1-1 AN ACT
1-2 relating to the enterprise zones and certain projects in enterprise
1-3 zones.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2303.052(d), Government Code, is amended
1-6 to read as follows:
1-7 (d) On or before December 15 [1] of each year the department
1-8 shall submit to the governor, the legislature, and the Legislative
1-9 Budget Board a report that:
1-10 (1) evaluates the effectiveness of the enterprise zone
1-11 program;
1-12 (2) describes the use of state and local incentives
1-13 under this chapter and their effect on revenue; and
1-14 (3) suggests legislation.
1-15 SECTION 2. Section 2303.0525(a), Government Code, is amended
1-16 to read as follows:
1-17 (a) On or before December 15 [1] of each even-numbered year,
1-18 the department shall prepare a cost-benefit analysis of the
1-19 enterprise zone program.
1-20 SECTION 3. Sections 2303.104(b) and (c), Government Code,
1-21 are amended to read as follows:
1-22 (b) At least three [one] of the incentives summarized under
1-23 Subsection (a)(3) must not apply throughout the governmental entity
1-24 or entities nominating the area as an enterprise zone. At least
2-1 two of the incentives summarized under Subsection (a)(3) must be
2-2 financial incentives.
2-3 (c) This section does not prohibit a municipality or county
2-4 from extending additional incentives, including tax incentives, for
2-5 business enterprises in an enterprise zone by a separate ordinance
2-6 or order or by a written agreement.
2-7 SECTION 4. Section 2303.401, Government Code, is amended to
2-8 read as follows:
2-9 Sec. 2303.401. DEFINITIONS [DEFINITION]. In this
2-10 subchapter:
2-11 (1) "New[, "new] permanent job" means a new employment
2-12 position created by a qualified business as described by Section
2-13 2303.402 that:
2-14 (A) [(1)] has provided at least 1,820 hours of
2-15 employment a year to a qualified employee; and
2-16 (B) [(2)] is intended to exist during the period
2-17 that the qualified business is designated as an enterprise project
2-18 under Section 2303.406.
2-19 (2) "Retained job" means a job that existed with a
2-20 qualified business before designation as an enterprise project
2-21 that:
2-22 (A) has provided employment to a qualified
2-23 employee of at least 1,820 hours annually; and
2-24 (B) is intended to be an employment position
2-25 retained during the period the business is designated as an
2-26 enterprise project in accordance with Chapter 151, Tax Code.
2-27 SECTION 5. Section 2303.403, Government Code, is amended to
3-1 read as follows:
3-2 Sec. 2303.403. Prohibition on Qualified Business
3-3 Certification. If the department determines that the governing
3-4 body of an enterprise zone is not complying with this chapter, the
3-5 department shall prohibit the certification of a qualified business
3-6 in the zone until the department determines that the governing body
3-7 is complying with this chapter. The department may not designate
3-8 more than 65 businesses as enterprise projects during the [any]
3-9 biennium beginning September 1, 1997, or September 1, 1999. The
3-10 department in its discretion may withhold up to five project slots
3-11 from designation.
3-12 SECTION 6. Sections 2303.406(a) and (b), Government Code,
3-13 are amended to read as follows:
3-14 (a) The department may designate a business as an enterprise
3-15 project only if the department determines that:
3-16 (1) the business is a qualified business under Section
3-17 2303.402 that:
3-18 (A) is located in or has made a substantial
3-19 commitment to locate in an enterprise zone described by Section
3-20 2303.404(b); and
3-21 (B) has made a commitment to create or retain at
3-22 least:
3-23 (i) 10 jobs, if the company is locating in
3-24 an enterprise zone in which the community has a population equal to
3-25 or less than 50,000, according to the most recent estimates based
3-26 on the most recent decennial census provided by the State Data
3-27 Center; or
4-1 (ii) 25 jobs, if the company is locating
4-2 in an enterprise zone in which the community has a population of
4-3 more than 50,000, according to the most recent estimates based on
4-4 the most recent decennial census provided by the State Data Center;
4-5 (2) the governing body of the enterprise zone making
4-6 the application has demonstrated that a high level of cooperation
4-7 exists among public, private, and neighborhood entities in the
4-8 zone; and
4-9 (3) the designation will contribute significantly to
4-10 the achievement of the plans of the governing body making the
4-11 application for development and revitalization of the zone.
4-12 (b) The department shall designate qualified businesses as
4-13 enterprise projects on a competitive basis. The department shall
4-14 establish a minimum scoring threshold that must be met by the
4-15 qualified business applying for a project designation and make its
4-16 designation decisions using a weighted scale in which:
4-17 (1) 40 [50] percent of the evaluation depends on the
4-18 economic distress of:
4-19 (A) the enterprise zone in which a proposed
4-20 enterprise project is located; and
4-21 (B) the area within the enterprise zone where
4-22 the project is located;
4-23 (2) 15 [25] percent of the evaluation depends on the
4-24 local public effort used for the project to achieve development and
4-25 revitalization of the enterprise zone; [and]
4-26 (3) 20 [25] percent of the evaluation depends on the
4-27 [evaluation criteria as determined by the department, which must
5-1 include:]
5-2 [(A) the] level of cooperation and support the
5-3 project applicant commits to the revitalization goals of the zone;
5-4 (4) 10 percent of the evaluation depends on the amount
5-5 of capital investment; and
5-6 (5) 15 percent of the evaluation depends on
5-7 [(B)] the type and wage level in relation to the
5-8 prevailing wage for that occupation in the local labor market area
5-9 of the jobs to be created or retained by the business.
5-10 SECTION 7. Section 2303.511(b), Government Code, is amended
5-11 to read as follows:
5-12 (b) A reduction in utility rates under Subsection (a)(9)(B)
5-13 is subject to the agreement of the affected utility and the
5-14 approval of the appropriate regulatory authority under Sections 16
5-15 and 17, Public Utility Regulatory Act (Article 1446c, Vernon's
5-16 Texas Civil Statutes). The rates may [not] be reduced up to but
5-17 not more than five percent below the lowest rate allowable for that
5-18 customer class [offered to any customer located in the enterprise
5-19 zone, including economic development rates and standby rates]. A
5-20 qualified enterprise project or the governing body of the
5-21 enterprise zone may petition the appropriate utility and the
5-22 appropriate regulatory authority to receive a reduced rate under
5-23 this section, and the regulatory authority may order that rates be
5-24 reduced. In making its determination under this section, the
5-25 regulatory authority shall consider revitalization goals for the
5-26 enterprise zone. In setting the rates of the utility the
5-27 appropriate regulatory authority shall allow the utility to recover
6-1 the amount of the reduction.
6-2 SECTION 8. Sections 151.429(a) and (g), Tax Code, are
6-3 amended to read as follows:
6-4 (a) An enterprise project is eligible for a refund in the
6-5 amount provided by this section of the taxes imposed by this
6-6 chapter on purchases of:
6-7 (1) equipment or machinery sold to, repaired for, or
6-8 rented by an enterprise project for use in an enterprise zone;
6-9 (2) building materials sold to an enterprise project
6-10 for use in remodeling, rehabilitating, or constructing a structure
6-11 in an enterprise zone;
6-12 (3) labor for remodeling, rehabilitating, or
6-13 constructing a structure by an enterprise project in an enterprise
6-14 zone; and
6-15 (4) electricity and natural gas purchased and consumed
6-16 in the normal course of business in the enterprise zone, including
6-17 electricity and natural gas used in leased or rented facilities
6-18 where the utility account is in the name of the landlord who meters
6-19 and directly passes through the itemized charges, including sales
6-20 tax, for the electricity and natural gas used by the project to the
6-21 owner of the enterprise project.
6-22 (g) The refund provided by this section is conditioned on
6-23 the enterprise project maintaining at least the same level of
6-24 employment of qualified employees as existed at the time it
6-25 qualified for a refund for a period of three years from that date.
6-26 The Texas Department of Commerce shall annually certify to the
6-27 comptroller [and the Legislative Budget Board] whether that level
7-1 of employment of qualified employees has been maintained. On the
7-2 Texas Department of Commerce certifying that such a level has not
7-3 been maintained, the comptroller shall assess that portion of the
7-4 refund attributable to any such decrease in employment, including
7-5 penalty and interest from the date of the refund.
7-6 SECTION 9. Section 171.1015(g), Tax Code, is amended to read
7-7 as follows:
7-8 (g) Only enterprise projects [qualified businesses] that
7-9 have been certified as eligible for a tax deduction under this
7-10 section by the Texas Department of Commerce to the comptroller may
7-11 apply for [and the Legislative Budget Board are entitled to] the
7-12 tax deduction.
7-13 SECTION 10. Section 351.001(2), Tax Code, is amended to read
7-14 as follows:
7-15 (2) "Convention center facilities" or "convention
7-16 center complex" means civic centers, civic center buildings,
7-17 auditoriums, exhibition halls, and coliseums that are owned by the
7-18 municipality or other governmental entity or that are managed in
7-19 whole or part by the municipality, hotels owned by the municipality
7-20 or a nonprofit municipally sponsored local government corporation
7-21 created pursuant to the Texas Transportation Corporation Act
7-22 (Article 1528l, Vernon's Texas Civil Statutes) within 1,000 feet of
7-23 a convention center owned by a municipality or county with a
7-24 population of 440,000 [1,500,000] or more, or a historic hotel
7-25 owned by a municipality or a nonprofit municipally sponsored local
7-26 government corporation created pursuant to the Texas Transportation
7-27 Corporation Act (Article 1528l, Vernon's Texas Civil Statutes)
8-1 within one mile of a convention center owned by a municipality or
8-2 county with a population of 440,000 [1,500,000] or more. The term
8-3 includes parking areas or facilities that are for the parking or
8-4 storage of conveyances and that are located at or in the vicinity
8-5 of other convention center facilities.
8-6 SECTION 11. Section 351.102(a), Tax Code, is amended to read
8-7 as follows:
8-8 (a) Subject to the limitations provided by this subchapter,
8-9 a municipality may pledge the revenue derived from the tax imposed
8-10 under this chapter for the payment of bonds that are issued under
8-11 Section 3, Chapter 63, Acts of the 59th Legislature, Regular
8-12 Session, 1965 (Article 1269j-4.1, Vernon's Texas Civil Statutes),
8-13 for one or more of the purposes provided by Section 351.101 or, in
8-14 the case of a municipality of 440,000 [1,500,000] or more, for the
8-15 payment of principal of or interest on bonds or other obligations
8-16 of a municipality or of a municipally sponsored local government
8-17 corporation created pursuant to the Texas Transportation
8-18 Corporation Act (Article 1528l, Vernon's Texas Civil Statutes) that
8-19 were issued to pay the cost of the acquisition and construction of
8-20 a convention center hotel or the cost of acquisition, remodeling,
8-21 or rehabilitation of a historic hotel structure; provided, however,
8-22 such pledge may only be that portion of the tax collected at such
8-23 hotel.
8-24 SECTION 12. Section 2(a), Chapter 63, Acts of the 59th
8-25 Legislature, Regular Session, 1965 (Article 1269j-4.1, Vernon's
8-26 Texas Civil Statutes), is amended to read as follows:
8-27 (a) Any such city is hereby authorized to establish,
9-1 acquire, lease as lessee or lessor, purchase, construct, improve,
9-2 enlarge, equip, repair, operate or maintain (any or all)
9-3 improvements such as civic centers, civic center buildings,
9-4 auditoriums, opera houses, music halls, exhibition halls,
9-5 coliseums, museums, libraries, or other city buildings (either or
9-6 all), golf courses, tennis courts, and other similar recreational
9-7 facilities, hotels owned by a municipality or a nonprofit
9-8 municipally sponsored local government corporation created pursuant
9-9 to the Texas Transportation Corporation Act (Article 1528l,
9-10 Vernon's Texas Civil Statutes) within 1,000 feet of a convention
9-11 center owned by a municipality or county with a population of
9-12 440,000 [1,500,000] or more, or a historic hotel owned by a
9-13 municipality or a nonprofit municipally sponsored local government
9-14 corporation created pursuant to the Texas Transportation
9-15 Corporation Act (Article 1528l, Vernon's Texas Civil Statutes)
9-16 within one mile of a convention center owned by a municipality or
9-17 county with a population of 440,000 [1,500,000] or more, and to
9-18 establish, acquire, lease as lessee or lessor, purchase, construct,
9-19 improve, enlarge, equip, repair, operate or maintain (any or all)
9-20 structures, parking areas, or facilities, located at or in the
9-21 immediate vicinity of such public improvements, to be used in
9-22 connection with such improvements for off-street parking or storage
9-23 of motor vehicles or other conveyances; and provided that any such
9-24 lease shall be on such terms and conditions as said city shall deem
9-25 appropriate.
9-26 SECTION 13. Section 2303.003(8), Government Code, is amended
9-27 to read as follows:
10-1 (8) "Qualified hotel project" means a hotel proposed
10-2 to be constructed by a municipality or a nonprofit municipally
10-3 sponsored local government corporation created under the Texas
10-4 Transportation Corporation Act (Article 1528l, Vernon's Texas Civil
10-5 Statutes) that is within 1,000 feet of a convention center owned by
10-6 a municipality having a population of 440,000 [1,500,000] or more
10-7 or owned by a county containing a municipality having a population
10-8 of 440,000 or more, including shops, parking facilities, and any
10-9 other facilities ancillary to the hotel.
10-10 SECTION 14. Section 151.429, Tax Code, is amended by adding
10-11 Subsections (i) and (j) to read as follows:
10-12 (i) Only one qualified hotel project as defined under
10-13 Chapter 2303.003(8), Government Code, may be constructed in each
10-14 eligible municipality with a population of less than 1,500,000,
10-15 however, the qualified hotel project under this subsection shall
10-16 not be entitled to the sales tax refund or rebate contained in
10-17 Subsection (h).
10-18 (j) Subsections (h) and (i) expire December 31, 2001. A
10-19 project that is eligible under Subsection (h) before December 31,
10-20 2001, shall continue to receive any rebates, refunds, or payments
10-21 through the first 10 years after such project is open for initial
10-22 occupancy as stated by the law in effect at that time.
10-23 SECTION 15. Section 2303.5055(b), Government Code, is
10-24 amended to read as follows:
10-25 (b) A municipality with a population of 440,000 [1,500,000]
10-26 or more may agree to guarantee from hotel occupancy taxes the bonds
10-27 or other obligations of a municipality or of a municipally
11-1 sponsored local government corporation created under the Texas
11-2 Transportation Corporation Act (Article 1528l, Vernon's Texas Civil
11-3 Statutes) that were issued or incurred to pay the cost of
11-4 construction, remodeling, or rehabilitation of a qualified hotel
11-5 project.
11-6 SECTION 16. Section 2303.0525(b), Section 2303.0525(c),
11-7 Section 2303.110(d), Government Code, and Section 171.501, Tax
11-8 Code, are repealed.
11-9 SECTION 17. (a) An enterprise project designated under
11-10 Chapter 2303, Government Code, after August 31, 1997, may not
11-11 receive a tax refund under Section 151.429, Tax Code, as amended by
11-12 this Act, or a tax reduction under Section 171.1015, Tax Code,
11-13 before September 1, 1999.
11-14 (b) An enterprise project designated under Chapter 2303,
11-15 Government Code, after August 31, 1999, may not receive a tax
11-16 refund under Section 151.429, Tax Code, as amended by this Act, or
11-17 a tax reduction under Section 171.1015, Tax Code, before
11-18 September 1, 2001.
11-19 (c) Not more than $8 million in state sales and use taxes
11-20 may be refunded to enterprise projects during any biennium.
11-21 SECTION 18. This Act takes effect September 1, 1997.
11-22 SECTION 19. The importance of this legislation and the
11-23 crowded condition of the calendars in both houses create an
11-24 emergency and an imperative public necessity that the
11-25 constitutional rule requiring bills to be read on three several
11-26 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2001 was passed by the House on May
5, 1997, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 2001 on May 29, 1997, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 2001 on June 1, 1997, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2001 was passed by the Senate, with
amendments, on May 27, 1997, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 2001 on June 1, 1997,
by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor