By Lucio S.B. No. 1170 74R1550 DRH-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the authority of a coastal municipality to undertake 1-3 projects affecting beaches, dunes, bays, and similar natural 1-4 resources, to issue bonds, and to impose an ad valorem tax. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subtitle A, Title 10, Local Government Code, is 1-7 amended by adding Chapter 309 to read as follows: 1-8 CHAPTER 309. COASTAL MANAGEMENT BY MUNICIPALITIES 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 309.001. APPLICATION. This chapter applies only to a 1-11 municipality that borders the Gulf of Mexico or is located on a 1-12 channel, bay, or inlet connected to the Gulf of Mexico. 1-13 Sec. 309.002. ACQUISITION OF PROPERTY. (a) A 1-14 municipality may acquire an interest in real property, including 1-15 improvements, to create, maintain, or further develop: 1-16 (1) a public beach, sand dune, artificial reef, or 1-17 other natural or artificial feature used to preserve or enhance the 1-18 shoreline; or 1-19 (2) a channel, bay, harbor, boat basin, or other 1-20 natural or artificial coastal waterway used for navigation or 1-21 recreation. 1-22 (b) Real property acquired under Subsection (a) must be: 1-23 (1) in the municipality; or 1-24 (2) in a county in which the municipality is located, 2-1 but not more than five miles offshore. 2-2 Sec. 309.003. USE OF PROPERTY; LOCATION OF IMPROVEMENTS. 2-3 (a) A municipality may use any property acquired under Section 2-4 309.002 or undertake any project for any public purpose necessary 2-5 for coastal management. 2-6 (b) A municipality may construct an improvement on property 2-7 that is held in trust by the state for the public's right of access 2-8 to the Gulf of Mexico or any public waterway leading to the Gulf of 2-9 Mexico. 2-10 Sec. 309.004. FUNDING. A municipality may use any source of 2-11 available funds to carry out the purposes of this chapter including 2-12 revenue derived from: 2-13 (1) a sales and use tax under Chapter 321, Tax Code; 2-14 (2) a hotel occupancy tax under Chapter 351, Tax Code; 2-15 or 2-16 (3) an ad valorem tax on property. 2-17 Sec. 309.005. GIFTS. A municipality may accept gifts or 2-18 grants of money or property from any source to accomplish the 2-19 purposes of this chapter. 2-20 Sec. 309.006. CONTRACTS WITH OTHER GOVERNMENT ENTITIES. A 2-21 municipality may contract with the United States or an agency of 2-22 this state or a political subdivision of this state to accomplish 2-23 the purposes of this chapter. 2-24 Sec. 309.007. LOANS. A municipality may borrow money from 2-25 any person to accomplish the purposes of this chapter. 2-26 Sec. 309.008. EMINENT DOMAIN. A municipality may acquire 2-27 land, easements, or other property to carry out the purposes of 3-1 this chapter by condemnation under Chapter 21, Property Code. The 3-2 municipality may condemn the fee simple title. 3-3 Sec. 309.009. EXEMPTION FROM TAXATION. A municipality is 3-4 exempt from a tax imposed by this state or political subdivision of 3-5 this state on an activity or improvement authorized by this 3-6 chapter. 3-7 Sec. 309.010. COOPERATION WITH CORPORATION CREATED BY 3-8 MUNICIPALITY. A municipality may contract with a corporation 3-9 created under Section 4A, Development Corporation Act of 1979 3-10 (Article 5190.6, Vernon's Texas Civil Statutes), to perform any of 3-11 the activities authorized under this chapter. The corporation may 3-12 use a sales and use tax that the municipality collects for the 3-13 corporation's benefit to pay for any cost incurred under this 3-14 chapter, including the costs of paying off bonds issued under 3-15 Subchapter B. 3-16 (Sections 309.011-309.020 reserved for expansion 3-17 SUBCHAPTER B. BONDS AND TAXES 3-18 Sec. 309.021. APPLICATION TO BONDS ISSUED UNDER SUBCHAPTER; 3-19 DEFINITION. (a) This subchapter applies only to bonds issued by a 3-20 municipality under this chapter. 3-21 (b) In this subchapter, "bonds" includes other similar 3-22 evidences of indebtedness. 3-23 Sec. 309.022. ISSUANCE OF BONDS. (a) A municipality may 3-24 issue bonds that are secured by any source of revenue described by 3-25 Section 309.004. A source of revenue other than an ad valorem tax 3-26 may be used without calling an election. Bonds that do not require 3-27 an election for their issuance: 4-1 (1) are not a debt or obligation of the municipality 4-2 but are only a charge against the revenues or property pledged for 4-3 their payment; and 4-4 (2) are not included in any limitations imposed by law 4-5 on the power of a municipality to issue bonds. 4-6 (b) Bonds that are payable in whole or in part by the 4-7 proceeds of an ad valorem tax may not be issued unless the issuance 4-8 is approved at an election called by the municipality for that 4-9 purpose. 4-10 (c) An election under Subsection (b) is held in the same 4-11 manner as other bond elections in the municipality. The bonds may 4-12 be issued only if a majority of those voting at the election favor 4-13 the issuance of the bonds. 4-14 Sec. 309.023. TERMS OF BONDS. (a) Bonds may mature 4-15 serially or otherwise not more than 40 years from their date of 4-16 issuance. 4-17 (b) The municipality may: 4-18 (1) issue the bonds on any terms it finds desirable; 4-19 and 4-20 (2) provide in the ordinance, order, or resolution 4-21 authorizing the issuance of the bonds for: 4-22 (A) the deposit and accounting of funds; 4-23 (B) the establishment and maintenance of an 4-24 interest and sinking fund; and 4-25 (C) any additional covenants regarding the 4-26 bonds, or revenues or properties that are pledged to the bonds. 4-27 Sec. 309.024. AD VALOREM TAXES. A municipality may impose 5-1 an ad valorem tax in the same manner as other ad valorem taxes in 5-2 the municipality to pay for bonds the issuance of which is 5-3 authorized at an election. 5-4 Sec. 309.025. PROCEEDS OF BONDS. The proceeds of bonds may 5-5 be used to accomplish the purposes of this chapter, including the 5-6 payment of fees for professional services and costs related to 5-7 issuing the bonds. 5-8 Sec. 309.026. TAX STATUS OF BONDS. Bonds, any transaction 5-9 relating to the bonds, and profits made in the sale of the bonds 5-10 are free from taxation by this state or a political subdivision of 5-11 this state. 5-12 SECTION 2. (a) An election that is held before the 5-13 effective date of this Act to authorize the issuance of bonds as 5-14 required by Subchapter B, Chapter 309, as added by Section 1 of 5-15 this Act, is validated as of the date of the election. All actions 5-16 relating to the election are also validated. 5-17 (b) This section does not apply to any matter that on the 5-18 effective date of this Act: 5-19 (1) is involved in litigation if the litigation 5-20 ultimately results in the matter being held invalid by a final 5-21 judgment of a court of competent jurisdiction; or 5-22 (2) has been held invalid by a final judgment of a 5-23 court of competent jurisdiction. 5-24 SECTION 3. The importance of this legislation and the 5-25 crowded condition of the calendars in both houses create an 5-26 emergency and an imperative public necessity that the 5-27 constitutional rule requiring bills to be read on three several 6-1 days in each house be suspended, and this rule is hereby suspended, 6-2 and that this Act take effect and be in force from and after its 6-3 passage, and it is so enacted.