74R12096 E
By Ramsay H.B. No. 1706
Substitute the following for H.B. No. 1706:
By Solomons C.S.H.B. No. 1706
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation and operation of industrial development
1-3 corporations by certain cities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 4B, Development Corporation Act of 1979
1-6 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
1-7 Chapters 1022 and 1031, Acts of the 73rd Legislature, Regular
1-8 Session, 1993, is amended to read as follows:
1-9 Sec. 4B. (a) In this section:
1-10 (1) "Eligible city" means a city that is not at the
1-11 time it creates a corporation under this section, and has not
1-12 previously been, included within the boundaries of an authority
1-13 under:
1-14 (A) Chapter 141, Acts of the 63rd Legislature,
1-15 Regular Session, 1973 (Article 1118x, Vernon's Texas Civil
1-16 Statutes);
1-17 (B) Chapter 683, Acts of the 66th Legislature,
1-18 1979 (Article 1118y, Vernon's Texas Civil Statutes); or
1-19 (C) Article 1118z, Revised Statutes. <a city:>
1-20 <(A) that is located in a county with a
1-21 population of 750,000 or more, according to the most recent federal
1-22 decennial census and in which the combined rate of all sales and
1-23 use taxes imposed by the city, the state, and other political
1-24 subdivisions of the state having territory in the city does not
2-1 exceed 7.25 percent on the date of any election held under or made
2-2 applicable to this section;>
2-3 <(B) that has a population of 400,000 or more,
2-4 according to the most recent federal decennial census, and that is
2-5 located in more than one county, and in which the combined rate of
2-6 all sales and use taxes imposed by the city, the state, and other
2-7 political subdivisions of the state having territory in the city,
2-8 including taxes under this section, does not exceed 8.25 percent;
2-9 or>
2-10 <(C) to which Section 4A of this Act applies.>
2-11 (2) "Project" means land, buildings, equipment,
2-12 facilities, and improvements included in the definition of that
2-13 term under Section 2 of this Act, including recycling facilities,
2-14 and land, buildings, equipment, facilities, and improvements found
2-15 by the board of directors to:
2-16 (A) be required or suitable for use for
2-17 professional and amateur (including children's) sports, athletic,
2-18 entertainment, tourist, convention, and public park purposes and
2-19 events, including stadiums, ball parks, auditoriums, amphitheaters,
2-20 concert halls, learning centers, parks and park facilities, open
2-21 space improvements, municipal buildings, museums, exhibition
2-22 facilities, and related store, restaurant, concession, and
2-23 automobile parking facilities, related area transportation
2-24 facilities, and related roads, streets, and water and sewer
2-25 facilities, and other related improvements that enhance any of
2-26 those items; or
2-27 (B) promote or develop new or expanded business
3-1 enterprises, including a project to provide public safety
3-2 facilities, streets and roads, drainage and related improvements,
3-3 demolition of existing structures, general municipally owned
3-4 improvements, as well as any improvements or facilities that are
3-5 related to any of those projects and any other project that the
3-6 board in its discretion determines promotes or develops new or
3-7 expanded business enterprises.
3-8 (b) <(a-1)> A corporation may undertake a project under this
3-9 section unless within 60 days after first publishing notice of a
3-10 specific project or type of general project the governing body of
3-11 the city receives a petition from more than 10 percent of the
3-12 registered voters of the city where the petition requests that an
3-13 election be held before that specific project or that general type
3-14 of project is undertaken. An election is not required to be held
3-15 after the submission of a petition if the qualified citizens of the
3-16 city have previously approved the undertaking of a specific project
3-17 or that general type of project at an election called for that
3-18 purpose by the governing body of the city or in conjunction with
3-19 another election required to be held under this section.
3-20 (c) <(a-2)> The costs of a publicly owned and operated
3-21 project that is purchased or constructed under this section include
3-22 the maintenance and operating costs of the project, and the
3-23 proceeds of taxes may be used to pay the maintenance and operating
3-24 costs of a project, unless within 60 days after first publishing
3-25 notice of this specific use of the proceeds of the taxes the
3-26 governing body of the city receives a petition from more than 10
3-27 percent of the registered voters of the city where the petition
4-1 requests that an election be held before the proceeds of taxes
4-2 imposed under this section may be used to pay the maintenance and
4-3 operating costs of a project. An election is not required to be
4-4 held after the submission of a petition if the qualified citizens
4-5 of the city have previously approved that the costs of a publicly
4-6 owned and operated project purchased or constructed under this
4-7 section include the maintenance and operating costs of the project
4-8 and that the proceeds of taxes may be used to pay the maintenance
4-9 and operating costs of a project, at an election called for that
4-10 purpose by the governing body of the city or in conjunction with
4-11 another election required to be held under this section. The
4-12 election in this subsection shall not be required in a municipality
4-13 located in a county with a population in excess of 750,000 that has
4-14 held an election prior to February 1, 1993, under this section and
4-15 at which election the additional sales tax was approved.
4-16 (d) A corporation created under this section may spend
4-17 corporate revenues for promotional purposes and may contract with
4-18 other existing private corporations to carry out industrial
4-19 development programs consistent with the purposes and duties as set
4-20 out in this Act.
4-21 (e) <(b)> An eligible city may create a corporation under
4-22 this Act governed by this section. The corporation has the powers
4-23 granted by this section and by other sections of this Act and is
4-24 subject to the limitations of a corporation created under other
4-25 provisions of this Act. To the extent of a conflict between this
4-26 section and another provision of this Act, this section prevails.
4-27 The articles of incorporation of a corporation under this section
5-1 must state that the corporation is governed by this section and may
5-2 include within its name any words and phrases specified by the
5-3 eligible city. An eligible city may not create more than one
5-4 corporation governed by this section.
5-5 (f) <(c)> The board of directors of a corporation under this
5-6 section consists of seven directors who are appointed by the
5-7 governing body of the eligible city for two-year terms of office.
5-8 A director may be removed by the governing body of the eligible
5-9 city at any time without cause. Each director must be a resident
5-10 of or owner of real property located in the eligible city. Three
5-11 directors shall be persons who are not employees, officers, or
5-12 members of the governing body of the eligible city. A majority of
5-13 the entire membership of the board is a quorum. The board shall
5-14 conduct all meetings within the boundaries of the eligible city.
5-15 The board shall appoint a president, a secretary, and other
5-16 officers of the corporation that the governing body of the eligible
5-17 city considers necessary. The corporation's registered agent must
5-18 be an individual resident of the state and the corporation's
5-19 registered office must be within the boundaries of the eligible
5-20 city.
5-21 (g) <(d)> The governing body of an eligible city by
5-22 ordinance may levy a sales and use tax for the benefit of the
5-23 corporation under this section if the tax is authorized by a
5-24 majority of the qualified voters of the eligible city voting at an
5-25 election called and held for that purpose in accordance with
5-26 Chapter 321, Tax Code. This election requirement is satisfied and
5-27 another election is not required if the voters of the eligible city
6-1 approved the levy and collection of an additional one-half cent
6-2 sales and use tax at an election held before the effective date of
6-3 this section under an ordinance calling the election that was
6-4 published in a newspaper of general circulation within the eligible
6-5 city at least 14 days in advance of the election and that expressly
6-6 stated that the election was held in anticipation of the enactment
6-7 of enabling and implementing legislation without further elections.
6-8 An election described by this section and held before the effective
6-9 date of this section is validated as of the date on which the
6-10 election occurred.
6-11 (h) <(e)> The rate of a tax adopted under this section must
6-12 be one-eighth, one-fourth, three-eighths, or one-half of one
6-13 percent. The ballot proposition at the election held to adopt the
6-14 tax must specify the rate of the tax to be adopted. A corporation
6-15 that holds an election to reduce a tax imposed under Section 4A of
6-16 this Act may in a separate proposition on the same ballot adopt a
6-17 tax under this section. If an eligible city adopts the tax, a tax
6-18 is imposed on the receipts from the sale at retail of taxable items
6-19 within the eligible city at the rate approved at the election.
6-20 There is also imposed an excise tax on the use, storage, or other
6-21 consumption within the eligible city of tangible personal property
6-22 purchased, leased, or rented from a retailer during the period that
6-23 the tax is effective within the eligible city. The rate of the
6-24 excise tax is the same as the rate of the sales tax portion of the
6-25 tax and is applied to the sale price of the tangible personal
6-26 property.
6-27 (i) <(e)> If an eligible city adopts the tax, a tax is
7-1 imposed on the receipts from the sale at retail of taxable items
7-2 within the eligible city at a rate approved by the governing body
7-3 of the eligible city. The rate must be equal to one-eighth,
7-4 one-fourth, three-eighths, or one-half of one percent. There is
7-5 also imposed an excise tax on the use, storage, or other
7-6 consumption within the eligible city of tangible personal property
7-7 purchased, leased, or rented from a retailer during the period that
7-8 the tax is effective within the eligible city. The rate of the
7-9 excise tax is the same as the rate of the sales tax portion of the
7-10 tax and is applied to the sale price of the tangible personal
7-11 property.
7-12 (j) <(f)> Chapter 321, Tax Code, governs the imposition,
7-13 computation, administration, collection, and remittance of the tax
7-14 except as inconsistent with this section. The tax imposed under
7-15 this section takes effect as provided by Section 321.102(a), Tax
7-16 Code. If, however, an election is held under this section at the
7-17 same time an election is held to impose or change the rate of the
7-18 additional municipal sales and use tax, the tax under this section
7-19 and the imposition or change in rate of the additional municipal
7-20 sales and use tax take effect as provided by Section 321.102(b),
7-21 Tax Code. After the effective date of the taxes imposed under this
7-22 section, the adoption of a sales and use tax or the attempted
7-23 adoption of a sales and use tax by the eligible city or any other
7-24 taxing jurisdiction having territory in the city does not impair
7-25 the taxes imposed under this section.
7-26 (k) <(g)> On receipt of the proceeds of the sales and use
7-27 tax imposed under this section from the comptroller, the eligible
8-1 city shall deliver the proceeds to the corporation. Tax proceeds
8-2 may be used to:
8-3 (1) pay the costs of projects of the types added to
8-4 the definition of that term by Subsection (a) of this section; or
8-5 (2) pay the principal of, interest on, and other costs
8-6 relating to bonds or other obligations issued by the corporation to
8-7 pay the costs of the projects or to refund bonds or other
8-8 obligations issued to pay the costs of projects.
8-9 (l) <(h)> Bonds or other obligations having a maturity not
8-10 longer than 30 years and issued to pay the costs of projects of the
8-11 types added to the definition of that term by Subsection (a) of
8-12 this section may be made payable from any source of funds available
8-13 to the corporation, including the proceeds of a sales and use tax
8-14 imposed under this section. The principal amount of bonds and
8-15 other obligations that by their terms are payable in whole or in
8-16 part from the sales and use tax, together with the amount of the
8-17 costs of the projects, other than interest on bonds and other
8-18 obligations, for which payment is made in cash directly from the
8-19 proceeds of the tax, may not, in the aggregate, exceed $135
8-20 million. The bonds or other obligations that by their terms are
8-21 payable from the tax may not be paid in whole or in part from any
8-22 property taxes raised or to be raised by the eligible city and are
8-23 not a debt of and do not give rise to a claim for payment against
8-24 the eligible city except as to sales and use tax revenue held by a
8-25 city and required under this section to be paid over to the
8-26 corporation.
8-27 <(i) A sales and use tax imposed under this section may not
9-1 be collected after the last day of the first calendar quarter
9-2 occurring after notification to the comptroller by the corporation
9-3 that all bonds or other obligations of the corporation that are
9-4 payable in whole or in part from the proceeds of the sales and use
9-5 tax under this section, including any refunding bonds or other
9-6 obligations, have been paid in full or the full amount of money,
9-7 exclusive of guaranteed interest, necessary to pay in full the
9-8 bonds and other obligations has been set aside in a trust account
9-9 dedicated to the payment of the bonds and other obligations.>
9-10 (m) <(j)> The corporation may exercise the power of eminent
9-11 domain only on approval of the action by the governing body of the
9-12 eligible city. The power must be exercised in accordance with and
9-13 subject to the laws applicable to the eligible city.
9-14 (n) <(k)> The legislature finds for all constitutional and
9-15 statutory purposes that projects of the types added to the
9-16 definition of that term by Subsection (a) of this section are
9-17 owned, used, and held for public purposes for and on behalf of the
9-18 eligible city incorporating the corporation, and Section 23(b) of
9-19 this Act and Section 25.07(a), Tax Code, are not applicable to
9-20 leasehold or other possessory interests granted by the corporation
9-21 during the period projects are owned by the corporation on behalf
9-22 of the eligible city. Projects are exempt from taxation under
9-23 Section 11.11, Tax Code, for that period.
9-24 (o) <(l)> Section 24 of this Act does not apply to a
9-25 corporation under this section.
9-26 (p) <(m)> The corporation, a director of the corporation,
9-27 the eligible city creating the corporation, a member of the
10-1 governing body of the eligible city, or an employee of the
10-2 corporation or eligible city is not liable for damages arising from
10-3 the performance of a governmental function of the corporation or
10-4 eligible city. For the purposes of Chapter 101, Civil Practice and
10-5 Remedies Code, the corporation is a governmental unit and its
10-6 actions are governmental functions.
10-7 (q) <(n)> Before expending funds to undertake a project, a
10-8 corporation under this section shall hold at least one public
10-9 hearing on the proposed project.
10-10 SECTION 2. Section 1 of this Act expires September 1, 1997.
10-11 SECTION 3. The importance of this legislation and the
10-12 crowded condition of the calendars in both houses create an
10-13 emergency and an imperative public necessity that the
10-14 constitutional rule requiring bills to be read on three several
10-15 days in each house be suspended, and this rule is hereby suspended,
10-16 and that this Act take effect and be in force from and after its
10-17 passage, and it is so enacted.