HBA-EDN H.B. 2808 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2808 By: Chavez Economic Development 7/19/2001 Enrolled BACKGROUND AND PURPOSE Many areas of the state have experienced prosperity but border communities have frequently not benefitted from this economic growth. The North American Free Trade Agreement has given hope of economic growth to many stagnant border communities. In order to encourage the construction of new businesses in these communities, it may be helpful to establish zones in which certain construction fees are waived, taxes are refunded or reduced, and baseline performance standards are established to encourage the use of alternative building materials that address concerns relating to the environment or to building cost, maintenance, or energy consumption. House Bill 2808 authorizes a municipality to establish North American Free Trade Agreement impact zones. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 2808 amends the Local Government Code to authorize a municipality to create a North American Free Trade Agreement (NAFTA) impact zone (zone) covering a part of the municipality if the municipality determines that the creation of such a zone would promote: _business opportunities for local businesses in the zone; _an increase in economic development in the zone; or _employment opportunities for residents of the zone. The bill authorizes a municipality to create a zone if the governing body of the municipality adopts a resolution containing that determination, a description of the boundaries of the zone, and a finding by the governing body that the creation of the zone satisfies the requirements of criteria for a reinvestment zone. A municipality is authorized to create more than one zone and to include an area in more than one zone. The bill sets forth additional powers of a municipality relating to a zone. The bill requires a business that operates in a zone and receives benefits as a result of a municipality's action to waive or adopt fees related to the construction of buildings in the zone, enter into agreements for sales tax refunds or tax abatements of municipal sales tax on sales made in the zone, or enter into agreements abating municipal property taxes on property in the zone to make a good faith effort to hire individuals receiving federal NAFTA transitional adjustment assistance. The bill requires such a business to annually report to the governing body of the municipality on what percentage of the total number of individuals hired by the business during the year covered by the report is comprised of individuals receiving NAFTA assistance. EFFECTIVE DATE September 1, 2001.