79R1262 CLG-D
By: Keffer of Eastland H.B. No. 2412
A BILL TO BE ENTITLED
AN ACT
relating to the enterprise zone program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2303.401, Government Code, is amended to
read as follows:
Sec. 2303.401. DEFINITIONS. In this subchapter:
(1) "Certified job" means a new or retained job that:
(A) has provided at least 1,820 hours of
employment a year to a qualified employee of a qualified business as
described by Section 2303.402;
(B) is intended to exist for at least three years
after the date on which the comptroller makes the initial
certification of hiring commitments for the qualified business
under Section 2303.516(d); and
(C) has been certified by the comptroller as
eligible for receipt of a state benefit under this chapter.
(2) "New [permanent] job" means any [a] new job
[employment position] created by a qualified business as described
by Section 2303.402 at the qualified business site or in an
enterprise zone after the business's project or activity has been
designated as an enterprise project [that:
[(A) has provided at least 1,820 hours of
employment a year to a qualified employee; and
[(B) is intended to exist at the qualified
business site for at least three years after the date on which a
state benefit is received as authorized by this chapter].
(3) [(2)] "Retained job" means any [a] job that
existed with a qualified business before designation of the
business's project or activity as an enterprise project [that:
[(A) has provided employment to a qualified
employee of at least 1,820 hours annually; and
[(B) is intended to be an employment position for
at least three years after the date on which a state benefit is
received as authorized by this chapter].
SECTION 2. Section 2303.405(b), Government Code, is amended
to read as follows:
(b) An application must contain an economic analysis of the
plans of the qualified business for expansion, revitalization, or
other activity with regard to the enterprise project, including:
(1) the number of anticipated certified [new
permanent] jobs the enterprise project will create during the
designation period;
(2) the anticipated number of certified [permanent]
jobs the enterprise project will retain during the designation
period;
(3) the amount of investment to be made by the
enterprise project;
(4) a complete description of the projected schedule
for completion of the specific activity described by Section
2303.404(b) to be undertaken by the enterprise project;
(5) other information the bank requires;
(6) a description of the local effort made by the
nominating body, the qualified business, and other affected
entities to develop and revitalize the jurisdiction of the
governmental entity nominating the project or activity; and
(7) if the nominating body is applying for a double or
triple jumbo enterprise project, as defined by Section 2303.407, an
indication of which of those types of designations is being sought.
SECTION 3. Sections 2303.4051(e) and (f), Government Code,
are amended to read as follows:
(e) Except as provided by Subsection (f), an [Unless the
nominating body holds a public hearing before adopting an ordinance
or order under this section, the] ordinance or order adopted under
this section is not valid unless the nominating body holds a public
hearing before adopting the ordinance or order.
(f) If the nominating body has previously nominated a
project or activity for designation as an enterprise project, the
nominating body, instead of issuing a new ordinance or order and
holding another hearing under this section for a nominated project
or activity, may by resolution make a reference to a previously
issued ordinance or order that met the requirements of this section
if:
(1) the resolution nominates the project or activity
for designation as an enterprise project and states whether the
nominated project or activity is located in an area designated as an
enterprise zone;
(2) the local incentives described in the previously
issued ordinance or order for the areas described by Subsections
(b)(1) and (2) are substantially the same on the date the resolution
is issued; [and]
(3) the local incentives to be made available to the
nominated project or activity are substantially the same as those
made available to the project or activity that are the subject of
the previously issued ordinance or order; and
(4) the resolution briefly summarizes each of the
local incentives, if any, that are specific to the nominated
project or activity.
SECTION 4. Section 2303.406(b), Government Code, is amended
to read as follows:
(b) This subsection does not apply to a qualified business
located in a federally designated zone, as described by Section
2303.101(2), which will receive priority designation in allocating
the number of enterprise projects allowed statewide per biennium as
provided by Section 2303.403. The bank shall designate qualified
businesses as enterprise projects on a competitive basis. The bank
shall make its designation decisions using a weighted scale in
which:
(1) 40 percent of the evaluation depends on the
economic distress of the block group in which a proposed enterprise
project is located;
(2) 25 percent of the evaluation depends on the local
effort to achieve development and revitalization of the area within
the jurisdiction of the nominating governmental entity [block group
in which a proposed enterprise project is located]; and
(3) 35 percent of the evaluation depends on the
evaluation criteria as determined by the bank, which must include:
(A) the level of cooperation and support the
project applicant commits to the revitalization goals of all of the
enterprise zone block groups within the jurisdiction of the
nominating governmental entity; and
(B) the type and wage level of the certified jobs
to be created or retained by the business.
SECTION 5. Section 2303.407, Government Code, is amended to
read as follows:
Sec. 2303.407. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND.
(a) The bank shall allocate to an enterprise project the maximum
number of certified [new permanent jobs or retained] jobs eligible
based on the amount of capital investment made in the project and
the refund per job with a maximum refund to be included in a
computation of a tax refund for the project.
(b) A capital investment in a project of:
(1) $40,000 to $399,999 will result in a refund of up
to $2,500 per job with a maximum refund of $25,000 for the creation
or retention of 10 certified jobs;
(2) $400,000 to $999,999 will result in a refund of up
to $2,500 per job with a maximum refund of $62,500 for the creation
or retention of 25 certified jobs;
(3) $1,000,000 to $4,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $312,500 for the
creation or retention of 125 certified jobs;
(4) $5,000,000 to $149,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $1,250,000 for the
creation or retention of 500 certified jobs;
(5) $150,000,000 to $249,999,999 will result in a
refund of up to $5,000 per job with a maximum refund of $2,500,000
for the creation or retention of 500 certified jobs; or
(6) $250,000,000 or more will result in a refund of up
to $7,500 per job with a maximum refund of $3,750,000 for the
creation or retention of 500 certified jobs.
(c) A capital investment in the range amount and the
creation or retention of the number of certified jobs described by
Subsection (b)(5) is considered a double jumbo enterprise project.
(d) A capital investment in the range amount and the
creation or retention of the number of certified jobs described by
Subsection (b)(6) is considered a triple jumbo enterprise project.
SECTION 6. Section 2303.4072, Government Code, is amended
to read as follows:
Sec. 2303.4072. ENTERPRISE PROJECT CLAIM FOR STATE BENEFIT.
A person must make a claim to the comptroller for a state benefit as
prescribed under this chapter and Chapter [Chapters] 151 [and 171],
Tax Code, not later than 18 months after the date on which the term
of the enterprise project designation expires as provided by
Section 2303.404.
SECTION 7. Sections 2303.504(b) and (c), Government Code,
are amended to read as follows:
(b) At the time of receipt of any tax benefit available as a
result of participating in the enterprise zone program, including a
state sales and use tax refund [or franchise tax credit], a fee in
an amount equal to three percent of the amount of the tax benefit
shall be transferred to the Texas economic development bank fund
under Subchapter B, Chapter 489, to defray the cost of
administering this chapter. The fee does not reduce the amount of
the refund to which the enterprise project is entitled under
Section 2303.4071.
(c) Not later than the 60th day after the last day of each
fiscal year, the comptroller shall report to the bank the statewide
total of actual certified jobs created, actual certified jobs
retained, and the tax refunds made under this section during that
fiscal year.
SECTION 8. Section 2303.516, Government Code, is amended by
amending Subsections (b) and (d) and adding Subsection (d-1) to
read as follows:
(b) The bank may determine that the business or project is
not entitled to a refund [or credit] of state taxes under Section
2303.504 if the bank finds that:
(1) the business or project is not willing to
cooperate with the bank in providing the bank with the information
the bank needs to make the determination under Subsection (a); or
(2) the business or project has substantially failed
to follow through on any commitments made by it or on its behalf
under this chapter.
(d) A qualified business may obtain a state benefit, earned
through a specific enterprise project designation, on completion
of:
(1) a review of the project or activity for
completeness that is conducted [an audit performed] by the
comptroller to [that will] certify hiring commitments of a
qualified business under this chapter; and
(2) a verification process conducted by the
comptroller to certify eligible purchases of taxable items made by
or on behalf of the [a] qualified business [under this chapter].
(d-1) The comptroller shall certify that a purchase is
eligible for a state benefit not later than the 90th day after the
date documentation related to the purchase is submitted for
verification under Subsection (d)(2).
SECTION 9. Section 2303.517, Government Code, is amended to
read as follows:
Sec. 2303.517. REPORT. Before obtaining a state benefit,
the qualified business must submit to the bank a certified report of
the actual number of certified jobs created or retained and the
capital investment made at or committed to the qualified business
site.
SECTION 10. Section 151.429, Tax Code, is amended by
amending Subsections (a), (b), (c), (e), and (g) and adding
Subsections (c-1) and (c-2) to read as follows:
(a) An enterprise project is eligible for a refund in the
amount provided by this section of the taxes imposed by this chapter
on purchases of taxable items [:
[(1) equipment or machinery sold to an enterprise
project for use at the qualified business site;
[(2) building materials sold to an enterprise project
for use in remodeling, rehabilitating, or constructing a structure
at the qualified business site;
[(3) labor for remodeling, rehabilitating, or
constructing a structure by an enterprise project at the qualified
business site; and
[(4) electricity and natural gas purchased and
consumed in the normal course of business at the qualified business
site].
(b) Subject to the limitations provided by Subsection (c) or
(c-1) of this section, an enterprise project qualifies for a refund
of taxes under this section based on the amount of capital
investment made at the qualified business site and refund per job
with a maximum refund to be included in a computation of a tax
refund for the project. A capital investment at the qualified
business site of:
(1) $40,000 to $399,999 will result in a refund of up
to $2,500 per job with a maximum refund of $25,000 for the creation
or retention of 10 certified jobs;
(2) $400,000 to $999,999 will result in a refund of up
to $2,500 per job with a maximum refund of $62,500 for the creation
or retention of 25 certified jobs;
(3) $1,000,000 to $4,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $312,500 for the
creation or retention of 125 certified jobs;
(4) $5,000,000 to $149,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $1,250,000 for the
creation or retention of 500 certified jobs;
(5) $150,000,000 to $249,999,999 will result in a
refund of up to $5,000 per job with a maximum refund of $2,500,000
for the creation or retention of 500 certified jobs; or
(6) $250,000,000 or more will result in a refund of up
to $7,500 per job with a maximum refund of $3,750,000 for the
creation or retention of 500 certified jobs.
(c) The total amount of tax refund that an enterprise
project may apply for in a state fiscal year may not exceed
$250,000. If an enterprise project qualifies in a state fiscal year
for a refund of taxes in an amount in excess of the limitation
provided by this subsection, it may apply for a refund of those
taxes in a subsequent year, subject to the $250,000 limitation for
each year. The total amount that may be refunded to an enterprise
project under this section may not exceed the amount determined by
multiplying $250,000 by the number of state fiscal years during
which the enterprise project created or retained one or more
certified jobs for qualified employees.
(c-1) To the same extent and in the same manner as provided
by Subsection (c) for an enterprise project, a double jumbo
enterprise project is eligible for a maximum refund of $500,000 and
a triple jumbo enterprise project is eligible for a maximum refund
of $750,000 in each state fiscal year.
(c-2) Cumulative tax refunds based on two or more prior
years may be applied for and refunded in any one year, subject to
the limitation for that year provided by Subsection (c) for an
enterprise project or by Subsection (c-1) for a double jumbo
enterprise project or triple jumbo enterprise project.
(e) In this section:
(1) "Enterprise project" means a person designated by
the Texas Economic Development Bank as an enterprise project under
Chapter 2303, Government Code.
(2) "Enterprise zone," "qualified employee," and
"qualified hotel project" have the meanings assigned to those terms
by Section 2303.003, Government Code.
(3) "New [permanent] job" has the meaning assigned by
Section 2303.401, Government Code [means a new employment position
created by a qualified business as described by Section 2303.402,
Government Code, that:
[(A) has provided at least 1,820 hours of
employment a year to a qualified employee; and
[(B) is intended to exist for at least three
years after a state benefit is received under Chapter 2303,
Government Code].
(4) "Retained job" has the meaning assigned by
Section 2303.401, Government Code.
(4-a) "Certified job" has the meaning assigned by
Section 2303.401, Government Code.
(5) "Double jumbo enterprise project" and "triple
jumbo enterprise project" have the meanings assigned by Section
2303.407, Government Code.
(g) The refund provided by this section is conditioned on
the enterprise project maintaining for a three-year period at least
the same number [level] of certified jobs [employment of qualified
employees] as existed on the date the comptroller initially
certified the hiring commitments for the project under Section
2303.516(d)(1), Government Code [at the time it qualified for a
refund for a period of three years from that date]. The comptroller
shall annually certify whether that number [level] of certified
jobs [employment of qualified employees] has been maintained. On
certifying that such a number [level] has not been maintained, the
comptroller shall assess that portion of the refund attributable to
any such decrease in certified jobs [employment], including penalty
and interest from the date of the refund.
SECTION 11. Section 151.429(i), Tax Code, is repealed.
SECTION 12. The changes in law made by this Act to Chapter
2303, Government Code, apply only to an application for a
designation under the enterprise zone program under Chapter 2303,
Government Code, as amended by this Act, that is filed on or after
the effective date of this Act. An application for designation
under the enterprise zone program that is filed before the
effective date of this Act is governed by the law in effect on the
date the application was filed, and the former law is continued in
effect for that purpose.
SECTION 13. The changes in law made by this Act to Section
151.429, Tax Code, apply only to an application for a tax refund
made on or after the effective date of this Act. An application for
a tax refund made before the effective date of this Act is governed
by the law in effect on the date the application was made, and the
former law is continued in effect for that purpose.
SECTION 14. This Act takes effect September 1, 2005.