84R1690 DDT-D
By: Johnson H.B. No. 1626
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.
(4) "Proposed Texas financial institution" means:
(A) a proposed new bank for which an application
for a state bank charter has been filed with the Texas Department of
Banking; or
(B) a proposed new savings bank or savings and
loan association for which an application to incorporate under the
laws of this state has been filed with the Department of Savings and
Mortgage Lending.
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.
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 or the organizers or incorporators of a
proposed Texas 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 proposed banking development district at the time the
local government submits an application in conjunction with the
institution under Section 279.101.
Sec. 279.103. 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 or the organizers or
incorporators of the proposed Texas financial institution, as
appropriate;
(3) comptroller;
(4) Texas Economic Development and Tourism Office;
(5) lieutenant governor; and
(6) speaker of the house of representatives.
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.
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:
(1) a financial institution that owns property in a
banking development district on which the institution proposes to
open a branch of the institution; or
(2) the organizers or incorporators of a proposed
Texas financial institution that owns property in a banking
development district on which the organizers propose to establish
and operate a branch of the institution.
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) In this
section, "financial institution" and "proposed Texas financial
institution" have the meanings assigned by Section 279.001, Finance
Code.
(b) 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 as otherwise
provided by this section, the provisions of this subchapter apply
to the abatement of taxes on property located in a banking
development district.
(c) Only the governing body of a municipality or county is
eligible to enter into a tax abatement agreement with an owner of
property located in a banking development district so long as the
property is owned by a financial institution or the organizers or
incorporators of a proposed Texas financial institution.
(d) The governing body of a municipality or county may enter
into an agreement with a financial institution to abate taxes on
property owned by the institution only on the condition that the
institution open a branch on the property.
(e) The governing body of a municipality or county may enter
into an agreement with the organizers or incorporators of a
proposed Texas financial institution to abate taxes on property
owned by the organizers or incorporators only on the condition that
the proposed financial institution:
(1) is granted a state bank charter or issued a
certificate of incorporation, as appropriate, to engage in business
in this state; and
(2) establish and operate a branch on the property.
(f) 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) In this
section, "financial institution" and "proposed Texas financial
institution" have the meanings assigned by Section 279.001, Finance
Code.
(b) 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 as otherwise
provided by this section, the provisions of this subchapter apply
to the abatement of taxes on property located in a banking
development district.
(c) Only the governing body of a county is eligible to enter
into a tax abatement agreement with an owner of property located in
a banking development district so long as the property is owned by a
financial institution or the organizers or incorporators of a
proposed Texas financial institution.
(d) The governing body of a county may enter into an
agreement with a financial institution to abate taxes on property
owned by the institution only on the condition that the institution
open a branch on the property.
(e) The governing body of a county may enter into an
agreement with the organizers or incorporators of a proposed Texas
financial institution to abate taxes on property owned by the
organizers or incorporators only on the condition that the proposed
financial institution:
(1) is granted a state bank charter or issued a
certificate of incorporation, as appropriate, to engage in business
in this state; and
(2) establish and operate a branch on the property.
(f) 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, 2016, 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, 2015.