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Government Code - CHAPTER 481

SUBTITLE F. COMMERCE AND INDUSTRIAL DEVELOPMENT

CHAPTER 481. TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT

SUBCHAPTER A. GENERAL PROVISIONS

§ 481.001. Definitions

     In this chapter:

     (1) "Governing board" means the governing board of the department.

     (2) "Bond" includes a note, draft, bill, warrant, debenture, certificate, or other evidence of indebtedness.

     (3) "Border region" means the area composed of the counties of Brewster, Cameron, Culberson, Dimmit, El Paso, Hidalgo, Hudspeth, Jeff Davis, Kinney, La Salle, Maverick, Presidio, Starr, Terrell, Val Verde, Webb, Willacy, Zapata, and Zavala.

     (4) "Department" means the Texas Department of Economic Development.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 1, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 2, eff. Sept. 1, 1997.

§ 481.002. Department

     The Texas Department of Economic Development is an agency of the state.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1041, § 3, eff. Sept. 1, 1997.

§ 481.003. Sunset Provision

     The Texas Department of Economic Development is subject to Chapter 325 (Texas Sunset Act). Unless continued in existence as provided by that chapter, the department is abolished and this chapter expires September 1, 2001.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 17, § 1.22, eff. Nov. 12, 1991; Acts 1993, 73rd Leg., ch. 986, § 1, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 4, eff. Sept. 1, 1997.

§ 481.004. Governing Board

     (a) The governing board is composed of nine public members appointed by the governor with the advice and consent of the senate, which members shall be appointed to give geographical representation on the governing board to all regions of the state.

     (b) Members of the governing board serve for six-year terms with the terms of three members expiring February 1 of each odd-numbered year.

     (c) Appointments to the governing board shall be made without regard to the race, color, handicap, sex, religion, age, or national origin of the appointees.

     (d) In making appointments under this section, the governor shall attempt to include members of different minority groups including females, African Americans, Hispanic Americans, Native Americans, Asian Americans, and persons who are disabled.

     (e) At least one member of the governing board must be a resident of a county with a population of less than 30,000, at least one other member must have experience in international trade, at least one other member must have experience in tourism, and at least one other member must be an economic development practitioner.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 332, § 4, eff. June 5, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 2, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 986, § 2, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 5, eff. Sept. 1, 1997.

§ 481.0041. Removal of Governing Board Members

     (a) It is a ground for removal from the governing board if a member:

     (1) does not have at the time of appointment the qualifications required by Section 481.0042;

     (2) does not maintain during service on the governing board the qualifications required by Section 481.0042;

     (3) violates a prohibition established by Section 481.0042;

     (4) cannot discharge the member's duties for a substantial part of the term for which the member is appointed because of illness or disability; or

     (5) is absent from more than half of the regularly scheduled governing board meetings that the member is eligible to attend during a calendar year unless the absence is excused by majority vote of the governing board.

     (b) The validity of an action of the governing board is not affected by the fact that it is taken when a ground for removal of a governing board member exists.

     (c) If the executive director has knowledge that a potential ground for removal exists, the executive director shall notify the presiding officer of the governing board of the ground. The presiding officer shall then notify the governor that a potential ground for removal exists.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 3, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 3, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 6, eff. Sept. 1, 1997.

§ 481.0042. Conflict of Interest

     (a) A person may not serve as a public member of the governing board or be the executive director or an employee of the 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 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 department;

     (3) uses or receives a substantial amount of tangible goods, services, or funds from the 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 that contracts with the 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 department if the person's spouse:

     (1) participates in the management of or is a paid consultant of a business entity that contracts with the 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 department;

     (3) uses or receives a substantial amount of tangible goods, services, or funds from the department; or

     (4) is an officer, manager, or paid consultant of a trade association of businesses that contracts with the department.

     (c) For the purposes of this section, a trade association is a nonprofit, cooperative, and voluntarily joined association of business or professional competitors designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.

     (d) For the purposes of this section, a business entity is a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust, or any other entity recognized in law through which business for profit is conducted.

     (e) A person may not be a member of the governing board or the executive director or an employee of the 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 department or a profession related to the operation of the department.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 3, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 4, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 7, eff. Sept. 1, 1997.

§ 481.0043. Officers; Compensation; Meetings

     (a) The governor designates the presiding officer of the governing board. The governing board shall elect from among its members an assistant presiding officer and a secretary.

     (b) The governing board shall meet at least eight times each year.

     (c) A member of the governing board may not receive compensation for service on the governing board. A member is entitled to receive reimbursement, subject to any applicable limitation on reimbursement provided by the General Appropriations Act, for actual and necessary travel expenses incurred in performing services as a member of the governing board.

     (d) The governing board shall develop and implement policies that provide the public with a reasonable opportunity to appear before the governing board and to speak on any issue under the jurisdiction of the governing board.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 3, eff. Sept. 1, 1991. Amended by Acts 1997, 75th Leg., ch. 1041, § 8, eff. Sept. 1, 1997.

§ 481.0044. General Powers and Duties

     (a) The governing board shall adopt rules necessary for the administration of department programs and may adopt rules for its internal management and control.

     (b) The governing board shall perform the duties assigned to the department under this chapter or other law.

     (c) The governing board possesses the powers and shall perform the duties assigned by law to the department.

     (d) The governing board shall report to the governor annually and to the legislature at each regular session on the department's activities. The report must include:

     (1) a description of the activities of the governing board and the department during the preceding calendar year;

     (2) a description of the efforts of the governing board and the department to promote and market the department's economic development programs and services, including the Texas Business and Community Economic Development Clearinghouse;

     (3) a description of the efforts of the governing board and the department to obtain federal and private funding to accomplish the goals of the department;

     (4) recommendations to the legislature on issues related to economic development and the business climate of the state; and

     (5) an assessment of the effectiveness of the agreements executed under Section 481.028(b).

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 3, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 5, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 9, eff. Sept. 1, 1997.

§ 481.005. Executive Director; Governing Board Duties

     (a) The governing board shall employ an executive director of the department who serves at the pleasure of the governing board.

     (b) The executive director shall execute a bond payable to the state in an amount set by the members of the governing board conditioned on the faithful performance of the duties of the position. Premiums for the bond are payable from appropriations to the department. The executive director must have demonstrated experience in the areas of economic development or tourism and executive and organizational ability.

     (c) The executive director shall manage the affairs of the department under the direction of the 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 members of the governing board shall direct the activities of the department and, in performing that duty, shall establish policy, adopt rules, evaluate the implementation of new legislation that affects the department's duties, review and comment on the department's budget, prepare an annual report of the department's activities, conduct investigations and studies, and develop long-range plans for the future goals and needs of the department. The members of the policy board may not be involved in the daily operation of the department.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 4, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 986, § 6, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 10, eff. Sept. 1, 1997.

§ 481.006. Divisions

     (a) The governing board shall establish the divisions within the department, which may include:

     (1) an administrative division;

     (2) an information and referral division;

     (3) a research and data services division;

     (4) a business development division;

     (5) an international trade division;

     (6) a promotion and marketing division; and

     (7) a tourism division.

     (b) The executive director shall staff and assign duties to the divisions to carry out the department's functions.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 5, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 11, eff. Sept. 1, 1997.

§ 481.0065. Office of Defense Affairs

     (a) The department shall:

     (1) establish and maintain an Office of Defense Affairs; and

     (2) appoint a director to manage the Office of Defense Affairs.

     (b) The Office of Defense Affairs shall:

     (1) provide information to defense-dependent communities, the legislature, the Texas congressional delegation, and state agencies regarding federal actions affecting military installations and missions;

     (2) serve as a clearinghouse for:

     (A) defense economic adjustment and transition information and activities along with the Texas Business and Community Economic Development Clearinghouse; and

     (B) information about:

     (i) issues related to the operating costs and strategic value of federal military installations located in the state; and

     (ii) the loss of jobs in defense-dependent communities and defense-related businesses;

     (3) provide assistance to defense-dependent communities that have experienced a defense-related closure or realignment;

     (4) assist defense-dependent communities in the design and execution of programs that enhance a community's relationship with military installations and defense-related businesses; and

     (5) assist communities in the retention and recruiting of defense-related businesses.

     (c) The Office of Defense Affairs shall prepare an annual report about the active military installations, defense-dependent communities, and defense-related businesses in this state. The report must include:

     (1) an economic impact statement describing in detail the effect of the military on the economy of this state;

     (2) a statewide assessment of active military installations and current missions;

     (3) a statewide strategy to attract defense-related business and prevent future defense closures and realignments;

     (4) a list of state and federal activities that have significant impact on active military installations and current missions;

     (5) a statement identifying:

     (A) the state and federal programs and services that assist defense-dependent communities impacted by military base closures or realignments and the efforts to coordinate those programs; and

     (B) the efforts to coordinate state agency programs and services that assist defense-dependent communities in retaining active military installations and current missions;

     (6) an evaluation of initiatives to retain existing defense-related businesses; and

     (7) a list of agencies with regulations, policies, programs, or services that impact the operating costs or strategic value of federal military installations and activities in the state.

Text of subsec. (d) as added by Acts 1999, 76th Leg., ch. 283, § 1

     (d) State agencies shall cooperate with and assist the Office of Defense Affairs in the preparation of the report required under Subsection (c) including providing information about regulations, policies, programs, and services that may impact defense-dependent communities, defense-related businesses, and the viability of existing Texas military missions. The Office of Defense Affairs shall submit its report to the governor and the legislature not later than July 1 of each year.

Text of subsec. (d) as added by Acts 1999, 76th Leg., ch. 585, § 1

     (d) The Office of Defense Affairs shall develop and maintain a database of the names and public business information of all prime contractors and subcontractors operating in this state who perform defense-related work.

     (e) The Office of Defense Affairs shall coordinate an annual meeting with the head of each state agency, members of the Texas Strategic Military Planning Commission, and members of the legislature whose districts contain active, closed, or realigned military installations to discuss the implementation of the recommendations outlined in the report required under Subsection (c).

     (f) The Office of Defense Affairs may enter into an agreement with a consulting firm to provide information and assistance on a pending decision of the United States Department of Defense or other federal agency regarding the status of military installations and defense-related businesses located in this state.

     (g) In this section, "state agency" has the meaning assigned by Section 2151.002.

Added by Acts 1997, 75th Leg., ch. 1041, § 12, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 283, § 1, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 585, § 1, eff. Sept. 1, 1999.

§ 481.0066. Texas Strategic Military Planning Commission

     (a) In this chapter, "commission" means the Texas Strategic Military Planning Commission.

     (b) The commission is composed of:

     (1) nine public members, appointed by the governor; and

     (2) the following ex officio members:

     (A) the chair of the committee of the Texas House of Representatives that has primary jurisdiction of matters concerning state, federal, and international relations; and

     (B) the chair of the committee of the Texas Senate that has primary jurisdiction of matters concerning veteran affairs and military installations.

     (c) The nine public members of the commission serve staggered terms of three years with the terms of one-third of the members expiring February 1 of each year. A legislative member vacates the person's position on the commission if the person ceases to be the chair of the applicable legislative committee.

     (d) The governor shall designate the presiding officer of the commission from among the members of the commission.

     (e) A public member of the commission is not entitled to compensation but is entitled to reimbursement, from commission funds, for the travel expenses incurred by the member while conducting the business of the commission, as provided by the General Appropriations Act. The entitlement of a legislative member to compensation or reimbursement for travel expenses is governed by the law applying to the member's service in that underlying position, and any payments to the member shall be made from the appropriate funds of the applicable house of the legislature.

     (f) The commission shall meet at least quarterly. The commission is a governmental body for purposes of the open meetings law, Chapter 551.

     (g) Chapter 2110 does not apply to the commission.

     (h) The commission shall:

     (1) serve as an advisory committee to the Office of Defense Affairs in the department on the effect of the military on the economy of this state; and

     (2) make recommendations regarding:

     (A) the development of policies and plans to support the long-term viability and prosperity of the military, active and civilian, in this state;

     (B) the development of methods to improve private and public employment opportunities for former members of the military residing in this state;

     (C) the development of methods to assist defense-dependent communities in the design and execution of programs that enhance a community's relationship with military installations and defense-related businesses; and

     (D) the compilation of information for use in the report required under Section 481.0065(c).

Added by Acts 1997, 75th Leg., ch. 1041, § 12, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 283, § 2, eff. Sept. 1, 1999.

§ 481.0067. Office of Rural Affairs

     (a) The department shall establish and maintain an Office of Rural Affairs. The office shall be headed by a rural affairs director. To be eligible to serve as the rural affairs director, a person must have demonstrated a strong commitment to and involvement in economic development activities in rural areas.

     (b) The Office of Rural Affairs shall:

     (1) develop a rural resource guide and provide the information to rural areas through print and electronic media and through use of the Texas Business and Community Economic Development Clearinghouse;

     (2) provide information to state agencies on the effects of proposed policies or actions that affect rural areas;

     (3) cosponsor meetings, to the extent practical, in cooperation with public and private educational institutions to disseminate information beneficial to rural areas;

     (4) identify potential opportunities for businesses in rural areas and assist these businesses to maximize those opportunities;

     (5) conduct an analysis of the available federal, state, and local government and rural economic development business outreach and data services in rural areas of this state by examining the availability of:

     (A) computerized economic development databases that provide data for existing and prospective businesses and communities in rural areas of this state; and

     (B) business information outreach service offices or centers that provide comprehensive technical assistance, research, consulting services, training, and other services to businesses in rural areas; and

     (6) perform any other functions necessary to carry out the purposes of this section.

     (c) In administering this section, the department may:

     (1) employ and set the compensation of personnel to carry out the Office of Rural Affairs' functions under this section; and

     (2) consult with:

     (A) experts and authorities in the fields of rural development, economic development, and community development;

     (B) individuals with regulatory, legal, economic, or financial expertise, including members of the academic community; and

     (C) individuals who represent the public interest.

     (d) Each state agency must, on request, furnish the Office of Rural Affairs with reports and other information necessary to enable the Office of Rural Affairs to carry out the purposes of this section.

     (e) The Office of Rural Affairs may accept gifts, grants, and donations from sources other than the state for the purpose of performing specific projects, studies, or procedures or to provide assistance to rural areas.

     (f) Not later than October 15 of each even-numbered year, the department shall submit to the governor and the legislature a report containing specific information regarding each of the functions performed by the Office of Rural Affairs, including recommendations regarding issues that affect the rural areas of the state.

Added by Acts 1997, 75th Leg., ch. 1041, § 12, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 750, § 1, eff. June 18, 1999.

§ 481.0068. Office of Small Business Assistance

     (a) The Office of Small Business Assistance is an office within the department and shall be headed by a small business advocate designated by the governor. 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.

     (b) The Office of Small Business Assistance shall:

     (1) examine the role of small and historically underutilized businesses in the state's economy and the contribution of small and historically underutilized businesses in generating economic activity, expanding employment opportunities, promoting exports, stimulating innovation and entrepreneurship, and bringing new and untested products and services to the marketplace;

     (2) serve as the principal focal point in the state for small and historically underutilized businesses by:

     (A) providing to the legislature information on the effects of proposed policies or actions;

     (B) assisting state agencies in determining the impact proposed rules have on small businesses as required by Section 2006.002; and

     (C) assisting the agencies in reducing the adverse effect that rules have on small businesses, if appropriate;

     (3) evaluate the effectiveness of efforts of state agencies and other entities to assist small and historically underutilized businesses and make appropriate recommendations to the legislature and state agencies to assist the development and strengthening of small and historically underutilized businesses;

     (4) identify regulations that inhibit small and historically underutilized business development and to the extent possible identify conflicting state policy goals;

     (5) determine the availability of financial and other resources to small and historically underutilized businesses and recommend methods for:

     (A) increasing the availability of equity capital and other forms of financial assistance to small and historically underutilized businesses;

     (B) generating markets for the goods and services of small and historically underutilized businesses;

     (C) providing more effective education, training, and management and technical assistance to small and historically underutilized businesses; and

     (D) providing assistance to small and historically underutilized businesses in complying with federal, state, and local laws;

     (6) identify the reasons for small and historically underutilized business successes and failures, ascertain the related factors that are particularly important in this state, and recommend actions for increasing the success rate of small and historically underutilized businesses;

     (7) serve as a focal point for receiving comments and suggestions concerning state government policies and activities that affect small and historically underutilized businesses;

     (8) develop and suggest proposals for changes in state policies and activities that adversely affect small and historically underutilized businesses;

     (9) provide to state agencies information on the effects of proposed policies or actions that affect small and historically underutilized businesses;

     (10) provide information and assistance relating to establishing, operating, or expanding small and historically underutilized businesses;

     (11) assist small and historically underutilized businesses by:

     (A) identifying:

     (i) sources of financial assistance for those businesses; and

     (ii) financial barriers to those businesses;

     (B) working with relevant organizations to identify financing programs that aid small businesses in overcoming financial barriers;

     (C) matching those businesses with sources of financial assistance and credit enhancement; and

     (D) assisting those businesses with the preparation of applications for government loans, loan guarantees, and credit enhancement programs;

     (12) sponsor meetings, to the extent practicable in cooperation with public and private educational institutions, to provide training and disseminate information beneficial to small and historically underutilized businesses;

     (13) assist small and historically underutilized businesses in their dealings with federal, state, and local governmental agencies and provide information regarding governmental requirements affecting small and historically underutilized businesses;

     (14) perform research, studies, and analyses of matters affecting the interests of small and historically underutilized businesses;

     (15) use available resources within the state, such as small business development centers, educational institutions, and nonprofit associations, to coordinate the provision of management and technical assistance to small and historically underutilized businesses in a systematic manner;

     (16) publish newsletters, brochures, and other documents containing information useful to small and historically underutilized businesses;

     (17) identify successful small and historically underutilized business assistance programs provided by other states and determine the feasibility of adapting those programs for implementation in this state;

     (18) establish an outreach program to make the existence of the office known to small and historically underutilized businesses and potential clients throughout the state;

     (19) enlist the cooperation and assistance of public and private agencies, businesses, and other organizations in disseminating information about the programs and services provided by the state that benefit small businesses and how small businesses can participate in or make use of those programs and services;

     (20) defer to the small business stationary source assistance program as defined by Section 382.0365, Health and Safety Code, on advocacy and technical assistance related to environmental programs that regulate small businesses;

     (21) develop a "one-stop" approach for all small business needs, including competitive activity with state agencies and political subdivisions; and

     (22) perform any other functions necessary to carry out the purposes of this section.

     (c) Each state agency must, on request, furnish the Office of Small Business Assistance with reports and other information necessary to enable the Office of Small Business Assistance to carry out the purposes of this section.

     (d) The Office of Small Business Assistance may accept gifts, grants, and donations from sources other than the state for the purpose of performing specific projects and studies or to provide assistance to small businesses.

     (e) Not later than October 15 of each even-numbered year, the department shall submit to the governor, governing board, and the legislature a report containing specific information regarding each of the functions performed by the Office of Small Business Assistance, including recommendations regarding issues that affect small businesses of the state.

Added by Acts 1997, 75th Leg., ch. 1041, § 12, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 750, § 2, eff. June 18, 1999; Acts 1999, 76th Leg., ch. 1408, § 1, eff. Sept. 1, 1999.

§ 481.007. Advisory Committees

     The executive director or the governing board may appoint advisory committees to assist the executive director or the governing board in the performance of their duties. A member of an advisory committee appointed by the executive director or the governing board may not receive compensation for service on the advisory committee. A member appointed under this section is entitled to receive reimbursement, subject to any applicable limitation on reimbursement provided by the General Appropriations Act, for actual and necessary expenses included in performing service as a member of the advisory committee.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 332, § 2, eff. June 5, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 6, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 13, eff. Sept. 1, 1997.

§ 481.008. Audit

     (a) The financial transactions of the 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 presiding officer of the governing board when a financial audit of the department is not included in the audit plan for the state for a fiscal year. The governing board shall ensure that the department is audited under Subsection (a)(2) during those fiscal years.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 584, § 40, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 599, § 10, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 14, eff. Sept. 1, 1997.

§ 481.009. Review of Bonds

     (a) Bonds may not be issued under this chapter, and proceeds of bonds issued under this chapter may not be used to finance a project, unless the issuance or project, as applicable, has been reviewed and approved by the bond review board.

     (b) A member of the bond review board may not be held liable for damages resulting from the performance of the member's functions under this section.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.010. Personnel

     (a) The executive director shall employ personnel necessary for the performance of department functions. 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 governing board and may consult with the executive director or the executive director's designee.

     (b) The executive director shall provide to 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.

     (c) The governing board and executive director shall jointly develop and implement policies that clearly define the respective responsibilities of the members of the governing board and the executive director and staff of the department in accordance with this chapter.

     (d) The executive director or the executive director's designee shall develop an intraagency career ladder program. The program shall require intraagency postings of all non-entry-level positions concurrently with any public posting.

     (e) The executive director or the executive director's designee shall develop a system of annual performance evaluations. All merit pay for 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 department work force that meets federal and state guidelines;

     (3) procedures by which a determination can be made of significant underuse in the 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.

     (g) A policy statement prepared under Subsection (f) must cover an annual period, be updated annually and reviewed by the Commission on Human Rights for compliance with Subsection (f)(1), and be filed with the governor's office.

     (h) The governor's office shall deliver a biennial report to the legislature based on the information received under Subsection (g). The report may be made separately or as a part of other biennial reports made to the legislature.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 7, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 7, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 15, eff. Sept. 1, 1997.

§ 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 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.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 7, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 8, eff. Sept. 1, 1993.

§ 481.012. Public Interest Information and Complaints

     (a) The department shall prepare information of public interest describing the functions of the department and the department's procedures by which complaints are filed with and resolved by the department. The department shall make the information available to the public and appropriate state agencies.

     (b) The department shall keep an information file about each complaint filed with the department that the department has authority to resolve. If a written complaint is filed with the department that the department has authority to resolve, the 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.

     (c) The 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 department's programs. The governing board shall also comply with federal and state laws for program and facility accessibility.

     (d) The 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 department for the purpose of directing complaints to the department.

Added by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 7, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 986, § 9, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1041, § 16, eff. Sept. 1, 1997.

SUBCHAPTER B. GENERAL POWERS AND DUTIES OF DEPARTMENT

§ 481.021. General Powers of Department

     (a) The 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;

     (6) procure insurance and pay premiums on insurance of any type, in accounts, and from insurers as the department considers necessary and advisable to accomplish any of the department's purposes;

     (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;

     (8) sell advertisements in any medium; and

     (9) exercise any other power necessary to carry out this chapter.

     (b) Except as otherwise provided by this chapter, money paid to the department under this chapter shall be deposited in the state treasury.

     (c) The 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 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 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 602, § 1, eff. Sept. 1, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 8, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 986, § 10, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1423, § 8.23, eff. Sept. 1, 1997.

§ 481.022. General Duties of Department

     The department shall:

     (1) 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;

     (4) provide to businesses in the state assistance with exporting products and services to international markets;

     (5) promote the state as a premier tourist and business travel destination;

     (6) 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 819, § 6, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 933, § 4, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 602, § 2, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 17, eff. Sept. 1, 1997.

§ 481.023. Administration of Other Statutes

     (a) The department shall perform the administrative duties prescribed under:

     (1) the Act for Development of Employment, Industrial and Health Resources of 1971 (Article 5190.1, Vernon's Texas Civil Statutes); and

     (2) the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes).

     (b) The department shall perform the administrative duties formerly assigned to the Texas Economic Development Commission and the Enterprise Zone Board under Chapter 2303.

     (c) The department may not use money from the general revenue fund to support the Texas leverage fund.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1995, 74th Leg., ch. 76, §§ 5.95(20), 9.60, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1041, § 18, eff. Sept. 1, 1997.

§ 481.024. Texas Economic Development Corporation

     (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 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 members of the governing board serve ex officio as the board of directors of the corporation. The corporation has the powers and is subject to the limitations provided for the 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 department and with bond counsel, financial advisors, or underwriters as its board of directors considers necessary.

     (b) The corporation may engage exclusively in the performance of charitable functions and is exempt from all taxation by this state or a municipality or other political subdivision of this state.

     (c) The corporation is a nonprofit corporation, and no part of its net earnings remaining after payment of its expenses may inure to any individual, firm, or corporation, except that if the board of directors determines that sufficient provision has been made for the full payment of the expenses, bonds, and other obligations of the corporation, the additional net earnings of the corporation shall be deposited to the credit of the general revenue fund.

     (d) At any time the board of directors by written resolution may alter the structure, organization, programs, or activities of the corporation or terminate and dissolve the corporation, subject only to any limitation provided by the law of the state on the impairment of contracts of the corporation.

     (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 department.

     (f) The Texas Economic Development Corporation and any other corporation whose charter specifically dedicates the corporation's activities to the benefit of 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 602, §§ 3, 4, eff. Sept. 1, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 9, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 19, eff. Sept. 1, 1997.

§ 481.025. Empowerment Zone and Enterprise Community Program

     The department is the agency of this state responsible for administering the Empowerment Zone and Enterprise Community grant program in this state. The department shall cooperate with appropriate federal and local agencies as necessary to administer the grant program.

Added by Acts 1999, 76th Leg., ch. 1460, § 7.01, eff. Sept. 1, 1999.

§ 481.027. Foreign Offices

     (a) The 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 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 offices established by the department and share the overhead and operating expenses of the offices. Other state agencies and the 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 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 department and the institutions may enter contracts for this purpose. Chapter 771 does not apply to those contracts.

     (c) The department shall maintain regional offices in locations specified in the General Appropriations Act.

     (d) The department may collect fees for the use of the 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 offices under this section.

     (e) Chapter 2175 applies to the operation and maintenance of the offices. No other provisions of Subtitle D, Title 10, apply to the operation and maintenance of the offices, or to transactions of the department that are authorized by this section.

     (f) The General Services Commission may, at the request of a state agency, provide to the agency services exempted from the application of Subtitle D, Title 10 under Subsection (e). Chapter 771 does not apply to services provided under this subsection. The commission shall establish a system of charges and billings that ensures recovery of the cost of providing the services and shall submit a purchase voucher or a journal voucher, after the close of each month, to the agency for which services were performed.

Added by Acts 1989, 71st Leg., ch. 938, § 1, eff. Aug. 28, 1989. Renumbered from § 481.025 by Acts 1990, 71st Leg., 6th C.S., ch. 12, § 2(7), eff. Sept. 6, 1990. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 8, § 5.06, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 986, § 11, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 165, § 17.16, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 165, § 17.19(a), eff. Sept. 1, 1997.

§ 481.028. Memorandum of Understanding With Other State Agencies

     (a) The department shall initiate negotiations for and enter into a memorandum of understanding with any other state agency involved in economic development to cooperate in program planning and budgeting.

     (b) The department shall enter into an agreement as required by Subsection (a) with the:

     (1) Department of Agriculture regarding each agency's international marketing efforts and business finance programs;

     (2) Texas Workforce Commission regarding the skills development fund, and the dissemination of employment-related data, statistics, and analyses, and the use of field offices to distribute information of interest to businesses and communities in the state, including applications for Smart Jobs grants;

     (3) General Land Office regarding each agency's rural economic development efforts;

     (4) Texas Department of Housing and Community Affairs regarding each agency's community development programs;

     (5) Texas Department of Transportation and Parks and Wildlife Department regarding each agency's efforts to promote tourism;

     (6) Texas Natural Resource Conservation Commission regarding small business finance and permits, the marketing of recyclable products, and business permits;

     (7) office of the comptroller regarding the dissemination of economic data, statistics, and analyses and the use of field offices to distribute information to businesses and local communities in the state;

     (8) Texas Historical Commission regarding community preservation, restoration, and revitalization;

     (9)

     General Services Commission regarding providing procurement information, certification, and technical assistance to small and historically underutilized businesses;

     (10) Alternative Fuels Council regarding the promotion of alternative fuels;

     (11) institutions of higher education regarding work force development, literacy, and technology transfer; and

     (12) Texas Agricultural Finance Authority regarding the marketing and promotion of the programs administered by the authority.

     (c) Each agency listed in Subsection (b) may enter into memoranda of understanding in areas other than those listed for the respective agency.

     (d) The memorandum of understanding between the department and the other state agency shall be adopted as a rule of each department or agency.

Added by Acts 1993, 73rd Leg., ch. 986, § 12, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, § 11.10, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 165, § 6.17, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1041, § 20, eff. Sept. 1, 1997.

§ 481.029. Cost Recovery

     The department shall recover the cost of providing direct technical assistance, management training services, and other services to businesses and communities when reasonable and practical.

Added by Acts 1993, 73rd Leg., ch. 986, § 13, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1041, § 21, eff. Sept. 1, 1997.

SUBCHAPTER C. TEXAS STRATEGIC ECONOMIC DEVELOPMENT PLANNING COMMISSION [EXPIRED]

SUBCHAPTER D. INTERNATIONAL TRADE

§ 481.041. Legislative Findings

     The legislature finds that:

     (1) the development and expansion of international trade and the export of products and services from this state to foreign purchasers are essential to the economic growth of the state and to the full employment, welfare, and prosperity of its citizens; and

     (2) the measures authorized and the assistance provided by this subchapter, especially with respect to financing, are in the public interest and serve a public purpose of the state in promoting the economic welfare of the citizens of the state.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1041, § 24, eff. Sept. 1, 1997.

§ 481.043. General Powers and Duties Relating to International Trade

     The 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1041, § 25, eff. Sept. 1, 1997.

§ 481.045. Powers to be Interpreted Broadly

     The powers of the department provided by this subchapter shall be interpreted broadly to effect the purposes of this subchapter. The grant of powers under this subchapter is not a limitation of other powers of the department.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.047. Confidentiality

     Information collected by the 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.059. Texas Exporters Loan Fund

     (a) The Texas exporters loan fund is a fund in the state treasury. The fund consists of appropriations or transfers made to the fund, fees, other money received from operation of the program established by this section, and interest paid on money in the fund. Money in the fund may be used to establish a reserve fund in an amount determined by the department and to carry out the purposes of this section. If any appropriations are made to the department from the general revenue fund to carry out this section for a fiscal year, at the end of that fiscal year the unexpended balance of those appropriations shall be transferred to the Texas exporters loan fund.

     (b) The department may guarantee loans or make loans with a term of one year or less made by private lenders to Texas businesses to finance activities of those businesses entering or expanding into export markets, including activities related to the purchase of inventory, equipment, and raw materials, manufacture, and marketing.

     (c) In making guarantees or loans under this section, the department shall give preference to Texas products having the highest percentage of their total value represented by Texas source components, labor, or intellectual property.

     (d) A loan guarantee or loan under this section may not be for less than $10,000 or a lesser amount prescribed by department rule or more than $1 million. The department may not guarantee more than 90 percent of a loan by a private lender. The department may not provide a guarantee or make a loan for a project unless the business involved provides at least 10 percent of the total cost of the project. The department shall require each loan guaranteed under this section to be secured by appropriate collateral and may require the acquisition of insurance from the Export-Import Bank of the United States.

     (e) The department shall assist Texas businesses in determining eligibility for participation in the program established by this section, preparing necessary paperwork, identifying potential lenders, and explaining the program to lenders.

     (f) The department shall provide training to persons in small business development centers and export assistance centers to disseminate information concerning the program established by this section throughout the state.

     (g) The department shall administer the program established by this section in the same manner as its other programs under this chapter, except as provided otherwise by this section. The costs of administering the program must be paid by interest earned on money in the fund and by fees collected in connection with the program.

     (h) The department may not guarantee or make a loan under this section after August 31, 1997.

Added by Acts 1989, 71st Leg., ch. 818, § 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 18, § 4, eff. April 11, 1991; Acts 1991, 72nd Leg., ch. 602, § 5, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 26, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1163, § 2, eff. Sept. 1, 1997.

SUBCHAPTER E. BUSINESS DEVELOPMENT—GENERAL PROVISIONS

§ 481.071. Legislative Findings

     The legislature finds that:

     (1) the department should focus business development efforts on rural areas, the border region, and small business;

     (2) the measures authorized by this subchapter and the assistance provided by this subchapter, especially with respect to financing, are in the public interest and serve a public purpose of the state;

     (3) the economic future of Texas and its citizens depends on the ability of businesses to secure low-cost capital that promotes the high-quality jobs that improve the living standards of all Texans; and

     (4) the department should actively seek private funding to supplement the department's marketing and advertising efforts.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1041, § 28, eff. Sept. 1, 1997.

§ 481.072. Definitions

     In this subchapter:

     (1) "Cost" has the meaning assigned that term by the Development Corporation Act.

     (2) "Development Corporation Act" means the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes).

     (3) "Project" has the meaning assigned that term by the Development Corporation Act.

     (4) "User" includes any person.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.0725. General Powers and Duties

     The 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;

     (3) develop a comprehensive business recruitment marketing plan;

     (4) participate in international and domestic trade shows, trade missions, marketing trips, and seminars; and

     (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.

Amended by Acts 1997, 75th Leg., ch. 1041, § 29, eff. Sept. 1, 1997.

§ 481.073. Powers and Duties Relating to Financing

     (a) The department shall act on behalf of the state to carry out the public purposes of this subchapter and of the Development Corporation Act. The department may issue bonds to finance the cost of projects. The bonds may be secured as provided by Section 25(e) of the Development Corporation Act.

     (b) The governing board has the powers that are necessary to accomplish the purposes of this subchapter, including the powers granted to industrial development corporations by Section 23 of the Development Corporation Act, except those provided by Subsections (a)(7), (8), (9), and (10) of that section, and Sections 26, 27, and 29 of that Act.

     (c) The 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 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 department's bonds in classes of investments that the board determines.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 17, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 30, eff. Sept. 1, 1997.

§ 481.075. Program Rules

     (a) The department shall adopt rules to establish criteria for determining which users may participate in programs established by the department under this subchapter. The 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 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 department considers reasonable and necessary.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 18, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1041, § 31, eff. Sept. 1, 1997.

§ 481.077. Statewide Certified Development Corporation

     (a) The department may create a statewide certified development corporation to carry out the purposes of the Small Business Investment Act of 1958 (15 U.S.C. Section 697). 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 department, counsel, and other advisors its board of directors considers necessary.

     (b) The revenues and funds of the corporation shall be deposited with one or more financial institutions chosen for that purpose by the board of directors of the corporation. Expenses incurred by the corporation in the operation and administration of its programs and affairs, including expenditures for professional, management, and legal services, shall be paid out of the fees collected or revenues generated under this chapter. The corporation shall enter into a written agreement with the department for the provision of professional and management services.

     (c) A director, officer, or employee of the department is not personally liable for damage, loss, or injury resulting from the performance of the person's services to the statewide certified development corporation under this section or under any contract, commitment, or agreement executed with the corporation.

     (d) Except as provided by Subsection (e) of this section, the corporate existence of a statewide certified development corporation created pursuant to Section 481.024, Government Code, is not affected by the enactment of this section.

     (e) The by-laws adopted by a statewide certified development corporation created pursuant to Section 481.024, Government Code, are amended by this section.

     (f) The department shall transfer the corporation to the private sector not later than May 1, 1998, and may not use money from the general revenue fund to support the corporation after May 1, 1998. The department shall submit a report to the legislature and the comptroller detailing the plan for the transfer not later than December 1, 1997.

Added by Acts 1991, 72nd Leg., ch. 602, § 6, eff. June 15, 1991. Amended by Acts 1997, 75th Leg., ch. 1041, § 32, eff. Sept. 1, 1997.

SUBCHAPTER F. RURAL ECONOMIC DEVELOPMENT

§ 481.084. Loan Guarantees

     (a) The department may guarantee not more than 90 percent of a loan made by a private lender or to make loans to fund a project. For each guarantee the department shall determine:

     (1) that the project is located in a rural area;

     (2) the amount of equity the user must pledge or apply to the establishment of the project;

     (3) the fees charged by the department, including guarantee or loan fees, application fees, annual fees, and any other costs associated with the loan guarantee or loan, as necessary to fund the administration of this subchapter;

     (4) the maximum and minimum guarantee or loan amounts, if applicable;

     (5) the permissible interest rates and amortization requirements for a guaranteed loan or loan, as agreed on by the private lender, the user, and the department;

     (6) the acceptable security for the department's participation in a project; and

     (7) any other terms or conditions relating to a guarantee or loan.

     (b) The department may not make a loan guarantee or loan, except on approval of a qualified application submitted by a user or private lender for a project.

     (c) On approval of a qualified application and the department's determination that the establishment of a project has accomplished or will accomplish the public purposes of this subchapter, the department may provide a loan guarantee or make a loan of not more than 90 percent of the cost of the project to a participating lender, if the user holds funds or property in an amount or value equal to not less than 10 percent of the cost of the project and those funds or property are then available for and are pledged to be applied to the establishment of the project.

     (d) Before making a loan guarantee or loan, the department must have determined that the user has obtained from other independent and responsible financial sources a firm commitment for all other funds in excess of the loan guaranteed or loan made by the department, and that the sum of those funds and the equity to be provided by the user are adequate for the completion and operation of the project.

     (e) This chapter does not prohibit the use of money in the Texas rural economic development fund in conjunction with any other money available for the purposes of this chapter.

     (f) The department shall report to the comptroller the name of any user who is in default on a loan guaranteed or loan made under this subchapter and with respect to which the department has been required to honor a guarantee. The comptroller may not issue a warrant to the user while the user is in default.

     (g) The department may not guarantee or make a loan under this section after August 31, 1997.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 820, § 2, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 602, § 9, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 986, § 16, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1163, § 3, eff. Sept. 1, 1997.

§ 481.087. Fund

Text of subsec. (a) as amended by Acts 1991, 72nd Leg., ch. 18, § 7

     (a) The Texas rural economic development fund is a guaranteed loan fund in the state treasury. The department may use money in the fund to establish a reserve fund for bonds issued under Subchapter E of this chapter for projects that are eligible under this subchapter.

Text of subsec. (a) as amended by Acts 1991, 72nd Leg., ch. 602, § 11

     (a) The Texas rural economic development fund is a fund in the state treasury. The department may use money in the fund to establish a reserve fund, in an amount determined by the department as appropriate, for bonds issued under this chapter for projects which are also eligible under this subchapter or to insure and guarantee the bonds in any other manner. Reserve funds for the issuance of bonds under Subchapters Q and U may only be created on approval of the Product Development Advisory Board or the Product Commercialization Advisory Board, as applicable.

Text of subsec. (b) as amended by Acts 1991, 72nd Leg., ch. 18, § 7

     (b) Appropriations for the implementation and administration of this subchapter, investment earnings, and fees shall be deposited in the fund. The department may deposit funds issued under Subchapter E of this chapter in the fund.

Text of subsec. (b) as amended by Acts 1991, 72nd Leg., ch. 602, § 11

     (b) Appropriations for the implementation and administration of this subchapter, interest paid on money in the fund, investment earnings, and fees shall be deposited in the fund. The department may also deposit proceeds of bonds issued under this chapter in the fund.

     (c) Appropriated money in the fund may be used and reused for the purposes of this subchapter. Available funds in the fund in an amount not to exceed $700,000 may be used for the Texas-Mexico Development Fund program or the electronic data base established under Subchapter D.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Renumbered from § 481.089 and amended by Acts 1989, 71st Leg., ch. 820, § 2, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 18, § 7, eff. April 11, 1991; Acts 1991, 72nd Leg., ch. 602, § 11, eff. Sept. 1, 1991.

SUBCHAPTER H. BUSINESS DEVELOPMENT—PERMIT ASSISTANCE

§ 481.121. Definitions

     In this subchapter:

     (1) "Applicant" means a person acting for himself or authorized to act on behalf of another person to obtain a permit.

     (2) "Office" means the department's business permit office.

     (3) "Permit" means any license, certificate, registration, permit, or other form of authorization required by law or by state agency rules to be obtained by a person in order to engage in a particular business but does not include a permit or license issued in connection with any form of gaming or gambling.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.122. Creation

     The business permit office is an office within the department.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.123. Duties

     The 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 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 office;

     (10) adopt rules, procedures, instructions, and forms required to carry out the functions, powers, and duties of the 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 775, § 1, eff. Sept. 1, 1993.

§ 481.124. Comprehensive Permit Application Procedure

     (a) The office shall develop and by rule implement a comprehensive application procedure to expedite the identification and processing of required permits. The office shall specify the permits to which the comprehensive application procedure applies. A comprehensive application must be made on a form prescribed by the office. The 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 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 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 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.

     (e) If a notified state agency responds that it does not have an interest in the permit requirements of the business undertaking, project, or activity described in the comprehensive application or does not respond within the period specified by Subsection (d), no permit under the jurisdiction of that agency is required for the undertaking, project, or activity described in the comprehensive application. This subsection does not apply if the comprehensive application contains false, misleading, or deceptive information or fails to include pertinent information, the lack of which could reasonably lead a state agency to misjudge whether a permit under its jurisdiction is required.

     (f) The 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.

     (g) An applicant may withdraw a comprehensive application at any time without forfeiture of any permit approval applied for or obtained under the comprehensive application procedures.

     (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 office in carrying out this subchapter.

     (i) This section does not apply to a permit or license issued under Title 2, Tax Code, and does not exempt any person from liability for a tax under that title.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.125. Comprehensive Permit Handbook

     (a) The 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 office shall organize the list according to the types of businesses affected and shall publish the list in a comprehensive permit handbook.

     (c) The handbook must include:

     (1) the name of each state agency required to review, approve, or grant a permit on the list;

     (2) the address of the agency to which the license, permit, or registration materials must be sent; and

     (3) the telephone number of the agency.

     (d) The office shall periodically update the handbook.

     (e) The 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.126. Assistance of Other State Agencies

     Each state agency, on request of the office, shall provide assistance, services, facilities, and data to enable the office to carry out its duties. An agency is not required to provide information made confidential by a constitution, statute, or judicial decision.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.127. Comprehensive Permit Information

     (a) Each state agency required to review, approve, or grant permits for business undertakings, projects, or activities shall report to the office in a form prescribed by the office on each type of review, approval, or permit administered by the agency.

     (b) The agency's report must include application forms, applicable agency rules, and the estimated period necessary to process permit applications.

     (c) The office shall prepare an information file on state agency permit requirements and shall develop methods for maintenance, revision, update, and ready access. The office shall provide comprehensive permit information based on that file.

     (d) The 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.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.128. No Charges For Services

     The office shall provide its services without charge.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.129. Environmental Permits

     The 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 office's responsibilities under Section 481.123. The office and the Natural Resource Conservation Commission shall jointly submit any report required under Section 481.123.

Added by Acts 1993, 73rd Leg., ch. 775, § 2, eff. Sept. 1, 1993.

SUBCHAPTER J. BUSINESS DEVELOPMENT—SMART JOBS FUND PROGRAM

§ 481.151. Definitions

Text of section effective until December 31, 2001

     In this subchapter:

     (1) "County average weekly wage" means the average weekly wage paid by all employers in a county that are covered by unemployment compensation insurance, as determined by the Texas Workforce Commission for the most recent period for which data is available.

     (2) "Employee" means an individual who performs services for another under a contract of hire, whether express or implied, or oral or written.

     (3) "Employer" means a person that employs one or more employees.

     (4) "Executive director" means the executive director of the department.

     (5) "Existing employer" means an employer that:

     (A) has been liable to pay contributions under Subtitle A, Title 4, Labor Code, for more than one year;

     (B) has employees; and

     (C) is in compliance with the reporting and payment requirements of Subtitle A, Title 4, Labor Code, as determined by the Texas Workforce Commission.

     (6) "Group health benefit plan" means:

     (A) a health plan provided by a health maintenance organization established under the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code);

     (B) a health benefit plan approved by the commissioner of insurance; or

     (C) a self-funded or self-insured employee welfare benefit plan that provides health benefits and is established in accordance with the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.

     (7) "In-kind contribution" means a noncash contribution of goods and services provided by an employer as all or part of the employer's matching share of a grant or project.

     (8) "Job" means employment on a basis customarily considered full-time for the applicable occupation and industry.

     (9) "Large business" means a business entity that employs at least 500 employees.

     (10) "Medium business" means a business entity that employs more than 99 but fewer than 500 employees.

     (11) "Micro-business" means a business entity that employs not more than 20 employees.

     (12) "Minority employer" means a business entity at least 51 percent of which is owned by minority group members or, in the case of a corporation, at least 51 percent of the shares of which are owned by minority group members and that:

     (A) is managed and, in daily operations, is controlled by minority group members; and

     (B) is a domestic business entity with a home or branch office located in this state and is not a branch or subsidiary of a foreign corporation or other foreign business entity.

     (13) "Minority group members" include:

     (A) African-Americans;

     (B) American Indians;

     (C) Asian-Americans;

     (D) Mexican-Americans and other Americans of Hispanic origin; and

     (E) women.

     (14) "Program" means the smart jobs fund program created under this subchapter.

     (15) "Project" means a specific employment training project developed and implemented under this subchapter.

     (16) "Provider" means a person that provides employment-related training. The term includes employers, employer associations, labor organizations, community-based organizations, training consultants, public and private schools, technical institutes, junior or community colleges, senior colleges, universities, and proprietary schools, as defined by Section 132.001, Education Code.

     (17) "Qualified job" means a job for which an application has been submitted and that:

     (A) pays at least 100 percent of the county average weekly wage; and

     (B) is covered by a group health benefit plan for which the business offers to pay at least 50 percent of the premiums or other charges assessed for employee-only coverage under the plan, regardless of whether an employee may voluntarily waive the coverage.

     (18) "Small business" means a business entity that employs more than 20 but fewer than 100 employees.

     (19) "Trainee" means a participant in a project funded under this subchapter.

     (20) "Wages" means all forms of compensation or remuneration, excluding benefits, payable for a specific period to an employee for personal services rendered by that employee.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 260, § 29, eff. May 30, 1995; Acts 1997, 75th Leg., ch. 1041, § 35, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.01, eff. Sept. 1, 1999.

§ 481.152. Smart Jobs Fund Program; Purpose; Administration

Text of section effective until December 31, 2001

     (a) The smart jobs fund program is created in the department as a work force development incentive program to enhance employment opportunities for residents of this state and to increase the job skills of the existing work force by providing job training assistance to businesses operating in, or relocating to, this state.

     (b) The program shall award grants for the creation and retention of qualified jobs. At least 60 percent of the money spent under the program shall be used for projects that assist existing employers. At least 20 percent shall be used for employers that relocate operations to this state.

     (c) The governing board by rule shall develop and adopt a scoring system that evaluates the economic impact of grant applications and reflects the criteria set forth in this subchapter. The executive director shall use the scoring system and a competitive process to award grants. It is the intent of the legislature that, to the greatest extent practicable:

     (1) money from the smart jobs fund be spent:

     (A) in all areas of this state; and

     (B) in approximate proportion to each region's share of the state's population, civilian labor force, unemployed, and submission of grant applications for qualified jobs; and

     (2) grants shall be awarded to micro-businesses, small businesses, medium businesses, large businesses, and minority employers in a manner proportionate to the number of persons employed by those categories of businesses.

     (d) The governing board and the department shall determine appropriate means to accomplish the goals of the program. As necessary to implement those goals, the governing board and the department may work in conjunction with the Texas Workforce Commission and the comptroller.

     (e) The department shall administer the program.

     (f) The executive director may employ personnel as necessary to administer the program.

     (g) In implementing provisions under this subchapter regarding the classification of this state into regions, the department shall use the uniform service regions established by the comptroller under Section 120, Article V, Chapter 19, Acts of the 72nd Legislature, 1st Called Session, 1991 (the General Appropriations Act).

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.02, eff. Sept. 1, 1999.

§ 481.153. Rules

Text of section effective until December 31, 2001

     The governing board shall adopt rules as necessary to implement the program.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.03, eff. Sept. 1, 1999.

§ 481.154. Funding; Rainy Day Fund

Text of section effective until December 31, 2001

     (a) The smart jobs fund is established as a special trust fund in the custody of the comptroller separate and apart from all public money or funds of this state. The fund is composed of:

     (1) money transferred into the fund under Section 204.123, Labor Code;

     (2) gifts, grants, and other donations received by the department for the fund; and

     (3) any amounts appropriated by the legislature for the program from the general revenue fund.

     (b) The program is funded through the smart jobs fund.

     (c) Money in the smart jobs fund may be used for program administration, marketing expenses, and evaluation of the program. These costs of the department in any fiscal year may not exceed the lesser of:

     (1) five percent of the total amount appropriated for the program for that fiscal year; or

     (2) $1.5 million.

     (d) The smart jobs rainy day fund is established as a special trust fund in the custody of the comptroller separate and apart from all public money or funds of this state. The smart jobs rainy day fund is composed of:

     (1) money transferred to that fund as provided by Section 204.123, Labor Code;

     (2) money returned by employers or recouped by the program under Section 481.159(d); and

     (3) any other money received by the governing board for deposit in that fund.

     (e) The governing board may authorize the executive director to use money in the smart jobs rainy day fund if:

     (1) the governing board determines, after consulting with the comptroller, that the smart jobs fund contains insufficient money to cover the amounts appropriated by the legislature to operate the program; and

     (2) the Texas Workforce Commission has determined that:

     (A) the unemployment rate in this state is 125 percent of the average unemployment rate in this state during the preceding three years; or

     (B) a severe economic dislocation is occurring in a specific region of this state.

     (f) The Texas Workforce Commission by rule shall define "severe economic dislocation" for purposes of Subsection (e). In adopting a definition, the commission shall consider employment-related factors, including:

     (1) massive layoffs in a region of this state caused by:

     (A) the closure of military bases;

     (B) the effect of the implementation of the North American Free Trade Agreement;

     (C) employer relocations; or

     (D) other analogous situations; and

     (2) the number of jobs lost in a region compared to the region's usual rates of employment.

     (g) If the governing board approves the use of money from the smart jobs rainy day fund because of a severe economic dislocation occurring in a specific region of the state, the executive director may use the money allocated from the smart jobs rainy day fund solely for projects located in the affected region.

     (h) Notwithstanding any other provision of this section, the total combined amount spent in any fiscal year from the smart jobs fund and the smart jobs rainy day fund may not exceed the amount appropriated by the legislature for that fiscal year for the operation of the smart jobs fund program.

     (i) If, during any three consecutive months, the balance in the smart jobs fund or the smart jobs rainy day fund exceeds 0.15 percent of the total taxable wages for the four calendar quarters ending the preceding June 30, as computed under Section 204.062(c), Labor Code, the executive director shall immediately transfer the excess from the applicable fund to the Unemployment Compensation Fund created under Section 203.021, Labor Code.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1041, § 36, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1423, § 8.26, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.04, eff. Sept. 1, 1999.

§ 481.155. Grants

Text of section effective until December 31, 2001

     (a) The executive director may award grants for projects that meet the requirements of this chapter.

     (b) A grant may not be awarded unless each employer participating in the project certifies that:

     (1) a job or job opening exists or will exist at the end of the project for which the grant is sought; and

     (2) the job or job opening will be filled by a participant in the project.

     (c) Except as otherwise provided by this subsection, a grant may not be awarded unless each employer participating in the project certifies that each job under the project is covered by a group health benefit plan for which the business pays at least 50 percent of the premiums or other charges assessed for employee-only coverage under the plan. The executive director may waive the coverage requirement for a particular job if the affected employee voluntarily waives the coverage in the manner prescribed by rules adopted by the governing board.

     (d) A grant may not be awarded for a project under this section unless each employer participating in the project certifies that the starting wage for a new job created through the project will be equal to or greater than the county average weekly wage for the county in which the job or project is located and that the wage for a job existing on the date that the project is scheduled to begin will be increased to the greater of:

     (1) three percent for a micro-business or small business or five percent for a business that is not a micro-business or small business over the wage in effect on the day before the date on which the project is scheduled to begin for that job; or

     (2) 100 percent of the county average weekly wage for the county in which the job or project is located.

     (e) An employer may apply for a grant under this chapter. An employer may request a modification of the requirements provided by Subsection (d) and Section 481.159(c), if reasonable factors exist for the modification, as determined by the executive director.

     (f) Grants awarded under this section for which the executive director has modified the requirements of Subsection (d) may not, in any fiscal year, exceed 10 percent of the total dollar amount of grants awarded under the program in that year.

     (g) Unless modified by the executive director under rules adopted by the governing board, a grant may not be awarded for a project unless each employer participating in the project certifies that it will continue to spend on nonmanagerial training an amount from private sources equal to the average amount spent by that employer on such training for the most recent two-year period.

     (h) A grant may not be awarded for a project if the project will impair existing contracts for services or collective bargaining agreements, except that a project inconsistent with the terms of a collective bargaining agreement may be undertaken with the written concurrence of the collective bargaining unit and the employer or employers who are parties to the agreement.

Text of subsection (i) effective until September 1, 2001

     (i) Notwithstanding Subsection (d) of this section or any other provision of this subchapter, a grant awarded under this section for a job training project is exempt from the requirement that a job under the project pay at least 100 percent of the county average weekly wage for the county in which the job or project is located if the grant application was filed before September 1, 1999, and the application is for training for 1,000 or more technology-related jobs, the training is to begin not later than June 1, 2000, and all training is to be completed not later than August 31, 2001. This subsection expires September 1, 2001.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1993, 73rd Leg., ch. 986, § 21, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 985, § 10, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1041, § 37, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.05, eff. Sept. 1, 1999.

§ 481.156. Grant Application; Awarding of Grants

Text of section effective until December 31, 2001

     (a) The following may apply for a grant under this subchapter:

     (1) one or more employers to secure training;

     (2) one or more employers acting in partnership with an employer organization, labor organization, or community-based organization to secure training; or

     (3) one or more employers acting in partnership with a consortium composed of more than one provider to secure training.

     (b) A grant application must be filed with the department in a form approved by the executive director and, except as provided by Subsection (c), must include a complete business and training plan, including:

     (1) the number and kind of jobs available;

     (2) the skills and competencies required for the identified jobs;

     (3) the wages to be paid to trainees on successful completion of the project;

     (4) the goals, objectives, and outcome measures for the project;

     (5) the proposed curriculum for the project; and

     (6) the projected cost per person enrolled, trained, hired, and retained in employment.

     (c) The governing board by rule may exempt a micro-business from the requirement to submit a business and training plan that complies with Subsection (b). The governing board by rule shall establish a simplified application process for grant applications from micro-businesses.

     (d) The department may provide assistance with the application process to all applicants and shall give priority to assisting applicants who are small businesses or micro-businesses.

     (e) The department shall minimize the length of the application form and shall simplify as much as possible the review process for grant applications.

     (f) The department shall notify each applicant as to whether the application is complete not later than the fifth business day after the date on which the application is received by the department.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1041, § 38, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.06, eff. Sept. 1, 1999.

§ 481.1565. Participation in Additional Programs; Application Requirements

Text of section effective until December 31, 2001

     (a) A business may not apply both for a grant under this subchapter and to a public community or technical college for customized training and assessment from the college through a grant issued to the college under the skills development fund program established under Chapter 303, Labor Code, unless the business and the college file an application for concurrent participation in both programs.

     (b) The Texas Workforce Commission and the governing board by rule shall jointly establish the requirements for an application subject to this section.

Added by Acts 1999, 76th Leg., ch. 1485, § 1.07, eff. Sept. 1, 1999.

§ 481.157. Matching Requirements; Exemptions

Text of section effective until December 31, 2001

     (a) Money provided under a grant for a project must be matched by private funds provided by the employer benefiting from the project in an amount at least equal to the amount provided by the grant.

     (b) The governing board may adopt rules modifying the requirements of Subsection (a) for employers that are small businesses or micro-businesses and may also adopt rules modifying the requirements of Subsection (a) for projects that provide significant economic benefits to an entire region of the state.

     (c) Employer matches may include documented in-kind contributions as well as wages paid to trainees during the training period.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.08, eff. Sept. 1, 1999.

§ 481.158. Trainees

Text of section effective until December 31, 2001

     The program shall give priority to residents of this state, including residents formerly sentenced to the institutional division or the state jail division of the Texas Department of Criminal Justice.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 611, § 3, eff. Aug. 28, 1995.

§ 481.159. Contracts

Text of section effective until December 31, 2001

     (a) The executive director may approve any project that meets the requirements of this subchapter. If a project is approved and funds are available, the department shall enter into a contract with the grant applicant and with each employer participating in the project. The contract must specify those skills and competencies to be gained as a result of the project.

     (b) Reimbursable costs in the contract may include only those expenses related to direct training in job-related basic skills, including literacy skills, job-related vocational skills, and administrative costs. Total administrative costs for any particular project may not exceed 10 percent of the project's expenditures.

     (c) Each contract must provide a schedule for payment of smart jobs fund money. Twenty-five percent of allowable expenditures shall be withheld by the department for 90 days after the date of completion of the contract. If at least 85 percent of the trainees in the project have been retained in employment for that 90-day period, other than trainees who leave the employment voluntarily for better-paying jobs, and have successfully achieved the skills and competencies, wage requirements, and other contractual obligations, the amount of allowable expenditures withheld shall be remitted to the employer. The governing board by rule shall establish procedures as necessary to verify that a trainee has left the employment for a better-paying job. If there is a negative balance, the employer is liable for the amount of the negative balance and shall remit that amount to the department not later than the 30th day after the date on which the employer is notified of the negative balance by the department.

     (d) Each contract must state the term of the grant award. A grant recipient who does not use all money awarded under the grant for the prescribed purpose within the allotted term shall reimburse the program by submitting the appropriate amount to the executive director not later than the 30th day after the expiration date of the term of the grant award. The executive director shall remit money received under this subsection to the comptroller for deposit in the smart jobs rainy day fund.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1041, § 39, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.09, eff. Sept. 1, 1999.

§ 481.160. Annual Report

Text of section effective until December 31, 2001

     (a) The executive director shall report to the governor and the legislature at the end of each fiscal year on the status of the program.

     (b) The annual report must include for that fiscal year:

     (1) the total number of applications submitted, the total number of applications approved, and the total number of applications rejected, reported by region of the state and by size of business;

     (2) the number of employers receiving grants under the program reported by region of the state and the percentage that number represents of the total number of employers receiving grants under the program on a statewide basis;

     (3) the total amount of money awarded in each region of the state and the percentage that amount represents of the total amount of money awarded on a statewide basis;

     (4) a comparison of the percentage of total dollars awarded to each region versus each region's percentage of:

     (A) the state's population;

     (B) the civilian labor force;

     (C) the number of unemployed persons; and

     (D) the number of eligible grant applications for qualified jobs submitted to the department;

     (5) the value, expressed in dollars and as a percentage of total training expenditures, of matching contributions made by employers;

     (6) the number of businesses, classified by micro-businesses, small businesses, medium businesses, and large businesses, that receive grants under the program reported by region of the state and business size and the percentage that number represents of the total number of each of those categories of businesses receiving grants under the program on a statewide basis;

     (7) the total amount of money awarded to micro-businesses, small businesses, medium businesses, and large businesses, reported by region of the state and business size, and the percentage that amount represents of the total amount of money awarded to those businesses on a statewide basis;

     (8) the number of businesses located in enterprise zones, as that term is defined by Chapter 2303, that receive grants under the program and the total amount of the grants awarded to those businesses;

     (9) the total number of jobs created, enhanced, or retained under the program:

     (A) by region of the state;

     (B) by occupation, classified by the applicable two-digit standard industrial classification;

     (C) by wage level; and

     (D) whether attributable to:

     (i) relocation of businesses to this state, including the percentage the number attributable to the relocation of businesses represents of the total number of jobs created, enhanced, or retained under the program on a statewide basis; or

     (ii) training or retraining of employees of existing employers, including the percentage that the number attributable to the training or retraining of employees of existing employers represents of the total number of jobs created, enhanced, or retained under the program on a statewide basis;

     (10) the average and median weekly wage levels of trainees entering or returning to the workforce, broken down by current employees undergoing retraining and new hires, at three months and one year after the conclusion of their training;

     (11) the number and percentage of participating employers that provide workers' compensation insurance coverage and the number and percentage of employees covered;

     (12) the number and percentage of employees covered by the group health benefit plan offered by the employer;

     (13) the number and percentage of women, disabled persons, and minority group members receiving grants under the program as employers, participating as trainees in training projects, or participating in the program as providers, broken out by group;

     (14) a list of modifications granted under Section 481.155(e), the name of the project for which the modification was granted, and the reason the executive director granted the modification; and

     (15) the number of trainees who have left employment with a grant recipient because the trainee has obtained a better-paying job, as verified under Section 481.159(c).

     (c) In addition to the information required under Subsection (b), the department shall include in the annual report, for each region of the state in which a grant is awarded, the percentage paid by employers in that region of the total amount of unemployment insurance contributions paid by employers during the preceding calendar year.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(20), eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1041, § 40, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.10, eff. Sept. 1, 1999.

§ 481.161. Expiration

Text of section effective until December 31, 2001

     This subchapter expires December 31, 2001.

Added by Acts 1993, 73rd Leg., ch. 1, § 2.01, eff. Sept. 1, 1993.

Amended by Acts 1999, 76th Leg., ch. 1485, § 1.11, eff. Sept. 1, 1999.

SUBCHAPTER K. INFORMATION AND REFERRAL

§ 481.166. Legislative Findings

     The legislature finds that:

     (1) economic development programs and services are located in a number of state agencies;

     (2) businesses and communities need a single point of contact on business and community economic development programs and services; and

     (3) state agencies need to work together to provide outreach and assistance to local governments and businesses.

Added by Acts 1997, 75th Leg., ch. 1041, § 44, eff. Sept. 1, 1997.

§ 481.1665. Information on Programs and Services for Certain Communities and Entities

     (a) At least once each two-year period, the Texas Business and Community Economic Development Clearinghouse shall provide written notice in English and in Spanish regarding those programs and services described by Section 481.167(b) that will benefit and assist communities and entities that have experienced significant job losses associated with the implementation of the North American Free Trade Agreement (NAFTA). The clearinghouse shall provide the notice to each of the governing bodies of the municipalities and counties, chambers of commerce, small business development centers, and economic development centers located in the border region. The clearinghouse shall also provide the information contained in the notice on the department's Internet website.

     (b) The notice required by Subsection (a) must contain:

     (1) the Internet address of the department's website; and

     (2) the toll-free telephone number of the clearinghouse.

Added by Acts 1999, 76th Leg., ch. 420, § 1, eff. Aug. 30, 1999.

§ 481.167. Texas Business and Community Economic Development Clearinghouse

     (a) The 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.

     (b) The clearinghouse shall collect and disseminate information on federal, state, local, and private:

     (1) business development programs, including financial assistance and business incentive programs;

     (2) business development services, including technical assistance, workshops, business incubators, training, and useful publications;

     (3) rural and urban community economic development programs, including loans, grants, and other funding sources;

     (4) rural and urban community economic development services, including technical assistance, workshops, training, and useful publications;

     (5) small business programs and services and useful publications;

     (6) defense economic adjustment programs and services and useful publications; and

     (7) international trade programs, services, and useful publications.

     (c) The clearinghouse shall provide access to the information compiled under this subchapter in a user-friendly format through the use of the Internet.

     (d) The department shall obtain from other state agencies appropriate information needed by the department to carry out its duties under this subchapter.

     (e) The comptroller shall assist the department in furthering the purposes of this subchapter by allowing the department to use the field offices and personnel of the comptroller to disseminate brochures, documents, and other information useful to businesses in the state.

Added by Acts 1997, 75th Leg., ch. 1041, § 44, eff. Sept. 1, 1997.

SUBCHAPTER L. TOURISM

§ 481.171. Legislative Findings

     The legislature finds that:

     (1) tourism development and the marketing of this state as a travel destination is essential to the economic well-being and growth of this state and to the full employment, welfare, and prosperity of its citizens; and

     (2) the measures authorized by this subchapter in promoting tourism are in the public interest and serve a public purpose of the state in promoting the welfare of the citizens of this state economically.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.172. Duties

     The department shall:

     (1) 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

Text of subd. (8) as added by Acts 1997, 75th Leg., ch. 1041, § 41

     (8) cooperate fully with the Parks and Wildlife Department, the Texas Department of Transportation, the Texas Historical Commission, and the Texas Commission on the Arts in all matters relating to promotion of tourism.

Text of subd. (8) as added by Acts 1997, 75th Leg., ch. 1275, § 52

     (8) promote and encourage the horse racing and greyhound racing industry, if funds are appropriated for the promotion or encouragement.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 653, § 1, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 165, § 22(36), eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1041, § 41, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1275, § 52, eff. Sept. 1, 1997.

§ 481.173. Name and Picture of Living State Official

     The name or the picture of a living state official may not be used for advertising purposes under this subchapter.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

§ 481.174. Advertisements in Tourism Promotions

     (a) The department may sell advertisements in travel promotions in any medium.

     (b) The 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 department as provided by Section 156.251, Tax Code.

Added by Acts 1993, 73rd Leg., ch. 986, § 23, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1041, § 42, eff. Sept. 1, 1997.

SUBCHAPTER N. BUSINESS DEVELOPMENT—LINKED DEPOSIT PROGRAM

§ 481.191. Definitions

     In this subchapter:

     (1) "Child-care provider" means a small business that operates or proposes to operate a day-care center or group day-care home, as those terms are defined by Section 42.002, Human Resources Code.

     (2) "Eligible borrower" means:

     (A) a person who proposes to begin operating a small 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.

     (3) "Eligible lending institution" means a financial institution that makes commercial loans, is a depository of state funds, and agrees to participate in the linked deposit program established by this subchapter and to provide collateral equal to the amount of linked deposits placed with it.

     (4) "Historically underutilized business" means:

     (A) a corporation formed for the purpose of making a profit in which at least 51 percent of all classes of the shares of stock or other equitable securities is owned by one or more persons who are members of certain groups, including black Americans, Hispanic Americans, women, Asian Pacific Americans, and American Indians;

     (B) a sole proprietorship formed for the purpose of making a profit that is 100 percent owned, operated, and controlled by a person described by Paragraph (A) of this subdivision;

     (C) a partnership formed for the purpose of making a profit in which 51 percent of the assets and interest in the partnership is owned by one or more persons described by Paragraph (A) of this subdivision. Those persons must have proportionate interest and demonstrate active participation in the control, operation, and management of the partnership's affairs; or

     (D) a joint venture in which each entity in the joint venture is a historically underutilized business under this subdivision.

     (5) "Nonprofit corporation" means a not for profit corporation organized under the Texas Non-Profit Corporation Act (Article 1396–1.01 et seq., Vernon's Texas Civil Statutes).

     (6) "Small business" means a corporation, partnership, sole proprietorship, or other legal entity that:

     (A) is domiciled in this state;

     (B) is formed to make a profit;

     (C) is independently owned and operated; and

     (D) employs fewer than 100 full-time employees.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993. Amended by Acts 1997, 75th Leg., ch. 1162, § 2, eff. Sept. 1, 1997.

§ 481.192. Linked Deposit

     A linked deposit is a time deposit governed by a written deposit agreement between the state and an eligible lending institution that provides:

     (1) that the eligible lending institution pay interest on the deposit at a rate that is not less than the greater of:

     (A) the current market rate of a United States treasury bill or note of comparable maturity minus two percent; or

     (B) 1.5 percent; and

     (2) that the eligible lending institution agree to lend the value of the deposit to an eligible borrower at a maximum rate that is the current market rate of a United States treasury bill or note of comparable maturity plus four percent.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993.

§ 481.193. Linked Deposit Program

     (a) The 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) child-care services provided by and activities engaged in this state by nonprofit organizations; and

     (4) quality, affordable child-care services in this state.

     (b) The policy board shall adopt rules for the loan portion of the linked deposit program.

     (c) In order to participate in the linked deposit program, an eligible lending institution may solicit loan applications from eligible borrowers.

     (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 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 department.

     (f) After reviewing each linked deposit loan application, the executive director of the department shall recommend to the comptroller the acceptance or rejection of the application.

Text of subsec. (g) as amended by Acts 1997, 75th Leg., ch. 891, § 3.13 and Acts 1997, 75th Leg., ch. 1423, § 8.27

     (g) After the comptroller's acceptance of the application and the lending institution originates a loan to an eligible borrower, the comptroller shall place a linked deposit with the applicable eligible lending institution for the period the comptroller considers appropriate. The comptroller may not place a deposit for a period extending beyond the state fiscal biennium in which it is placed. Subject to the limitation described by Section 481.197, the comptroller may place time deposits at an interest rate described by Section 481.192.

Text of subsec. (g) as amended by Acts 1997, 75th Leg., ch. 1162, § 3

     (g) After the comptroller's acceptance of the application and the lending institution originates a loan to an eligible borrower, the comptroller shall place a linked deposit with the applicable eligible lending institution for the period of the loan, subject to Subsections (h) and (i). The comptroller is not required to maintain the deposit with the lending institution if the loan is extended, renewed, or renegotiated unless the 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 may place 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.

     (h) Before the placing of a linked deposit, the eligible lending institution and the state, represented by the 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 lending institution notify the comptroller if the borrower to which the deposit is linked defaults on the loan; and

     (2) in the event of a default the comptroller may withdraw the linked deposit.

     (i) If a lending institution holding linked deposits ceases to be a state depository, the comptroller may withdraw the linked deposits.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993. Amended by Acts 1997, 75th Leg., ch. 891, § 3.13, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1162, § 3, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1423, § 8.27, eff. Sept. 1, 1997.

§ 481.194. Compliance

     (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 department.

     (b) The department shall monitor compliance with this subchapter and inform the comptroller of noncompliance on the part of an eligible lending institution.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993. Amended by Acts 1997, 75th Leg., ch. 1423, § 8.28, eff. Sept. 1, 1997.

§ 481.196. State Liability Prohibited

     The state is not liable to an eligible lending institution for payment of the principal, interest, or any late charges on a loan made to an eligible borrower. Linked deposits are not an extension of the state's credit within the meaning of any state constitutional prohibition.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993.

§ 481.197. Limitations in Program

     (a) At any one time, not more than $6 million may be placed in linked deposits under this chapter.

     (b) The maximum amount of a loan under the linked deposit program is $250,000.

     (c) The borrower shall apply a loan granted under this subchapter to working capital or to the purchase, construction, or lease of capital assets, including land, buildings, and equipment.

Added by Acts 1993, 73rd Leg., ch. 689, § 1, eff. Aug. 30, 1993. Amended by Acts 1995, 74th Leg., ch. 633, § 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1162, § 4, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1231, § 1, eff. Sept. 1, 1999.

§ 481.198. Marketing

     (a) The 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 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 department's efforts in promoting the linked deposit program during the preceding two years.

Added by Acts 1997, 75th Leg., ch. 1162, § 5, eff. Sept. 1, 1997.

SUBCHAPTER O. MAIN STREET PROGRAM

§ 481.201. Agreement With Historical Commission

     The Texas Historical Commission shall execute a written agreement with the department providing for coordination and planning of and giving priority to loans made under the commission's Main Street program.

Added by Acts 1989, 71st Leg., ch. 4, § 3.01, eff. Sept. 1, 1989.

SUBCHAPTER P. RESEARCH AND DATA SERVICES

§ 481.211. Powers and Duties

     The 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.

Added by Acts 1997, 75th Leg., ch. 1041, § 44, eff. Sept. 1, 1997.

§ 481.212. Compilation and Distribution of Data and Research

     (a) To serve as a one-stop center for business-related information, the 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 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 department may charge a reasonable access fee in connection with this subchapter.

Added by Acts 1997, 75th Leg., ch. 1041, § 44, eff. Sept. 1, 1997.

SUBCHAPTER AA. WORKFORCE DEVELOPMENT INITIATIVE FOR YOUTH

§ 481.379. Design Committee

     (a) Expired.

     (b) The design committee is composed of members appointed by the executive director as follows:

     (1) three members who are employers, representing the business community, including representation of small businesses;

     (2) three members who are employees, representing the labor community;

     (3) three members who are high school teachers, representing secondary education, including representation by persons with experience in the federal technical preparatory education programs created under 20 U.S.C. Section 2394b;

     (4) three members who are faculty members of institutions of higher education, representing higher education, including representation by persons with experience in the federal technical preparatory education programs created under 20 U.S.C. Section 2394b;

     (5) three members who are training directors from registered United States Department of Labor Bureau of Apprenticeship and Training programs; and

     (6) three members who are persons who are not eligible for appointment under Subdivisions (1) through (5), representing the general public.

     (c) to (e) Expired.

Added by Acts 1993, 73rd Leg., ch. 709, § 1, eff. Aug. 30, 1993. Amended by Acts 1995, 74th Leg., ch. 260, § 30, eff. May 30, 1995.

SUBCHAPTER BB. CAPITAL ACCESS PROGRAM

§ 481.401. Definitions

     In this subchapter:

     (1) "Capital access loan" means a loan that is entitled to be secured by the fund.

     (2) "Financial institution" includes a bank, trust company, banking association, savings and loan association, mortgage company, investment bank, credit union, or nontraditional financial institution.

     (3) "Fund" means the capital access fund.

     (4) "Loan" includes a line of credit.

     (5) "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.

     (6) "Nonprofit organization" means a private, nonprofit, tax-exempt corporation, association, or organization listed in Section 501(c)(3), Internal Revenue Code of 1986, that is domiciled in this state or has at least 51 percent of its members located in this state.

     (7) "Participating financial institution" means a financial institution participating in the program.

     (8) "Program" means the capital access program.

     (9) "Reserve account" means an account established in a participating financial institution on approval of the 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.

     (10) "Small 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;

     (C) is independently owned and operated; and

     (D) employs fewer than 100 full-time employees.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.402. Capital Access Fund

     (a) The capital access fund is a dedicated account in the general revenue fund.

     (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 department for use in carrying out the purposes of this subchapter.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.403. Transfer of Money From Other Funds to the Capital Access Fund

     (a) At the beginning of each fiscal year, the department shall compute for the Texas exporters loan fund established under Subchapter D and the Texas rural economic development fund established under Subchapter F:

     (1) the amount sufficient for that fiscal year to cover loan guarantees made under Subchapter D or F, as applicable to each fund;

     (2) the amount sufficient for the fiscal year to repay bonds issued under Subchapter D, to carry out the purposes of Section 481.059, or for projects that are eligible under Subchapter F, as applicable to each fund; and

     (3) the amount of loan repayments for loans made under Subchapter D or F that will be expected to be received during the fiscal year, as applicable to each fund.

     (b) At the beginning of each fiscal year, the comptroller for each fund described by Subsection (a) shall subtract the sum of the amount computed by the department under Subsections (a)(1) and (a)(2) for the respective fund from the amount in the fund at the beginning of the fiscal year.

     (c) If a positive amount results from a computation made under Subsection (b), the comptroller shall transfer an amount equal to the computed amount from the fund to which the computation relates to the capital access fund.

     (d) As loan repayments are received for each fund described by Subsection (a), the comptroller shall transfer the payments to the capital access fund.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.404. Powers of Department in Administering Capital Access Fund

     In administering the fund, the 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 department's discretion in obligations determined proper by the 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.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.405. Capital Access Program

     (a) The 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 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 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 department that sets out the terms and conditions under which the department will make contributions to the institution's reserve account and specifies the criteria for a loan to qualify as a capital access loan.

     (e) To qualify as a capital access loan, a loan must:

     (1) be made to a small or medium-sized business or to a nonprofit organization;

     (2) be used by the business or nonprofit organization for any project, activity, or enterprise in this state that fosters economic development; and

     (3) meet any other criteria provided by this subchapter.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.406. Rulemaking Authority

     (a) The 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.

     (b) To qualify for participation in the program, a line of credit must:

     (1) be an account at a financial institution under which the financial institution agrees to lend money to a person from time to time to finance one or more projects, activities, or enterprises that are authorized by this subchapter; and

     (2) contain the same restrictions, to the extent possible, that are placed on a capital access loan that is not a line of credit.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.407. Provisions Relating to Capital Access Loan

     (a) Except as otherwise provided by this subchapter, the 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;

     (3) refinancing of existing loans not originally enrolled under this subchapter; or

     (4) inside bank transactions, as defined by the policy board.

     (c) The borrower of a capital access loan must apply the loan to working capital or to the purchase, construction, or lease of capital assets, including buildings and equipment used by the business or nonprofit organization. Working capital uses include the cost of exporting, accounts receivable, payroll, inventory, and other financing needs of the business or organization.

     (d) A capital access loan may be sold on the secondary market under conditions as may be determined by the department.

     (e) When enrolling a loan in the program, a participating financial institution may specify an amount to be covered under the program that is less than the total amount of the loan.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.408. Reserve Account

     (a) On approval by the department and after entering into a participation agreement with the 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.

     (b) When a participating financial institution makes a loan enrolled in the program, the institution shall require the borrower to pay to the institution a fee in an amount that is not less than two percent but not more than three percent of the principal amount of the loan, which the financial institution shall deposit in the reserve account. The institution shall also deposit in the reserve account an amount equal to the amount of the fee received by the institution from the borrower under this subsection. The institution may recover from the borrower all or part of the amount the institution is required to pay under this subsection in any manner agreed to by the institution and borrower.

     (c) For each capital access loan made by a financial institution, the institution shall certify to the department, within the period prescribed by the 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 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 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 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-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.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.409. Limitations on State Contribution to Reserve Account

     (a) The amount deposited by the 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 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 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-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.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.410. State's Rights With Respect to Reserve Account

     (a) All of the money in a reserve account established under this subchapter is property of the state.

     (b) The state is entitled to earn interest on the amount of contributions made by the department, borrower, and institution to a reserve account under this subchapter. The department shall withdraw monthly or quarterly from a reserve account the amount of the interest earned by the state. The 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 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 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 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.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.411. Annual Report

     A participating financial institution shall submit an annual report to the 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 department considers appropriate;

     (2) state the total amount of loans for which the 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.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.412. Reports; Audits

     (a) The department shall submit to the legislature an annual status report on the program's activities.

     (b) The financial transactions of the fund are subject to audit by the state auditor as provided by Chapter 321.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.413. State Liability Prohibited

     The state is not liable to a participating financial institution for payment of the principal, the interest, or any late charges on a capital access loan made under this subchapter.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

§ 481.414. Gifts and Grants

     The department may accept gifts, grants, and donations from any source for the purposes of this subchapter.

Added by Acts 1997, 75th Leg., ch. 1163, § 1, eff. Sept. 1, 1997.

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