1-1 By: Ratliff S.B. No. 1642
1-2 (In the Senate - Filed April 5, 1995; April 6, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 12, 1995, reported favorably, as amended, by the following
1-5 vote: Yeas 7, Nays 0; April 12, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Patterson
1-7 Amend S.B. No. 1642 by adding the following new section and
1-8 renumbering subsequent sections as appropriate.
1-9 SECTION 2. All acts and procedures of a municipality in
1-10 calling and holding an industrial development sales tax election
1-11 under authority of Section 4B, Development Corporation Act of 1979
1-12 (Article 5190.6, Vernon's Texas Civil Statutes), on a nonuniform
1-13 election date before January 1, 1995, declaring the results
1-14 thereof, and declaring the purpose for which the sales tax proceeds
1-15 authorized at such an election may be used, are validated as of the
1-16 dates on which they occurred.
1-17 A BILL TO BE ENTITLED
1-18 AN ACT
1-19 relating to industrial development corporations created by certain
1-20 cities.
1-21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-22 SECTION 1. Sections 4A and 4B, Development Corporation Act
1-23 of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are
1-24 amended to read as follows:
1-25 Sec. 4A. AUTHORIZATION TO LEVY SALES TAX FOR INDUSTRIAL
1-26 DEVELOPMENT. (a) ELIGIBLE CITY. In this section, "eligible city"
1-27 means a city that is not at the time it creates a corporation under
1-28 this section, and has not previously been, included within the
1-29 boundaries of an authority under:
1-30 (1) Chapter 141, Acts of the 63rd Legislature, Regular
1-31 Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes);
1-32 (2) Chapter 683, Acts of the 66th Legislature, 1979
1-33 (Article 1118y, Vernon's Texas Civil Statutes); or
1-34 (3) Article 1118z, Revised Statutes.
1-35 (b)(1) CREATION OF CORPORATION. An eligible city may create
1-36 a corporation under this Act governed by this section. The
1-37 corporation has the powers and is subject to the limitations of a
1-38 corporation created under other provisions of this Act. To the
1-39 extent of a conflict between this section and another provision of
1-40 this Act, this section prevails. The articles of incorporation of
1-41 a corporation under this section must state that the corporation is
1-42 governed by this section and may include within its name any words
1-43 and phrases specified by the eligible city. A city may not create
1-44 more than one corporation governed by this section.
1-45 (2) Spending for Promotion. A corporation created
1-46 under this section may spend no more than 10 percent of its
1-47 revenues for promotional purposes and may contract with other
1-48 existing private corporations to carry out industrial development
1-49 programs consistent with the purposes and duties provided by this
1-50 Act.
1-51 (3) Transfer of Assets from Corporation Created Under
1-52 this Act. On approval of the governing body of each unit and
1-53 corporation involved, a corporation created under this Act that is
1-54 not created under this section may transfer all of its assets to a
1-55 corporation governed by this section and dissolve as provided by
1-56 this Act.
1-57 (c) Board of Directors and Governance. The board of
1-58 directors of a corporation under this section consists of seven
1-59 directors who are appointed by the governing body of the eligible
1-60 city for two-year terms of office. A director may be removed by
1-61 the governing body of the eligible city at any time without cause.
1-62 Each director must be a resident of the eligible city. At least
1-63 three directors shall be persons who are not employees, officers,
1-64 or members of the governing body of the eligible city. A majority
1-65 of the entire membership of the board is a quorum. The board shall
1-66 conduct all meetings within the boundaries of the eligible city.
1-67 The board shall appoint a president, a secretary, and other
1-68 officers of the corporation that the governing body of the eligible
2-1 city considers necessary. The corporation's registered agent must
2-2 be an individual resident of the state and the corporation's
2-3 registered office must be within the boundaries of the eligible
2-4 city. A corporation created before September 1, 1995, that has a
2-5 board of directors consisting of five directors continues to have a
2-6 five-member board unless the governing body of the eligible city
2-7 establishes a seven-member board.
2-8 (d)(1) Authority to Levy Sales Tax. The governing body of
2-9 an eligible city by ordinance may levy a sales and use tax for the
2-10 benefit of the corporation under this section if the tax is
2-11 authorized by a majority of the qualified voters of the eligible
2-12 city voting at an election called and held for that purpose in
2-13 accordance with Chapter 321, Tax Code. This election requirement
2-14 is satisfied and another election is not required if the voters of
2-15 the eligible city approved the levy and collection of an additional
2-16 one-half cent sales and use tax at an election held before March
2-17 28, 1991, under an ordinance calling the election that was
2-18 published in a newspaper of general circulation within the eligible
2-19 city at least 14 days in advance of the election and that expressly
2-20 stated that the election was held in anticipation of the enactment
2-21 of enabling and implementing legislation without further elections.
2-22 (2) Imposition and Rate of Sales Tax. If an eligible
2-23 city adopts the tax, a tax is imposed on the receipts from the sale
2-24 at retail of taxable items within the eligible city at the rate
2-25 approved at the election. The rate of a tax adopted under this
2-26 section must be one-eighth, one-fourth, three-eighths, or one-half
2-27 of one percent. The rate adopted may not result in a combined rate
2-28 of all sales and use taxes, including the tax under this section,
2-29 imposed by the city and other political subdivisions of this state
2-30 having territory in the city that exceeds two percent. An election
2-31 adopting a rate that exceeds the limit on the combined rate has no
2-32 effect. There is also imposed an excise tax on the use, storage,
2-33 or other consumption within the city of taxable items purchased,
2-34 leased, or rented from a retailer during the period that the tax is
2-35 effective within the city. The rate of the excise tax is the same
2-36 as the rate of the sales tax portion of the tax and is applied to
2-37 the sales price of the taxable items.
2-38 (3) Application of Chapter 321, Tax Code. Chapter
2-39 321, Tax Code (Municipal Sales and Use Tax Act) governs an election
2-40 to authorize the imposition of the sales and use tax under this
2-41 section and governs the imposition, computation, administration,
2-42 governance, abolition, and use of the tax except as inconsistent
2-43 with this section. If an election is held under this section at
2-44 the same time an election is held to impose or change the rate of
2-45 the additional municipal sales and use tax, the tax under this
2-46 section takes effect, at the option of the city, as provided by
2-47 Section 321.102(a) or (b), Tax Code, and the imposition or change
2-48 in rate of the additional municipal sales and use tax takes effect
2-49 as provided by Section 321.102(b), Tax Code. After the effective
2-50 date of the taxes imposed under this section, the adoption of a
2-51 sales and use tax or the attempted adoption of a sales and use tax
2-52 by the eligible city or any other taxing jurisdiction having
2-53 territory in the city does not impair the taxes imposed under this
2-54 section.
2-55 (e)(1) Ballot Proposition--General. In an election to adopt
2-56 the tax under this section, the ballot shall be printed to provide
2-57 for voting for or against the proposition: "The adoption of a
2-58 sales and use tax for the promotion and development of new and
2-59 expanded business enterprises at the rate of _______ of one
2-60 percent" (one-eighth, one-fourth, three-eighths, or one-half to be
2-61 inserted as appropriate).
2-62 (2) Ballot Proposition--Time Limit. At an election
2-63 called and held under Subsection (d) of this section, the city may
2-64 also allow the voters to vote on a ballot proposition that limits
2-65 the length of time that a sales and use tax may be imposed. If a
2-66 city elects to limit the period the sales and use tax may be
2-67 imposed, there shall be added to the end of the ballot proposition
2-68 prescribed by Subdivision (1) of this subsection: "to be imposed
2-69 for _____ years" (the number of years to be inserted as
2-70 appropriate). The governing body of the city shall set the
3-1 expiration date of the proposed tax to occur on the appropriate
3-2 anniversary of the effective date of the tax. A sales and use tax
3-3 imposed for a limited period under this subsection expires on the
3-4 date set by the governing body under this section or on an earlier
3-5 date if the tax is repealed by a majority of the voters voting in
3-6 an election held in the city. If an earlier abolition election is
3-7 held, Sections 321.102(a) and 321.402(b), Tax Code, apply to the
3-8 date of repeal. A tax that is approved without a limit on its
3-9 period of imposition is effective until repealed by election.
3-10 Before the 90th day before the date that a tax is to expire, the
3-11 governing body shall send a notice to the comptroller stating the
3-12 expiration date of the tax. Revenue collected after the expiration
3-13 of the tax from the imposition of the tax after its expiration date
3-14 shall be forwarded by the state to the governing body to be used to
3-15 pay current bonded indebtedness of the municipality. A
3-16 municipality that has imposed a tax under this section may not
3-17 extend the period of the tax's imposition and may not reimpose the
3-18 tax after its expiration date unless the reimposition of the tax is
3-19 approved by a majority of the qualified voters of the city voting
3-20 at an election called and held for that purpose in accordance with
3-21 Chapter 321, Tax Code. If a city reduces the rate of an additional
3-22 sales and use tax under Chapter 321, Tax Code, to impose a tax
3-23 under this section for a limited period as provided under this
3-24 subsection, and does not have an election to change the rate of the
3-25 additional sales and use tax before the expiration date of the tax
3-26 under this section, on the expiration date of the tax under this
3-27 section the rate of the additional sales and use tax under Section
3-28 321.101(b), Tax Code, returns, without an election under Chapter
3-29 321, Tax Code, to its previous rate in effect when the tax imposed
3-30 under this section was adopted.
3-31 (3) Ballot Proposition--Reduce or Increase Tax Rate.
3-32 A city in which a sales and use tax has been imposed under this
3-33 section may reduce or increase the tax by majority vote of the
3-34 qualified voters of the city voting at an election called and held
3-35 for the purpose in the same manner as an election to impose the
3-36 tax. The rate may be reduced in one or more increments of
3-37 one-eighth of one percent to a minimum of one-eighth of one percent
3-38 or increased in one or more increments of one-eighth of one percent
3-39 to a maximum of one-half of one percent. On petition of 10 percent
3-40 or more of the registered voters of the city requesting an election
3-41 on the increase or decrease of the tax under this section, the
3-42 governing body of the city shall order an election on the issue.
3-43 The ballot shall be printed in the same manner as the ballot under
3-44 Subdivision (1) of this subsection.
3-45 (4) Ballot Proposition--Combine with Reduction in
3-46 Property Tax. A city that is authorized by this section to impose,
3-47 reduce, increase, or abolish the tax under this section may, at the
3-48 same time and on the same ballot, impose, reduce, increase, or
3-49 abolish the additional sales and use tax imposed under Section
3-50 321.101(b), Tax Code, if the city is authorized by Chapter 321, Tax
3-51 Code, to impose, reduce, increase, or abolish the additional sales
3-52 and use tax. To do so, the city must follow the procedures of
3-53 Chapter 321, Tax Code, except that in an election to impose,
3-54 reduce, increase, or abolish the tax under this section and the
3-55 additional sales and use tax the ballot shall be printed to provide
3-56 for voting for or against the proposition: "The adoption of a
3-57 sales and use tax within the city for the promotion and development
3-58 of new and expanded business enterprises at the rate of _____ of
3-59 one percent (one-eighth, one-fourth, three-eighths, or one-half to
3-60 be inserted as appropriate) and the adoption of an additional sales
3-61 and use tax within the city at the rate of _____ of one percent to
3-62 be used to reduce the property tax rate" (one-eighth, one-fourth,
3-63 three-eighths, or one-half to be inserted as appropriate).
3-64 (f)(1) Dissolution of Corporation. By order of the city's
3-65 governing body, or on petition of 10 percent or more of the
3-66 registered voters of the city requesting an election on the
3-67 dissolution of the corporation, the governing body shall order an
3-68 election on the dissolution of the corporation at the next
3-69 available uniform election date that is not less than 45 days after
3-70 the date that the order is issued or the petition is filed. The
4-1 election must be conducted according to the applicable provisions
4-2 of the Election Code.
4-3 (2) Ballot Proposition for Dissolution Election. The
4-4 ballot for the election shall be printed to provide for voting for
4-5 or against the proposition: "Dissolution of the _______ (name of
4-6 the corporation)." If a majority of voters voting on the issue
4-7 approve the dissolution, the corporation shall continue operations
4-8 only as necessary to pay the principal of and interest on its bonds
4-9 and to meet obligations incurred before the date of the election
4-10 and, to the extent practicable, shall dispose of its assets and
4-11 apply the proceeds to satisfy those obligations. When the last of
4-12 the obligations is satisfied, any remaining assets of the
4-13 corporation shall be transferred to the city, and the corporation
4-14 is dissolved. A tax imposed under this section may not be
4-15 collected after the last day of the first calendar quarter
4-16 beginning after notification to the comptroller by the corporation
4-17 that the last of its obligations is satisfied.
4-18 (g)(1) Authorized Use of Sales Tax Proceeds. On receipt of
4-19 the proceeds of the sales and use tax imposed under this section
4-20 from the comptroller, the eligible city shall deliver the proceeds
4-21 to the corporation. Tax proceeds may be used to pay the costs of a
4-22 project authorized by this section.
4-23 (2) Definition of Authorized Project. In this
4-24 section, "project" means the land, buildings, equipment,
4-25 facilities, and improvements found by the board of directors to be
4-26 required or suitable for the development and expansion of
4-27 manufacturing facilities, industrial facilities, warehouse
4-28 facilities, distribution centers, recycling facilities, general
4-29 aviation business service airports that are an integral part of an
4-30 industrial park, and port-related facilities to support waterborne
4-31 commerce.
4-32 (3) Improvements Ancillary to Project. A project
4-33 includes the cost of transportation facilities, water supply
4-34 facilities, sewage or solid waste disposal facilities, air or water
4-35 pollution control facilities, and other improvements ancillary and
4-36 directly beneficial to a project. Except as provided by Section 4B
4-37 of this Act, a corporation may not use revenues from the sales tax
4-38 authorized under this section for a project the primary purpose of
4-39 which is to provide transportation facilities, water supply
4-40 facilities, air or water pollution control facilities, or other
4-41 municipal facilities for the benefit of the general public.
4-42 (4) Project Debt Service Costs. A project includes
4-43 any payments toward the principal of, interest on, and other costs
4-44 relating to bonds or other obligations issued by the corporation to
4-45 pay the costs of a project or to refund bonds or other obligations
4-46 issued to pay the cost of a project. The bonds or any instrument
4-47 related to the bonds may not give a bondholder a right to demand
4-48 payment from tax proceeds in excess of those collected from the tax
4-49 imposed by this section.
4-50 (5) Authorization Limited to Specific Project. At an
4-51 election called or held under Subsection (d) of this section, the
4-52 city may also allow the voters to vote on a ballot proposition that
4-53 limits the use of the sales and use tax to a specific project
4-54 authorized by this subsection. If a city elects to limit the use
4-55 to a specific project, in the ballot proposition prescribed by
4-56 Subsection (e) of this section a description of the project shall
4-57 be substituted in place of the words "new and expanded business
4-58 enterprises." When the last of its obligations for the specific
4-59 project has been satisfied, the corporation shall send a notice to
4-60 the comptroller stating that the sales and use tax imposed for the
4-61 specific project may not be collected after the last day of the
4-62 first calendar quarter beginning after the date of notification. A
4-63 sales and use tax imposed for a specific project under this
4-64 subsection may not be collected after the last day of the first
4-65 calendar quarter beginning after the date of the notification to
4-66 the comptroller. Revenue collected after the obligations for the
4-67 specific project have been satisfied shall be forwarded by the
4-68 state to the governing body to be used to pay current bonded
4-69 indebtedness of the municipality. A corporation that has been
4-70 created to perform a specific project under this subsection may
5-1 remain in existence and perform other projects approved by the
5-2 voters of the city under an election called and held under
5-3 Subsection (d) of this section.
5-4 (6) Assumption of PreExisting Debt. A corporation
5-5 under this section may not assume a debt or make any expenditure to
5-6 pay principal or interest on a debt if the debt existed before the
5-7 date the city created the corporation.
5-8 (h) Eminent Domain. A corporation may exercise the power of
5-9 eminent domain only on approval of the action by the governing body
5-10 of the eligible city. The power must be exercised in accordance
5-11 with and subject to the laws applicable to the eligible city.
5-12 (i) Governmental Immunity under Tort Claims Act. The
5-13 corporation, a director of the corporation, the city creating the
5-14 corporation, a member of the governing body of the city, or an
5-15 employee of the corporation or city is not liable for damages
5-16 arising from the performance of a governmental function of the
5-17 corporation or city. For the purposes of Subchapter A, Chapter
5-18 101, Civil Practice and Remedies Code (Texas Tort Claims Act), the
5-19 corporation is a governmental unit and its actions are governmental
5-20 functions.
5-21 (j) Ownership of Projects under Tax Code. The legislature
5-22 finds for all constitutional and statutory purposes that projects
5-23 undertaken under this section are owned, used, and held for public
5-24 purposes for and on behalf of the eligible city incorporating the
5-25 corporation, and Section 23(b) of this Act and Section 25.07(a),
5-26 Tax Code, do not apply to leasehold or other possessory interests
5-27 granted by the corporation during the period projects are owned by
5-28 the corporation on behalf of the eligible city. Projects are
5-29 exempt from taxation under Section 11.11, Tax Code, for that
5-30 period.
5-31 (k) Section 24 Applicability. Section 24 of this Act does
5-32 not apply to a corporation under this section.
5-33 Sec. 4B. Authorization to Levy Sales Tax for Other Than
5-34 Industrial Development. (a) ELECTION. A city that creates a
5-35 corporation under Section 4A of this Act may submit to the voters
5-36 of the city, at a separate election or at an election held under
5-37 another provision of this Act, a ballot proposition that authorizes
5-38 the corporation to use the sales and use tax for a specific project
5-39 or for a specific category of projects that does not qualify under
5-40 Section 4A of this Act but qualifies under the expanded project
5-41 definition in Subsection (c) of this section.
5-42 (b) Ballot Proposition--Specific Project or Specific
5-43 Category of Projects. In the election to authorize the use of the
5-44 sales or use tax for a specific project or for a specific category
5-45 of projects not authorized under Section 4A of this Act, the
5-46 project or category of projects must be clearly described on the
5-47 ballot so that the average voter will be able to discern the limits
5-48 that will control the expenditure of the proceeds of the tax. If
5-49 maintenance and operating costs of an otherwise authorized facility
5-50 are to be paid from the sales or use tax, the ballot language must
5-51 clearly state that fact.
5-52 (c)(1) Expanded "Project" Definition. In this section,
5-53 "project" or "category of projects" means land, buildings,
5-54 equipment, facilities, and improvements described by Subdivisions
5-55 (2) and (3) of this subsection.
5-56 (2) Municipal Facilities. Municipal facility projects
5-57 are land, buildings, equipment, facilities, and improvements found
5-58 by the board of directors to be required or suitable for use for:
5-59 (A) professional and amateur (including
5-60 children's) sports, athletic, entertainment, tourist, convention,
5-61 and public park purposes and events, including stadiums, ball
5-62 parks, auditoriums, amphitheaters, concert halls, learning centers,
5-63 parks, park facilities, open space improvements, municipal
5-64 buildings, museums, exhibition facilities, and related store,
5-65 restaurant, concession, and automobile parking facilities;
5-66 (B) related area transportation facilities;
5-67 (C) related roads, streets, and water and sewer
5-68 facilities; and
5-69 (D) other related improvements that enhance any
5-70 of those items.
6-1 (3) Expanded Business Enterprises. Expanded business
6-2 enterprise projects are land, buildings, equipment, facilities, and
6-3 improvements found by the board of directors to promote or develop
6-4 new or expanded business enterprises, including a project to
6-5 provide public safety facilities, streets and roads, drainage and
6-6 related improvements, demolition of existing structures, general
6-7 municipally owned improvements, and any improvements or facilities
6-8 that are related to any of those projects.
6-9 (d) SPECIFIC PROJECT UNDER GENERAL AUTHORITY. If a
6-10 corporation has previously held an election authorizing a category
6-11 of projects, the corporation may undertake a project of the general
6-12 type described by the category unless within 60 days after the date
6-13 of first publishing notice of the project the governing body of the
6-14 city receives a petition signed by more than 10 percent of the
6-15 registered voters of the city requesting that an election be held
6-16 before that specific project is undertaken. If such a petition is
6-17 submitted, the corporation may undertake the project only if the
6-18 specific project is approved at a subsequent election.
6-19 (e)(1) Previous Election in Certain Cities. An election
6-20 under Section 4A(d) of this Act is not required to carry out a
6-21 project under this section in a city that is located in a county
6-22 with a population in excess of 750,000 if a sales and use tax was
6-23 approved under this section at an election held before February 1,
6-24 1993.
6-25 (2) Bond Requirements. In a city to which Subdivision
6-26 (1) of this section applies, bonds or other obligations having a
6-27 maturity not longer than 30 years and issued to pay the costs of
6-28 projects of the types authorized by this section may be made
6-29 payable from any source of funds available to the corporation,
6-30 including the proceeds of a sales and use tax imposed under this
6-31 section. The sum of the principal amount of bonds and other
6-32 obligations that by their terms are payable in whole or in part
6-33 from the sales and use tax plus the amount of the costs of the
6-34 projects, other than interest on bonds and other obligations, for
6-35 which payment is made in cash directly from the proceeds of the tax
6-36 may not exceed $135 million. The bonds or other obligations that
6-37 by their terms are payable from the tax may not be paid in whole or
6-38 part from property taxes raised by the eligible city, are not a
6-39 debt of the eligible city, and do not give rise to a claim for
6-40 payment against the eligible city except as to sales and use tax
6-41 revenue held by a city and required under this section to be paid
6-42 over to the corporation.
6-43 (3) Expiration of Sales and Use Tax. In a city to
6-44 which Subdivision (1) of this subsection applies, a sales and use
6-45 tax imposed for a project under this section may not be collected
6-46 after the last day of the first calendar quarter occurring after
6-47 notification to the comptroller by the corporation that all bonds
6-48 or other obligations of the corporation that are payable in whole
6-49 or in part from the proceeds of the sales and use tax under this
6-50 section, including any refunding bonds or other obligations, have
6-51 been paid in full or the full amount of money, exclusive of
6-52 guaranteed interest, necessary to pay in full the bonds and other
6-53 obligations has been set aside in a trust account dedicated to the
6-54 payment of the bonds and other obligations. <(a) This section
6-55 applies only to a city:>
6-56 <(1) located in a county with a population of 500,000
6-57 or fewer according to the most recent federal decennial census; or>
6-58 <(2) with a population of fewer than 50,000 according
6-59 to the most recent federal decennial census that:>
6-60 <(A) is located in two or more counties, one of
6-61 which has a population of 500,000 or greater according to the most
6-62 recent federal decennial census;>
6-63 <(B) is located within the territorial limits
6-64 but has not elected to become a part of a metropolitan rapid
6-65 transit authority that has a principal city with a population of
6-66 less than 1.2 million according to the most recent federal
6-67 decennial census, with such authority being created before January
6-68 1, 1980, under Chapter 141, Acts of the 63rd Legislature, Regular
6-69 Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes); or>
6-70 <(C) is located within the territorial limits
7-1 but has not elected to become a part of a metropolitan rapid
7-2 transit authority that has a principal city with a population of
7-3 more than 750,000 according to the most recent federal decennial
7-4 census, with such authority being created under Chapter 683, Acts
7-5 of the 66th Legislature, Regular Session, 1979 (Article 1118y,
7-6 Vernon's Texas Civil Statutes).>
7-7 <(b)(1) A city may create a corporation under this Act
7-8 governed by this section. The corporation has the powers and is
7-9 subject to the limitations of a corporation created under other
7-10 provisions of this Act. To the extent of a conflict between this
7-11 section and another provision of this Act, this section prevails.
7-12 The articles of incorporation of a corporation under this section
7-13 must state that the corporation is governed by this section. A
7-14 city may not create more than one corporation governed by this
7-15 section. A corporation created under this section may spend no
7-16 more than 10 percent of the corporate revenues for promotional
7-17 purposes and may contract with other existing private corporations
7-18 to carry out industrial development programs consistent with the
7-19 purposes and duties as set out in this Act.>
7-20 <(2) Notwithstanding Subdivision (1), a corporation
7-21 created under this section may spend no more than 25 percent of the
7-22 corporate revenues for promotional purposes if the corporation was
7-23 created by a city:>
7-24 <(i) the municipal limits of which include
7-25 two counties;>
7-26 <(ii) that has less than 24,250 population
7-27 according to the 1990 federal census; and>
7-28 <(iii) any part of which is located within
7-29 ten miles of a federal military reservation.>
7-30 <(c) The board of directors of a corporation under this
7-31 section consists of five directors who are appointed by the
7-32 governing body of the city and who serve at the pleasure of the
7-33 governing body. A majority of the entire membership of the board
7-34 constitutes a quorum. The board shall conduct each of its meetings
7-35 within the boundaries of the city. The board shall appoint a
7-36 president, a secretary, and other officers of the corporation that
7-37 the governing body of the city considers necessary. The
7-38 corporation's registered agent must be an individual resident of
7-39 the state and the corporation's registered office must be within
7-40 the boundaries of the city.>
7-41 <(d) The city may levy a sales and use tax for the benefit
7-42 of a corporation under this section if the tax is authorized by a
7-43 majority of the qualified voters of the city voting at an election
7-44 called and held for that purpose. If the city adopts the tax,
7-45 there is imposed a tax on the receipts from the sale at retail of
7-46 taxable items within the city at the rate approved by the voters.
7-47 The rate must be equal to one-eighth, one-fourth, three-eighths, or
7-48 one-half of one percent. The city may not adopt a rate that would
7-49 result in a combined rate of all sales and use taxes, including the
7-50 tax under this section, imposed by the city and other political
7-51 subdivisions of this state having territory in the city that
7-52 exceeds two percent. An election adopting a rate that exceeds the
7-53 limit on the combined rate has no effect. There is also imposed an
7-54 excise tax on the use, storage, or other consumption within the
7-55 city of taxable items purchased, leased, or rented from a retailer
7-56 during the period that the tax is effective within the city. The
7-57 rate of the excise tax is the same as the rate of the sales tax
7-58 portion of the tax and is applied to the sales price of the taxable
7-59 items.>
7-60 <(e) The Municipal Sales and Use Tax Act (Chapter 321, Tax
7-61 Code) governs an election to authorize the imposition of the sales
7-62 and use tax under this section and governs the imposition,
7-63 computation, administration, governance, abolition, and use of the
7-64 tax except as inconsistent with this section. If an election is
7-65 held under Subsection (f) of this section at the same time as
7-66 another election under this section and an additional sales and use
7-67 tax under Section 321.101(b), Tax Code, is adopted or repealed or
7-68 its rate is increased or reduced, each tax under this section and
7-69 the imposition or change in the rate of the additional sales and
7-70 use tax takes effect as provided by Section 321.102(b), Tax Code.>
8-1 <(f) On receipt of the proceeds of the sales and use tax
8-2 imposed under this section from the comptroller, the city shall
8-3 deliver the proceeds to the corporation to use in carrying out its
8-4 functions. Tax proceeds may be used to pay the principal of,
8-5 interest on, and other costs relating to the corporation's bonds,
8-6 but neither the bonds nor any instrument related to the bonds may
8-7 give a bondholder a right to demand payment from tax proceeds in
8-8 excess of those collected from the tax imposed by this section.>
8-9 <(g) The corporation may not exercise the power of eminent
8-10 domain except by action of the governing body of the city that
8-11 created the corporation.>
8-12 <(h) Section 24 of this Act does not apply to a corporation
8-13 under this section.>
8-14 <(i) Except as provided by this subsection, the corporation
8-15 may not undertake a project the primary purpose of which is to
8-16 provide transportation facilities, solid waste disposal facilities,
8-17 or air or water pollution control facilities. However, the
8-18 corporation may provide those facilities to benefit property
8-19 acquired for a project having another primary purpose. The
8-20 corporation may undertake a project the primary purpose of which is
8-21 to provide:>
8-22 <(1) a general aviation business service airport that
8-23 is an integral part of an industrial park; or>
8-24 <(2) port-related facilities to support waterborne
8-25 commerce.>
8-26 <(j) The corporation, a director of the corporation, the
8-27 city creating the corporation, a member of the governing body of
8-28 the city, or an employee of the corporation or city is not liable
8-29 for damages arising from the performance of a governmental function
8-30 of the corporation or city. For the purposes of the Texas Tort
8-31 Claims Act (Subchapter A, Chapter 101, Civil Practice and Remedies
8-32 Code), the corporation is a governmental unit and its actions are
8-33 governmental functions.>
8-34 <(k) On petition of 10 percent or more of the registered
8-35 voters of the city requesting an election on the dissolution of the
8-36 corporation, the governing body shall order an election on the
8-37 issue at the next available uniform election date that is not less
8-38 than 45 days after the date that the petition is filed. The
8-39 election must be conducted according to the applicable provisions
8-40 of the Election Code. The ballot for the election shall be printed
8-41 to provide for voting for or against the proposition: "Dissolution
8-42 of the ________________ (name of the corporation)." If a majority
8-43 of voters voting on the issue approve the dissolution, the
8-44 corporation shall continue operations only as necessary to pay the
8-45 principal of and interest on its bonds and to meet obligations
8-46 incurred before the date of the election and, to the extent
8-47 practicable, shall dispose of its assets and apply the proceeds to
8-48 satisfy those obligations. When the last of the obligations is
8-49 satisfied, any remaining assets of the corporation shall be
8-50 transferred to the city, and the corporation is dissolved. A tax
8-51 imposed under this section may not be collected after the last day
8-52 of the first calendar quarter beginning after notification to the
8-53 comptroller by the corporation that the last of its obligations is
8-54 satisfied.>
8-55 <(l) On approval of the governing body of each unit and
8-56 corporation involved, a corporation created under this Act that is
8-57 not created under this section may transfer all of its assets to a
8-58 corporation governed by this section and dissolve as provided by
8-59 this Act.>
8-60 <(m) In an election to adopt the tax under this section, the
8-61 ballot shall be printed to provide for voting for or against the
8-62 proposition: "The adoption of a sales and use tax for the
8-63 promotion and development of new and expanded business enterprises
8-64 at the rate of ________ of one percent" (one-eighth, one-fourth,
8-65 three-eighths, or one-half to be inserted as appropriate).>
8-66 <(n) At an election called and held under Subsection (d) or
8-67 (o) of this section, the city may also allow the voters to vote on
8-68 a ballot proposition that limits the length of time that a sales
8-69 and use tax may be imposed. If a city elects to limit the period
8-70 the sales and use tax may be imposed, there shall be added to the
9-1 end of the ballot proposition prescribed by Subsection (m) of this
9-2 section: "to be imposed for ________ years" (the number of years
9-3 to be inserted as appropriate). The governing body of the city
9-4 shall set the expiration date of the proposed tax to occur on the
9-5 appropriate anniversary of the effective date of the tax. A sales
9-6 and use tax imposed for a limited period under this subsection
9-7 expires on the date set by the governing body under this section or
9-8 on an earlier date if, by a majority of the voters voting in an
9-9 election held in the city, the tax is repealed. If an earlier
9-10 abolition election is held, Sections 321.102(a) and 321.402(b), Tax
9-11 Code, apply to the date of repeal. A tax that is approved without
9-12 a limit on its period of imposition is effective until repealed by
9-13 election. Before the 60th day before the date that a tax is to
9-14 expire, the governing body shall send a notice to the comptroller
9-15 stating the expiration date of the tax. Revenue collected after
9-16 the expiration of the tax from the imposition of the tax after its
9-17 expiration date shall be forwarded by the state to the governing
9-18 body to be used to pay current bonded indebtedness of the
9-19 municipality. A municipality that has imposed a tax under this
9-20 section may not extend the period of the tax's imposition or
9-21 reimpose the tax after its expiration date. If a city reduces the
9-22 rate of an additional sales and use tax under Chapter 321, Tax
9-23 Code, to impose a tax under this section for a limited period as
9-24 provided under this subsection, and does not have an election to
9-25 change the rate of the additional sales and use tax before the
9-26 expiration date of the tax under this section, the rate of the
9-27 additional sales and use tax under Section 321.101(b), Tax Code, in
9-28 the city returns to its previous rate in effect at the time the tax
9-29 imposed under this section was adopted on the expiration date of
9-30 the tax under this section without having to hold an election under
9-31 Chapter 321, Tax Code, to impose the increase in the rate.>
9-32 <(o) In a city in which a sales and use tax for the benefit
9-33 of a corporation has been imposed under this section, in the same
9-34 manner and by the same procedure the city by majority vote of the
9-35 qualified voters of the city voting at an election called and held
9-36 for the purpose may reduce or increase the tax. The rate may be
9-37 reduced in one or more increments of one-eighth of one percent to a
9-38 minimum of one-eighth of one percent or increased in one or more
9-39 increments of one-eighth of one percent to a maximum of one-half of
9-40 one percent. On petition of 10 percent or more of the registered
9-41 voters of the city requesting an election on the increase or
9-42 decrease of the tax under this section, the governing body of the
9-43 city shall order an election on the issue. The ballot shall be
9-44 printed in the same manner as the ballot under Subsection (m) of
9-45 this section.>
9-46 <(p) A city that is authorized by this section to impose,
9-47 reduce, increase, or abolish the tax under this section may, at the
9-48 same time and on the same ballot, impose, reduce, increase, or
9-49 abolish the additional sales and use tax imposed under Section
9-50 321.101(b), Tax Code, if the city is authorized by Chapter 321, Tax
9-51 Code, to impose, reduce, increase, or abolish the additional sales
9-52 and use tax. The city must follow, in relation to the imposition,
9-53 reduction, increase, or abolishment of the additional sales and use
9-54 tax imposed under Section 321.101(b), Tax Code, the procedures of
9-55 that chapter, except that in an election to impose, reduce,
9-56 increase, or abolish the tax under this section and the additional
9-57 sales and use tax the ballot shall be printed to provide for voting
9-58 for or against the proposition: "The adoption of a sales and use
9-59 tax within the city for the promotion and development of new and
9-60 expanded business enterprises at the rate of __________ of one
9-61 percent (one-eighth, one-fourth, three-eighths, or one-half to be
9-62 inserted as appropriate) and the adoption of an additional sales
9-63 and use tax within the city at the rate of ________ of one percent
9-64 to be used to reduce the property tax rate" (one-eighth,
9-65 one-fourth, three-eighths, or one-half to be inserted as
9-66 appropriate).>
9-67 <(q) A corporation under this section may not assume a debt
9-68 or make any expenditure to pay principal or interest on a debt if
9-69 the debt existed before the date the city created the corporation.>
9-70 <(r) At an election called or held under Subsection (d) or
10-1 (o) of this section, the city may also allow the voters to vote on
10-2 a ballot proposition that limits the use of the sales and use tax
10-3 to a specific project. If a city elects to limit the use to a
10-4 specific project, in the ballot proposition prescribed by
10-5 Subsection (m) or (p) a description of the project shall be
10-6 substituted in place of the words "new and expanded business
10-7 enterprises." When the last of its obligations for the specific
10-8 project have been satisfied, the corporation shall send a notice to
10-9 the comptroller stating that the sales and use tax imposed for the
10-10 specific project may not be collected after the last day of the
10-11 first calendar quarter beginning after the date of notification. A
10-12 sales and use tax imposed for a specific project under this
10-13 subsection may not be collected after the last day of the first
10-14 calendar quarter beginning after the date of the notification to
10-15 the comptroller. Revenue collected after the obligations for the
10-16 specific project have been satisfied shall be forwarded by the
10-17 state to the governing body to be used to pay current bonded
10-18 indebtedness of the municipality. A corporation that has been
10-19 created to perform a specific project under this subsection may
10-20 retain its corporate existence and perform other projects as may be
10-21 approved by the voters of the city under an election called and
10-22 held under Subsection (d) or (o) of this section.>
10-23 <Sec. 4B. (a) In this section:>
10-24 <(1) "Eligible city" means a city:>
10-25 <(A) that is located in a county with a
10-26 population of 750,000 or more, according to the most recent federal
10-27 decennial census and in which the combined rate of all sales and
10-28 use taxes imposed by the city, the state, and other political
10-29 subdivisions of the state having territory in the city does not
10-30 exceed 7.25 percent on the date of any election held under or made
10-31 applicable to this section;>
10-32 <(B) that has a population of 400,000 or more,
10-33 according to the most recent federal decennial census, and that is
10-34 located in more than one county, and in which the combined rate of
10-35 all sales and use taxes imposed by the city, the state, and other
10-36 political subdivisions of the state having territory in the city,
10-37 including taxes under this section, does not exceed 8.25 percent;
10-38 or>
10-39 <(C) to which Section 4A of this Act applies.>
10-40 <(2) "Project" means land, buildings, equipment,
10-41 facilities, and improvements included in the definition of that
10-42 term under Section 2 of this Act, including recycling facilities,
10-43 and land, buildings, equipment, facilities, and improvements found
10-44 by the board of directors to:>
10-45 <(A) be required or suitable for use for
10-46 professional and amateur (including children's) sports, athletic,
10-47 entertainment, tourist, convention, and public park purposes and
10-48 events, including stadiums, ball parks, auditoriums, amphitheaters,
10-49 concert halls, learning centers, parks and park facilities, open
10-50 space improvements, municipal buildings, museums, exhibition
10-51 facilities, and related store, restaurant, concession, and
10-52 automobile parking facilities, related area transportation
10-53 facilities, and related roads, streets, and water and sewer
10-54 facilities, and other related improvements that enhance any of
10-55 those items; or>
10-56 <(B) promote or develop new or expanded business
10-57 enterprises, including a project to provide public safety
10-58 facilities, streets and roads, drainage and related improvements,
10-59 demolition of existing structures, general municipally owned
10-60 improvements, as well as any improvements or facilities that are
10-61 related to any of those projects and any other project that the
10-62 board in its discretion determines promotes or develops new or
10-63 expanded business enterprises.>
10-64 <(a-1) A corporation may undertake a project under this
10-65 section unless within 60 days after first publishing notice of a
10-66 specific project or type of general project the governing body of
10-67 the city receives a petition from more than 10 percent of the
10-68 registered voters of the city where the petition requests that an
10-69 election be held before that specific project or that general type
10-70 of project is undertaken. An election is not required to be held
11-1 after the submission of a petition if the qualified citizens of the
11-2 city have previously approved the undertaking of a specific project
11-3 or that general type of project at an election called for that
11-4 purpose by the governing body of the city or in conjunction with
11-5 another election required to be held under this section.>
11-6 <(a-2) The costs of a publicly owned and operated project
11-7 that is purchased or constructed under this section include the
11-8 maintenance and operating costs of the project, and the proceeds of
11-9 taxes may be used to pay the maintenance and operating costs of a
11-10 project, unless within 60 days after first publishing notice of
11-11 this specific use of the proceeds of the taxes the governing body
11-12 of the city receives a petition from more than 10 percent of the
11-13 registered voters of the city where the petition requests that an
11-14 election be held before the proceeds of taxes imposed under this
11-15 section may be used to pay the maintenance and operating costs of a
11-16 project. An election is not required to be held after the
11-17 submission of a petition if the qualified citizens of the city have
11-18 previously approved that the costs of a publicly owned and operated
11-19 project purchased or constructed under this section include the
11-20 maintenance and operating costs of the project and that the
11-21 proceeds of taxes may be used to pay the maintenance and operating
11-22 costs of a project, at an election called for that purpose by the
11-23 governing body of the city or in conjunction with another election
11-24 required to be held under this section. The election in this
11-25 subsection shall not be required in a municipality located in a
11-26 county with a population in excess of 750,000 that has held an
11-27 election prior to February 1, 1993, under this section and at which
11-28 election the additional sales tax was approved.>
11-29 <(b) An eligible city may create a corporation under this
11-30 Act governed by this section. The corporation has the powers
11-31 granted by this section and by other sections of this Act and is
11-32 subject to the limitations of a corporation created under other
11-33 provisions of this Act. To the extent of a conflict between this
11-34 section and another provision of this Act, this section prevails.
11-35 The articles of incorporation of a corporation under this section
11-36 must state that the corporation is governed by this section and may
11-37 include within its name any words and phrases specified by the
11-38 eligible city. An eligible city may not create more than one
11-39 corporation governed by this section.>
11-40 <(c) The board of directors of a corporation under this
11-41 section consists of seven directors who are appointed by the
11-42 governing body of the eligible city for two-year terms of office.
11-43 A director may be removed by the governing body of the eligible
11-44 city at any time without cause. Each director must be a resident
11-45 of the eligible city. Three directors shall be persons who are not
11-46 employees, officers, or members of the governing body of the
11-47 eligible city. A majority of the entire membership of the board is
11-48 a quorum. The board shall conduct all meetings within the
11-49 boundaries of the eligible city. The board shall appoint a
11-50 president, a secretary, and other officers of the corporation that
11-51 the governing body of the eligible city considers necessary. The
11-52 corporation's registered agent must be an individual resident of
11-53 the state and the corporation's registered office must be within
11-54 the boundaries of the eligible city.>
11-55 <(d) The governing body of an eligible city by ordinance may
11-56 levy a sales and use tax for the benefit of the corporation under
11-57 this section if the tax is authorized by a majority of the
11-58 qualified voters of the eligible city voting at an election called
11-59 and held for that purpose in accordance with Chapter 321, Tax Code.
11-60 This election requirement is satisfied and another election is not
11-61 required if the voters of the eligible city approved the levy and
11-62 collection of an additional one-half cent sales and use tax at an
11-63 election held before the effective date of this section under an
11-64 ordinance calling the election that was published in a newspaper of
11-65 general circulation within the eligible city at least 14 days in
11-66 advance of the election and that expressly stated that the election
11-67 was held in anticipation of the enactment of enabling and
11-68 implementing legislation without further elections. An election
11-69 described by this section and held before the effective date of
11-70 this section is validated as of the date on which the election
12-1 occurred.>
12-2 <(e) The rate of a tax adopted under this section must be
12-3 one-eighth, one-fourth, three-eighths, or one-half of one percent.
12-4 The ballot proposition at the election held to adopt the tax must
12-5 specify the rate of the tax to be adopted. A corporation that
12-6 holds an election to reduce a tax imposed under Section 4A of this
12-7 Act may in a separate proposition on the same ballot adopt a tax
12-8 under this section. If an eligible city adopts the tax, a tax is
12-9 imposed on the receipts from the sale at retail of taxable items
12-10 within the eligible city at a rate approved by the governing body
12-11 of the eligible city. The rate must be equal to one-eighth,
12-12 one-fourth, three-eighths, or one-half of one percent. There is
12-13 also imposed an excise tax on the use, storage, or other
12-14 consumption within the eligible city of tangible personal property
12-15 purchased, leased, or rented from a retailer during the period that
12-16 the tax is effective within the eligible city. The rate of the
12-17 excise tax is the same as the rate of the sales tax portion of the
12-18 tax and is applied to the sale price of the tangible personal
12-19 property.>
12-20 <(f) Chapter 321, Tax Code, governs the imposition,
12-21 computation, administration, collection, and remittance of the tax
12-22 except as inconsistent with this section. The tax imposed under
12-23 this section takes effect as provided by Section 321.102(a), Tax
12-24 Code. If, however, an election is held under this section at the
12-25 same time an election is held to impose or change the rate of the
12-26 additional municipal sales and use tax, the tax under this section
12-27 and the imposition or change in rate of the additional municipal
12-28 sales and use tax take effect as provided by Section 321.102(b),
12-29 Tax Code. After the effective date of the taxes imposed under this
12-30 section, the adoption of a sales and use tax or the attempted
12-31 adoption of a sales and use tax by the eligible city or any other
12-32 taxing jurisdiction having territory in the city does not impair
12-33 the taxes imposed under this section.>
12-34 <(g) On receipt of the proceeds of the sales and use tax
12-35 imposed under this section from the comptroller, the eligible city
12-36 shall deliver the proceeds to the corporation. Tax proceeds may be
12-37 used to:>
12-38 <(1) pay the costs of projects of the types added to
12-39 the definition of that term by Subsection (a) of this section; or>
12-40 <(2) pay the principal of, interest on, and other
12-41 costs relating to bonds or other obligations issued by the
12-42 corporation to pay the costs of the projects or to refund bonds or
12-43 other obligations issued to pay the costs of projects.>
12-44 <(h) Bonds or other obligations having a maturity not longer
12-45 than 30 years and issued to pay the costs of projects of the types
12-46 added to the definition of that term by Subsection (a) of this
12-47 section may be made payable from any source of funds available to
12-48 the corporation, including the proceeds of a sales and use tax
12-49 imposed under this section. The principal amount of bonds and
12-50 other obligations that by their terms are payable in whole or in
12-51 part from the sales and use tax, together with the amount of the
12-52 costs of the projects, other than interest on bonds and other
12-53 obligations, for which payment is made in cash directly from the
12-54 proceeds of the tax, may not, in the aggregate, exceed $135
12-55 million. The bonds or other obligations that by their terms are
12-56 payable from the tax may not be paid in whole or in part from any
12-57 property taxes raised or to be raised by the eligible city and are
12-58 not a debt of and do not give rise to a claim for payment against
12-59 the eligible city except as to sales and use tax revenue held by a
12-60 city and required under this section to be paid over to the
12-61 corporation.>
12-62 <(i) A sales and use tax imposed under this section may not
12-63 be collected after the last day of the first calendar quarter
12-64 occurring after notification to the comptroller by the corporation
12-65 that all bonds or other obligations of the corporation that are
12-66 payable in whole or in part from the proceeds of the sales and use
12-67 tax under this section, including any refunding bonds or other
12-68 obligations, have been paid in full or the full amount of money,
12-69 exclusive of guaranteed interest, necessary to pay in full the
12-70 bonds and other obligations has been set aside in a trust account
13-1 dedicated to the payment of the bonds and other obligations.>
13-2 <(j) The corporation may exercise the power of eminent
13-3 domain only on approval of the action by the governing body of the
13-4 eligible city. The power must be exercised in accordance with and
13-5 subject to the laws applicable to the eligible city.>
13-6 <(k) The legislature finds for all constitutional and
13-7 statutory purposes that projects of the types added to the
13-8 definition of that term by Subsection (a) of this section are
13-9 owned, used, and held for public purposes for and on behalf of the
13-10 eligible city incorporating the corporation, and Section 23(b) of
13-11 this Act and Section 25.07(a), Tax Code, are not applicable to
13-12 leasehold or other possessory interests granted by the corporation
13-13 during the period projects are owned by the corporation on behalf
13-14 of the eligible city. Projects are exempt from taxation under
13-15 Section 11.11, Tax Code, for that period.>
13-16 <(l) Section 24 of this Act does not apply to a corporation
13-17 under this section.>
13-18 <(m) The corporation, a director of the corporation, the
13-19 eligible city creating the corporation, a member of the governing
13-20 body of the eligible city, or an employee of the corporation or
13-21 eligible city is not liable for damages arising from the
13-22 performance of a governmental function of the corporation or
13-23 eligible city. For the purposes of Chapter 101, Civil Practice and
13-24 Remedies Code, the corporation is a governmental unit and its
13-25 actions are governmental functions.>
13-26 <(n) Before expending funds to undertake a project, a
13-27 corporation under this section shall hold at least one public
13-28 hearing on the proposed project.>
13-29 SECTION 2. (a) A corporation created before the effective
13-30 date of this Act under Section 4A or 4B, Development Corporation
13-31 Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes),
13-32 continues to exist on and after the effective date of this Act as
13-33 if the corporation were created under Section 4A, Development
13-34 Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil
13-35 Statutes), as amended by this Act. The city that created the
13-36 corporation may continue to collect any tax authorized for the
13-37 benefit of the corporation before the effective date of this Act,
13-38 and the corporation may continue to undertake any project
13-39 authorized for the corporation before the effective date of this
13-40 Act. The tax and project are subject to the same restrictions
13-41 applicable under Sections 4A and 4B as those sections existed
13-42 immediately before the effective date of this Act. A tax
13-43 authorized for the corporation or project undertaken by the
13-44 corporation on or after the effective date of this Act is governed
13-45 by Sections 4A and 4B as those sections are amended by this Act.
13-46 (b) Before January 1, 1996, the articles of incorporation of
13-47 a corporation created before the effective date of this Act under
13-48 Section 4B, Development Corporation Act of 1979 (Article 5190.6,
13-49 Vernon's Texas Civil Statutes), as it existed before amendment by
13-50 this Act, shall be amended to state that the corporation is
13-51 governed by Section 4A of that Act.
13-52 SECTION 3. The importance of this legislation and the
13-53 crowded condition of the calendars in both houses create an
13-54 emergency and an imperative public necessity that the
13-55 constitutional rule requiring bills to be read on three several
13-56 days in each house be suspended, and this rule is hereby suspended,
13-57 and that this Act take effect and be in force from and after its
13-58 passage, and it is so enacted.
13-59 * * * * *