By Sibley S.B. No. 1629
76R8801 CLG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the enterprise zone program.
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) "Day" means the period between 8 a.m. and 5 p.m.
1-8 of a day other than a Saturday, Sunday, or state or federal
1-9 holiday.
1-10 (2) "Department" means the Texas Department of
1-11 Economic Development [Commerce].
1-12 (3) "Enterprise zone" means an area designated as an
1-13 enterprise zone under this chapter.
1-14 (4) "Neighborhood enterprise association" means an
1-15 association certified as a neighborhood enterprise association
1-16 under Section 2303.302.
1-17 (5) "Nominating body" means the governing body of a
1-18 municipality or county, or a combination of the governing bodies of
1-19 municipalities or counties, that nominates and applies for
1-20 designation of an area as an enterprise zone.
1-21 (6) "Qualified business" means a person certified as a
1-22 qualified business under Section 2303.402.
1-23 (7) "Qualified employee" means a person who:
1-24 (A) works for a qualified business; and
2-1 (B) performs at least 50 percent of the person's
2-2 service for the business in the enterprise zone.
2-3 (8) "Qualified hotel project" means a hotel proposed
2-4 to be constructed by a municipality or a nonprofit municipally
2-5 sponsored local government corporation created under the Texas
2-6 Transportation Corporation Act, Chapter 431, Transportation Code,
2-7 [(Article 1528l, Vernon's Texas Civil Statutes)] that is within
2-8 1,000 feet of a convention center owned by a municipality having a
2-9 population of 1,500,000 or more, including shops, parking
2-10 facilities, and any other facilities ancillary to the hotel.
2-11 SECTION 2. Section 2303.052(d), Government Code, is amended
2-12 to read as follows:
2-13 (d) On or before December 15 [1] of each year the department
2-14 shall submit to the governor, the legislature, and the Legislative
2-15 Budget Board a report that:
2-16 (1) evaluates the effectiveness of the enterprise zone
2-17 program;
2-18 (2) describes the use of state and local incentives
2-19 under this chapter and their effect on revenue; and
2-20 (3) suggests legislation.
2-21 SECTION 3. Section 2303.401, Government Code, is amended to
2-22 read as follows:
2-23 Sec. 2303.401. DEFINITIONS [DEFINITION]. In this subchapter:
2-24 (1) "New[, "new] permanent job" means a new employment
2-25 position created by a qualified business as described by Section
2-26 2303.402 that:
2-27 (A) [(1)] has provided at least 1,820 hours of
3-1 employment a year to a qualified employee; and
3-2 (B) [(2)] is intended to exist during the period
3-3 that the qualified business is designated as an enterprise project
3-4 under Section 2303.406.
3-5 (2) "Retained job" means a job that existed with a
3-6 qualified business before designation as an enterprise project
3-7 that:
3-8 (A) has provided employment to a qualified
3-9 employee of at least 1,820 hours annually; and
3-10 (B) is intended to be an employment position
3-11 during the period the business is designated as an enterprise
3-12 project in accordance with Chapter 151, Tax Code.
3-13 SECTION 4. Section 2303.406, Government Code, is amended to
3-14 read as follows:
3-15 Sec. 2303.406. ENTERPRISE PROJECT DESIGNATION. (a) The
3-16 department may designate a business as an enterprise project only
3-17 if the department determines that:
3-18 (1) the business is a qualified business under Section
3-19 2303.402 that is located in or has made a substantial commitment to
3-20 locate in an enterprise zone described by Section 2303.404(b);
3-21 (2) the governing body of the enterprise zone making
3-22 the application has demonstrated that a high level of cooperation
3-23 exists among public, private, and neighborhood entities in the
3-24 zone; [and]
3-25 (3) the designation will contribute significantly to
3-26 the achievement of the plans of the governing body making the
3-27 application for development and revitalization of the zone; and
4-1 (4) if the business is seeking job retention benefits:
4-2 (A) the permanent employees of the business will
4-3 be permanently laid off;
4-4 (B) the business will close down permanently;
4-5 (C) the business will relocate out-of-state;
4-6 (D) a 10 percent increase in the production
4-7 capacity of the business will occur;
4-8 (E) a 10 percent decrease in overall cost per
4-9 unit produced will occur; or
4-10 (F) the business facility has been legitimately
4-11 destroyed or impaired because of fire, flood, tornado, hurricane,
4-12 or any other natural disaster.
4-13 (b) The department shall designate qualified businesses as
4-14 enterprise projects on a competitive basis. The department shall
4-15 establish a minimum scoring threshold that must be met by the
4-16 qualified business applying for a project designation and make its
4-17 designation decisions using a weighted scale in which:
4-18 (1) 50 percent of the evaluation depends on the
4-19 economic distress of:
4-20 (A) the enterprise zone in which a proposed
4-21 enterprise project is located; and
4-22 (B) the area within the enterprise zone where
4-23 the project is located;
4-24 (2) 25 percent of the evaluation depends on the local
4-25 effort to achieve development and revitalization of the enterprise
4-26 zone; and
4-27 (3) 25 percent of the evaluation depends on the
5-1 evaluation criteria as determined by the department, which must
5-2 include:
5-3 (A) the level of cooperation and support the
5-4 project applicant commits to the revitalization goals of the zone;
5-5 and
5-6 (B) the type and wage level of the jobs to be
5-7 created or retained by the business.
5-8 (c) [The designation of an enterprise project is effective
5-9 until the fifth anniversary of the date on which the designation is
5-10 made.]
5-11 [(d)] The department may remove an enterprise project
5-12 designation if it determines that the business is not complying
5-13 with a requirement for its designation.
5-14 SECTION 5. Section 2303.511, Government Code, is amended to
5-15 read as follows:
5-16 Sec. 2303.511. OTHER LOCAL INCENTIVES. (a) The governing
5-17 body of a municipality or county that is the governing body of an
5-18 enterprise zone may:
5-19 (1) defer compliance in the zone with the subdivision
5-20 and development ordinances or rules, other than those relating to
5-21 streets and roads or sewer or water services, of the municipality
5-22 or county, as appropriate;
5-23 (2) give priority to the zone for the receipt of:
5-24 (A) [urban development action grant money;]
5-25 [(B)] community development block grant money;
5-26 (B) [(C)] industrial revenue bonds; or
5-27 (C) [(D)] funds received under the federal Job
6-1 Training [Texas Job-Training] Partnership Act (29 U.S.C. Section
6-2 1501 et seq.) [(Article 4413(52), Vernon's Texas Civil Statutes)];
6-3 (3) adopt and implement a plan for police protection
6-4 in the zone;
6-5 (4) amend the zoning ordinances of the municipality or
6-6 county, as appropriate, to promote economic development in the
6-7 zone;
6-8 (5) establish permitting preferences for businesses in
6-9 the zone;
6-10 (6) establish simplified, accelerated, or other
6-11 special permit procedures for businesses in the zone;
6-12 (7) waive development fees for projects in the zone;
6-13 (8) create a local enterprise zone fund for funding
6-14 bonds or other programs or activities to develop or revitalize the
6-15 zone;
6-16 (9) for qualified businesses in the zone, reduce rates
6-17 charged by:
6-18 (A) a utility owned by the municipality or
6-19 county, as appropriate; or
6-20 (B) a cooperative corporation or utility owned
6-21 by private investors, subject to the requirements of Subsection
6-22 (b);
6-23 (10) in issuing housing finance bonds, give priority
6-24 to persons or projects in the zone;
6-25 (11) in providing services, give priority to local
6-26 economic development, educational, job training, or transportation
6-27 programs that benefit the zone; or
7-1 (12) sell real property owned by the municipality or
7-2 county, as appropriate, and located in the enterprise zone in
7-3 accordance with Section 2303.513.
7-4 (b) A reduction in utility rates under Subsection (a)(9)(B)
7-5 is subject to the agreement of the affected utility and the
7-6 approval of the appropriate regulatory authority [under Sections 16
7-7 and 17, Public Utility Regulatory Act (Article 1446c, Vernon's
7-8 Texas Civil Statutes)]. The rates may [not] be reduced up to but
7-9 not more than five percent below the lowest rate authorized for a
7-10 person described by Subsection (a)(9)(B) [offered to any customer
7-11 located in the enterprise zone, including economic development
7-12 rates and standby rates]. A qualified enterprise project or the
7-13 governing body of the enterprise zone may petition the appropriate
7-14 utility and the appropriate regulatory authority to receive a
7-15 reduced rate under this section, and the regulatory authority may
7-16 order that rates be reduced. In making its determination under
7-17 this section, the regulatory authority shall consider
7-18 revitalization goals for the enterprise zone. In setting the rates
7-19 of the utility the appropriate regulatory authority shall allow the
7-20 utility to recover the amount of the reduction.
7-21 SECTION 6. Sections 151.429(d), (e), and (g), Tax Code, are
7-22 amended to read as follows:
7-23 (d) To receive a refund under this section, an enterprise
7-24 project must apply to the comptroller for the refund. The Texas
7-25 Department [department] of Economic Development [commerce] shall
7-26 provide the comptroller with the assistance that the comptroller
7-27 requires in administering this section.
8-1 (e) In this section:
8-2 (1) "Enterprise project" means a person designated by
8-3 the Texas Department of Economic Development [Commerce] as an
8-4 enterprise project under Chapter 2303, Government Code.
8-5 (2) "Enterprise zone," "qualified employee," and
8-6 "qualified hotel project" have the meanings assigned to those terms
8-7 by Section 2303.003, Government Code.
8-8 (3) "New permanent job" means a new employment
8-9 position created by a qualified business as described by Section
8-10 2303.402, Government Code, that:
8-11 (A) has provided at least 1,820 [1,040] hours of
8-12 employment a year to a qualified employee; and
8-13 (B) is intended to exist during the period that
8-14 the qualified business is designated as an enterprise project under
8-15 Chapter 2303, Government Code.
8-16 (4) "Retained job" has the meaning assigned by Section
8-17 2303.401.
8-18 (g) The refund provided by this section is conditioned on
8-19 the enterprise project maintaining at least the same level of
8-20 employment of qualified employees as existed at the time it
8-21 qualified for a refund for a period of three years from that date.
8-22 The Texas Department of Economic Development [Commerce] shall
8-23 annually certify to the comptroller [and the Legislative Budget
8-24 Board] whether that level of employment of qualified employees has
8-25 been maintained. On the Texas Department of Economic Development
8-26 [Commerce] certifying that such a level has not been maintained,
8-27 the comptroller shall assess that portion of the refund
9-1 attributable to any such decrease in employment, including penalty
9-2 and interest from the date of the refund.
9-3 SECTION 7. Section 171.1015(g), Tax Code, is amended to read
9-4 as follows:
9-5 (g) Only enterprise projects [qualified businesses] that
9-6 have been certified as eligible for a tax deduction under this
9-7 section by the Texas Department of Economic Development [Commerce]
9-8 to the comptroller may apply for [and the Legislative Budget Board
9-9 are entitled to] the tax deduction.
9-10 SECTION 8. This Act takes effect September 1, 1999.
9-11 SECTION 9. The importance of this legislation and the
9-12 crowded condition of the calendars in both houses create an
9-13 emergency and an imperative public necessity that the
9-14 constitutional rule requiring bills to be read on three several
9-15 days in each house be suspended, and this rule is hereby suspended.