HBA-RBT H.B. 3258 76(R) BILL ANALYSIS
Office of House Bill AnalysisH.B. 3258
By: Bailey
Ways & Means
5/3/1999
Introduced
BACKGROUND AND PURPOSE
H.B. 3258 is designed to meet needs of areas that have the transportation
nodes necessary to build upon international, industrial and commercial
opportunities. Historically, growth and prosperity have grown away from
these transportation nodes, leaving an overlay of poverty and economic
distress over areas that should be bursting with economic potential.
Incentives that address economic development, education, and quality of
life are necessary to entice business owners to once again take advantage
of proximity to major transportation nodes and reinvest in these areas of
the community while at the same time producing a stronger, more diversified
market for international, commercial and industrial trade. If successful,
the incentives would eliminate areas of poverty, increase the tax base,
improve local labor skills, create needed jobs, elevate the quality of life
of local residents, and allow the region and the state to better compete
with others in international and domestic trade. This bill outlines
provisions for the creation of a development zone and supportive
neighborhood redevelopment zones.
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 Subtitle B, Title 12, Local Government Code, by adding
Chapter 384 as follows:
CHAPTER 384. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 384.001. DEFINITIONS. Defines "board" as a board of directors of a
commercial and industrial development zone and "development zone" as an
area designated as a commercial and industrial development zone under this
chapter.
Sec. 384.002. JURISDICTION OF MUNICIPALITY. Provides that, for the
purposes of this chapter, territory in the extraterritorial jurisdiction of
a municipality is considered to be in the jurisdiction of the municipality.
SUBCHAPTER B. CREATION OF COMMERCIAL AND INDUSTRIAL
DEVELOPMENT ZONE
Sec. 384.031. CRITERIA FOR DEVELOPMENT ZONE CREATION. Sets forth criteria
for development zone creation.
Sec. 384.032. AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, AND ECONOMIC
DISTRESS. Provides that an area is an area of pervasive poverty,
unemployment, and economic distress for the purposes of Section 384.031 if
it meets the requirements of Section 2303.102 (Area of Pervasive Poverty,
Unemployment, and Economic Distress), Government Code.
Sec. 384.033. CREATION OF DEVELOPMENT ZONE. Provides that the governing
body of a municipality or county, individually or in combination with other
municipalities or counties, by ordinance or order may create as a
development zone an area within its jurisdiction that meets the criteria
under Section 384.031. Provides that each creating body must hold a public
hearing before adopting an ordinance or order under this section. Prohibits
the governing body of a county from designating territory in a
municipality, including extraterritorial jurisdiction of a municipality,
to be included in a proposed development zone unless the governing body of
the municipality also designates the territory. Provides that a
development zone created under this section is a political subdivision of
the state and a special district.
Sec. 384.034. DESIGNATING ORDINANCE OR ORDER. Provides that an ordinance
or order designating an area as a development zone must describe precisely
the area to be included in the zone by a legal description or by reference
to roadways, lakes, waterways, or municipal or county boundaries, state a
finding that the area meets the requirements of this chapter, summarize
briefly the incentives, including tax incentives, that, at the election of
the designating body, apply to business enterprises in the area, and
designate the area as a development zone. Provides that a least one of the
incentives must be an incentive that does not apply to all business
enterprises located in the jurisdiction of a governmental entity that
designated the area as a development zone. Sets forth that this section
does not prohibit a municipality or county from extending additional
incentives, including tax incentives, to business enterprises in a
development zone by a separate ordinance or order.
Sec. 384.035. TAX INCREMENT. Authorizes a creating body to allow one
quarter of one percent of a local property tax increment to fund a
development zone, as provided by Chapter 311 (Tax Increment Financing Act),
Tax Code. Authorizes the fund, on adoption of an order or ordinance by
each creating body, to be used to pay salaries of employees of the board
and administrative expenses of the development zone.
Sec. 384.036. AMENDING BOUNDARIES. Authorizes the creating body by
ordinance or order to amend the boundary of a development zone after a
public hearing on the issue. Sets forth requirements for the boundaries.
Provides that the entire development zone with the amended boundary must
continue to meet the unemployment and economic distress requirements of
Section 384.031. Prohibits a creating body from making more than one
boundary amendment for a development zone in a calendar year. Provides
that if more than one body created the development zone, each body must
agree on the amendment by ordinance or order.
SUBCHAPTER C. BOARD OF DIRECTORS
Sec. 384.061. BOARD OF DIRECTORS. Provides that a development zone is
governed by a board of seven directors who serve two-year terms. Sets
forth the manner of appointment of the directors. Provides that the
initial terms of directors may be staggered, so long as a term does not
exceed two years.
Sec. 384.062. QUALIFICATIONS OF DIRECTORS. Provides that to serve as a
director, a person must be at least 21 years old and be registered to vote
in the county in which the development zone is located.
Sec. 384.063. PERSONS DISQUALIFIED FROM SERVING. Provides that Section
49.052 (Disqualification of Directors), Water Code, applies to directors of
a development zone created under this chapter as if the zone were a
district governed by that section.
Sec. 384.064. BOARD VACANCIES. Requires a vacancy in the office of
director to be filled by appointment by the entity that appointed the
vacating director.
Sec. 384.065. REMOVAL OF DIRECTOR. Authorizes a majority of the board to
remove a director for misconduct or failure to carry out the director's
duties.
Sec. 384.066. ORGANIZATION OF BOARD. Requires the board, after each
appointment and qualification of directors by the appointing entities, to
organize by electing a president, a vice president, a secretary, and any
other officers the board considers necessary.
Sec. 384.067. QUORUM; DIRECTOR'S DUTIES; MANAGEMENT OF ZONE. Provides
that Sections 49.053 (Quorum), 49.057 (Management of District), and 49.058
(Conflicts of Interest), Water Code, apply to the board of directors of a
development zone created under this chapter as if the zone were a district
governed by those sections.
Sec. 384.068. MEETINGS AND NOTICE. Requires the board to designate and
establish a development zone office in the county. Authorizes the board to
establish regular meetings to conduct development zone business and to hold
special meetings at other times as the business of a zone requires.
Requires notice of the time, place, and purpose of any meeting of the board
to be given by posting a notice containing that information at a place
convenient to the public within the development zone. Requires a copy of
the notice to be furnished to the clerk or clerks of the county in which
the zone is located, who shall post the notice on a bulletin board in the
county courthouse used for that purpose.
Sec. 384.069. DIRECTOR'S COMPENSATION; BOND AND OATH OF OFFICE. Provides
that Sections 375.067 (Director's Bond and Oath), 375.069 (Board Position
Not Civil Office of Emolument), and 375.070 (Compensation of Directors;
Reimbursement of Expenses) apply to directors of a development zone created
under this chapter as if the zone were a municipal management district.
SUBCHAPTER D. POWERS AND DUTIES
Sec. 384.101. GENERAL POWERS. Authorizes a development zone to acquire
and dispose of projects and have the powers, authority, rights, and duties
necessary to permit accomplishment of the purposes for which the zone was
created. Authorizes a development zone to provide for general promotion
of and tourist advertising regarding the zone and its vicinity and for a
marketing program to attract visitors. Authorizes those activities to be
conducted by the zone under contracts for professional services with
persons or organizations selected by the zone. Authorizes a development
zone to enter into a memorandum of understanding with any state agency,
including an institution of higher education, to further the economic
development of the zone. Provides that to the extent not inconsistent with
this chapter, a development zone has the powers of a municipal management
district created under Chapter 375 (Municipal Management Districts in
General) and a county commissioners court under Section 381.004.
Sec. 384.102. EMINENT DOMAIN. Authorizes a development zone not located
within the corporate limits of a municipality to exercise the power of
eminent domain, as provided by Chapter 21 (Eminent Domain), Property Code,
to acquire interests in land within the zone the board of directors of the
zone considers necessary to provide water and sewer services.
Sec. 384.103. SUITS. Authorizes a development zone to, through its
directors, sue and be sued in this state in the name of the development
zone. Authorizes service of process in any suit to be had by serving a
director.
SUBCHAPTER E. BENEFITS OF DEVELOPMENT ZONE
Sec. 384.201. GENERAL BENEFITS. Provides that to the extent not
inconsistent with this chapter, a development zone has the powers and
benefits of an enterprise zone, including powers and benefits relating to
neighborhood enterprise associations, qualified businesses, enterprise
projects, and state agencies under Chapter 2303 (Enterprise Zones),
Government Code, and Chapters 151 (Limited Sales, Excise, and Use Tax) and
171 (Franchise Tax), Tax Code.
Sec. 384.202. ENTERPRISE ZONE REFERENCES. Provides that a reference to
the department in Chapter 2303, Government Code, means the board, except
for the references to the department in Sections 2303.502 (Review of State
Agency Rules; Report) and 2303.503 (State Preferences), Government Code,
which continue to mean the Texas Department of Economic Development and a
reference to a "governing body of a municipality or county that is the
governing body of an enterprise zone" in Chapter 2303, Government Code,
means a creating body under this chapter.
Sec. 384.203. MONITORING. Requires the board to monitor each person in a
development zone that receives benefits available under this chapter.
Requires, on the board's request, the Texas Workforce Commission or the
comptroller's office to provide to the board tax records of a person that
receives benefits under this chapter.
SUBCHAPTER F. GENERAL FISCAL PROVISIONS
Sec. 384.301. EXPENDITURES. Authorizes a development zone's money to be
disbursed only by check, draft, order, or other instrument signed by at
least three directors. Authorizes the general manager, treasurer, or other
employee of the development zone, if authorized by resolution of the board,
to sign checks, drafts, orders, or other instruments on any development
zone operation account on behalf of the board.
Sec. 384.302. COMPETITIVE BIDDING; CONTRACT AWARD. Provides that Sections
375.221 (Competitive Bidding on Certain Public Works Contracts) and 375.223
(Supersedes Other Law) apply to a development zone created under this
chapter as if the zone were a municipal management district, except that a
contract between the development zone and a governmental entity or
nonprofit corporation created under the Development Corporation Act of 1979
(Article 5190.6, V.T.C.S.) is not subject to the competitive bidding
requirement.
SUBCHAPTER G. DISSOLUTION
Sec. 384.401. DISSOLUTION OF DEVELOPMENT ZONE BY CREATING BODY. Authorizes
the dissolution of a development zone under specified criteria.
Sec. 384.402. DISSOLUTION BY BOARD REQUEST. Authorizes a board to
petition a creating body to dissolve the development zone under Section
384.401 if a majority of the board finds at any time before the
authorization of bonds or the final lending of its credit that the proposed
undertaking is impracticable or cannot be successfully and beneficially
accomplished, or that all bonds of the development zone or other debts of
the zone have been paid and the purposes of the zone have been
accomplished.
Sec. 384.403. TAXES. On dissolution of a development zone, any taxes
levied on behalf of the zone are abolished.
SECTION 2. Emergency clause.
Effective date: upon passage.