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.