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A BILL TO BE ENTITLED
|
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|
AN ACT
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|
relating to the enterprise zone program. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 2303.003(5-a), (7), and (8), Government |
|
|
Code, are amended to read as follows: |
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|
(5-a) "Office" means the Texas Economic Development |
|
|
and Tourism Office within the office of the governor. |
|
|
(7) "Qualified employee" means a person who: |
|
|
(A) works for a qualified business; and |
|
|
(B) performs at least 50 percent of the person's |
|
|
service for the business at the qualified business site [in the
|
|
|
enterprise zone]. |
|
|
(8) "Qualified hotel project" means a hotel proposed |
|
|
to be constructed by a municipality on land owned by a municipality, |
|
|
a county, or a nonprofit municipally sponsored or county-sponsored |
|
|
local government corporation created under the Texas |
|
|
Transportation Corporation Act, Chapter 431, Transportation Code, |
|
|
that is within 1,000 feet of a convention center owned by a |
|
|
municipality or county having a population of 1,100,000 [1,500,000] |
|
|
or more, including shops, parking facilities, and any other |
|
|
facilities ancillary to the hotel. |
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|
SECTION 2. Section 2303.004, Government Code, is amended to |
|
|
read as follows: |
|
|
Sec. 2303.004. JURISDICTION OF MUNICIPALITY. (a) For the |
|
|
purposes of this chapter, territory in the municipal boundaries and |
|
|
in the extraterritorial jurisdiction of a municipality is |
|
|
considered to be in the jurisdiction of the municipality. |
|
|
(b) Notwithstanding Subsection (a), the governing body of a |
|
|
county with a population of 750,000 or more may nominate for |
|
|
designation as an enterprise project a project or activity of a |
|
|
qualified business that is located within the jurisdiction of a |
|
|
municipality located in the county. For purposes of this |
|
|
subsection, a county during any biennium may not use in any one |
|
|
municipality more than three of the maximum number of designations |
|
|
the county is permitted under Section 2303.406(d)(2). |
|
|
SECTION 3. Section 2303.052, Government Code, is amended to |
|
|
read as follows: |
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|
Sec. 2303.052. BANK [EVALUATION;] REPORT REGARDING |
|
|
PROGRAM. [(a)] The bank must include the following information |
|
|
regarding the enterprise zone program in the report required by |
|
|
Section 489.107 [shall conduct a continuing evaluation of the
|
|
|
enterprise zone program.
|
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|
[(b) The bank shall develop data from available information
|
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|
demonstrating the relationship between the incentives provided
|
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|
under this chapter and the economy.
|
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|
[(c)The bank biennially shall review local incentives.
|
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|
[(d) On or before January 1 of each year the bank shall
|
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|
submit to the governor, the legislature, and the Legislative Budget
|
|
|
Board a report that]: |
|
|
(1) an evaluation of [evaluates] the effectiveness of |
|
|
the [enterprise zone] program; |
|
|
(2) a description of [describes] the use of state and |
|
|
local incentives under this chapter and their effect on revenue; |
|
|
and |
|
|
(3) suggestions for [suggests] legislation with |
|
|
regard to the program. |
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|
SECTION 4. Section 2303.401, Government Code, is amended to |
|
|
read as follows: |
|
|
Sec. 2303.401. DEFINITIONS. In this subchapter: |
|
|
(1) "New permanent job" means a new employment |
|
|
position that: |
|
|
(A) is created by a qualified business as |
|
|
described by Section 2303.402 at the qualified business site not |
|
|
earlier than the 90th day before the date the business's project or |
|
|
activity is designated as an enterprise project under this chapter; |
|
|
(B) will provide or has provided for the duration |
|
|
of the project's designation period [that:
|
|
|
[(A)has provided] at least 1,820 hours of |
|
|
employment a year to a qualified employee; and |
|
|
(C) will [(B) is intended to] exist or has |
|
|
existed at the qualified business site for the longer of: |
|
|
(i) the duration of the project's |
|
|
designation period; or |
|
|
(ii) [at least] three years after the date |
|
|
on which a state benefit is received as authorized by this chapter. |
|
|
(2) "Retained job" means a job that: |
|
|
(A) existed with a qualified business on the 91st |
|
|
day before the date [designation of] the business's project or |
|
|
activity is designated as an enterprise project; |
|
|
(B) [that:
|
|
|
[(A)] has provided and will continue to provide |
|
|
employment to a qualified employee of at least 1,820 hours |
|
|
annually; and |
|
|
(C) will [(B) is intended to] be or has been an |
|
|
employment position for the longer of: |
|
|
(i) the duration of the project's |
|
|
designation period; or |
|
|
(ii) [at least] three years after the |
|
|
expiration date of the claim period for receipt of [date on which] a |
|
|
state benefit [is received as] authorized by this chapter. |
|
|
SECTION 5. Section 2303.402(c), Government Code, is amended |
|
|
to read as follows: |
|
|
(c) For the purposes of this section, an economically |
|
|
disadvantaged individual is an individual who: |
|
|
(1) was unemployed for at least three months before |
|
|
obtaining employment with the qualified business; |
|
|
(2) receives public assistance benefits, including |
|
|
welfare payments or food stamps, based on need and intended to |
|
|
alleviate poverty; |
|
|
(3) is a low-income [an economically disadvantaged] |
|
|
individual, as defined by Section 101, Workforce Investment Act of |
|
|
1998 (29 U.S.C. Section 2801(25)) [4(8), Job Training Partnership
|
|
|
Act (29 U.S.C. Section 1503(8))]; |
|
|
(4) is an individual with a disability [handicaps], as |
|
|
defined by 29 U.S.C. Section 705(20)(A) [706(8)]; |
|
|
(5) is an inmate, as defined by Section 498.001; |
|
|
(6) is entering the workplace after being confined in |
|
|
a facility operated by the institutional division of the Texas |
|
|
Department of Criminal Justice or under contract with the Texas |
|
|
Department of Criminal Justice; |
|
|
(7) has been released by the Texas Youth Commission |
|
|
and is on parole, if state law provides for such a person to be on |
|
|
parole; or |
|
|
(8) meets the current low income or moderate income |
|
|
limits developed under Section 8, United States Housing Act of 1937 |
|
|
(42 U.S.C. Section 1437f et seq.). |
|
|
SECTION 6. Section 2303.403, Government Code, is amended to |
|
|
read as follows: |
|
|
Sec. 2303.403. PROHIBITION ON QUALIFIED BUSINESS |
|
|
CERTIFICATION; LIMIT ON ENTERPRISE PROJECT DESIGNATIONS. If the |
|
|
bank determines that the governing body eligible to nominate an |
|
|
enterprise project is not complying with this chapter, the bank |
|
|
shall prohibit the certification of a qualified business until the |
|
|
bank determines that the governing body is complying with this |
|
|
chapter. The bank may not designate more than 105 [85] enterprise |
|
|
projects during any biennium. Any designations remaining at the |
|
|
end of a biennium may be carried forward to the next biennium. |
|
|
SECTION 7. Section 2303.404(c), Government Code, is amended |
|
|
to read as follows: |
|
|
(c) The designation period for an enterprise project may not |
|
|
be for less than one year or more than [exceed] five years from the |
|
|
date on which the designation is made. |
|
|
SECTION 8. Sections 2303.405(a) and (b), Government Code, |
|
|
are amended to read as follows: |
|
|
(a) If the governing body approves a request made under |
|
|
Section 2303.404, the governing body may apply to the bank for the |
|
|
designation of the project or activity of a qualified business as an |
|
|
enterprise project only after it submits to the bank the order or |
|
|
ordinance and other information that complies with the requirements |
|
|
of Sections 2303.4051 and 2303.4052. |
|
|
(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 employment positions in existence at |
|
|
the qualified business site on the 91st day before the application |
|
|
deadline; |
|
|
(1-a) the number of [anticipated] new permanent jobs |
|
|
the enterprise project commits to [will] create during the |
|
|
designation period presented in the form of a tabular listing of: |
|
|
(A) the classification titles of those jobs; and |
|
|
(B) the number of jobs and salary range for each |
|
|
classification title; |
|
|
(2) the [anticipated] number of permanent jobs the |
|
|
enterprise project commits to [will] retain during the designation |
|
|
period presented in the form of a tabular listing of: |
|
|
(A) the classification titles of the retained |
|
|
jobs; and |
|
|
(B) the number of retained jobs and salary range |
|
|
for each classification title; |
|
|
(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 level [of those types] of designation |
|
|
[designations] is being sought. |
|
|
SECTION 9. Sections 2303.4051(a), (b), (e), (f), and (g), |
|
|
Government Code, are amended to read as follows: |
|
|
(a) In this section, "local incentive" means each tax |
|
|
incentive, grant, other financial incentive or benefit, or program |
|
|
to be provided by the governing body to qualified businesses |
|
|
participating in the enterprise zone program [business enterprises
|
|
|
in the block group] and any other local incentive listed in Section |
|
|
2303.511. |
|
|
(b) Before nominating the project or activity of a qualified |
|
|
business for designation as an enterprise project, the governing |
|
|
body of the municipality or county in which the business is located, |
|
|
by ordinance or order, as appropriate, must identify and summarize |
|
|
briefly any local incentives available[:
|
|
|
[(1) in each of the block groups or other areas within
|
|
|
its jurisdiction that qualify as an enterprise zone under Section
|
|
|
2303.101, if any; and
|
|
|
[(2) in any area within its jurisdiction that does not
|
|
|
qualify as an enterprise zone]. |
|
|
(e) 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. Notice of the hearing must be published in a |
|
|
newspaper having general circulation in the municipality not later |
|
|
than the seventh calendar day before the date of the hearing. The |
|
|
notice must contain: |
|
|
(1) the date, time, and location of the hearing; |
|
|
(2) the provisions for any tax or other incentives |
|
|
applicable to the enterprise zone program; |
|
|
(3) the name of the qualified business whose project |
|
|
or activity is being nominated for enterprise project designation; |
|
|
and |
|
|
(4) the location of the qualified business site. |
|
|
(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 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: |
|
|
(A) whether the nominated project or activity is |
|
|
located in an area designated as an enterprise zone; |
|
|
(B) the level of enterprise project designation |
|
|
being sought; and |
|
|
(C) the ending date of the project's designation |
|
|
period; |
|
|
(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 the same as those made available |
|
|
to the project or activity that are the subject of the previously |
|
|
issued ordinance or order. |
|
|
(g) This section does not prohibit a municipality or county |
|
|
from extending additional incentives, including tax incentives, |
|
|
for qualified businesses [business enterprises] in an enterprise |
|
|
zone by a separate order or ordinance. |
|
|
SECTION 10. Section 2303.4052, Government Code, is amended |
|
|
to read as follows: |
|
|
Sec. 2303.4052. REQUIRED INFORMATION FROM NOMINATING BODY. |
|
|
Before nominating the project or activity of a qualified business |
|
|
for designation as an enterprise project, the nominating body must |
|
|
submit to the bank: |
|
|
(1) a certified copy of the ordinance or order, as |
|
|
appropriate, or reference to an ordinance or order as required by |
|
|
Section 2303.4051; |
|
|
(2) a transcript of all public hearings conducted with |
|
|
respect to local incentives available to qualified businesses |
|
|
[business enterprises] within the jurisdiction of the governmental |
|
|
entity nominating the project or activity, regardless of whether |
|
|
those businesses [business enterprises] are located in an |
|
|
enterprise zone; |
|
|
(3) the name, title, address, telephone number, and |
|
|
electronic mail address of the nominating body's liaison designated |
|
|
under Section 2303.204; [and] |
|
|
(4) if the business is seeking job retention benefits, |
|
|
documentation showing the number of employment positions at the |
|
|
qualified business site; and |
|
|
(5) any additional information the bank may require. |
|
|
SECTION 11. Section 2303.406, Government Code, is amended |
|
|
by amending Subsection (a) and adding Subsections (g) and (h) to |
|
|
read as follows: |
|
|
(a) The bank may designate a project or activity of a |
|
|
business as an enterprise project only if the bank receives all of |
|
|
the information required by Section 2303.4052 and determines that: |
|
|
(1) the business is a qualified business under Section |
|
|
2303.402 that is located in or has made a substantial commitment to |
|
|
locate in an enterprise zone or at a qualified business site; |
|
|
(2) the nominating body making the application has |
|
|
demonstrated that a high level of cooperation exists among public, |
|
|
private, and neighborhood entities within the jurisdiction of the |
|
|
governmental entity nominating the project or activity; |
|
|
(3) the designation will contribute significantly to |
|
|
the achievement of the plans of the nominating body making the |
|
|
application for development and revitalization of the area in which |
|
|
the enterprise project will be located; and |
|
|
(4) if the business is seeking job retention benefits, |
|
|
the business has clearly demonstrated that: |
|
|
(A) the permanent employees of the business will |
|
|
be permanently laid off; |
|
|
(B) the business will close down permanently; |
|
|
(C) the business will relocate out-of-state; |
|
|
(D) the business is able to employ individuals in |
|
|
accordance with Section 2303.402 [a 10 percent increase in the
|
|
|
production capacity of the business will occur]; or |
|
|
(E) [a 10 percent decrease in overall cost per
|
|
|
unit produced will occur;
|
|
|
[(F)] the business facility has been |
|
|
legitimately destroyed or substantially impaired because of fire, |
|
|
flood, tornado, hurricane, or any other natural disaster and that |
|
|
at least 60 percent of the capital investment is being spent to |
|
|
repair damages resulting from the disaster[; or
|
|
|
[(G) the business facility is both adding a new
|
|
|
business line or product and deleting or decreasing an existing
|
|
|
business line or product, and the designation will prevent the
|
|
|
facility's net production capacity from decreasing]. |
|
|
(g) The bank may lower the designation level of a proposed |
|
|
project or activity nominated for enterprise project designation: |
|
|
(1) if there are fewer designations available than |
|
|
applications received; or |
|
|
(2) to further the economic interests of the state. |
|
|
(h) A state benefit may not be obtained under this chapter |
|
|
or Chapter 151, Tax Code, for jobs moved from one jurisdiction in |
|
|
this state to another jurisdiction in this state. |
|
|
SECTION 12. Section 2303.406(e), Government Code, as added |
|
|
by Chapter 814, Acts of the 78th Legislature, Regular Session, |
|
|
2003, is amended to read as follows: |
|
|
(e) The office may, during any biennium, designate multiple |
|
|
concurrent enterprise projects to a qualified business located in |
|
|
an enterprise zone [during any biennium]. |
|
|
SECTION 13. 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 new permanent jobs or retained jobs eligible based on the |
|
|
amount of capital investment made in the project, the project's |
|
|
designation level, 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 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 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 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 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 jobs if the bank designates the |
|
|
project as a double jumbo enterprise project; 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 at least 500 jobs if the bank designates |
|
|
the project as a triple jumbo enterprise project. |
|
|
(c) An enterprise project for which a commitment for a [A] |
|
|
capital investment in the range amount and the creation or |
|
|
retention of the number of jobs specified [described] by Subsection |
|
|
(b)(5) is made is considered a double jumbo enterprise project if |
|
|
the project is so designated by the bank. |
|
|
(d) An enterprise project for which a commitment for a [A] |
|
|
capital investment in the range amount and the creation or |
|
|
retention of the number of jobs specified [described] by Subsection |
|
|
(b)(6) is made is considered a triple jumbo enterprise project if |
|
|
the project is so designated by the bank. |
|
|
SECTION 14. 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 15. Section 2303.502(c), Government Code, is |
|
|
amended to read as follows: |
|
|
(c) The bank shall disseminate the reports to the governing |
|
|
bodies of the entities that nominated the enterprise projects |
|
|
[enterprise zones] and others as necessary to advance the purposes |
|
|
of this chapter. |
|
|
SECTION 16. (a) Section 2303.504, Government Code, is |
|
|
amended to read as follows: |
|
|
Sec. 2303.504. STATE TAX REFUNDS AND CREDITS; REPORT. (a) |
|
|
Subject to Section 2303.516, an enterprise project is entitled to: |
|
|
(1) a refund of state taxes under Section 151.429, Tax |
|
|
Code; and |
|
|
(2) a franchise tax credit under Subchapter Q-1, |
|
|
Chapter 171, Tax Code. |
|
|
(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, 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. |
|
|
(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 jobs created, actual jobs retained, and the tax |
|
|
refunds and credits made under this section during that fiscal |
|
|
year. |
|
|
(b) Chapter 171, Tax Code, is amended by adding Subchapter |
|
|
Q-1 to read as follows: |
|
|
SUBCHAPTER Q-1. TAX CREDITS FOR ENTERPRISE PROJECTS FOR CERTAIN |
|
|
CAPITAL INVESTMENTS |
|
|
Sec. 171.815. DEFINITIONS. In this subchapter: |
|
|
(1) "Enterprise project" means: |
|
|
(A) a person designated by the Texas Department |
|
|
of Economic Development as an enterprise project under Chapter |
|
|
2303, Government Code, on or after September 1, 2001, but before |
|
|
September 1, 2003; and |
|
|
(B) a person designated by the Texas Economic |
|
|
Development Bank as an enterprise project under Chapter 2303, |
|
|
Government Code, on or after September 1, 2003, but before January |
|
|
1, 2005. |
|
|
(2) "Enterprise zone" has the meaning assigned by |
|
|
Section 2303.003, Government Code. |
|
|
(3) "Qualified business" means a person certified as a |
|
|
qualified business under Section 2303.402, Government Code. |
|
|
(4) "Qualified capital investment" means tangible |
|
|
personal property that is first placed in service in an enterprise |
|
|
zone by a qualified business that has been designated as an |
|
|
enterprise project and that is described in Section 1245(a), |
|
|
Internal Revenue Code, such as engines, machinery, tools, and |
|
|
implements used in a trade or business or held for investment and |
|
|
subject to an allowance for depreciation, cost recovery under the |
|
|
accelerated cost recovery system, or amortization. The term does |
|
|
not include real property or buildings and their structural |
|
|
components. Property that is leased under a capitalized lease is |
|
|
considered a qualified capital investment, but property that is |
|
|
leased under an operating lease is not considered a qualified |
|
|
capital investment. Property expensed under Section 179, Internal |
|
|
Revenue Code, is not considered a qualified capital investment. |
|
|
Sec. 171.816. TANGIBLE PERSONAL PROPERTY FIRST PLACED IN |
|
|
SERVICE IN AN ENTERPRISE ZONE. For purposes of determining whether |
|
|
an investment is a qualified capital investment under Section |
|
|
171.815, "tangible personal property first placed in service in an |
|
|
enterprise zone" includes tangible personal property: |
|
|
(1) purchased by an enterprise project for placement |
|
|
in an improvement that was under active construction or other |
|
|
physical preparation; |
|
|
(2) identified by a purchase order, invoice, billing, |
|
|
sales slip, or contract; and |
|
|
(3) physically present at the enterprise project's |
|
|
qualified business site, as defined by Section 2303.003, Government |
|
|
Code, and in use by the enterprise project on the original due date |
|
|
of the report on which the credit is taken. |
|
|
Sec. 171.817. ELIGIBILITY. (a) Subject to Subsection (b), |
|
|
an enterprise project is eligible for a credit against the tax |
|
|
imposed under this chapter in the amount and under the conditions |
|
|
and limitations provided by this subchapter if the enterprise |
|
|
project is a qualified business. |
|
|
(b) An enterprise project is not eligible for a credit under |
|
|
this subchapter if the enterprise project claimed a credit under |
|
|
Subchapter Q before the repeal of that subchapter on January 1, |
|
|
2008. |
|
|
(c) An enterprise project that is eligible for a credit |
|
|
under this subchapter may claim a credit or take a carryforward |
|
|
credit without regard to whether the enterprise zone in which it |
|
|
made the qualified capital investment subsequently loses its |
|
|
designation as an enterprise zone. |
|
|
(d) A taxable entity, other than a combined group, may not |
|
|
claim the credit under this subchapter unless the taxable entity |
|
|
was, on May 1, 2006, subject to the tax imposed by this chapter as |
|
|
this chapter existed on that date. A taxable entity that is a |
|
|
combined group may claim the credit for each member entity that was, |
|
|
on May 1, 2006, subject to the tax imposed by this chapter as this |
|
|
chapter existed on that date and shall compute the amount of the |
|
|
credit for that member as provided by this subchapter. |
|
|
Sec. 171.818. CALCULATION OF CREDIT. (a) An enterprise |
|
|
project that is eligible for a credit under this subchapter may, on |
|
|
or after the later of January 1, 2008, or the date the project was |
|
|
designated, establish a credit equal to 7.5 percent of the |
|
|
qualified capital investment made on or after January 1, 2005, and |
|
|
before January 1, 2007. |
|
|
(b) The enterprise project may claim the entire credit |
|
|
earned on a report originally due on or after January 1, 2008, and |
|
|
before January 1, 2009, subject to Section 171.819. |
|
|
Sec. 171.819. LIMITATIONS. The total credit claimed under |
|
|
this subchapter for a report, including the amount of any |
|
|
carryforward credit under Section 171.820, may not exceed 50 |
|
|
percent of the amount of franchise tax due for the report before any |
|
|
other applicable tax credits. |
|
|
Sec. 171.820. CARRYFORWARD. If an enterprise project is |
|
|
eligible for a credit that exceeds the limitation under Section |
|
|
171.819, the enterprise project may carry the unused credit forward |
|
|
for not more than five consecutive reports. |
|
|
Sec. 171.821. CERTIFICATION OF ELIGIBILITY. (a) For the |
|
|
initial and each succeeding report in which a credit is claimed |
|
|
under this subchapter, the enterprise project shall file with its |
|
|
report, on a form provided by the comptroller, information that |
|
|
sufficiently demonstrates that the enterprise project is eligible |
|
|
for the credit. |
|
|
(b) The burden of establishing entitlement to and the value |
|
|
of the credit is on the enterprise project. |
|
|
Sec. 171.822. ASSIGNMENT PROHIBITED. An enterprise project |
|
|
may not convey, assign, or transfer the credit allowed under this |
|
|
subchapter to another entity unless all of the assets of the |
|
|
enterprise project are conveyed, assigned, or transferred in the |
|
|
same transaction. |
|
|
Sec. 171.823. BIENNIAL REPORT BY COMPTROLLER. (a) Before |
|
|
the beginning of each regular session of the legislature, the |
|
|
comptroller shall submit to the governor, the lieutenant governor, |
|
|
and the speaker of the house of representatives a report that |
|
|
states: |
|
|
(1) the total amount of qualified capital investments |
|
|
made by enterprise projects that claim a credit under this |
|
|
subchapter and the average and median wages paid by those |
|
|
enterprise projects; |
|
|
(2) the total amount of credits applied against the |
|
|
tax under this chapter and the amount of unused credits, including: |
|
|
(A) the total amount of franchise tax due by |
|
|
enterprise projects claiming a credit under this subchapter before |
|
|
and after the application of the credit; |
|
|
(B) the average percentage reduction in |
|
|
franchise tax due by enterprise projects claiming a credit under |
|
|
this subchapter; |
|
|
(C) the percentage of tax credits that were |
|
|
awarded to enterprise projects with fewer than 100 employees; and |
|
|
(D) the two-digit standard industrial |
|
|
classification of enterprise projects claiming a credit under this |
|
|
subchapter; |
|
|
(3) the geographical distribution of the qualified |
|
|
capital investments on which tax credit claims are made under this |
|
|
subchapter; and |
|
|
(4) the impact of the credit provided under this |
|
|
subchapter on employment, capital investment, personal income, and |
|
|
state tax revenues. |
|
|
(b) The final report issued before the expiration of this |
|
|
subchapter must include historical information on the credit |
|
|
authorized under this subchapter. |
|
|
(c) The comptroller may not include in the report |
|
|
information that is confidential by law. |
|
|
(d) For purposes of this section, the comptroller may |
|
|
require an enterprise project that claims a credit under this |
|
|
subchapter to submit information, on a form provided by the |
|
|
comptroller, on the location of the enterprise project's capital |
|
|
investment in this state and any other information necessary to |
|
|
complete the report required under this section. |
|
|
(e) The comptroller shall provide notice to the members of |
|
|
the legislature that the report required under this section is |
|
|
available on request. |
|
|
Sec. 171.824. COMPTROLLER POWERS AND DUTIES. The |
|
|
comptroller shall adopt rules and forms necessary to implement this |
|
|
subchapter. |
|
|
Sec. 171.825. EXPIRATION. (a) This subchapter expires |
|
|
December 31, 2009. |
|
|
(b) The expiration of this subchapter does not affect the |
|
|
carryforward of a credit under Section 171.820 or those credits for |
|
|
which an enterprise project is eligible before the date this |
|
|
subchapter expires. |
|
|
(c) A taxable entity may claim a credit under Subchapter |
|
|
Q-1, Chapter 171, Tax Code, as added by this section, only: |
|
|
(1) on a franchise tax report originally due on or |
|
|
after January 1, 2008; and |
|
|
(2) notwithstanding any other law, for qualified |
|
|
capital investments made on or after January 1, 2005, and before |
|
|
January 1, 2007. |
|
|
(d) The comptroller by rule shall prescribe the manner in |
|
|
which a taxable entity may claim a credit for qualified capital |
|
|
investments made on or after January 1, 2005, and before January 1, |
|
|
2007. |
|
|
(e) Subchapter Q-1, Chapter 171, Tax Code, as added by this |
|
|
section, and Section 2303.504, Government Code, as amended by this |
|
|
section, do not affect taxes imposed before January 1, 2008, and the |
|
|
law in effect before that date is continued in effect for purposes |
|
|
of the liability for and collection of those taxes. |
|
|
(f) Notwithstanding any other provision of this Act, this |
|
|
section takes effect January 1, 2008. |
|
|
SECTION 17. Section 2303.505(a), Government Code, is |
|
|
amended to read as follows: |
|
|
(a) To encourage the development of areas designated as |
|
|
enterprise zones, the governing body of a municipality through a |
|
|
program may refund its local sales and use taxes paid by a qualified |
|
|
business on all taxable items purchased for use at the qualified |
|
|
business site related to the project or activity[:
|
|
|
[(1) the purchase, lease, or rental of equipment or
|
|
|
machinery for use in an enterprise zone;
|
|
|
[(2) the purchase of material for use in remodeling,
|
|
|
rehabilitating, or constructing a structure in an enterprise zone;
|
|
|
[(3) labor for remodeling, rehabilitating, or
|
|
|
constructing a structure in an enterprise zone; and
|
|
|
[(4) electricity and natural gas purchased and
|
|
|
consumed in the normal course of business in the enterprise zone]. |
|
|
SECTION 18. Section 2303.516, Government Code, is amended |
|
|
to read as follows: |
|
|
Sec. 2303.516. MONITORING QUALIFIED BUSINESS OR ENTERPRISE |
|
|
PROJECT COMMITMENTS. (a) The comptroller [bank] may monitor a |
|
|
qualified business or enterprise project to determine whether and |
|
|
to what extent the business or project has followed through on any |
|
|
commitments made by it or on its behalf under this chapter. |
|
|
(b) The comptroller [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 comptroller [bank] finds that: |
|
|
(1) the business or project is not willing to |
|
|
cooperate with the comptroller [bank] in providing the comptroller |
|
|
[bank] with the information the comptroller [bank] needs to |
|
|
determine the state benefits [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. |
|
|
(c) [On the date on which a certificate of occupancy is
|
|
|
issued with respect to an enterprise project or at the completion of
|
|
|
the enterprise project designation period as indicated by the
|
|
|
approved application, the nominating body shall monitor the
|
|
|
qualified business to determine whether the business or project has
|
|
|
followed through on any commitments or goals made by it or on its
|
|
|
behalf in the designation application. On completion, the
|
|
|
nominating body shall submit a report of its findings to the bank
|
|
|
and comptroller.
|
|
|
[(d)] A qualified business may obtain a state benefit, |
|
|
earned through a specific enterprise project designation, on |
|
|
completion of an audit performed by the comptroller that will |
|
|
certify hiring commitments and eligible purchases made by or on |
|
|
behalf of a qualified business under this chapter. |
|
|
SECTION 19. Section 2303.517, Government Code, is amended |
|
|
to read as follows: |
|
|
Sec. 2303.517. REPORT. (a) Before obtaining a state |
|
|
benefit, the qualified business must submit to the comptroller |
|
|
[bank] a certified report of the actual number of jobs created or |
|
|
retained and the capital investment made at or committed to the |
|
|
qualified business site. |
|
|
(b) Not later than the 30th day after the date the |
|
|
comptroller completes an enterprise project's close-out, the |
|
|
comptroller shall submit to the bank a report stating the actual |
|
|
amount of capital investment made and the actual number of jobs |
|
|
created or retained as a result of the enterprise project |
|
|
designation. |
|
|
SECTION 20. Sections 151.429(a), (b), (c), and (e), Tax |
|
|
Code, are amended 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 all taxable items purchased for use at the qualified |
|
|
business site related to the project or activity [:
|
|
|
[(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) 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, the project's designation level, and |
|
|
the 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 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 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 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 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 jobs if the Texas Economic |
|
|
Development Bank designates the project as a double jumbo |
|
|
enterprise project; 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 at least 500 jobs if the Texas Economic |
|
|
Development Bank designates the project as a triple jumbo |
|
|
enterprise project. |
|
|
(c) The total amount of tax refund that an enterprise |
|
|
project may apply for in a state fiscal year may not exceed |
|
|
$250,000, at not more than $2,500 per job. The total amount of tax |
|
|
refund that a double jumbo enterprise project may apply for in a |
|
|
state fiscal year may not exceed $500,000, at not more than $5,000 |
|
|
per job. The total amount of tax refund that a triple jumbo |
|
|
enterprise project may apply for in a state fiscal year may not |
|
|
exceed $750,000, at not more than $7,500 per job. If an enterprise |
|
|
project, double jumbo enterprise project, or triple jumbo |
|
|
enterprise project qualifies in a state fiscal year for a refund of |
|
|
taxes in an amount in excess of the applicable limitation provided |
|
|
by this subsection, it may apply for a refund of those taxes in a |
|
|
subsequent year, subject to the applicable [$250,000] limitation |
|
|
for each year. The total amount that may be refunded to: |
|
|
(1) 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 jobs for qualified employees; |
|
|
(2) a double jumbo enterprise project under this |
|
|
section may not exceed the amount determined by multiplying |
|
|
$500,000 by the number of state fiscal years during which the double |
|
|
jumbo enterprise project created or retained one or more jobs for |
|
|
qualified employees; or |
|
|
(3) a triple jumbo enterprise project under this |
|
|
section may not exceed the amount determined by multiplying |
|
|
$750,000 by the number of state fiscal years during which the triple |
|
|
jumbo enterprise project created or retained one or more jobs for |
|
|
qualified employees. |
|
|
(e) In this section: |
|
|
(1) "Enterprise project" means a project or activity |
|
|
[person] designated by the Texas Economic Development Bank as an |
|
|
enterprise project under Chapter 2303, Government Code. |
|
|
(2) "Qualified employee" ["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 |
|
|
[means a new employment position created by a qualified business as
|
|
|
described by] Section 2303.401 [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. |
|
|
(5) "Double jumbo enterprise project" and "triple |
|
|
jumbo enterprise project" have the meanings assigned by Section |
|
|
2303.407, Government Code. |
|
|
SECTION 21. The following provisions are repealed: |
|
|
(1) Section 2303.4051(d), Government Code; and |
|
|
(2) Section 2303.406(e), Government Code, as added by |
|
|
Chapter 209, Acts of the 78th Legislature, Regular Session, 2003. |
|
|
SECTION 22. 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 23. 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 24. This Act takes effect immediately if it |
|
|
receives a vote of two-thirds of all the members elected to each |
|
|
house, as provided by Section 39, Article III, Texas Constitution. |
|
|
If this Act does not receive the vote necessary for immediate |
|
|
effect, this Act takes effect September 1, 2007. |
|
|
|
|
|
* * * * * |