By Ratliff S.B. No. 1642
74R9110 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to industrial development corporations created by certain
1-3 cities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 4A and 4B, Development Corporation Act
1-6 of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are
1-7 amended to read as follows:
1-8 Sec. 4A. AUTHORIZATION TO LEVY SALES TAX FOR INDUSTRIAL
1-9 DEVELOPMENT. (a) ELIGIBLE CITY. In this section, "eligible city"
1-10 means a city that is not at the time it creates a corporation under
1-11 this section, and has not previously been, included within the
1-12 boundaries of an authority under:
1-13 (1) Chapter 141, Acts of the 63rd Legislature, Regular
1-14 Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes);
1-15 (2) Chapter 683, Acts of the 66th Legislature, 1979
1-16 (Article 1118y, Vernon's Texas Civil Statutes); or
1-17 (3) Article 1118z, Revised Statutes.
1-18 (b)(1) CREATION OF CORPORATION. An eligible city may create
1-19 a corporation under this Act governed by this section. The
1-20 corporation has the powers and is subject to the limitations of a
1-21 corporation created under other provisions of this Act. To the
1-22 extent of a conflict between this section and another provision of
1-23 this Act, this section prevails. The articles of incorporation of
1-24 a corporation under this section must state that the corporation is
2-1 governed by this section and may include within its name any words
2-2 and phrases specified by the eligible city. A city may not create
2-3 more than one corporation governed by this section.
2-4 (2) Spending for Promotion. A corporation created
2-5 under this section may spend no more than 10 percent of its
2-6 revenues for promotional purposes and may contract with other
2-7 existing private corporations to carry out industrial development
2-8 programs consistent with the purposes and duties provided by this
2-9 Act.
2-10 (3) Transfer of Assets from Corporation Created Under
2-11 this Act. On approval of the governing body of each unit and
2-12 corporation involved, a corporation created under this Act that is
2-13 not created under this section may transfer all of its assets to a
2-14 corporation governed by this section and dissolve as provided by
2-15 this Act.
2-16 (c) Board of Directors and Governance. The board of
2-17 directors of a corporation under this section consists of seven
2-18 directors who are appointed by the governing body of the eligible
2-19 city for two-year terms of office. A director may be removed by
2-20 the governing body of the eligible city at any time without cause.
2-21 Each director must be a resident of the eligible city. At least
2-22 three directors shall be persons who are not employees, officers,
2-23 or members of the governing body of the eligible city. A majority
2-24 of the entire membership of the board is a quorum. The board shall
2-25 conduct all meetings within the boundaries of the eligible city.
2-26 The board shall appoint a president, a secretary, and other
2-27 officers of the corporation that the governing body of the eligible
3-1 city considers necessary. The corporation's registered agent must
3-2 be an individual resident of the state and the corporation's
3-3 registered office must be within the boundaries of the eligible
3-4 city. A corporation created before September 1, 1995, that has a
3-5 board of directors consisting of five directors continues to have a
3-6 five-member board unless the governing body of the eligible city
3-7 establishes a seven-member board.
3-8 (d)(1) Authority to Levy Sales Tax. The governing body of
3-9 an eligible city by ordinance may levy a sales and use tax for the
3-10 benefit of the corporation under this section if the tax is
3-11 authorized by a majority of the qualified voters of the eligible
3-12 city voting at an election called and held for that purpose in
3-13 accordance with Chapter 321, Tax Code. This election requirement
3-14 is satisfied and another election is not required if the voters of
3-15 the eligible city approved the levy and collection of an additional
3-16 one-half cent sales and use tax at an election held before March
3-17 28, 1991, under an ordinance calling the election that was
3-18 published in a newspaper of general circulation within the eligible
3-19 city at least 14 days in advance of the election and that expressly
3-20 stated that the election was held in anticipation of the enactment
3-21 of enabling and implementing legislation without further elections.
3-22 (2) Imposition and Rate of Sales Tax. If an eligible
3-23 city adopts the tax, a tax is imposed on the receipts from the sale
3-24 at retail of taxable items within the eligible city at the rate
3-25 approved at the election. The rate of a tax adopted under this
3-26 section must be one-eighth, one-fourth, three-eighths, or one-half
3-27 of one percent. The rate adopted may not result in a combined rate
4-1 of all sales and use taxes, including the tax under this section,
4-2 imposed by the city and other political subdivisions of this state
4-3 having territory in the city that exceeds two percent. An election
4-4 adopting a rate that exceeds the limit on the combined rate has no
4-5 effect. There is also imposed an excise tax on the use, storage,
4-6 or other consumption within the city of taxable items purchased,
4-7 leased, or rented from a retailer during the period that the tax is
4-8 effective within the city. The rate of the excise tax is the same
4-9 as the rate of the sales tax portion of the tax and is applied to
4-10 the sales price of the taxable items.
4-11 (3) Application of Chapter 321, Tax Code. Chapter
4-12 321, Tax Code (Municipal Sales and Use Tax Act) governs an election
4-13 to authorize the imposition of the sales and use tax under this
4-14 section and governs the imposition, computation, administration,
4-15 governance, abolition, and use of the tax except as inconsistent
4-16 with this section. If an election is held under this section at
4-17 the same time an election is held to impose or change the rate of
4-18 the additional municipal sales and use tax, the tax under this
4-19 section takes effect, at the option of the city, as provided by
4-20 Section 321.102(a) or (b), Tax Code, and the imposition or change
4-21 in rate of the additional municipal sales and use tax takes effect
4-22 as provided by Section 321.102(b), Tax Code. After the effective
4-23 date of the taxes imposed under this section, the adoption of a
4-24 sales and use tax or the attempted adoption of a sales and use tax
4-25 by the eligible city or any other taxing jurisdiction having
4-26 territory in the city does not impair the taxes imposed under this
4-27 section.
5-1 (e)(1) Ballot Proposition -- General. In an election to
5-2 adopt the tax under this section, the ballot shall be printed to
5-3 provide for voting for or against the proposition: "The adoption of
5-4 a sales and use tax for the promotion and development of new and
5-5 expanded business enterprises at the rate of _______ of one
5-6 percent" (one-eighth, one-fourth, three-eighths, or one-half to be
5-7 inserted as appropriate).
5-8 (2) Ballot Proposition -- Time Limit. At an election
5-9 called and held under Subsection (d) of this section, the city may
5-10 also allow the voters to vote on a ballot proposition that limits
5-11 the length of time that a sales and use tax may be imposed. If a
5-12 city elects to limit the period the sales and use tax may be
5-13 imposed, there shall be added to the end of the ballot proposition
5-14 prescribed by Subdivision (1) of this subsection: "to be imposed
5-15 for _____ years" (the number of years to be inserted as
5-16 appropriate). The governing body of the city shall set the
5-17 expiration date of the proposed tax to occur on the appropriate
5-18 anniversary of the effective date of the tax. A sales and use tax
5-19 imposed for a limited period under this subsection expires on the
5-20 date set by the governing body under this section or on an earlier
5-21 date if the tax is repealed by a majority of the voters voting in
5-22 an election held in the city. If an earlier abolition election is
5-23 held, Sections 321.102(a) and 321.402(b), Tax Code, apply to the
5-24 date of repeal. A tax that is approved without a limit on its
5-25 period of imposition is effective until repealed by election.
5-26 Before the 90th day before the date that a tax is to expire, the
5-27 governing body shall send a notice to the comptroller stating the
6-1 expiration date of the tax. Revenue collected after the expiration
6-2 of the tax from the imposition of the tax after its expiration date
6-3 shall be forwarded by the state to the governing body to be used to
6-4 pay current bonded indebtedness of the municipality. A
6-5 municipality that has imposed a tax under this section may not
6-6 extend the period of the tax's imposition and may not reimpose the
6-7 tax after its expiration date unless the reimposition of the tax is
6-8 approved by a majority of the qualified voters of the city voting
6-9 at an election called and held for that purpose in accordance with
6-10 Chapter 321, Tax Code. If a city reduces the rate of an additional
6-11 sales and use tax under Chapter 321, Tax Code, to impose a tax
6-12 under this section for a limited period as provided under this
6-13 subsection, and does not have an election to change the rate of the
6-14 additional sales and use tax before the expiration date of the tax
6-15 under this section, on the expiration date of the tax under this
6-16 section the rate of the additional sales and use tax under Section
6-17 321.101(b), Tax Code, returns, without an election under Chapter
6-18 321, Tax Code, to its previous rate in effect when the tax imposed
6-19 under this section was adopted.
6-20 (3) Ballot Proposition--Reduce or Increase Tax Rate.
6-21 A city in which a sales and use tax has been imposed under this
6-22 section may reduce or increase the tax by majority vote of the
6-23 qualified voters of the city voting at an election called and held
6-24 for the purpose in the same manner as an election to impose the
6-25 tax. The rate may be reduced in one or more increments of
6-26 one-eighth of one percent to a minimum of one-eighth of one percent
6-27 or increased in one or more increments of one-eighth of one percent
7-1 to a maximum of one-half of one percent. On petition of 10 percent
7-2 or more of the registered voters of the city requesting an election
7-3 on the increase or decrease of the tax under this section, the
7-4 governing body of the city shall order an election on the issue.
7-5 The ballot shall be printed in the same manner as the ballot under
7-6 Subdivision (1) of this subsection.
7-7 (4) Ballot Proposition--Combine with Reduction in
7-8 Property Tax. A city that is authorized by this section to impose,
7-9 reduce, increase, or abolish the tax under this section may, at the
7-10 same time and on the same ballot, impose, reduce, increase, or
7-11 abolish the additional sales and use tax imposed under Section
7-12 321.101(b), Tax Code, if the city is authorized by Chapter 321, Tax
7-13 Code, to impose, reduce, increase, or abolish the additional sales
7-14 and use tax. To do so, the city must follow the procedures of
7-15 Chapter 321, Tax Code, except that in an election to impose,
7-16 reduce, increase, or abolish the tax under this section and the
7-17 additional sales and use tax the ballot shall be printed to provide
7-18 for voting for or against the proposition: "The adoption of a sales
7-19 and use tax within the city for the promotion and development of
7-20 new and expanded business enterprises at the rate of _____ of one
7-21 percent (one-eighth, one-fourth, three-eighths, or one-half to be
7-22 inserted as appropriate) and the adoption of an additional sales
7-23 and use tax within the city at the rate of _____ of one percent to
7-24 be used to reduce the property tax rate" (one-eighth, one-fourth,
7-25 three-eighths, or one-half to be inserted as appropriate).
7-26 (f)(1) Dissolution of Corporation. By order of the city's
7-27 governing body, or on petition of 10 percent or more of the
8-1 registered voters of the city requesting an election on the
8-2 dissolution of the corporation, the governing body shall order an
8-3 election on the dissolution of the corporation at the next
8-4 available uniform election date that is not less than 45 days after
8-5 the date that the order is issued or the petition is filed. The
8-6 election must be conducted according to the applicable provisions
8-7 of the Election Code.
8-8 (2) Ballot Proposition for Dissolution Election. The
8-9 ballot for the election shall be printed to provide for voting for
8-10 or against the proposition: "Dissolution of the _______ (name of
8-11 the corporation)." If a majority of voters voting on the issue
8-12 approve the dissolution, the corporation shall continue operations
8-13 only as necessary to pay the principal of and interest on its bonds
8-14 and to meet obligations incurred before the date of the election
8-15 and, to the extent practicable, shall dispose of its assets and
8-16 apply the proceeds to satisfy those obligations. When the last of
8-17 the obligations is satisfied, any remaining assets of the
8-18 corporation shall be transferred to the city, and the corporation
8-19 is dissolved. A tax imposed under this section may not be
8-20 collected after the last day of the first calendar quarter
8-21 beginning after notification to the comptroller by the corporation
8-22 that the last of its obligations is satisfied.
8-23 (g)(1) Authorized Use of Sales Tax Proceeds. On receipt of
8-24 the proceeds of the sales and use tax imposed under this section
8-25 from the comptroller, the eligible city shall deliver the proceeds
8-26 to the corporation. Tax proceeds may be used to pay the costs of a
8-27 project authorized by this section.
9-1 (2) Definition of Authorized Project. In this
9-2 section, "project" means the land, buildings, equipment,
9-3 facilities, and improvements found by the board of directors to be
9-4 required or suitable for the development and expansion of
9-5 manufacturing facilities, industrial facilities, warehouse
9-6 facilities, distribution centers, recycling facilities, general
9-7 aviation business service airports that are an integral part of an
9-8 industrial park, and port-related facilities to support waterborne
9-9 commerce.
9-10 (3) Improvements Ancillary to Project. A project
9-11 includes the cost of transportation facilities, water supply
9-12 facilities, sewage or solid waste disposal facilities, air or water
9-13 pollution control facilities, and other improvements ancillary and
9-14 directly beneficial to a project. Except as provided by Section
9-15 4B of this Act, a corporation may not use revenues from the sales
9-16 tax authorized under this section for a project the primary purpose
9-17 of which is to provide transportation facilities, water supply
9-18 facilities, air or water pollution control facilities, or other
9-19 municipal facilities for the benefit of the general public.
9-20 (4) Project Debt Service Costs. A project includes
9-21 any payments toward the principal of, interest on, and other costs
9-22 relating to bonds or other obligations issued by the corporation to
9-23 pay the costs of a project or to refund bonds or other obligations
9-24 issued to pay the cost of a project. The bonds or any instrument
9-25 related to the bonds may not give a bondholder a right to demand
9-26 payment from tax proceeds in excess of those collected from the tax
9-27 imposed by this section.
10-1 (5) Authorization Limited to Specific Project. At an
10-2 election called or held under Subsection (d) of this section, the
10-3 city may also allow the voters to vote on a ballot proposition that
10-4 limits the use of the sales and use tax to a specific project
10-5 authorized by this subsection. If a city elects to limit the use
10-6 to a specific project, in the ballot proposition prescribed by
10-7 Subsection (e) of this section a description of the project shall
10-8 be substituted in place of the words "new and expanded business
10-9 enterprises." When the last of its obligations for the specific
10-10 project have been satisfied, the corporation shall send a notice to
10-11 the comptroller stating that the sales and use tax imposed for the
10-12 specific project may not be collected after the last day of the
10-13 first calendar quarter beginning after the date of notification. A
10-14 sales and use tax imposed for a specific project under this
10-15 subsection may not be collected after the last day of the first
10-16 calendar quarter beginning after the date of the notification to
10-17 the comptroller. Revenue collected after the obligations for the
10-18 specific project have been satisfied shall be forwarded by the
10-19 state to the governing body to be used to pay current bonded
10-20 indebtedness of the municipality. A corporation that has been
10-21 created to perform a specific project under this subsection may
10-22 remain in existence and perform other projects approved by the
10-23 voters of the city under an election called and held under
10-24 Subsection (d) of this section.
10-25 (6) Assumption of PreExisting Debt. A corporation
10-26 under this section may not assume a debt or make any expenditure to
10-27 pay principal or interest on a debt if the debt existed before the
11-1 date the city created the corporation.
11-2 (h) Eminent Domain. A corporation may exercise the power
11-3 of eminent domain only on approval of the action by the governing
11-4 body of the eligible city. The power must be exercised in
11-5 accordance with and subject to the laws applicable to the eligible
11-6 city.
11-7 (i) Governmental Immunity under Tort Claims Act. The
11-8 corporation, a director of the corporation, the city creating the
11-9 corporation, a member of the governing body of the city, or an
11-10 employee of the corporation or city is not liable for damages
11-11 arising from the performance of a governmental function of the
11-12 corporation or city. For the purposes of Subchapter A, Chapter
11-13 101, Civil Practice and Remedies Code (Texas Tort Claims Act), the
11-14 corporation is a governmental unit and its actions are governmental
11-15 functions.
11-16 (j) Ownership of Projects under Tax Code. The legislature
11-17 finds for all constitutional and statutory purposes that projects
11-18 undertaken under this section are owned, used, and held for public
11-19 purposes for and on behalf of the eligible city incorporating the
11-20 corporation, and Section 23(b) of this Act and Section 25.07(a),
11-21 Tax Code, do not apply to leasehold or other possessory interests
11-22 granted by the corporation during the period projects are owned by
11-23 the corporation on behalf of the eligible city. Projects are
11-24 exempt from taxation under Section 11.11, Tax Code, for that
11-25 period.
11-26 (k) Section 24 Applicability. Section 24 of this Act does
11-27 not apply to a corporation under this section.
12-1 Sec. 4B. Authorization to Levy Sales Tax for Other Than
12-2 Industrial Development. (a) ELECTION. A city that creates a
12-3 corporation under Section 4A of this Act may submit to the voters
12-4 of the city, at a separate election or at an election held under
12-5 another provision of this Act, a ballot proposition that authorizes
12-6 the corporation to use the sales and use tax for a specific project
12-7 or for a specific category of projects that does not qualify under
12-8 Section 4A of this Act but qualifies under the expanded project
12-9 definition in Subsection (c) of this section.
12-10 (b) Ballot Proposition--Specific Project or Specific
12-11 Category of Projects. In the election to authorize the use of the
12-12 sales or use tax for a specific project or for a specific category
12-13 of projects not authorized under Section 4A of this Act, the
12-14 project or category of projects must be clearly described on the
12-15 ballot so that the average voter will be able to discern the limits
12-16 that will control the expenditure of the proceeds of the tax. If
12-17 maintenance and operating costs of an otherwise authorized facility
12-18 are to be paid from the sales or use tax, the ballot language must
12-19 clearly state that fact.
12-20 (c)(1) Expanded "Project" Definition. In this section,
12-21 "project" or "category of projects" means land, buildings,
12-22 equipment, facilities, and improvements described by Subdivisions
12-23 (2) and (3) of this subsection.
12-24 (2) Municipal Facilities. Municipal facility projects
12-25 are land, buildings, equipment, facilities, and improvements found
12-26 by the board of directors to be required or suitable for use for:
12-27 (A) professional and amateur (including
13-1 children's) sports, athletic, entertainment, tourist, convention,
13-2 and public park purposes and events, including stadiums, ball
13-3 parks, auditoriums, amphitheaters, concert halls, learning centers,
13-4 parks, park facilities, open space improvements, municipal
13-5 buildings, museums, exhibition facilities, and related store,
13-6 restaurant, concession, and automobile parking facilities;
13-7 (B) related area transportation facilities;
13-8 (C) related roads, streets, and water and sewer
13-9 facilities; and
13-10 (D) other related improvements that enhance any
13-11 of those items.
13-12 (3) Expanded Business Enterprises. Expanded business
13-13 enterprise projects are land, buildings, equipment, facilities, and
13-14 improvements found by the board of directors to promote or develop
13-15 new or expanded business enterprises, including a project to
13-16 provide public safety facilities, streets and roads, drainage and
13-17 related improvements, demolition of existing structures, general
13-18 municipally owned improvements, and any improvements or facilities
13-19 that are related to any of those projects.
13-20 (d) SPECIFIC PROJECT UNDER GENERAL AUTHORITY. If a
13-21 corporation has previously held an election authorizing a category
13-22 of projects, the corporation may undertake a project of the general
13-23 type described by the category unless within 60 days after the date
13-24 of first publishing notice of the project the governing body of the
13-25 city receives a petition signed by more than 10 percent of the
13-26 registered voters of the city requesting that an election be held
13-27 before that specific project is undertaken. If such a petition is
14-1 submitted, the corporation may undertake the project only if the
14-2 specific project is approved at a subsequent election.
14-3 (e)(1) Previous Election in Certain Cities. An election
14-4 under Section 4A(d) of this Act is not required to carry out a
14-5 project under this section in a city that is located in a county
14-6 with a population in excess of 750,000 if a sales and use tax was
14-7 approved under this section at an election held before February 1,
14-8 1993.
14-9 (2) Bond Requirements. In a city to which
14-10 Subdivision (1) of this section applies, bonds or other obligations
14-11 having a maturity not longer than 30 years and issued to pay the
14-12 costs of projects of the types authorized by this section may be
14-13 made payable from any source of funds available to the corporation,
14-14 including the proceeds of a sales and use tax imposed under this
14-15 section. The sum of the principal amount of bonds and other
14-16 obligations that by their terms are payable in whole or in part
14-17 from the sales and use tax plus the amount of the costs of the
14-18 projects, other than interest on bonds and other obligations, for
14-19 which payment is made in cash directly from the proceeds of the tax
14-20 may not exceed $135 million. The bonds or other obligations that
14-21 by their terms are payable from the tax may not be paid in whole or
14-22 part from property taxes raised by the eligible city, are not a
14-23 debt of the eligible city, and do not give rise to a claim for
14-24 payment against the eligible city except as to sales and use tax
14-25 revenue held by a city and required under this section to be paid
14-26 over to the corporation.
14-27 (3) Expiration of Sales and Use Tax. In a city to
15-1 which Subdivision (1) of this subsection applies, a sales and use
15-2 tax imposed for a project under this section may not be collected
15-3 after the last day of the first calendar quarter occurring after
15-4 notification to the comptroller by the corporation that all bonds
15-5 or other obligations of the corporation that are payable in whole
15-6 or in part from the proceeds of the sales and use tax under this
15-7 section, including any refunding bonds or other obligations, have
15-8 been paid in full or the full amount of money, exclusive of
15-9 guaranteed interest, necessary to pay in full the bonds and other
15-10 obligations has been set aside in a trust account dedicated to the
15-11 payment of the bonds and other obligations.
15-12 <Sec. 4A. (a) This section applies only to a city:>
15-13 <(1) located in a county with a population of 500,000
15-14 or fewer according to the most recent federal decennial census; or>
15-15 <(2) with a population of fewer than 50,000 according
15-16 to the most recent federal decennial census that:>
15-17 <(A) is located in two or more counties, one of
15-18 which has a population of 500,000 or greater according to the most
15-19 recent federal decennial census;>
15-20 <(B) is located within the territorial limits
15-21 but has not elected to become a part of a metropolitan rapid
15-22 transit authority that has a principal city with a population of
15-23 less than 1.2 million according to the most recent federal
15-24 decennial census, with such authority being created before January
15-25 1, 1980, under Chapter 141, Acts of the 63rd Legislature, Regular
15-26 Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes); or>
15-27 <(C) is located within the territorial limits
16-1 but has not elected to become a part of a metropolitan rapid
16-2 transit authority that has a principal city with a population of
16-3 more than 750,000 according to the most recent federal decennial
16-4 census, with such authority being created under Chapter 683, Acts
16-5 of the 66th Legislature, Regular Session, 1979 (Article 1118y,
16-6 Vernon's Texas Civil Statutes).>
16-7 <(b)(1) A city may create a corporation under this Act
16-8 governed by this section. The corporation has the powers and is
16-9 subject to the limitations of a corporation created under other
16-10 provisions of this Act. To the extent of a conflict between this
16-11 section and another provision of this Act, this section prevails.
16-12 The articles of incorporation of a corporation under this section
16-13 must state that the corporation is governed by this section. A
16-14 city may not create more than one corporation governed by this
16-15 section. A corporation created under this section may spend no
16-16 more than 10 percent of the corporate revenues for promotional
16-17 purposes and may contract with other existing private corporations
16-18 to carry out industrial development programs consistent with the
16-19 purposes and duties as set out in this Act.>
16-20 <(2) Notwithstanding Subdivision (1), a corporation
16-21 created under this section may spend no more than 25 percent of the
16-22 corporate revenues for promotional purposes if the corporation was
16-23 created by a city:>
16-24 <(i) the municipal limits of which include
16-25 two counties;>
16-26 <(ii) that has less than 24,250 population
16-27 according to the 1990 federal census; and>
17-1 <(iii) any part of which is located within
17-2 ten miles of a federal military reservation.>
17-3 <(c) The board of directors of a corporation under this
17-4 section consists of five directors who are appointed by the
17-5 governing body of the city and who serve at the pleasure of the
17-6 governing body. A majority of the entire membership of the board
17-7 constitutes a quorum. The board shall conduct each of its meetings
17-8 within the boundaries of the city. The board shall appoint a
17-9 president, a secretary, and other officers of the corporation that
17-10 the governing body of the city considers necessary. The
17-11 corporation's registered agent must be an individual resident of
17-12 the state and the corporation's registered office must be within
17-13 the boundaries of the city.>
17-14 <(d) The city may levy a sales and use tax for the benefit
17-15 of a corporation under this section if the tax is authorized by a
17-16 majority of the qualified voters of the city voting at an election
17-17 called and held for that purpose. If the city adopts the tax,
17-18 there is imposed a tax on the receipts from the sale at retail of
17-19 taxable items within the city at the rate approved by the voters.
17-20 The rate must be equal to one-eighth, one-fourth, three-eighths, or
17-21 one-half of one percent. The city may not adopt a rate that would
17-22 result in a combined rate of all sales and use taxes, including the
17-23 tax under this section, imposed by the city and other political
17-24 subdivisions of this state having territory in the city that
17-25 exceeds two percent. An election adopting a rate that exceeds the
17-26 limit on the combined rate has no effect. There is also imposed an
17-27 excise tax on the use, storage, or other consumption within the
18-1 city of taxable items purchased, leased, or rented from a retailer
18-2 during the period that the tax is effective within the city. The
18-3 rate of the excise tax is the same as the rate of the sales tax
18-4 portion of the tax and is applied to the sales price of the taxable
18-5 items.>
18-6 <(e) The Municipal Sales and Use Tax Act (Chapter 321, Tax
18-7 Code) governs an election to authorize the imposition of the sales
18-8 and use tax under this section and governs the imposition,
18-9 computation, administration, governance, abolition, and use of the
18-10 tax except as inconsistent with this section. If an election is
18-11 held under Subsection (f) of this section at the same time as
18-12 another election under this section and an additional sales and use
18-13 tax under Section 321.101(b), Tax Code, is adopted or repealed or
18-14 its rate is increased or reduced, each tax under this section and
18-15 the imposition or change in the rate of the additional sales and
18-16 use tax takes effect as provided by Section 321.102(b), Tax Code.>
18-17 <(f) On receipt of the proceeds of the sales and use tax
18-18 imposed under this section from the comptroller, the city shall
18-19 deliver the proceeds to the corporation to use in carrying out its
18-20 functions. Tax proceeds may be used to pay the principal of,
18-21 interest on, and other costs relating to the corporation's bonds,
18-22 but neither the bonds nor any instrument related to the bonds may
18-23 give a bondholder a right to demand payment from tax proceeds in
18-24 excess of those collected from the tax imposed by this section.>
18-25 <(g) The corporation may not exercise the power of eminent
18-26 domain except by action of the governing body of the city that
18-27 created the corporation.>
19-1 <(h) Section 24 of this Act does not apply to a corporation
19-2 under this section.>
19-3 <(i) Except as provided by this subsection, the corporation
19-4 may not undertake a project the primary purpose of which is to
19-5 provide transportation facilities, solid waste disposal facilities,
19-6 or air or water pollution control facilities. However, the
19-7 corporation may provide those facilities to benefit property
19-8 acquired for a project having another primary purpose. The
19-9 corporation may undertake a project the primary purpose of which is
19-10 to provide:>
19-11 <(1) a general aviation business service airport that
19-12 is an integral part of an industrial park; or>
19-13 <(2) port-related facilities to support waterborne
19-14 commerce.>
19-15 <(j) The corporation, a director of the corporation, the
19-16 city creating the corporation, a member of the governing body of
19-17 the city, or an employee of the corporation or city is not liable
19-18 for damages arising from the performance of a governmental function
19-19 of the corporation or city. For the purposes of the Texas Tort
19-20 Claims Act (Subchapter A, Chapter 101, Civil Practice and Remedies
19-21 Code), the corporation is a governmental unit and its actions are
19-22 governmental functions.>
19-23 <(k) On petition of 10 percent or more of the registered
19-24 voters of the city requesting an election on the dissolution of the
19-25 corporation, the governing body shall order an election on the
19-26 issue at the next available uniform election date that is not less
19-27 than 45 days after the date that the petition is filed. The
20-1 election must be conducted according to the applicable provisions
20-2 of the Election Code. The ballot for the election shall be printed
20-3 to provide for voting for or against the proposition: "Dissolution
20-4 of the ________________ (name of the corporation)." If a majority
20-5 of voters voting on the issue approve the dissolution, the
20-6 corporation shall continue operations only as necessary to pay the
20-7 principal of and interest on its bonds and to meet obligations
20-8 incurred before the date of the election and, to the extent
20-9 practicable, shall dispose of its assets and apply the proceeds to
20-10 satisfy those obligations. When the last of the obligations is
20-11 satisfied, any remaining assets of the corporation shall be
20-12 transferred to the city, and the corporation is dissolved. A tax
20-13 imposed under this section may not be collected after the last day
20-14 of the first calendar quarter beginning after notification to the
20-15 comptroller by the corporation that the last of its obligations is
20-16 satisfied.>
20-17 <(l) On approval of the governing body of each unit and
20-18 corporation involved, a corporation created under this Act that is
20-19 not created under this section may transfer all of its assets to a
20-20 corporation governed by this section and dissolve as provided by
20-21 this Act.>
20-22 <(m) In an election to adopt the tax under this section, the
20-23 ballot shall be printed to provide for voting for or against the
20-24 proposition: "The adoption of a sales and use tax for the
20-25 promotion and development of new and expanded business enterprises
20-26 at the rate of ________ of one percent" (one-eighth, one-fourth,
20-27 three-eighths, or one-half to be inserted as appropriate).>
21-1 <(n) At an election called and held under Subsection (d) or
21-2 (o) of this section, the city may also allow the voters to vote on
21-3 a ballot proposition that limits the length of time that a sales
21-4 and use tax may be imposed. If a city elects to limit the period
21-5 the sales and use tax may be imposed, there shall be added to the
21-6 end of the ballot proposition prescribed by Subsection (m) of this
21-7 section: "to be imposed for ________ years" (the number of years
21-8 to be inserted as appropriate). The governing body of the city
21-9 shall set the expiration date of the proposed tax to occur on the
21-10 appropriate anniversary of the effective date of the tax. A sales
21-11 and use tax imposed for a limited period under this subsection
21-12 expires on the date set by the governing body under this section or
21-13 on an earlier date if, by a majority of the voters voting in an
21-14 election held in the city, the tax is repealed. If an earlier
21-15 abolition election is held, Sections 321.102(a) and 321.402(b), Tax
21-16 Code, apply to the date of repeal. A tax that is approved without
21-17 a limit on its period of imposition is effective until repealed by
21-18 election. Before the 60th day before the date that a tax is to
21-19 expire, the governing body shall send a notice to the comptroller
21-20 stating the expiration date of the tax. Revenue collected after
21-21 the expiration of the tax from the imposition of the tax after its
21-22 expiration date shall be forwarded by the state to the governing
21-23 body to be used to pay current bonded indebtedness of the
21-24 municipality. A municipality that has imposed a tax under this
21-25 section may not extend the period of the tax's imposition or
21-26 reimpose the tax after its expiration date. If a city reduces the
21-27 rate of an additional sales and use tax under Chapter 321, Tax
22-1 Code, to impose a tax under this section for a limited period as
22-2 provided under this subsection, and does not have an election to
22-3 change the rate of the additional sales and use tax before the
22-4 expiration date of the tax under this section, the rate of the
22-5 additional sales and use tax under Section 321.101(b), Tax Code, in
22-6 the city returns to its previous rate in effect at the time the tax
22-7 imposed under this section was adopted on the expiration date of
22-8 the tax under this section without having to hold an election under
22-9 Chapter 321, Tax Code, to impose the increase in the rate.>
22-10 <(o) In a city in which a sales and use tax for the benefit
22-11 of a corporation has been imposed under this section, in the same
22-12 manner and by the same procedure the city by majority vote of the
22-13 qualified voters of the city voting at an election called and held
22-14 for the purpose may reduce or increase the tax. The rate may be
22-15 reduced in one or more increments of one-eighth of one percent to a
22-16 minimum of one-eighth of one percent or increased in one or more
22-17 increments of one-eighth of one percent to a maximum of one-half of
22-18 one percent. On petition of 10 percent or more of the registered
22-19 voters of the city requesting an election on the increase or
22-20 decrease of the tax under this section, the governing body of the
22-21 city shall order an election on the issue. The ballot shall be
22-22 printed in the same manner as the ballot under Subsection (m) of
22-23 this section.>
22-24 <(p) A city that is authorized by this section to impose,
22-25 reduce, increase, or abolish the tax under this section may, at the
22-26 same time and on the same ballot, impose, reduce, increase, or
22-27 abolish the additional sales and use tax imposed under Section
23-1 321.101(b), Tax Code, if the city is authorized by Chapter 321, Tax
23-2 Code, to impose, reduce, increase, or abolish the additional sales
23-3 and use tax. The city must follow, in relation to the imposition,
23-4 reduction, increase, or abolishment of the additional sales and use
23-5 tax imposed under Section 321.101(b), Tax Code, the procedures of
23-6 that chapter, except that in an election to impose, reduce,
23-7 increase, or abolish the tax under this section and the additional
23-8 sales and use tax the ballot shall be printed to provide for voting
23-9 for or against the proposition: "The adoption of a sales and use
23-10 tax within the city for the promotion and development of new and
23-11 expanded business enterprises at the rate of __________ of one
23-12 percent (one-eighth, one-fourth, three-eighths, or one-half to be
23-13 inserted as appropriate) and the adoption of an additional sales
23-14 and use tax within the city at the rate of ________ of one percent
23-15 to be used to reduce the property tax rate" (one-eighth,
23-16 one-fourth, three-eighths, or one-half to be inserted as
23-17 appropriate).>
23-18 <(q) A corporation under this section may not assume a debt
23-19 or make any expenditure to pay principal or interest on a debt if
23-20 the debt existed before the date the city created the corporation.>
23-21 <(r) At an election called or held under Subsection (d) or
23-22 (o) of this section, the city may also allow the voters to vote on
23-23 a ballot proposition that limits the use of the sales and use tax
23-24 to a specific project. If a city elects to limit the use to a
23-25 specific project, in the ballot proposition prescribed by
23-26 Subsection (m) or (p) a description of the project shall be
23-27 substituted in place of the words "new and expanded business
24-1 enterprises." When the last of its obligations for the specific
24-2 project have been satisfied, the corporation shall send a notice to
24-3 the comptroller stating that the sales and use tax imposed for the
24-4 specific project may not be collected after the last day of the
24-5 first calendar quarter beginning after the date of notification. A
24-6 sales and use tax imposed for a specific project under this
24-7 subsection may not be collected after the last day of the first
24-8 calendar quarter beginning after the date of the notification to
24-9 the comptroller. Revenue collected after the obligations for the
24-10 specific project have been satisfied shall be forwarded by the
24-11 state to the governing body to be used to pay current bonded
24-12 indebtedness of the municipality. A corporation that has been
24-13 created to perform a specific project under this subsection may
24-14 retain its corporate existence and perform other projects as may be
24-15 approved by the voters of the city under an election called and
24-16 held under Subsection (d) or (o) of this section.>
24-17 <Sec. 4B. (a) In this section:>
24-18 <(1) "Eligible city" means a city:>
24-19 <(A) that is located in a county with a
24-20 population of 750,000 or more, according to the most recent federal
24-21 decennial census and in which the combined rate of all sales and
24-22 use taxes imposed by the city, the state, and other political
24-23 subdivisions of the state having territory in the city does not
24-24 exceed 7.25 percent on the date of any election held under or made
24-25 applicable to this section;>
24-26 <(B) that has a population of 400,000 or more,
24-27 according to the most recent federal decennial census, and that is
25-1 located in more than one county, and in which the combined rate of
25-2 all sales and use taxes imposed by the city, the state, and other
25-3 political subdivisions of the state having territory in the city,
25-4 including taxes under this section, does not exceed 8.25 percent;
25-5 or>
25-6 <(C) to which Section 4A of this Act applies.>
25-7 <(2) "Project" means land, buildings, equipment,
25-8 facilities, and improvements included in the definition of that
25-9 term under Section 2 of this Act, including recycling facilities,
25-10 and land, buildings, equipment, facilities, and improvements found
25-11 by the board of directors to:>
25-12 <(A) be required or suitable for use for
25-13 professional and amateur (including children's) sports, athletic,
25-14 entertainment, tourist, convention, and public park purposes and
25-15 events, including stadiums, ball parks, auditoriums, amphitheaters,
25-16 concert halls, learning centers, parks and park facilities, open
25-17 space improvements, municipal buildings, museums, exhibition
25-18 facilities, and related store, restaurant, concession, and
25-19 automobile parking facilities, related area transportation
25-20 facilities, and related roads, streets, and water and sewer
25-21 facilities, and other related improvements that enhance any of
25-22 those items; or>
25-23 <(B) promote or develop new or expanded business
25-24 enterprises, including a project to provide public safety
25-25 facilities, streets and roads, drainage and related improvements,
25-26 demolition of existing structures, general municipally owned
25-27 improvements, as well as any improvements or facilities that are
26-1 related to any of those projects and any other project that the
26-2 board in its discretion determines promotes or develops new or
26-3 expanded business enterprises.>
26-4 <(a-1) A corporation may undertake a project under this
26-5 section unless within 60 days after first publishing notice of a
26-6 specific project or type of general project the governing body of
26-7 the city receives a petition from more than 10 percent of the
26-8 registered voters of the city where the petition requests that an
26-9 election be held before that specific project or that general type
26-10 of project is undertaken. An election is not required to be held
26-11 after the submission of a petition if the qualified citizens of the
26-12 city have previously approved the undertaking of a specific project
26-13 or that general type of project at an election called for that
26-14 purpose by the governing body of the city or in conjunction with
26-15 another election required to be held under this section.>
26-16 <(a-2) The costs of a publicly owned and operated project
26-17 that is purchased or constructed under this section include the
26-18 maintenance and operating costs of the project, and the proceeds of
26-19 taxes may be used to pay the maintenance and operating costs of a
26-20 project, unless within 60 days after first publishing notice of
26-21 this specific use of the proceeds of the taxes the governing body
26-22 of the city receives a petition from more than 10 percent of the
26-23 registered voters of the city where the petition requests that an
26-24 election be held before the proceeds of taxes imposed under this
26-25 section may be used to pay the maintenance and operating costs of a
26-26 project. An election is not required to be held after the
26-27 submission of a petition if the qualified citizens of the city have
27-1 previously approved that the costs of a publicly owned and operated
27-2 project purchased or constructed under this section include the
27-3 maintenance and operating costs of the project and that the
27-4 proceeds of taxes may be used to pay the maintenance and operating
27-5 costs of a project, at an election called for that purpose by the
27-6 governing body of the city or in conjunction with another election
27-7 required to be held under this section. The election in this
27-8 subsection shall not be required in a municipality located in a
27-9 county with a population in excess of 750,000 that has held an
27-10 election prior to February 1, 1993, under this section and at which
27-11 election the additional sales tax was approved.>
27-12 <(b) An eligible city may create a corporation under this
27-13 Act governed by this section. The corporation has the powers
27-14 granted by this section and by other sections of this Act and is
27-15 subject to the limitations of a corporation created under other
27-16 provisions of this Act. To the extent of a conflict between this
27-17 section and another provision of this Act, this section prevails.
27-18 The articles of incorporation of a corporation under this section
27-19 must state that the corporation is governed by this section and may
27-20 include within its name any words and phrases specified by the
27-21 eligible city. An eligible city may not create more than one
27-22 corporation governed by this section.>
27-23 <(c) The board of directors of a corporation under this
27-24 section consists of seven directors who are appointed by the
27-25 governing body of the eligible city for two-year terms of office.
27-26 A director may be removed by the governing body of the eligible
27-27 city at any time without cause. Each director must be a resident
28-1 of the eligible city. Three directors shall be persons who are not
28-2 employees, officers, or members of the governing body of the
28-3 eligible city. A majority of the entire membership of the board is
28-4 a quorum. The board shall conduct all meetings within the
28-5 boundaries of the eligible city. The board shall appoint a
28-6 president, a secretary, and other officers of the corporation that
28-7 the governing body of the eligible city considers necessary. The
28-8 corporation's registered agent must be an individual resident of
28-9 the state and the corporation's registered office must be within
28-10 the boundaries of the eligible city.>
28-11 <(d) The governing body of an eligible city by ordinance may
28-12 levy a sales and use tax for the benefit of the corporation under
28-13 this section if the tax is authorized by a majority of the
28-14 qualified voters of the eligible city voting at an election called
28-15 and held for that purpose in accordance with Chapter 321, Tax Code.
28-16 This election requirement is satisfied and another election is not
28-17 required if the voters of the eligible city approved the levy and
28-18 collection of an additional one-half cent sales and use tax at an
28-19 election held before the effective date of this section under an
28-20 ordinance calling the election that was published in a newspaper of
28-21 general circulation within the eligible city at least 14 days in
28-22 advance of the election and that expressly stated that the election
28-23 was held in anticipation of the enactment of enabling and
28-24 implementing legislation without further elections. An election
28-25 described by this section and held before the effective date of
28-26 this section is validated as of the date on which the election
28-27 occurred.>
29-1 <(e) The rate of a tax adopted under this section must be
29-2 one-eighth, one-fourth, three-eighths, or one-half of one percent.
29-3 The ballot proposition at the election held to adopt the tax must
29-4 specify the rate of the tax to be adopted. A corporation that
29-5 holds an election to reduce a tax imposed under Section 4A of this
29-6 Act may in a separate proposition on the same ballot adopt a tax
29-7 under this section. If an eligible city adopts the tax, a tax is
29-8 imposed on the receipts from the sale at retail of taxable items
29-9 within the eligible city at a rate approved by the governing body
29-10 of the eligible city. The rate must be equal to one-eighth,
29-11 one-fourth, three-eighths, or one-half of one percent. There is
29-12 also imposed an excise tax on the use, storage, or other
29-13 consumption within the eligible city of tangible personal property
29-14 purchased, leased, or rented from a retailer during the period that
29-15 the tax is effective within the eligible city. The rate of the
29-16 excise tax is the same as the rate of the sales tax portion of the
29-17 tax and is applied to the sale price of the tangible personal
29-18 property.>
29-19 <(f) Chapter 321, Tax Code, governs the imposition,
29-20 computation, administration, collection, and remittance of the tax
29-21 except as inconsistent with this section. The tax imposed under
29-22 this section takes effect as provided by Section 321.102(a), Tax
29-23 Code. If, however, an election is held under this section at the
29-24 same time an election is held to impose or change the rate of the
29-25 additional municipal sales and use tax, the tax under this section
29-26 and the imposition or change in rate of the additional municipal
29-27 sales and use tax take effect as provided by Section 321.102(b),
30-1 Tax Code. After the effective date of the taxes imposed under this
30-2 section, the adoption of a sales and use tax or the attempted
30-3 adoption of a sales and use tax by the eligible city or any other
30-4 taxing jurisdiction having territory in the city does not impair
30-5 the taxes imposed under this section.>
30-6 <(g) On receipt of the proceeds of the sales and use tax
30-7 imposed under this section from the comptroller, the eligible city
30-8 shall deliver the proceeds to the corporation. Tax proceeds may be
30-9 used to:>
30-10 <(1) pay the costs of projects of the types added to
30-11 the definition of that term by Subsection (a) of this section; or>
30-12 <(2) pay the principal of, interest on, and other
30-13 costs relating to bonds or other obligations issued by the
30-14 corporation to pay the costs of the projects or to refund bonds or
30-15 other obligations issued to pay the costs of projects.>
30-16 <(h) Bonds or other obligations having a maturity not longer
30-17 than 30 years and issued to pay the costs of projects of the types
30-18 added to the definition of that term by Subsection (a) of this
30-19 section may be made payable from any source of funds available to
30-20 the corporation, including the proceeds of a sales and use tax
30-21 imposed under this section. The principal amount of bonds and
30-22 other obligations that by their terms are payable in whole or in
30-23 part from the sales and use tax, together with the amount of the
30-24 costs of the projects, other than interest on bonds and other
30-25 obligations, for which payment is made in cash directly from the
30-26 proceeds of the tax, may not, in the aggregate, exceed $135
30-27 million. The bonds or other obligations that by their terms are
31-1 payable from the tax may not be paid in whole or in part from any
31-2 property taxes raised or to be raised by the eligible city and are
31-3 not a debt of and do not give rise to a claim for payment against
31-4 the eligible city except as to sales and use tax revenue held by a
31-5 city and required under this section to be paid over to the
31-6 corporation.>
31-7 <(i) A sales and use tax imposed under this section may not
31-8 be collected after the last day of the first calendar quarter
31-9 occurring after notification to the comptroller by the corporation
31-10 that all bonds or other obligations of the corporation that are
31-11 payable in whole or in part from the proceeds of the sales and use
31-12 tax under this section, including any refunding bonds or other
31-13 obligations, have been paid in full or the full amount of money,
31-14 exclusive of guaranteed interest, necessary to pay in full the
31-15 bonds and other obligations has been set aside in a trust account
31-16 dedicated to the payment of the bonds and other obligations.>
31-17 <(j) The corporation may exercise the power of eminent
31-18 domain only on approval of the action by the governing body of the
31-19 eligible city. The power must be exercised in accordance with and
31-20 subject to the laws applicable to the eligible city.>
31-21 <(k) The legislature finds for all constitutional and
31-22 statutory purposes that projects of the types added to the
31-23 definition of that term by Subsection (a) of this section are
31-24 owned, used, and held for public purposes for and on behalf of the
31-25 eligible city incorporating the corporation, and Section 23(b) of
31-26 this Act and Section 25.07(a), Tax Code, are not applicable to
31-27 leasehold or other possessory interests granted by the corporation
32-1 during the period projects are owned by the corporation on behalf
32-2 of the eligible city. Projects are exempt from taxation under
32-3 Section 11.11, Tax Code, for that period.>
32-4 <(l) Section 24 of this Act does not apply to a corporation
32-5 under this section.>
32-6 <(m) The corporation, a director of the corporation, the
32-7 eligible city creating the corporation, a member of the governing
32-8 body of the eligible city, or an employee of the corporation or
32-9 eligible city is not liable for damages arising from the
32-10 performance of a governmental function of the corporation or
32-11 eligible city. For the purposes of Chapter 101, Civil Practice and
32-12 Remedies Code, the corporation is a governmental unit and its
32-13 actions are governmental functions.>
32-14 <(n) Before expending funds to undertake a project, a
32-15 corporation under this section shall hold at least one public
32-16 hearing on the proposed project.>
32-17 SECTION 2. (a) A corporation created before the effective
32-18 date of this Act under Section 4A or 4B, Development Corporation
32-19 Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes),
32-20 continues to exist on and after the effective date of this Act as
32-21 if the corporation were created under Section 4A, Development
32-22 Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil
32-23 Statutes), as amended by this Act. The city that created the
32-24 corporation may continue to collect any tax authorized for the
32-25 benefit of the corporation before the effective date of this Act,
32-26 and the corporation may continue to undertake any project
32-27 authorized for the corporation before the effective date of this
33-1 Act. The tax and project are subject to the same restrictions
33-2 applicable under Sections 4A and 4B as those sections existed
33-3 immediately before the effective date of this Act. A tax
33-4 authorized for the corporation or project undertaken by the
33-5 corporation on or after the effective date of this Act is governed
33-6 by Sections 4A and 4B as those sections are amended by this Act.
33-7 (b) Before January 1, 1996, the articles of incorporation of
33-8 a corporation created before the effective date of this Act under
33-9 Section 4B, Development Corporation Act of 1979 (Article 5190.6,
33-10 Vernon's Texas Civil Statutes), as it existed before amendment by
33-11 this Act, shall be amended to state that the corporation is
33-12 governed by Section 4A of that Act.
33-13 SECTION 3. The importance of this legislation and the
33-14 crowded condition of the calendars in both houses create an
33-15 emergency and an imperative public necessity that the
33-16 constitutional rule requiring bills to be read on three several
33-17 days in each house be suspended, and this rule is hereby suspended,
33-18 and that this Act take effect and be in force from and after its
33-19 passage, and it is so enacted.