By West                                               S.B. No. 1413
         76R6589 CLG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the enterprise zones.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 2303.003, Government Code, is amended to
 1-5     read as follows:
 1-6           Sec. 2303.003.  DEFINITIONS.  In this chapter:
 1-7                 (1)  "Comptroller" means the comptroller of public
 1-8     accounts.
 1-9                 (2)  "Day" means the period between 8 a.m. and 5 p.m.
1-10     of a day other than a Saturday, Sunday, or state or federal
1-11     holiday.
1-12                 [(2)  "Department" means the Texas Department of
1-13     Commerce.]
1-14                 (3)  "Economically distressed area" means an area that
1-15     is severely economically distressed, as characterized by high
1-16     levels of unemployment or underemployment, low income levels, and
1-17     other similar criteria.
1-18                 (4)  "Enterprise zone" means an area designated as an
1-19     enterprise zone under this chapter.
1-20                 (5)  "Enterprise zone business" means a business that
1-21     is located in an area eligible to be designated as an enterprise
1-22     zone and that would meet the criteria for designation as a
1-23     qualified business if the area were an enterprise zone.
1-24                 (6)  "Good faith effort" means an attempt by a state
 2-1     agency, to the best of its ability, to acquire goods and services
 2-2     from a business in an enterprise zone or neighborhood empowerment
 2-3     zone in a cost-effective manner, while providing economic
 2-4     opportunities for those businesses.
 2-5                 (7)  "Neighborhood empowerment zone" means the area
 2-6     designated by the comptroller to:
 2-7                       (A)  promote an increase in economic development;
 2-8     or
 2-9                       (B)  increase the quality of social services,
2-10     education, or public safety provided to persons living within the
2-11     zone.
2-12                 (8) [(4)]  "Neighborhood enterprise association" means
2-13     an association certified as a neighborhood enterprise association
2-14     under Section 2303.302.
2-15                 (9) [(5)  "Nominating body" means the governing body of
2-16     a municipality or county, or a combination of the governing bodies
2-17     of municipalities or counties, that nominates and applies for
2-18     designation of an area as an enterprise zone.]
2-19                 [(6)]  "Qualified business" means a person certified as
2-20     a qualified business under Section 2303.402.
2-21                 (10) [(7)]  "Qualified employee" means a person who:
2-22                       (A)  works for a qualified business; and
2-23                       (B)  performs at least 50 percent of the person's
2-24     service for the business in the enterprise zone.
2-25                 (11) [(8)]  "Qualified hotel project" means a hotel
2-26     proposed to be constructed by a municipality or a nonprofit
2-27     municipally sponsored local government corporation created under
 3-1     Chapter 431, Transportation Code, [the Texas Transportation
 3-2     Corporation Act (Article 1528l, Vernon's Texas Civil Statutes)]
 3-3     that is within 1,000 feet of a convention center owned by a
 3-4     municipality having a population of 1,500,000 or more, including
 3-5     shops, parking facilities, and any other facilities ancillary to
 3-6     the hotel.
 3-7                 (12)  "Reasonable bid" means any bid within five
 3-8     percent of the lowest bid received that does not cause a
 3-9     substantial inconvenience to the state agency.
3-10           SECTION 2.  Section 2303.051, Government Code, is amended to
3-11     read as follows:
3-12           Sec. 2303.051.  GENERAL POWERS AND DUTIES.  (a)  The
3-13     comptroller [department] shall administer and monitor the
3-14     implementation of this chapter.
3-15           (b)  The comptroller [department] shall establish criteria
3-16     and procedures for designating a qualified area as an enterprise
3-17     zone and for designating an enterprise project in compliance with
3-18     Section 2303.101.
3-19           (c)  The comptroller [department] shall adopt rules necessary
3-20     to carry out the purposes of this chapter.
3-21           SECTION 3.  Section 2303.052, Government Code, is amended to
3-22     read as follows:
3-23           Sec. 2303.052.  EVALUATION; REPORT.  (a)  The comptroller
3-24     [department] shall conduct a continuing evaluation of the programs
3-25     of enterprise zones.
3-26           (b)  The comptroller [department] shall develop data from
3-27     available information demonstrating the relationship between the
 4-1     incentives provided under this chapter and the economy.
 4-2           (c)  The comptroller [department] biennially shall review
 4-3     local incentives.
 4-4           (d)  On or before December 1 of each year the comptroller
 4-5     [department] shall submit to the governor, the legislature, and the
 4-6     Legislative Budget Board a report that:
 4-7                 (1)  evaluates the effectiveness of the enterprise zone
 4-8     program;
 4-9                 (2)  describes the use of state and local incentives
4-10     under this chapter and their effect on revenue; and
4-11                 (3)  suggests legislation.
4-12           SECTION 4.  Section 2303.053, Government Code, is amended to
4-13     read as follows:
4-14           Sec. 2303.053.  ASSISTANCE.  (a)  The comptroller
4-15     [department] shall assist:
4-16                 (1)  a qualified business in obtaining the benefits of
4-17     any incentive or inducement program provided by law;
4-18                 (2)  a unit of local government in obtaining status as
4-19     a federal enterprise zone;
4-20                 (3)  a qualified business [the governing body of an
4-21     enterprise zone] in obtaining assistance from another state agency,
4-22     including training and technical assistance [to qualified
4-23     businesses in a zone]; and
4-24                 (4)  a qualified business [the governing body of an
4-25     enterprise zone] in developing small business incubators.
4-26           (b)  The comptroller [department] shall provide to persons
4-27     desiring to locate and engage in business in an enterprise zone
 5-1     information and appropriate assistance relating to the required
 5-2     legal authorization, including a state license, permit,
 5-3     certificate, approval, registration, or charter, to engage in
 5-4     business in this state.
 5-5           (c)  The comptroller [department] shall publicize existing
 5-6     tax incentives and economic development programs in enterprise
 5-7     zones.
 5-8           (d)  On request the comptroller [department] shall offer to a
 5-9     unit of local government having an enterprise zone within its
5-10     jurisdiction technical assistance relating to tax abatement and the
5-11     development of alternative revenue sources.
5-12           SECTION 5.  Section 2303.054, Government Code, is amended to
5-13     read as follows:
5-14           Sec. 2303.054.  COORDINATION WITH OTHER GOVERNMENTAL
5-15     ENTITIES.  (a)  In cooperation with the appropriate units of local
5-16     government and other state agencies, the comptroller [department]
5-17     shall coordinate and streamline state business assistance programs
5-18     and permit or license application procedures for businesses in
5-19     enterprise zones.
5-20           (b)  The comptroller [department] shall:
5-21                 (1)  work with the responsible state and federal
5-22     agencies to coordinate enterprise zone programs with other programs
5-23     carried out in an enterprise zone, including housing, community and
5-24     economic development, small business, banking, financial
5-25     assistance, transportation, and employment training programs;
5-26                 (2)  work to expedite, to the greatest extent possible,
5-27     the consideration of applications for those programs by
 6-1     consolidating forms or by other means; and
 6-2                 (3)  work, when possible, for the consolidation of
 6-3     periodic reports required under those programs into one summary
 6-4     report.
 6-5           (c)  The comptroller [department] shall encourage other state
 6-6     agencies in awarding grants, loans, or services to give priority to
 6-7     businesses in enterprise zones.
 6-8           SECTION 6.  Section 2303.101, Government Code, is amended to
 6-9     read as follows:
6-10           Sec. 2303.101.  CRITERIA FOR ENTERPRISE ZONE DESIGNATION.
6-11     (a)  To be designated as an enterprise zone an area must:
6-12                 (1)  have a continuous boundary;
6-13                 (2)  be at least one square mile but not larger than
6-14     [the greater of:]
6-15                       [(A)  10 square miles, excluding lakes,
6-16     waterways, and transportation arteries; or]
6-17                       [(B)  an area, not to exceed] 20 square miles[,
6-18     that is equal to five percent of the area, excluding lakes,
6-19     waterways, and transportation arteries, of the municipality,
6-20     county, or combination of municipalities or counties nominating the
6-21     area as an enterprise zone];
6-22                 (3)  be an area of pervasive poverty, unemployment, and
6-23     economic distress as provided by Section 2303.102; and
6-24                 (4)  be submitted for designation [nominated] as an
6-25     enterprise zone by an enterprise zone business [an ordinance or
6-26     order adopted  by the nominating body].
6-27           (b)  The comptroller [department] may not designate an area
 7-1     as an enterprise zone if three enterprise zones are located in the
 7-2     jurisdiction of [and were nominated as enterprise zones by the
 7-3     governing body of] the municipality or county in which the zone is
 7-4     to be located [nominating the area as an enterprise zone].
 7-5           (c)  An enterprise zone may be based on historic community or
 7-6     neighborhood identity and may also use United States census
 7-7     geographical units or Indian reservations.
 7-8           SECTION 7.  Section 2303.102, Government Code, is amended to
 7-9     read as follows:
7-10           Sec. 2303.102.  AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, AND
7-11     ECONOMIC DISTRESS.  (a)  An area is an area of pervasive poverty,
7-12     unemployment, and economic distress for the purposes of Section
7-13     2303.101 if:
7-14                 (1)  the average rate of unemployment in the area
7-15     during the most recent 12-month period for which data are available
7-16     was at least one and one-half times the state average for that
7-17     period; or
7-18                 (2)  the area had a population loss of at least 12
7-19     percent during the most recent six-year period or at least four
7-20     percent during the most recent three-year period; and
7-21                       (A)  the area is a low-income poverty area;
7-22                       (B)  the area is in a jurisdiction or pocket of
7-23     poverty eligible for urban development action grants under federal
7-24     law, according to the most recent certification available from the
7-25     United States Department of Housing and Urban Development;
7-26                       (C)  at least 70 percent of the residents or
7-27     households of the area have an income that is less than 80 percent
 8-1     of the median income of the residents or households of the locality
 8-2     or state, whichever is less; or
 8-3                       (D)  the applying enterprise zone business
 8-4     [nominating body] establishes to the satisfaction of the
 8-5     comptroller [department] that:
 8-6                             (i)  chronic abandonment or demolition of
 8-7     commercial or residential structures exists in the area;
 8-8                             (ii)  substantial tax arrearages for
 8-9     commercial or residential structures exist in the area;
8-10                             (iii)  substantial losses of businesses or
8-11     jobs have occurred in the area;
8-12                             (iv)  the area is part of a disaster area
8-13     declared by the state or federal government during the preceding 18
8-14     months; or
8-15                             (v)  the area has had a substantial
8-16     increase in the number of individuals younger than 18 years of age
8-17     arrested due to criminal activity.
8-18           (b)  Labor force and population data are considered current
8-19     if:
8-20                 (1)  they are the most recently published estimates; or
8-21                 (2)  the enterprise zone application containing the
8-22     data is received by the comptroller [department] before the 61st
8-23     day after the date revised estimates of that data are published.
8-24           SECTION 8.  Sections 2303.105(a) and (b), Government Code,
8-25     are amended to read as follows:
8-26           (a)  For an area to be designated as an enterprise zone, an
8-27     enterprise zone business [the nominating body, after nominating the
 9-1     area as an enterprise zone,] must send to the comptroller
 9-2     [department] a written application for designation of the area as
 9-3     an enterprise zone.
 9-4           (b)  The application must include:
 9-5                 (1)  [a certified copy of the ordinance or order, as
 9-6     appropriate, nominating the area as an enterprise zone;]
 9-7                 [(2)]  a map of the area showing existing streets and
 9-8     highways;
 9-9                 (2) [(3)]  an analysis and appropriate supporting
9-10     documents and statistics demonstrating that the area qualifies for
9-11     designation as an enterprise zone;
9-12                 (3) [(4)  a statement that specifies each tax
9-13     incentive, grant, other financial incentive or benefit, or program
9-14     to be provided by the nominating body to business enterprises in
9-15     the area that is not to be provided throughout the governmental
9-16     entity or entities nominating the area as an enterprise zone;]
9-17                 [(5)]  a statement of the economic development and
9-18     planning objectives for the area;
9-19                 (4) [(6)]  a description of the functions, programs,
9-20     and services to be performed by a neighborhood enterprise
9-21     association in the area;
9-22                 (5) [(7)]  an estimate of the economic impact of the
9-23     designation of the area as an enterprise zone on the revenues of
9-24     the proposed [governmental entity or entities nominating the area
9-25     as an] enterprise zone, considering all the financial incentives
9-26     and benefits and the programs contemplated;
9-27                 (6) [(8)]  a transcript or tape recording of all public
 10-1    hearings on the proposed zone;
 10-2                (7) [(9)]  if the application is a joint application, a
 10-3    description and copy of the agreement between the applicants;
 10-4                (8) [(10)]  the procedures for negotiating with
 10-5    residents, community groups, and other entities affected by the
 10-6    designation of the area as an enterprise zone and with qualified
 10-7    businesses in the area;
 10-8                (9) [(11)]  a description of the executive board
 10-9    [administrative authority, if one is to be appointed for the
10-10    enterprise zone under Section 2303.202]; and
10-11                (10) [(12)]  any additional information the comptroller
10-12    [department] requires.
10-13          SECTION 9.  Section 2303.106, Government Code, is amended to
10-14    read as follows:
10-15          Sec. 2303.106.  REVIEW OF APPLICATION.  (a)  On receipt of an
10-16    application for the designation of an enterprise zone, the
10-17    comptroller [department] shall review the application to determine
10-18    if the [nominated] area qualifies for designation as an enterprise
10-19    zone under this chapter.
10-20          (b)  The comptroller [department] shall allow an applicant to
10-21    correct any omission or clerical error in the application and to
10-22    return the application to the comptroller [department] on or before
10-23    the 10th day after the day on which the comptroller [department]
10-24    receives the application.
10-25          SECTION 10.  Sections 2303.107(a), (b), (c), and (d),
10-26    Government Code, are amended to read as follows:
10-27          (a)  If the comptroller [department] determines that an [a
 11-1    nominated] area for which a designation application has been
 11-2    received satisfies the criteria under Section 2303.101, the
 11-3    comptroller [department] shall negotiate with the applicant
 11-4    [nominating body] for a designation agreement.
 11-5          (b)  A designation agreement must:
 11-6                (1)  designate the [nominated] area as an enterprise
 11-7    zone; and
 11-8                (2)  designate the executive board [administrative
 11-9    authority, if one is to be appointed for the zone under Section
11-10    2303.202,] and describe its functions and duties, which should
11-11    include decision-making authority and the authority to negotiate
11-12    with affected entities.
11-13          (c)  The comptroller [department] shall complete the
11-14    negotiations and sign the agreement not later than the 60th day
11-15    after the day on which the application is received unless the
11-16    comptroller [department] extends that period to the 90th day after
11-17    the day on which the application was received.
11-18          (d)  If an agreement is not completed within the 60-day
11-19    period provided by Subsection (c), the comptroller [department]
11-20    shall provide to the applicant [nominating body] the specific areas
11-21    of concern  and a final proposal for the agreement.
11-22          SECTION 11.  Section 2303.108, Government Code, is amended to
11-23    read as follows:
11-24          Sec. 2303.108.  DENIAL OF APPLICATION; NOTICE.  (a)  The
11-25    comptroller [department] may deny an application for the
11-26    designation of an enterprise zone only if the comptroller
11-27    [department] determines that the [nominated] area does not satisfy
 12-1    the criteria under Section 2303.101.
 12-2          (b)  The comptroller [department] shall inform the applicant
 12-3    [nominating body] of the specific reasons for denial of an
 12-4    application, including denial under Section 2303.107(e).
 12-5          SECTION 12.  Sections 2303.110(a), (d), and (e), Government
 12-6    Code, are amended to read as follows:
 12-7          (a)  The enterprise zone business that applied for creation
 12-8    of the zone [nominating body] may amend the boundary of an
 12-9    enterprise zone by notifying the comptroller of the amendment
12-10    [ordinance or order, as appropriate, adopted after a public hearing
12-11    on the issue].
12-12          (d)  The enterprise zone business [A nominating body] may not
12-13    make more than one boundary amendment annually for an enterprise
12-14    zone.
12-15          (e)  For each amendment of an enterprise zone boundary, the
12-16    enterprise zone business [nominating body] shall pay the
12-17    comptroller [department] a reasonable fee, in an amount specified
12-18    by the comptroller [department], not to exceed $500. The
12-19    comptroller [department] may use fees collected under this
12-20    subsection to administer this  chapter and for other purposes to
12-21    advance this chapter.
12-22          SECTION 13.  Section 2303.111, Government Code, is amended to
12-23    read as follows:
12-24          Sec. 2303.111.  REMOVAL OF DESIGNATION.  (a)  The comptroller
12-25    [department] may remove the designation of an area as an enterprise
12-26    zone if:
12-27                (1)  the area no longer meets the criteria for
 13-1    designation under this chapter or by comptroller [department] rule
 13-2    adopted under this chapter; or
 13-3                (2)  the comptroller [department] determines that the
 13-4    executive board [governing body] of the enterprise zone has not
 13-5    complied with  commitments made in the application for designation
 13-6    of [ordinance or order nominating] the area as an enterprise zone.
 13-7          (b)  The removal of a designation does not affect the
 13-8    validity of:
 13-9                (1)  a tax incentive or regulatory relief granted or
13-10    accrued before the removal; [or]
13-11                (2)  bonds issued under this chapter; or
13-12                (3)  contracts and stipulations agreed on or entered
13-13    into before termination of designation.
13-14          SECTION 14.  Section 2303.201, Government Code, is amended to
13-15    read as follows:
13-16          Sec. 2303.201.  ADMINISTRATION [BY GOVERNING BODY].  An
13-17    enterprise zone is administered by an executive board appointed by
13-18    the enterprise zone business that applied for designation of the
13-19    zone.  The board must:
13-20                (1)  be composed of 3, 5, 7, 9, 11, or 15 members;
13-21                (2)  be a viable and responsive body generally
13-22    representative of all public or private entities that have a stake
13-23    in the development of the zone; and
13-24                (3)  include enterprise zone residents and
13-25    representatives of the zone and of local businesses  [The governing
13-26    body of an enterprise zone is the governing body of the
13-27    municipality or county, or the governing bodies of the combination
 14-1    of municipalities or counties, that applied to have the area
 14-2    designated as an enterprise zone].
 14-3          SECTION 15.  Section 2303.204, Government Code, is amended to
 14-4    read as follows:
 14-5          Sec. 2303.204.  LIAISON.  The executive board [governing
 14-6    body] of an enterprise zone shall designate a liaison to
 14-7    communicate and negotiate with:
 14-8                (1)  the comptroller [department];
 14-9                (2)  [the administrative authority, if one exists;]
14-10                [(3)]  an enterprise project; and
14-11                (3) [(4)]  other entities in or affected by the
14-12    enterprise zone.
14-13          SECTION 16.  Section 2303.205, Government Code, is amended to
14-14    read as follows:
14-15          Sec. 2303.205.  ANNUAL REPORT.  (a)  Not later than October 1
14-16    of each year, the executive board [governing body] of an enterprise
14-17    zone shall submit to the comptroller [department] a report in the
14-18    form required by the comptroller [department].
14-19          (b)  [The report must be approved by the enterprise zone's
14-20    administrative authority, if one exists.]
14-21          [(c)]  The report must include for the year preceding the
14-22    date of the report:
14-23                (1)  a list of local incentives for community
14-24    development available in the zone;
14-25                (2)  the use of local incentives in [for which the
14-26    governing body provided in the ordinance or order nominating] the
14-27    enterprise zone and the effect of those incentives on revenue;
 15-1                (3)  the number of businesses assisted, located, and
 15-2    retained in the zone since its designation due to the existence of
 15-3    the enterprise zone;
 15-4                (4)  a summary of all industrial revenue bonds issued
 15-5    to finance projects located in the zone; and
 15-6                (5)  a description of all efforts made to attain
 15-7    revitalization goals for the zone.
 15-8          SECTION 17.  Section 2303.301(e) and (f), Government Code,
 15-9    are amended to read as follows:
15-10          (e)  The incorporators shall publish in a newspaper of
15-11    general circulation, encompassing [in] the [governmental entity or
15-12    entities that applied to have the] area designated as an enterprise
15-13    zone, an explanation of the proposed association and the
15-14    incorporators' rights in the association.
15-15          (f)  A copy of the association's articles of incorporation
15-16    and bylaws shall be available for public inspection at[:]
15-17                [(1)]  the office of the executive board [city manager
15-18    or comparable municipal officer if the entity is a municipality; or]
15-19                [(2)  the county judge's office if the entity is a
15-20    county].
15-21          SECTION 18.  Section 2303.302, Government Code, is amended to
15-22    read as follows:
15-23          Sec. 2303.302.  CERTIFICATION OF ASSOCIATION.  (a)  After a
15-24    neighborhood enterprise association is organized, the association's
15-25    board of directors must apply to the executive board [governing
15-26    body] of the enterprise zone or to the comptroller [department] for
15-27    certification as a neighborhood enterprise association.
 16-1          (b)  The executive board [governing body] of the enterprise
 16-2    zone or the comptroller [department] may not grant certification
 16-3    unless the association has hired or appointed a suitable chief
 16-4    executive officer.
 16-5          SECTION 19.  Sections 2303.304(d) and (g), Government Code,
 16-6    are amended to read as follows:
 16-7          (d)  The state or local governmental entity responsible for
 16-8    providing a service may contract with a neighborhood enterprise
 16-9    association to provide services in an amount equal to the amount
16-10    saved by the entity by the provision of the service under the
16-11    contract.
16-12          (g)  A neighborhood enterprise association may receive money
16-13    without approval of the executive board [governing body] of the
16-14    enterprise zone.
16-15          SECTION 20.  Section 2303.401, Government Code, is amended to
16-16    read as follows:
16-17          Sec. 2303.401.  DEFINITION.  In this subchapter, "new
16-18    permanent job" means a new employment position created by a
16-19    qualified business as described by Section 2303.402 that:
16-20                (1)  has provided at least 1,820 hours of employment a
16-21    year to a qualified employee; and
16-22                (2)  is intended to exist during the period that the
16-23    qualified business is designated as an enterprise project under
16-24    Section 2303.406 and until contracts entered into while designated
16-25    an enterprise project are completed unless otherwise agreed upon by
16-26    the contracting parties.
16-27          SECTION 21.  Section 2303.402(a) and (b), Government Code,
 17-1    are amended to read as follows:
 17-2          (a)  A person is a qualified business if the comptroller
 17-3    [department], for the purpose of state benefits under this chapter,
 17-4    or the executive board [governing body] of an enterprise zone, for
 17-5    the purpose of local benefits, certifies that:
 17-6                (1)  the person is engaged in or has provided
 17-7    substantial commitment to initiate the active conduct of a trade or
 17-8    business in the enterprise zone; and
 17-9                (2)  at least 25 percent of the person's new employees
17-10    in the enterprise zone are:
17-11                      (A)  residents of [any enterprise zone in the
17-12    jurisdiction of the governing body of] the enterprise zone; or
17-13                      (B)  economically disadvantaged individuals.
17-14          (b)  The executive board [governing body] of an enterprise
17-15    zone may certify a franchise or subsidiary of a new or existing
17-16    business as a qualified business if the franchise or subsidiary:
17-17                (1)  is located entirely in the enterprise zone; and
17-18                (2)  maintains separate books and records of the
17-19    business activity conducted in the zone.
17-20          SECTION 22.  Section 2303.403, Government Code, is amended to
17-21    read as follows:
17-22          Sec. 2303.403.  PROHIBITION ON QUALIFIED BUSINESS
17-23    CERTIFICATION.  If the comptroller [department] determines that the
17-24    executive board [governing body] of an enterprise zone is not
17-25    complying with this chapter, the comptroller [department] shall
17-26    prohibit the certification of a qualified business in the zone
17-27    until the comptroller [department] determines that the executive
 18-1    board [governing body] is complying with this chapter.  The
 18-2    comptroller [department] may not designate more than 65 businesses
 18-3    as enterprise projects during any biennium.
 18-4          SECTION 23.  Section 2303.404, Government Code, is amended to
 18-5    read as follows:
 18-6          Sec. 2303.404.  REQUEST FOR APPLICATION FOR ENTERPRISE
 18-7    PROJECT DESIGNATION.  (a)  A qualified business in an enterprise
 18-8    zone described by Subsection (b) may request that the executive
 18-9    board [governing body] of the enterprise zone apply to the
18-10    comptroller [department] for designation of the business as an
18-11    enterprise project.  [The request must also be made to the
18-12    enterprise zone's administrative authority, if one exists.]
18-13          (b)  A request may be made under this section only to the
18-14    executive board [governing body] of an enterprise zone that has:
18-15                (1)  an unemployment rate that is at least one and
18-16    one-half times the state average; or
18-17                (2)  a population loss of at least:
18-18                      (A)  12 percent during the most recent six-year
18-19    period; or
18-20                      (B)  four percent during the most recent
18-21    three-year period.
18-22          SECTION 24.  Sections 2303.405(a) and (b), Government Code,
18-23    are amended to read as follows:
18-24          (a)  If the executive board [governing body] of an enterprise
18-25    zone approves [or the governing body and administrative authority
18-26    of an enterprise zone, as appropriate, approve] a request made
18-27    under Section 2303.404, the executive board [governing body] may
 19-1    apply to the comptroller [department] for the designation of the
 19-2    qualified business as an enterprise project.
 19-3          (b)  An application must:
 19-4                (1)  describe completely the conditions in the
 19-5    enterprise zone that constitute pervasive poverty, unemployment,
 19-6    and economic distress for purposes of Section 2303.101;
 19-7                (2)  describe the procedures and efforts of the
 19-8    enterprise zone business [governmental entity or entities] that
 19-9    applied to have the area designated as an enterprise zone to
19-10    facilitate and encourage participation by and negotiation among all
19-11    affected entities in the zone in which the qualified business is
19-12    located;
19-13                (3)  contain an economic analysis of the plans of the
19-14    qualified business for expansion, revitalization, or other activity
19-15    in the enterprise zone, including:
19-16                      (A)  the number of anticipated new permanent jobs
19-17    the business will create;
19-18                      (B)  the anticipated number of permanent jobs the
19-19    business will retain;
19-20                      (C)  the amount of investment to be made in the
19-21    zone; and
19-22                      (D)  other information the comptroller
19-23    [department] requires; and
19-24                (4)  describe the local effort made by the enterprise
19-25    zone business [governmental entity or entities] that applied to
19-26    have the area designated as an enterprise zone, [the administrative
19-27    authority, if one exists], the qualified business, and other
 20-1    affected entities to develop and revitalize the zone.
 20-2          SECTION 25.  Sections 2303.406(a), (b), and (d), Government
 20-3    Code, are amended to read as follows:
 20-4          (a)  The comptroller [department] may designate a business as
 20-5    an enterprise project only if the comptroller [department]
 20-6    determines that:
 20-7                (1)  the business is a qualified business under Section
 20-8    2303.402 that is located in or has made a substantial commitment to
 20-9    locate in an enterprise zone described by Section 2303.404(b);
20-10                (2)  the executive board [governing body] of the
20-11    enterprise zone making the application has demonstrated that a high
20-12    level of cooperation exists among public, private, and neighborhood
20-13    entities in the zone; and
20-14                (3)  the designation will contribute significantly to
20-15    the achievement of the plans of the executive board [governing
20-16    body] making the application for development and revitalization of
20-17    the zone.
20-18          (b)  The comptroller [department] shall designate qualified
20-19    businesses as enterprise projects on a competitive basis.  The
20-20    comptroller [department] shall make its designation decisions using
20-21    a weighted scale in which:
20-22                (1)  50 percent of the evaluation depends on the
20-23    economic distress of:
20-24                      (A)  the enterprise zone in which a proposed
20-25    enterprise project is located; and
20-26                      (B)  the area within the enterprise zone where
20-27    the project is located;
 21-1                (2)  25 percent of the evaluation depends on the local
 21-2    effort to achieve development and revitalization of the enterprise
 21-3    zone; and
 21-4                (3)  25 percent of the evaluation depends on the
 21-5    evaluation criteria as determined by the comptroller [department],
 21-6    which must include:
 21-7                      (A)  the level of cooperation and support the
 21-8    project applicant commits to the revitalization goals of the zone;
 21-9    and
21-10                      (B)  the type and wage level of the jobs to be
21-11    created or retained by the business.
21-12          (d)  The comptroller [department] may remove an enterprise
21-13    project designation if it determines that the business is not
21-14    complying with a requirement for its designation.
21-15          SECTION 26.  Section 2303.407, Government Code, is amended to
21-16    read as follows:
21-17          Sec. 2303.407.  ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND.
21-18    When the comptroller [department] designates a business as an
21-19    enterprise project, the comptroller [department] shall allocate to
21-20    the project the maximum number of new permanent jobs or retained
21-21    jobs eligible to be included in a computation of a tax refund for
21-22    the project.  The number may not exceed 625 or a number equal to
21-23    110 percent of the number of anticipated new permanent jobs or
21-24    retained jobs specified in the application for designation of the
21-25    business as an enterprise project under Section 2303.405, whichever
21-26    is less.    
21-27          SECTION 27.  Section 2303.408, Government Code, is amended to
 22-1    read as follows:
 22-2          Sec. 2303.408.  DURATION OF CERTAIN DESIGNATIONS.  The
 22-3    comptroller's [department's] designation of a qualified business as
 22-4    an enterprise project is effective until the fifth anniversary of
 22-5    the date on which the designation is made regardless of whether the
 22-6    enterprise zone in which the project is located expires before the
 22-7    fifth anniversary of the project.
 22-8          SECTION 28.  Section 2303.501(b), Government Code, is amended
 22-9    to read as follows:
22-10          (b)  A local government entity may suspend local regulation,
22-11    including an ordinance, rule, or standard, relating to zoning,
22-12    licensing, or building codes in an enterprise zone.
22-13          SECTION 29.  Sections 2303.502(b) and (c), Government Code,
22-14    are amended to read as follows:
22-15          (b)  Annually each state agency shall:
22-16                (1)  review the rules it administers that:
22-17                      (A)  may adversely affect:
22-18                            (i)  the renovation, improvement, or new
22-19    construction of housing in enterprise zones; or
22-20                            (ii)  the economic viability and
22-21    profitability of business and commerce in enterprise zones; or
22-22                      (B)  may otherwise affect the implementation of
22-23    this chapter; and
22-24                (2)  report the results of the review to the
22-25    comptroller [department].
22-26          (c)  The comptroller [department] shall disseminate the
22-27    reports to the governing bodies of enterprise zones and others as
 23-1    necessary to advance the purposes of this chapter.
 23-2          SECTION 30.  Sections 2303.503(a), (c), and (d), Government
 23-3    Code, are amended to read as follows:
 23-4          (a)  A state agency shall give preference to [the governing
 23-5    body of an enterprise zone or] a qualified business or qualified
 23-6    employee located in an enterprise zone over other eligible
 23-7    applicants for grants or loans that are administered by the state
 23-8    agency if:
 23-9                (1)  at least 50 percent of the grant or loan will be
23-10    spent for the direct benefit of the enterprise zone; and
23-11                (2)  the purpose of the grant or loan is to:
23-12                      (A)  promote economic development in the
23-13    community; or
23-14                      (B)  construct, improve, extend, repair, or
23-15    maintain public facilities in the community.
23-16          (c)  A state agency shall make a good faith effort [may and
23-17    is encouraged] to contract with businesses located in enterprise
23-18    zones or neighborhood empowerment zones.  A contract shall be
23-19    awarded to a business in the enterprise or neighborhood empowerment
23-20    zone that makes a reasonable bid.
23-21          (d)  The comptroller [department] may give preference to
23-22    enterprise zones in granting economic development money or other
23-23    benefits.
23-24          SECTION 31.  Section 2303.504(c), Government Code, is amended
23-25    to read as follows:
23-26          (c)  Not later than the 60th day after the last day of each
23-27    fiscal year, the comptroller shall report [to the department] the
 24-1    statewide total of the tax refunds made under this section during
 24-2    that fiscal year.
 24-3          SECTION 32.  Section 2303.505(c), Government Code, is amended
 24-4    to read as follows:
 24-5          (c)  The governing body of a municipality or county in which
 24-6    [that is the governing body of] an enterprise zone is located may
 24-7    provide for the partial or total refund of its local sales and use
 24-8    taxes paid by a person making a taxable purchase, lease, or rental
 24-9    for development or revitalization in the zone.
24-10          SECTION 33.  Section 2303.510(a), Government Code, is amended
24-11    to read as follows:
24-12          (a)  The governing body of a municipality that contains [that
24-13    is the governing body of] an enterprise zone may create, in
24-14    accordance with the Development Corporation Act of 1979 (Article
24-15    5190.6, Vernon's Texas Civil Statutes), an industrial development
24-16    corporation for use by the enterprise zone.
24-17          SECTION 34.  Section 2303.511(a), Government Code, is amended
24-18    to read as follows:
24-19          (a)  The governing body of a municipality or county that
24-20    contains [that is the governing body of] an enterprise zone may:
24-21                (1)  defer compliance in the zone with the subdivision
24-22    and development ordinances or rules, other than those relating to
24-23    streets and roads or sewer or water services, of the municipality
24-24    or county, as appropriate;
24-25                (2)  give priority to the zone for the receipt of:
24-26                      (A)  urban development action grant money;
24-27                      (B)  community development block grant money;
 25-1                      (C)  industrial revenue bonds; or
 25-2                      (D)  funds received under Chapter 301, Labor Code
 25-3    [the Texas Job-Training Partnership Act (Article 4413(52), Vernon's
 25-4    Texas Civil Statutes)];
 25-5                (3)  adopt and implement a plan for police protection
 25-6    in the zone;
 25-7                (4)  amend the zoning ordinances of the municipality or
 25-8    county, as appropriate, to promote economic development in the
 25-9    zone;
25-10                (5)  establish permitting preferences for businesses in
25-11    the zone;
25-12                (6)  establish simplified, accelerated, or other
25-13    special permit procedures for businesses in the zone;
25-14                (7)  waive development fees for projects in the zone;
25-15                (8)  create a local enterprise zone fund for funding
25-16    bonds or other programs or activities to develop or revitalize the
25-17    zone;
25-18                (9)  for qualified businesses in the zone, reduce rates
25-19    charged by:
25-20                      (A)  a utility owned by the municipality or
25-21    county, as appropriate; or
25-22                      (B)  a cooperative corporation or utility owned
25-23    by private investors, subject to the requirements of Subsection
25-24    (b);
25-25                (10)  in issuing housing finance bonds, give priority
25-26    to persons or projects in the zone;
25-27                (11)  in providing services, give priority to local
 26-1    economic development, educational, job training, or transportation
 26-2    programs that benefit the zone; or
 26-3                (12)  sell real property owned by the municipality or
 26-4    county, as appropriate, and located in the enterprise zone in
 26-5    accordance with Section 2303.513.
 26-6          SECTION 35.  Section 2303.513(b), Government Code, is amended
 26-7    to read as follows:
 26-8          (b)  A municipality or county may sell a surplus building or
 26-9    vacant land in the enterprise zone at less than fair market value
26-10    if the governing body of the municipality or county by ordinance or
26-11    order, as appropriate, adopts criteria that specify the conditions
26-12    and circumstances under which the sale may occur and the public
26-13    purpose to be achieved by the sale.  The building or land may be
26-14    sold to a buyer who is not the highest bidder if the criteria and
26-15    public purpose specified in the application for designation as an
26-16    enterprise zone [ordinance or order] are satisfied.  A copy of the
26-17    application for designation as an enterprise zone [ordinance or
26-18    order] must be filed with the comptroller [department] not later
26-19    than the day on which the sale occurs.
26-20          SECTION 36.  Sections 2303.103, 2303.104, and 2303.202,
26-21    Government Code, are repealed.
26-22          SECTION 37.  (a)  This Act takes effect September 1, 1999.
26-23          (b)  On September 1, 1999, all powers, duties, funds,
26-24    obligations, contracts, property, and records of the Texas
26-25    Department of Economic Development relating to enterprise zones are
26-26    transferred to the comptroller.  A rule of the Texas Department of
26-27    Economic Development relating to enterprise zones continues in
 27-1    effect as a rule of the comptroller until superseded by a rule of
 27-2    the comptroller.
 27-3          (c)  This Act does not affect the existence or form of the
 27-4    governing body  of an enterprise zone existing September 1, 1999.
 27-5    A reference in law to the executive board of the enterprise zone is
 27-6    a reference to the governing body of the zone as established under
 27-7    the law in existence when the governing body was established.
 27-8          SECTION 38.  The importance of this legislation and the
 27-9    crowded condition of the calendars in both houses create an
27-10    emergency and an imperative public necessity that the
27-11    constitutional rule requiring bills to be read on three several
27-12    days in each house be suspended, and this rule is hereby suspended.