CHAPTER 2310. DEFENSE ECONOMIC READJUSTMENT ZONE
GOVERNMENT CODE
TITLE 10. GENERAL GOVERNMENT
SUBTITLE G. ECONOMIC DEVELOPMENT PROGRAMS INVOLVING BOTH STATE
AND LOCAL GOVERNMENTS
CHAPTER 2310. DEFENSE ECONOMIC READJUSTMENT ZONE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2310.001. DEFINITIONS. In this chapter:
(1) "Bank" means the Texas Economic Development Bank established
under Chapter 489.
(1-a) "Defense worker" means:
(A) an employee of the United States Department of Defense,
including a member of the armed forces and a government civilian
worker;
(B) an employee of a government agency or private business, or
an entity providing a department of defense related function, who
is employed on a defense facility;
(C) an employee of a business that provides direct services or
products to the department of defense and whose job is directly
dependent on defense expenditures; or
(D) an employee or private contractor employed by the United
States Department of Energy working on a defense or department of
energy facility in support of a department of defense related
project.
(2) "Defense worker job" means a department of defense
authorized permanent position or a position held or occupied by
one or more defense workers for more than 12 months.
(3) Repealed by Acts 2003, 78th Leg., ch. 814, Sec. 6.01(8).
(4) "Nominating body" means the governing body of a municipality
or county, or a combination of the governing bodies of
municipalities or counties, that nominates and applies for
designation of an area as a readjustment zone.
(4-a) "Office" means the Texas Economic Development and Tourism
Office.
(5) "Qualified business" means a person certified as a qualified
business under Section 2310.302.
(6) "Qualified employee" means a person who:
(A) works for a qualified business; and
(B) performs at least 50 percent of the person's service for the
business in the readjustment zone.
(7) "Readjustment zone" means an area designated as a defense
economic readjustment zone under this chapter.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.27,
6.01(8), eff. Sept. 1, 2003.
Sec. 2310.002. JURISDICTION OF MUNICIPALITY. For the purposes
of this chapter, territory in the extraterritorial jurisdiction
of a municipality is considered to be in the jurisdiction of the
municipality.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
SUBCHAPTER B. DEPARTMENT POWERS AND DUTIES RELATING TO ZONES
Sec. 2310.051. GENERAL POWERS AND DUTIES. (a) The bank shall
administer and monitor the implementation of this chapter.
(b) The bank shall establish criteria and procedures for
designating a qualified area as a readjustment zone and for
designating a defense readjustment project.
(c) The office shall adopt rules necessary to carry out the
purposes of this chapter.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.28, eff.
Sept. 1, 2003.
Sec. 2310.052. EVALUATION; REPORT. (a) The bank shall conduct
a continuing evaluation of the programs of readjustment zones.
(b) On or before December 1 of each year, the office shall
submit to the governor, the legislature, and the Legislative
Budget Board a report that:
(1) evaluates the effectiveness of the readjustment zone
program;
(2) describes the use of state and local incentives under this
chapter and their effect on revenue; and
(3) suggests legislation, as appropriate.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.29, eff.
Sept. 1, 2003.
Sec. 2310.053. ASSISTANCE. (a) The bank shall assist:
(1) a qualified business in obtaining the benefits of any state
incentive or inducement program provided by law;
(2) the governing body of a readjustment zone in obtaining
assistance from another state agency, including job training and
technical assistance to qualified businesses in a zone; and
(3) the governing body of a readjustment zone in encouraging
small business development.
(b) The bank shall provide to persons desiring to locate and
engage in business in a readjustment zone information and
appropriate assistance relating to the required legal
authorization, including a state license, permit, certificate,
approval, registration, or charter, to engage in business in this
state.
(c) The bank shall publicize existing tax incentives and
economic development programs in readjustment zones.
(d) On request the bank shall offer to a unit of local
government having a readjustment zone within its jurisdiction
technical assistance relating to tax abatement and the
development of alternative revenue sources.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.30, eff.
Sept. 1, 2003.
Sec. 2310.054. COORDINATION WITH OTHER GOVERNMENTAL ENTITIES.
(a) In cooperation with the appropriate units of local
government and other state agencies, the bank shall coordinate
and streamline state business assistance programs and permit or
license application procedures for businesses in readjustment
zones.
(b) The bank shall work with the responsible state and federal
agencies to coordinate readjustment zone programs with other
programs carried out in a readjustment zone, including housing,
community and economic development, small business, banking,
financial assistance, transportation, and employment training
programs.
(c) The bank shall encourage other state agencies in awarding
grants, loans, or services to give priority to businesses in
readjustment zones.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.31, eff.
Sept. 1, 2003.
SUBCHAPTER C. DESIGNATION OF READJUSTMENT ZONE
Sec. 2310.101. CRITERIA FOR READJUSTMENT ZONE DESIGNATION. (a)
To be designated as a readjustment zone an area must:
(1) have a continuous boundary;
(2) be at least one square mile but not larger than 20 square
miles, excluding lakes, waterways, and transportation arteries,
of the municipality, county, or combination of municipalities or
counties nominating the area as a readjustment zone;
(3) be located in an adversely affected defense-dependent
community;
(4) have at least 50 percent of its area located in an existing
or former United States Department of Defense facility; and
(5) be nominated as a readjustment zone by an ordinance or order
adopted by the nominating body.
(b) An area is not prohibited from being included in a
readjustment zone because the area is also included in an
enterprise zone designated under Chapter 2303.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.102. ADVERSELY AFFECTED DEFENSE-DEPENDENT COMMUNITY.
A municipality or county is an adversely affected
defense-dependent community if the bank determines that:
(1) the municipality or county requires assistance because of:
(A) the proposed or actual establishment, realignment, or
closure of a defense facility;
(B) the cancellation or termination of a United States
Department of Defense contract or the failure of the department
of defense to proceed with an approved major weapon system
program;
(C) a publicly announced planned major reduction in department
of defense spending that would directly and adversely affect the
municipality or county; or
(D) the closure or a significant reduction of the operations of
a defense facility as the result of a merger, acquisition, or
consolidation of a defense contractor operating the facility; and
(2) the municipality or county is expected to experience, during
the period between the beginning of the federal fiscal year
during which an event described by Subdivision (1) is finally
approved and the date that the event is to be substantially
completed, a direct loss of:
(A) 2,500 or more defense worker jobs in any area of the
municipality or county that is located in an urbanized area of a
metropolitan statistical area;
(B) 1,000 or more defense worker jobs in any area of the
municipality or county that is not located in an urbanized area
of a metropolitan statistical area; or
(C) one percent of the civilian jobs in the municipality or
county.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.32, eff.
Sept. 1, 2003.
Sec. 2310.103. NOMINATION OF READJUSTMENT ZONE. (a) The
governing body of a municipality or county that is an adversely
affected defense-dependent community, individually or in
combination with other municipalities or counties that are
adversely affected defense-dependent communities, by ordinance or
order, as appropriate, may nominate as a readjustment zone an
area within its jurisdiction that meets the criteria under
Section 2310.101.
(b) Unless the nominating body holds a public hearing before
adopting an ordinance or order under this section, the ordinance
or order is not valid.
(c) The governing body of a county may not nominate territory in
a municipality, including extraterritorial jurisdiction of a
municipality, to be included in a proposed readjustment zone
unless the governing body of the municipality also nominates the
territory and together with the county files a joint application
under Section 2310.105.
(d) The governing bodies of a combination of municipalities or
counties may not jointly nominate an area as a readjustment zone
unless the governing bodies have entered into a binding agreement
to administer the zone jointly.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.104. NOMINATING ORDINANCE OR ORDER. (a) An ordinance
or order nominating an area as a readjustment zone must:
(1) describe precisely the area to be included in the zone by a
legal description or reference to roadways, lakes, waterways, or
municipal or county boundaries;
(2) state a finding that the area meets the requirements of this
chapter;
(3) summarize briefly the incentives, including tax incentives,
that, at the election of the nominating body, apply to business
enterprises in the area; and
(4) nominate the area as a readjustment zone.
(b) At least one of the incentives summarized under Subsection
(a)(3) must not be offered elsewhere within the jurisdiction
except within an enterprise zone designated under Chapter 2303.
(c) This section does not prohibit a municipality or county from
extending additional incentives, including tax incentives, for
business enterprises in a readjustment zone by a separate
ordinance or order.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.105. APPLICATION FOR DESIGNATION. (a) For an area to
be designated as a readjustment zone, the nominating body, after
nominating the area as a readjustment zone, must send to the bank
a written application for designation of the area as a
readjustment zone.
(b) The application must include:
(1) a certified copy of the ordinance or order, as appropriate,
nominating the area as a readjustment zone;
(2) a map of the area showing existing streets and highways;
(3) an analysis and appropriate supporting documents and
statistics demonstrating that the area qualifies for designation
as a readjustment zone;
(4) a statement that specifies each tax incentive, grant, other
financial incentive or benefit, or program to be provided by the
nominating body to business enterprises in the area that is not
to be provided throughout the governmental entity or entities
nominating the area as a readjustment zone;
(5) a statement of the economic development and planning
objectives for the area;
(6) an estimate of the economic impact of the designation of the
area as a readjustment zone on the revenues of the governmental
entity or entities nominating the area as a readjustment zone,
considering all the financial incentives and benefits and the
programs contemplated;
(7) a transcript or tape recording of all public hearings on the
proposed zone;
(8) if the application is a joint application, a description and
copy of the agreement between the applicants;
(9) the procedures for negotiating with residents, community
groups, and other entities affected by the designation of the
area as a readjustment zone and with qualified businesses in the
area;
(10) a description of the administrative authority, if one is to
be appointed for the readjustment zone under Section 2310.202;
and
(11) any additional information the bank requires.
(c) Information required by Subsection (b) is for evaluation
purposes only.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.33, eff.
Sept. 1, 2003.
Sec. 2310.106. REVIEW OF APPLICATION. (a) On receipt of an
application for the designation of a readjustment zone, the bank
shall review the application to determine if the nominated area
qualifies for designation as a readjustment zone under this
chapter.
(b) The bank shall allow an applicant to correct any omission or
clerical error in the application and to return the application
to the bank on or before the 15th day after the date on which the
bank receives the application.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.34, eff.
Sept. 1, 2003.
Sec. 2310.107. DESIGNATION AGREEMENT. (a) If the bank
determines that a nominated area for which a designation
application has been received satisfies the criteria under
Section 2310.101, the bank shall negotiate with the nominating
body for a designation agreement.
(b) A designation agreement must:
(1) designate the nominated area as a readjustment zone; and
(2) designate the administrative authority, if one is to be
appointed for the zone under Section 2310.202, and describe its
functions and duties, which should include decision-making
authority and the authority to negotiate with affected entities.
(c) The bank shall complete the negotiations and sign the
agreement not later than the 60th day after the date on which the
application is received unless the bank extends that period to
the 90th day after the date on which the application was
received.
(d) If an agreement is not completed within the 60-day period
provided by Subsection (c), the bank shall provide to the
nominating body the specific areas of concern and a final
proposal for the agreement.
(e) If the agreement is not executed before the 91st day after
the date on which the application was received, the application
is considered to be denied.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.35, eff.
Sept. 1, 2003.
Sec. 2310.108. DENIAL OF APPLICATION; NOTICE. (a) The bank may
deny an application for the designation of a readjustment zone
only if the bank determines that the nominated area does not
satisfy the criteria under Section 2310.101.
(b) The bank shall inform the nominating body of the specific
reasons for denial of an application, including denial under
Section 2310.107(e).
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.36, eff.
Sept. 1, 2003.
Sec. 2310.109. PERIOD OF DESIGNATION. An area may be designated
as a readjustment zone for a maximum of seven years. A
designation remains in effect until September 1 of the final year
of the designation.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.110. AMENDING BOUNDARIES. (a) The nominating body
may amend the boundary of a readjustment zone by ordinance or
order, as appropriate, adopted after a public hearing on the
issue.
(b) The amended boundary:
(1) must be continuous;
(2) may not exceed the original size requirement of Section
2310.101; and
(3) may not exclude any qualified business designated as a
defense readjustment project included within the boundary of the
zone as designated.
(c) The readjustment zone with the amended boundary must
continue to meet the location requirements of Section
2310.101(a)(4).
(d) A nominating body may not make more than one boundary
amendment annually for a readjustment zone.
(e) For each amendment of a readjustment zone boundary, the
nominating body shall pay the bank a reasonable fee, in an amount
specified by the bank, not to exceed $500. The bank may use fees
collected under this subsection to administer this chapter and
for other purposes to advance this chapter.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 356, Sec. 1, eff. June
18, 2003; Acts 2003, 78th Leg., ch. 814, Sec. 3.37, eff. Sept. 1,
2003.
Sec. 2310.111. REMOVAL OF DESIGNATION. (a) The bank may remove
the designation of an area as a readjustment zone if:
(1) the area no longer meets the criteria for designation under
this chapter or by rule of the office adopted under this chapter;
or
(2) the bank determines that the governing body of the
readjustment zone has not complied with commitments made in the
ordinance or order nominating the area as a readjustment zone.
(b) The removal of a designation does not affect the validity of
a tax incentive or regulatory relief granted or accrued before
the removal.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.38, eff.
Sept. 1, 2003.
SUBCHAPTER D. ADMINISTRATION OF READJUSTMENT ZONES
Sec. 2310.201. ADMINISTRATION BY GOVERNING BODY. The governing
body of a readjustment zone is the governing body of the
municipality or county, or the governing bodies of the
combination of municipalities or counties, that applied to have
the area designated as a readjustment zone.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.202. ADMINISTRATION BY ADMINISTRATIVE AUTHORITY. (a)
The governing body of a readjustment zone may delegate its
administrative duties to an administrative authority appointed by
the governing body.
(b) An administrative authority must:
(1) be composed of 3, 5, 7, 9, 11, or 15 members;
(2) be a viable and responsive body generally representative of
all public or private entities that have a stake in the
development of the zone; and
(3) if the readjustment zone includes private residences,
include:
(A) an elected official representing readjustment zone residents
and businesses; or
(B) at least two readjustment zone residents.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.203. LIAISON. The governing body of a readjustment
zone shall designate a liaison to communicate and negotiate with:
(1) the bank;
(2) the administrative authority, if one exists;
(3) a defense readjustment project; and
(4) other entities in or affected by the readjustment zone.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.39, eff.
Sept. 1, 2003.
Sec. 2310.204. ANNUAL REPORT. (a) Not later than October 1 of
each year, the governing body of a readjustment zone shall submit
to the bank a report in the form required by the bank.
(b) The report must be approved by the readjustment zone's
administrative authority, if one exists.
(c) The report must include for the year preceding the date of
the report:
(1) a list of local incentives for community development
available in the zone;
(2) the use of local incentives for which the governing body
provided in the ordinance or order nominating the readjustment
zone and the effect of those incentives on revenue;
(3) the number of businesses assisted, located, and retained in
the zone since its designation due to the existence of the
readjustment zone;
(4) a summary of all industrial revenue bonds issued to finance
projects located in the zone; and
(5) a description of all efforts made to attain revitalization
goals for the zone.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.40, eff.
Sept. 1, 2003.
SUBCHAPTER E. QUALIFIED BUSINESSES AND DEFENSE READJUSTMENT
PROJECTS
Sec. 2310.301. DEFINITION. In this subchapter, "new permanent
job" means a new employment position created by a qualified
business as described by Section 2310.302 that:
(1) has provided at least 1,820 hours of employment a year to a
qualified employee; and
(2) is intended to exist during the period that the qualified
business is designated as a defense readjustment project under
Section 2310.306.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.302. QUALIFIED BUSINESS. (a) A person is a qualified
business if the bank, for the purpose of state benefits under
this chapter, or the governing body of a readjustment zone, for
the purpose of local benefits, certifies that:
(1) the person is engaged in or has provided substantial
commitment to initiate the active conduct of a trade or business
in the readjustment zone; and
(2) at least 25 percent of the person's new employees in the
readjustment zone are:
(A) residents of the governing jurisdiction;
(B) economically disadvantaged individuals, as defined by
Section 2303.402(c); or
(C) dislocated defense workers.
(b) The governing body of a readjustment zone may certify a
franchise or subsidiary of a new or existing business as a
qualified business if the franchise or subsidiary:
(1) is located entirely in the readjustment zone; and
(2) maintains separate books and records of the business
activity conducted in the zone.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.41, eff.
Sept. 1, 2003.
Sec. 2310.303. PROHIBITION ON QUALIFIED BUSINESS CERTIFICATION.
If the bank determines that the governing body of a readjustment
zone is not complying with this chapter, the bank shall prohibit
the certification of a qualified business in the zone until the
bank determines that the governing body is complying with this
chapter. The bank may not designate more than two defense
readjustment projects in a single readjustment zone.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.42, eff.
Sept. 1, 2003.
Sec. 2310.304. REQUEST FOR APPLICATION FOR DEFENSE READJUSTMENT
PROJECT DESIGNATION. A qualified business in a readjustment zone
may request that the governing body of the readjustment zone
apply to the bank for designation of the business as a defense
readjustment project. The request must also be made to the
readjustment zone's administrative authority, if one exists.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.42, eff.
Sept. 1, 2003.
Sec. 2310.305. APPLICATION FOR DEFENSE READJUSTMENT PROJECT
DESIGNATION. (a) If the governing body of a readjustment zone
or the governing body and administrative authority of a
readjustment zone, as appropriate, approve a request made under
Section 2310.304, the governing body may apply to the bank for
the designation of the qualified business as a defense
readjustment project.
(b) An application must:
(1) describe the procedures and efforts of the governmental
entity or entities that applied to have the area designated as a
readjustment zone to facilitate and encourage participation by
and negotiation among affected entities in the zone in which the
qualified business is located;
(2) contain an economic analysis of the plans of the qualified
business for expansion, revitalization, or other activity in the
readjustment zone, including:
(A) the number of anticipated new permanent jobs the business
will create;
(B) the anticipated number of permanent jobs the business will
retain;
(C) the amount of investment to be made in the zone; and
(D) other information the bank requires; and
(3) describe the local effort made by the governmental entity or
entities that applied to have the area designated as a
readjustment zone, the administrative authority, if one exists,
the qualified business, and other affected entities to develop
and revitalize the zone.
(c) For the purposes of this section, local effort to develop
and revitalize a readjustment zone is:
(1) the willingness of public entities in the zone to provide
services, incentives, and regulatory relief authorized by this
chapter and to negotiate with the qualified business for which
application is made and with other local groups or businesses to
achieve the public purposes of this chapter; and
(2) the effort of the qualified business and other affected
entities to cooperate in achieving those public purposes.
(d) Factors to be considered in evaluating the local effort of a
public entity include:
(1) tax abatement, deferral, refunds, or other tax incentives;
(2) regulatory relief, including:
(A) zoning changes or variances;
(B) exemptions from unnecessary building code requirements,
impact fees, or inspection fees; and
(C) streamlined permitting;
(3) enhanced municipal services, including:
(A) improved police and fire protection;
(B) institution of community crime prevention programs; and
(C) special public transportation routes or reduced fares;
(4) improvements in community facilities, including:
(A) capital improvements in water and sewer facilities;
(B) road repair; and
(C) creation or improvement of parks;
(5) improvements to housing, including:
(A) low-interest loans for housing rehabilitation, improvement,
or new construction; and
(B) transfer of abandoned housing to individuals or community
groups;
(6) business and industrial development services, including:
(A) low-interest loans for business;
(B) use of surplus school buildings or other underutilized
publicly owned facilities as small business incubators;
(C) provision of publicly owned land for development purposes,
including residential, commercial, or industrial development;
(D) creation of special one-stop permitting and problem
resolution centers or ombudsmen; and
(E) promotion and marketing services; and
(7) job training and employment services, including:
(A) retraining programs;
(B) literacy and employment skills programs;
(C) vocational education; and
(D) customized job training.
(e) Factors to be considered in evaluating the local effort of a
private entity include:
(1) the willingness to negotiate or cooperate in the
redevelopment of vacated defense facilities and the creation of
high-skilled, high wage jobs;
(2) commitments to hire dislocated defense workers and
economically disadvantaged workers;
(3) commitments to hire minority workers and to contract with
minority-owned businesses;
(4) provision of technical and vocational job training for
residents of the nominating body's jurisdiction or economically
disadvantaged employees;
(5) provision of child care for employees;
(6) commitments to implement and contribute to a tutoring or
mentoring program for area students;
(7) prevention or reduction of juvenile crime; and
(8) the willingness to make contributions to the well-being of
the community, such as job training, or the donation of land for
parks or other public purposes.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.43, eff.
Sept. 1, 2003.
Sec. 2310.306. DEFENSE READJUSTMENT PROJECT DESIGNATION. (a)
The bank may designate a qualified business as a defense
readjustment project only if the bank determines that:
(1) the business is a qualified business under Section 2310.302
that is located in or has made a substantial commitment to locate
in a defense readjustment zone;
(2) the governing body of the readjustment zone making the
application has demonstrated that a high level of cooperation
exists among public, private, and neighborhood entities in the
zone; and
(3) the designation will contribute significantly to the
achievement of the plans of the governing body making the
application for development and revitalization of the zone.
(b) The bank shall designate qualified businesses as defense
readjustment projects on a competitive basis. The bank shall make
its designation decisions using a weighted scale in which:
(1) 50 percent of the evaluation is based on the effect of the
loss of defense expenditures and employment on the community;
(2) 25 percent of the evaluation depends on the local effort to
achieve development and revitalization of the readjustment zone;
and
(3) 25 percent of the evaluation depends on the evaluation
criteria as determined by the bank, which must include:
(A) the level of cooperation and support the project applicant
commits to the revitalization goals of the zone; and
(B) the type and wage level of the jobs to be created or
retained by the business.
(c) The bank may remove a defense readjustment project
designation if it determines that the business is not complying
with a requirement for its designation.
(d) The bank may designate the same qualified business in a
readjustment zone as more than one defense readjustment project.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 356, Sec. 2, eff. June
18, 2003; Acts 2003, 78th Leg., ch. 814, Sec. 3.44, eff. Sept. 1,
2003.
Sec. 2310.307. ALLOCATION OF JOBS ELIGIBLE FOR TAX REFUND. When
the bank designates a business as a defense readjustment project,
the bank shall allocate to the project the maximum number of new
permanent jobs or retained jobs eligible to be included in a
computation of a tax refund for the project. The number may not
exceed 500 or a number equal to 110 percent of the number of
anticipated new permanent jobs or retained jobs specified in the
application for designation of the business as a defense
readjustment project under Section 2310.305, whichever is less.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.44, eff.
Sept. 1, 2003.
Sec. 2310.308. DURATION OF CERTAIN DESIGNATIONS. The bank's
designation of a qualified business as a defense readjustment
project is effective until the fifth anniversary of the date on
which the designation is made regardless of whether the
readjustment zone in which the project is located expires before
the fifth anniversary of the project.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.44, eff.
Sept. 1, 2003.
SUBCHAPTER F. READJUSTMENT ZONE BENEFITS
Sec. 2310.401. EXEMPTIONS FROM STATE REGULATION; SUSPENSION OF
LOCAL REGULATION. (a) A state agency may exempt from its
regulation a qualified business, qualified employee, or qualified
property in a readjustment zone if the exemption is consistent
with:
(1) the purposes of this chapter; and
(2) the protection and promotion of the general health and
welfare.
(b) A local government may suspend local regulation, including
an ordinance, rule, or standard, relating to zoning, licensing,
or building codes in a readjustment zone.
(c) An exemption from or suspension of regulation under this
section must be adopted in the same manner that the regulation
was adopted.
(d) The authorization provided by Subsection (a) or (b) does not
apply to regulation:
(1) that relates to:
(A) civil rights;
(B) equal employment;
(C) equal opportunity;
(D) fair housing rights; or
(E) preservation of historical sites or historical artifacts;
(2) the relaxation of which is likely to harm the public safety
or public health, including environmental health; or
(3) that is specifically imposed by law.
(e) For the purposes of this section, property is classified as
qualified property if the property is:
(1) tangible personal property located in the readjustment zone
that was acquired from the federal government by lease or deed
or:
(A) acquired by a taxpayer not earlier than the 90th day before
the date on which the area was designated as a readjustment zone;
and
(B) used predominantly by the taxpayer in the active conduct of
a trade or business;
(2) real property located in the readjustment zone that was
acquired from the federal government by lease or deed or:
(A) acquired by a taxpayer not earlier than the 90th day before
the date on which the area was designated as a readjustment zone
and was used predominantly by the taxpayer in the active conduct
of a trade or business; or
(B) the principal residence of the taxpayer on the date of the
sale or exchange; or
(3) an interest in an entity that was certified as a qualified
business under Section 2310.302 for the entity's most recent tax
year ending before the date of the sale or exchange.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.402. REVIEW OF STATE AGENCY RULES; REPORT. (a) A
state agency by rule may provide, when applicable, encouragements
and incentives to increase:
(1) the renovation, improvement, or new construction of housing
in readjustment zones; and
(2) the economic viability and profitability of business and
commerce in readjustment zones.
(b) The bank shall disseminate the reports to the governing
bodies of readjustment zones and others as necessary to advance
the purposes of this chapter.
(c) To contribute to the implementation of this chapter, an
agency may waive, modify, provide exemptions to, or otherwise
minimize the adverse effects of the rules it administers on the
renovation, improvement, or new construction of housing in
readjustment zones or on the economic viability and profitability
of business and commerce in readjustment zones.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.45, eff.
Sept. 1, 2003.
Sec. 2310.403. STATE PREFERENCES. (a) A state agency shall
give preference to the governing body of a readjustment zone or a
qualified business or qualified employee located in a
readjustment zone over other eligible applicants for grants,
loans, or credit enhancements that are administered by the state
agency if:
(1) at least 50 percent of the grant, loan, or credit
enhancement will be spent for the direct benefit of the
readjustment zone; and
(2) the purpose of the grant, loan, or credit enhancement is to:
(A) promote economic development in the community; or
(B) construct, improve, extend, repair, or maintain public
facilities in the community.
(b) The comptroller may and is encouraged to deposit state money
in financial institutions located or doing business in
readjustment zones.
(c) A state agency may and is encouraged to contract with
businesses located in readjustment zones.
(d) The office or another state agency may give preference to
readjustment zones in granting economic development money or
other benefits.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.46, eff.
Sept. 1, 2003.
Sec. 2310.404. STATE TAX REFUNDS AND CREDITS; REPORT. (a)
Subject to Section 2310.413, a defense readjustment project is
eligible for:
(1) a refund of state taxes under Section 151.4291, Tax Code;
(2) a franchise tax credit under Subchapter P or Q, Chapter 171,
Tax Code; and
(3) the exclusion of receipts from service performed in a
readjustment zone in the determination of gross receipts from
business done in this state under Sections 171.103 and 171.1032,
Tax Code.
(b) Not later than the 60th day after the last day of each
fiscal year, the comptroller shall report to the department the
statewide total of the tax refunds or credits made under this
section during that fiscal year.
Amended by:
Acts 2005, 79th Leg., Ch.
1280, Sec. 8, eff. September 1, 2005.
Sec. 2310.405. LOCAL SALES AND USE TAX REFUNDS. (a) To
encourage the development of areas designated as readjustment
zones, the governing body of a municipality through a program may
refund its local sales and use taxes paid by a qualified business
on:
(1) the purchase, lease, or rental of equipment or machinery for
use in a readjustment zone;
(2) the purchase of material for use in remodeling,
rehabilitating, or constructing a structure in a readjustment
zone;
(3) labor for remodeling, rehabilitating, or constructing a
structure in a readjustment zone; and
(4) electricity and natural gas purchased and consumed in the
normal course of business in the readjustment zone.
(b) To promote the public health, safety, or welfare, the
governing body of a municipality or county through a program may
refund its local sales and use taxes paid by a qualified business
or qualified employee.
(c) The governing body of a municipality or county that is the
governing body of a readjustment zone may provide for the partial
or total refund of its local sales and use taxes paid by a person
making a taxable purchase, lease, or rental for development or
revitalization in the zone.
(d) A person eligible for a refund of local sales and use taxes
under this section shall pay the entire amount of state and local
sales and use taxes at the time the taxes would be due if an
agreement for the refund did not exist.
(e) An agreement to refund local sales and use taxes under this
section must:
(1) be written;
(2) contain an expiration date; and
(3) require that the person eligible for the refund provide to
the municipality or county making the refund the documentation
necessary to support a refund claim.
(f) The municipality or county shall make the refund directly to
the person eligible for the refund in the manner provided by the
agreement.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.406. REDUCTION OR ELIMINATION OF LOCAL FEES OR TAXES.
(a) To promote the public health, safety, or welfare, the
governing body of a municipality or county through a program may
reduce or eliminate fees or taxes that it imposes on a qualified
business or qualified employee.
(b) This section does not apply to sales and use taxes or
property taxes.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.407. TAX INCREMENT FINANCING AND ABATEMENT.
Designation of an area as a readjustment zone is also designation
of the area as a reinvestment zone for:
(1) tax increment financing under Chapter 311, Tax Code; and
(2) tax abatement under Chapter 312, Tax Code.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.408. DEVELOPMENT BONDS. To finance a project in a
readjustment zone, bonds may be issued under:
(1) Chapter 1433; or
(2) the Development Corporation Act (Subtitle C1, Title 12,
Local Government Code).
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.248, eff.
Sept. 1, 2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.14, eff. April 1, 2009.
Sec. 2310.409. OTHER LOCAL INCENTIVES. (a) The governing body
of a municipality or county that is the governing body of a
readjustment zone may:
(1) defer compliance in the zone with the subdivision and
development ordinances or rules, other than those relating to
streets and roads or sewer or water services, of the municipality
or county, as appropriate;
(2) give priority to the zone for the receipt of:
(A) community development block grant money;
(B) industrial revenue bonds; or
(C) funds received for job training;
(3) adopt and implement a plan for police protection in the
zone;
(4) amend the zoning ordinances of the municipality or county,
as appropriate, to promote economic development in the zone;
(5) establish permitting preferences for businesses in the zone;
(6) establish simplified, accelerated, or other special permit
procedures for businesses in the zone;
(7) waive development fees for projects in the zone;
(8) create a local readjustment zone fund for funding bonds or
other programs or activities to develop or revitalize the zone;
(9) for qualified businesses in the zone, reduce rates charged
by:
(A) a utility owned by the municipality or county, as
appropriate; or
(B) a cooperative corporation or utility owned by private
investors, subject to the requirements of Subsection (b);
(10) in issuing housing finance bonds, give priority to persons
or projects in the zone;
(11) in providing services, give priority to local economic
development, educational, job training, or transportation
programs that benefit the zone; or
(12) sell real property owned by the municipality or county, as
appropriate, and located in the readjustment zone in accordance
with Section 2310.410.
(b) A reduction in utility rates under Subsection (a)(9)(B) is
subject to the agreement of the affected utility and the approval
of the appropriate regulatory authority under Title 2, Utilities
Code. The rates may be reduced up to but not more than five
percent below the lowest rate allowable for that customer class.
In making its determination under this section, the regulatory
authority shall consider revitalization goals for the
readjustment zone. In setting the rates of the utility the
appropriate regulatory authority shall allow the utility to
recover the amount of the reduction.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.29, eff.
Sept. 1, 1999.
Sec. 2310.410. DISPOSITION OF PUBLIC PROPERTY IN READJUSTMENT
ZONE. (a) After an area is designated as a readjustment zone,
the state, a municipality, or a county that owns a surplus
building (including any structure) or vacant land in the zone may
dispose of the building or land by:
(1) selling the building or land at a public auction;
(2) selling the building or land without notice or bidding as
provided by Subsection (d); or
(3) establishing an urban homestead program described by
Subsection (e).
(b) A municipality or county may sell a surplus building or
vacant land in the readjustment zone at less than fair market
value if the governing body of the municipality or county by
ordinance or order, as appropriate, adopts criteria that specify
the conditions and circumstances under which the sale may occur
and the public purpose to be achieved by the sale. A copy of the
ordinance or order must be filed with the bank not later than the
day on which the sale occurs.
(c) If the surplus building or vacant land is sold at a public
auction, the building or land may be sold to a buyer who is not
the highest bidder if the criteria and public purpose specified
in the ordinance or order adopted under Subsection (b) are
satisfied.
(d) The surplus building or vacant land may be sold without
complying with notice or bidding requirements (including election
or voter approval requirements imposed by other law, if any) if
the criteria and public purpose specified in the ordinance or
order adopted under Subsection (b) are satisfied.
(e) An urban homestead program must provide that:
(1) the state, municipality, or county is to sell to an
individual a residence or part of a residence that it owns for an
amount not to exceed $100;
(2) as a condition of the sale, the individual must agree by
covenant in the deed conveying the residence to live in the
residence for at least seven years and to renovate or remodel the
residence to meet the level of maintenance stated in an agreement
between the individual and the governmental entity; and
(3) after the individual satisfies the seven-year residency and
property improvement requirements of the agreement, the
governmental entity shall assign the residence to the individual.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997. Amended by Acts 1999, 76th Leg., ch. 1055, Sec. 1, eff.
June 18, 1999; Acts 2001, 77th Leg., ch. 894, Sec. 1, eff. Sept.
1, 2001; Acts 2003, 78th Leg., ch. 814, Sec. 3.49, eff. Sept. 1,
2003.
Sec. 2310.411. WAIVER OF PERFORMANCE BOND. A subcontractor is
not required to execute a performance bond under Chapter 2253 if:
(1) the construction, alteration, repair, or other public work
to be performed under the contract is entirely in a readjustment
zone; and
(2) the amount of the contract does not exceed $200,000.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.412. LIABILITY OF CONTRACTOR OR ARCHITECT. A
contractor or architect who constructs or rehabilitates a
building in a readjustment zone is liable for any structural
defect in the building only for the period ending on the 10th
anniversary of the date on which beneficial occupancy of the
building begins after the construction or rehabilitation,
notwithstanding a statute of limitations to the contrary.
Added by Acts 1997, 75th Leg., ch. 114, Sec. 1, eff. May 19,
1997.
Sec. 2310.413. MONITORING DEFENSE READJUSTMENT PROJECT
COMMITMENTS. (a) The bank may monitor a defense readjustment
project to determine whether and to what extent the project has
followed through on any commitments made by it or on its behalf
under this chapter.
(b) The bank may determine that the defense readjustment project
is not eligible for state tax refunds and credits under Section
2310.404 if the bank finds that:
(1) the project is not willing to cooperate with the bank in
providing the bank with the information the bank needs to make
the determination under Subsection (a); or
(2) the project has substantially failed to follow through on
its commitments made by it or on its behalf under this chapter.
Added by Acts 2001, 77th Leg., ch. 1134, Sec. 1.05, eff. Sept. 1,
2001. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.50, eff.
Sept. 1, 2003.