HBA-EDN H.B. 2808 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2808
By: Chavez
Economic Development
7/19/2001
Enrolled



BACKGROUND AND PURPOSE 

Many areas of the state have experienced prosperity but border communities
have frequently not benefitted from this economic growth.  The North
American Free Trade Agreement has given hope of economic growth to many
stagnant border communities.  In order to encourage the construction of new
businesses in these communities, it may be helpful to establish zones in
which certain construction fees are waived, taxes are refunded or reduced,
and baseline performance standards are established to encourage the use of
alternative building materials that address concerns relating to the
environment or to building cost, maintenance, or energy consumption.  House
Bill 2808 authorizes a municipality to establish North American Free Trade
Agreement impact 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. 

ANALYSIS

House Bill 2808 amends the Local Government Code to authorize a
municipality to create a North American Free Trade Agreement (NAFTA) impact
zone (zone) covering a part of the municipality if the municipality
determines that the creation of such a zone would promote: 

_business opportunities for local businesses in the zone;

_an increase in economic development in the zone; or

_employment opportunities for residents of the zone.

The bill authorizes a municipality to create a zone if the governing body
of the municipality adopts a resolution containing that determination, a
description of the boundaries of the zone, and a finding by the governing
body that the creation of the zone satisfies the requirements of  criteria
for a reinvestment zone. A municipality is authorized to create more than
one zone and to include an area in more than one zone. The bill sets forth
additional powers of a municipality relating to a zone. 

The bill requires a business that operates in a zone and receives benefits
as a result of a municipality's action to waive or adopt fees related to
the construction of buildings in the zone, enter into agreements for sales
tax refunds or tax abatements of municipal sales tax on sales made in the
zone, or enter into agreements abating municipal property taxes on property
in the zone to make a good faith effort to hire individuals receiving
federal NAFTA transitional adjustment assistance.  The bill requires such a
business to annually report to the governing body of the municipality on
what percentage of the total number of individuals hired by the business
during the year covered by the report is comprised of individuals receiving
NAFTA assistance. 


 EFFECTIVE DATE

September 1, 2001.