HBA-TYH H.B. 3658 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3658 By: Oliveira Economic Development 4/5/1999 Introduced BACKGROUND AND PURPOSE Currently, the enterprise zone program (program) provides incentives to businesses located in economically distressed neighborhoods. The purpose of this bill is to make technical and substantive changes to the program to increase the efficiency of the program. H.B. 3658 modifies certain reporting and certification requirements, clarifies when a retained job is eligible for enterprise zone benefits, requires enterprise projects to meet certain scoring criteria, and eliminates a specific tax incentive that is infrequently used. 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 2303.003, Government Code, to redefine "department" as the Texas Department of Economic Development, rather than the Texas Department of Commerce, and "qualified hotel project" as a hotel proposed to be constructed by a municipality or a nonprofit municipally sponsored local government corporation created under Chapter 431 (Texas Transportation Corporation Act), Transportation Code, rather than Article 1528l, V.T.C.S., which has been repealed. SECTION 2. Amends Section 2303.052(d), Government Code, to change the due date for submitting a report regarding the enterprise zone program from December 1 to December 15 of each year. SECTION 3. Amends Section 2303.401, Government Code, as follows: Sec. 2303.401. DEFINITIONS. Adds the definition of "retained job." Makes conforming changes. SECTION 4. Amends Section 2303.406, Government Code, to authorize the department to designate a business as an enterprise project only if the department determines the enumerated circumstances, including that if the business is seeking job retention benefits: _the permanent employees of the business will be permanently laid off; _the business will close down permanently; _the business will relocate out-of-state; _a 10 percent increase in the production capacity of the business will occur; _a 10 percent decrease in overall cost per unit produced will occur; or _the business facility has been legitimately destroyed or impaired because of fire, flood, tornado, hurricane, or any other natural disaster. Requires the department to establish a minimum scoring threshold that must be met by the qualified business applying for a project designation and make its designation decisions using a weighted scale in which the enumerated requirements are met. Deletes text regarding the effective date of the designation of an enterprise project. Makes a conforming change. SECTION 5. Amends Section 2303.511, Government Code, to authorize the governing body of a municipality or county that is the governing body of an enterprise zone to give priority to the zone for the receipt of funds received under Section 1501 et seq.(Statement of Purpose), Title 29 U.S.C. (federal Job Training Partnership Act), rather than Article 4413(52) (repealed), V.T.C.S. (Texas Job Training Partnership Act). Deletes text giving priority to an enterprise zone for the receipt of urban development action grant money. Deletes text providing that a reduction in utility rates is subject to the approval of the appropriate regulatory authority "under Sections 16 and 17, Article 1446c (repealed), V.T.C.S. (Public Utility Regulatory Act)." Deletes reference to the lowest rate "offered to any customer located in the enterprise zone, including economic development rates and standby rates." Authorizes a qualified enterprise project or the governing body of the enterprise zone to petition the appropriate utility and the appropriate regulatory authority to receive a reduced rate. SECTION 6. Amends Sections 151.429(d), (e), and (g), Tax Code, to redefine "new permanent job" as a new employment position created by a qualified business that has provided at least 1,820 hours, rather than 1,040 hours, of employment a year to a qualified employee. Deletes requirement for the department to annually certify to the Legislative Budget Board whether the specified level of employment of qualified employees has been maintained. Makes conforming changes. SECTION 7. Amends Section 171.1015(g), Tax Code, to authorize only enterprise projects, rather than only qualified businesses, that have been certified as eligible for a tax deduction by the department to the comptroller to apply for the tax deduction. Makes conforming changes. SECTION 8. Effective date: September 1, 1999. SECTION 9. Emergency clause.