By: Scott (Senate Sponsor - Hinojosa) H.B. No. 1560
(In the Senate - Received from the House April 11, 2011;
April 20, 2011, read first time and referred to Committee on
Economic Development; May 24, 2011, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 6,
Nays 0; May 24, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 1560 By: Jackson
A BILL TO BE ENTITLED
AN ACT
relating to the enterprise zone program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2303.003(7), Government Code, is amended
to read as follows:
(7) "Qualified employee" means a person who:
(A) works for a qualified business; and
(B) either:
(i) performs at least 50 percent of the
person's service for the business at the qualified business site;
or
(ii) met the requirements under
Subparagraph (i) immediately before being promoted to a different
job with the qualified business.
SECTION 2. Section 2303.402(a), Government Code, is amended
to read as follows:
(a) A person is a qualified business if the bank, for the
purpose of state benefits under this chapter, or the nominating
body of a project or activity of the person under this chapter, for
the purpose of local incentives, certifies that:
(1) the person is engaged in or has provided
substantial commitment to initiate the active conduct of a trade or
business in an enterprise zone, and at least 25 percent of the
person's new permanent jobs [employees] in the enterprise zone
eligible for enterprise zone program benefits are held by:
(A) residents of any enterprise zone in this
state; or
(B) economically disadvantaged individuals; [or]
(2) the person is engaged in or has provided
substantial commitment to initiate the active conduct of a trade or
business in an area of this state that does not qualify as an
enterprise zone, and at least 35 percent of the person's new
permanent jobs [employees] at the qualified business site eligible
for enterprise zone program benefits are held by:
(A) residents of any enterprise zone in this
state; or
(B) individuals who are economically
disadvantaged; or
(3) the person is engaged in or has provided
substantial commitment to initiate the active conduct of a trade or
business in an enterprise zone, and at least 10 percent of the
person's retained jobs in the enterprise zone eligible for
enterprise zone program benefits are held by residents of that
enterprise zone.
SECTION 3. Section 2303.403, Government Code, is amended to
read as follows:
Sec. 2303.403. PROHIBITION ON QUALIFIED BUSINESS
CERTIFICATION; LIMIT ON ENTERPRISE PROJECT DESIGNATIONS. (a) If
the bank determines that the governing body eligible to nominate an
enterprise project is not complying with this chapter, the bank
shall prohibit the certification of a qualified business until the
bank determines that the governing body is complying with this
chapter.
(b) The bank may not designate more than 105 enterprise
projects during any biennium. The bank may not designate the
maximum number of project designations provided by this subsection
in a single application round. Any designations remaining at the
end of a biennium may be carried forward to the next biennium.
SECTION 4. Section 2303.4052, Government Code, is amended
to read as follows:
Sec. 2303.4052. REQUIRED INFORMATION FROM NOMINATING BODY.
Before nominating the project or activity of a qualified business
for designation as an enterprise project, the nominating body must
submit to the bank:
(1) a certified copy of the ordinance or order, as
appropriate, or reference to an ordinance or order as required
by Section 2303.4051;
(2) a certified copy of the minutes [transcript] of
all public hearings conducted with respect to local incentives
available to qualified businesses within the jurisdiction of the
governmental entity nominating the project or activity, regardless
of whether those businesses are located in an enterprise zone;
(3) the name, title, address, telephone number, and
electronic mail address of the nominating body's liaison designated
under Section 2303.204;
(4) if the business is seeking job retention benefits,
documentation showing the number of employment positions at the
qualified business site; and
(5) any additional information the bank may require.
SECTION 5. Sections 2303.406(b) and (g), Government Code,
are amended to read as follows:
(b) [This subsection does not apply to a qualified business
located in a federally designated zone, as described by Section
2303.101(2), which will receive priority designation in allocating
the number of enterprise projects allowed statewide per biennium as
provided by Section 2303.403.] The bank shall designate qualified
businesses as enterprise projects on a competitive basis. The bank
shall make its designation decisions using a weighted scale in
which:
(1) 40 percent of the evaluation depends on the
economic distress of the block group or distressed county in which a
proposed enterprise project is located;
(2) 25 percent of the evaluation depends on the local
effort to achieve development and revitalization of the block group
or distressed county in which a proposed enterprise project is
located; and
(3) 35 percent of the evaluation depends on the
evaluation criteria as determined by the bank, which must include:
(A) with respect to a proposed enterprise project
located in a block group, the level of cooperation and support the
project applicant commits to the revitalization goals of all of the
enterprise zone block groups within the jurisdiction of the
nominating governmental entity;
(B) with respect to a proposed enterprise project
located in a distressed county, the level of cooperation and
support the project applicant commits to the revitalization of the
distressed county; and
(C) the type and wage level of the jobs to be
created or retained by the business.
(g) The bank may lower the designation level of a proposed
project or activity nominated for enterprise project designation or
split a proposed project or activity nominated for that
designation, based on the number of projected new permanent jobs or
retained jobs,[:
[(1)] if there are fewer designations available than
applications received[;] or
[(2)] to further the economic interests of the state.
If an enterprise project designation is split between two or more
projects or activities, the bank may determine how to
proportionally allocate state benefits among the projects or
activities.
SECTION 6. Section 2303.504, Government Code, is amended to
read as follows:
Sec. 2303.504. STATE TAX REFUNDS [AND CREDITS]; REPORT.
(a) Subject to Section 2303.516, an enterprise project is entitled
to[:
[(1)] a refund of state taxes under Section 151.429,
Tax Code[; and
[(2) a franchise tax credit under Subchapter Q-1,
Chapter 171, Tax Code].
(b) At the time of receipt of any tax benefit available as a
result of participating in the enterprise zone program, including a
state sales and use tax refund [or franchise tax credit], three
percent of the amount of the tax benefit shall be transferred to the
Texas economic development bank fund under Subchapter B, Chapter
489, to defray the cost of administering this chapter.
(c) Not later than the 60th day after the last day of each
fiscal year, the comptroller shall report to the bank the statewide
total of actual jobs created, actual jobs retained, and the tax
refunds [and credits] made under this section during that fiscal
year.
SECTION 7. Section 2303.516(b), Government Code, is amended
to read as follows:
(b) The comptroller may determine that the business or
project is not entitled to a refund [or credit] of state taxes under
Section 2303.504 if the comptroller finds that:
(1) the business or project is not willing to
cooperate with the comptroller in providing the comptroller with
the information the comptroller needs to determine the state
benefits; or
(2) the business or project has substantially failed
to follow through on any commitments made by it or on its behalf
under this chapter.
SECTION 8. Sections 2303.109(b) and 2303.406(e),
Government Code, are repealed.
SECTION 9. The changes in law made by this Act to Section
2303.402, Government Code, apply only to an application for a
designation of an enterprise project under the enterprise zone
program under Chapter 2303, Government Code, as amended by this
Act, filed or pending on or after September 1, 2011. An application
for designation of an enterprise project under the enterprise zone
program granted before September 1, 2011, is governed by the law in
effect on the date the application was granted, and the former law
is continued in effect for that purpose.
SECTION 10. This Act takes effect September 1, 2011.
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