77R13413 E
By Coleman H.B. No. 3532
Substitute the following for H.B. No. 3532:
By Heflin C.S.H.B. No. 3532
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of commercial and industrial development
1-3 zones in certain populous counties; providing for taxes and the
1-4 issuance of bonds.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle B, Title 12, Local Government Code, is
1-7 amended by adding Chapter 386 to read as follows:
1-8 CHAPTER 386. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 386.001. DEFINITIONS. In this chapter:
1-11 (1) "Board" means a board of directors of a commercial
1-12 and industrial development zone.
1-13 (2) "Development zone" means an area designated as a
1-14 commercial and industrial development zone under this chapter.
1-15 Sec. 386.002. JURISDICTION OF MUNICIPALITY. For the
1-16 purposes of this chapter, territory in the extraterritorial
1-17 jurisdiction of a municipality is considered to be in the
1-18 jurisdiction of the municipality.
1-19 (Sections 386.003-386.030 reserved for expansion
1-20 SUBCHAPTER B. CREATION OF COMMERCIAL AND INDUSTRIAL
1-21 DEVELOPMENT ZONE
1-22 Sec. 386.031. CRITERIA FOR DEVELOPMENT ZONE CREATION.
1-23 (a) To be created as a development zone, an area must:
1-24 (1) have a continuous boundary;
2-1 (2) be an area of pervasive poverty, unemployment, or
2-2 economic distress;
2-3 (3) be adjacent to major transportation nodes and
2-4 thoroughfares that may be used for exporting products to major
2-5 airports, railways, and ports; and
2-6 (4) be designated as a development zone by an
2-7 ordinance or order adopted by each creating body.
2-8 (b) A municipality may contain not more than three
2-9 development zones within its jurisdiction.
2-10 (c) A county may contain not more than three development
2-11 zones in its unincorporated areas.
2-12 (d) Creation of a development zone in a municipality or
2-13 county does not affect the number of enterprise zones that may be
2-14 designated in the municipality or county under Chapter 2303,
2-15 Government Code.
2-16 Sec. 386.032. AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, OR
2-17 ECONOMIC DISTRESS. An area is an area of pervasive poverty,
2-18 unemployment, or economic distress for the purposes of Section
2-19 386.031 if:
2-20 (1) the average rate of unemployment in the area
2-21 during the most recent 12-month period for which data are available
2-22 was at least 1-1/2 times the state average for that period;
2-23 (2) the area is a low-income poverty area;
2-24 (3) the area is in a jurisdiction or pocket of
2-25 poverty, according to the most recent certification available from
2-26 the United States Department of Housing and Urban Development; or
2-27 (4) at least 70 percent of the residents or households
3-1 of the area have an income that is less than 80 percent of the
3-2 median income of the residents or households of the locality or
3-3 state, whichever is less.
3-4 Sec. 386.033. CREATION OF DEVELOPMENT ZONE. (a) A
3-5 development zone is created to promote and encourage:
3-6 (1) commercial development, including the development
3-7 of businesses in the technology field;
3-8 (2) workforce development;
3-9 (3) the improvement of competitiveness in education;
3-10 (4) public and private sector partnerships; and
3-11 (5) the revitalization of neighborhoods.
3-12 (b) The governing body of a municipality or county,
3-13 individually or in combination with other municipalities, by
3-14 ordinance or order may create as a development zone an area within
3-15 its jurisdiction that meets the criteria under Section 386.031.
3-16 (c) Each creating body must hold a public hearing before
3-17 adopting an ordinance or order under this section.
3-18 (d) The governing body of a county may not designate
3-19 territory in the jurisdiction of a municipality as part of a
3-20 proposed development zone unless the governing body of the
3-21 municipality also designates the territory.
3-22 (e) A development zone created under this section is a:
3-23 (1) political subdivision of the state; and
3-24 (2) special district.
3-25 Sec. 386.034. DESIGNATING ORDINANCE OR ORDER. (a) An
3-26 ordinance or order designating an area as a development zone must:
3-27 (1) describe precisely the area to be included in the
4-1 zone by a legal description or by reference to roadways, lakes,
4-2 waterways, or municipal or county boundaries;
4-3 (2) state a finding that the area meets the
4-4 requirements of this chapter;
4-5 (3) summarize briefly the:
4-6 (A) incentives, including tax incentives, that
4-7 the designating body chooses to apply to businesses in the area; or
4-8 (B) programs to be developed to affect
4-9 businesses in the area; and
4-10 (4) designate the area as a development zone.
4-11 (b) The incentives or programs summarized under Subsection
4-12 (a)(3) must include:
4-13 (1) an incentive that does not apply to all businesses
4-14 located in the jurisdiction of a governmental entity that
4-15 designated the area as a development zone;
4-16 (2) an incentive or program designed to improve the
4-17 skills of the local labor pool; and
4-18 (3) an incentive or program designed to address
4-19 infrastructure, housing, or other elements essential to improving
4-20 quality of life.
4-21 (c) This section does not prohibit a municipality or county
4-22 from extending additional incentives, including tax incentives, to
4-23 business enterprises in a development zone by a separate ordinance
4-24 or order.
4-25 Sec. 386.035. TAX INCREMENT. A creating body may allow one
4-26 quarter of one percent of a local property tax increment to fund a
4-27 development zone, as provided by Chapter 311, Tax Code. On
5-1 adoption of an order or ordinance by each creating body, the fund
5-2 may be used to pay salaries of employees of the board and
5-3 administrative expenses of the development zone.
5-4 Sec. 386.036. AMENDING BOUNDARIES. (a) A creating body by
5-5 ordinance or order may amend the boundary of a development zone
5-6 after a public hearing on the issue.
5-7 (b) The amended boundary:
5-8 (1) must be continuous;
5-9 (2) may not exceed the original size requirement of
5-10 Section 386.031; and
5-11 (3) may not exclude any area originally included
5-12 within the boundary of the development zone.
5-13 (c) The entire development zone with the amended boundary
5-14 must continue to meet the unemployment or economic distress
5-15 requirements of Section 386.031.
5-16 (d) A creating body may not make more than one boundary
5-17 amendment for a development zone in a calendar year.
5-18 (e) If more than one body created the development zone, each
5-19 body must agree on the amendment by ordinance or order.
5-20 (Sections 386.037-386.060 reserved for expansion
5-21 SUBCHAPTER C. BOARD OF DIRECTORS
5-22 Sec. 386.061. BOARD OF DIRECTORS. (a) A development zone
5-23 is governed by a board of nine directors who serve two-year terms,
5-24 appointed as follows:
5-25 (1) the governing body of the municipality, if any,
5-26 that includes the greatest part of the zone's territory shall
5-27 appoint four directors;
6-1 (2) other municipalities, if any, any part of which
6-2 are included in the zone's territory, jointly shall appoint one
6-3 director;
6-4 (3) the commissioners court of the county in which the
6-5 zone is located shall appoint:
6-6 (A) nine directors, if the zone contains no
6-7 municipality; or
6-8 (B) four directors, if the zone contains one or
6-9 more municipalities; and
6-10 (4) if a development zone contains territory in only
6-11 one municipality, the municipality and the county in which the zone
6-12 is located jointly shall appoint one director.
6-13 (b) The initial terms of directors may be staggered.
6-14 Sec. 386.062. QUALIFICATIONS OF DIRECTORS. To serve as a
6-15 director, a person must:
6-16 (1) be at least 21 years old; and
6-17 (2) be registered to vote in the county in which the
6-18 development zone is located.
6-19 Sec. 386.063. DISQUALIFICATION OF DIRECTORS. Section
6-20 49.052, Water Code, applies to directors of a development zone
6-21 created under this chapter as if the zone were a district governed
6-22 by that section.
6-23 Sec. 386.064. BOARD VACANCIES. A vacancy in the office of
6-24 director shall be filled by appointment by the entity that
6-25 appointed the vacating director.
6-26 Sec. 386.065. REMOVAL OF DIRECTOR. A majority of the board
6-27 may remove a director for misconduct or failure to carry out the
7-1 director's duties.
7-2 Sec. 386.066. ORGANIZATION OF BOARD. (a) Except as
7-3 provided by Subsection (b), after each appointment and
7-4 qualification of directors by the appointing entities, the board
7-5 shall organize by electing a president, a vice president, a
7-6 secretary, and any other officers the board considers necessary.
7-7 (b) If a director is appointed under Section 386.061(a)(4),
7-8 that director shall serve as board president.
7-9 Sec. 386.067. QUORUM; DIRECTOR'S DUTIES; MANAGEMENT OF ZONE.
7-10 Sections 49.053, 49.057, and 49.058, Water Code, apply to the board
7-11 of directors of a development zone created under this chapter as if
7-12 the zone were a district governed by those sections.
7-13 Sec. 386.068. MEETINGS AND NOTICE. (a) The board shall
7-14 designate and establish a development zone office in the county.
7-15 (b) The board may establish regular meetings to conduct
7-16 development zone business and may hold special meetings at other
7-17 times as the business of a zone requires.
7-18 (c) Notice of the time, place, and purpose of any meeting of
7-19 the board shall be given by posting a notice containing that
7-20 information at a place convenient to the public within the
7-21 development zone. A copy of the notice shall be furnished to the
7-22 clerk or clerks of the county in which the zone is located, who
7-23 shall post the notice on a bulletin board in the county courthouse
7-24 used for that purpose.
7-25 Sec. 386.069. DIRECTOR'S COMPENSATION; BOND AND OATH OF
7-26 OFFICE. Sections 375.067, 375.069, and 375.070 apply to directors
7-27 of a development zone created under this chapter as if the zone
8-1 were a municipal management district.
8-2 (Sections 386.070-386.100 reserved for expansion
8-3 SUBCHAPTER D. POWERS AND DUTIES
8-4 Sec. 386.101. GENERAL POWERS. (a) A development zone may
8-5 acquire and dispose of projects and has the powers, authority,
8-6 rights, and duties that are necessary to permit the accomplishment
8-7 of purposes for which the zone was created.
8-8 (b) A development zone may provide for general promotion of
8-9 and tourist advertising regarding the zone and its vicinity and for
8-10 a marketing program to attract visitors. The zone may conduct
8-11 those activities under contracts for professional services with
8-12 persons or organizations the zone selects.
8-13 (c) A development zone may enter into a memorandum of
8-14 understanding with any state agency, including an institution of
8-15 higher education, to further the economic development of the zone.
8-16 (d) To the extent not inconsistent with this chapter, a
8-17 development zone has the powers of:
8-18 (1) a municipal management district created under
8-19 Chapter 375; and
8-20 (2) a county commissioners court under Section
8-21 381.004.
8-22 Sec. 386.102. DUTY TO EVALUATE AVAILABLE FINANCING OPTIONS.
8-23 The board shall evaluate all options available to the development
8-24 zone as alternatives to imposing a tax under Section 386.035,
8-25 including:
8-26 (1) regional grants from federal and state agencies;
8-27 (2) local money from a creating body;
9-1 (3) money from charities;
9-2 (4) sales taxes for economic development in the
9-3 development zone;
9-4 (5) use or impact fees on affected business entities;
9-5 (6) incentives for business entities that may benefit
9-6 from the development zone;
9-7 (7) money provided by local governmental entities; and
9-8 (8) in-kind contributions.
9-9 Sec. 386.103. LIMIT ON DEVELOPMENT ZONE POWERS; OTHER LAWS
9-10 SUPERSEDE. (a) For purposes of this section, "district or zone"
9-11 means:
9-12 (1) a federal enterprise zone;
9-13 (2) a state enterprise zone;
9-14 (3) a municipal management district; or
9-15 (4) any other special district, other than a
9-16 development zone.
9-17 (b) This section applies only to a district or zone that
9-18 contains territory included in the development zone's territory.
9-19 (c) The authority granted to a development zone under this
9-20 chapter is not intended to duplicate the authority granted to a
9-21 district or zone.
9-22 (d) This chapter does not limit the authority or
9-23 jurisdiction of any district or zone.
9-24 (e) To the extent the laws of this chapter conflict with the
9-25 laws of any other district or zone, the laws of the other district
9-26 or zone shall control over this chapter.
9-27 Sec. 386.104. MONITORING. (a) The board shall monitor each
10-1 person in a development zone that receives benefits available under
10-2 this chapter.
10-3 (b) On the board's request, the Texas Workforce Commission
10-4 or the comptroller's office shall provide to the board tax records
10-5 of a person that receives benefits under this chapter.
10-6 Sec. 386.105. NEIGHBORHOOD REDEVELOPMENT ZONES. (a) The
10-7 board may designate an area as a neighborhood redevelopment zone if
10-8 the area is:
10-9 (1) adjacent to the development zone; and
10-10 (2) eligible for inclusion in the development zone
10-11 under Sections 386.036(b) and (c).
10-12 (b) A development zone may exercise the powers available to
10-13 it in an area designated by the board under Subsection (a).
10-14 Sec. 386.106. SUITS. A development zone may, through its
10-15 directors, sue and be sued in this state in the name of the
10-16 development zone. Service of process in a suit may be had by
10-17 serving a director.
10-18 (Sections 386.107-386.200 reserved for expansion
10-19 SUBCHAPTER E. GENERAL FISCAL PROVISIONS
10-20 Sec. 386.201. EXPENDITURES. A development zone's money may
10-21 be disbursed only by check, draft, order, or other instrument
10-22 signed by at least three directors. The general manager,
10-23 treasurer, or other employee of the development zone, if authorized
10-24 by resolution of the board, may sign checks, drafts, orders, or
10-25 other instruments on any development zone operation account on
10-26 behalf of the board.
10-27 Sec. 386.202. COMPETITIVE BIDDING; CONTRACT AWARD.
11-1 Subchapter K, Chapter 375, applies to a development zone created
11-2 under this chapter as if the zone were a municipal management
11-3 district.
11-4 (Sections 386.203-386.300 reserved for expansion
11-5 SUBCHAPTER F. DISSOLUTION
11-6 Sec. 386.301. DISSOLUTION OF DEVELOPMENT ZONE BY CREATING
11-7 BODY. (a) After a hearing, a creating body may dissolve a
11-8 development zone if:
11-9 (1) the area no longer meets the criteria for
11-10 designation under this chapter;
11-11 (2) the best interests of the creating body and the
11-12 owners of property and interests in property in the zone will be
11-13 served by dissolving the zone; and
11-14 (3) each creating body agrees by ordinance or order on
11-15 the:
11-16 (A) proposition that the zone should be
11-17 dissolved;
11-18 (B) disposition of zone assets; and
11-19 (C) assumption of liabilities by the creating
11-20 bodies.
11-21 (b) The dissolution of a development zone does not affect
11-22 the validity of a:
11-23 (1) tax incentive or regulatory relief granted or
11-24 accrued before the removal; or
11-25 (2) bond issued under this chapter.
11-26 Sec. 386.302. DISSOLUTION BY BOARD REQUEST. A board may
11-27 petition a creating body to dissolve the development zone under
12-1 Section 386.301 if a majority of the board finds at any time:
12-2 (1) before the authorization of bonds or the final
12-3 lending of its credit that the continuation of the development zone
12-4 is impracticable or cannot be successfully and beneficially
12-5 accomplished; or
12-6 (2) that all bonds of the development zone or other
12-7 debts of the zone have been paid and the purposes of the zone have
12-8 been accomplished.
12-9 Sec. 386.303. TAXES. On dissolution of a development zone,
12-10 any taxes levied on behalf of the zone are abolished.
12-11 SECTION 2. Section 311.002(1), Tax Code, is amended to read
12-12 as follows:
12-13 (1) "Project costs" means the expenditures made or
12-14 estimated to be made and monetary obligations incurred or estimated
12-15 to be incurred by the municipality or county establishing a
12-16 reinvestment zone that are listed in the project plan as costs of
12-17 public works or public improvements in the zone, plus other costs
12-18 incidental to those expenditures and obligations. "Project costs"
12-19 include:
12-20 (A) capital costs, including the actual costs of
12-21 the acquisition and construction of public works, public
12-22 improvements, new buildings, structures, and fixtures; the actual
12-23 costs of the acquisition, demolition, alteration, remodeling,
12-24 repair, or reconstruction of existing buildings, structures, and
12-25 fixtures; and the actual costs of the acquisition of land and
12-26 equipment and the clearing and grading of land;
12-27 (B) financing costs, including all interest paid
13-1 to holders of evidences of indebtedness or other obligations issued
13-2 to pay for project costs and any premium paid over the principal
13-3 amount of the obligations because of the redemption of the
13-4 obligations before maturity;
13-5 (C) real property assembly costs;
13-6 (D) professional service costs, including those
13-7 incurred for architectural, planning, engineering, and legal advice
13-8 and services;
13-9 (E) imputed administrative costs, including
13-10 reasonable charges for the time spent by employees of the
13-11 municipality or county in connection with the implementation of a
13-12 project plan;
13-13 (F) relocation costs;
13-14 (G) organizational costs, including the costs of
13-15 conducting environmental impact studies or other studies, the cost
13-16 of publicizing the creation of the zone, and the cost of
13-17 implementing the project plan for the zone;
13-18 (H) interest before and during construction and
13-19 for one year after completion of construction, whether or not
13-20 capitalized;
13-21 (I) the cost of operating the reinvestment zone
13-22 and project facilities;
13-23 (J) the amount of any contributions made by the
13-24 municipality or county from general revenue for the implementation
13-25 of the project plan; and
13-26 (K) payments made at the discretion of the
13-27 governing body of the municipality or the commissioners court of
14-1 the county that the municipality or county finds necessary or
14-2 convenient to the creation of the zone or to the implementation of
14-3 the project plans for the zone.
14-4 SECTION 3. Chapter 311, Tax Code, is amended by adding
14-5 Section 311.019 to read as follows:
14-6 Sec. 311.019. PROCEDURE FOR CREATING REINVESTMENT ZONE IN
14-7 UNINCORPORATED AREA OF COUNTY. (a) The commissioners court of a
14-8 county may designate a contiguous geographic area in the
14-9 unincorporated area of the county to be a reinvestment zone to
14-10 promote development or redevelopment of the area if the
14-11 commissioners court determines that development or redevelopment
14-12 would not occur solely through private investment in the reasonably
14-13 foreseeable future.
14-14 (b) Before designating a reinvestment zone, the
14-15 commissioners court of the county must prepare a preliminary
14-16 reinvestment zone financing plan. On completion of the plan, a copy
14-17 of the plan must be sent to the governing body of each taxing unit
14-18 that levies taxes on real property in the proposed zone.
14-19 (c) Before designating a reinvestment zone, the county must
14-20 hold a public hearing on the creation of the zone and its benefits
14-21 to the county and to the property in the proposed zone. At the
14-22 hearing any interested person may speak for or against the creation
14-23 of the zone, its boundaries, or the concept of tax increment
14-24 financing. Not later than the seventh day before the date of the
14-25 hearing, notice of the hearing must be published in a newspaper of
14-26 general circulation in the county.
14-27 (d) A county must provide a reasonable opportunity for an
15-1 owner of property to protest the inclusion of the owner's property
15-2 in a proposed reinvestment zone.
15-3 (e) Not later than the 60th day before the date of the
15-4 public hearing required by Subsection (c), the commissioners court
15-5 of the county must notify in writing the governing body of each
15-6 taxing unit that levies real property taxes in the proposed
15-7 reinvestment zone that it intends to establish the zone. The
15-8 notice must contain a description of the proposed boundaries of the
15-9 zone, the plans for the development or redevelopment zone, and an
15-10 estimate of the general impact of the proposed zone on property
15-11 values and tax revenues. The notice may be given later than the
15-12 60th day before the date of the public hearing if the commissioners
15-13 court of each county and the governing body of each school district
15-14 that levies real property taxes in the proposed zone agree to waive
15-15 that requirement.
15-16 (f) A taxing unit may request additional information from
15-17 the commissioners court of the county. The commissioners court of
15-18 the county shall provide the information requested to the extent
15-19 practicable. The commissioners court of the county shall make a
15-20 formal presentation to the governing body of each school district
15-21 that levies real property taxes in the proposed reinvestment zone.
15-22 The presentation must include a description of the proposed
15-23 boundaries of the zone, the plans for the development or
15-24 redevelopment of the zone, and an estimate of the general impact of
15-25 the proposed zone on property values and tax revenues. The
15-26 commissioners court of the county shall notify each taxing unit
15-27 that levies real property taxes in the proposed zone of each
16-1 presentation to be made to a school district under this subsection.
16-2 Members of the governing body of each taxing unit that levies real
16-3 property taxes in the proposed zone may attend a presentation under
16-4 this subsection. If the school districts involved agree, the
16-5 commissioners court of the county may make a single presentation to
16-6 more than one school district governing body.
16-7 (g) Not later than the 15th day after the date the notice
16-8 required by Subsection (e) is given, each taxing unit that levies
16-9 real property taxes in the proposed reinvestment zone shall
16-10 designate a representative to meet with the commissioners court of
16-11 the county to discuss the project plan and the reinvestment zone
16-12 financing plan and shall notify the commissioners court of the
16-13 county of its designation. At any time after the 15th day after
16-14 the date the notice required by Subsection (e) has been given to
16-15 every taxing unit, the commissioners court of the county may call a
16-16 meeting of the representatives of the taxing units. The
16-17 commissioners court of the county may call as many meetings as it
16-18 considers necessary. Each representative shall be notified of each
16-19 meeting in advance. At the meetings the commissioners court of the
16-20 county and the representatives of the taxing units may discuss the
16-21 boundaries of the zone, development in the zone, the tax increment
16-22 that each taxing unit will contribute to the tax increment fund,
16-23 the retention by a taxing unit of a portion of its tax increment as
16-24 permitted by Section 311.013, the exclusion of particular parcels
16-25 of property from the zone, the board of directors of the zone, and
16-26 tax collection for the zone. On the motion of the commissioners
16-27 court of the county calling the meeting, any other matter relevant
17-1 to the proposed reinvestment zone may be discussed.
17-2 SECTION 4. Subchapter D, Chapter 431, Transportation Code, is
17-3 amended by adding Sections 431.110 and 431.111 to read as follows:
17-4 Sec. 431.110. CONFLICT OF INTEREST IN CONTRACT. Chapter 171,
17-5 Local Government Code, applies to the award of a contract by a
17-6 local government corporation.
17-7 Sec. 431.111. ANNUAL REPORT TO COMPTROLLER. (a) Not later
17-8 than February 1 of each year, the board of a local government
17-9 corporation shall submit to the comptroller a report in the form
17-10 required by the comptroller. The form for the report may not exceed
17-11 one page in length.
17-12 (b) The report must include:
17-13 (1) a statement of the corporation's purpose;
17-14 (2) a statement of the corporation's total revenues
17-15 and expenditures during the preceding fiscal year; and
17-16 (3) a summary of the corporation's activities during
17-17 the preceding fiscal year, including any bonds issued and capital
17-18 projects undertaken.
17-19 (c) The board shall submit a copy of the report to the local
17-20 government that created the corporation.
17-21 SECTION 5. This Act takes effect immediately if it receives
17-22 a vote of two-thirds of all the members elected to each house, as
17-23 provided by Section 39, Article III, Texas Constitution. If this
17-24 Act does not receive the vote necessary for immediate effect, this
17-25 Act takes effect September 1, 2001.