By: Gallegos S.B. No. 1907
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the creation of commercial and industrial development
1-2 zones in certain populous counties; providing for taxes and the
1-3 issuance of bonds.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle B, Title 12, Local Government Code, is
1-6 amended by adding Chapter 384 to read as follows:
1-7 CHAPTER 384. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Sec. 384.001. DEFINITIONS. In this chapter:
1-10 (1) "Board" means a board of directors of a commercial
1-11 and industrial development zone.
1-12 (2) "Development zone" means an area designated as a
1-13 commercial and industrial development zone under this chapter.
1-14 Sec. 384.002. JURISDICTION OF MUNICIPALITY. For the
1-15 purposes of this chapter, territory in the extraterritorial
1-16 jurisdiction of a municipality is considered to be in the
1-17 jurisdiction of the municipality.
1-18 (Sections 384.003-384.030 reserved for expansion
1-19 SUBCHAPTER B. CREATION OF COMMERCIAL AND INDUSTRIAL
1-20 DEVELOPMENT ZONE
1-21 Sec. 384.031. CRITERIA FOR DEVELOPMENT ZONE CREATION.
1-22 (a) To be created as a development zone, and area must:
2-1 (1) have a continuous boundary;
2-2 (2) be at least 10 square miles but not larger than an
2-3 area that is equal to five percent of the area, excluding lakes,
2-4 waterways, and transportation arteries, of the municipality,
2-5 county, or combination of municipalities and the county nominating
2-6 the area as a development zone;
2-7 (3) be an area of pervasive poverty, unemployment, or
2-8 economic distress;
2-9 (4) be located in a county with a population of 2.5
2-10 million or more;
2-11 (5) be adjacent to major transportation nodes and
2-12 thoroughfares that may be used for exporting products to major
2-13 airports, railways, and ports; and
2-14 (6) be designated as a development zone by an
2-15 ordinance or order adopted by each creating body.
2-16 (b) A municipality may contain not more than three
2-17 development zones within its jurisdiction.
2-18 (c) A county may contain not more than three development
2-19 zones in its unincorporated areas.
2-20 (d) Creation of a development zone in a municipality or
2-21 county does not affect the number of enterprise zones that may be
2-22 designated in the municipality or county under Chapter 2303,
2-23 Government Code.
2-24 Sec. 384.032. AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, OR
2-25 ECONOMIC DISTRESS. An area is an area of pervasive poverty,
2-26 unemployment, or economic distress for the purposes of Section
3-1 384.031 if:
3-2 (1) the average rate of unemployment in the area
3-3 during the most recent 12-month period for which data are available
3-4 was at least one and one-half times the state average for that
3-5 period;
3-6 (2) the area is a low-income poverty area;
3-7 (3) the area is in a jurisdiction or pocket of
3-8 poverty, according to the most recent certification available from
3-9 the United States Department of Housing and Urban Development; or
3-10 (4) at least 70 percent of the residents or households
3-11 of the area have an income that is less than 80 percent of the
3-12 median income of the residents or households of the locality or
3-13 state, whichever is less.
3-14 Sec. 384.033. CREATION OF DEVELOPMENT ZONE. (a) A
3-15 development zone is created to promote and encourage:
3-16 (1) commercial development, including the development
3-17 of businesses in the technology field;
3-18 (2) workforce development;
3-19 (3) the improvement of competitiveness in education;
3-20 (4) public and private sector partnerships; and
3-21 (5) the revitalization of neighborhoods.
3-22 (b) The governing body of a municipality or county,
3-23 individually or in combination with other municipalities, by
3-24 ordinance or order may create as a development zone an area within
3-25 its jurisdiction that meets the criteria under Section 384.031.
3-26 (c) Each creating body must hold a public hearing before
4-1 adopting an ordinance or order under this section.
4-2 (d) The governing body of a county may not designate
4-3 territory in the jurisdiction of a municipality as part of a
4-4 proposed development zone unless the governing body of the
4-5 municipality also designates the territory.
4-6 (e) A development zone created under this section is a:
4-7 (1) political subdivision of the state; and
4-8 (2) special district.
4-9 Sec. 384.034. DESIGNATING ORDINANCE OR ORDER. (a) An
4-10 ordinance or order designating an area as a development zone must:
4-11 (1) describe precisely the area to be included in the
4-12 zone by a legal description or by reference to roadways, lakes,
4-13 waterways, or municipal or county boundaries;
4-14 (2) state a finding that the area meets the
4-15 requirements of this chapter;
4-16 (3) summarize briefly the:
4-17 (A) incentives, including tax incentives, that
4-18 the designating body chooses to apply to businesses in the area; or
4-19 (B) programs to be developed to affect
4-20 businesses in the area; and
4-21 (4) designate the area as a development zone.
4-22 (b) The incentives or programs summarized under Subsection
4-23 (a)(3) must include:
4-24 (1) an incentive that does not apply to all businesses
4-25 located in the jurisdiction of a governmental entity that
4-26 designated the area as a development zone;
5-1 (2) an incentive or program designed to improve the
5-2 skills of the local labor pool; and
5-3 (3) an incentive or program designed to address
5-4 infrastructure, housing, or other elements essential to improving
5-5 quality of life.
5-6 (c) This section does not prohibit a municipality or county
5-7 from extending additional incentives, including tax incentives, to
5-8 business enterprises in a development zone by a separate ordinance
5-9 or order.
5-10 Sec. 384.035. TAX INCREMENT. A creating body may allow one
5-11 quarter of one percent of a local property tax increment to fund a
5-12 development zone, as provided by Chapter 311, Tax Code. On
5-13 adoption of an order or ordinance by each creating body, the fund
5-14 may be used to pay salaries of employees of the board and
5-15 administrative expenses of the development zone.
5-16 Sec. 384.036. AMENDING BOUNDARIES. (a) A creating body by
5-17 ordinance or order may amend the boundary of a development zone
5-18 after a public hearing on the issue.
5-19 (b) The amended boundary:
5-20 (1) must be continuous;
5-21 (2) may not exceed the original size requirement of
5-22 Section 384.031; and
5-23 (3) may not exclude any area originally included
5-24 within the boundary of the development zone.
5-25 (c) The entire development zone with the amended boundary
5-26 must continue to meet the unemployment or economic distress
6-1 requirements of Section 384.031.
6-2 (d) A creating body may not make more than one boundary
6-3 amendment for a development zone in a calendar year.
6-4 (e) If more than one body created the development zone, each
6-5 body must agree on the amendment by ordinance or order.
6-6 (Sections 384.037-384.060 reserved for expansion
6-7 SUBCHAPTER C. BOARD OF DIRECTORS
6-8 Sec. 384.061. BOARD OF DIRECTORS. (a) A development zone
6-9 is governed by a board of nine directors who serve two-year terms,
6-10 appointed as follows:
6-11 (1) the governing body of the municipality, if any,
6-12 that includes the greatest part of the zone's territory shall
6-13 appoint four directors;
6-14 (2) other municipalities, if any, any part of which
6-15 are included in the zone's territory, jointly shall appoint one
6-16 director;
6-17 (3) the commissioners court of the county in which the
6-18 zone is located shall appoint:
6-19 (A) nine directors, if the zone contains no
6-20 municipality; or
6-21 (B) four directors, if the zone contains one or
6-22 more municipalities; and
6-23 (4) if a development zone contains territory in only
6-24 one municipality, the municipality and the county in which the zone
6-25 is located jointly shall appoint one director.
6-26 (b) The initial terms of directors may be staggered, but a
7-1 director's term may not exceed two years.
7-2 Sec. 384.062. QUALIFICATIONS OF DIRECTORS. To serve as a
7-3 director, a person must:
7-4 (1) be at least 21 years old; and
7-5 (2) be registered to vote in the county in which the
7-6 development zone is located.
7-7 Sec. 384.063. DISQUALIFICATION OF DIRECTORS. Section
7-8 49.052, Water Code, applies to directors of a development zone
7-9 created under this chapter as if the zone were a district governed
7-10 by that section.
7-11 Sec. 384.064. BOARD VACANCIES. A vacancy in the office of
7-12 director shall be filled by appointment by the entity that
7-13 appointed the vacating director.
7-14 Sec. 384.065. REMOVAL OF DIRECTOR. A majority of the board
7-15 may remove a director for misconduct or failure to carry out the
7-16 director's duties.
7-17 Sec. 384.066. ORGANIZATION OF BOARD. (a) Except as
7-18 provided by Subsection (b), after each appointment and
7-19 qualification of directors by the appointing entities, the board
7-20 shall organize by electing a president, a vice president, a
7-21 secretary, and any other officers the board considers necessary.
7-22 (b) If a director is appointed under Section 384.061(a)(4),
7-23 that director shall serve as board president.
7-24 Sec. 384.067. QUORUM; DIRECTOR'S DUTIES; MANAGEMENT OF ZONE.
7-25 Sections 49.053, 49.057, and 49.058, Water Code, apply to the board
7-26 of directors of a development zone created under this chapter as if
8-1 the zone were a district governed by those sections.
8-2 Sec. 384.068. MEETINGS AND NOTICE. (a) The board shall
8-3 designate and establish a development zone office in the county.
8-4 (b) The board may establish regular meetings to conduct
8-5 development zone business and may hold special meetings at other
8-6 times as the business of a zone requires.
8-7 (c) Notice of the time, place, and purpose of any meeting of
8-8 the board shall be given by posting a notice containing that
8-9 information at a place convenient to the public within the
8-10 development zone. A copy of the notice shall be furnished to the
8-11 clerk or clerks of the county in which the zone is located, who
8-12 shall post the notice on a bulletin board in the county courthouse
8-13 used for that purpose.
8-14 Sec. 384.069. DIRECTOR'S COMPENSATION; BOND AND OATH OF
8-15 OFFICE. Sections 375.067, 375.069, and 375.070 apply to directors
8-16 of a development zone created under this chapter as if the zone
8-17 were a municipal management district.
8-18 (Sections 384.070-384.100 reserved for expansion
8-19 SUBCHAPTER D. POWERS AND DUTIES
8-20 Sec. 384.101. GENERAL POWERS. (a) A development zone may
8-21 acquire and dispose of projects and has the powers, authority,
8-22 rights, and duties that are necessary to permit the accomplishment
8-23 of purposes for which the zone was created.
8-24 (b) A development zone may provide for general promotion of
8-25 and tourist advertising regarding the zone and its vicinity and for
8-26 a marketing program to attract visitors. The zone may conduct
9-1 those activities under contracts for professional services with
9-2 persons or organizations the zone selects.
9-3 (c) A development zone may enter into a memorandum of
9-4 understanding with any state agency, including an institution of
9-5 higher education, to further the economic development of the zone.
9-6 (d) To the extent not inconsistent with this chapter, a
9-7 development zone has the powers of:
9-8 (1) a municipal management district created under
9-9 Chapter 375; and
9-10 (2) a county commissioners court under Section
9-11 381.004.
9-12 Sec. 384.102. DUTY TO EVALUATE AVAILABLE FINANCING OPTIONS.
9-13 The board shall evaluate all options available to the development
9-14 zone as alternatives to imposing a tax under Section 384.035,
9-15 including:
9-16 (1) regional grants from federal and state agencies;
9-17 (2) local money from a creating body;
9-18 (3) money from charities;
9-19 (4) sales taxes for economic development in the
9-20 development zone;
9-21 (5) use or impact fees on affected business entities;
9-22 (6) incentives for business entities that may benefit
9-23 from the development zone;
9-24 (7) money provided by local governmental entities; and
9-25 (8) in-kind contributions.
9-26 Sec. 384.103. LIMIT ON DEVELOPMENT ZONE POWERS; OTHER LAWS
10-1 SUPERSEDE. (a) For purposes of this section, "district or zone"
10-2 means:
10-3 (1) a federal enterprise zone;
10-4 (2) a state enterprise zone;
10-5 (3) a municipal management district; or
10-6 (4) any other special district, other than a
10-7 development zone.
10-8 (b) This section applies only to a district or zone that
10-9 contains territory included in the development zone's territory.
10-10 (c) The authority granted to a development zone under this
10-11 chapter is not intended to duplicate the authority granted to a
10-12 district or zone.
10-13 (d) This chapter does not limit the authority or
10-14 jurisdiction of any district or zone.
10-15 (e) To the extent the laws of this chapter conflict with the
10-16 laws of any other district or zone, the laws of the other district
10-17 or zone shall control over this chapter.
10-18 Sec. 384.104. SUITS. A development zone may, through its
10-19 directors, sue and be sued in this state in the name of the
10-20 development zone. Service of process in a suit may be had by
10-21 serving a director.
10-22 (Sections 384.105-384.200 reserved for expansion
10-23 SUBCHAPTER E. BENEFITS OF DEVELOPMENT ZONE
10-24 Sec. 384.201. MONITORING. (a) The board shall monitor each
10-25 person in a development zone that receives benefits available under
10-26 this chapter.
11-1 (b) On the board's request, the Texas Workforce Commission
11-2 or the comptroller's office shall provide to the board tax records
11-3 of a person that receives benefits under this chapter.
11-4 Sec. 384.202. NEIGHBORHOOD REDEVELOPMENT ZONES. (a) The
11-5 board may designate an area as a neighborhood redevelopment zone if
11-6 the area is:
11-7 (1) adjacent to the development zone; and
11-8 (2) eligible for inclusion in the development zone
11-9 under Sections 384.036(b) and (c).
11-10 (b) A development zone may exercise the powers available to
11-11 it in an area designated by the board under Subsection (a).
11-12 (Sections 384.203-384.300 reserved for expansion
11-13 SUBCHAPTER F. GENERAL FISCAL PROVISIONS
11-14 Sec. 384.301. EXPENDITURES. A development zone's money may
11-15 be disbursed only by check, draft, order, or other instrument
11-16 signed by at least three directors. The general manager,
11-17 treasurer, or other employee of the development zone, if authorized
11-18 by resolution of the board, may sign checks, drafts, orders, or
11-19 other instruments on any development zone operation account on
11-20 behalf of the board.
11-21 Sec. 384.302. COMPETITIVE BIDDING; CONTRACT AWARD. Sections
11-22 375.221, 375.222, and 375.223 apply to a development zone created
11-23 under this chapter as if the zone were a municipal management
11-24 district.
12-1 (Sections 384.303-384.400 reserved for expansion
12-2 SUBCHAPTER G. DISSOLUTION
12-3 Sec. 384.401. DISSOLUTION OF DEVELOPMENT ZONE BY CREATING
12-4 BODY. (a) After a hearing, a creating body may dissolve a
12-5 development zone if:
12-6 (1) the area no longer meets the criteria for
12-7 designation under this chapter;
12-8 (2) the best interests of the creating body and the
12-9 owners of property and interests in property in the zone will be
12-10 served by dissolving the zone; and
12-11 (3) each creating body agrees by ordinance or order on
12-12 the:
12-13 (A) proposition that the zone should be
12-14 dissolved;
12-15 (B) disposition of zone assets; and
12-16 (C) assumption of liabilities by the creating
12-17 bodies.
12-18 (b) The dissolution of a development zone does not affect
12-19 the validity of a:
12-20 (1) tax incentive or regulatory relief granted or
12-21 accrued before the removal; or
12-22 (2) bond issued under this chapter.
12-23 Sec. 384.402. DISSOLUTION BY BOARD REQUEST. A board may
12-24 petition a creating body to dissolve the development zone under
12-25 Section 384.401 if a majority of the board finds at any time:
12-26 (1) before the authorization of bonds or the final
13-1 lending of its credit that the continuation of the development zone
13-2 is impracticable or cannot be successfully and beneficially
13-3 accomplished; or
13-4 (2) that all bonds of the development zone or other
13-5 debts of the zone have been paid and the purposes of the zone have
13-6 been accomplished.
13-7 Sec. 384.403. TAXES. On dissolution of a development zone,
13-8 any taxes levied on behalf of the zone are abolished.
13-9 SECTION 2. The importance of this legislation and the
13-10 crowded condition of the calendars in both houses create an
13-11 emergency and an imperative public necessity that the
13-12 constitutional rule requiring bills to be read on three several
13-13 days in each house be suspended, and this rule is hereby suspended,
13-14 and that this Act take effect and be in force from and after its
13-15 passage, and it is so enacted.