By Gallegos S.B. No. 1860
75R6252 BEM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of commercial and industrial development
1-3 zones; providing for the power of eminent domain and the issuance
1-4 of bonds.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle G, Title 10, Government Code, is amended
1-7 by adding Chapter 2310 to read as follows:
1-8 CHAPTER 2310. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 2310.001. PURPOSES. The purposes of this chapter are
1-11 to establish a process that clearly identifies severely distressed
1-12 areas of the state as well as other areas that would be benefited
1-13 by increased economic development or redevelopment, to provide
1-14 incentives by federal, state, and local government to induce
1-15 private reinvestment in those areas by removing unnecessary
1-16 governmental regulatory barriers to economic growth, and to provide
1-17 tax incentives and economic development program benefits.
1-18 Sec. 2310.002. DEFINITIONS. In this chapter:
1-19 (1) "Department" means the Texas Department of
1-20 Commerce.
1-21 (2) "Development zone" means an area designated as a
1-22 commercial and industrial development zone under this chapter.
1-23 Sec. 2310.003. DEPARTMENT POWERS AND DUTIES. (a) The
1-24 department shall administer and monitor the implementation of this
2-1 chapter.
2-2 (b) The department shall establish criteria and procedures
2-3 for designating a qualified area as a commercial and industrial
2-4 development zone.
2-5 (c) The department shall adopt rules necessary to carry out
2-6 the purposes of this chapter.
2-7 (Sections 2310.004-2310.100 reserved for expansion
2-8 SUBCHAPTER B. DESIGNATION OF COMMERCIAL AND
2-9 INDUSTRIAL DEVELOPMENT ZONE
2-10 Sec. 2310.101. CRITERIA FOR DEVELOPMENT ZONE DESIGNATION.
2-11 (a) To be designated as a development zone an area must:
2-12 (1) have a continuous boundary;
2-13 (2) be at least one square mile but not larger than
2-14 the greater of:
2-15 (A) 10 square miles, excluding lakes, waterways,
2-16 and transportation arteries; or
2-17 (B) an area that is equal to five percent of the
2-18 area, excluding lakes, waterways, and transportation arteries, of
2-19 the municipality, county, or combination of municipalities or
2-20 counties nominating the area as a development zone;
2-21 (3) be an area of pervasive poverty, unemployment, and
2-22 economic distress;
2-23 (4) be located in a county with a population of 2.5
2-24 million or more;
2-25 (5) be adjacent to major transportation nodes and
2-26 thoroughfares that may be used for exporting products to major
2-27 airports, railways, and ports; and
3-1 (6) be nominated as a development zone by an ordinance
3-2 or order adopted by the nominating body.
3-3 (b) The department may designate not more than three
3-4 development zones within the boundaries of a municipality and not
3-5 more than three development zones in the unincorporated areas of a
3-6 county. Designation of a development zone in a municipality or
3-7 county does not affect the number of enterprise zones that may be
3-8 designated in the municipality or county under Chapter 2303.
3-9 Sec. 2310.102. AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, AND
3-10 ECONOMIC DISTRESS. An area is an area of pervasive poverty,
3-11 unemployment, and economic distress for the purposes of Section
3-12 2310.101 if it meets the requirements of Section 2303.102.
3-13 Sec. 2310.103. NOMINATION OF DEVELOPMENT ZONE. (a) The
3-14 governing body of a municipality or county, individually or in
3-15 combination with other municipalities or counties, by ordinance or
3-16 order, as appropriate, may nominate as a development zone an area
3-17 within its jurisdiction that meets the criteria under Section
3-18 2310.101.
3-19 (b) Unless the nominating body holds a public hearing before
3-20 adopting an ordinance or order under this section, the ordinance or
3-21 order is not valid.
3-22 (c) The governing body of a county may not nominate
3-23 territory in a municipality, including extraterritorial
3-24 jurisdiction of a municipality, to be included in a proposed
3-25 development zone unless the governing body of the municipality also
3-26 nominates the territory and together with the county files a joint
3-27 application under Section 2310.105.
4-1 (d) The governing bodies of a combination of municipalities
4-2 or counties may not jointly nominate an area as a development zone
4-3 unless the governing bodies have entered into a binding agreement
4-4 to administer the zone jointly.
4-5 (e) Notwithstanding Subsections (c) and (d), the governing
4-6 body of a county may nominate territory in that county that is in
4-7 the extraterritorial jurisdiction of a municipality to be included
4-8 in one or more of the county's development zones, and the county
4-9 shall administer a zone that is established as a result of the
4-10 nomination.
4-11 Sec. 2310.104. NOMINATING ORDINANCE OR ORDER. (a) An
4-12 ordinance or order nominating an area as a development zone must:
4-13 (1) describe precisely the area to be included in the
4-14 zone by a legal description or by reference to roadways, lakes,
4-15 waterways, or municipal or county boundaries;
4-16 (2) state a finding that the area meets the
4-17 requirements of this chapter;
4-18 (3) summarize briefly the incentives, including tax
4-19 incentives, that, at the election of the nominating body, apply to
4-20 business enterprises in the area; and
4-21 (4) nominate the area as a development zone.
4-22 (b) At least one of the incentives summarized under
4-23 Subsection (a)(3) must not apply throughout the governmental entity
4-24 or entities nominating the area as a development zone.
4-25 (c) This section does not prohibit a municipality or county
4-26 from extending additional incentives, including tax incentives, to
4-27 business enterprises in a development zone by a separate ordinance
5-1 or order.
5-2 Sec. 2310.105. APPLICATION FOR DESIGNATION. (a) For an
5-3 area to be designated as a development zone, the nominating body,
5-4 after nominating the area as a development zone, must send to the
5-5 department a written application for designation of the area as a
5-6 development zone.
5-7 (b) The application must include:
5-8 (1) a certified copy of the ordinance or order, as
5-9 appropriate, nominating the area as a development zone;
5-10 (2) a map of the area showing existing streets and
5-11 highways;
5-12 (3) an analysis and appropriate supporting documents
5-13 and statistics demonstrating that the area qualifies for
5-14 designation as a development zone;
5-15 (4) a statement that specifies each tax incentive,
5-16 grant, other financial incentive or benefit, or program to be
5-17 provided by the nominating body to business enterprises in the area
5-18 that is not to be provided throughout the governmental entity or
5-19 entities nominating the area as a development zone;
5-20 (5) a statement of the economic development and
5-21 planning objectives for the area;
5-22 (6) an estimate of the economic impact of the
5-23 designation of the area as a development zone on the revenues of
5-24 the governmental entity or entities nominating the area as a
5-25 development zone, considering all the financial incentives and
5-26 benefits and the programs contemplated;
5-27 (7) a transcript or tape recording of all public
6-1 hearings on the proposed zone;
6-2 (8) if the application is a joint application, a
6-3 description and copy of the agreement between the applicants;
6-4 (9) the procedures for negotiating with residents,
6-5 community groups, and other entities affected by the designation of
6-6 the area as a development zone and with qualified businesses in the
6-7 area;
6-8 (10) a description of the administrative authority, if
6-9 one is to be appointed for the development zone; and
6-10 (11) any additional information the department
6-11 requires.
6-12 (c) Information required by Subsection (b) is for evaluation
6-13 purposes only.
6-14 Sec. 2310.106. Review of Application. (a) On receipt of an
6-15 application for the designation of a development zone, the
6-16 department shall review the application to determine if the
6-17 nominated area qualifies for designation as a development zone
6-18 under this chapter.
6-19 (b) The department shall allow an applicant to correct any
6-20 omission or clerical error in the application and return the
6-21 application to the department on or before the 10th day after the
6-22 date on which the department receives the application.
6-23 Sec. 2310.107. DESIGNATION AGREEMENT. (a) If the
6-24 department determines that a nominated area for which a designation
6-25 application has been received satisfies the criteria under Section
6-26 2310.101, the department shall negotiate with the nominating body
6-27 for a designation agreement.
7-1 (b) A designation agreement must:
7-2 (1) designate the nominated area as a development
7-3 zone; and
7-4 (2) describe the functions and duties of the board of
7-5 directors of the zone, which should include decision-making
7-6 authority and the authority to negotiate with affected entities.
7-7 (c) The department shall complete the negotiations and sign
7-8 the agreement not later than the 60th day after the date on which
7-9 the application is received unless the department extends that
7-10 period to the 90th day after the date on which the application was
7-11 received.
7-12 (d) If an agreement is not completed within the 60-day
7-13 period provided by Subsection (c), the department shall provide to
7-14 the nominating body the specific areas of concern and a final
7-15 proposal for the agreement.
7-16 (e) If the agreement is not executed before the 91st day
7-17 after the date on which the application was received, the
7-18 application is considered to be denied.
7-19 Sec. 2310.108. DENIAL OF APPLICATION; NOTICE. (a) The
7-20 department may deny an application for the designation of a
7-21 development zone only if the department determines that the
7-22 nominated area does not satisfy the criteria under Section
7-23 2310.101.
7-24 (b) The department shall inform the nominating body of the
7-25 specific reasons for denial of an application, including denial
7-26 under Section 2310.107(e).
7-27 Sec. 2310.109. PERIOD OF DESIGNATION. (a) An area may be
8-1 designated as a development zone for a maximum of seven years. A
8-2 designation remains in effect until September 1 of the final year
8-3 of the designation.
8-4 (b) Notwithstanding Subsection (a), an area designated as a
8-5 federal enterprise zone, federal empowerment zone, or federal
8-6 enterprise community may be designated as a development zone
8-7 without further qualification for longer than seven years but not
8-8 longer than the period permitted by federal law.
8-9 Sec. 2310.110. AMENDING BOUNDARIES. (a) The nominating
8-10 body may amend the boundary of a development zone by ordinance or
8-11 order, as appropriate, adopted after a public hearing on the issue.
8-12 (b) The amended boundary:
8-13 (1) must be continuous;
8-14 (2) may not exceed the original size requirement of
8-15 Section 2310.101; and
8-16 (3) may not exclude any area originally included
8-17 within the boundary of the zone as designated.
8-18 (c) The entire development zone with the amended boundary
8-19 must continue to meet the unemployment and economic distress
8-20 requirements of Section 2310.101.
8-21 (d) A nominating body may not make more than one boundary
8-22 amendment annually for a development zone.
8-23 (e) For each amendment of a development zone boundary, the
8-24 nominating body shall pay the department a reasonable fee, in an
8-25 amount specified by the department, not to exceed $500. The
8-26 department may use fees collected under this subsection to
8-27 administer this chapter and for other purposes to advance this
9-1 chapter.
9-2 Sec. 2310.111. REMOVAL OF DESIGNATION. (a) The department
9-3 may remove the designation of an area as a development zone if:
9-4 (1) the area no longer meets the criteria for
9-5 designation under this chapter or by department rule adopted under
9-6 this chapter; or
9-7 (2) the department determines that the governing body
9-8 of the development zone has not complied with commitments made in
9-9 the ordinance or order nominating the area as a development zone.
9-10 (b) The removal of a designation does not affect the
9-11 validity of:
9-12 (1) a tax incentive or regulatory relief granted or
9-13 accrued before the removal; or
9-14 (2) bonds issued under this chapter.
9-15 (Sections 2310.112-2310.200 reserved for expansion
9-16 SUBCHAPTER C. ADMINISTRATION OF DEVELOPMENT ZONE
9-17 Sec. 2310.201. BOARD OF DIRECTORS. (a) A development zone
9-18 is governed by a board of seven directors who serve four-year
9-19 terms. If the development zone does not include territory within a
9-20 municipality, the directors are appointed by the county
9-21 commissioners court. If the development zone includes territory
9-22 within a municipality:
9-23 (1) three directors shall be appointed by the
9-24 governing body of the municipality that includes the greatest part
9-25 of the zone's territory;
9-26 (2) two directors shall be appointed by the
9-27 commissioners court of the county in which the zone is located; and
10-1 (3) two directors shall be appointed jointly by other
10-2 municipalities that are included in the development zone territory,
10-3 except that if there are no other municipalities included in the
10-4 development zone territory, the municipality and county governing
10-5 bodies appoint one additional director each.
10-6 (b) Four directors shall be appointed to terms that expire
10-7 on September 1 of the second year after creation of the zone.
10-8 (c) Three directors shall be appointed to terms that expire
10-9 on September 1 of the fourth year after creation of the zone.
10-10 Sec. 2310.202. QUALIFICATIONS OF DIRECTORS. To serve as a
10-11 director, a person must be:
10-12 (1) at least 21 years old;
10-13 (2) a resident of this state; and
10-14 (3) a qualified voter in the county in which the
10-15 development zone is located.
10-16 Sec. 2310.203. PERSONS DISQUALIFIED FROM SERVING. Section
10-17 49.052, Water Code, applies to directors of a development zone
10-18 created under this chapter as if the zone were a district governed
10-19 by that section.
10-20 Sec. 2310.204. BOARD VACANCIES. A vacancy in the office of
10-21 director shall be filled by appointment by the entity that
10-22 appointed the vacating director.
10-23 Sec. 2310.205. REMOVAL OF DIRECTOR. The governing body of
10-24 the county or municipality, after notice and hearing, may bring an
10-25 action to remove a director for misconduct or failure to carry out
10-26 the director's duties on petition by a majority of the remaining
10-27 directors.
11-1 Sec. 2310.206. ORGANIZATION OF BOARD. After each
11-2 appointment and qualification of directors by the appointing
11-3 entities, the board shall organize by electing a president, a vice
11-4 president, a secretary, and any other officers the board considers
11-5 necessary.
11-6 Sec. 2310.207. QUORUM; OFFICERS' DUTIES; MANAGEMENT OF ZONE.
11-7 Sections 49.053, 49.057, and 49.058, Water Code, apply to the board
11-8 of directors of a development zone created under this chapter as if
11-9 the zone were a district governed by those sections.
11-10 Sec. 2310.208. MEETINGS AND NOTICE. (a) The board shall
11-11 designate and establish a development zone office in the county.
11-12 (b) The board may establish regular meetings to conduct zone
11-13 business and may hold special meetings at other times as the
11-14 business of a zone requires.
11-15 (c) Notice of the time, place, and purpose of any meeting of
11-16 the board shall be given by posting a notice containing that
11-17 information at a place convenient to the public within the zone. A
11-18 copy of the notice shall be furnished to the clerk or clerks of the
11-19 county in which the zone is located who shall post the notice on a
11-20 bulletin board in the county courthouse used for that purpose.
11-21 (d) Except as provided by this chapter, the open meetings
11-22 law, Chapter 551, Government Code, applies to meetings of the board
11-23 of directors.
11-24 Sec. 2310.209. DIRECTOR'S COMPENSATION; BOND AND OATH OF
11-25 OFFICE. Sections 375.067, 375.069, and 375.070, Local Government
11-26 Code, apply to directors of a development zone created under this
11-27 chapter as if the zone were a municipal management district.
12-1 Sec. 2310.210. GOVERNMENTAL AGENCY; SUITS. (a) A
12-2 development zone may, through its directors, sue and be sued in a
12-3 court of this state in the name of the development zone. Service
12-4 of process in any suit may be had by serving any two directors.
12-5 (b) Section 375.004, Local Government Code, applies to a
12-6 development zone created under this chapter as if the zone were a
12-7 municipal management district.
12-8 (Sections 2310.211-2310.300 reserved for expansion
12-9 SUBCHAPTER D. BENEFITS AND POWERS OF A DEVELOPMENT ZONE
12-10 Sec. 2310.301. BENEFITS. A development zone shall have all
12-11 the powers and benefits of an enterprise zone, including powers and
12-12 benefits relating to qualified businesses and enterprise projects,
12-13 under:
12-14 (1) Chapter 2303; and
12-15 (2) Chapters 151 and 171, Tax Code.
12-16 Sec. 2310.302. ADDITIONAL POWERS. (a) A development zone
12-17 may acquire and dispose of projects and has all of the other
12-18 powers, authority, rights, and duties necessary to permit
12-19 accomplishment of the purposes for which the zone was created.
12-20 (b) The development zone may provide for general promotion
12-21 and tourist advertising of the zone and its vicinity and conduct a
12-22 marketing program to attract visitors. Those activities may be
12-23 conducted by the zone under contracts for professional services
12-24 with persons or organizations selected by the zone.
12-25 (c) To the extent not inconsistent with this chapter, the
12-26 development zone has the powers of:
12-27 (1) a municipal management district created under
13-1 Chapter 375, Local Government Code; and
13-2 (2) a county commissioners court under Section
13-3 381.004, Local Government Code.
13-4 Sec. 2310.303. COMPETITIVE BIDDING; CONTRACT AWARD.
13-5 Sections 375.221 and 375.223, Local Government Code, apply to a
13-6 development zone created under this chapter as if the zone were a
13-7 municipal management district, except that a contract between the
13-8 development zone and a governmental entity or nonprofit corporation
13-9 created under the Development Corporation Act of 1979 (Article
13-10 5190.6, Vernon's Texas Civil Statutes) is not subject to the
13-11 competitive bidding requirement.
13-12 Sec. 2310.304. EMINENT DOMAIN. A development zone not
13-13 located within the corporate limits of a municipality may exercise
13-14 the power of eminent domain, as provided by Chapter 21, Property
13-15 Code, to acquire interests in land within the zone considered
13-16 necessary by the board of directors of the zone to provide water
13-17 and sewer services to an authorized project.
13-18 (Sections 2310.305-2310.400 reserved for expansion
13-19 SUBCHAPTER E. GENERAL FISCAL PROVISIONS
13-20 Sec. 2310.401. EXPENDITURES. A development zone's money may
13-21 be disbursed only by check, draft, order, or other instrument
13-22 signed by at least three directors. The general manager,
13-23 treasurer, or other employee of the development zone, if authorized
13-24 by resolution of the board, may sign checks, drafts, orders, or
13-25 other instruments on any development zone operation account on
13-26 behalf of the board.
13-27 SECTION 2. This Act takes effect September 1, 1997.
14-1 SECTION 3. The importance of this legislation and the
14-2 crowded condition of the calendars in both houses create an
14-3 emergency and an imperative public necessity that the
14-4 constitutional rule requiring bills to be read on three several
14-5 days in each house be suspended, and this rule is hereby suspended.