HBA-AMW H.B. 3452 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3452
By: Gallego
Economic Development
3/26/2001
Introduced



BACKGROUND AND PURPOSE 

In 1997, the Texas Department of Commerce was abolished and its functions
were transferred to the Texas Department of Economic Development (TDED).
TDED helps develop and promote the Texas economy by funding job training
for Texas businesses, promoting Texas as a tourist destination, providing
assistance to Texas businesses and communities, and serving as a central
source of economic development information.  TDED is subject to the Texas
Sunset Act and will be abolished on September 1, 2001, unless continued by
the legislature.  As a result of its review of TDED, the Sunset Advisory
Commission has recommended a two-year continuation of TDED along with
several modifications in TDED's practices and procedures, and recommended
the transfer of TDED's smart jobs fund program to the Texas Workforce
Commission (TWC).  House Bill 3452 continues TDED until September 1, 2003,
modifies TDED's enabling statutes, and transfers the operation, funding,
and administration of the smart jobs fund program to TWC. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Department of Economic
Development in SECTION 1.12 (Section 481.021, Government Code) and SECTION
1.14, and to the Texas Workforce Commission in SECTION 2.01 (Sections
310.002, 310.003, 310.004, 310.006, 310.007, 310.008, 310.009, 310.011,
310.012, and 310.013, Labor Code) and SECTION 2.10 of this bill. 

ANALYSIS

House Bill 3452 amends the Government Code to continue the Texas Department
of Economic Development (TDED) until September 1, 2003, and to set forth
standard Sunset Advisory Commission recommendations, with respect to the
governing board of TDED (board), regarding board member training, board
member removal, policy implementation by the board, and the maintaining of
written complaints (Secs. 481.003,481.0041,481.0044,481.0045, and 481.012). 

Continuation and Oversight of TDED

The bill establishes several criteria to be used to determine if TDED has
successfully implemented the proper management and oversight controls of
the state's economic development efforts.  The criteria include: 

 _effective development and implementation of a strategic plan;

 _establishment of subcommittees that relate to the key administrative and
programmatic functions of TDED; 

 _establishment of effective, department-wide contracting standards and
methodologies; 

 _effective development and implementation of policies, procedures, and
controls over daily  operations; 

 _effective development and implementation of a centralized information and
accounting system; and 

 _effective use of TDED's internal audit function.

The bill requires TDED to report to the Sunset Advisory Commission by
September 1, 2002, on the status of the criteria as part of the
reevaluation of TDED (Sec. 481.0031). 

The bill requires the executive director or the executive director's
designee to provide to TDED employees information and training on the
benefits and methods of participation in the state employee incentive
program (Sec. 481.010).  

Governing Board

H.B. 3452 removes the designated representation requirements of the board
members, including a member with experience in tourism, a member with
experience in international trade, a member who is an economic development
practitioner, and a member who is a resident of a county with a population
of less than 30,000 (Sec. 481.004). 

Advisory Committees

H.B. 3452 prohibits an advisory committee to the executive director of TDED
(director) or the board (advisory committee) from involvement in setting
TDED policy or management of TDED's actual operations and from including a
board member as a member of the advisory committee.  The bill provides that
an advisory committee must provide independent, external expertise on TDED
functions (Sec. 481.007).   

The bill prohibits the Texas Strategic Military Planning Commission, in
carrying out its duties, from deliberating the purchase, exchange, lease,
or value of real property, deliberating the appointment, employment,
evaluation, reassignment, duties, discipline, or dismissal of an officer or
employee of TDED, or hearing a complaint or charge against an officer or
employee of TDED (Sec. 481.0066). The bill requires the director or the
director's designee to provide to TDED employees information and training
on the benefits and methods of participation in the state employee
incentive program (481.010). 

Private Funding

H.B. 3452 requires TDED to adopt rules, on or before December 1, 2001, that
require TDED to account for all general revenue money contributed to
projects supported by money held outside the treasury and provide that TDED
is required to be fully reimbursed for those contributions as money becomes
available, and requires TDED to account for all staff time spent on fund
raising activities associated with private donations (Sec. 481.021 and
SECTION 1.4)).   

The bill abolishes the Texas Economic Development Corporation and repeals
law relating to the Texas Economic Development Corporation (SECTION 1.14). 

Tourism Coordinating Council

H.B. 3452 creates the Texas Tourism Coordinating Council (council) and sets
forth its powers and duties (Sec. 481.177).  The bill specifies the
composition of the council (Sec. 481.175).  The bill provides for the
administration and operation of the council (Secs. 481.175 and 481.176).   



 Smart Jobs Fund Program

H.B. 3452 amends the Education, Government, and Labor codes to transfer the
smart jobs fund program (program) from TDED to the Texas Workforce
Commission (TWC) (SECTIONS 2.01-2.09).  The bill transfers all powers,
duties, obligations, rights, contracts, records, employees, property,
appropriations, and other funds of TDED used to administer the program to
TWC on September 1, 2001 (SECTION 2.10). 

The bill requires a percentage of money in the smart jobs fund determined
by the General Appropriations Act to be transferred to TDED for the purpose
of attracting business for economic development through the use of the
program.  The bill requires TDED to determine the qualified recipients in
accordance with TWC rules and requirements for smart jobs grants, but
provides that the grants are exempt from the competitive grant awarding
process and are administered by TWC (Sec. 310.005, Labor Code).   

The bill requires TWC by rule to require each smart jobs contract to have
certain clearly defined contract provisions (Sec. 310.012, Labor Code).
The bill also requires TWC by rule to adopt program monitoring practices
and  sets forth provisions regarding the program monitoring practices to be
included (Sec. 310.013, Labor Code). 

EFFECTIVE DATE

September 1, 2001.