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A BILL TO BE ENTITLED
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AN ACT
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relating to the designation of certain areas as banking development |
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districts to encourage the establishment of financial institution |
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branches in those areas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by |
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adding Chapter 279 to read as follows: |
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CHAPTER 279. BANKING DEVELOPMENT DISTRICTS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 279.001. DEFINITIONS. In this chapter: |
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(1) "Finance commission" means the Finance Commission |
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of Texas. |
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(2) "Financial institution" means a state or national |
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bank, a state or federal savings bank, or a state or federal savings |
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and loan association. |
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(3) "Local government" means a municipality or county. |
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(4) "Proposed Texas financial institution" means: |
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(A) a proposed new bank for which an application |
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for a state bank charter has been filed with the Texas Department of |
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Banking; or |
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(B) a proposed new savings bank or savings and |
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loan association for which an application to incorporate under the |
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laws of this state has been filed with the Department of Savings and |
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Mortgage Lending. |
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SUBCHAPTER B. POWERS AND DUTIES OF FINANCE COMMISSION |
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Sec. 279.051. ADMINISTRATION OF PROGRAM. The finance |
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commission shall administer and monitor a banking development |
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district program under this chapter to encourage the establishment |
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of branches of a financial institution in geographic areas where |
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there is a demonstrated need for banking services. |
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Sec. 279.052. RULES. (a) Subject to Subsection (b), the |
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finance commission shall adopt rules to implement this chapter. |
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(b) The finance commission, in consultation with the Texas |
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Economic Development and Tourism Office, shall adopt rules |
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regarding the criteria for the designation of banking development |
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districts under this chapter. The rules must require the finance |
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commission to consider: |
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(1) the location, number, and proximity of sites where |
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banking services are available in the proposed district; |
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(2) consumer needs for banking services in the |
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proposed district; |
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(3) the economic viability and local credit needs of |
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the community in the proposed district; |
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(4) the existing commercial development in the |
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proposed district; and |
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(5) the impact additional banking services would have |
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on potential economic development in the proposed district. |
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SUBCHAPTER C. DESIGNATION OF BANKING DEVELOPMENT DISTRICT |
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Sec. 279.101. APPLICATION FOR DESIGNATION OF BANKING |
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DEVELOPMENT DISTRICT. A local government, in conjunction with a |
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financial institution or the organizers or incorporators of a |
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proposed Texas financial institution, may submit an application to |
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the finance commission for the designation of a banking development |
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district. |
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Sec. 279.102. APPLICATION BY FINANCIAL INSTITUTION TO OPEN |
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BRANCH IN DISTRICT. A financial institution may apply to open a |
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branch in the proposed banking development district at the time the |
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local government submits an application in conjunction with the |
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institution under Section 279.101. |
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Sec. 279.103. DETERMINATION BY FINANCE COMMISSION. (a) |
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Not later than the 91st day after the date an application for the |
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designation of a banking development district is submitted under |
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Section 279.101, the finance commission shall make a determination |
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regarding whether to approve the application. |
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(b) If the finance commission approves the application, the |
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finance commission shall notify the: |
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(1) local government; |
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(2) financial institution or the organizers or |
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incorporators of the proposed Texas financial institution, as |
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appropriate; |
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(3) comptroller; |
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(4) Texas Economic Development and Tourism Office; |
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(5) lieutenant governor; and |
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(6) speaker of the house of representatives. |
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SUBCHAPTER D. DEPOSIT OF PUBLIC FUNDS IN BANKING DISTRICT |
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DEPOSITORY |
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Sec. 279.151. DESIGNATION OF BANKING DISTRICT |
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DEPOSITORY. (a) The governing body of a local government in which |
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a banking development district has been designated under Subchapter |
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C may by resolution designate a financial institution located in |
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the district as a banking district depository for purposes of this |
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subchapter. |
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(b) A resolution adopted under Subsection (a) must specify |
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the maximum amount that may be kept on deposit with the banking |
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district depository. |
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(c) In calculating the yield under Section 2256.006, |
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Government Code, of public funds deposited in a banking district |
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depository, the governing body of a local government may consider |
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the benefit to this state of stimulating economic development. |
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Sec. 279.152. DEPOSIT OF PUBLIC FUNDS BY LOCAL |
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GOVERNMENT. (a) A local government may deposit public funds with |
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a financial institution designated as a banking district depository |
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under Section 279.151 regardless of whether the financial |
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institution is designated by the comptroller as a state depository |
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under Subchapter C, Chapter 404, Government Code. |
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(b) Subject to an agreement between the governing body and |
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the banking district depository, public funds deposited in the |
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banking district depository may earn a fixed interest rate that is |
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at or below the financial institution's posted two-year certificate |
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of deposit rate. The terms of the agreement must be specified in |
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the resolution adopted under Section 279.151. |
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Sec. 279.153. DEPOSIT OF PUBLIC FUNDS BY STATE. (a) If the |
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comptroller designates the financial institution as a state |
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depository under Subchapter C, Chapter 404, Government Code, the |
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comptroller may deposit public funds with a financial institution |
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designated as a banking district depository under Section 279.151. |
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(b) For purposes of Subsection (a), a financial institution |
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is subject to the collateral requirements of Section 404.031, |
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Government Code. |
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(c) Subject to an agreement between the comptroller and the |
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banking district depository, public funds deposited in the banking |
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district depository may earn a fixed interest rate that is at or |
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below the financial institution's posted two-year certificate of |
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deposit rate. |
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(d) In calculating the yield under Section 2256.006, |
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Government Code, of public funds deposited in a banking district |
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depository, the comptroller may consider the benefit to this state |
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of stimulating economic development. |
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SUBCHAPTER E. BANKING DISTRICT BENEFITS |
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Sec. 279.201. TAX ABATEMENT. The governing body of a local |
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government may enter into a tax abatement agreement as provided by |
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Chapter 312, Tax Code, with: |
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(1) a financial institution that owns property in a |
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banking development district on which the institution proposes to |
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open a branch of the institution; or |
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(2) the organizers or incorporators of a proposed |
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Texas financial institution that owns property in a banking |
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development district on which the organizers propose to establish |
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and operate a branch of the institution. |
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SECTION 2. Subchapter B, Chapter 312, Tax Code, is amended |
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by adding Section 312.2012 to read as follows: |
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Sec. 312.2012. BANKING DEVELOPMENT DISTRICT. (a) In this |
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section, "financial institution" and "proposed Texas financial |
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institution" have the meanings assigned by Section 279.001, Finance |
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Code. |
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(b) The designation of an area as a banking development |
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district under Chapter 279, Finance Code, constitutes designation |
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of the area as a reinvestment zone under this subchapter without |
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further hearing or other procedural requirements other than those |
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provided by Chapter 279, Finance Code. Except as otherwise |
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provided by this section, the provisions of this subchapter apply |
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to the abatement of taxes on property located in a banking |
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development district. |
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(c) Only the governing body of a municipality or county is |
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eligible to enter into a tax abatement agreement with an owner of |
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property located in a banking development district so long as the |
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property is owned by a financial institution or the organizers or |
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incorporators of a proposed Texas financial institution. |
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(d) The governing body of a municipality or county may enter |
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into an agreement with a financial institution to abate taxes on |
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property owned by the institution only on the condition that the |
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institution open a branch on the property. |
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(e) The governing body of a municipality or county may enter |
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into an agreement with the organizers or incorporators of a |
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proposed Texas financial institution to abate taxes on property |
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owned by the organizers or incorporators only on the condition that |
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the proposed financial institution: |
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(1) is granted a state bank charter or issued a |
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certificate of incorporation, as appropriate, to engage in business |
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in this state; and |
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(2) establish and operate a branch on the property. |
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(f) The designation of an area as a reinvestment zone under |
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this section is for purposes of this subchapter only and not for |
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purposes of any other law, including Chapters 311 and 313. |
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SECTION 3. Subchapter C, Chapter 312, Tax Code, is amended |
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by adding Section 312.4012 to read as follows: |
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Sec. 312.4012. BANKING DEVELOPMENT DISTRICT. (a) In this |
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section, "financial institution" and "proposed Texas financial |
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institution" have the meanings assigned by Section 279.001, Finance |
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Code. |
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(b) The designation of an area as a banking development |
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district under Chapter 279, Finance Code, constitutes designation |
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of the area as a reinvestment zone under this subchapter without |
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further hearing or other procedural requirements other than those |
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provided by Chapter 279, Finance Code. Except as otherwise |
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provided by this section, the provisions of this subchapter apply |
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to the abatement of taxes on property located in a banking |
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development district. |
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(c) Only the governing body of a county is eligible to enter |
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into a tax abatement agreement with an owner of property located in |
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a banking development district so long as the property is owned by a |
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financial institution or the organizers or incorporators of a |
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proposed Texas financial institution. |
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(d) The governing body of a county may enter into an |
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agreement with a financial institution to abate taxes on property |
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owned by the institution only on the condition that the institution |
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open a branch on the property. |
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(e) The governing body of a county may enter into an |
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agreement with the organizers or incorporators of a proposed Texas |
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financial institution to abate taxes on property owned by the |
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organizers or incorporators only on the condition that the proposed |
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financial institution: |
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(1) is granted a state bank charter or issued a |
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certificate of incorporation, as appropriate, to engage in business |
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in this state; and |
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(2) establish and operate a branch on the property. |
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(f) The designation of an area as a reinvestment zone under |
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this section is for purposes of this subchapter only and not for |
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purposes of any other law, including Chapters 311 and 313. |
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SECTION 4. Not later than January 1, 2016, the Finance |
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Commission of Texas shall adopt rules governing the designation of |
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banking development districts, as required by Chapter 279, Finance |
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Code, as added by this Act. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |