BILL ANALYSIS
Senate Research Center S.B. 607
80R4387 HLT-F By: Ellis
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Currently, there is no state law, program, incentive, or other policy encouraging the development of banking services in geographic areas that have demonstrated a need for them.
As proposed, S.B. 607 requires the Finance Commission of Texas (commission) to administer and monitor a banking development district program, in order to encourage the establishment of financial institution branches in geographic areas in which there is a demonstrated need for banking services. The bill also authorizes a local government, in conjunction with a financial institution, to submit an application to the commission for designation as a banking development district and sets forth the process for such designation.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the Finance Commission of Texas in SECTION 1 (Section 279.052, Finance Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle Z, Title 3, Finance Code, by adding Chapter 279, as follows:
CHAPTER 279. BANKING DEVELOPMENT DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 279.001. DEFINITIONS. Defines "finance commission," "financial institution," and "local government."
[Reserves Sections 279.002-279.050 for expansion.]
SUBCHAPTER B. POWERS AND DUTIES OF FINANCE COMMISSION
Sec. 279.051. ADMINISTRATION OF PROGRAM. Requires the Finance Commission of Texas (commission) to administer and monitor a banking development district (district) program under this chapter in order to encourage the establishment of branches of a financial institution in areas where there is a demonstrated need for banking services.
Sec. 279.052. RULES. Requires the commission, in consultation with the Texas Economic Development and Tourism Office, to adopt rules regarding the criteria for designation of a district under this chapter. Sets forth the requirements of those rules.
[Reserves Sections 279.053-279.100 for expansion.]
SUBCHAPTER C. DESIGNATION OF BANKING DEVELOPMENT DISTRICT
Sec. 279.101. APPLICATION FOR DESIGNATION OF BANKING DEVELOPMENT DISTRICT. Authorizes a local government, in conjunction with a financial institution, to submit an application to the commission for the designation of a district.
Sec. 279.102. APPLICATION BY FINANCIAL INSTITUTION TO OPEN BRANCH IN DISTRICT. Authorizes a financial institution to open a branch in the district at the time a local government submits an application in conjunction with the institution under Section 279.101.
Sec. 279.103. APPLICATION BY FINANCIAL INSTITUTION WITH EXISTING BRANCH IN PROPOSED DISTRICT. Authorizes a local government to submit an application under Section 279.101, in conjunction with a financial institution that is operating a branch in the proposed district at the time of the application's submission, if the branch was opened after December 31, 1996. Requires the commission to consider the importance and benefits of preserving the banking services offered by that branch in determining whether to approve the application.
Sec. 279.104. DETERMINATION BY FINANCE COMMISSION. Requires the commission to make a determination as to whether to approve the application not later than the 61st day after the date of the application's submission. Sets forth the entities the commission is to notify if the application is approved.
[Reserves Sections 279.105-279.150 for expansion.]
SUBCHAPTER D. DEPOSIT OF PUBLIC FUNDS IN BANKING
DISTRICT DEPOSITORY
Sec. 279.151. DESIGNATION OF BANKING DISTRICT DEPOSITORY. Authorizes the governing body of a local government for which a district has been designated, by resolution, to designate a financial institution located in the district as a banking district depository for the purposes of this subchapter, regardless of whether the institution is designated by the comptroller as a state depository under Subchapter C (State Depositories and Investment of State Funds), Chapter 404, Government Code. Requires a resolution adopted under this section to specify the maximum amount that may be kept on deposit with the district depository.
Sec. 279.152. DEPOSIT OF PUBLIC FUNDS BY LOCAL GOVERNMENT. Authorizes a local government to deposit public funds with a depository designated under Section 279.151. Authorizes those funds to earn a fixed interest rate at or below the institution's posted two-year certificate of deposit rate, subject to an agreement between the governing body and the depository. Requires the terms of the agreement to be specified in the resolution adopted under Section 279.151.
Sec. 279.153. DEPOSIT OF PUBLIC FUNDS BY STATE. Authorizes the comptroller to deposit public funds with a depository designated under Section 279.151. Authorizes those funds to earn a fixed interest rate at or below the institution's posted two-year certificate of deposit rate, subject to an agreement between the comptroller and the depository.
[Reserves Sections 279.154-279.200 for expansion.]
SUBCHAPTER E. BANKING DISTRICT BENEFITS
Sec. 279.201. TAX ABATEMENT. Authorizes the governing body of a local government to enter into a tax abatement agreement with a financial institution that owns property in a district, as provided by Chapter 312 (Property Redevelopment and Tax Abatement Act), Tax Code.
SECTION 2. Amends Subchapter B, Chapter 312, Tax Code, by adding Section 312.2012, as follows:
Sec. 312.2012. BANKING DEVELOPMENT DISTRICT. Provides that a designation of an area as a district under Chapter 279, Finance Code, constitutes, without further hearing or procedural requirements other than those required by that chapter, a designation as a reinvestment zone under this subchapter, except that a property is eligible for tax abatement under this subchapter only if owned by a financial institution as defined by Section 279.001, Finance Code.
SECTION 3. Amends Subchapter C, Chapter 312, Tax Code, by adding Section 312.4012, as follows:
Sec. 312.4012. BANKING DEVELOPMENT DISTRICT. Provides that a designation of an area as a district under Chapter 279, Finance Code, constitutes, without further hearing or procedural requirements other than those required by that chapter, a designation as a reinvestment zone under this subchapter, except that a property is eligible for tax abatement under this subchapter only if owned by a financial institution as defined by Section 279.001, Finance Code.
SECTION 4. Requires the commission to adopt rules governing the designation of districts, as required by Chapter 279, Finance Code, as added by this Act, not later than January 1, 2008.
SECTION 5. Effective date: upon passage or September 1, 2007.