Texas Administrative Code › Title 10 - COMMUNITY DEVELOPMENT › Part 5 - OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM OFFICE › Chapter 175 - DEFENSE ECONOMIC READJUSTMENT ZONES › Section 175.1 - Defense Economic Readjustment General Provisions

Current through Reg. 49, No. 28; July 12, 2024
(a) Introduction. Pursuant to the authority
				granted by the Defense Economic Readjustment Zone Act, Texas Government Code,
				Chapter 2310, and the Administrative Procedure Act, Texas Government Code,
				Chapter 2001, Subchapter B, as amended, the Economic Development and Tourism
				Office in the Office of the Governor (Office) prescribes the following sections
				regarding practice and procedure before the Office in the administration and
				implementation of the Readjustment Zone Program.
(b) Purpose. It is the purpose of the Defense
				Economic Readjustment Zone Act to establish a process to identify areas
				impacted by defense base closure, downsizing, or realignment and to provide
				local and state regulatory and tax incentives to encourage businesses to locate
				or expand in these areas. The purpose of these sections is to provide standards
				of eligibility and procedures for applications for designating qualified areas
				as readjustment zones and for designating qualified businesses as readjustment
				projects.
(c) Definition of terms.
				The following words and terms, when used in this chapter, shall have the
				following meanings, unless the context clearly indicates otherwise:
(1) Act--The Defense Economic Readjustment
				Zone Act, Texas Government Code, Chapter 2310.
(2) Administrative authority--An
				administrative body that may be delegated responsibilities by the readjustment
				zone governing body. The administrative authority must:
(A) be composed of 3, 5, 7, 9, 11, or 15
				members;
(B) 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
(C) if the readjustment zone includes private
				residences, include:
(i) an elected official
				representing readjustment zone residents and businesses; or
(ii) at least two readjustment zone
				residents.
(3) Adversely affected defense dependent
				community--A municipality or county is an adversely affected defense-dependent
				community if the Office determines that:
(A)
				the municipality or county requires assistance because of:
(i) the proposed or actual establishment,
				realignment, or closure of a defense facility;
(ii) 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;
(iii) a publicly announced planned major
				reduction in Department of Defense spending that would directly and adversely
				affect the municipality or county; or
(iv) 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
(B) 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 subparagraph (A) of this
				paragraph is finally approved and the date that the event is to be
				substantially completed, a direct loss of:
(i) 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;
(ii)
				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
(iii) 1.0% of the civilian jobs
				in the municipality or county.
(4) Applicant--The municipality, county or
				combination of municipalities or counties filing an application with the Office
				for designation of a readjustment zone or nominating a business for designation
				as a readjustment project or a business filing for certification as a qualified
				business.
(5) Application--An
				application, including supporting and supplemental instruments and
				documentation, for designation of a readjustment zone or readjustment project
				or for certification by the Office or local governing body as a qualified
				business under the Act and this chapter.
(6) Day--The period of time between 8:00 a.m.
				and 5:00 p.m. Central Standard Time on any day other than a Saturday, Sunday,
				or state or federal holiday.
(7)
				Defense worker--
(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.
(8) Defense
				worker job--A Department of Defense authorized permanent position or a position
				held or occupied by one or more defense workers for more than 12
				months.
(9) Extraterritorial
				jurisdiction--Territory in the extraterritorial jurisdiction of a municipality
				that is considered to be in the jurisdiction of the municipality as defined by
				Local Government Code, Chapter 42.
(10) Governing body--The governing body of a
				municipality or county that has applied to have an area within its jurisdiction
				designated as a readjustment zone.
(11) New permanent job--A new employment
				position created by a qualified business as described by Texas Government Code,
				§
										RSA
				2310.302, that:
(A) has provided at least 1,820 hours of
				employment a year to a qualified employee; and
(B) is intended to exist during the period
				that the qualified business is designated as a defense readjustment project
				under Texas Government Code, §
											RSA
				2310.306.
(12) Nominating body--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.
(13)
				Office--The Economic Development and Tourism Office in the Office of the
				Governor.
(14) Qualified
				business--A person is a qualified business if the Office, 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:
(A) 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
(B) at
				least 25% of the person's new employees in the readjustment zone are:
(i) residents of the governing
				jurisdiction;
(ii) economically
				disadvantaged individuals, as defined by Government Code, §
												RSA
				2310.402(c);
				or
(iii) dislocated defense
				workers.
(15)
				Qualified employee--A person who:
(A) works
				for a qualified business; and
(B)
				performs at least 50% of the person's service for the business in the
				readjustment zone.
(16)
				Qualified property--Any one or more of the following:
(A) tangible personal property located in the
				zone that was acquired by the taxpayer not earlier than the 90th day before the
				date of designation of the area as a readjustment zone or readjustment project,
				as applicable, and was or will be used predominantly by the taxpayer in the
				active conduct of a trade or business;
(B) real property located in a zone that:
(i) was acquired by the taxpayer no earlier
				than the 90th day before the date of designation of the readjustment zone or
				readjustment project, as applicable, and used predominantly by the taxpayer in
				the active conduct of a trade or business; or
(ii) was the principal residence of the
				taxpayer on the date of the sale or exchange; or
(C) interest in a corporation, partnership,
				or other entity if, for the most recent taxable year of the entity ending
				before the date or sale or exchange the entity was a qualified
				business.
(17)
				Readjustment project--A person designated by the Office as a readjustment
				project under Texas Government Code, Chapter 2310.
(18) Readjustment zone--An area designated as
				a readjustment zone under Government Code, Chapter 2310.
(19) Retained job--A job that existed with a
				business prior to designation as a readjustment project or certification as a
				qualified business that has provided employment to a qualified employee of at
				least 1,820 hours annually and that is intended to be an employment position
				retained during the period the business is designated a readjustment project or
				certified as a qualified business in accordance with Texas Tax Code, §
										RSA
				151.4291.
(20) Staff--The staff of the
				Office.