84(R) - 2015
Economic & Small Business Development
Relating to the enterprise zone program.
A fiscal note dated April 8, 2015 anticipates no significant fiscal implication to the State or to units of local government.
The fiscal note adds that the Office of Governor indicates the provisions of the bill could be implemented within existing resources and the Comptroller of Public Accounts indicates there would be a minimal cost associated with implementing the provisions of the bill and it is assumed that these costs could be absorbed within existing resources.
Senate Bill 100 would make several changes to the Enterprise Zone Program.
It would change the definition of a "qualified employee" under the program by amending section 2303.003 (7)(C) to include persons engaging in transportation of goods and services who report to the qualified business site and live within 50 miles of it.
Senate Bill 100 would require that any county enter into an interlocal agreement with a municipality that has under its jurisdiction a project or activity of a qualified business the county wants to nominate as an enterprise project. The county and the municipality would have to decide which body would be the governing body of the enterprise project.
The bill would add veterans to the list of qualifying employees for the minimum new permanent jobs allocated to specific populations.
Senate Bill 100 would require that a certified copy of the minutes (as opposed to a 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, as well as any interlocal agreement, be presented to the Economic Development Bank by the nominating body of a project.
Senate Bill 100 would allow an enterprise project designation to be split into two half designations.
It would also prevent any designation of multiple concurrent enterprise projects to a qualified business located at a qualified business site.
Senate Bill 100 would also require that projects designated as double jumbo enterprise projects and triple jumbo enterprise projects create new permanent jobs to be eligible for tax refunds, instead of leaving to them the option of creating or retaining jobs.
Enterprise projects would only remain eligible for refunds of taxes under Section 151.429 of the Tax Code, not for a franchise tax credit anymore.
Vote Recommendation Notes
No amendments have been introduced on the Senate floor and no changes have been made to the bill in House committee. We continue to remain neutral.
The second chamber sponsor is Representative Jim Murphy.
First chamber recommendation:
The Enterprise Zone Program is an economic development program that provides tax refunds and credits to certain businesses that commit to a capital investment and to creating a certain amount of jobs in certain economically distressed areas, part of the jobs having to go to certain disadvantaged populations or people residing in the enterprise zone.
In essence, the Enterprise Zone Program favors certain businesses with tax credits and refunds.
Senate Bill 100 would try to encourage the creation of jobs by big enterprise projects instead of creation and retention. It would also somewhat expand the reach of the program by creating the designation of half enterprise project in order for small businesses to have more access to the program, and by adding veterans to the list of the people that have to be part of the target of the job creations.
When businesses settle in a State, county, or city, and hire people, they take into account many business-related considerations that go far beyond the possible attractiveness of a tax refund or credit. The Enterprise Zone Program, because it favors some businesses above others, and dictates what kind of and how many jobs they should create to be eligible to keep more of the wealth they create in the form of tax refunds or credits, distorts the free market system. A low-tax, limited government system across the board is the best definition of business friendliness, and hence the best way to attract businesses. The Enterprise Zone Program should be abolished, not adjusted. Nevertheless, we realize that Senate Bill 100 tries to improve the program from what it is today. As a consequence, we will remain neutral on this bill.