2005 Texas Local Government Code CHAPTER 386. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES

LOCAL GOVERNMENT CODE

CHAPTER 386. COMMERCIAL AND INDUSTRIAL DEVELOPMENT ZONES

SUBCHAPTER A. GENERAL PROVISIONS


	§ 386.001. DEFINITIONS.  In this chapter:                                   
		(1)  "Board" means a board of directors of a commercial 
and industrial development zone.
		(2)  "Development zone" means an area designated as a 
commercial and industrial development zone under this chapter.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.002. 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 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          

SUBCHAPTER B. CREATION OF COMMERCIAL AND INDUSTRIAL DEVELOPMENT 
ZONE


	§ 386.031. CRITERIA FOR DEVELOPMENT ZONE CREATION.  (a) 
To be created as a development zone, an area must:
		(1)  have a continuous boundary;                                              
		(2)  be at least 10 square miles but not larger than an 
area that is equal to five percent of the area, excluding lakes, 
waterways, and transportation arteries, of the municipality, 
county, or combination of municipalities and the county nominating 
the area as a development zone;
		(3)  be an area of pervasive poverty, unemployment, or 
economic distress;   
		(4)  be located in a county with a population of 2.5 
million or more;       
		(5)  be adjacent to major transportation nodes and 
thoroughfares that may be used for exporting products to major 
airports, railways, and ports;  and
		(6)  be designated as a development zone by an 
ordinance or order adopted by each creating body.
	(b)  A municipality may contain not more than three 
development zones within its jurisdiction.
	(c)  A county may contain not more than three development 
zones in its unincorporated areas.
	(d)  Repealed by Acts 2003, 78th Leg., ch. 814, § 6.01(9).                  

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.  
Amended by Acts 2003, 78th Leg., ch. 814, § 6.01(9), eff. Sept. 
1, 2003.


	§ 386.032. AREA OF PERVASIVE POVERTY, UNEMPLOYMENT, OR 
ECONOMIC DISTRESS.  An area is an area of pervasive poverty, 
unemployment, or economic distress for the purposes of Section 
386.031 if:
		(1)  the average rate of unemployment in the area 
during the most recent 12-month period for which data are available 
was at least 1-1/2 times the state average for that period;
		(2)  the area is a low-income poverty area;                                   
		(3)  the area is in a jurisdiction or pocket of poverty, 
according to the most recent certification available from the 
United States Department of Housing and Urban Development;  or
		(4)  at least 70 percent of the residents or households 
of the area have an income that is less than 80 percent of the median 
income of the residents or households of the locality or state, 
whichever is less.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.033. CREATION OF DEVELOPMENT ZONE.  (a) A 
development zone is created to promote and encourage:
		(1)  commercial development, including the development 
of businesses in the technology field;
		(2)  workforce development;                                                   
		(3)  excellence in education through cooperation with 
public schools, junior colleges, and institutions of higher 
education;
		(4)  public and private sector partnerships;  and                             
		(5)  the revitalization of neighborhoods.                                     
	(b)  The governing body of a municipality or county, 
individually or in combination with other municipalities, by 
ordinance or order may create as a development zone an area within 
its jurisdiction that meets the criteria under Section 386.031.
	(c)  Each creating body must hold a public hearing before 
adopting an ordinance or order under this section.
	(d)  The governing body of a county may not designate 
territory in the jurisdiction of a municipality as part of a 
proposed development zone unless the governing body of the 
municipality also designates the territory.
	(e)  A development zone created under this section is a:                       
		(1)  political subdivision of the state;  and                                 
		(2)  special district.                                                        

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.034. DESIGNATING ORDINANCE OR ORDER.  (a) An 
ordinance or order designating an area as a development zone must:
		(1)  describe precisely the area to be included in the 
zone by a legal description or by 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:                                                   
			(A)  incentives, including tax incentives, that 
the designating body chooses to apply to businesses in the area;  or
			(B)  programs to be developed to affect businesses 
in the area;  and       
		(4)  designate the area as a development zone.                                
	(b)  The incentives or programs summarized under Subsection 
(a)(3) must include:
		(1)  an incentive that does not apply to all businesses 
located in the jurisdiction of a governmental entity that 
designated the area as a development zone;
		(2)  an incentive or program designed to improve the 
skills of the local labor pool;  and
		(3)  an incentive or program designed to address 
infrastructure, housing, or other elements essential to improving 
quality of life.
	(c)  This section does not prohibit a municipality or county 
from extending additional incentives, including tax incentives, to 
business enterprises in a development zone by a separate ordinance 
or order.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.035. TAX INCREMENT.  (a) A creating body may use tax 
increment financing to fund a development zone, as provided by 
Chapter 311, Tax Code, and as modified by this section.
	(b)  On adoption of an order or ordinance by each creating 
body, the fund may be used to pay salaries of employees of the board 
and administrative expenses of the development zone.
	(c)  For the purpose of tax increment financing under this 
section, the board is considered the board of directors of the 
reinvestment zone under Chapter 311, Tax Code.  Section 311.009, 
Tax Code, does not apply to this chapter.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.036. AMENDING BOUNDARIES.  (a) A creating body by 
ordinance or order may amend the boundary of a development zone 
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 386.031;  and  
		(3)  may not exclude any area originally included 
within the boundary of the development zone.
	(c)  The entire development zone with the amended boundary 
must continue to meet the unemployment or economic distress 
requirements of Section 386.031.
	(d)  A creating body may not make more than one boundary 
amendment for a development zone in a calendar year.
	(e)  If more than one body created the development zone, each 
body must agree on the amendment by ordinance or order.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          

SUBCHAPTER C. BOARD OF DIRECTORS


	§ 386.061. BOARD OF DIRECTORS.  (a) A development zone is 
governed by a board of nine directors who serve two-year terms, 
appointed as follows:
		(1)  the governing body of the municipality, if any, 
that includes the greatest part of the zone's territory shall 
appoint four directors;
		(2)  other municipalities, if any, any part of which 
are included in the zone's territory, jointly shall appoint one 
director;
		(3)  the commissioners court of the county in which the 
zone is located shall appoint:
			(A)  nine directors, if the zone contains no 
municipality;  or             
			(B)  four directors, if the zone contains one or 
more municipalities;  and 
		(4)  if a development zone contains territory in only 
one municipality, the municipality and the county in which the zone 
is located jointly shall appoint one director.
	(b)  The initial terms of directors may be staggered.                          

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.062. QUALIFICATIONS OF DIRECTORS.  To serve as a 
director, a person must:
		(1)  be at least 21 years old;  and                                           
		(2)  be registered to vote in the county in which the 
development zone is located.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.063. DISQUALIFICATION OF DIRECTORS.  Section 
49.052, Water Code, applies to directors of a development zone 
created under this chapter as if the zone were a district governed 
by that section.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.064. BOARD VACANCIES.  A vacancy in the office of 
director shall be filled by appointment by the entity that 
appointed the vacating director.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.065. REMOVAL OF DIRECTOR.  A majority of the board 
may remove a director for misconduct or failure to carry out the 
director's duties.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.066. ORGANIZATION OF BOARD.  (a) Except as provided 
by Subsection (b), after each appointment and qualification of 
directors by the appointing entities, the board shall organize by 
electing a president, a vice president, a secretary, and any other 
officers the board considers necessary.
	(b)  If a director is appointed under Section 386.061(a)(4), 
that director shall serve as board president.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.067. QUORUM;  DIRECTOR'S DUTIES;  MANAGEMENT OF 
ZONE.  Sections 49.053, 49.057, and 49.058, Water Code, apply to 
the board of directors of a development zone created under this 
chapter as if the zone were a district governed by those sections.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.068. MEETINGS AND NOTICE.  (a) The board shall 
designate and establish a development zone office in the county.
	(b)  The board may establish regular meetings to conduct 
development zone business and may hold special meetings at other 
times as the business of a zone requires.
	(c)  Notice of the time, place, and purpose of any meeting of 
the board shall be given by posting a notice containing that 
information at a place convenient to the public within the 
development zone.  A copy of the notice shall be furnished to the 
clerk or clerks of the county in which the zone is located, who 
shall post the notice on a bulletin board in the county courthouse 
used for that purpose.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.069. DIRECTOR'S COMPENSATION;  BOND AND OATH OF 
OFFICE.  Sections 375.067, 375.069, and 375.070 apply to directors 
of a development zone created under this chapter as if the zone were 
a municipal management district.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          

SUBCHAPTER D. POWERS AND DUTIES


	§ 386.101. GENERAL POWERS.  (a) A development zone may 
acquire and dispose of projects and has the powers, authority, 
rights, and duties that are necessary to permit the accomplishment 
of purposes for which the zone was created.
	(b)  A development zone may provide for general promotion of 
and tourist advertising regarding the zone and its vicinity and for 
a marketing program to attract visitors.  The zone may conduct those 
activities under contracts for professional services with persons 
or organizations the zone selects.
	(c)  A development zone may enter into a memorandum of 
understanding with any state agency, including an institution of 
higher education, to further the economic development of the zone.
	(d)  To the extent not inconsistent with this chapter, a 
development zone has the powers of:
		(1)  a municipal management district created under 
Chapter 375;  and        
		(2)  a county commissioners court under Section 
381.004.                    

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.102. DUTY TO EVALUATE AVAILABLE FINANCING 
OPTIONS.  The board shall evaluate all options available to the 
development zone as alternatives to imposing a tax under Section 
386.035, including:
		(1)  regional grants from federal and state agencies;                         
		(2)  local money from a creating body;                                        
		(3)  money from charities;                                                    
		(4)  sales taxes for economic development in the 
development zone;          
		(5)  use or impact fees on affected business entities;                        
		(6)  incentives for business entities that may benefit 
from the development zone;
		(7)  money provided by local governmental entities;  
and                    
		(8)  in-kind contributions.                                                   

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.103. LIMIT ON DEVELOPMENT ZONE POWERS;  OTHER LAWS 
SUPERSEDE.  (a) For purposes of this section, "district or zone" 
means:
		(1)  a federal enterprise zone;                                               
		(2)  a state enterprise zone;                                                 
		(3)  a municipal management district;  or                                     
		(4)  any other special district, other than a 
development zone.             
	(b)  This section applies only to a district or zone that 
contains territory included in the development zone's territory.
	(c)  The authority granted to a development zone under this 
chapter is not intended to duplicate the authority granted to a 
district or zone.
	(d)  This chapter does not limit the authority or 
jurisdiction of any district or zone.
	(e)  To the extent the laws of this chapter conflict with the 
laws of any other district or zone, the laws of the other district 
or zone shall control over this chapter.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.104. MONITORING.  (a) The board shall monitor each 
person in a development zone that receives benefits available under 
this chapter.
	(b)  On the board's request, the Texas Workforce Commission 
or the comptroller's office shall provide to the board tax records 
of a person that receives benefits under this chapter.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.105. NEIGHBORHOOD REDEVELOPMENT ZONES.  (a) The 
board may designate an area as a neighborhood redevelopment zone if 
the area is:
		(1)  adjacent to the development zone;  and                                   
		(2)  eligible for inclusion in the development zone 
under Sections 386.036(b) and (c).
	(b)  A development zone may exercise the powers available to 
it in an area designated by the board under Subsection (a).

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.106. SUITS.  A development zone may, through its 
directors, sue and be sued in this state in the name of the 
development zone.  Service of process in a suit may be had by 
serving a director.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          

SUBCHAPTER E. GENERAL FISCAL PROVISIONS


	§ 386.201. EXPENDITURES.  A development zone's money may 
be disbursed only by check, draft, order, or other instrument 
signed by at least three directors.  The general manager, 
treasurer, or other employee of the development zone, if authorized 
by resolution of the board, may sign checks, drafts, orders, or 
other instruments on any development zone operation account on 
behalf of the board.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.202. COMPETITIVE BIDDING;  CONTRACT 
AWARD.  Subchapter K, Chapter 375,  applies to a development zone 
created under this chapter as if the zone were a municipal 
management district.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          

SUBCHAPTER F. DISSOLUTION


	§ 386.301. DISSOLUTION OF DEVELOPMENT ZONE BY CREATING 
BODY.  (a) After a hearing, a creating body may dissolve a 
development zone if:
		(1)  the area no longer meets the criteria for 
designation under this chapter;
		(2)  the best interests of the creating body and the 
owners of property and interests in property in the zone will be 
served by dissolving the zone;  and
		(3)  each creating body agrees by ordinance or order on 
the:                
			(A)  proposition that the zone should be 
dissolved;                        
			(B)  disposition of zone assets;  and                                        
			(C)  assumption of liabilities by the creating 
bodies.                     
	(b)  The dissolution of a development zone does not affect 
the validity of a:
		(1)  tax incentive or regulatory relief granted or 
accrued before the removal;  or
		(2)  bond issued under this chapter.                                          

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.302. DISSOLUTION BY BOARD REQUEST.  A board may 
petition a creating body to dissolve the development zone under 
Section 386.301 if a majority of the board finds at any time:
		(1)  before the authorization of bonds or the final 
lending of its credit that the continuation of the development zone 
is impracticable or cannot be successfully and beneficially 
accomplished;  or
		(2)  that all bonds of the development zone or other 
debts of the zone have been paid and the purposes of the zone have 
been accomplished.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.          


	§ 386.303. TAXES.  On dissolution of a development zone, 
any taxes levied on behalf of the zone are abolished.

Added by Acts 2001, 77th Leg., ch. 1390, § 1, eff. June 16, 2001.