79R1753 ATP-D
By: Jones of Dallas H.B. No. 1380
A BILL TO BE ENTITLED
AN ACT
relating to the creation of renaissance zones to promote the
relocation of businesses to certain areas of this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 10, Government Code, is
amended by adding Chapter 2312 to read as follows:
CHAPTER 2312. RENAISSANCE ZONES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2312.001. DEFINITIONS. In this chapter:
(1) "Business" includes a part of the operations of a
business entity.
(2) "Eligible business" means a business designated as
an eligible business under Section 2312.102.
(3) "Office" means the Texas Economic Development and
Tourism Office.
(4) "Relocate" means to establish a physical presence
at a new location, including:
(A) the transfer of an existing business
operation to a facility at a different location;
(B) the expansion of an existing business
operation to an additional location; or
(C) the establishment of an office or plant at a
different location.
(5) "Taxing unit" has the meaning assigned by Section
1.04, Tax Code.
(6) "Zone" means an area designated as a renaissance
zone under this chapter.
Sec. 2312.002. REINVESTMENT ZONE. A zone is a reinvestment
zone within the meaning of Section 1-g(a), Article VIII, Texas
Constitution.
[Sections 2312.003-2312.050 reserved for expansion]
SUBCHAPTER B. CREATION OF ZONE
Sec. 2312.051. NOMINATION OF AREA. (a) The governing body
of a taxing unit, singly or jointly with another taxing unit, may by
order or ordinance nominate an area located within the boundaries
of the taxing unit for designation as a zone by submitting an
application to the office.
(b) An application for designation as a zone shall contain:
(1) a copy of the order or ordinance nominating the
area as a zone;
(2) a map of the area showing existing streets and
highways and the boundaries of the area;
(3) an analysis and appropriate supporting documents
and statistics demonstrating that the area qualifies for
designation as a zone;
(4) information demonstrating that an eligible
business is likely to relocate to the area if the area is designated
as a zone; and
(5) any other information required by the office.
Sec. 2312.052. DESIGNATION BY OFFICE. (a) The office shall
review each application submitted by a taxing unit seeking
designation as a zone.
(b) The office must decide whether to designate an area as a
zone before the 90th day after the date on which the application is
submitted.
(c) The office shall decide whether to designate an area as
a zone based on:
(1) whether the criteria for designation as a zone
prescribed by Section 2312.053 are met; and
(2) the likelihood that an eligible business will
relocate to the area.
Sec. 2312.053. CRITERIA FOR DESIGNATION. To be designated
as a zone an area must:
(1) have a continuous boundary;
(2) be at least one square mile but not larger than the
greater of:
(A) 10 square miles, excluding lakes, waterways,
and transportation arteries; or
(B) an area, not to exceed 20 square miles, that
is equal to five percent of the area, excluding lakes, waterways,
and transportation arteries, of the county in which the area is
located; and
(3) be an area classified as an area of pervasive
poverty, unemployment, and economic distress under Section
2303.102.
[Sections 2312.054-2312.100 reserved for expansion]
SUBCHAPTER C. BOARD OF DIRECTORS; POWERS AND DUTIES OF BOARD
Sec. 2312.101. BOARD OF DIRECTORS. (a) A zone is governed
by a board of directors.
(b) The executive director of the office shall by rule
determine the number of directors, the qualifications of directors,
and the method of apportioning the appointment of directors among
the taxing units that nominated the area for designation as a zone.
The executive director of the office shall provide that each taxing
unit may appoint at least one director.
(c) A taxing unit must make its appointments to the board of
directors before the 30th day after the date on which the office
designates an area as a zone.
Sec. 2312.102. DESIGNATION OF ELIGIBLE BUSINESSES. (a)
The board of directors shall determine whether a business is an
eligible business.
(b) If the board of directors determines that a business
meets the requirements prescribed by Section 2312.151(b), the board
by order shall designate the business as an eligible business.
Sec. 2312.103. ADVERTISEMENT OF ZONE. The board of
directors shall advertise the existence of a zone and the benefits
of relocating to a zone to attract businesses to the zone and
encourage new business growth in the zone.
[Sections 2312.104-2312.150 reserved for expansion]
SUBCHAPTER D. INCENTIVES FOR BUSINESS RECRUITMENT
Sec. 2312.151. ELIGIBLE BUSINESS. (a) In this section,
"new job" means a new employment position that is intended to
provide at least 1,820 hours of employment a year.
(b) A business is an eligible business if:
(1) the business relocates to a zone after the date on
which the zone is designated; and
(2) the business delivers a written statement to the
board of directors that guarantees that:
(A) the relocation of the business to the zone
will create 50 or more new jobs in the zone; and
(B) the business will invest a minimum of $1
million in real property improvements in the zone.
(c) An eligible business that has not created 50 or more new
jobs in the zone before the first anniversary of the date on which
the business is designated as an eligible business or that has not
invested $1 million or more in real property improvements before
the fifth anniversary of the date on which the business is
designated as an eligible business may not receive further tax
abatements or exemptions under this chapter.
Sec. 2312.152. EXPIRATION. The designation of a business
as an eligible business expires on the 10th anniversary of the date
on which a business is designated as an eligible business.
Sec. 2312.153. SALES AND USE TAX EXEMPTIONS. An eligible
business is exempt from sales and use taxes as provided by Section
151.356, Tax Code.
Sec. 2312.154. FRANCHISE TAX EXEMPTION. An eligible
business is exempt from franchise taxes as provided by Section
171.088, Tax Code.
Sec. 2312.155. LOCAL AD VALOREM TAX ABATEMENT. The
governing body of a taxing unit located wholly or partly in a zone
may enter into a tax abatement agreement as provided by Chapter 314,
Tax Code, with an eligible business operating in the zone.
SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.356 to read as follows:
Sec. 151.356. ITEMS SOLD TO OR USED BY CERTAIN BUSINESSES
LOCATED IN RENAISSANCE ZONES. (a) A taxable item sold, leased, or
rented to or stored, used, or consumed by a business designated as
an eligible business under Section 2312.102, Government Code, is
exempted from the taxes imposed by this chapter if the item is for
the exclusive use and benefit of the eligible business.
(b) The exemption provided by this section does not apply to
an item that is to be leased, sold, or lent by the eligible
business.
SECTION 3. Subchapter B, Chapter 171, Tax Code, is amended
by adding Section 171.088 to read as follows:
Sec. 171.088. EXEMPTION--CERTAIN CORPORATIONS LOCATED IN
RENAISSANCE ZONES. (a) A corporation designated as an eligible
business under Section 2312.102, Government Code, is exempted from
the franchise tax before the seventh anniversary of the date on
which the corporation is designated as an eligible business.
(b) A corporation designated as an eligible business under
Section 2312.102, Government Code, is exempted from:
(1) 75 percent of the amount of franchise tax due for
the period beginning on the seventh anniversary and ending on the
day before the eighth anniversary of the date on which the
corporation is designated as an eligible business;
(2) 50 percent of the amount of franchise tax due for
the period beginning on the eighth anniversary and ending on the day
before the ninth anniversary of the date on which the corporation is
designated as an eligible business; and
(3) 25 percent of the amount of franchise tax due for
the period beginning on the ninth anniversary and ending on the day
before the 10th anniversary of the date on which the corporation is
designated as an eligible business.
SECTION 4. Subtitle B, Title 3, Tax Code, is amended by
adding Chapter 314 to read as follows:
CHAPTER 314. TAX ABATEMENT IN RENAISSANCE ZONES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 314.001. DEFINITIONS. In this chapter:
(1) "Eligible business" means a business designated as
an eligible business under Section 2312.102, Government Code.
(2) "Taxing unit" has the meaning assigned by Section
1.04.
Sec. 314.002. TAXING UNIT WITH TAX RATE SET BY
COMMISSIONERS COURT. (a) The commissioners court of a county that
enters into a tax abatement agreement for the county may enter into
a tax abatement agreement applicable to the same property on behalf
of a taxing unit other than the county if by statute the ad valorem
tax rate of the other taxing unit is approved by the commissioners
court or the commissioners court is expressly required by statute
to impose the ad valorem taxes of the other taxing unit. The tax
abatement agreement entered into on behalf of the other taxing unit
is not required to contain the same terms as the tax abatement
agreement entered into on behalf of the county.
(b) This section does not apply to a taxing unit because the
county tax assessor-collector is required by law to assess or
collect the taxing unit's ad valorem taxes.
Sec. 314.003. STATE ADMINISTRATION. (a) The comptroller
shall maintain a central registry of ad valorem tax abatement
agreements executed under this chapter. The chief appraiser of
each appraisal district that appraises property for a taxing unit
that is located wholly or partly in a reinvestment zone and has
executed a tax abatement agreement under this chapter shall deliver
to the comptroller before July 1 of the year following the year in
which the zone is designated or the agreement is executed a report
providing the following information:
(1) a general description of the reinvestment zone,
including its boundaries and the taxing units that are located
wholly or partly in the zone;
(2) a copy of each tax abatement agreement to which a
taxing unit that participates in the appraisal district is a party;
and
(3) any other information required by the comptroller
to administer this section.
(b) The comptroller may provide assistance to a taxing unit
on request of its governing body or the presiding officer of its
governing body relating to the administration of this chapter. The
Texas Economic Development and Tourism Office and the comptroller
may provide technical assistance to a local governing body
regarding the execution of tax abatement agreements.
[Sections 314.004-314.050 reserved for expansion]
SUBCHAPTER B. TAX ABATEMENT
Sec. 314.051. REINVESTMENT ZONE. Designation of an area as
a renaissance zone under Chapter 2312, Government Code, constitutes
designation of the area as a reinvestment zone under this chapter
without procedural requirements other than those provided by
Chapter 2312, Government Code.
Sec. 314.052. TAX ABATEMENT AGREEMENT. (a) The governing
body of a taxing unit authorized to enter into tax abatement
agreements under Section 2312.155, Government Code, may agree in
writing with an eligible business to exempt from taxation a portion
of the value of the property owned by the eligible business as
provided by this section.
(b) A tax abatement agreement shall provide that:
(1) 100 percent of the value of the taxable property is
exempt from taxation before the seventh anniversary of the date on
which the business is designated as an eligible business;
(2) 75 percent of the value of the taxable property is
exempt from taxation for the period beginning on the seventh
anniversary and ending on the day before the eighth anniversary of
the date on which the business is designated as an eligible
business;
(3) 50 percent of the value of the taxable property is
exempt from taxation for the period beginning on the eighth
anniversary and ending on the day before the ninth anniversary of
the date on which the business is designated as an eligible
business; and
(4) 25 percent of the value of the taxable property is
exempt from taxation for the period beginning on the ninth
anniversary and ending on the day before the 10th anniversary of the
date on which the business is designated as an eligible business.
(c) A tax abatement agreement expires on the 10th
anniversary of the date on which the business is designated as an
eligible business.
Sec. 314.053. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
(a) An agreement made under this chapter must:
(1) provide for recapturing property tax revenue lost
as a result of the agreement if the property ceases to be owned by an
eligible business; and
(2) require the owner of the property to certify
annually to the governing body of the taxing unit that the owner is
an eligible business and is in compliance with each applicable term
of the agreement.
(b) An agreement made under this chapter may include any
term agreed on by the taxing unit and the eligible business that
does not alter the terms prescribed by this subchapter.
Sec. 314.054. APPROVAL BY GOVERNING BODY. (a) To be
effective, an agreement made under this chapter must be approved by
the affirmative vote of a majority of the members of the governing
body of the taxing unit at a regularly scheduled meeting of the
governing body.
(b) On approval by the governing body, an agreement may be
executed in the same manner as other contracts made by the taxing
unit.
Sec. 314.055. MODIFICATION OR TERMINATION OF AGREEMENT.
(a) At any time before the expiration of an agreement made under
this chapter, the agreement may be modified by the parties to the
agreement to include other provisions that could have been included
in the original agreement or to delete provisions that were not
necessary to the original agreement. The agreement may not be
modified to alter the terms expressly imposed by this subchapter.
(b) The modification must be made by the same procedure by
which the original agreement was approved and executed.
(c) The original agreement may not be modified to extend
beyond the 10th anniversary of the date on which the business is
designated as an eligible business.
SECTION 5. This Act takes effect September 1, 2005.