1-1 By: Ramsay (Senate Sponsor - Ratliff) H.B. No. 2297
1-2 (In the Senate - Received from the House March 31, 1993;
1-3 April 1, 1993, read first time and referred to Committee on
1-4 Economic Development; May 12, 1993, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 9, Nays
1-6 0; May 12, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Parker x
1-10 Lucio x
1-11 Ellis x
1-12 Haley x
1-13 Harris of Dallas x
1-14 Harris of Tarrant x
1-15 Leedom x
1-16 Madla x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 COMMITTEE SUBSTITUTE FOR H.B. No. 2297 By: Haley
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the incorporation of certain industrial development
1-24 corporations and the projects, powers, and limitation of those
1-25 corporations.
1-26 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-27 SECTION 1. Section 2(14), Development Corporation Act of
1-28 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
1-29 read as follows:
1-30 (14) "User" means an individual, partnership,
1-31 corporation, or any other private entity, whether organized for
1-32 profit or not for profit, or a city, county, district, or any other
1-33 political subdivision, <or> public entity, or agency of the state
1-34 or federal government.
1-35 SECTION 2. Section 4A, Development Corporation Act of 1979
1-36 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
1-37 S.B. No. 124, Acts of the 73rd Legislature, Regular Session, 1993,
1-38 is amended by amending Subsections (i), (k), and (n) and adding
1-39 Subsections (q) and (r) to read as follows:
1-40 (i) Except as provided by this subsection, the corporation
1-41 may not undertake a project the primary purpose of which is to
1-42 provide transportation facilities, solid waste disposal facilities,
1-43 or air or water pollution control facilities. However, the
1-44 corporation may provide those facilities to benefit property
1-45 acquired for a project having another primary purpose. <The
1-46 corporation may undertake a municipal water supply project and
1-47 provide related transmission and treatment facilities connected
1-48 with a municipally owned or operated water system or sewage
1-49 system.> The corporation may undertake a project the primary
1-50 purpose of which is to provide:
1-51 (1) a general aviation business service airport that
1-52 is an integral part of an industrial park; or
1-53 (2) port-related facilities to support waterborne
1-54 commerce<; or>
1-55 <(3) any purpose authorized under Section 4B(a)(2) of
1-56 this Act, if the corporation is in a city that is located wholly on
1-57 an island that is adjacent to the Gulf of Mexico and is within 35
1-58 miles of the Republic of Mexico or if the corporation is in a city
1-59 that is located adjacent to the Gulf of Mexico and has a population
1-60 of more than 250,000 according to the most recent federal decennial
1-61 census>.
1-62 (k) On petition of 10 percent or more of the registered
1-63 voters of the city requesting an election on the dissolution of the
1-64 corporation, the governing body shall order an election on the
1-65 issue at the next available uniform election date that is not less
1-66 than 45 days after the date that the petition is filed. The
1-67 election must be conducted according to the applicable provisions
1-68 of the Election Code. The ballot for the election shall be printed
2-1 to provide for voting for or against the proposition: "Dissolution
2-2 of the ________________ (name of the corporation)." If a majority
2-3 of voters voting on the issue approve the dissolution, the
2-4 corporation shall continue operations only as necessary to pay the
2-5 principal of and interest on its bonds and to meet obligations
2-6 incurred before the date of the election and, to the extent
2-7 practicable, shall dispose of its assets and apply the proceeds to
2-8 satisfy those obligations. When the last of the obligations is
2-9 satisfied, any remaining assets of the corporation shall be
2-10 transferred to the city, and the corporation is dissolved. A tax
2-11 imposed under this section may not be collected after the last day
2-12 of the first calendar quarter beginning after notification to the
2-13 comptroller by the corporation that the last of its obligations is
2-14 satisfied.
2-15 (n) At an election called and held under Subsection (d) or
2-16 (o) of this section, the city may also allow the voters to vote on
2-17 a ballot proposition that limits the length of time that a sales
2-18 and use tax may be imposed. If a city elects to limit the period
2-19 the sales and use tax may be imposed, there shall be added to the
2-20 end of the ballot proposition prescribed by Subsection (m) of this
2-21 section: "to be imposed for ________ years" (the number of years
2-22 to be inserted as appropriate). The governing body of the city
2-23 shall set the expiration date of the proposed tax to occur on the
2-24 appropriate anniversary of the effective date of the tax. A sales
2-25 and use tax imposed for a limited period under this subsection
2-26 expires on the date set by the governing body under this section or
2-27 on an earlier date if, by a majority of the voters voting in an
2-28 election held in the city, the tax is repealed. If an earlier
2-29 abolition election is held, Sections 321.102(a) and 321.402(b), Tax
2-30 Code, apply to the date of repeal. A tax that is approved without
2-31 a limit on its period of imposition is effective until repealed by
2-32 election. Before the 60th day before the date that a tax is to
2-33 expire, the governing body shall send a notice to the comptroller
2-34 stating the expiration date of the tax. Revenue collected after
2-35 the expiration of the tax from the imposition of the tax after its
2-36 expiration date shall be forwarded by the state to the governing
2-37 body to be used to pay current bonded indebtedness of the
2-38 municipality <retained by the state for state purposes and
2-39 deposited to the credit of the general revenue fund if the tax
2-40 revenue cannot be returned to the purchaser of taxable items on
2-41 which the tax was paid>. A municipality that has imposed a tax
2-42 under this section may not extend the period of the tax's
2-43 imposition or reimpose the tax after its expiration date. If a
2-44 city reduces the rate of an additional sales and use tax under
2-45 Chapter 321, Tax Code, to impose a tax under this section for a
2-46 limited period as provided under this subsection, and does not have
2-47 an election to change the rate of the additional sales and use tax
2-48 before the expiration date of the tax under this section, the rate
2-49 of the additional sales and use tax under Section 321.101(b), Tax
2-50 Code, in the city returns to its previous rate in effect at the
2-51 time the tax imposed under this section was adopted on the
2-52 expiration date of the tax under this section without having to
2-53 hold an election under Chapter 321, Tax Code, to impose the
2-54 increase in the rate. <In addition, whether or not a time limit is
2-55 imposed, at an election called and held under Subsections (d) and
2-56 (o) of this section, nothing in this section shall be construed to
2-57 prevent the city from also allowing the voters to vote on a ballot
2-58 proposition that describes and limits, generally or specifically,
2-59 the project or projects for which the proceeds of the sales and use
2-60 tax may be used.>
2-61 (q) A corporation under this section may not assume a debt
2-62 or make any expenditure to pay principal or interest on a debt if
2-63 the debt existed before the date the city created the corporation.
2-64 (r) At an election called or held under Subsection (d) or
2-65 (o) of this section, the city may also allow the voters to vote on
2-66 a ballot proposition that limits the use of the sales and use tax
2-67 to a specific project. If a city elects to limit the use to a
2-68 specific project, in the ballot proposition prescribed by
2-69 Subsection (m) or (p) a description of the project shall be
2-70 substituted in place of the words "new and expanded business
3-1 enterprises." When the last of its obligations for the specific
3-2 project have been satisfied, the corporation shall send a notice to
3-3 the comptroller stating that the sales and use tax imposed for the
3-4 specific project may not be collected after the last day of the
3-5 first calendar quarter beginning after the date of notification. A
3-6 sales and use tax imposed for a specific project under this
3-7 subsection may not be collected after the last day of the first
3-8 calendar quarter beginning after the date of the notification to
3-9 the comptroller. Revenue collected after the obligations for the
3-10 specific project have been satisfied shall be forwarded by the
3-11 state to the governing body to be used to pay current bonded
3-12 indebtedness of the municipality. A corporation that has been
3-13 created to perform a specific project under this subsection may
3-14 retain its corporate existence and perform other projects as may be
3-15 approved by the voters of the city under an election called and
3-16 held under Subsection (d) or (o) of this section.
3-17 SECTION 3. Section 4B, Development Corporation Act of 1979
3-18 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
3-19 S.B. No. 124, Acts of the 73rd Legislature, Regular Session, 1993,
3-20 is amended by amending Subsections (a) and (e) and adding
3-21 Subsections (a-1), (a-2), and (n) to read as follows:
3-22 (a) In this section:
3-23 (1) "Eligible city" means a city:
3-24 (A) that is located <wholly or partly> in a
3-25 county with a population of 750,000 or more, according to the most
3-26 recent federal decennial census and in which the combined rate of
3-27 all sales and use taxes imposed by the city, the state, and other
3-28 political subdivisions of the state having territory in the city
3-29 does not exceed 7.25 percent on the date of any election held under
3-30 or made applicable to this section; <or>
3-31 (B) that has a population of 400,000 <150,000>
3-32 or more, according to the most recent federal decennial census, and
3-33 that is located in more than one county, and in which the combined
3-34 rate of all sales and use taxes imposed by the city, the state, and
3-35 other political subdivisions of the state having territory in the
3-36 city, including taxes under this section, does not exceed 8.25
3-37 percent; or
3-38 (C) to which Section 4A of this Act applies.
3-39 (2) "Project" means land, buildings, equipment,
3-40 facilities, and improvements included in the definition of that
3-41 term under Section 2 of this Act and land, buildings, equipment,
3-42 facilities, and improvements found by the board of directors to:
3-43 (A) be required or suitable for use for
3-44 professional and amateur (including children's) sports, athletic,
3-45 entertainment, tourist, convention, and public park purposes and
3-46 events, including stadiums, ball parks, auditoriums, amphitheaters,
3-47 concert halls, learning centers, parks and park facilities, open
3-48 space improvements, municipal buildings, museums, exhibition
3-49 facilities, and related store, restaurant, concession, and
3-50 automobile parking facilities, related area transportation
3-51 facilities, and related roads, streets, and water and sewer
3-52 facilities, and other related improvements that enhance any of
3-53 those items; or
3-54 (B) promote or develop new or expanded business
3-55 enterprises, including a project to provide public safety
3-56 facilities, streets and roads, drainage and related improvements,
3-57 demolition of existing structures, general municipally owned
3-58 improvements, as well as any improvements or facilities that are
3-59 related to any of those projects and any other project that the
3-60 board in its discretion determines promotes or develops new or
3-61 expanded business enterprises.
3-62 (a-1) A corporation may not undertake a project under this
3-63 section unless that specific project or that general type of
3-64 project has been approved by the qualified voters of the city at an
3-65 election called for that purpose by the governing body of the city
3-66 or in conjunction with another election required to be held under
3-67 this section.
3-68 (a-2) The costs of a publicly owned and operated project
3-69 that is purchased or constructed under this section include the
3-70 maintenance and operating costs of the project, except that the
4-1 proceeds of taxes imposed under this section may not be used to pay
4-2 the maintenance and operating costs of a project unless that
4-3 specific use has been approved by the qualified voters of the city
4-4 at an election called for that purpose by the governing body of the
4-5 city or in conjunction with another election required to be held
4-6 under this section. The election in this subsection shall not be
4-7 required in a municipality, located in a county with a population
4-8 in excess of 750,000, that has held an election prior to February
4-9 1, 1993, under this section and at which election the additional
4-10 sales tax was approved.
4-11 (e) The rate of a tax adopted under this section must be
4-12 one-eighth, one-fourth, three-eighths, or one-half of one percent.
4-13 The ballot proposition at the election held to adopt the tax must
4-14 specify the rate of the tax to be adopted. A corporation that
4-15 holds an election to reduce a tax imposed under Section 4A of this
4-16 Act may in a separate proposition on the same ballot adopt a tax
4-17 under this section. If an eligible city adopts the tax, a tax is
4-18 imposed on the receipts from the sale at retail of taxable items
4-19 within the eligible city at the rate approved at the election <a
4-20 rate equal to one-half of one percent>. There is also imposed an
4-21 excise tax on the use, storage, or other consumption within the
4-22 eligible city of tangible personal property purchased, leased, or
4-23 rented from a retailer during the period that the tax is effective
4-24 within the eligible city. The rate of the excise tax is the same
4-25 as the rate of the sales tax portion of the tax and is applied to
4-26 the sale price of the tangible personal property.
4-27 (n) Before expending funds to undertake a project, a
4-28 corporation under this section shall hold at least one public
4-29 hearing on the proposed project.
4-30 SECTION 4. Section 4A(1), Development Corporation Act of
4-31 1979 (Article 5190.6, Vernon's Texas Civil Statutes), as added by
4-32 Section 1, Chapter 634, Acts of the 72nd Legislature, Regular
4-33 Session, 1991, is repealed.
4-34 SECTION 5. A corporation created before the effective date
4-35 of this Act under Section 4A, Development Corporation Act of 1979
4-36 (Article 5190.6, Vernon's Texas Civil Statutes), may undertake a
4-37 project authorized by Section 4B of that Act as if the project were
4-38 authorized by the voters after the effective date of this Act if,
4-39 before an election held before the effective date of this Act to
4-40 authorize the levy of a sales and use tax for the benefit of the
4-41 corporation, the corporation's intent to undertake that project was
4-42 widely publicized in the city for which the corporation was
4-43 created.
4-44 SECTION 6. This Act takes effect September 1, 1993.
4-45 SECTION 7. The importance of this legislation and the
4-46 crowded condition of the calendars in both houses create an
4-47 emergency and an imperative public necessity that the
4-48 constitutional rule requiring bills to be read on three several
4-49 days in each house be suspended, and this rule is hereby suspended.
4-50 * * * * *
4-51 Austin,
4-52 Texas
4-53 May 12, 1993
4-54 Hon. Bob Bullock
4-55 President of the Senate
4-56 Sir:
4-57 We, your Committee on Economic Development to which was referred
4-58 H.B. No. 2297, have had the same under consideration, and I am
4-59 instructed to report it back to the Senate with the recommendation
4-60 that it do not pass, but that the Committee Substitute adopted in
4-61 lieu thereof do pass and be printed.
4-62 Parker,
4-63 Chairman
4-64 * * * * *
4-65 WITNESSES
4-66 No witnesses appeared on H.B. No. 2297.