HBA-MPA H.B. 2388 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2388
By: Solis, Jim
Economic Development
4/21/1999
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Currently, Section 381.004(c)(3), Local Government Code, provides that the
commissioners court may  use county employees or funds for a program
designed to stimulate economic development in a county.  The statute does
not specifically address the use of a county's real property as an
incentive for the location of businesses.  Article 725d (County Acquisition
of Land and Facilities for Lease to Public or Private Entities), V.T.C.S.,
allows for the leasing of real property for economic development purposes
but does not address the purchase of property.   

A site for establishing a business is an important element of a package
offered to encourage a business to locate within a jurisdiction. Various
sale statutes applicable to counties make the negotiation of development
incentive packages difficult to achieve, particularly laws requiring that
real property be sold under an auction or sealed bid procedure.  There is
no exemption in the applicable statutes for real property used for economic
development purposes. For that reason, counties are often unable to
directly negotiate with any degree of certainty the terms of the sale.
H.B. 2388 authorizes counties to sell property for economic development
purposes without going through the competitive bid process. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 381.004, Local Government Code, by amending
Subsection (c) and adding Subsections (f) and (g), as follows: 

Sec. 381.004. COMMUNITY AND ECONOMIC DEVELOPMENT IN CERTAIN COUNTIES. (c)
Makes a conforming change. 

(f) Authorizes the commissioners court to sell or lease real property of
the county for use in a program established under this section.  Authorizes
the commissioners court to negotiate directly with a business participating
in the program in selling and leasing the property.  Provides that a sale
or lease of property under this subsection is exempt from the requirements
of Sections 263.001 (Sale or Lease of Real Property), 263.007 (Sale or
Lease of Real Property Through Sealed-Bid Procedure), 272.001(a) (Notice of
Sale or Exchange of Land by Political Subdivision; Exceptions). 

(g) Authorizes the commissioners court to sell real property under
Subsection (f) for less than the appraised fair market value only as part
of a transaction allowing the county to recover the value or benefits of
the property's use if the business purchasing the property fails to comply
with the standards of the program established under this section. 

SECTION 2.   Makes application of this Act prospective.

SECTION 3.   Emergency clause.
  Effective date:  upon passage.
 
EXPLANATION OF AMENDMENTS

Amendment #1

Amends proposed Section 381.004(f) to authorize the commissioners court to
sell or lease real property of the county for use in a program established
under this section (Community and Economic Development Programs in Certain
Counties) if the county acquired the property on or before September 1,
1999.