By Ramsay H.B. No. 1706
74R3298 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation and operation of an industrial development
1-3 corporation by a city.
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:
1-11 (A) that is located in a county with a
1-12 population of 750,000 or more, according to the most recent federal
1-13 decennial census and in which the combined rate of all sales and
1-14 use taxes imposed by the city, the state, and other political
1-15 subdivisions of the state having territory in the city does not
1-16 exceed 7.25 percent on the date of any election held under or made
1-17 applicable to this section;
1-18 (B) that has a population of 400,000 or more,
1-19 according to the most recent federal decennial census, and that is
1-20 located in more than one county, and in which the combined rate of
1-21 all sales and use taxes imposed by the city, the state, and other
1-22 political subdivisions of the state having territory in the city,
1-23 including taxes under this section, does not exceed 8.25 percent;
1-24 <or>
2-1 (C) that is located in a county with a
2-2 population of 500,000 or less according to the most recent federal
2-3 decennial census; or
2-4 (D) that has a population of less than 50,000
2-5 according to the most recent federal decennial census and that:
2-6 (i) is located in two or more counties,
2-7 one of which has a population of 500,000 or greater according to
2-8 the most recent federal decennial census;
2-9 (ii) is located within the territorial
2-10 limits but has not elected to become a part of a metropolitan rapid
2-11 transit authority that has a principal city with a population of
2-12 less than 1.2 million according to the most recent federal
2-13 decennial census, with such authority being created before January
2-14 1, 1980, under Chapter 141, Acts of the 63rd Legislature, Regular
2-15 Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes); or
2-16 (iii) is located within the territorial
2-17 limits but has not elected to become a part of a metropolitan rapid
2-18 transit authority that has a principal city with a population of
2-19 more than 750,000 according to the most recent federal decennial
2-20 census, with such authority being created under Chapter 683, Acts
2-21 of the 66th Legislature, Regular Session, 1979 (Article 1118y,
2-22 Vernon's Texas Civil Statutes) <to which Section 4A of this Act
2-23 applies>.
2-24 (2) "Project" means land, buildings, equipment,
2-25 facilities, and improvements included in the definition of that
2-26 term under Section 2 of this Act, including recycling facilities,
2-27 and land, buildings, equipment, facilities, and improvements found
3-1 by the board of directors to:
3-2 (A) be required or suitable for use for
3-3 professional and amateur (including children's) sports, athletic,
3-4 entertainment, tourist, convention, and public park purposes and
3-5 events, including stadiums, ball parks, auditoriums, amphitheaters,
3-6 concert halls, learning centers, parks and park facilities, open
3-7 space improvements, municipal buildings, museums, exhibition
3-8 facilities, and related store, restaurant, concession, and
3-9 automobile parking facilities, related area transportation
3-10 facilities, and related roads, streets, and water and sewer
3-11 facilities, and other related improvements that enhance any of
3-12 those items; or
3-13 (B) promote or develop new or expanded business
3-14 enterprises, including a project to provide public safety
3-15 facilities, streets and roads, drainage and related improvements,
3-16 demolition of existing structures, general municipally owned
3-17 improvements, as well as any improvements or facilities that are
3-18 related to any of those projects and any other project that the
3-19 board in its discretion determines promotes or develops new or
3-20 expanded business enterprises.
3-21 (b) <(a-1)> A corporation may undertake a project under this
3-22 section unless within 60 days after first publishing notice of a
3-23 specific project or type of general project the governing body of
3-24 the city receives a petition from more than 10 percent of the
3-25 registered voters of the city where the petition requests that an
3-26 election be held before that specific project or that general type
3-27 of project is undertaken. An election is not required to be held
4-1 after the submission of a petition if the qualified citizens of the
4-2 city have previously approved the undertaking of a specific project
4-3 or that general type of project at an election called for that
4-4 purpose by the governing body of the city or in conjunction with
4-5 another election required to be held under this section.
4-6 (c) <(a-2)> The costs of a publicly owned and operated
4-7 project that is purchased or constructed under this section include
4-8 the maintenance and operating costs of the project, and the
4-9 proceeds of taxes may be used to pay the maintenance and operating
4-10 costs of a project, unless within 60 days after first publishing
4-11 notice of this specific use of the proceeds of the taxes the
4-12 governing body of the city receives a petition from more than 10
4-13 percent of the registered voters of the city where the petition
4-14 requests that an election be held before the proceeds of taxes
4-15 imposed under this section may be used to pay the maintenance and
4-16 operating costs of a project. An election is not required to be
4-17 held after the submission of a petition if the qualified citizens
4-18 of the city have previously approved that the costs of a publicly
4-19 owned and operated project purchased or constructed under this
4-20 section include the maintenance and operating costs of the project
4-21 and that the proceeds of taxes may be used to pay the maintenance
4-22 and operating costs of a project, at an election called for that
4-23 purpose by the governing body of the city or in conjunction with
4-24 another election required to be held under this section. The
4-25 election in this subsection shall not be required in a municipality
4-26 located in a county with a population in excess of 750,000 that has
4-27 held an election prior to February 1, 1993, under this section and
5-1 at which election the additional sales tax was approved.
5-2 (d) A corporation created under this section may spend no
5-3 more than 25 percent of the corporate revenues for promotional
5-4 purposes and may contract with other existing private corporations
5-5 to carry out industrial development programs consistent with the
5-6 purposes and duties as set out in this Act.
5-7 (e) <(b)> An eligible city may create a corporation under
5-8 this Act governed by this section. The corporation has the powers
5-9 granted by this section and by other sections of this Act and is
5-10 subject to the limitations of a corporation created under other
5-11 provisions of this Act. To the extent of a conflict between this
5-12 section and another provision of this Act, this section prevails.
5-13 The articles of incorporation of a corporation under this section
5-14 must state that the corporation is governed by this section and may
5-15 include within its name any words and phrases specified by the
5-16 eligible city. An eligible city may not create more than one
5-17 corporation governed by this section.
5-18 (f) <(c)> The board of directors of a corporation under this
5-19 section consists of seven directors who are appointed by the
5-20 governing body of the eligible city for two-year terms of office.
5-21 A director may be removed by the governing body of the eligible
5-22 city at any time without cause. Each director must be a resident
5-23 of the eligible city. Three directors shall be persons who are not
5-24 employees, officers, or members of the governing body of the
5-25 eligible city. A majority of the entire membership of the board is
5-26 a quorum. The board shall conduct all meetings within the
5-27 boundaries of the eligible city. The board shall appoint a
6-1 president, a secretary, and other officers of the corporation that
6-2 the governing body of the eligible city considers necessary. The
6-3 corporations's registered agent must be an individual resident of
6-4 the state and the corporation's registered office must be within
6-5 the boundaries of the eligible city.
6-6 (g) <(d)> The governing body of an eligible city by
6-7 ordinance may levy a sales and use tax for the benefit of the
6-8 corporation under this section if the tax is authorized by a
6-9 majority of the qualified voters of the eligible city voting at an
6-10 election called and held for that purpose in accordance with
6-11 Chapter 321, Tax Code. This election requirement is satisfied and
6-12 another election is not required if the voters of the eligible city
6-13 approved the levy and collection of an additional one-half cent
6-14 sales and use tax at an election held before the effective date of
6-15 this section under an ordinance calling the election that was
6-16 published in a newspaper of general circulation within the eligible
6-17 city at least 14 days in advance of the election and that expressly
6-18 stated that the election was held in anticipation of the enactment
6-19 of enabling and implementing legislation without further elections.
6-20 An election described by this section and held before the effective
6-21 date of this section is validated as of the date on which the
6-22 election occurred.
6-23 <(e) The rate of a tax adopted under this section must be
6-24 one-eighth, one-fourth, three-eighths, or one-half of one percent.
6-25 The ballot proposition at the election held to adopt the tax must
6-26 specify the rate of the tax to be adopted. A corporation that
6-27 holds an election to reduce a tax imposed under Section 4A of this
7-1 Act may in a separate proposition on the same ballot adopt a tax
7-2 under this section. If an eligible city adopts the tax, a tax is
7-3 imposed on the receipts from the sale at retail of taxable items
7-4 within the eligible city at the rate approved at the election.
7-5 There is 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 (h) <(e)> If an eligible city adopts the tax, a tax is
7-13 imposed on the receipts from the sale at retail of taxable items
7-14 within the eligible city at a rate approved by the governing body
7-15 of the eligible city. The rate must be equal to one-eighth,
7-16 one-fourth, three-eighths, or one-half of one percent. There is
7-17 also imposed an excise tax on the use, storage, or other
7-18 consumption within the eligible city of tangible personal property
7-19 purchased, leased, or rented from a retailer during the period that
7-20 the tax is effective within the eligible city. The rate of the
7-21 excise tax is the same as the rate of the sales tax portion of the
7-22 tax and is applied to the sale price of the tangible personal
7-23 property.
7-24 (i) <(f)> Chapter 321, Tax Code, governs the imposition,
7-25 computation, administration, collection, and remittance of the tax
7-26 except as inconsistent with this section. The tax imposed under
7-27 this section takes effect as provided by Section 321.102(a), Tax
8-1 Code. If, however, an election is held under this section at the
8-2 same time an election is held to impose or change the rate of the
8-3 additional municipal sales and use tax, the tax under this section
8-4 and the imposition or change in rate of the additional municipal
8-5 sales and use tax take effect as provided by Section 321.102(b),
8-6 Tax Code. After the effective date of the taxes imposed under this
8-7 section, the adoption of a sales and use tax or the attempted
8-8 adoption of a sales and use tax by the eligible city or any other
8-9 taxing jurisdiction having territory in the city does not impair
8-10 the taxes imposed under this section.
8-11 (j) <(g)> On receipt of the proceeds of the sales and use
8-12 tax imposed under this section from the comptroller, the eligible
8-13 city shall deliver the proceeds to the corporation. Tax proceeds
8-14 may be used to:
8-15 (1) pay the costs of projects of the types added to
8-16 the definition of that term by Subsection (a) of this section; or
8-17 (2) pay the principal of, interest on, and other costs
8-18 relating to bonds or other obligations issued by the corporation to
8-19 pay the costs of the projects or to refund bonds or other
8-20 obligations issued to pay the costs of projects.
8-21 (k) <(h)> Bonds or other obligations having a maturity not
8-22 longer than 30 years and issued to pay the costs of projects of the
8-23 types added to the definition of that term by Subsection (a) of
8-24 this section may be made payable from any source of funds available
8-25 to the corporation, including the proceeds of a sales and use tax
8-26 imposed under this section. The principal amount of bonds and
8-27 other obligations that by their terms are payable in whole or in
9-1 part from the sales and use tax, together with the amount of the
9-2 costs of the projects, other than interest on bonds and other
9-3 obligations, for which payment is made in cash directly from the
9-4 proceeds of the tax, may not, in the aggregate, exceed $135
9-5 million. The bonds or other obligations that by their terms are
9-6 payable from the tax may not be paid in whole or in part from any
9-7 property taxes raised or to be raised by the eligible city and are
9-8 not a debt of and do not give rise to a claim for payment against
9-9 the eligible city except as to sales and use tax revenue held by a
9-10 city and required under this section to be paid over to the
9-11 corporation.
9-12 (l) <(i)> A sales and use tax imposed under this section may
9-13 not be collected after the last day of the first calendar quarter
9-14 occurring after notification to the comptroller by the corporation
9-15 that all bonds or other obligations of the corporation that are
9-16 payable in whole or in part from the proceeds of the sales and use
9-17 tax under this section, including any refunding bonds or other
9-18 obligations, have been paid in full or the full amount of money,
9-19 exclusive of guaranteed interest, necessary to pay in full the
9-20 bonds and other obligations has been set aside in a trust account
9-21 dedicated to the payment of the bonds and other obligations.
9-22 (m) <(j)> The corporation may exercise the power of eminent
9-23 domain only on approval of the action by the governing body of the
9-24 eligible city. The power must be exercised in accordance with and
9-25 subject to the laws applicable to the eligible city.
9-26 (n) <(k)> The legislature finds for all constitutional and
9-27 statutory purposes that projects of the types added to the
10-1 definition of that term by Subsection (a) of this section are
10-2 owned, used, and held for public purposes for and on behalf of the
10-3 eligible city incorporating the corporation, and Section 23(b) of
10-4 this Act and Section 25.07(a), Tax Code, are not applicable to
10-5 leasehold or other possessory interests granted by the corporation
10-6 during the period projects are owned by the corporation on behalf
10-7 of the eligible city. Projects are exempt from taxation under
10-8 Section 11.11, Tax Code, for that period.
10-9 (o) <(l)> Section 24 of this Act does not apply to a
10-10 corporation under this section.
10-11 (p) <(m)> The corporation, a director of the corporation,
10-12 the eligible city creating the corporation, a member of the
10-13 governing body of the eligible city, or an employee of the
10-14 corporation or eligible city is not liable for damages arising from
10-15 the performance of a governmental function of the corporation or
10-16 eligible city. For the purposes of Chapter 101, Civil Practice and
10-17 Remedies Code, the corporation is a governmental unit and its
10-18 actions are governmental functions.
10-19 (q) <(n)> Before expending funds to undertake a project, a
10-20 corporation under this section shall hold at least one public
10-21 hearing on the proposed project.
10-22 (r) On approval of the governing body of each unit and
10-23 corporation involved, a corporation created under this Act that is
10-24 not created under this section may transfer all of its assets to a
10-25 corporation governed by this section and dissolve as provided by
10-26 this Act.
10-27 SECTION 2. Section 4A, Development Corporation Act of 1979
11-1 (Article 5190.6, Vernon's Texas Civil Statutes), is repealed.
11-2 SECTION 3. (a) A corporation created before the effective
11-3 date of this Act under Section 4A, Development Corporation Act of
11-4 1979 (Article 5190.6, Vernon's Texas Civil Statutes), continues to
11-5 exist on and after the effective date of this Act as if the
11-6 corporation had been created under Section 4B, Development
11-7 Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil
11-8 Statutes). Except as otherwise provided by this section, the
11-9 corporation and city creating the corporation have all of the
11-10 powers and duties of a corporation and creating city under Section
11-11 4B.
11-12 (b) A city that created a corporation under Section 4A,
11-13 Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
11-14 Civil Statutes), may continue on and after the effective date of
11-15 this Act to collect any tax authorized for the benefit of the
11-16 corporation before the effective date of this Act, and the
11-17 corporation may continue to undertake any project authorized for
11-18 the corporation before the effective date of this Act. The tax and
11-19 project are subject to the same restrictions applicable under
11-20 Section 4A, and that section is continued in effect for that
11-21 purpose. A tax authorized for the corporation or project
11-22 undertaken by the corporation on or after the effective date of
11-23 this Act is governed by Section 4B, Development Corporation Act of
11-24 1979 (Article 5190.6, Vernon's Texas Civil Statutes). A tax
11-25 authorized before the effective date of this Act may be used to
11-26 fund a project under Section 4B only if no restriction applicable
11-27 to the tax prohibits the use of its proceeds for such a project and
12-1 the project is authorized as required by Section 4B.
12-2 (c) Before January 1, 1996:
12-3 (1) the articles of incorporation of a corporation
12-4 created under Section 4A, Development Corporation Act of 1979
12-5 (Article 5190.6, Vernon's Texas Civil Statutes), shall be amended
12-6 to state that the corporation is governed by Section 4B of that
12-7 Act, except as provided by Subsection (b) of this section; and
12-8 (2) the board of directors of a corporation created
12-9 under Section 4A shall be conformed to the requirements for a board
12-10 of directors under Section 4B.
12-11 SECTION 4. The importance of this legislation and the
12-12 crowded condition of the calendars in both houses create an
12-13 emergency and an imperative public necessity that the
12-14 constitutional rule requiring bills to be read on three several
12-15 days in each house be suspended, and this rule is hereby suspended,
12-16 and that this Act take effect and be in force from and after its
12-17 passage, and it is so enacted.