1-1 By: Oliveira, Chavez (Senate Sponsor - Lucio) H.B. No. 1916
1-2 (In the Senate - Received from the House May 5, 1999;
1-3 May 6, 1999, read first time and referred to Committee on Economic
1-4 Development; May 14, 1999, reported favorably by the following
1-5 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to funding certain job training expenditures through taxes
1-9 collected by certain industrial development corporations.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 2(10), Development Corporation Act of
1-12 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
1-13 read as follows:
1-14 (10)(A) "Project" shall mean the land, buildings,
1-15 equipment, facilities, and improvements (one or more) found by the
1-16 board of directors to be required or suitable for the promotion of
1-17 development and expansion of manufacturing and industrial
1-18 facilities, transportation facilities (including but not limited to
1-19 airports, ports, mass commuting facilities, and parking
1-20 facilities), sewage or solid waste disposal facilities, recycling
1-21 facilities, air or water pollution control facilities, facilities
1-22 for the furnishing of water to the general public, distribution
1-23 centers, and small warehouse facilities capable of serving as
1-24 decentralized storage and distribution centers, and for the
1-25 promotion of development or redevelopment and expansion, including
1-26 costs of administration and operation, of a military base closed or
1-27 realigned pursuant to recommendation of the Defense Closure and
1-28 Realignment Commission pursuant to the Defense Base Closure and
1-29 Realignment Act of 1990 (10 U.S.C. Section 2687 note) as amended,
1-30 and of facilities which are related to any of the foregoing, and in
1-31 furtherance of the public purposes of this Act, all as defined in
1-32 the rules of the department, irrespective of whether in existence
1-33 or required to be identified, acquired, or constructed thereafter.
1-34 "Project" also includes job training required or
1-35 suitable for the promotion of development and expansion of business
1-36 enterprises and other enterprises described by this Act, as
1-37 provided by Section 38 of this Act.
1-38 (B) As used in this Act, the term "development
1-39 areas" shall mean any area or areas of a city that the city finds
1-40 and determines, after a public hearing, should be developed in
1-41 order to meet the development objectives of the city. In addition,
1-42 in blighted or economically depressed areas, development areas,
1-43 federally designated empowerment zones and enterprise communities
1-44 designated under Section 1391, Internal Revenue Code of 1986, or
1-45 federally assisted new communities located within a home-rule city
1-46 or a federally designated economically depressed county of less
1-47 than 50,000 persons according to the last federal decennial census,
1-48 a project may include the land, buildings, equipment, facilities,
1-49 and improvements (one or more) found by the board of directors to
1-50 be required or suitable for the promotion of commercial development
1-51 and expansion and in furtherance of the public purposes of this
1-52 Act, or for use by commercial enterprises, all as defined in the
1-53 rules of the department, irrespective of whether in existence or
1-54 required to be acquired or constructed thereafter.
1-55 (C) As used in this Act, the term blighted or
1-56 economically depressed areas shall mean those areas and areas
1-57 immediately adjacent thereto within a city which by reason of the
1-58 presence of a substantial number of substandard, slum,
1-59 deteriorated, or deteriorating structures, or which suffer from a
1-60 high relative rate of unemployment, or which have been designated
1-61 and included in a tax incremental district created under Chapter
1-62 695, Acts of the 66th Legislature, Regular Session, 1979 (Article
1-63 1066d, Vernon's Texas Civil Statutes), or any combination of the
1-64 foregoing, the city finds and determines, after a hearing,
2-1 substantially impair or arrest the sound growth of the city, or
2-2 constitute an economic or social liability and are a menace to the
2-3 public health, safety, or welfare in their present condition and
2-4 use. The department shall adopt guidelines that describe the kinds
2-5 of areas that may be considered to be blighted or economically
2-6 depressed. The city shall consider these guidelines in making its
2-7 findings and determinations. Notice of the hearing at which the
2-8 city considers establishment of a development area or an
2-9 economically depressed or blighted area shall be posted at the city
2-10 hall before the hearing.
2-11 "Federally assisted new communities" shall mean those
2-12 federally assisted areas which have received or will receive
2-13 assistance in the form of loan guarantees unter Title X of the
2-14 National Housing Act and a portion of the federally assisted area
2-15 has received grants under Section 107(a)(1) of the Housing and
2-16 Community Development Act of 1974, as amended.
2-17 SECTION 2. Section 3, Development Corporation Act of 1979
2-18 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to read
2-19 as follows:
2-20 Sec. 3. (a) It is hereby found, determined, and declared:
2-21 (1) that the present and prospective right to gainful
2-22 employment and general welfare of the people of this state require
2-23 as a public purpose the promotion and development of new and
2-24 expanded business enterprises and the promotion and development of
2-25 job training;
2-26 (2) that the existence, development, and expansion of
2-27 business, commerce, [and] industry, and job training are essential
2-28 to the economic growth of the state and to the full employment,
2-29 welfare, and prosperity of its citizens;
2-30 (3) that the means and measures authorized by this Act
2-31 and the assistance provided in this Act, especially with respect to
2-32 financing, are in the public interest and serve a public purpose of
2-33 the state in promoting the welfare of the citizens of the state
2-34 economically by the securing and retaining of business enterprises
2-35 and the resulting maintenance of a higher level of employment,
2-36 economic activity, and stability;
2-37 (4) that community industrial development corporations
2-38 in Texas have themselves invested substantial funds in successful
2-39 industrial development projects and have experienced difficulty in
2-40 undertaking such additional projects by reason of the partial
2-41 inadequacy of their own funds or funds potentially available from
2-42 local subscription sources and by reason of limitations of local
2-43 financial institutions in providing additional and sufficiently
2-44 sizable first mortgage loans; and
2-45 (5) that communities in this state are at a critical
2-46 disadvantage in competing with communities in other states for the
2-47 location or expansion of such enterprises by virtue of the
2-48 availability and prevalent use in all other states of financing and
2-49 other special incentives; therefore, the issuance of revenue bonds
2-50 by corporations on behalf of political subdivisions of the state as
2-51 hereinafter provided for the promotion and development of new and
2-52 expanded business enterprises to provide and encourage employment
2-53 and the public welfare is hereby declared to be in the public
2-54 interest and a public purpose.
2-55 (b) This Act shall be liberally construed in conformity with
2-56 the intention of the legislature herein expressed.
2-57 SECTION 3. Section 4A(f), Development Corporation Act of
2-58 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
2-59 read as follows:
2-60 (f) On receipt of the proceeds of the sales and use tax
2-61 imposed under this section from the comptroller, the city shall
2-62 deliver the proceeds to the corporation to use in carrying out its
2-63 functions. Tax proceeds may be used to pay the principal of,
2-64 interest on, and other costs relating to the corporation's bonds,
2-65 but neither the bonds nor any instrument related to the bonds may
2-66 give a bondholder a right to demand payment from tax proceeds in
2-67 excess of those collected from the tax imposed by this section.
2-68 Tax proceeds may also be used to pay expenses incurred by the
2-69 corporation under Section 38 of this Act relating to job training.
3-1 SECTION 4. Section 4B(a)(2), Development Corporation Act of
3-2 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
3-3 read as follows:
3-4 (2) "Project" means land, buildings, equipment,
3-5 facilities, and improvements included in the definition of that
3-6 term under Section 2 of this Act, and includes job training as
3-7 provided by Section 38 of this Act. For purposes of this section,
3-8 the term includes [including] recycling facilities, and land,
3-9 buildings, equipment, facilities, and improvements found by the
3-10 board of directors to:
3-11 (A) be required or suitable for use for
3-12 professional and amateur (including children's) sports, athletic,
3-13 entertainment, tourist, convention, and public park purposes and
3-14 events, including stadiums, ball parks, auditoriums, amphitheaters,
3-15 concert halls, learning centers, parks and park facilities, open
3-16 space improvements, municipal buildings, museums, exhibition
3-17 facilities, and related store, restaurant, concession, and
3-18 automobile parking facilities, related area transportation
3-19 facilities, and related roads, streets, and water and sewer
3-20 facilities, and other related improvements that enhance any of
3-21 those items;
3-22 (B) promote or develop new or expanded business
3-23 enterprises, including a project to provide public safety
3-24 facilities, streets and roads, drainage and related improvements,
3-25 demolition of existing structures, general municipally owned
3-26 improvements, as well as any improvements or facilities that are
3-27 related to any of those projects and any other project that the
3-28 board in its discretion determines promotes or develops new or
3-29 expanded business enterprises; or
3-30 (C) be required or suitable for the promotion of
3-31 development and expansion of affordable housing, as defined by 42
3-32 U.S.C. Section 12745.
3-33 SECTION 5. Section 4C(b), Development Corporation Act of
3-34 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
3-35 read as follows:
3-36 (b) The reporting form shall not exceed one page in length
3-37 and must include:
3-38 (1) a statement of the corporation's primary economic
3-39 development objectives;
3-40 (2) a statement of the corporation's total revenues
3-41 during the preceding fiscal year;
3-42 (3) a statement of the corporation's total
3-43 expenditures during the preceding fiscal year;
3-44 (4) a statement of the corporation's total
3-45 expenditures during the preceding fiscal year in each of the
3-46 following categories:
3-47 (A) administration;
3-48 (B) personnel;
3-49 (C) marketing or promotion;
3-50 (D) direct business incentives;
3-51 (E) job training;
3-52 (F) debt service;
3-53 (G) [(F)] capital costs;
3-54 (H) [(G)] affordable housing; and
3-55 (I) [(H)] payments to taxing units, including
3-56 school districts;
3-57 (5) a list of the corporation's capital assets,
3-58 including land and buildings; and
3-59 (6) any other information the comptroller requires to
3-60 determine the use of the sales and use tax imposed under Section 4A
3-61 or 4B of this Act to encourage economic development in this state.
3-62 SECTION 6. The Development Corporation Act of 1979 (Article
3-63 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
3-64 38 to read as follows:
3-65 Sec. 38. (a) In this section, "average weekly wage" has the
3-66 meaning defined by the labor market information division of the
3-67 Texas Workforce Commission.
3-68 (b) Except as provided by Subsection (c) of this section, a
3-69 corporation may spend tax revenue received under this Act for job
4-1 training offered through a business enterprise only if the business
4-2 enterprise has committed in writing to create new jobs that pay at
4-3 least the average weekly wage for the county in which the jobs are
4-4 to be located.
4-5 (c) In a county in which the unemployment rate for the
4-6 preceding calendar year equals or exceeds 1.5 times the state
4-7 average unemployment rate for the preceding calendar year, a
4-8 corporation may spend tax revenue received under this Act for job
4-9 training offered through a business enterprise only if the business
4-10 enterprise has committed in writing to create new jobs that pay at
4-11 least 90 percent of the average weekly wage for the county in which
4-12 the jobs are to be located.
4-13 (d) A corporation may not spend tax revenue received under
4-14 this Act for job training in an amount that exceeds more than
4-15 one-half the actual cost of the job training.
4-16 (e) Unless the project is located in a county in which the
4-17 unemployment rate for the preceding calendar year equals or exceeds
4-18 1.5 times the state average unemployment rate for the preceding
4-19 calendar year, a corporation may not spend tax revenue received
4-20 under this Act for job training if other state or federal funds
4-21 dedicated to job training are used in the project.
4-22 SECTION 7. The importance of this legislation and the
4-23 crowded condition of the calendars in both houses create an
4-24 emergency and an imperative public necessity that the
4-25 constitutional rule requiring bills to be read on three several
4-26 days in each house be suspended, and this rule is hereby suspended,
4-27 and that this Act take effect and be in force from and after its
4-28 passage, and it is so enacted.
4-29 * * * * *