Enrolled Bill Summary

            Senate Bill 275 amends the Government Code to abolish the Texas Department of Economic Development and transfer its business development, financial incentive, and tourism functions to the Texas Economic Development and Tourism Office (office) in the Governor's Office. The office will expire September 1, 2015, unless continued by the legislature. The bill also abolishes the Texas Aerospace Commission and transfers its functions to the Aerospace and Aviation Office within the office. It requires the governor to appoint a seven-member Aerospace and Aviation Advisory Committee to assist in recruiting and retaining aerospace and aviation jobs and investment. It also establishes the spaceport trust fund consisting of money from gifts, grants, or donations for the development of spaceport infrastructure.

            The bill establishes that the office's first duty is to market and promote the state as a premier business location and tourist destination, and requires the governor to appoint the office's executive director, who serves at the pleasure of the governor. Other provisions require the executive director to designate an individual as the small business advocate to assist small and historically underutilized businesses; require the office to work with certain entities to identify regional and statewide industry clusters and strengthen their competitiveness; and require the office to coordinate state efforts to attract, develop, or retain technology industries in certain sectors, including the semiconductor industry. Additionally, the office is required, not later than December 31, 2003, to enter into a memorandum of understanding with the Parks and Wildlife Department, Texas Department of Transportation, Texas Historical Commission, and Texas Commission on the Arts to direct the efforts of those agencies in all matters pertaining to tourism.

            Senate Bill 275 requires the office to establish the Texas Economic Development Bank (bank) to administer a variety of financial incentives for communities and businesses, including the linked deposit program and capital access program, and creates the Texas economic development bank fund as a general fund for all of the incentives. The fund is created as a dedicated account in the general revenue fund, and the office is authorized to issue bonds and impose and collect fees in administering it. It creates the nine-member Product Development and Small Business Incubator Board, appointed by the governor, to govern the newly created Texas product development fund and small business incubator fund administered by the bank. The funds are created as revolving funds in the state treasury, and the bank is authorized to issue general obligation bonds to finance them.             The bill establishes that the bank also administers and monitors the Enterprise Zone Program, and sets forth requirements for designation of enterprise zones and enterprise projects. It also establishes designation periods for enterprise zones and enterprise projects and the process for local nomination of enterprise projects. Additionally, the bill amends the Government Code and the Tax Code to specify the tax refund per job and the maximum tax refund for a range of capital investments in an enterprise project. It requires three percent of the amount of a tax benefit from participation in the enterprise zone program to be transferred to the Texas economic development bank fund to defray administrative costs.

            The bill also amends the Government Code and the Tax Code to establish that the defense economic readjustment zone program is administered by the Texas Economic Development Bank. It amends the Government Code and the Development Corporation Act of 1979 to require the governor to appoint the board of directors of the Texas Economic Development Corporation and the Texas Small Business Industrial Development Corporation. It amends the Agriculture Code to establish the Fuel Ethanol and Biodiesel Production Incentive Program and the fuel ethanol and biodiesel production account administered by the office to provide grants to producers as an incentive for the development of the fuel ethanol and biodiesel industry and agriculture production in this state. To fund the program, the office is required to impose a fee on each producer, and the comptroller is required to transfer a certain amount from undedicated general revenue to the production account.

            Senate Bill 275 requires the office to promote the sports industry and related industries; promotion may include the establishment by the governor of a Texas Sports Commission composed of volunteers who are knowledgeable about or active in amateur sports. It also requires the office to assist endorsing counties and municipalities in attracting major sports events by providing financing for the costs of bidding for selection, making necessary preparations, and conducting the games. The bill recreates the Olympic Games trust fund by authorizing the comptroller to retain a certain amount of state and local sales and use tax revenue, mixed beverage tax revenue, and hotel occupancy tax revenue that increase due to holding the Olympic Games in a certain endorsing county and municipality. Similarly, it extends the law supporting a certain endorsing municipality's bid to host the 2007 Pan American Games to cover future Pan American Games and recreates the Pan American Games trust fund as a fund outside the state treasury and administered by the comptroller. It also creates the Other Events trust fund until January 1, 2007, to help an endorsing county or municipality with a population of one million or more attract a one-day game event such as the Super Bowl.

            The bill repeals certain other provisions to conform to current law.