and that improvement or fixture is expected to derive most of its value in subsequent uses of the site for future events, a disbursement from the [trust] fund made for purposes of that obligation is limited to five percent of the cost of the improvement or fixture and the remainder of the obligation is not eligible for a disbursement from the [trust] fund, unless the improvement or fixture is for a publicly owned facility. In considering whether to make a disbursement from the [trust] fund, the comptroller may not consider a contingency clause in an event support contract as relieving a local organizing committee's, endorsing municipality's, or endorsing county's obligation to pay a cost under the contract. A disbursement may not be made from the [trust] fund that the comptroller determines would be used for the purpose of soliciting the relocation of a professional sports franchise located in this state.

(l) If a disbursement is made from the Major Events reimbursement program [trust] fund under Subsection (k), the obligation shall be satisfied proportionately from the state and local revenue in the [trust] fund.

(m) On payment of all state, municipal, or county obligations under a game support contract or event support contract related to the location of any particular event in the state, the comptroller shall remit to each endorsing entity, in proportion to the amount contributed by the entity, any money remaining in the [trust] fund.

(w) Not later than 10 months after the last day of an event eligible for disbursements from the Major Events reimbursement program [trust] fund for costs associated with the event, the comptroller using existing resources shall complete a study in the market area of the event on the measurable economic impact directly attributable to the preparation for and presentation of the event and related activities. The comptroller shall post on the comptroller's Internet website:

(1) the results of the study conducted under this subsection, including any source documentation or other information relied on by the comptroller for the study;

(2) the amount of incremental increase in tax receipts for the event determined under Subsection (b) of this section;

(3) the site selection organization documentation described in Subsection (p)(3) of this section;

(4) any source documentation or information described under Subsection (i) of this section that was relied on by the comptroller in making the determination of the amount of incremental increase in tax receipts under Subsection (b) of this section; and

(5) documentation verifying that:

(A) a request submitted by a local organizing committee, endorsing municipality, or endorsing county under Subsection (p) of this section is complete and certified as such by the comptroller;

(B) the determination on the amount of incremental increases in tax receipts under Subsection (b) of this section considered the information submitted by a local organizing committee, endorsing municipality, or endorsing county as required under Subsection (b-1) of this section; and

(C) each deadline established under this section was timely met.

(y) After the conclusion of an event, the comptroller shall compare information on the actual attendance figures provided to the comptroller under Subsection (i) of this section with the estimated attendance numbers used to determine the incremental increase in tax receipts under Subsection (b) of this section. If the actual attendance figures are significantly lower than the estimated attendance numbers, the comptroller may reduce the amount of a disbursement for an endorsing entity under the Major Events reimbursement program [trust] fund in proportion to the discrepancy between the actual and estimated attendance and in proportion to the amount contributed to the fund by the entity. The comptroller by rule shall define "significantly lower" for purposes of this subsection and provide the manner in which a disbursement may be proportionately reduced. This subsection does not affect the remittance of any money remaining in the fund in accordance with Subsection (m) of this section.

ARTICLE 7. EFFECTIVE DATE

SECTION 7.01. Except as otherwise provided by this Act, this Act takes effect September 1, 2015.