By: Eckels H.B. No. 2214
73R843 CAG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to restrictions on the formation or operation of a public
1-3 corporation by a local government.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle C, Title 12, Local Government Code, is
1-6 amended by adding Chapter 396 to read as follows:
1-7 CHAPTER 396. PARTICIPATION BY MUNICIPALITIES, COUNTIES, AND OTHER
1-8 LOCAL GOVERNMENTS IN FORMATION OR OPERATION OF PUBLIC CORPORATION
1-9 Sec. 396.001. DEFINITIONS. In this chapter:
1-10 (1) "Public corporation" means a corporation that a
1-11 local government creates, organizes, sponsors, or operates,
1-12 individually or in conjunction with other governmental or private
1-13 entities. The term includes a development corporation,
1-14 transportation corporation, public facility corporation, housing
1-15 finance corporation, cultural education facilities corporation, or
1-16 health facilities development corporation.
1-17 (2) "Local government" means a municipality, county,
1-18 special district or authority, or other political subdivision of
1-19 the state.
1-20 Sec. 396.002. RESTRICTIONS ON FORMATION OF CORPORATION. (a)
1-21 A local government shall:
1-22 (1) hold a public hearing before participating in
1-23 creating, organizing, sponsoring, or operating a public
1-24 corporation; and
2-1 (2) post and publish notice of the public hearing on
2-2 two separate occasions before the 14th day before the date of the
2-3 public hearing.
2-4 (b) The notice required by this section must be posted at
2-5 the administrative headquarters of the local government and
2-6 published in a newspaper of general circulation in the local
2-7 government.
2-8 Sec. 396.003. RESTRICTIONS ON OPERATION OF CORPORATION. A
2-9 public corporation is considered a municipal board or department
2-10 for purposes of complying with state laws, the municipal charter,
2-11 or municipal ordinances, including provisions regarding bidding and
2-12 purchasing requirements and requirements for open meetings.
2-13 Sec. 396.004. RESTRICTIONS ON MEMBERS OF CORPORATIONS. A
2-14 person is not eligible to be appointed to the governing board of a
2-15 public corporation or to be an officer or employee of the
2-16 corporation if the person or the person's spouse:
2-17 (1) is employed by or participates in the management
2-18 of a business entity or other organization receiving funds from the
2-19 corporation;
2-20 (2) owns or controls, directly or indirectly, more
2-21 than a 10 percent interest in a business entity or other
2-22 organization receiving funds from the corporation; or
2-23 (3) uses or receives a substantial amount of tangible
2-24 goods, services, or funds from the corporation, other than
2-25 compensation or reimbursement as a board member, officer, or
2-26 employee of the corporation.
2-27 SECTION 2. Subchapter A, Chapter 394, Local Government Code,
3-1 is amended by adding Section 394.006 to read as follows:
3-2 Sec. 394.006. RESTRICTIONS UNDER OTHER LAW. The
3-3 restrictions prescribed by Chapter 396, Local Government Code,
3-4 apply to the formation and operation of a housing finance
3-5 corporation under this chapter.
3-6 SECTION 3. Subchapter A, Chapter 221, Health and Safety
3-7 Code, is amended by adding Section 221.006 to read as follows:
3-8 Sec. 221.006. RESTRICTIONS UNDER OTHER LAW. The
3-9 restrictions prescribed by Chapter 396, Local Government Code,
3-10 apply to the formation and operation of a development corporation
3-11 under this chapter.
3-12 SECTION 4. The Public Facility Corporations Act (Article
3-13 717s, Revised Statutes) is amended by adding Section 1.006 to read
3-14 as follows:
3-15 Sec. 1.006. RESTRICTIONS UNDER OTHER LAW. The restrictions
3-16 prescribed by Chapter 396, Local Government Code, and its
3-17 subsequent amendments, apply to the formation and operation of a
3-18 corporation under this chapter.
3-19 SECTION 5. The Texas Transportation Corporation Act (Article
3-20 1528l, Vernon's Texas Civil Statutes), is amended by adding Section
3-21 3A to read as follows:
3-22 Sec. 3A. RESTRICTIONS UNDER OTHER LAW. The restrictions
3-23 prescribed by Chapter 396, Local Government Code, and its
3-24 subsequent amendments, apply to the formation and operation of a
3-25 local government corporation under this chapter.
3-26 SECTION 6. The Cultural Education Facilities Finance
3-27 Corporation Act (Article 1528m, Vernon's Texas Civil Statutes) is
4-1 amended by adding Section 3A to read as follows:
4-2 Sec. 3A. RESTRICTIONS UNDER OTHER LAW. The restrictions
4-3 prescribed by Chapter 396, Local Government Code, and its
4-4 subsequent amendments, apply to the formation and operation of a
4-5 corporation under this chapter.
4-6 SECTION 7. The Development Corporation Act of 1979 (Article
4-7 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
4-8 3A to read as follows:
4-9 Sec. 3A. RESTRICTIONS UNDER OTHER LAW. The restrictions
4-10 prescribed by Chapter 396, Local Government Code, and its
4-11 subsequent amendments, apply to the formation and operation of a
4-12 corporation under this chapter.
4-13 SECTION 8. The restrictions imposed by Section 396.004,
4-14 Local Government Code, as added by this Act, on eligibility for
4-15 appointment to the governing board of a corporation or to service
4-16 as an officer or employee of a corporation, apply only to
4-17 appointments or employments made on or after September 1, 1993.
4-18 SECTION 9. This Act takes effect on September 1, 1993.
4-19 SECTION 10. The importance of this legislation and the
4-20 crowded condition of the calendars in both houses create an
4-21 emergency and an imperative public necessity that the
4-22 constitutional rule requiring bills to be read on three several
4-23 days in each house be suspended, and this rule is hereby suspended.