JH C.S.H.B. 1117 75(R) BILL ANALYSIS URBAN AFFAIRS C.S.H.B. 1117 By: Giddings 4-10-97 Committee Report (Substituted) BACKGROUND As municipalities work to revitalize inner city neighborhoods and to create environments conducive to re-urbanization, multiple incentives are needed to stimulate the absent social and economic drivers that are present in healthy communities. Housing opportunities that are affordable and attractive to potential homeowners are an important component. Incentives to recruit and retain builders and buyers of affordable housing are needed to enhance participation in core neighborhoods seeking to become self-sustaining communities. There are precedents for incentive components in economic development initiatives and Tax Increment Financing districts (TIFs). Several cities have been recipients of federal economic community and enterprise zone program funds which incorporate multiple incentives to enhance defined objectives in targeted areas. PURPOSE C.S.H.B. 1117 authorizes the establishment of Neighborhood Empowerment Zones so that local governments can effectively apply resources in targeted core communities that may not be located in established federal and state enterprise zones. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle A, Title 12, Local Government Code, by adding Chapter 377,. Sections 377.001, 377.002, 377.003, 377.004 and 377.005 as follows: Sec. 377.001. DEFINITION. Defines "zone" as a neighborhood empowerment zone created by a municipality. Sec. 377.002. CREATION OF ZONE. Allows a municipality to create a neighborhood empowerment zone to cover a part of the municipality if the municipality determines the zone would promote (1) the creation of affordable housing, (2) an increase in economic development or (3) an increase in the quality of social services, education, or public safety provided to persons living in the zone. Sec. 377.003. ADOPTION OF ZONE. (a) allows a municipality to create a zone if (1) the governing body adopts a resolution creating a zone, (2) describes the zone boundaries, and (3) finds that the zone benefits and increases the public health, safety, and welfare of the persons in the municipality, and (b) allows a municipality to create and include an area in more than one zone. Sec. 377.004. EFFECT OF CREATION OF ZONE. Allows a municipality to certain powers granted under this chapter. Sec. 377.005. ADDITIONAL POWERS. Allows a municipality to (1) waive or adopt fees related to the construction of buildings in the zone, including inspection of buildings and impact fees; (2) enter into ten-year sales tax refund or abatement agreements with persons benefiting the zone; and (3) enter into property tax abatement agreements with persons owning land in the zone for a limited period of time as provided for by Chapter 312 of the Tax Code. SECTION 2. Emergency Clause. Effective Immediately. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute replaces "a person living" with "residents" regarding increased services. The substitute limitation periods for sales tax and property tax abatement agreements.