1-1 By: Oliveira, Seaman, Solis of Cameron H.B. No. 3658
1-2 (Senate Sponsor: Sibley)
1-3 (In the Senate - Received from the House May 13, 1999;
1-4 May 14, 1999, read first time and referred to Committee on Economic
1-5 Development; May 14, 1999, reported favorably by the following
1-6 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the enterprise zone program.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 2303.003, Government Code, is amended to
1-12 read as follows:
1-13 Sec. 2303.003. DEFINITIONS. In this chapter:
1-14 (1) "Day" means the period between 8 a.m. and 5 p.m.
1-15 of a day other than a Saturday, Sunday, or state or federal
1-16 holiday.
1-17 (2) "Department" means the Texas Department of
1-18 Economic Development [Commerce].
1-19 (3) "Enterprise zone" means an area designated as an
1-20 enterprise zone under this chapter.
1-21 (4) "Neighborhood enterprise association" means an
1-22 association certified as a neighborhood enterprise association
1-23 under Section 2303.302.
1-24 (5) "Nominating body" means the governing body of a
1-25 municipality or county, or a combination of the governing bodies of
1-26 municipalities or counties, that nominates and applies for
1-27 designation of an area as an enterprise zone.
1-28 (6) "Qualified business" means a person certified as a
1-29 qualified business under Section 2303.402.
1-30 (7) "Qualified employee" means a person who:
1-31 (A) works for a qualified business; and
1-32 (B) performs at least 50 percent of the person's
1-33 service for the business in the enterprise zone.
1-34 (8) "Qualified hotel project" means a hotel proposed
1-35 to be constructed by a municipality or a nonprofit municipally
1-36 sponsored local government corporation created under the Texas
1-37 Transportation Corporation Act, Chapter 431, Transportation Code,
1-38 [(Article 1528l, Vernon's Texas Civil Statutes)] that is within
1-39 1,000 feet of a convention center owned by a municipality having a
1-40 population of 1,500,000 or more, including shops, parking
1-41 facilities, and any other facilities ancillary to the hotel.
1-42 SECTION 2. Section 2303.052(d), Government Code, is amended
1-43 to read as follows:
1-44 (d) On or before December 15 [1] of each year the department
1-45 shall submit to the governor, the legislature, and the Legislative
1-46 Budget Board a report that:
1-47 (1) evaluates the effectiveness of the enterprise zone
1-48 program;
1-49 (2) describes the use of state and local incentives
1-50 under this chapter and their effect on revenue; and
1-51 (3) suggests legislation.
1-52 SECTION 3. Section 2303.401, Government Code, is amended to
1-53 read as follows:
1-54 Sec. 2303.401. DEFINITIONS [DEFINITION]. In this subchapter:
1-55 (1) "New[, "new] permanent job" means a new employment
1-56 position created by a qualified business as described by Section
1-57 2303.402 that:
1-58 (A) [(1)] has provided at least 1,820 hours of
1-59 employment a year to a qualified employee; and
1-60 (B) [(2)] is intended to exist during the period
1-61 that the qualified business is designated as an enterprise project
1-62 under Section 2303.406.
1-63 (2) "Retained job" means a job that existed with a
1-64 qualified business before designation as an enterprise project
2-1 that:
2-2 (A) has provided employment to a qualified
2-3 employee of at least 1,820 hours annually; and
2-4 (B) is intended to be an employment position
2-5 during the period the business is designated as an enterprise
2-6 project in accordance with Chapter 151, Tax Code.
2-7 SECTION 4. Section 2303.406, Government Code, is amended to
2-8 read as follows:
2-9 Sec. 2303.406. ENTERPRISE PROJECT DESIGNATION. (a) The
2-10 department may designate a business as an enterprise project only
2-11 if the department determines that:
2-12 (1) the business is a qualified business under Section
2-13 2303.402 that is located in or has made a substantial commitment to
2-14 locate in an enterprise zone described by Section 2303.404(b);
2-15 (2) the governing body of the enterprise zone making
2-16 the application has demonstrated that a high level of cooperation
2-17 exists among public, private, and neighborhood entities in the
2-18 zone; [and]
2-19 (3) the designation will contribute significantly to
2-20 the achievement of the plans of the governing body making the
2-21 application for development and revitalization of the zone; and
2-22 (4) if the business is seeking job retention benefits:
2-23 (A) the permanent employees of the business will
2-24 be permanently laid off;
2-25 (B) the business will close down permanently;
2-26 (C) the business will relocate out-of-state;
2-27 (D) a 10 percent increase in the production
2-28 capacity of the business will occur;
2-29 (E) a 10 percent decrease in overall cost per
2-30 unit produced will occur; or
2-31 (F) the business facility has been legitimately
2-32 destroyed or impaired because of fire, flood, tornado, hurricane,
2-33 or any other natural disaster.
2-34 (b) The department shall designate qualified businesses as
2-35 enterprise projects on a competitive basis. The department shall
2-36 establish a minimum scoring threshold that must be met by the
2-37 qualified business applying for a project designation and make its
2-38 designation decisions using a weighted scale in which:
2-39 (1) 50 percent of the evaluation depends on the
2-40 economic distress of:
2-41 (A) the enterprise zone in which a proposed
2-42 enterprise project is located; and
2-43 (B) the area within the enterprise zone where
2-44 the project is located;
2-45 (2) 25 percent of the evaluation depends on the local
2-46 effort to achieve development and revitalization of the enterprise
2-47 zone; and
2-48 (3) 25 percent of the evaluation depends on the
2-49 evaluation criteria as determined by the department, which must
2-50 include:
2-51 (A) the level of cooperation and support the
2-52 project applicant commits to the revitalization goals of the zone;
2-53 and
2-54 (B) the type and wage level of the jobs to be
2-55 created or retained by the business.
2-56 (c) [The designation of an enterprise project is effective
2-57 until the fifth anniversary of the date on which the designation is
2-58 made.]
2-59 [(d)] The department may remove an enterprise project
2-60 designation if it determines that the business is not complying
2-61 with a requirement for its designation.
2-62 SECTION 5. Section 2303.511, Government Code, is amended to
2-63 read as follows:
2-64 Sec. 2303.511. OTHER LOCAL INCENTIVES. (a) The governing
2-65 body of a municipality or county that is the governing body of an
2-66 enterprise zone may:
2-67 (1) defer compliance in the zone with the subdivision
2-68 and development ordinances or rules, other than those relating to
2-69 streets and roads or sewer or water services, of the municipality
3-1 or county, as appropriate;
3-2 (2) give priority to the zone for the receipt of:
3-3 (A) [urban development action grant money;]
3-4 [(B)] community development block grant money;
3-5 (B) [(C)] industrial revenue bonds; or
3-6 (C) [(D)] funds received under the federal Job
3-7 Training [Texas Job-Training] Partnership Act (29 U.S.C. Section
3-8 1501 et seq.) [(Article 4413(52), Vernon's Texas Civil Statutes)];
3-9 (3) adopt and implement a plan for police protection
3-10 in the zone;
3-11 (4) amend the zoning ordinances of the municipality or
3-12 county, as appropriate, to promote economic development in the
3-13 zone;
3-14 (5) establish permitting preferences for businesses in
3-15 the zone;
3-16 (6) establish simplified, accelerated, or other
3-17 special permit procedures for businesses in the zone;
3-18 (7) waive development fees for projects in the zone;
3-19 (8) create a local enterprise zone fund for funding
3-20 bonds or other programs or activities to develop or revitalize the
3-21 zone;
3-22 (9) for qualified businesses in the zone, reduce rates
3-23 charged by:
3-24 (A) a utility owned by the municipality or
3-25 county, as appropriate; or
3-26 (B) a cooperative corporation or utility owned
3-27 by private investors, subject to the requirements of Subsection
3-28 (b);
3-29 (10) in issuing housing finance bonds, give priority
3-30 to persons or projects in the zone;
3-31 (11) in providing services, give priority to local
3-32 economic development, educational, job training, or transportation
3-33 programs that benefit the zone; or
3-34 (12) sell real property owned by the municipality or
3-35 county, as appropriate, and located in the enterprise zone in
3-36 accordance with Section 2303.513.
3-37 (b) A reduction in utility rates under Subsection (a)(9)(B)
3-38 is subject to the agreement of the affected utility and the
3-39 approval of the appropriate regulatory authority [under Sections 16
3-40 and 17, Public Utility Regulatory Act (Article 1446c, Vernon's
3-41 Texas Civil Statutes)]. The rates may [not] be reduced up to but
3-42 not more than five percent below the lowest rate authorized for a
3-43 person described by Subsection (a)(9)(B) [offered to any customer
3-44 located in the enterprise zone, including economic development
3-45 rates and standby rates]. A qualified enterprise project or the
3-46 governing body of the enterprise zone may petition the appropriate
3-47 utility and the appropriate regulatory authority to receive a
3-48 reduced rate under this section, and the regulatory authority may
3-49 order that rates be reduced. In making its determination under
3-50 this section, the regulatory authority shall consider
3-51 revitalization goals for the enterprise zone. In setting the rates
3-52 of the utility the appropriate regulatory authority shall allow the
3-53 utility to recover the amount of the reduction.
3-54 SECTION 6. Sections 151.429(d), (e), and (g), Tax Code, are
3-55 amended to read as follows:
3-56 (d) To receive a refund under this section, an enterprise
3-57 project must apply to the comptroller for the refund. The Texas
3-58 Department [department] of Economic Development [commerce] shall
3-59 provide the comptroller with the assistance that the comptroller
3-60 requires in administering this section.
3-61 (e) In this section:
3-62 (1) "Enterprise project" means a person designated by
3-63 the Texas Department of Economic Development [Commerce] as an
3-64 enterprise project under Chapter 2303, Government Code.
3-65 (2) "Enterprise zone," "qualified employee," and
3-66 "qualified hotel project" have the meanings assigned to those terms
3-67 by Section 2303.003, Government Code.
3-68 (3) "New permanent job" means a new employment
3-69 position created by a qualified business as described by Section
4-1 2303.402, Government Code, that:
4-2 (A) has provided at least 1,820 [1,040] hours of
4-3 employment a year to a qualified employee; and
4-4 (B) is intended to exist during the period that
4-5 the qualified business is designated as an enterprise project under
4-6 Chapter 2303, Government Code.
4-7 (4) "Retained job" has the meaning assigned by Section
4-8 2303.401, Government Code.
4-9 (g) The refund provided by this section is conditioned on
4-10 the enterprise project maintaining at least the same level of
4-11 employment of qualified employees as existed at the time it
4-12 qualified for a refund for a period of three years from that date.
4-13 The Texas Department of Economic Development [Commerce] shall
4-14 annually certify to the comptroller [and the Legislative Budget
4-15 Board] whether that level of employment of qualified employees has
4-16 been maintained. On the Texas Department of Economic Development
4-17 [Commerce] certifying that such a level has not been maintained,
4-18 the comptroller shall assess that portion of the refund
4-19 attributable to any such decrease in employment, including penalty
4-20 and interest from the date of the refund.
4-21 SECTION 7. Section 171.1015(g), Tax Code, is amended to read
4-22 as follows:
4-23 (g) Only enterprise projects [qualified businesses] that
4-24 have been certified as eligible for a tax deduction under this
4-25 section by the Texas Department of Economic Development [Commerce]
4-26 to the comptroller may apply for [and the Legislative Budget Board
4-27 are entitled to] the tax deduction.
4-28 SECTION 8. This Act takes effect September 1, 1999.
4-29 SECTION 9. The importance of this legislation and the
4-30 crowded condition of the calendars in both houses create an
4-31 emergency and an imperative public necessity that the
4-32 constitutional rule requiring bills to be read on three several
4-33 days in each house be suspended, and this rule is hereby suspended.
4-34 * * * * *