HBA-EDN C.S.H.B. 2808 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2808
By: Chavez
Economic Development
4/5/2001
Committee Report (Substituted)



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.
C.S.H.B. 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

C.S.H.B. 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 the determination
described above, 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 NAFTA
transitional adjustment assistance under federal law.  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

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.  

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2808 modifies the original by adding a requirement that certain
businesses which benefit from agreements with a municipality regarding fees
and taxes within a zone make a good faith effort to hire individuals
receiving NAFTA assistance.  The substitute 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.