By Oliveira, Serna, Luna, Seaman H.B. No. 2001
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the enterprise zone program.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2303.052(d), Government Code, is amended
1-5 to read as follows:
1-6 (d) On or before December 15 [1] of each year the department
1-7 shall submit to the governor, the legislature, and the Legislative
1-8 Budget Board a report that:
1-9 (1) evaluates the effectiveness of the enterprise zone
1-10 program;
1-11 (2) describes the use of state and local incentives
1-12 under this chapter and their effect on revenue; and
1-13 (3) suggests legislation.
1-14 SECTION 2. Section 2303.0525(a), Government Code, is amended
1-15 to read as follows:
1-16 (a) On or before December 15 [1] of each even-numbered year,
1-17 the department shall prepare a cost-benefit analysis of the
1-18 enterprise zone program.
1-19 SECTION 3. Sections 2303.104(b) and (c), Government Code,
1-20 are amended to read as follows:
1-21 (b) At least three [one] of the incentives summarized under
1-22 Subsection (a)(3) must not apply throughout the governmental entity
1-23 or entities nominating the area as an enterprise zone. At least
1-24 two of the incentives summarized under Subsection (a)(3) must be
2-1 financial incentives.
2-2 (c) This section does not prohibit a municipality or county
2-3 from extending additional incentives, including tax incentives, for
2-4 business enterprises in an enterprise zone by a separate ordinance
2-5 or order or by a written agreement.
2-6 SECTION 4. Section 2303.401, Government Code, is amended to
2-7 read as follows:
2-8 Sec. 2303.401. DEFINITIONS [DEFINITION]. In this subchapter:
2-9 (1) "New[, "new] permanent job" means a new employment
2-10 position created by a qualified business as described by Section
2-11 2303.402 that:
2-12 (A) [(1)] has provided at least 1,820 hours of
2-13 employment a year to a qualified employee; and
2-14 (B) [(2)] is intended to exist during the period
2-15 that the qualified business is designated as an enterprise project
2-16 under Section 2303.406.
2-17 (2) "Retained job" means a job that existed with a
2-18 qualified business before designation as an enterprise project
2-19 that:
2-20 (A) has provided employment to a qualified
2-21 employee of at least 1,820 hours annually; and
2-22 (B) is intended to be an employment position
2-23 retained during the period the business is designated as an
2-24 enterprise project in accordance with Chapter 151, Tax Code.
2-25 SECTION 5. Section 2303.403, Government Code, is amended to
2-26 read as follows:
2-27 Sec. 2303.403. PROHIBITION ON QUALIFIED BUSINESS
3-1 CERTIFICATION. If the department determines that the governing
3-2 body of an enterprise zone is not complying with this chapter, the
3-3 department shall prohibit the certification of a qualified business
3-4 in the zone until the department determines that the governing body
3-5 is complying with this chapter. The department may not designate
3-6 more than 65 businesses as enterprise projects during the [any]
3-7 biennium beginning September 1, 1997 or September 1, 1999. The
3-8 department in its discretion may withhold up to five project slots
3-9 from designation.
3-10 SECTION 6. Sections 2303.406(a) and (b), Government Code,
3-11 are amended to read as follows:
3-12 (a) The department may designate a business as an enterprise
3-13 project only if the department determines that:
3-14 (1) the business is a qualified business under Section
3-15 2303.402 that:
3-16 (A) is located in or has made a substantial
3-17 commitment to locate in an enterprise zone described by Section
3-18 2303.404(b); and
3-19 (B) has made a commitment to create or retain at
3-20 least:
3-21 (i) 10 jobs, if the company is locating in
3-22 an enterprise zone in which the community has a population equal to
3-23 or less than 50,000, according to the most recent estimates based
3-24 on the most recent decennial census provided by the State Data
3-25 Center; or
3-26 (ii) 25 jobs, if the company is locating
3-27 in an enterprise zone in which the community has a population of
4-1 more than 50,000, according to the most recent estimates based on
4-2 the most recent decennial census provided by the State Data Center;
4-3 (2) the governing body of the enterprise zone making
4-4 the application has demonstrated that a high level of cooperation
4-5 exists among public, private, and neighborhood entities in the
4-6 zone; and
4-7 (3) the designation will contribute significantly to
4-8 the achievement of the plans of the governing body making the
4-9 application for development and revitalization of the zone.
4-10 (b) The department shall designate qualified businesses as
4-11 enterprise projects on a competitive basis. The department shall
4-12 establish a minimum scoring threshold that must be met by the
4-13 qualified business applying for a project designation and make its
4-14 designation decisions using a weighted scale in which:
4-15 (1) 35 [50] percent of the evaluation depends on the
4-16 economic distress of:
4-17 (A) the enterprise zone in which a proposed
4-18 enterprise project is located; and
4-19 (B) the area within the enterprise zone where
4-20 the project is located;
4-21 (2) 20 [25] percent of the evaluation depends on the
4-22 local public effort used for the project to achieve development
4-23 and revitalization of the enterprise zone; [and]
4-24 (3) 20 [25] percent of the evaluation depends on the
4-25 [evaluation criteria as determined by the department, which must
4-26 include:]
4-27 [(A) the] level of cooperation and support the
5-1 project applicant commits to the revitalization goals of the zone;
5-2 (4) 10 percent of the evaluation depends on amount of
5-3 capital investment; and
5-4 (5) 15 percent of the evaluation depends on
5-5 [(B)] the type and wage level in relation to the
5-6 prevailing wage for that occupation in the local labor market area
5-7 of the jobs to be created or retained by the business.
5-8 SECTION 7. Section 2303.407, Government Code, is amended to
5-9 read as follows:
5-10 Sec. 2303.407. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND.
5-11 When the department designates a business as an enterprise project,
5-12 the department shall allocate to the project the maximum number of
5-13 new permanent jobs or retained jobs eligible to be included in a
5-14 computation of a tax refund for the project. The number may not
5-15 exceed 500 [625] or a number equal to 110 percent of the number of
5-16 anticipated new permanent jobs or retained jobs specified in the
5-17 application for designation of the business as an enterprise
5-18 project under Section 2303.405, whichever is less.
5-19 SECTION 8. Section 2303.511(b), Government Code, is amended
5-20 to read as follows:
5-21 (b) A reduction in utility rates under Subsection (a)(9)(B)
5-22 is subject to the agreement of the affected utility and the
5-23 approval of the appropriate regulatory authority under Sections 16
5-24 and 17, Public Utility Regulatory Act (Article 1446c, Vernon's
5-25 Texas Civil Statutes). The rates may [not] be reduced up to but
5-26 not more than five percent below the lowest rate allowable for that
5-27 customer class [offered to any customer located in the enterprise
6-1 zone, including economic development rates and standby rates]. A
6-2 qualified enterprise project or the governing body of the
6-3 enterprise zone may petition the appropriate utility and the
6-4 appropriate regulatory authority to receive a reduced rate under
6-5 this section, and the regulatory authority may order that rates be
6-6 reduced. In making its determination under this section, the
6-7 regulatory authority shall consider revitalization goals for the
6-8 enterprise zone. In setting the rates of the utility the
6-9 appropriate regulatory authority shall allow the utility to recover
6-10 the amount of the reduction.
6-11 SECTION 9. Sections 151.429(a) and (g), Tax Code, are
6-12 amended to read as follows:
6-13 (a) An enterprise project is eligible for a refund in the
6-14 amount provided by this section of the taxes imposed by this
6-15 chapter on purchases of:
6-16 (1) equipment or machinery sold to, repaired for, or
6-17 rented by an enterprise project for use in an enterprise zone;
6-18 (2) building materials sold to an enterprise project
6-19 for use in remodeling, rehabilitating, or constructing a structure
6-20 in an enterprise zone;
6-21 (3) labor for remodeling, rehabilitating, or
6-22 constructing a structure by an enterprise project in an enterprise
6-23 zone; and
6-24 (4) electricity and natural gas purchased and consumed
6-25 in the normal course of business in the enterprise zone.
6-26 (g) The refund provided by this section is conditioned on
6-27 the enterprise project maintaining at least the same level of
7-1 employment of qualified employees as existed at the time it
7-2 qualified for a refund for a period of three years from that date.
7-3 The Texas Department of Commerce shall annually certify to the
7-4 comptroller [and the Legislative Budget Board] whether that level
7-5 of employment of qualified employees has been maintained. On the
7-6 Texas Department of Commerce certifying that such a level has not
7-7 been maintained, the comptroller shall assess that portion of the
7-8 refund attributable to any such decrease in employment, including
7-9 penalty and interest from the date of the refund.
7-10 SECTION 10. Section 171.1015(g), Tax Code, is amended to
7-11 read as follows:
7-12 (g) Only enterprise projects [qualified businesses] that
7-13 have been certified as eligible for a tax deduction under this
7-14 section by the Texas Department of Commerce to the comptroller may
7-15 apply for [and the Legislative Budget Board are entitled to] the
7-16 tax deduction.
7-17 SECTION 11. Section 2303.110(d), Government Code, and
7-18 Section 171.501, Tax Code, are repealed.
7-19 SECTION 12. (a) An enterprise project designated under
7-20 Chapter 2303, Government Code, after August 31, 1997, may not
7-21 receive a tax refund under Section 151.429, Tax Code, as amended by
7-22 this Act, or a tax reduction under Section 171.1015, Tax Code,
7-23 before September 1, 1999.
7-24 (b) An enterprise project designated under Chapter 2303,
7-25 Government Code, after August 31, 1999, may not receive a tax
7-26 refund under Section 151.429, Tax Code, as amended by this Act, or
7-27 a tax reduction under Section 171.1015, Tax Code, before September
8-1 1, 2001.
8-2 SECTION 13. Section 151.429, Tax Code, is amended by
8-3 amending Subsection (h) and adding Subsection (i) to read as
8-4 follows:
8-5 (h) Notwithstanding the other provisions of this section,
8-6 the owner of a qualified hotel project shall receive a rebate,
8-7 refund, or payment of 100 percent of:
8-8 (1) the sales and use taxes paid or collected by the
8-9 qualified hotel project or businesses located in the qualified
8-10 hotel project pursuant to this chapter;
8-11 (2) [and 100 percent of] the hotel occupancy taxes
8-12 paid by persons for the use or possession of or for the right to
8-13 the use or possession of a room or space at the qualified hotel
8-14 project pursuant to the provisions of Chapter 156; and
8-15 (3) the mixed beverage taxes paid by permittees, as
8-16 that term is defined by Section 183.001, located at the qualified
8-17 hotel project that are payable to a county or municipality under
8-18 Section 183.051 [during the first 10 years after such qualified
8-19 hotel project is open for initial occupancy].
8-20 (i) The owner of a qualified hotel project shall receive the
8-21 rebate, refund, or payment under Subsection (h) for taxes paid or
8-22 collected during the first 10 years after the date the project
8-23 opens for initial occupancy.
8-24 SECTION 14. Subchapter I, Chapter 151, Tax Code, is amended
8-25 by adding Section 151.4295 to read as follows:
8-26 Sec. 151.4295. COLLECTION OF CERTAIN TAXES.
8-27 (a) Notwithstanding any other provision of this code, the
9-1 comptroller shall enter into an agreement with the owner of a
9-2 qualified hotel project entitled to receive a rebate, refund, or
9-3 payment under Section 151.429 under which the owner will collect
9-4 those taxes as the comptroller's agent and retain the taxes.
9-5 (b) An agreement made under Subsection (a) must:
9-6 (1) specify the date on which the agreement begins and
9-7 ends;
9-8 (2) require the owner of the qualified hotel project
9-9 to file periodic reports with the comptroller that include detailed
9-10 information relating to the total amount of each tax collected and
9-11 retained by the owner during the reporting period; and
9-12 (3) require the owner to keep and retain records
9-13 relating to the total amount of each tax collected and retained by
9-14 the owner.
9-15 (c) After the comptroller enters into an agreement under
9-16 Subsection (a), the comptroller shall issue to the owner of the
9-17 qualified hotel project and to each owner of a business located in
9-18 the qualified hotel project a certificate that:
9-19 (1) authorizes each owner to present the certificate
9-20 or a copy of the certificate to a seller of taxable items relating
9-21 to the qualified hotel project or business in lieu of the payment
9-22 of taxes under this chapter that would otherwise be due on the
9-23 purchase of the taxable items; and
9-24 (2) requires a business located in the qualified hotel
9-25 project to remit to the owner of the qualified hotel project any
9-26 taxes that would otherwise be remitted to the comptroller and
9-27 subject to rebate, refund, or payment under Section 151.429.
10-1 SECTION 15. Section 2303.5055, Government Code, is amended
10-2 by adding Subsections (f) and (g) to read as follows:
10-3 (f) Notwithstanding any other provision of the Tax Code, an
10-4 agreement entered into under this section may:
10-5 (1) provide that eligible taxable proceeds need not be
10-6 paid to or collected by a governmental body, the tax
10-7 assessor-collector of a governmental body, or the comptroller but
10-8 may be paid to, collected by, or retained by the owner of a
10-9 qualified hotel project;
10-10 (2) require the owner of a qualified hotel project to
10-11 file periodic reports with the governmental body that include
10-12 detailed information relating to the total amount of eligible
10-13 taxable proceeds collected and retained by the owner during the
10-14 reporting period; and
10-15 (3) require the owner to keep and retain records
10-16 relating to the total amount of eligible taxable proceeds collected
10-17 and retained by the owner.
10-18 (g) A governmental body that enters into an agreement under
10-19 this section may issue to each owner of a business located in a
10-20 qualified hotel project a certificate that requires each owner to
10-21 pay all eligible taxable proceeds directly to the owner of the
10-22 qualified hotel project in lieu of the payment or remittance of the
10-23 eligible taxable proceeds to the governmental body or the
10-24 comptroller.
10-25 SECTION 16. The change in law made by Sections 13, 14, and
10-26 15 of this Act does not affect taxes imposed before the effective
10-27 date of this Act, and the law in effect before that date is
11-1 continued in effect for purposes of the liability for and
11-2 collection of those taxes.
11-3 SECTION 17. This Act takes effect September 1, 1997.
11-4 SECTION 18. The importance of this legislation and the
11-5 crowded condition of the calendars in both houses create an
11-6 emergency and an imperative public necessity that the
11-7 constitutional rule requiring bills to be read on three several
11-8 days in each house be suspended, and this rule is hereby suspended.