By: Hinojosa S.B. No. 100
(In the Senate - Filed November 10, 2014; January 26, 2015,
read first time and referred to Committee on Natural Resources and
Economic Development; April 9, 2015, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 11,
Nays 0; April 9, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 100 By: Hinojosa
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, Government Code, is amended by
amending Subdivision (7) and adding Subdivision (9) to read as
follows:
(7) "Qualified employee" means a person who:
(A) works for a qualified business;
(B) receives wages from the qualified business
from which employment taxes are deducted; and
(C) performs at least 50 percent of the person's
service for the business at the qualified business site, or if the
person engages in the transportation of goods or services, the
person reports to the qualified business site and resides within 50
miles of the qualified business site [unless the person's job
responsibility is to transport or deliver the enterprise project's
goods or services].
(9) "Veteran" means a person who:
(A) has served in:
(i) the army, navy, air force, coast guard,
or marine corps of the United States;
(ii) the state military forces as defined
by Section 431.001; or
(iii) an auxiliary service of one of those
branches of the armed forces; and
(B) has been honorably discharged from the branch
of the service in which the person served.
SECTION 2. Section 2303.004, Government Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) Notwithstanding Subsection (a), the governing body of a
county [with a population of one million or more] may nominate for
designation as an enterprise project a project or activity of a
qualified business that is located within the jurisdiction of a
municipality located in the county. [For purposes of this
subsection, a county during any biennium may not use in any one
municipality more than three of the maximum number of designations
the county is permitted under Section 2303.406(d)(2).]
(c) Before a county makes a nomination under Subsection (b),
the nominating county must enter into an interlocal agreement with
the municipality that has jurisdiction of the territory in which
the nominated project or activity will be located. The interlocal
agreement must specify that either the nominating county or the
municipality that has jurisdiction of the territory in which the
nominated project or activity will be located is the governmental
body having administration authority under Section 2303.201 and
that both the nominating county and municipality approve the
nomination. For purposes of this subsection, a county during any
biennium may use the maximum number of designations the county is
permitted under Section 2303.406(d) within the territory described
by this subsection.
SECTION 3. Section 2303.201, Government Code, is amended to
read as follows:
Sec. 2303.201. ADMINISTRATION BY GOVERNING BODY. (a) The
governing body of an enterprise zone is the governing body of the
municipality or county with jurisdiction over the area designated
as an enterprise zone, except as provided by Subsection (b).
(b) The governing body with administration authority over
an enterprise project nominated under Section 2303.004(c) is
determined under the terms of an interlocal agreement required by
that subsection.
SECTION 4. 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 are
held by:
(A) residents of any enterprise zone in this
state; [or]
(B) economically disadvantaged individuals; or
(C) veterans; 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 are held
by:
(A) residents of any enterprise zone in this
state; [or]
(B) individuals who are economically
disadvantaged; or
(C) veterans.
SECTION 5. 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 interlocal agreement required under Section
2303.004(c) that states:
(A) which governing body has the administration
authority under Section 2303.201; and
(B) that both the county in which the project or
activity is located and the municipality in whose jurisdiction the
project or activity is located approve the nomination of the
project or activity; and
(6) any additional information the bank may require.
SECTION 6. Section 2303.406, Government Code, is amended by
amending Subsections (b) and (e) and adding Subsection (d-1) 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.
(d-1) An enterprise project designation may be split into
two half designations. A half designation uses one-half of one of
the enterprise project designations allowed to a nominating body
under Subsection (d) and to the bank under Section 2303.403.
(e) The office may not[, during any biennium,] designate
multiple concurrent enterprise projects to a qualified business
located at a qualified business site.
SECTION 7. Section 2303.407, Government Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsection (e) to
read as follows:
(b) A capital investment in a project of:
(1) $40,000 to $399,999 will result in a refund of up
to $2,500 per job with a maximum refund of $25,000 for the creation
or retention of 10 jobs;
(2) $400,000 to $999,999 will result in a refund of up
to $2,500 per job with a maximum refund of $62,500 for the creation
or retention of 25 jobs;
(3) $1,000,000 to $4,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $312,500 for the
creation or retention of 125 jobs;
(4) $5,000,000 or more [to $149,999,999] will result
in a refund of up to $2,500 per job with a maximum refund of
$1,250,000 for the creation or retention of 500 jobs, except as
provided by Subdivision (5) or (6);
(5) $150,000,000 to $249,999,999 will result in a
refund of up to $5,000 per new permanent job with a maximum refund
of $2,500,000 for the creation [or retention] of 500 new permanent
jobs if the bank designates the project as a double jumbo enterprise
project; or
(6) $250,000,000 or more will result in a refund of up
to $7,500 per new permanent job with a maximum refund of $3,750,000
for the creation [or retention] of at least 500 new permanent jobs
if the bank designates the project as a triple jumbo enterprise
project.
(c) An enterprise project for which a commitment for a
capital investment in the range amount and the creation [or
retention] of the number of new permanent jobs specified by
Subsection (b)(5) is made is considered a double jumbo enterprise
project if the project is so designated by the bank.
(d) An enterprise project for which a commitment for a
capital investment in the range amount and the creation [or
retention] of the number of new permanent jobs specified by
Subsection (b)(6) is made is considered a triple jumbo enterprise
project if the project is so designated by the bank.
(e) The maximum number of jobs that the bank may allocate to
an enterprise project split into two half designations as provided
by Section 2303.406(d-1) is 250.
SECTION 8. Section 2303.4071, Government Code, is amended
by amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) In this section:
(1) "Double [,"double] jumbo enterprise project" and
"triple jumbo enterprise project" have the meanings assigned by
Section 2303.407.
(2) "Half enterprise project" means an enterprise
project split into two half designations as provided by Section
2303.406(d-1).
(e) A half enterprise project is eligible for a maximum
refund not to exceed $125,000 in each state fiscal year and is
subject to the capital investment and job allocation requirements
under Section 2303.407(b)(1), (2), or (3).
SECTION 9. 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 10. 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 11. Section 151.429, Tax Code, is amended by
amending Subsections (b) and (c) and adding Subsection (k) to read
as follows:
(b) Subject to the limitations provided by Subsection (c) of
this section, an enterprise project qualifies for a refund of taxes
under this section based on the amount of capital investment made at
the qualified business site, the project's designation level, and
the refund per job with a maximum refund to be included in a
computation of a tax refund for the project. A capital investment
at the qualified business site of:
(1) $40,000 to $399,999 will result in a refund of up
to $2,500 per job with a maximum refund of $25,000 for the creation
or retention of 10 jobs;
(2) $400,000 to $999,999 will result in a refund of up
to $2,500 per job with a maximum refund of $62,500 for the creation
or retention of 25 jobs;
(3) $1,000,000 to $4,999,999 will result in a refund
of up to $2,500 per job with a maximum refund of $312,500 for the
creation or retention of 125 jobs;
(4) $5,000,000 or more [to $149,999,999] will result
in a refund of up to $2,500 per job with a maximum refund of
$1,250,000 for the creation or retention of 500 jobs, except as
provided by Subdivision (5) or (6);
(5) $150,000,000 to $249,999,999 will result in a
refund of up to $5,000 per new permanent job with a maximum refund
of $2,500,000 for the creation [or retention] of 500 new permanent
jobs if the Texas Economic Development Bank designates the project
as a double jumbo enterprise project; or
(6) $250,000,000 or more will result in a refund of up
to $7,500 per new permanent job with a maximum refund of $3,750,000
for the creation [or retention] of at least 500 new permanent jobs
if the Texas Economic Development Bank designates the project as a
triple jumbo enterprise project.
(c) The total amount of tax refund that an enterprise
project may apply for in a state fiscal year may not exceed
$250,000, at not more than $2,500 per job. The total amount of tax
refund that a double jumbo enterprise project may apply for in a
state fiscal year may not exceed $500,000, at not more than $5,000
per new permanent job. The total amount of tax refund that a triple
jumbo enterprise project may apply for in a state fiscal year may
not exceed $750,000, at not more than $7,500 per new permanent job.
If an enterprise project, double jumbo enterprise project, or
triple jumbo enterprise project qualifies in a state fiscal year
for a refund of taxes in an amount in excess of the applicable
limitation provided by this subsection, it may apply for a refund of
those taxes in a subsequent year, subject to the applicable
limitation for each year. The total amount that may be refunded to:
(1) an enterprise project under this section may not
exceed the amount determined by multiplying $250,000 by the number
of state fiscal years during which the enterprise project created
or retained one or more jobs for qualified employees;
(2) a double jumbo enterprise project under this
section may not exceed the amount determined by multiplying
$500,000 by the number of state fiscal years during which the double
jumbo enterprise project created [or retained] one or more new
permanent jobs for qualified employees; or
(3) a triple jumbo enterprise project under this
section may not exceed the amount determined by multiplying
$750,000 by the number of state fiscal years during which the triple
jumbo enterprise project created [or retained] one or more new
permanent jobs for qualified employees.
(k) A half enterprise project is eligible for a maximum
refund not to exceed $125,000 in each state fiscal year and is
subject to the capital investment and job allocation requirements
under Subsection (b)(1), (2), or (3).
SECTION 12. Section 151.429(e), Tax Code, is amended by
adding Subdivision (6) to read as follows:
(6) "Half enterprise project" means an enterprise
project split into two half designations as provided by Section
2303.406(d-1), Government Code.
SECTION 13. Section 2303.109(b), Government Code, is
repealed.
SECTION 14. (a) The changes in law made by this Act to
Section 2303.402(a), 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 on or after the effective date of this Act. An
application for designation of an enterprise project under the
enterprise zone program filed before the effective date of this Act
is governed by the law in effect on the date the application was
filed, and the former law is continued in effect for that purpose.
(b) The changes in law made by this Act to Section 2303.407,
Government Code, and Section 151.429, Tax Code, apply only to an
enterprise project designation made on or after the effective date
of this Act. An enterprise project designation made before the
effective date of this Act is governed by the law in effect when the
designation was made, and the former law is continued in effect for
that purpose.
SECTION 15. This Act takes effect September 1, 2015.
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