By Smithee H.B. No. 3228
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of economic development districts in
1-3 certain counties; authorizing certain taxes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 44, Revised Statutes, is amended by adding
1-6 Article 2370d-11 to read as follows:
1-7 ART. 2370D-11 COUNTY ECONOMIC DEVELOPMENT DISTRICTS
1-8 ARTICLE I. GENERAL PROVISIONS
1-9 Sec. 1.01. SHORT TITLE. This Act may be cited as the County
1-10 Economic Development District Act.
1-11 Sec. 1.02. LEGISLATIVE INTENT. The intent of the
1-12 Legislature is to further the public purpose of developing and
1-13 diversifying the economy of the state by providing incentives for
1-14 the location and development of projects in certain counties to
1-15 attract visitors and tourists.
1-16 Sec. 1.03. LEGISLATIVE FINDINGS. The legislature finds
1-17 that:
1-18 (1) certain counties in Texas are in need of
1-19 incentives for the development of public improvements to attract
1-20 visitors and tourists to such counties, and that such counties are
1-21 at a disadvantage in competing with counties in other states for
1-22 the location and development of projects that attract visitors and
1-23 tourists by virtue of the availability and prevalent use in other
2-1 states of financial incentives;
2-2 (2) that the means and measures authorized by this Act
2-3 are in the public interest and serve a public purpose of the state
2-4 in promoting the economic welfare of the citizens of the state by
2-5 providing incentives for the location and development in certain
2-6 Texas counties of projects that attract visitors and tourists and
2-7 that result in employment and economic activity; and
2-8 (3) the creation of county economic development
2-9 districts is essential to the accomplishment of Article III,
2-10 Section 52-2, Texas Constitution and to the accomplishment of the
2-11 other public purposes stated in this Act and further serves the
2-12 purpose of Article XVI, Section 59, and Article III, Section 52,
2-13 Texas Constitution.
2-14 Sec. 1.04. DEFINITIONS. In this Act:
2-15 (1) "District" means a county economic development
2-16 district created under this Act.
2-17 (2) "Board" means the board of directors of the
2-18 district.
2-19 (3) "Director" means a member of the board.
2-20 (4) "Commissioners court" means the governing body of
2-21 the county in which the district is located.
2-22 (5) "County" means the county in which the district is
2-23 located.
2-24 (6) "Project" means the land, buildings, equipment,
2-25 facilities, and improvements found by the board of directors to be
3-1 required or suitable for use for entertainment, tourist,
3-2 convention, public park, professional and amateur sports, and
3-3 athletic purposes and events, including auditoriums, arenas,
3-4 coliseums, conventions centers, amphitheaters, concert halls, Texas
3-5 heritage and learning centers, parks and park facilities, open
3-6 space improvements, public buildings, museums, exhibition
3-7 facilities, stadiums, and ball parks (either or all) that serve the
3-8 purpose of attracting visitors and tourists to the county, and
3-9 related store, restaurant, concession, and automobile parking
3-10 facilities, related area transportation facilities, including
3-11 trams, monorails, and other forms of transportation, and related
3-12 roads, streets, and water and sewer facilities, and other related
3-13 improvements that enhance any of those items.
3-14 (7) "Cost" as applied to a project means the cost of
3-15 acquisition, construction, reconstruction, improvement, and
3-16 expansion, maintenance, and operation, including the cost of the
3-17 acquisition of all land, rights-of-way, property rights, easements,
3-18 and interests, the cost of all machinery and equipment, financing
3-19 charges, inventory, raw materials and other supplies, research and
3-20 development costs, interest, whether or not capitalized, necessary
3-21 reserve funds, cost of estimates and of design, architectural,
3-22 engineering and legal services, plans, specifications, surveys,
3-23 estimates of cost and of revenue, other expenses necessary or
3-24 incident to determining the feasibility and practicability of
3-25 acquiring, constructing, reconstructing, improving, and expanding
4-1 any such project, administrative expense and such other expense as
4-2 may be necessary or incident to the acquisition, construction,
4-3 reconstruction, improvement, and expansion thereof, and the
4-4 financing or refinancing of any such project, including the
4-5 refunding of any outstanding obligations, mortgages, or advances
4-6 issued, made, or given by any person for any of the aforementioned
4-7 costs.
4-8 (8) "Comptroller" means the Texas Comptroller of
4-9 Public Accounts.
4-10 (9) "User" means an individual, partnership,
4-11 corporation, or any other private entity, whether organized for
4-12 profit or not for profit, or a city, county, district, or any other
4-13 political subdivision, public entity, or agency of the state or
4-14 federal government.
4-15 (10) "Developer of property in the district" means any
4-16 person who owns land or an interest in land located within a
4-17 district and who has divided or proposes to divide the land into
4-18 two or more parts or lease such land or interest in land for the
4-19 purpose of laying out any subdivision of any tract of land or any
4-20 addition to any town or city, or for laying out suburban lots or
4-21 building lots, and streets, alleys, or parks or other portions
4-22 intended for public use or for the use of purchasers or owners of
4-23 lots fronting thereon or adjacent thereto.
4-24 (11) "Bonds" means bonds, notes, and other
4-25 obligations.
5-1 (12) "Taxing entity" means the state, a municipality,
5-2 a county, or other political subdivision, but shall not mean a
5-3 school district.
5-4 Sec. 1.05. COUNTIES AUTHORIZED TO CREATE DISTRICTS. The
5-5 commissioners court in a county with a population of not less than
5-6 75,000 and not more than 400,000 according to the most recent
5-7 federal decennial census may, upon petition of the owners of land
5-8 in a proposed county, commence the creation of a county economic
5-9 development district. The creation of the district is subject to a
5-10 confirmation election held as provided by Article 2 of this Act.
5-11 ARTICLE 2. CREATION OF DISTRICTS
5-12 Sec. 2.01. PETITION OF LANDOWNERS. To create a district, a
5-13 petition requesting creation shall be filed with the county
5-14 commissioners court of the county in which all of the land in the
5-15 proposed district is located. The petition shall be signed by the
5-16 developer of land in the district and shall be accompanied by a
5-17 sworn statement indicating consent to creation signed by the
5-18 holders of fee simple title of all of the land within the proposed
5-19 district.
5-20 Sec. 2.02. CONTENTS OF PETITION. The petition shall:
5-21 (1) describe the boundaries of the proposed district
5-22 by metes and bounds or by lot and block number, if there is a
5-23 recorded map or plat and survey of the area;
5-24 (2) include a name of the district which shall include
5-25 the name of the county followed by the words Economic Development
6-1 District No. ___;
6-2 (3) include the names of five persons who are willing
6-3 and qualified to serve as temporary directors of the proposed
6-4 district;
6-5 (4) state the general nature of the work proposed to
6-6 be done and the cost of the project as then estimated by the
6-7 petitioner; and
6-8 (5) state the necessity and feasibility of the
6-9 proposed district and whether the district will serve the public
6-10 purpose of attracting visitors and tourists to the county.
6-11 Sec. 2.03. HEARING ON PETITION. Not later than the 60th day
6-12 after the date a petition is received, the commissioners court
6-13 shall fix a date, time, and place at which the petition shall be
6-14 heard and shall issue notice of the date, time, place, and subject
6-15 matter of the hearing. The notice shall inform all persons of
6-16 their right to appear and present evidence and testify for or
6-17 against the creation of the district.
6-18 Sec. 2.04. NOTICE OF HEARING. At least 30 days before the
6-19 date set for the hearing, notice of the hearing shall be mailed to
6-20 the developer who signed the petition and the landowner of all the
6-21 land in the district and shall be published in a newspaper with
6-22 general circulation in the county in which the proposed district is
6-23 located.
6-24 Sec. 2.05. HEARING. At the hearing, the commissioners court
6-25 shall examine the petition to ascertain its sufficiency, and any
7-1 person interested may appear before the commission to offer
7-2 testimony on the sufficiency of the petition and whether or not the
7-3 district should be created.
7-4 Sec. 2.06. GRANTING OR REFUSING PETITION. (a) After the
7-5 hearing, if it is found that the petition conforms to the
7-6 requirements of Section 2.02 of this Act and that the creation of
7-7 the district and the proposed project is feasible and necessary and
7-8 would serve the public purpose of attracting visitors and tourists
7-9 to the county, the commissioners court shall so find and enter an
7-10 order creating the district.
7-11 (b) If the commissioners court finds that the petition does
7-12 not conform to the requirements of Section 2.02 of this Act or that
7-13 the creation of the district and the proposed project is not
7-14 feasible and necessary and would not serve the purpose of
7-15 attracting visitors and tourists to the county, the commissioners
7-16 court shall so find by its order and deny the petition.
7-17 Sec. 2.07. TEMPORARY DIRECTORS. If the commissioners court
7-18 grants the petition, it shall appoint to serve as temporary
7-19 directors of the district five persons who are qualified under this
7-20 Act to serve as directors.
7-21 Sec. 2.08. VACANCY IN OFFICE. A vacancy in the office of
7-22 temporary director shall be filled by appointment by the
7-23 commissioners court.
7-24 Sec. 2.09. QUALIFICATION OF TEMPORARY DIRECTORS. Each
7-25 temporary director shall execute a bond in accordance with the
8-1 provisions of Section 3.14 of this Act and shall take an oath of
8-2 office, and the board shall meet and organize.
8-3 Sec. 2.10. CONFIRMATION AND SALES AND USE TAX ELECTION. The
8-4 temporary board of directors shall conduct an election within the
8-5 boundaries of the district to confirm the creation of the district
8-6 and authorize a sales and use tax in conformity with this Act.
8-7 Sec. 2.11. ELECTION ORDER. An order calling an election
8-8 under Section 2.10 of this Act must state:
8-9 (1) the nature of the election, including the
8-10 proposition that is to appear on the ballot;
8-11 (2) the date of the election;
8-12 (3) the hours during which the polls will be open;
8-13 (4) the location of the polling places; and
8-14 (5) the proposed rate of the sales and use tax for the
8-15 district.
8-16 Sec. 2.12. NOTICE. The temporary directors shall give
8-17 notice of the confirmation and sales and use tax election by
8-18 publishing a substantial copy of the election order in a newspaper
8-19 with general circulation in the county in which the proposed
8-20 district is located once a week for two consecutive weeks. The
8-21 first publication must appear at least 14 days before the date set
8-22 for the election.
8-23 Sec. 2.13. CONDUCT OF ELECTION. (a) The election shall be
8-24 held in accordance with the provisions of the Election Code, to the
8-25 extent not inconsistent with this Act.
9-1 (b) The ballot shall be printed to permit voting for or
9-2 against the proposition: "The creation of ___________ County
9-3 Economic Development District No. ____ and the adoption of a
9-4 proposed local sales and use tax rate of ____ (the rate specified
9-5 in the election order) to be used for the promotion and development
9-6 of tourism."
9-7 Sec. 2.14. RESULTS OF ELECTION. (a) After the confirmation
9-8 and sales and use tax election, the presiding judge shall make
9-9 returns of the result to the temporary board of directors. The
9-10 temporary board of directors shall canvass the returns and declare
9-11 the results.
9-12 (b) If a majority of the votes cast in the election favor
9-13 the creation of the district and the adoption of the sales and use
9-14 tax, then the temporary board shall declare that the district is
9-15 created and shall declare the amount of the local sales and use tax
9-16 adopted and enter the result on its minutes. If a majority of the
9-17 votes cast in the election are against the creation of the district
9-18 and the adoption of the sales and use tax, the temporary board
9-19 shall declare that the proposition to create the district was
9-20 defeated and enter the result in its minutes.
9-21 (c) A certified copy of the minute order declaring that the
9-22 district is created and the local sales and use tax adopted and
9-23 including the rate of the sales and use tax, or declaring that the
9-24 proposition to create the district was defeated, shall be sent to
9-25 the commissioners court, the Comptroller, and any taxing entity by
10-1 certified or registered mail. Such order also shall show:
10-2 (1) the date of the election;
10-3 (2) the proposition on which the vote was held;
10-4 (3) the total number of votes cast for or against the
10-5 proposition; and
10-6 (4) the number of votes by which the proposition was
10-7 approved.
10-8 ARTICLE 3. DISTRICT ADMINISTRATION
10-9 Sec. 3.01. BOARD OF DIRECTORS. (a) A district is governed
10-10 by a board of five directors appointed by the county commissioners
10-11 of the county in which the district is located. The temporary
10-12 directors appointed under Section 2.07 of this Act shall become
10-13 permanent directors of the district provided that the creation of
10-14 the district is confirmed at the confirmation election.
10-15 (b) Directors serve staggered four-year terms that expire
10-16 September 1. Following confirmation of the district at the
10-17 election, the temporary directors shall draw lots to determine:
10-18 (1) the two directors to serve terms that expire on
10-19 September 1 of the second year following creation of the district;
10-20 and
10-21 (2) the three directors to serve terms that expire on
10-22 September 1 of the fourth year following creation of the district.
10-23 Sec. 3.02. QUALIFICATIONS FOR DIRECTORS. To be qualified to
10-24 serve as a director, a person shall be at least 21 years old, a
10-25 resident citizen of the state of Texas, and a qualified voter
11-1 within the county in which the district is located.
11-2 Sec. 3.03. PERSONS DISQUALIFIED FROM SERVING. (a) A person
11-3 is disqualified from serving as a director if:
11-4 (1) he is related within the third degree of affinity
11-5 or consanguinity, as determined under Chapter 573, Government Code,
11-6 to a developer of property in the district, any other member of the
11-7 board of directors of the district, or the manager, engineer, or
11-8 attorney for the district;
11-9 (2) he is an employee of any developer of property in
11-10 the district or any director, manager, engineer, or attorney for
11-11 the district;
11-12 (3) he is a developer of property in the district; or
11-13 (4) he is serving as an attorney, consultant,
11-14 engineer, manager, architect, or in some other professional
11-15 capacity for the district or a developer of property in the
11-16 district in connection with the district or property located in the
11-17 district.
11-18 (b) Within 60 days after the board of directors determines a
11-19 relationship or employment which constitutes a disqualification
11-20 under Subsection (a) of this section, it shall petition the
11-21 commissioners court to replace the director with a person who would
11-22 not be disqualified.
11-23 (c) Any person who willfully occupies an office as a
11-24 director and exercises the powers and duties of that office when
11-25 disqualified under the provisions of Subsection (a) of this section
12-1 is guilty of a misdemeanor, and on conviction, shall be fined not
12-2 less than $100 nor more than $1,000.
12-3 (d) Any rights obtained by any third party through official
12-4 action of the board of directors are not impaired or affected by
12-5 the disqualification under this section of any director to serve,
12-6 provided that the third party had no knowledge at the time the
12-7 rights were obtained of the fact that the director was disqualified
12-8 to serve.
12-9 Sec. 3.04. VACANCIES ON THE BOARD. A vacancy in the office
12-10 of director shall be filled by appointment of the commissioners
12-11 court.
12-12 Sec. 3.05. BOARD POSITION NOT CIVIL OFFICE OF EMOLUMENT. A
12-13 position on the board may not construed to be a civil office of
12-14 emolument for any purpose, including those purposes described by
12-15 Article XVI, Section 40, of the Texas Constitution.
12-16 Sec. 3.06. REMOVAL OF DIRECTOR. The governing body of the
12-17 commissioners court, after notice and hearing, may remove a
12-18 director for misconduct or failure to carry out the director's
12-19 duties on petition by a majority of the remaining directors.
12-20 Sec. 3.07. ORGANIZATION OF BOARD. After each appointment of
12-21 directors by the commissioners court, and after the directors have
12-22 qualified by taking the proper oath, they shall organize by
12-23 electing a president, a vice president, a secretary, and any other
12-24 officers as in the judgment of the board are considered necessary.
12-25 Sec. 3.08. QUORUM; OFFICERS' DUTIES. (a) Three directors
13-1 shall constitute a quorum and a concurrence of three shall be
13-2 sufficient in all matters pertaining to the business of the
13-3 district.
13-4 (b) The president shall preside at all meetings of the board
13-5 and shall be the chief executive officer of the district. The vice
13-6 president shall act as president in case of the absence or
13-7 disability of the president.
13-8 (c) The secretary shall act as president if both the
13-9 president and vice president are absent or disabled. The secretary
13-10 shall act as secretary of the board of directors and shall be
13-11 charged with the duty of seeing that all records and books of the
13-12 district are properly kept.
13-13 (d) The board may appoint another director, the general
13-14 manager, or any employee as assistant or deputy secretary to assist
13-15 the secretary and any such person shall be entitled to certify as
13-16 to the authenticity of any record of the district, including all
13-17 proceedings relating to bonds, contracts, or indebtedness of the
13-18 district.
13-19 Sec. 3.09. BYLAWS. The board is empowered to adopt bylaws
13-20 to govern:
13-21 (1) the time, place, and manner of conducting its
13-22 meetings;
13-23 (2) the powers, duties, and responsibilities of its
13-24 officers and employees;
13-25 (3) the disbursement of funds by checks, drafts, and
14-1 warrants;
14-2 (4) the appointment and authority of director
14-3 committees;
14-4 (5) the keeping of records and accounts; and
14-5 (6) other matters as the board considers appropriates.
14-6 Sec. 3.10. MEETINGS AND NOTICE. (a) The board may
14-7 establish regular meetings to conduct district business and may
14-8 hold special meetings at other times as the business of a district
14-9 requires.
14-10 (b) Notice of the time, place, and purpose of any meeting of
14-11 the board shall be given by posting at a place convenient to the
14-12 public within the district. A copy of the notice shall be
14-13 furnished to the clerk or clerks of the county in which the
14-14 district is located, who shall post them on a bulletin board in the
14-15 county courthouse used for such purpose.
14-16 (c) Except as herein provided the provisions of Chapter 551,
14-17 Government Code, shall be applicable to meetings of the board of
14-18 directors. Any interested person may attend any meeting of the
14-19 board.
14-20 Sec. 3.11. DISTRICT OFFICE AND MEETING PLACE. The board
14-21 shall designate and establish a district office in the county. The
14-22 meeting place may be a private residence or office provided that
14-23 the board of directors in its order establishing the meeting place
14-24 declares the same to be a public place and invites the public to
14-25 attend any meeting of the board.
15-1 Sec. 3.12. MANAGEMENT OF DISTRICT. (a) The board of
15-2 directors shall have control over and management of all the affairs
15-3 of the district and shall employ or engage in professional
15-4 contracts with all persons, firms, partnerships, or corporations
15-5 deemed necessary by the board for the conduct of the affairs of the
15-6 district, including, but not limited to, architects, engineers,
15-7 attorneys, financial advisors, a project manager, a general
15-8 manager, bookkeepers, auditors, and secretaries.
15-9 (b) The board of directors shall determine the term of
15-10 office and the compensation of all employees and consultants by
15-11 contracts or by resolution of the board.
15-12 (c) All employees may be removed by the board.
15-13 (d) The board of directors may require a bond of any officer
15-14 or employee payable to the district and conditioned on the faithful
15-15 performance of his duties.
15-16 Sec. 3.13. COMPENSATION OF DIRECTORS; REIMBURSEMENT OF
15-17 EXPENSES. (a) A director is not entitled to receive compensation
15-18 for service on the board.
15-19 (b) Upon approval by the board, a director may be reimbursed
15-20 for travel or other expenses incurred on behalf of the district
15-21 upon presentation of a verified statement.
15-22 Sec. 3.14. BOND AND OATH OF OFFICE. (a) As soon as
15-23 practicable after a director is appointed, the director shall
15-24 execute a bond for $10,000 payable to the district and conditioned
15-25 on the faithful performance of the director's duties.
16-1 (b) All bonds of the directors, including the bonds of the
16-2 temporary directors, shall be approved by the board.
16-3 (c) Each director shall take the oath of office prescribed
16-4 by the Constitution for public officers.
16-5 (d) The bond and oath shall be filed with the district and
16-6 retained in its records.
16-7 Sec. 3.15. DIRECTOR INTERESTED IN CONTRACT. (a) A director
16-8 who is financially interested in any contract with the district or
16-9 a director who is an employee of a person who or firm which is
16-10 financially interested in any contract with the district shall
16-11 disclose that fact to the other directors, and the disclosure shall
16-12 be entered into the minutes of the meeting.
16-13 (b) An interested director may not vote on the acceptance of
16-14 the contract or participate in the discussion on the contract.
16-15 (c) The failure of a director to disclose his financial
16-16 interest and to have it entered on the minutes shall invalidate the
16-17 contract.
16-18 Sec. 3.16. SUITS. (a) A district, when created and
16-19 confirmed, may, through its directors, sue and be sued in any and
16-20 all courts of this state in the name of the district. Service of
16-21 process in any suit may be had by serving any two directors.
16-22 (b) A district is a governmental agency, a body politic and
16-23 corporate, and a political subdivision of the state.
16-24 (c) A district is a unit of government for purposes of
16-25 Chapter 101, Civil Practice and Remedies Code (Texas Tort Claims
17-1 Act), and operations of a district are considered to be essential
17-2 governmental functions and not proprietary functions for all
17-3 purposes, including application of the Texas Tort Claims Act.
17-4 Sec. 3.17. CONTRACTS. A district shall contract and be
17-5 contracted within the name of the district.
17-6 ARTICLE 4. POWERS AND DUTIES
17-7 Sec. 4.01. POWERS. (a) A district shall have all of the
17-8 powers, authority, rights, and duties which will permit
17-9 accomplishment of the purposes for which the district was created.
17-10 (b) The district shall have the power to provide for general
17-11 promotion and tourist advertising of the district and its vicinity
17-12 and to conduct a marketing program to attract visitors, any of
17-13 which may be conducted by the district pursuant to contracts for
17-14 professional services with persons or organizations selected by
17-15 district.
17-16 (c) The district shall have the following powers with
17-17 respect to projects together with all powers incidental thereto or
17-18 necessary for the performance of those hereinafter stated:
17-19 (1) to acquire, whether by construction, devise,
17-20 purchase, lease, lease-purchase, gift, or otherwise or any one or
17-21 more of such methods and to design, construct, improve, maintain,
17-22 equip, and furnish one or more projects located within the
17-23 district;
17-24 (2) to lease, license, or otherwise contract for the
17-25 use of all or any part of any project for such rentals, license
18-1 fees, revenues, or other compensation deemed appropriate, upon such
18-2 terms and conditions as the board of directors deems advisable and
18-3 not in conflict with the provisions of this Act;
18-4 (3) to sell, transfer, or otherwise dispose of all or
18-5 any part of any project to a user or other party for such sales
18-6 price, installment payment, license fee, lease payment or other
18-7 compensation deemed appropriate, and upon such terms and conditions
18-8 as its board of directors may deem advisable and not in conflict
18-9 with the provisions of this Act;
18-10 (4) to issue bonds for the purpose of defraying all or
18-11 part of the cost of any project and to secure the payment of such
18-12 bonds as provided in this Act;
18-13 (5) to provide for security for the payment of the
18-14 principal of and interest on any bonds issued and any agreements
18-15 made in connection therewith, to mortgage and pledge any or all of
18-16 its projects or any part or parts thereof, or any revenues, license
18-17 fees, lease payments or other compensation derived therefrom and to
18-18 pledge any tax revenues, assessments, or other sources of funds
18-19 available to the district; and
18-20 (6) to enter into contracts with a user or other
18-21 person, including but not limited to governmental entities and
18-22 nonprofit corporations created under Article 5190.6, Texas Civil
18-23 Statutes, as amended, to perform any of the rights, powers, or
18-24 authority granted to the district. Notwithstanding any other
18-25 provision of this Act to the contrary, any contract between the
19-1 district and a governmental entity or nonprofit corporation created
19-2 under Article 5190.6, Texas Civil Statutes, as amended, shall not
19-3 be subject to the competitive bidding requirement of this Act.
19-4 (d) The district shall not have the power to own or operate
19-5 any project as a business other than as lessor or seller or
19-6 pursuant to the requirements of any trust agreement securing the
19-7 credit transaction. Accordingly, the user pursuant to any lease or
19-8 sale agreement relating to a project shall be considered to be the
19-9 owner of the project for the purposes of the application of any ad
19-10 valorem, sales, and use taxes or any other taxes levied or imposed
19-11 by this state or any political subdivision of this state. The
19-12 purchase and holding of mortgages, deeds of trust, or other
19-13 security interests and contracting for any servicing thereof shall
19-14 not be deemed the operation of a project.
19-15 Sec. 4.02. COMPETITIVE BIDDING; CONTRACT AWARD. (a) A
19-16 contract, other than a contract for services, for more than $15,000
19-17 for the construction of public improvements or the purchase of
19-18 material, machinery, equipment, supplies, and other property used
19-19 in public improvements, except real property, may be entered into
19-20 only after competitive bids. Notice of bid solicitation shall be
19-21 published once a week for two consecutive weeks in a newspaper with
19-22 general circulation in the county in which the district is located.
19-23 The first publication of notice must be not later than the 15th day
19-24 before the date set for receiving bids. The board shall adopt
19-25 rules governing receipt of bids and the award of the contract and
20-1 providing for the waiver of the competitive bid requirement if:
20-2 (1) there is an emergency;
20-3 (2) the needed materials are available from only one
20-4 source;
20-5 (3) in a procurement requiring design by the supplier
20-6 competitive bidding would not be appropriate and competitive
20-7 negotiation, with proposals solicited from an adequate number of
20-8 qualified sources, would permit reasonable competition consistent
20-9 with the nature and requirements of the procurement; or
20-10 (4) after solicitation, it is ascertained that there
20-11 will be only one bidder; or
20-12 (5) the contract is entered into between the district
20-13 and a governmental entity or nonprofit corporation created under
20-14 Article 5190.6, Texas Civil Statutes.
20-15 (b) If a proposed contract for works, plant improvements,
20-16 facilities other than land, or the purchase of equipment,
20-17 appliances, materials, or supplies for public improvements is for
20-18 an estimated amount of more than $15,000 but less than $25,000 or
20-19 for a duration of more than two years, competitive bids shall be
20-20 asked from at least three persons.
20-21 (c) This section provides the necessary procedures for the
20-22 district to award certain contracts and supersedes any law or other
20-23 requirement with respect to the award of contracts.
20-24 Sec. 4.03. EMINENT DOMAIN. (a) The district may exercise
20-25 the power of eminent domain to acquire land or interests in land
21-1 within the district deemed necessary by the board of directors of
21-2 the district for the purpose of providing water and sewer services
21-3 to an authorized project.
21-4 (b) the right of eminent domain shall be exercised in the
21-5 manner provided in Title 52, Texas Civil Statutes, as amended.
21-6 Sec. 4.04. GRANTS AND GIFTS. A district may accept grants,
21-7 gratuities, advances, and loans in any form from any source
21-8 approved by the board, including the United States, the state or
21-9 any of its agencies, any private or public corporation, and any
21-10 other person and may make and enter into contracts, agreements, and
21-11 covenants which the board considers appropriate in connection with
21-12 acceptance of grants, gratuities, advances, and loans.
21-13 ARTICLE 5. GENERAL FISCAL PROVISIONS
21-14 Sec. 5.01. EXPENDITURES. A district's money may be
21-15 disbursed only by check, draft, order, or other instrument which
21-16 shall be signed by at least three directors. The general manager,
21-17 treasurer, or other employee of the district when authorized by
21-18 resolution of the board may sign checks, drafts, orders or other
21-19 instruments on any district operation account and these need not be
21-20 signed by anyone else.
21-21 Sec. 5.02. PURPOSES FOR BORROWING MONEY. The district may
21-22 borrow money for any corporate purpose or combination of corporate
21-23 purposes.
21-24 Sec. 5.03. REVENUE NOTES. (a) The board may borrow money
21-25 on negotiable notes of the district to mature over a term of not
22-1 more than 20 years and to bear interest at any rate permitted by
22-2 the Constitution and laws of the state to be paid solely from
22-3 district revenues.
22-4 (b) The notes may be first or subordinate lien notes within
22-5 the discretion of the board, but no obligation may ever be a charge
22-6 on the property of the district but shall be solely a charge on the
22-7 revenues pledged for the payment of the obligation.
22-8 Sec. 5.04. BOND ANTICIPATION NOTES. (a) The board may
22-9 declare an emergency in the matter of funds not being available to
22-10 pay principal of and interest on any bonds of the district or to
22-11 meet any other needs of the district and may issue negotiable bond
22-12 anticipation notes to borrow the money needed by the district.
22-13 Bond anticipation notes may bear interest at any rate permitted by
22-14 the Constitution and laws of the state and shall mature within one
22-15 year of their date.
22-16 (b) Bond anticipation notes may be issued for any purpose
22-17 for which bonds of the district may be issued and for the purpose
22-18 of refunding previously issued bond anticipation notes. A district
22-19 may covenant with the purchases of the bond anticipation notes that
22-20 the district will use the proceeds of sale of any bonds in the
22-21 process of issuance for the purpose of refunding the bond
22-22 anticipation notes, in which case the board will be required to use
22-23 the process received from sale of the bonds in the process of
22-24 issuance to pay principal, interest, or redemption price on the
22-25 bond anticipation notes.
23-1 Sec. 5.05. REPAYMENT OF ORGANIZATIONAL EXPENSES. The
23-2 district's directors are authorized to pay all costs and expenses
23-3 necessarily incurred in the creation and organization of a
23-4 district, the cost of investigation and making plans, the cost of
23-5 the engineer's report, project designer fees, legal fees, and other
23-6 incidental expenses, and to reimburse any person for money advanced
23-7 for these purposes. These payments may be made from money obtained
23-8 from the issuance of notes or the sale of bonds first issued by the
23-9 district or out of other revenues of the district.
23-10 Sec. 5.06. DEPOSITORY. (a) The board, by order or
23-11 resolution, shall designate one or more banks inside or outside the
23-12 district to serve as the depository for the funds of the district.
23-13 All funds of the district shall be deposited in the depository bank
23-14 or banks unless otherwise required by orders or resolutions
23-15 authorizing the issuance of the district's bonds.
23-16 (b) To the extent that funds in the depository bank or banks
23-17 are not insured by the Federal Deposit Insurance Corporation, they
23-18 shall be secured in the manner provided by law for the security of
23-19 funds of counties of the State of Texas.
23-20 (c) The board, by resolution, may authorize a designated
23-21 representative to supervise the substitution of securities pledged
23-22 to secure the district's funds.
23-23 Sec. 5.07. INVESTMENTS. Funds of the district may be
23-24 invested and reinvested by the board or its authorized
23-25 representative in direct or indirect obligations of the United
24-1 States, the state, or any county, city, school district, or other
24-2 political subdivision of the state. Funds of the district may be
24-3 placed in certificates of deposit of state or national banks or
24-4 savings and loan associations within the state provided that they
24-5 are secured in the manner provided for the security of the funds of
24-6 counties of the State of Texas. Money may be withdrawn from the
24-7 appropriate accounts of the district for the investments on such
24-8 terms as the board considers advisable.
24-9 ARTICLE 6. ISSUANCE OF BONDS
24-10 Sec. 6.01. ISSUANCE OF BONDS. The district may issue bonds
24-11 for the purpose of defraying all or part of the cost of any project
24-12 as provided in this Act.
24-13 Sec. 6.02. FORM OF BONDS. (a) A district may issue its
24-14 bonds in various series or issues.
24-15 (b) Bonds shall mature serially or otherwise not more than
24-16 40 years from their date. Bonds may bear interest and may be
24-17 issued in accordance with Articles 717k, 717k-2, 717k-6, 717k-8,
24-18 and 717q, Civil Statutes, as amended.
24-19 (c) A district's bonds are investment securities under the
24-20 terms of Chapter 8 of the Business & Commerce Code and may be
24-21 issued registrable as to principal or as to both principal and
24-22 interest and shall or may be made redeemable before maturity, at
24-23 the option of the district, or may contain a mandatory redemption
24-24 provision all as may be provided by the board. A district's bonds
24-25 may be issued in the form, denominations, and manner and under the
25-1 terms, conditions, and details, and shall be signed and executed,
25-2 as provided by the board in the resolution or order authorizing the
25-3 issuance of the bonds.
25-4 Sec. 6.03. MANNER OF REPAYMENT OF BONDS. The board may
25-5 provide for the payment of principal of and interest and redemption
25-6 price on bonds in any one of the following manners:
25-7 (1) from the levy and collections of sales and use
25-8 taxes, hotel occupancy taxes, and other revenues as set forth in
25-9 Article 7 of this Act;
25-10 (2) by pledging all or any part of the designated
25-11 revenues, license fees, or other compensation from a project or any
25-12 part thereof, including revenues and receipts derived by the
25-13 district from the lease or sale of the project, or by pledging all
25-14 or any part of any grant, donation, revenues, or income received or
25-15 to be received from any public or private source; or
25-16 (3) a combination of the sources set forth in
25-17 subsections (1) and (2) of this section.
25-18 Sec. 6.04. Additional Security for Bonds. (a) The
25-19 principal of and interest on any bonds issued by the district for a
25-20 project may be secured by a mortgage covering all or any part of
25-21 such project, including any enlargements of and additions to such
25-22 project thereafter made. The resolution under which bonds are
25-23 authorized to be issued and any such mortgage may contain any
25-24 agreements and provisions respecting the maintenance of the project
25-25 covered thereby, the fixing and collection of rents, purchase price
26-1 payments, the creation and maintenance of special funds from such
26-2 revenues and the rights and remedies available in the event of
26-3 default, all as the board of directors shall deem advisable and not
26-4 in conflict with the provisions hereof. Each pledge, agreement,
26-5 and mortgage made for the benefit or security of any of the bonds
26-6 of the district shall continue in effect until the principal of and
26-7 interest on the bonds for the benefit for which the same were made
26-8 have been fully paid.
26-9 (b) Bonds may be secured by a trust agreement by and between
26-10 the district and a corporate trustee, which may be any trust
26-11 company or bank having the powers of a trust company within or
26-12 without the state. Any such trust agreement may evidence a pledge
26-13 or assignment of the lease or sale revenues to be received from a
26-14 lessee or purchaser with respect to a project for the payment of
26-15 principal of and interest and any premium on such bonds as the same
26-16 shall become due and payable and may provide for creation and
26-17 maintenance of reserves for such purposes. Any such trust
26-18 agreement or resolution providing for the issuance of such bonds
26-19 may contain such provisions for protecting and enforcing the rights
26-20 and remedies of the bondholders as may be reasonable and proper and
26-21 not in violation of law, including covenants setting forth the
26-22 duties in relation to the acquisition of property and the
26-23 construction, improvement, maintenance, repair, operation, and
26-24 insurance of the project in connection with which such bonds shall
26-25 have been authorized, and the custody, safeguarding, and
27-1 application of all money. It shall be lawful for any bank or trust
27-2 company incorporated under the laws of the state which may act as
27-3 depository of the proceeds of bonds or of revenues to furnish such
27-4 indemnifying bonds or to pledge such securities as may be required
27-5 by the district. Any such trust agreement may contain such
27-6 provisions as the district may deem reasonable and proper for the
27-7 security of the bondholders. All expenses incurred in carrying out
27-8 the provisions of any such trust agreement may be treated as a part
27-9 of the cost of the operation of the project.
27-10 (c) Any agreement relating to any project shall be for the
27-11 benefit of the district. Any such agreement shall contain a
27-12 provision that, in the event of a default in the payment of the
27-13 principal of or the interest or premium on such bonds or in the
27-14 performance of any agreement contained in such proceedings,
27-15 mortgage, or instrument, such payment and performance may be
27-16 enforced by mandamus or by the appointment of a receiver in equity
27-17 with power to charge and collect rents and purchase price payments
27-18 and to apply the revenues from the project in accordance with such
27-19 resolution, mortgage, or instrument.
27-20 (d) Any mortgage to secure bonds issued thereunder may also
27-21 provide that, in the event of a default in the payment thereof or
27-22 the violation of any agreement contained in the mortgage, the
27-23 mortgage may be foreclosed and sold under proceedings in equity or
27-24 in any other manner now or hereafter permitted by law. Such
27-25 mortgage may also provide that any trustee under such mortgage or
28-1 the holder of any of the bonds secured thereby may become the
28-2 purchaser at any foreclosure sale if the highest bidder therefor.
28-3 Sec. 6.05. Provisions of Bonds. (a) In the orders or
28-4 resolutions authorizing the issuance of bonds, including refunding
28-5 bonds, the board may provide for the flow of funds, the
28-6 establishment and maintenance of the interest and sinking fund, the
28-7 reserve fund, and other funds, and may make additional convenants
28-8 with respect to the bonds and the pledged revenues.
28-9 (b) The orders or resolutions of the board authorizing the
28-10 issuance of bonds may also prohibit the further issuance of bonds
28-11 or other obligations payable from the pledged revenue or may
28-12 reserve the right to issue additional bonds to be secured by a
28-13 pledge of and payable from the revenue on a parity with or
28-14 subordinate to the lien and pledge in support of the bonds being
28-15 issued, subject to the conditions which may be set forth in the
28-16 orders or resolutions.
28-17 (c) The orders or resolutions of the board issuing bonds may
28-18 contain other provisions and covenants as the board may determine,
28-19 not prohibited by the Constitution or by this Act.
28-20 (d) The board may adopt and cause to be executed any other
28-21 proceedings or instruments necessary and convenient in the issuance
28-22 of bonds.
28-23 Sec. 6.06. Use of Bond Proceeds. The district may use bond
28-24 proceeds to pay interest on the bonds during and after the period
28-25 of the acquisition or construction of a project, to pay
29-1 administrative and operating expenses, to create a reserve fund for
29-2 the payment of principal and interest on the bonds, and to pay all
29-3 expenses incurred and to be incurred in the issuance, sale, and
29-4 delivery of the bonds.
29-5 Sec. 6.07. Notice of Bond Sale. Except for refunding bonds,
29-6 bonds sold to a state or federal agency, and bonds registered with
29-7 any federal agency, after any bonds are finally approved and before
29-8 they are sold by a district, the board shall publish an appropriate
29-9 notice of the sale:
29-10 (1) at least one time not less than 10 days before the
29-11 date of sale in a newspaper of general circulation which is
29-12 published in the county in which the district is located; and
29-13 (2) at least one time in one or more recognized
29-14 financial publications of general circulation in the state as
29-15 approved by the Attorney General.
29-16 Sec. 6.08. Approval by Attorney General; Registration by
29-17 Comptroller. (a) Bonds issued by a district shall be submitted to
29-18 the Attorney General of the State of Texas for examination as
29-19 required by this Act and general law.
29-20 (b) If the Attorney General finds that the bonds have been
29-21 authorized in accordance with law, the Attorney General shall
29-22 approve the bonds, and the bonds shall be registered by the
29-23 Comptroller.
29-24 (c) After the approval and registration of bonds by the
29-25 Comptroller they shall be incontestable in any court or other
30-1 forum, for any reason, and shall be valid and binding obligations
30-2 in accordance with their terms for all purposes.
30-3 (d) If the bonds recite that they are secured partially or
30-4 otherwise by a pledge of the proceeds of a contract or a lease made
30-5 between the district and another party or parties, a copy of the
30-6 contract or lease and the proceedings authorizing the contract or
30-7 lease may or may not be submitted to the Attorney General along
30-8 with the bond records, and if submitted, the approval by the
30-9 Attorney General of the bonds shall constitute an approval of the
30-10 contract or lease, and the contract or lease shall be
30-11 incontestable.
30-12 Sec. 6.09. Refunding Bonds. (a) Bonds issued under this
30-13 Act may be refunded or otherwise refinanced by the issuance of
30-14 refunding bonds under terms or conditions determined by order or
30-15 resolution of the board. Refunding bonds may be issued in amounts
30-16 necessary to pay the principal of, and interest on and redemption
30-17 premium, if any, on bonds to be refunded, at maturity or on any
30-18 redemption dates and to provide for the payment of costs incurred
30-19 in connection with the refunding.
30-20 (b) The refunding bonds shall be issued in the manner
30-21 provided by this Act for other bonds.
30-22 Sec. 6.10. Authorized Investments; Security. All bonds
30-23 issued by a district shall be legal and authorized investments for
30-24 all banks, trust companies, building and loan associations, savings
30-25 and loan associations, insurance companies of all kinds and types,
31-1 fiduciaries, and trustees, and for all interest and sinking funds
31-2 and other public funds of the State of Texas, and all agencies,
31-3 subdivisions, and instrumentalities of the state including all
31-4 counties, cities, towns, villages, school districts, and all other
31-5 kinds and types of districts, public agencies, and bodies politic.
31-6 A district's bonds, notes, and other obligations shall be eligible
31-7 and lawful security for all deposits of public funds of the State
31-8 of Texas, and all agencies, subdivisions, and instrumentalities of
31-9 the state including all counties, cities, towns, villages, school
31-10 districts, and all other kinds and types of districts, public
31-11 agencies, and bodies politic, to the extent of the market value of
31-12 the bonds, and other obligations when accompanied by any unmatured
31-13 interest coupons attached to them.
31-14 ARTICLE 7. TAXES
31-15 Sec. 7.01. Sales and Use Tax. (a) A district may levy a
31-16 sales and use tax for the benefit of the district if authorized by
31-17 a majority of the qualified voters of the district voting at an
31-18 election called and held for that purpose. The sales and use tax,
31-19 if adopted, does not count toward the limitation imposed by Chapter
31-20 323, Tax Code (County Sales and Use Tax Act) on any sales and use
31-21 tax that has been levied by the county.
31-22 (b) If a district adopts the tax, there is imposed a tax on
31-23 the receipts from the sale at retail of taxable items within the
31-24 district at a rate of up to one-half of one percent. For purposes
31-25 of this section, the term "taxable items" shall include all items
32-1 subject to any sales and use tax that is imposed by the county in
32-2 which the district is located if the county has imposed a sales and
32-3 use tax. There is also imposed an excise tax on the use, storage,
32-4 or other consumption within the district of taxable items
32-5 purchased, leased, or rented from a retailer during the period that
32-6 the tax is effective within the district. The rate of the excise
32-7 tax is the same as the rate of the sales tax portion of the tax
32-8 applied to the sales price of the taxable items and is included in
32-9 the sales tax.
32-10 (c) Chapter 323, Tax Code (County Sales and Use Tax Act), to
32-11 the extent not inconsistent with this Act, governs the imposition,
32-12 computation, administration, and governance, of the tax under this
32-13 section, except that Sections 323.101 (b), (e), 323.209,
32-14 323.401-406, and 323.505 do not apply. Chapter 323, Tax Code
32-15 (County Sales and Use Tax Act) does not apply to the use and
32-16 allocation of revenues under this Act. In applying the procedures
32-17 under Chapter 323, Tax Code (County Sales and Use Tax Act), the
32-18 district's name shall be substituted for "the county" and "board of
32-19 directors" is substituted for "commissioners court."
32-20 (d) The permissible rates for a local sales and use tax
32-21 levied under this Act are:
32-22 (1) one-fourth of one percent;
32-23 (2) three-eighths of one percent; and
32-24 (3) one-half of one percent.
32-25 (e) The board by order may decrease or abolish the local
33-1 sales and use tax rate or may call an election to increase,
33-2 decrease or abolish the local sales and use tax rate.
33-3 (f) At the election, the ballots shall be prepared to permit
33-4 voting for or against the proposition: "The increase (decrease) of
33-5 the local sales and use tax rate of (name of district) to
33-6 (percentage) to be used for the promotion and development of
33-7 tourism" or, "The abolition of the district sales and use tax used
33-8 for the promotion and development of tourism." The increase or
33-9 decrease in the tax rate is effective if it is approved by a
33-10 majority of the votes cast. In calling and holding the election,
33-11 the board shall use the procedures for the confirmation and tax
33-12 election set forth in Article 2 of this Act.
33-13 (g) Taxes collected under this section may be used only for
33-14 the purposes for which the district was created, and the district
33-15 may pledge the revenue derived from the taxes imposed under this
33-16 Section to the payment of bonds issued by the district.
33-17 Sec. 7.02. Hotel Occupancy Tax. (a) The board of directors
33-18 by the adoption of an order or resolution may impose a hotel
33-19 occupancy tax. The hotel occupancy tax, if adopted, does not count
33-20 toward the limitation imposed by Chapter 352, Tax Code, on the
33-21 hotel occupancy tax that has been levied by the county.
33-22 (b) Chapter 352, Tax Code (County Hotel Occupancy Taxes), to
33-23 the extent not inconsistent with this Act, governs the imposition
33-24 and collection of the tax under section, except that Sections
33-25 352.002(a), (d) and 352.003 do not apply. Chapter 352, Tax Code
34-1 (County Hotel Occupancy Taxes) does not apply to the use and
34-2 allocation of revenues under this Act. In applying the procedures
34-3 under Chapter 352, Tax Code (County Hotel Occupancy Taxes), the
34-4 district's name shall be substituted for "the county" and "board of
34-5 directors" is substituted for "commissioners court."
34-6 (c) The permissible rate for a hotel occupancy tax
34-7 authorized by this Act shall not exceed seven percent of the price
34-8 paid for a room in a hotel.
34-9 (d) Taxes collected under this Section may be used only for
34-10 the purposes for which the district was created, and the district
34-11 may pledge the revenue derived from the taxes imposed under this
34-12 Section to the payment of bonds issued by the district.
34-13 Sec. 7.03. Receipt of Incremental Tax Proceeds. (a) The
34-14 district shall receive a payment equal to 100 percent of the
34-15 incremental tax proceeds collected by taxing entities within the
34-16 district during the first twenty years following creation of the
34-17 district.
34-18 (b) For purposes of this section, "tax proceeds" means the
34-19 hotel occupancy taxes, ad valorem taxes, and sales and use taxes
34-20 collected from individuals or entities within the boundaries of the
34-21 district and "incremental tax proceeds" means the amount by which
34-22 the tax proceeds collected by the taxing entity in a fiscal year
34-23 exceeds the amount of such tax proceeds collected by such entity
34-24 during the last fiscal year before the district was created.
34-25 (c) Tax increments collected under this section may be used
35-1 only for the purposes for which the district was created, and the
35-2 district may pledge the revenues derived from the taxes imposed
35-3 under this Section to the payment of bonds issued by the district.
35-4 ARTICLE 8. ADDING AND EXCLUDING TERRITORY;
35-5 CONSOLIDATING AND DISSOLVING DISTRICTS
35-6 Sec. 8.01. Adding and Excluding Land from the district. (a)
35-7 Before the board issues bonds, the board may, upon its own motion
35-8 or upon request of a landowner in the district, petition the county
35-9 commissioners for the addition of land to or exclusion of land from
35-10 the district.
35-11 (b) Upon receipt of a petition from the board for addition
35-12 or exclusion of land to the district, the commissioners court shall
35-13 hold a hearing as provided in Article 2 of this Act.
35-14 (c) If the commissioners court unanimously determines from
35-15 the evidence that the best interests of the persons and property in
35-16 the district will be served by adding or excluding land, the
35-17 commissioners court shall enter the appropriate findings and order
35-18 in its record adding or excluding land.
35-19 Sec. 8.02. Dissolution of district. (a) A district may be
35-20 dissolved only as provided by this Section.
35-21 (b) The board of directors may petition the commissioners
35-22 court to dissolve the district if a majority of the board finds at
35-23 any time (1) before the authorization of bonds, or the final
35-24 lending of its credit that the proposed undertaking is
35-25 impracticable or cannot be successfully and beneficially
36-1 accomplished, or (2) after all bonds of the district or other debts
36-2 of the district have been paid and the purposes of the district
36-3 shall have been accomplished.
36-4 (c) Upon receipt of a petition from the board for
36-5 dissolution of the district, the county commissioners shall hold a
36-6 hearing as provided in Article 2 of this Act.
36-7 (d) If the commissioners court unanimously determines from
36-8 the evidence that the best interests of the county and the owners
36-9 of property and interests in property within the district will be
36-10 served by dissolving the district, the commissioners court shall
36-11 enter the appropriate findings and order in its records dissolving
36-12 the district. Otherwise the commissioners court shall enter its
36-13 order providing that the district has not been dissolved. Upon
36-14 dissolution of the district, funds and property of the district, if
36-15 any, shall be transferred to the commissioners court.
36-16 SECTION 2. The importance of this legislation and the
36-17 crowded condition of the calendars in both houses create an
36-18 emergency and an imperative public necessity that the
36-19 constitutional rule requiring bills to be read on three several
36-20 days in each house be suspended, and this rule is hereby suspended,
36-21 and that this Act take effect and be in force from and after its
36-22 passage, and it is so enacted.