By: Ellis S.B. No. 825
(In the Senate - Filed February 12, 2009; March 4, 2009,
read first time and referred to Committee on Business and Commerce;
May 19, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; May 19, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 825 By: Fraser
A BILL TO BE ENTITLED
AN ACT
relating to the designation of certain areas as banking development
districts to encourage the establishment of financial institution
branches in those areas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 279 to read as follows:
CHAPTER 279. BANKING DEVELOPMENT DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 279.001. DEFINITIONS. In this chapter:
(1) "Finance commission" means the Finance Commission
of Texas.
(2) "Financial institution" means a state or national
bank, a state or federal savings bank, or a state or federal savings
and loan association.
(3) "Local government" means a municipality or county.
[Sections 279.002-279.050 reserved for expansion]
SUBCHAPTER B. POWERS AND DUTIES OF FINANCE COMMISSION
Sec. 279.051. ADMINISTRATION OF PROGRAM. The finance
commission shall administer and monitor a banking development
district program under this chapter to encourage the establishment
of branches of a financial institution in geographic areas where
there is a demonstrated need for banking services.
Sec. 279.052. RULES. (a) Subject to Subsection (b), the
finance commission shall adopt rules to implement this chapter.
(b) The finance commission, in consultation with the Texas
Economic Development and Tourism Office, shall adopt rules
regarding the criteria for the designation of banking development
districts under this chapter. The rules must require the finance
commission to consider:
(1) the location, number, and proximity of sites where
banking services are available in the proposed district;
(2) consumer needs for banking services in the
proposed district;
(3) the economic viability and local credit needs of
the community in the proposed district;
(4) the existing commercial development in the
proposed district; and
(5) the impact additional banking services would have
on potential economic development in the proposed district.
[Sections 279.053-279.100 reserved for expansion]
SUBCHAPTER C. DESIGNATION OF BANKING DEVELOPMENT DISTRICT
Sec. 279.101. APPLICATION FOR DESIGNATION OF BANKING
DEVELOPMENT DISTRICT. A local government, in conjunction with a
financial institution, may submit an application to the finance
commission for the designation of a banking development district.
Sec. 279.102. APPLICATION BY FINANCIAL INSTITUTION TO OPEN
BRANCH IN DISTRICT. A financial institution may apply to open a
branch in the district at the time the local government submits an
application in conjunction with the institution under Section
279.101.
Sec. 279.103. APPLICATION BY FINANCIAL INSTITUTION WITH
EXISTING BRANCH IN PROPOSED DISTRICT. (a) A local government may
submit an application under Section 279.101 in conjunction with a
financial institution that operates a branch in the proposed
district at the time the application is submitted, if the branch was
opened after December 31, 1996.
(b) The finance commission shall consider the importance
and benefits of preserving the banking services offered by the
branch located in the proposed district in making a determination
under Section 279.104.
Sec. 279.104. DETERMINATION BY FINANCE COMMISSION.
(a) Not later than the 91st day after the date an application for
the designation of a banking development district is submitted
under Section 279.101, the finance commission shall make a
determination regarding whether to approve the application.
(b) If the finance commission approves the application, the
finance commission shall notify the:
(1) local government;
(2) financial institution;
(3) comptroller;
(4) Texas Economic Development and Tourism Office;
(5) lieutenant governor; and
(6) speaker of the house of representatives.
[Sections 279.105-279.150 reserved for expansion]
SUBCHAPTER D. DEPOSIT OF PUBLIC FUNDS IN BANKING DISTRICT
DEPOSITORY
Sec. 279.151. DESIGNATION OF BANKING DISTRICT DEPOSITORY.
(a) The governing body of a local government in which a banking
development district has been designated under Subchapter C may by
resolution designate a financial institution located in the
district as a banking district depository for purposes of this
subchapter.
(b) A resolution adopted under Subsection (a) must specify
the maximum amount that may be kept on deposit with the banking
district depository.
(c) In calculating the yield under Section 2256.006,
Government Code, of public funds deposited in a banking district
depository, the governing body of a local government may consider
the benefit to this state of stimulating economic development.
Sec. 279.152. DEPOSIT OF PUBLIC FUNDS BY LOCAL GOVERNMENT.
(a) A local government may deposit public funds with a financial
institution designated as a banking district depository under
Section 279.151 regardless of whether the financial institution is
designated by the comptroller as a state depository under
Subchapter C, Chapter 404, Government Code.
(b) Subject to an agreement between the governing body and
the banking district depository, public funds deposited in the
banking district depository may earn a fixed interest rate that is
at or below the financial institution's posted two year certificate
of deposit rate. The terms of the agreement must be specified in
the resolution adopted under Section 279.151.
Sec. 279.153. DEPOSIT OF PUBLIC FUNDS BY STATE. (a) If the
comptroller designates the financial institution as a state
depository under Subchapter C, Chapter 404, Government Code, the
comptroller may deposit public funds with a financial institution
designated as a banking district depository under Section 279.151.
(b) For purposes of Subsection (a), a financial institution
is subject to the collateral requirements of Section 404.031,
Government Code.
(c) Subject to an agreement between the comptroller and the
banking district depository, public funds deposited in the banking
district depository may earn a fixed interest rate that is at or
below the financial institution's posted two year certificate of
deposit rate.
(d) In calculating the yield under Section 2256.006,
Government Code, of public funds deposited in a banking district
depository, the comptroller may consider the benefit to this state
of stimulating economic development.
[Sections 279.154-279.200 reserved for expansion]
SUBCHAPTER E. BANKING DISTRICT BENEFITS
Sec. 279.201. TAX ABATEMENT. The governing body of a local
government may enter into a tax abatement agreement as provided by
Chapter 312, Tax Code, with a financial institution that owns
property in a banking development district.
SECTION 2. Subchapter B, Chapter 312, Tax Code, is amended
by adding Section 312.2012 to read as follows:
Sec. 312.2012. BANKING DEVELOPMENT DISTRICT. (a) The
designation of an area as a banking development district under
Chapter 279, Finance Code, constitutes designation of the area as a
reinvestment zone under this subchapter without further hearing or
other procedural requirements other than those provided by Chapter
279, Finance Code, except that property is eligible for tax
abatement under this subchapter only if the property is owned by a
financial institution as defined by Section 279.001, Finance Code.
(b) The designation of an area as a reinvestment zone under
this section is for purposes of this subchapter only and not for
purposes of any other law, including Chapters 311 and 313.
SECTION 3. Subchapter C, Chapter 312, Tax Code, is amended
by adding Section 312.4012 to read as follows:
Sec. 312.4012. BANKING DEVELOPMENT DISTRICT. (a) The
designation of an area as a banking development district under
Chapter 279, Finance Code, constitutes designation of the area as a
reinvestment zone under this subchapter without further hearing or
other procedural requirements other than those provided by Chapter
279, Finance Code, except that property is eligible for tax
abatement under this subchapter only if the property is owned by a
financial institution as defined by Section 279.001, Finance Code.
(b) The designation of an area as a reinvestment zone under
this section is for purposes of this subchapter only and not for
purposes of any other law, including Chapters 311 and 313.
SECTION 4. Not later than January 1, 2010, the Finance
Commission of Texas shall adopt rules governing the designation of
banking development districts, as required by Chapter 279, Finance
Code, as added by this Act.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.
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