1-1                                   AN ACT
 1-2     relating to the cleanup of contaminated property.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Section 2(4), Development Corporation Act of 1979
 1-5     (Article 5190.6, Vernon's Texas Civil Statutes), is amended to read
 1-6     as follows:
 1-7                 (4)  "Cost" as applied to a project shall mean and
 1-8     embrace the cost of acquisition, cleanup, construction,
 1-9     reconstruction, improvement, and expansion, including the cost of
1-10     the acquisition of all land, rights-of-way, property rights,
1-11     easements, and interests, the cost of all machinery and equipment,
1-12     financing charges, inventory, raw materials and other supplies,
1-13     research and development costs, interest prior to and during
1-14     construction and for one year after completion of construction
1-15     whether or not capitalized, necessary reserve funds, cost of
1-16     estimates and of engineering and legal services, plans,
1-17     specifications, surveys, estimates of cost and of revenue, other
1-18     expenses necessary or incident to determining the feasibility and
1-19     practicability of acquiring, cleaning, constructing,
1-20     reconstructing, improving, and expanding any such project,
1-21     administrative expense and such other expense as may be necessary
1-22     or incident to the acquisition, cleanup, construction,
1-23     reconstruction, improvement, and expansion thereof, the placing of
1-24     the same in operation, and the financing or refinancing of any such
 2-1     project, including the refunding of any outstanding obligations,
 2-2     mortgages, or advances issued, made or given by any person for any
 2-3     of the aforementioned costs.
 2-4           SECTION 2. Section 4A, Development Corporation Act of 1979
 2-5     (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
 2-6     adding Subsection (t) to read as follows:
 2-7           (t)  The department, with the assistance of the Texas Natural
 2-8     Resource Conservation Commission, may encourage the cleanup of
 2-9     contaminated property by corporations created under this section
2-10     through the use of sales and use tax proceeds.  A corporation
2-11     created under this section may use proceeds from the sales and use
2-12     tax to undertake the cleanup of contaminated property only if the
2-13     use of tax proceeds for that purpose is authorized by a majority of
2-14     the qualified voters of the city voting in an election called and
2-15     held for that purpose.  The ballot in an election held under this
2-16     subsection shall be printed to provide for voting for or against
2-17     the proposition: "The use of sales and use tax proceeds for the
2-18     cleanup of contaminated property."
2-19           SECTION 3. Section 4B, Development Corporation Act of 1979
2-20     (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
2-21     adding Subsection (p) to read as follows:
2-22           (p)  The department, with the assistance of the Texas Natural
2-23     Resource Conservation Commission, may encourage the cleanup of
2-24     contaminated property by corporations created under this section
2-25     through the use of sales and use tax proceeds.  Notwithstanding any
2-26     other provision of this section, a corporation created under this
2-27     section may use proceeds from the sales and use tax to undertake
 3-1     the cleanup of contaminated property only if the use of tax
 3-2     proceeds for that purpose is authorized by a majority of the
 3-3     qualified voters of the city voting in an election called and held
 3-4     for that purpose.  The ballot in an election held under this
 3-5     subsection shall be printed to provide for voting for or against
 3-6     the proposition: "The use of sales and use tax proceeds for the
 3-7     cleanup of contaminated property."
 3-8           SECTION 4.  Subchapter H, Chapter 2155, Government Code, is
 3-9     amended by adding Section 2155.449 to read as follows:
3-10           Sec. 2155.449.  PREFERENCE FOR PRODUCTS OF FACILITIES ON
3-11     FORMERLY CONTAMINATED PROPERTY.  The commission and state agencies
3-12     shall give preference to goods produced at a facility located on
3-13     property for which the owner has received a certificate of
3-14     completion under Section 361.609, Health and Safety Code, if the
3-15     goods meet state specifications regarding quantity, quality,
3-16     delivery, life cycle costs, and price.
3-17           SECTION 5. Section 2303.102, Government Code, is amended by
3-18     adding Subsection (c) to read as follows:
3-19           (c)  For purposes of determining the average rate of
3-20     unemployment in the area under Subsection (a)(1), individuals who
3-21     are employed by a business and whose principal place of employment
3-22     is on property for which the business has received a certificate of
3-23     completion under Section 361.609, Health and Safety Code, are not
3-24     considered.
3-25           SECTION 6. Section 312.211(a), Tax Code, is amended to read
3-26     as follows:
3-27           (a)  This section applies only to:
 4-1                 (1)  real property:
 4-2                       (A)  that is located in a reinvestment zone;
 4-3                       (B)  that is not in an improvement project
 4-4     financed by tax increment bonds; and
 4-5                       (C)  that is the subject of a voluntary cleanup
 4-6     agreement under Section 361.606, Health and Safety Code; and
 4-7                       [(D)  the value of which is adversely affected by
 4-8     the release of a hazardous substance or contaminant according to
 4-9     the two preceding appraisals by the appraisal office; and]
4-10                 (2)  tangible personal property located on the real
4-11     property.
4-12           SECTION 7. Section 7.067(a), Water Code, is amended to read
4-13     as follows:
4-14           (a)  The commission may compromise, modify, or remit, with or
4-15     without conditions, an administrative penalty imposed under this
4-16     subchapter.  In determining the appropriate amount of a penalty for
4-17     settlement of an administrative enforcement matter, the commission
4-18     may consider a respondent's willingness to contribute to
4-19     supplemental environmental projects that are approved by the
4-20     commission, giving preference to projects that benefit the
4-21     community in which the alleged violation occurred.  The commission
4-22     may encourage the cleanup of contaminated property through the use
4-23     of supplemental environmental projects.  The commission may approve
4-24     a supplemental environmental project with activities in territory
4-25     of the United Mexican States if the project substantially benefits
4-26     territory in this state in a manner described by Subsection (b).
4-27     The commission may not approve a project that is necessary to bring
 5-1     a respondent into compliance with environmental laws or that is
 5-2     necessary to remediate environmental harm caused by the
 5-3     respondent's alleged violation.
 5-4           SECTION 8. (a)  This Act takes effect September 1, 2001.
 5-5           (b)  The change in law made by Section 2303.102(c),
 5-6     Government Code, as added by this Act, applies only to an area that
 5-7     is nominated as an enterprise zone on or after the effective date
 5-8     of this Act.  An area that is nominated as an enterprise zone
 5-9     before the effective date of this Act is governed by the former
5-10     law, and that law is continued in effect for that purpose.
5-11           (c)  The change in law made by Section 312.211(a), Tax Code,
5-12     as amended by this Act, applies only to a tax abatement agreement
5-13     entered into on or after the effective date of this Act.  A tax
5-14     abatement agreement entered into before the effective date of this
5-15     Act is governed by the former law, and that law is continued in
5-16     effect for that purpose.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1027 was passed by the House on March
         29, 2001, by a non-record vote; and that the House concurred in
         Senate amendments to H.B. No. 1027 on May 18, 2001, by a non-record
         vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1027 was passed by the Senate, with
         amendments, on May 16, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor