SRC-TNM S.B. 901 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 901
By: Ellis
State Affairs
4-1-97
As Filed


DIGEST 

Currently, the Foreign Trade Zones Act provides for the establishment of
foreign trade zones, in which business property may be exempt from local
ad valorem taxation.  The Act entitles each port of entry to at least one
zone.  Entities wishing to establish zones are required to apply for zone
status. Once zone status is granted by the Foreign Trade Zone Board, the
zone guarantee may sponsor other corporations applying for subzone status.

There is no formal requirement that the governing bodies of local taxing
units, whose tax bases may be affected by zone or subzone grants, consider
and decide whether to support or oppose the zone or subzone application.
The only notice requirement of zone or subzone applications is publication
in the Federal Register, giving notice of public hearings, and an
opportunity for participation.  As a result, a number of zones and
subzones have been granted without the support or knowledge of affected
local taxing units.  S.B. 901 would  require the eligible corporation or
governmental entity, as a part of its application seeking the grant, to
include resolutions of the governing bodies of all political subdivisions
which tax property within the geographical area of the proposed foreign
trading zone, either supporting or opposing the grant of the foreign trade
zone or subzone.  The failure to include such resolutions would be grounds
for revocation of the eligibility of the corporation or governmental
entity to operate and maintain a foreign trade zone or subzone.  
   
PURPOSE

As proposed, S.B. 901 outlines provisions regarding an entity's
eligibility for foreign trade zone or subzone status.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2, Article 1446.01, V.T.C.S., to provide that an
eligible corporation or a governmental entity is authorized to submit an
application, rather than apply for, and accept a grant to establish,
operate, and maintain the foreign trade zone and subzones.  Requires the
application to include a resolution either supporting or opposing the
application from the governing body of each political subdivision that has
the authority to tax any of the real property located in the geographical
area of the proposed foreign trade zone or subzone. 

SECTION 2. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 3. Emergency clause.