H.B. No. 2297
1-1 AN ACT
1-2 relating to the incorporation of certain industrial development
1-3 corporations and the projects, powers, and limitation of those
1-4 corporations.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 2(14), Development Corporation Act of
1-7 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
1-8 read as follows:
1-9 (14) "User" means an individual, partnership,
1-10 corporation, or any other private entity, whether organized for
1-11 profit or not for profit, or a city, county, district, or any other
1-12 political subdivision, <or> public entity, or agency of the state
1-13 or federal government.
1-14 SECTION 2. Section 4A, Development Corporation Act of 1979
1-15 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
1-16 S.B. No. 124, Acts of the 73rd Legislature, Regular Session, 1993,
1-17 is amended by amending Subsections (i), (k), and (n) and adding
1-18 Subsections (q) and (r) to read as follows:
1-19 (i) Except as provided by this subsection, the corporation
1-20 may not undertake a project the primary purpose of which is to
1-21 provide transportation facilities, solid waste disposal facilities,
1-22 or air or water pollution control facilities. However, the
1-23 corporation may provide those facilities to benefit property
1-24 acquired for a project having another primary purpose. <The
2-1 corporation may undertake a municipal water supply project and
2-2 provide related transmission and treatment facilities connected
2-3 with a municipally owned or operated water system or sewage
2-4 system.> The corporation may undertake a project the primary
2-5 purpose of which is to provide:
2-6 (1) a general aviation business service airport that
2-7 is an integral part of an industrial park; or
2-8 (2) port-related facilities to support waterborne
2-9 commerce<; or>
2-10 <(3) any purpose authorized under Section 4B(a)(2) of
2-11 this Act, if the corporation is in a city that is located wholly on
2-12 an island that is adjacent to the Gulf of Mexico and is within 35
2-13 miles of the Republic of Mexico or if the corporation is in a city
2-14 that is located adjacent to the Gulf of Mexico and has a population
2-15 of more than 250,000 according to the most recent federal decennial
2-16 census>.
2-17 (k) On petition of 10 percent or more of the registered
2-18 voters of the city requesting an election on the dissolution of the
2-19 corporation, the governing body shall order an election on the
2-20 issue at the next available uniform election date that is not less
2-21 than 45 days after the date that the petition is filed. The
2-22 election must be conducted according to the applicable provisions
2-23 of the Election Code. The ballot for the election shall be printed
2-24 to provide for voting for or against the proposition: "Dissolution
2-25 of the ________________ (name of the corporation)." If a majority
2-26 of voters voting on the issue approve the dissolution, the
2-27 corporation shall continue operations only as necessary to pay the
3-1 principal of and interest on its bonds and to meet obligations
3-2 incurred before the date of the election and, to the extent
3-3 practicable, shall dispose of its assets and apply the proceeds to
3-4 satisfy those obligations. When the last of the obligations is
3-5 satisfied, any remaining assets of the corporation shall be
3-6 transferred to the city, and the corporation is dissolved. A tax
3-7 imposed under this section may not be collected after the last day
3-8 of the first calendar quarter beginning after notification to the
3-9 comptroller by the corporation that the last of its obligations is
3-10 satisfied.
3-11 (n) At an election called and held under Subsection (d) or
3-12 (o) of this section, the city may also allow the voters to vote on
3-13 a ballot proposition that limits the length of time that a sales
3-14 and use tax may be imposed. If a city elects to limit the period
3-15 the sales and use tax may be imposed, there shall be added to the
3-16 end of the ballot proposition prescribed by Subsection (m) of this
3-17 section: "to be imposed for ________ years" (the number of years
3-18 to be inserted as appropriate). The governing body of the city
3-19 shall set the expiration date of the proposed tax to occur on the
3-20 appropriate anniversary of the effective date of the tax. A sales
3-21 and use tax imposed for a limited period under this subsection
3-22 expires on the date set by the governing body under this section or
3-23 on an earlier date if, by a majority of the voters voting in an
3-24 election held in the city, the tax is repealed. If an earlier
3-25 abolition election is held, Sections 321.102(a) and 321.402(b), Tax
3-26 Code, apply to the date of repeal. A tax that is approved without
3-27 a limit on its period of imposition is effective until repealed by
4-1 election. Before the 60th day before the date that a tax is to
4-2 expire, the governing body shall send a notice to the comptroller
4-3 stating the expiration date of the tax. Revenue collected after
4-4 the expiration of the tax from the imposition of the tax after its
4-5 expiration date shall be forwarded by the state to the governing
4-6 body to be used to pay current bonded indebtedness of the
4-7 municipality <retained by the state for state purposes and
4-8 deposited to the credit of the general revenue fund if the tax
4-9 revenue cannot be returned to the purchaser of taxable items on
4-10 which the tax was paid>. A municipality that has imposed a tax
4-11 under this section may not extend the period of the tax's
4-12 imposition or reimpose the tax after its expiration date. If a
4-13 city reduces the rate of an additional sales and use tax under
4-14 Chapter 321, Tax Code, to impose a tax under this section for a
4-15 limited period as provided under this subsection, and does not have
4-16 an election to change the rate of the additional sales and use tax
4-17 before the expiration date of the tax under this section, the rate
4-18 of the additional sales and use tax under Section 321.101(b), Tax
4-19 Code, in the city returns to its previous rate in effect at the
4-20 time the tax imposed under this section was adopted on the
4-21 expiration date of the tax under this section without having to
4-22 hold an election under Chapter 321, Tax Code, to impose the
4-23 increase in the rate. <In addition, whether or not a time limit is
4-24 imposed, at an election called and held under Subsections (d) and
4-25 (o) of this section, nothing in this section shall be construed to
4-26 prevent the city from also allowing the voters to vote on a ballot
4-27 proposition that describes and limits, generally or specifically,
5-1 the project or projects for which the proceeds of the sales and use
5-2 tax may be used.>
5-3 (q) A corporation under this section may not assume a debt
5-4 or make any expenditure to pay principal or interest on a debt if
5-5 the debt existed before the date the city created the corporation.
5-6 (r) At an election called or held under Subsection (d) or
5-7 (o) of this section, the city may also allow the voters to vote on
5-8 a ballot proposition that limits the use of the sales and use tax
5-9 to a specific project. If a city elects to limit the use to a
5-10 specific project, in the ballot proposition prescribed by
5-11 Subsection (m) or (p) a description of the project shall be
5-12 substituted in place of the words "new and expanded business
5-13 enterprises." When the last of its obligations for the specific
5-14 project have been satisfied, the corporation shall send a notice to
5-15 the comptroller stating that the sales and use tax imposed for the
5-16 specific project may not be collected after the last day of the
5-17 first calendar quarter beginning after the date of notification. A
5-18 sales and use tax imposed for a specific project under this
5-19 subsection may not be collected after the last day of the first
5-20 calendar quarter beginning after the date of the notification to
5-21 the comptroller. Revenue collected after the obligations for the
5-22 specific project have been satisfied shall be forwarded by the
5-23 state to the governing body to be used to pay current bonded
5-24 indebtedness of the municipality. A corporation that has been
5-25 created to perform a specific project under this subsection may
5-26 retain its corporate existence and perform other projects as may be
5-27 approved by the voters of the city under an election called and
6-1 held under Subsection (d) or (o) of this section.
6-2 SECTION 3. Section 4B, Development Corporation Act of 1979
6-3 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
6-4 S.B. No. 124, Acts of the 73rd Legislature, Regular Session, 1993,
6-5 is amended by amending Subsections (a) and (e) and adding
6-6 Subsections (a-1), (a-2), and (n) to read as follows:
6-7 (a) In this section:
6-8 (1) "Eligible city" means a city:
6-9 (A) that is located <wholly or partly> in a
6-10 county with a population of 750,000 or more, according to the most
6-11 recent federal decennial census and in which the combined rate of
6-12 all sales and use taxes imposed by the city, the state, and other
6-13 political subdivisions of the state having territory in the city
6-14 does not exceed 7.25 percent on the date of any election held under
6-15 or made applicable to this section; <or>
6-16 (B) that has a population of 400,000 <150,000>
6-17 or more, according to the most recent federal decennial census, and
6-18 that is located in more than one county, and in which the combined
6-19 rate of all sales and use taxes imposed by the city, the state, and
6-20 other political subdivisions of the state having territory in the
6-21 city, including taxes under this section, does not exceed 8.25
6-22 percent; or
6-23 (C) to which Section 4A of this Act applies.
6-24 (2) "Project" means land, buildings, equipment,
6-25 facilities, and improvements included in the definition of that
6-26 term under Section 2 of this Act and land, buildings, equipment,
6-27 facilities, and improvements found by the board of directors to:
7-1 (A) be required or suitable for use for
7-2 professional and amateur (including children's) sports, athletic,
7-3 entertainment, tourist, convention, and public park purposes and
7-4 events, including stadiums, ball parks, auditoriums, amphitheaters,
7-5 concert halls, learning centers, parks and park facilities, open
7-6 space improvements, municipal buildings, museums, exhibition
7-7 facilities, and related store, restaurant, concession, and
7-8 automobile parking facilities, related area transportation
7-9 facilities, and related roads, streets, and water and sewer
7-10 facilities, and other related improvements that enhance any of
7-11 those items; or
7-12 (B) promote or develop new or expanded business
7-13 enterprises, including a project to provide public safety
7-14 facilities, streets and roads, drainage and related improvements,
7-15 demolition of existing structures, general municipally owned
7-16 improvements, as well as any improvements or facilities that are
7-17 related to any of those projects and any other project that the
7-18 board in its discretion determines promotes or develops new or
7-19 expanded business enterprises.
7-20 (a-1) A corporation may undertake a project under this
7-21 section unless within 60 days after first publishing notice of a
7-22 specific project or type of general project the governing body of
7-23 the city receives a petition from more than 10 percent of the
7-24 registered voters of the city where the petition requests that an
7-25 election be held before that specific project or that general type
7-26 of project is undertaken. An election is not required to be held
7-27 after the submission of a petition if the qualified citizens of the
8-1 city have previously approved the undertaking of a specific project
8-2 or that general type of project at an election called for that
8-3 purpose by the governing body of the city or in conjunction with
8-4 another election required to be held under this section.
8-5 (a-2) The costs of a publicly owned and operated project
8-6 that is purchased or constructed under this section include the
8-7 maintenance and operating costs of the project, and the proceeds of
8-8 taxes may be used to pay the maintenance and operating costs of a
8-9 project, unless within 60 days after first publishing notice of
8-10 this specific use of the proceeds of the taxes the governing body
8-11 of the city receives a petition from more than 10 percent of the
8-12 registered voters of the city where the petition requests that an
8-13 election be held before the proceeds of taxes imposed under this
8-14 section may be used to pay the maintenance and operating costs of a
8-15 project. An election is not required to be held after the
8-16 submission of a petition if the qualified citizens of the city have
8-17 previously approved that the costs of a publicly owned and operated
8-18 project purchased or constructed under this section include the
8-19 maintenance and operating costs of the project and that the
8-20 proceeds of taxes may be used to pay the maintenance and operating
8-21 costs of a project, at an election called for that purpose by the
8-22 governing body of the city or in conjunction with another election
8-23 required to be held under this section. The election in this
8-24 subsection shall not be required in a municipality located in a
8-25 county with a population in excess of 750,000 that has held an
8-26 election prior to February 1, 1993, under this section and at which
8-27 election the additional sales tax was approved.
9-1 (e) The rate of a tax adopted under this section must be
9-2 one-eighth, one-fourth, three-eighths, or one-half of one percent.
9-3 The ballot proposition at the election held to adopt the tax must
9-4 specify the rate of the tax to be adopted. A corporation that
9-5 holds an election to reduce a tax imposed under Section 4A of this
9-6 Act may in a separate proposition on the same ballot adopt a tax
9-7 under this section. If an eligible city adopts the tax, a tax is
9-8 imposed on the receipts from the sale at retail of taxable items
9-9 within the eligible city at the rate approved at the election <a
9-10 rate equal to one-half of one percent>. There is also imposed an
9-11 excise tax on the use, storage, or other consumption within the
9-12 eligible city of tangible personal property purchased, leased, or
9-13 rented from a retailer during the period that the tax is effective
9-14 within the eligible city. The rate of the excise tax is the same
9-15 as the rate of the sales tax portion of the tax and is applied to
9-16 the sale price of the tangible personal property.
9-17 (n) Before expending funds to undertake a project, a
9-18 corporation under this section shall hold at least one public
9-19 hearing on the proposed project.
9-20 SECTION 4. Section 4A(l), Development Corporation Act of
9-21 1979 (Article 5190.6, Vernon's Texas Civil Statutes), as added by
9-22 Section 1, Chapter 634, Acts of the 72nd Legislature, Regular
9-23 Session, 1991, is repealed.
9-24 SECTION 5. A corporation created before the effective date
9-25 of this Act under Section 4A, Development Corporation Act of 1979
9-26 (Article 5190.6, Vernon's Texas Civil Statutes), may undertake a
9-27 project authorized by Section 4B of that Act as if the project were
10-1 authorized by the voters after the effective date of this Act if,
10-2 before an election held before the effective date of this Act to
10-3 authorize the levy of a sales and use tax for the benefit of the
10-4 corporation, the corporation's intent to undertake that project was
10-5 widely publicized in the city for which the corporation was
10-6 created.
10-7 SECTION 6. This Act takes effect September 1, 1993.
10-8 SECTION 7. The importance of this legislation and the
10-9 crowded condition of the calendars in both houses create an
10-10 emergency and an imperative public necessity that the
10-11 constitutional rule requiring bills to be read on three several
10-12 days in each house be suspended, and this rule is hereby suspended.