1-1 By: West, Cain S.B. No. 1346
1-2 (In the Senate - Filed March 10, 1995; March 16, 1995, read
1-3 first time and referred to Committee on State Affairs;
1-4 April 25, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 2; April 25, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1346 By: West
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the creation of sports authorities and sports facility
1-11 enterprise zones and to the financing of sports facilities.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Chapter 2303, Government Code, is amended by
1-14 adding Subchapter H to read as follows:
1-15 SUBCHAPTER H. QUALIFIED SPORTS FACILITY PROJECTS
1-16 Sec. 2303.601. In this subchapter:
1-17 (1) "Local government" means a municipality.
1-18 (2) "Qualified sports facility project" means a sports
1-19 facility that is constructed, remodeled, or rehabilitated or is
1-20 proposed to be constructed, remodeled, or rehabilitated by a
1-21 municipality, county, or other political subdivision or by a sports
1-22 authority that receives or will receive rebates, refunds, or
1-23 payment from the state or a municipality, county, or other
1-24 political subdivision under this chapter.
1-25 (3) "Sports authority" means a nonprofit corporation
1-26 created by a local government under Section 4A, Texas
1-27 Transportation Corporation Act (Article 1528l, Vernon's Texas Civil
1-28 Statutes).
1-29 (4) "Sports facility" means an arena, coliseum,
1-30 stadium, or speedway, or any combination, that is owned by a
1-31 municipality, county, or other political subdivision or by a sports
1-32 authority and that is used or proposed to be used for National
1-33 Football League, National Basketball Association, National Hockey
1-34 League, or major league baseball games or events, NASCAR or Indy
1-35 Car sanctioned events, or for Olympic or international games or
1-36 events. The term includes administrative, service, concession, and
1-37 related parking facilities.
1-38 (5) "Sports facility enterprise zone" means an area
1-39 designated by a local government as a reinvestment zone under
1-40 Chapter 311, Tax Code, and that includes or will include a
1-41 qualified sports facility project.
1-42 Sec. 2303.602. DESIGNATION OF SPORTS FACILITY ENTERPRISE
1-43 ZONE. (a) A sports facility enterprise zone is an enterprise zone
1-44 entitled to the benefits of this chapter applicable to enterprise
1-45 zones.
1-46 (b) If a local government in the ordinance or order
1-47 designating an area as a reinvestment zone under Chapter 311, Tax
1-48 Code, also designates the area as a sports facility enterprise
1-49 zone, the area is designated as a sports facility enterprise zone
1-50 without further hearing or procedural requirement other than as
1-51 required by Chapter 311, Tax Code.
1-52 (c) The governing body of a sports facility enterprise zone
1-53 in which a qualified sports facility project is located may apply
1-54 to the department for designation as a sports facility enterprise
1-55 zone for the purpose of state benefits under this chapter. The
1-56 department shall designate the sports facility enterprise zone if
1-57 the department or the governing body of a local government
1-58 certifies that the zone was created in accordance with this
1-59 subchapter and Chapter 311, Tax Code.
1-60 (d) Designation of a sports facility enterprise zone under
1-61 this subchapter does not reduce the number of enterprise zones the
1-62 department may otherwise designate under this chapter.
1-63 Sec. 2303.603. QUALIFIED SPORTS FACILITY PROJECT. (a) A
1-64 person is a qualified business, an enterprise project, and a
1-65 qualified sports facility project if the department, for the
1-66 purpose of state benefits under this chapter, or the governing body
1-67 of a local government, for the purpose of local benefits, certifies
1-68 that the person is a qualified sports facility project that is
2-1 owned by a sports authority.
2-2 (b) For purposes of Subsection (a), a qualified sports
2-3 facility project meets the employment, income, and other criteria
2-4 of a qualified business and enterprise project under this chapter.
2-5 (c) For purposes of Subsection (a), a sports facility
2-6 enterprise zone in which a qualified sports facility project is
2-7 located meets the requirements of this chapter.
2-8 (d) In determining the number of enterprise projects that
2-9 the department may approve under this chapter, the department may
2-10 not consider new permanent jobs or retained jobs created by a
2-11 qualified sports facility project.
2-12 Sec. 2303.604. REFUND, REBATE, OR PAYMENT OF TAX PROCEEDS TO
2-13 CERTAIN SPORTS AUTHORITIES. (a) To promote the public health,
2-14 safety, or welfare, the governing body of a municipality or county
2-15 may establish a program by which it reduces or eliminates any fees
2-16 or taxes that it imposes on a qualified sports facility project.
2-17 (b) For the period prescribed by the agreement, a
2-18 governmental body, including a municipality, county, or political
2-19 subdivision, may agree to rebate, refund, or pay to a sports
2-20 authority that owns or is rehabilitating or remodeling a qualified
2-21 sports facility project:
2-22 (1) any eligible tax proceeds; and
2-23 (2) any incremental increase in tax proceeds.
2-24 (c) A local government may agree to guarantee, from revenue
2-25 from hotel occupancy taxes or sales and use taxes, the bonds or
2-26 other obligations of a sports authority that were issued or
2-27 incurred to pay the cost of construction, remodeling, or
2-28 rehabilitation of a qualified sports facility project owned by the
2-29 sports authority or a local government.
2-30 (d) An agreement under this section must be in writing,
2-31 contain an expiration date, and require the beneficiary to provide
2-32 documentation necessary to support a claim.
2-33 (e) A governmental body that makes an agreement under this
2-34 section shall make the rebate, refund, or payment directly to the
2-35 beneficiary.
2-36 (f) In this section:
2-37 (1) "Eligible tax proceeds" means proceeds a taxing
2-38 entity receives that are generated, paid, or collected by a sports
2-39 authority at the qualified sports facility project or by a business
2-40 at a qualified sports facility project or for events at the
2-41 project, including hotel occupancy taxes, ad valorem taxes, sales
2-42 and use taxes, and mixed beverage taxes.
2-43 (2) "Incremental increase in tax proceeds" means the
2-44 amount of hotel occupancy taxes, sales and use taxes, and mixed
2-45 beverage taxes received by a taxing entity that is generated, paid,
2-46 or collected in the taxing entity's fiscal year by all businesses
2-47 operating in the sports facility enterprise zone, if one is
2-48 created, and that exceeds the amount of those taxes generated,
2-49 paid, or collected by those businesses in the taxing entity's
2-50 fiscal year preceding the fiscal year in which the sports facility
2-51 enterprise zone is created.
2-52 SECTION 2. Subchapter C, Chapter 111, Tax Code, is amended
2-53 by adding Section 111.110 to read as follows:
2-54 Sec. 111.110. REBATE, REFUND, OR PAYMENT OF TAX PROCEEDS TO
2-55 CERTAIN SPORTS AUTHORITIES. (a) Notwithstanding any other
2-56 provision of this code, a sports authority that owns or is
2-57 assisting a municipality, county, or other political subdivision in
2-58 rehabilitating or remodeling a qualified sports facility project
2-59 located in a sports facility enterprise zone shall receive from the
2-60 state a rebate, refund, or payment of:
2-61 (1) 80 percent of the state sales and use taxes, not
2-62 otherwise dedicated by law, generated, paid, or collected by the
2-63 qualified sports facility project or a business at the qualified
2-64 sports facility project or for events at the project;
2-65 (2) 80 percent of the mixed beverage taxes retained by
2-66 the state and generated, paid, or collected by the qualified sports
2-67 facility project or a business at the qualified sports facility
2-68 project; and
2-69 (3) 80 percent of the amount of the incremental
2-70 increase in state sales and use taxes and mixed beverage taxes
3-1 retained by the state.
3-2 (b) The sports authority shall receive the rebate, refund,
3-3 or payment for the term of the bonds or other obligations issued or
3-4 incurred by the sports authority to construct, remodel, or
3-5 rehabilitate the qualified sports facility project. The sports
3-6 authority may not, however, receive a rebate, refund, or payment
3-7 under this section before September 1, 1998, regardless of the date
3-8 on which the bonds or other obligations are issued or incurred.
3-9 (c) A sports authority is not entitled to a rebate, refund,
3-10 or payment under this section unless each local government that
3-11 created the sports authority agrees to rebate, refund, or pay to
3-12 the sports authority eligible tax proceeds and any incremental
3-13 increase in tax proceeds in accordance with Section 2303.604,
3-14 Government Code, during the period in which the authority receives
3-15 funds under this section.
3-16 (d) In this section:
3-17 (1) "Incremental increase in tax proceeds" means the
3-18 amount of tax generated, paid, or collected in a state fiscal year
3-19 by all businesses operating in the sports facility enterprise zone,
3-20 if one is created, that exceeds the amount of those taxes
3-21 generated, paid, or collected by those businesses in the state
3-22 fiscal year preceding the fiscal year in which the sports facility
3-23 enterprise zone is created.
3-24 (2) "Local government," "qualified sports facility
3-25 project," "sports authority," and "sports facility enterprise zone"
3-26 have the meanings assigned by Section 2303.601, Government Code.
3-27 SECTION 3. Section 311.002, Tax Code, is amended by adding
3-28 Subdivisions (5) and (6) to read as follows:
3-29 (5) "Qualified sports facility project," "sports
3-30 authority," and "sports facility enterprise zone" have the meanings
3-31 assigned by Section 2303.601, Government Code.
3-32 (6) "Eligible tax proceeds" and "incremental increase
3-33 in tax proceeds" have the meanings assigned by Section 2303.604,
3-34 Government Code.
3-35 SECTION 4. Subsection (a), Section 311.005, Tax Code, is
3-36 amended to read as follows:
3-37 (a) To be designated as a reinvestment zone, an area must:
3-38 (1) substantially arrest or impair the sound growth of
3-39 the municipality creating the zone, retard the provision of housing
3-40 accommodations, or constitute an economic or social liability and
3-41 be a menace to the public health, safety, morals, or welfare in its
3-42 present condition and use because of the presence of:
3-43 (A) a substantial number of substandard, slum,
3-44 deteriorated, or deteriorating structures;
3-45 (B) the predominance of defective or inadequate
3-46 sidewalk or street layout;
3-47 (C) faulty lot layout in relation to size,
3-48 adequacy, accessibility, or usefulness;
3-49 (D) unsanitary or unsafe conditions;
3-50 (E) the deterioration of site or other
3-51 improvements;
3-52 (F) tax or special assessment delinquency
3-53 exceeding the fair value of the land;
3-54 (G) defective or unusual conditions of title; or
3-55 (H) conditions that endanger life or property by
3-56 fire or other cause;
3-57 (2) be predominantly open and, because of obsolete
3-58 platting, deterioration of structures or site improvements, or
3-59 other factors, substantially impair or arrest the sound growth of
3-60 the municipality; <or>
3-61 (3) be in a federally assisted new community located
3-62 in the municipality or in an area immediately adjacent to a
3-63 federally assisted new community; <or>
3-64 (4) <(5)> be an area described in a petition
3-65 requesting that the area be designated as a reinvestment zone, if
3-66 the petition is submitted to the governing body of the municipality
3-67 by the owners of property constituting at least 50 percent of the
3-68 appraised value of the property in the area according to the most
3-69 recent certified appraisal roll for the county in which the area is
3-70 located; or
4-1 (5) be an area that a local government determines
4-2 should be designated as a sports facility enterprise zone under
4-3 Subchapter H, Chapter 2303, Government Code.
4-4 SECTION 5. Section 311.015, Tax Code, is amended by adding
4-5 Subsection (m) to read as follows:
4-6 (m) Notwithstanding Subsection (l), tax increment bonds or
4-7 notes issued to finance a qualified sports facility project must
4-8 mature not later than the 30th anniversary after the date of
4-9 issuance. A local government may pledge eligible tax proceeds and
4-10 the incremental increase in tax proceeds to pay bonds or notes
4-11 issued to pay the costs of a qualified sports facility project
4-12 under terms and conditions the local government considers
4-13 appropriate.
4-14 SECTION 6. Chapter 311, Tax Code, is amended by adding
4-15 Section 311.0032 to read as follows:
4-16 Sec. 311.0032. SPORTS FACILITY ENTERPRISE ZONE. (a) A
4-17 local government may in the ordinance or order designating an area
4-18 as a reinvestment zone also designate the area as a sports facility
4-19 enterprise zone.
4-20 (b) A local government may not designate an area as a sports
4-21 facility enterprise zone unless:
4-22 (1) the zone contains or will contain a qualified
4-23 sports facility project; and
4-24 (2) the local government agrees to rebate, refund, or
4-25 pay to the sports authority that owns, proposes to own, or is
4-26 assisting a county, municipality, or other political subdivision in
4-27 rehabilitating or remodeling the qualified sports facility project
4-28 eligible tax proceeds and any incremental increase in tax proceeds
4-29 in accordance with Section 2303.604, Government Code.
4-30 (c) The local government must agree to provide the rebate,
4-31 refunding, or payment for the period during which the sports
4-32 authority receives funding under Section 111.110.
4-33 SECTION 7. Section 4A, Texas Transportation Corporation Act
4-34 (Article 1528l, Vernon's Texas Civil Statutes), is amended by
4-35 amending Subsections (a), (b), (c), (e), and (f), and by adding
4-36 Subsection (j) to read as follows:
4-37 (a) A local government corporation may be created to aid,
4-38 assist, and act on behalf of one or more local governments to
4-39 accomplish any governmental purpose, including a project or
4-40 activity permitted by its articles of incorporation. The
4-41 commission approval is not required for the articles of
4-42 incorporation, articles of dissolution, or bylaws of a local
4-43 government corporation. A local government corporation shall be
4-44 created and dissolved and the board of directors shall be appointed
4-45 and serve in the manner, for the term, and on the conditions as a
4-46 nonprofit corporation created pursuant to the provisions of Chapter
4-47 394, Local Government Code. A member of the board of directors is
4-48 required to be a resident of a local government creating the
4-49 corporation. The articles of incorporation and bylaws of a local
4-50 government corporation and any amendments thereto shall be in the
4-51 form and shall be executed, approved, and filed in the manner
4-52 prescribed by Chapter 394, Local Government Code.
4-53 (b) A local government corporation shall have all the powers
4-54 of:
4-55 (1) a corporation approved for creation by the
4-56 commission pursuant to this Act, including the power to contract
4-57 with the commission and any state agency or local government, road
4-58 districts, road utility districts, or other political subdivisions
4-59 in the manner and to the same extent as a corporation approved for
4-60 creation by the commission to accomplish any purpose for which the
4-61 corporation was created as prescribed by its articles of
4-62 incorporation; <, and>
4-63 (2) a nonprofit corporation incorporated under the
4-64 Texas Non-Profit Corporation Act (Article 1396-1.01, et seq.,
4-65 Vernon's Texas Civil Statutes); and
4-66 (3) an industrial development corporation created
4-67 under Section 4B, Development Corporation Act of 1979 (Article
4-68 5190.6, Vernon's Texas Civil Statutes), and may:
4-69 (A) exercise its borrowing capacity for any
4-70 authorized project or activity; and
5-1 (B) acquire land for any authorized project or
5-2 activity with the consent of each sponsoring local government in
5-3 accordance with Section 4B, Development Corporation Act of 1979
5-4 (Article 5190.6, Vernon's Texas Civil Statutes).
5-5 (c) A local government corporation is subject to Chapter
5-6 551, Government Code <the open meetings law (Article 6252-17,
5-7 Vernon's Texas Civil Statutes)>. The board of directors of a local
5-8 government corporation shall file notice of each meeting of the
5-9 board in the same manner and in the same location as is required of
5-10 the governing body or bodies of the local government or governments
5-11 granting approval to the creation of the local government
5-12 corporation.
5-13 (e) The commission, state agencies, local governments, road
5-14 districts, road utility districts, and other political subdivisions
5-15 shall have the power to contract with a local government
5-16 corporation to accomplish a governmental purpose of the sponsoring
5-17 local government or to implement an authorized project or activity
5-18 of the local government corporation, if it is also an authorized
5-19 purpose of the contracting commission, state agency, road district,
5-20 road utility district, or other political subdivision, in the same
5-21 manner and to the same extent as such entities have to contract
5-22 with a corporation approved for creation by the commission and as
5-23 authorized by Article 6702-3, Revised Statutes. A local government
5-24 also has authority to contract with a corporation to carry out a
5-25 governmental purpose of the sponsoring local government or to
5-26 implement an authorized project or activity of the corporation in
5-27 the manner prescribed by Article 6674r-2, Revised Statutes.
5-28 (f) A <The property of a> corporation, its property, and any
5-29 transaction in which the corporation's property <it> is acquired
5-30 shall have the same exemption from taxation as a corporation
5-31 created pursuant to Chapter 394, Local Government Code, or Section
5-32 4B, Development Corporation Act of 1979 (Article 5190.6, Vernon's
5-33 Texas Civil Statutes), including the exemption from the payment of
5-34 a sales and use tax.
5-35 (j) A municipality may create a local government corporation
5-36 that is a sports authority. The articles of incorporation of the
5-37 sports authority must provide that the authority have a
5-38 seven-member board with two of those members appointed by the
5-39 lieutenant governor and two appointed by the comptroller. The
5-40 directors are appointed for concurrent six-year terms. A sports
5-41 authority shall make a good faith effort to provide that at least
5-42 30 percent of the construction, procurement, and service contracts
5-43 for the qualified sports facility project and any business
5-44 operating in the facility are with minority-owned or women-owned
5-45 enterprises.
5-46 SECTION 8. Chapter 302, Tax Code, is amended by adding
5-47 Subchapter C to read as follows:
5-48 SUBCHAPTER C. SPORTS FACILITY ENTERPRISE ZONE EXCISE TAXES
5-49 Sec. 302.201. DEFINITIONS. In this subchapter:
5-50 (1) "Admissions tax" means the tax a municipality may
5-51 impose under Section 302.203 on each person admitted to an event in
5-52 a qualified sports facility project.
5-53 (2) "Event parking tax" means the tax a municipality
5-54 may impose under Section 302.202 on certain parking.
5-55 (3) "Qualified sports facility project," "sports
5-56 authority," "sports facility," and "sports facility enterprise
5-57 zone" have the meanings assigned by Section 2303.601, Government
5-58 Code.
5-59 Sec. 302.202. EVENT PARKING TAX. (a) A municipality by
5-60 ordinance may impose a tax on each motor vehicle parking in a
5-61 parking facility located inside or within a reasonable distance
5-62 adjacent to a sports facility enterprise zone. The municipality
5-63 may not impose the tax under this section:
5-64 (1) in an area that is not included in or adjacent to
5-65 a sports facility enterprise zone; or
5-66 (2) for an event at a sports facility existing on
5-67 September 1, 1995, unless the sports facility is designated as a
5-68 qualified sports facility project under Chapter 2303, Government
5-69 Code.
5-70 (b) The municipality may impose the tax during a period
6-1 beginning not more than two hours before and ending not more than
6-2 two hours after the time an event in a qualified sports facility
6-3 project is scheduled to begin. The municipality may not impose the
6-4 tax under this subchapter during any other time.
6-5 (c) The municipality by ordinance may provide that the tax
6-6 is imposed at a flat amount on each parked motor vehicle or is
6-7 imposed as a percentage of the amount charged for event parking by
6-8 the owner of the parking facility. Regardless of the method of
6-9 imposition, the amount of the tax may not exceed $2.50 per motor
6-10 vehicle. The municipality by ordinance may repeal or increase or
6-11 decrease the rate of the tax imposed under this section.
6-12 (d) The municipality by ordinance may require the owner of a
6-13 parking facility to collect the tax for the benefit of the
6-14 municipality. An owner required to collect the tax under this
6-15 section shall add the tax to the parking charge, and the tax is a
6-16 part of the parking charge, a debt owed to the parking facility
6-17 owner by the person parking, and recoverable at law in the same
6-18 manner as the parking charge. The tax imposed by this section is
6-19 not an occupation tax imposed on the owner of the parking facility.
6-20 Sec. 302.203. ADMISSIONS TAX. (a) A municipality by
6-21 ordinance may impose a tax on each person admitted to an event at a
6-22 qualified sports facility project. The municipality may not impose
6-23 the tax under this section for admission to an event at a facility
6-24 that is not a qualified sports facility project under Chapter 2303,
6-25 Government Code.
6-26 (b) The municipality by ordinance may provide that the tax
6-27 is imposed at a flat amount on each person admitted or is imposed
6-28 as a percentage of the amount charged for admission. Regardless of
6-29 the method of imposition, the amount of the tax may not exceed $2
6-30 per person. The municipality by ordinance may repeal or increase
6-31 or decrease the rate of the tax imposed under this section.
6-32 (c) The municipality by ordinance may require the owner of a
6-33 qualified sports facility project to collect the tax for the
6-34 benefit of the municipality. An owner required to collect the tax
6-35 under this section shall add the tax to the admissions price, and
6-36 the tax is a part of the admissions price, a debt owed to the
6-37 qualified sports facility project owner by the person admitted, and
6-38 recoverable at law in the same manner as the admissions charge.
6-39 The tax imposed by this section is not an occupation tax imposed on
6-40 the owner of the qualified sports facility project.
6-41 Sec. 302.204. EFFECTIVE DATE AND ENDING DATE OF TAX. (a) A
6-42 tax imposed under this subchapter takes effect on the date
6-43 prescribed by the ordinance imposing the tax.
6-44 (b) The municipality may impose a tax under this subchapter
6-45 only if the municipality or the sports authority issues bonds under
6-46 Section 302.207. The municipality may impose the tax only while
6-47 bonds of the municipality or sports authority issued to pay the
6-48 costs of constructing, remodeling, or rehabilitating a qualified
6-49 sports facility project are outstanding and unpaid.
6-50 Sec. 302.205. COLLECTION OF TAX. (a) A person required to
6-51 collect a tax imposed under this subchapter shall report and send
6-52 the taxes to the municipality as provided by the municipality
6-53 imposing the tax.
6-54 (b) The municipality by ordinance may prescribe penalties,
6-55 including interest charges and criminal penalties, for failure to
6-56 keep records required by the municipality, to report when required,
6-57 or to pay the tax when due. The municipal attorney or other
6-58 attorney acting for the municipality may bring suit against a
6-59 person who fails to collect a tax under this subchapter and to pay
6-60 it over to the municipality as required.
6-61 (c) The municipality by ordinance may permit a person who is
6-62 required to collect a tax under this subchapter to retain a
6-63 percentage of the amount collected and required to be reported as
6-64 reimbursement to the person for the costs of collecting the tax.
6-65 The municipality may provide that the person may retain the amount
6-66 only if the person pays the tax and files reports as required by
6-67 the municipality.
6-68 Sec. 302.206. USE OF TAX REVENUE. Revenue from a tax
6-69 imposed under this subchapter may be used only to acquire sites for
6-70 and acquire, construct, improve, rehabilitate, remodel, enlarge,
7-1 equip, or repair a qualified sports facility project.
7-2 Sec. 302.207. PLEDGE FOR BONDS. The municipality shall
7-3 pledge the revenue derived from a tax imposed under this subchapter
7-4 for the payment of any bonds issued for a purpose prescribed by
7-5 Section 302.204 by:
7-6 (1) the municipality under Chapter 63, Acts of the
7-7 59th Legislature, Regular Session, 1965 (Article 1269j-4.1,
7-8 Vernon's Texas Civil Statutes); or
7-9 (2) the sports authority.
7-10 SECTION 9. An enactment of the 74th Legislature, Regular
7-11 Session, 1995, that imposes a restriction or limitation on a
7-12 rebate, refund, or payment of state or local taxes to an enterprise
7-13 zone or qualified project does not apply to a sports facility
7-14 enterprise zone or qualified sports facility project created under
7-15 this Act.
7-16 SECTION 10. This Act takes effect September 1, 1995.
7-17 SECTION 11. The importance of this legislation and the
7-18 crowded condition of the calendars in both houses create an
7-19 emergency and an imperative public necessity that the
7-20 constitutional rule requiring bills to be read on three several
7-21 days in each house be suspended, and this rule is hereby suspended.
7-22 * * * * *