By: Bivins S.B. No. 1696
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the creation of economic development districts in
1-2 certain counties; authorizing certain taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 44, Revised Statutes, is amended by adding
1-5 Article 2370d-11 to read as follows:
1-6 ART. 2370d-11 COUNTY ECONOMIC DEVELOPMENT DISTRICTS
1-7 ARTICLE I. GENERAL PROVISIONS
1-8 Sec. 1.01. Short Title. This Act may be cited as the County
1-9 Economic Development District Act.
1-10 Sec. 1.02. Legislative Intent. The intent of the
1-11 Legislature is to further the public purpose of developing and
1-12 diversifying the the economy of the state by providing incentives
1-13 for the location and development of projects in certain counties to
1-14 attract visitors and tourists.
1-15 Sec. 1.03. Legislative Findings. The legislature finds
1-16 that:
1-17 (1) small and medium-sized counties in Texas are in
1-18 need of incentives for the development of public improvements to
1-19 attract visitors and tourists to such counties, and that such
1-20 counties are at a disadvantage in competing with counties in other
1-21 states for the location and development of projects that attract
1-22 visitors and tourists by virtue of the availability and prevalent
1-23 use in other states of financial incentives;
2-1 (2) that the means and measures authorized by this Act
2-2 are in the public interest and serve a public purpose of the state
2-3 in promoting the economic welfare of the citizens of the state by
2-4 providing incentives for the location and development in certain
2-5 Texas counties of projects that attract visitors and tourists and
2-6 that result in employment and economic activity; and
2-7 (3) the creation of county economic development
2-8 districts is essential to the accomplishment of Article III,
2-9 Section 52-2, Texas Constitution and to the accomplishment of the
2-10 other public purposes stated in this Act and further serves the
2-11 purpose of Article XVI, Section 59, and Article III, Section 52,
2-12 Texas Constitution.
2-13 Sec. 1.04. Definitions. In this Act: (1) "District" means
2-14 a county economic development district created under this Act.
2-15 (2) "Board" means the board of directors of the
2-16 district.
2-17 (3) "Director" means a member of the board.
2-18 (4) "Commissioners court" means the governing body of
2-19 the county in which the district is located.
2-20 (5) "County" means the county in which the district is
2-21 located.
2-22 (6) "Project" shall have the same meaning as that term
2-23 is defined in Article 5190.6, Section 4 B(a)(2), Texas Civil
2-24 Statutes.
2-25 (7) "Cost" shall have the same meaning as that term is
3-1 defined in Article 5190.6, Section 2(4), Texas Civil Statutes.
3-2 (8) "Bonds" means bonds, notes, and other obligations.
3-3 (9) "Taxing entity" means the state, a municipality, a
3-4 county, or other political subdivision, but shall not mean a school
3-5 district.
3-6 Sec. 1.05. Counties Authorized to Create Districts. The
3-7 commissioners court in a county with a population of not more than
3-8 400,000 according to the most recent federal decennial census may,
3-9 upon petition of the owners of land in a proposed county, commence
3-10 the creation of a county economic development district. The
3-11 creation of the district is subject to a confirmation election held
3-12 as provided by Article 2 of this Act.
3-13 ARTICLE 2. CREATION OF DISTRICTS
3-14 Sec. 2.01. Petition of Landowners. To create a district, a
3-15 petition requesting creation shall be filed with the county
3-16 commissioners court of the county is which all of the land in the
3-17 proposed district is located. The petition shall be accompanied by
3-18 a sworn statement indicating consent to creation signed by the
3-19 holders of fee simple title of all of the land within the proposed
3-20 district.
3-21 Sec. 2.02. Contents of petition. The petition shall:
3-22 (1) describe the boundaries of the proposed district by metes and
3-23 bounds or by lot and block number, if there is a recorded map or
3-24 plat and survey of the area;
3-25 (2) include a name of the district which shall include
4-1 the name of the county followed by the words Economic Development
4-2 District No. ____;
4-3 (3) include the names of five persons who are willing
4-4 and qualified to serve as temporary directors of the proposed
4-5 district;
4-6 (4) state the general nature of the work proposed to
4-7 be done and the cost of the project as then estimated by the
4-8 petitioners; and
4-9 (5) state the necessity and feasibility of the
4-10 proposed district and whether the district will serve the public
4-11 purpose of attracting visitors and tourists to the county.
4-12 Sec. 2.03. Hearing on Petition. Not later than the 60th day
4-13 after the date a petition is received, the commissioners court
4-14 shall fix a date, time, and place at which the petition shall be
4-15 heard and shall issue notice of the date, time, place, and subject
4-16 matter of the hearing. The notice shall inform all persons of
4-17 their right to appear and present evidence and testify for or
4-18 against the creation of the district.
4-19 Sec. 2.04. Notice of Hearing. At least 30 days before the
4-20 date set for the hearing, notice of the hearing shall be mailed to
4-21 the developer who signed the petition and the landowner of all the
4-22 land in the district and shall be published in a newspaper with
4-23 general circulation in the county in which the proposed district is
4-24 located.
4-25 Sec. 2.05. Hearing. At the hearing, the commissioners court
5-1 shall examine the petition to ascertain its sufficiency, and any
5-2 person interested may appear before the commission to offer
5-3 testimony on the sufficiency of the petition and whether or not the
5-4 district should be created.
5-5 Sec. 2.06. Granting or Refusing Petition. (a) After the
5-6 hearing, if it is found that the petition conforms to the
5-7 requirements of Section 2.02 of this Act and that the creation of
5-8 the district and the proposed project is feasible and necessary and
5-9 would serve the public purpose of attracting visitors and tourists
5-10 to the county, the commissioners court shall so find and enter an
5-11 order creating the district.
5-12 (b) If the commissioners court finds that the petition does
5-13 not conform to the requirements of Section 2.02 of this Act or that
5-14 the creation of the district and the proposed project is not
5-15 feasible and necessary and would not serve the purpose of
5-16 attracting visitors and tourists to the county, the commissioners
5-17 court shall so find by its order and deny the petition.
5-18 Sec. 2.07. Temporary Directors; Vacancy in office. If the
5-19 commissioners court grants the petition, it shall appoint to serve
5-20 as temporary directors of the district five persons who are
5-21 qualified under this Act to serve as directors. A vacancy in the
5-22 office of temporary director shall be filled by appointment by the
5-23 commissioners court.
5-24 Sec. 2.08. Qualification of Temporary Directors. Each
5-25 temporary director shall execute a bond in accordance with the
6-1 provisions of Section 3.14 of this Act and shall take an oath of
6-2 office, and the board shall meet and organize.
6-3 Sec. 2.09. Confirmation and Sales and Use Tax Election. The
6-4 temporary board of directors shall conduct an election within the
6-5 boundaries of the district to confirm the creation of the district
6-6 and authorize a sales and use tax in conformity with this Act.
6-7 Sec. 2.10. Election Order. An order calling an election
6-8 under Section 2.09 of this Act must state: (1) the nature of the
6-9 election, including the proposition that is to appear on the
6-10 ballot;
6-11 (2) the date of the election;
6-12 (3) the hours during which the polls will be open;
6-13 (4) the location of the polling places; and
6-14 (5) the proposed rate of the sales and use tax for the
6-15 district.
6-16 Sec. 2.11. Notice. The temporary directors shall give
6-17 notice of the confirmation and sales and use tax election by
6-18 publishing a substantial copy of the election order in a newspaper
6-19 with general circulation in the county in which the proposed
6-20 district is located once a week for two consecutive weeks. The
6-21 first publication must appear at least 14 days before the date set
6-22 for the election.
6-23 Sec. 2.12. Conduct of election. (a) The election shall be
6-24 held in accordance with the provisions of the Election Code, to the
6-25 extent not inconsistent with this Act.
7-1 (b) The ballot shall be printed to permit voting for or
7-2 against the proposition: "The creation of _____________ County
7-3 Economic Development District No. ______ and the adoption of a
7-4 proposed local sales and use tax rate of ____ (the rate specified
7-5 in the election order) to be used for the promotion and development
7-6 of tourism."
7-7 Sec. 2.13. Results of Election. (a) After the confirmation
7-8 and sales and use tax election, the presiding judge shall make
7-9 returns of the result to the temporary board of directors. The
7-10 temporary board of directors shall canvass the returns and declare
7-11 the results.
7-12 (b) If a majority of the votes cast in the election favor
7-13 the creation of the district and the adoption of the sales and use
7-14 tax, then the temporary board shall declare that the district is
7-15 created and shall declare the amount of the local sales and use tax
7-16 adopted and enter the result on its minutes. If a majority of the
7-17 votes cast in the election are against the creation of the district
7-18 and the adoption of the sales and use tax, the temporary board
7-19 shall declare that the proposition to create the district was
7-20 defeated and enter the result in its minutes.
7-21 (c) A certified copy of the minute order declaring that the
7-22 district is created and the local sales and use tax adopted and
7-23 including the rate of the sales and use tax, or declaring that the
7-24 proposition to create the district was defeated, shall be sent to
7-25 the commissioners court, the Comptroller, and any taxing entity by
8-1 certified or registered mail. Such order also shall show the date
8-2 of the election; the proposition on which the vote was held; the
8-3 total number of votes cast for or against the proposition; and the
8-4 number of votes by which the proposition was approved.
8-5 ARTICLE 3. DISTRICT ADMINISTRATION
8-6 Sec. 3.01. Board of Directors. (a) A district is governed
8-7 by a board of five directors appointed by the county commissioners
8-8 of the county in which the district is located. The temporary
8-9 directors appointed under Section 2.07 of this Act shall become
8-10 permanent directors of the district provided that the creation of
8-11 the district is confirmed at the confirmation election.
8-12 (b) Directors serve staggered four-year terms that expire
8-13 September 1. Following confirmation of the district at the
8-14 election, the temporary directors shall draw lots to determine:
8-15 (1) the two directors to serve terms that expire on
8-16 September 1 of the second year following creation of the district;
8-17 and
8-18 (2) the three directors to serve terms that expire on
8-19 September 1 of the fourth year following creation of the district.
8-20 Sec. 3.02. Qualifications for Directors. To be qualified to
8-21 serve as a director, a person shall be at least 21 years old, a
8-22 resident citizen of the State of Texas, and a qualified voter
8-23 within the county in which the district is located.
8-24 Sec. 3.03. Persons Disqualified from Serving. Section
8-25 50.026, Water Code, relating to disqualification of directors,
9-1 shall apply to directors of districts created under this Act.
9-2 Sec. 3.04. Vacancies on the Board. A vacancy in the office
9-3 of director shall be filled by appointment of the commissioners
9-4 court.
9-5 Sec. 3.05. Removal of Director. The governing body of the
9-6 commissioners court, after notice and hearing, may remove a
9-7 director for misconduct or failure to carry out the director's
9-8 duties on petition by a majority of the remaining directors.
9-9 Sec. 3.06. Organization of Board. After each appointment of
9-10 directors by the commissioners court, and after the directors have
9-11 qualified by taking the proper oath, they shall organize by
9-12 electing a president, a vice president, a secretary, and any other
9-13 officers as in the judgment of the board are considered necessary.
9-14 Sec. 3.07. Quorum; Officers' Duties; Management of District.
9-15 Sections 54.107, 54.108, 54.111, 54.118, Water Code, relating to
9-16 quorum, officers' duties, and management of the district, shall
9-17 govern the board of directors of a district created under this Act.
9-18 Sec. 3.08. Meetings and Notice. (a) The board shall
9-19 designate and establish a district office in the county.
9-20 (b) The board may establish regular meetings to conduct
9-21 district business and may hold special meetings at other times as
9-22 the business of a district requires.
9-23 (c) Notice of the time, place, and purpose of any meeting of
9-24 the board shall be given by posting at a place convenient to the
9-25 public within the district. A copy of the notice shall be
10-1 furnished to the clerk or clerks of the county in which the
10-2 district is located, who shall post them on a bulletin board in the
10-3 county courthouse used for such purpose.
10-4 (d) Except as herein provided the provisions of Chapter 551,
10-5 Government Code, shall be applicable to meetings of the board of
10-6 directors. Any interested person may attend any meeting of the
10-7 board.
10-8 Sec. 3.09. Director's Compensation; Bond and Oath of Office.
10-9 A director is not entitled to receive compensation for service on
10-10 the board. Sections 375.070, 375.069, Local Government Code, shall
10-11 apply to directors of a district created under this Act.
10-12 Sec. 3.10. Governmental Agency; Suits. (a) A district,
10-13 when created and confirmed, may, through its directors, sue and be
10-14 sued in any and all courts of this state in the name of the
10-15 district. Service of process in any suit may be had by serving any
10-16 two directors.
10-17 (b) A district is a governmental agency, a body politic and
10-18 corporate, and a political subdivision of the state. Section
10-19 357.004, Local Government Code, shall apply to a district created
10-20 under this Act.
10-21 ARTICLE 4. POWERS AND DUTIES
10-22 Sec. 4.01. Powers. (a) A district shall have the power to
10-23 acquire and dispose of projects and shall have all of the other
10-24 powers, authority, rights, and duties which will permit
10-25 accomplishment of the purposes for which the district was created.
11-1 (b) The district shall have the power to provide for general
11-2 promotion and tourist advertising of the district and its vicinity
11-3 and to conduct a marketing program to attract visitors, any of
11-4 which may be conducted by the district pursuant to contracts for
11-5 professional services with persons or organizations selected by
11-6 district.
11-7 (c) The district shall have the powers and duties of a
11-8 municipal management district created under Chapter 375, Local
11-9 Government Code, to the extent not inconsistent with this Act.
11-10 Sec. 4.02. Competitive Bidding; Contract Award. Section
11-11 375.221, Local Government Code, shall apply to a district created
11-12 under this Act. Notwithstanding any other provision of this Act to
11-13 the contrary, any contract between the district and a governmental
11-14 entity or nonprofit corporation created under Article 5190.6, Texas
11-15 Civil Statutes, as amended, shall not be subject to the competitive
11-16 bidding requirement of this Act.
11-17 Sec. 4.03. Eminent Domain. The district may exercise the
11-18 power of eminent domain to acquire land or interests in land within
11-19 the district deemed necessary by the board of directors of the
11-20 district for the purpose of providing water and sewer services to
11-21 an authorized project. The right of eminent domain shall be
11-22 exercised in the manner provided in Title 52, Texas Civil Statutes,
11-23 as amended.
11-24 ARTICLE 5. GENERAL FISCAL PROVISIONS
11-25 Sec. 5.01. Expenditures. A district's money may be
12-1 disbursed only by check, draft, order, or other instrument which
12-2 shall be signed by at least three directors. The general manager,
12-3 treasurer, or other employee of the district when authorized by
12-4 resolution of the board may sign checks, drafts, orders, or other
12-5 instruments on any district operation account and these need not be
12-6 signed by anyone else.
12-7 Sec. 5.02. Purposes For Borrowing Money. The district may
12-8 borrow money for any corporate purpose or combination of corporate
12-9 purposes.
12-10 Sec. 5.03. Repayment of Organizational Expenses. The
12-11 district's directors are authorized to pay all costs and expenses
12-12 necessarily incurred in the creation and organization of a
12-13 district, the cost of investigation and making plans, the cost of
12-14 the engineer's report, project designer fees, legal fees, and other
12-15 incidental expenses, and to reimburse any person for money advanced
12-16 for these purposes. These payments may be made from money obtained
12-17 from the issuance of notes or the sale of bonds first issued by the
12-18 district or out of other revenues of the district.
12-19 ARTICLE 6. ISSUANCE OF BONDS
12-20 Sec. 6.01. Issuance of Bonds. The district may issue bonds
12-21 for the purpose of defraying all or part of the cost of any project
12-22 as provided in this Act. Sections 375.201 through 375.208,
12-23 inclusive, Local Government Code, shall apply to district created
12-24 under this Act to the extent not inconsistent with this Act.
12-25 Sec. 6.02. Manner of Repayment of Bonds. The board may
13-1 provide for the payment of principal of and interest and redemption
13-2 price on bonds from taxes; by pledging all or any part of the
13-3 designated revenues, license fees, or other compensation from a
13-4 project or any part thereof, including revenues and receipts
13-5 derived by the district from the lease or sale of the project, or
13-6 by pledging all or any part of any grant, donation, revenues, or
13-7 income received or to be received from any public or private
13-8 source; or a combination of such sources.
13-9 Sec. 6.03. Use of Bond Proceeds. The district may use bond
13-10 proceeds to pay interest on the bonds during and after the period
13-11 of the acquisition or construction of a project, to pay
13-12 administrative and operating expenses, to create a reserve fund for
13-13 the payment of principal and interest on the bonds, and to pay all
13-14 expenses incurred and to be incurred in the issuance, sale, and
13-15 delivery of the bonds.
13-16 ARTICLE 7. TAXES
13-17 Sec. 7.01. Sales and Use Tax. (a) A district may levy a
13-18 sales and use tax for the benefit of the district if authorized by
13-19 a majority of the qualified voters of the district voting at an
13-20 election called and held for that purpose. The sales and use tax,
13-21 if adopted, does not count toward the limitation imposed by Chapter
13-22 323, Tax Code (County Sales and Use Tax Act) on any sales and use
13-23 tax that has been levied by the county.
13-24 (b) If a district adopts the tax, there is imposed a tax on
13-25 the receipts from the sale at retail of taxable items within the
14-1 district at a rate of up to one-half of one percent. For purposes
14-2 of this section, the term "taxable items" shall include all items
14-3 subject to any sales and use tax that is imposed by the county in
14-4 which the district is located if the county has imposed a sales and
14-5 use tax. There is also imposed an excise tax on the use, storage,
14-6 or other consumption within the district of taxable items
14-7 purchased, leased, or rented from a retailer during the period that
14-8 the tax is effective within the district. The rate of the excise
14-9 tax is the same as the rate of the sales tax portion of the tax
14-10 applied to the sales price of the taxable items and is included in
14-11 the sales tax.
14-12 (c) Chapter 323, Tax Code (County Sales and Use Tax Act), to
14-13 the extent not inconsistent with this Act, governs the imposition,
14-14 computation, administration, and governance, of the tax under this
14-15 section, except that Sections 323.101 (b), (e), 323.209,
14-16 323.401-406, and 323.505 do not apply. Chapter 323, Tax Code
14-17 (County Sales and Use Tax Act) does not apply to the use and
14-18 allocation of revenues under this Act. In applying the procedures
14-19 under Chapter 323, Tax Code (County Sales and Use Tax Act), the
14-20 district's name shall be substituted for "the county" and "board of
14-21 directors" is substituted for "commissioners court."
14-22 (d) The permissible rates for a local sales and use tax
14-23 levied under this Act are one-fourth of one percent; three-eighths
14-24 of one percent; and one-half of one percent.
14-25 (e) The board by order may decrease or abolish the local
15-1 sales and use tax rate or may call an election to increase,
15-2 decrease, or abolish the local sales and use tax rate.
15-3 (f) At the election, the ballots shall be prepared to permit
15-4 voting for or against the proposition: "The increase (decrease) of
15-5 the local sales and use tax rate of (name of district) to
15-6 (percentage) to be used for the promotion and development of
15-7 tourism" or, "The abolition of the district sales and use tax used
15-8 for the promotion and development of tourism." The increase or
15-9 decrease in the tax rate is effective if it is approved by a
15-10 majority of the votes cast. In calling and holding the election,
15-11 the board shall use the procedures for the confirmation and tax
15-12 election set forth in Article 2 of this Act.
15-13 (g) Taxes collected under this section may be used only for
15-14 the purposes for which the district was created, and the district
15-15 may pledge the revenue derived from the taxes imposed under this
15-16 Section to the payment of bonds issued by the district.
15-17 Sec. 7.02. Hotel Occupancy Tax. (a) The board of directors
15-18 by the adoption of an order or resolution may impose a hotel
15-19 occupancy tax. The hotel occupancy tax, if adopted, does not count
15-20 toward the limitation imposed by Chapter 352, Tax Code, on the
15-21 hotel occupancy tax that has been levied by the county.
15-22 (b) Chapter 352, Tax Code (County Hotel Occupancy Taxes), to
15-23 the extent not inconsistent with this Act, governs the imposition
15-24 and collection of the tax under section, except that Sections
15-25 352.002(a), (d) and 352.003 do not apply. Chapter 352, Tax Code
16-1 (County Hotel Occupancy Taxes) does not apply to the use and
16-2 allocation of revenues under this Act. In applying the procedures
16-3 under Chapter 352, Tax Code (County Hotel Occupancy Taxes), the
16-4 district's name shall be substituted for "the county" and "board of
16-5 directors" is substituted for "commissioners court."
16-6 (c) The permissible rate for a hotel occupancy tax
16-7 authorized by this Act shall not exceed seven percent of the price
16-8 paid for a room in a hotel.
16-9 (d) Taxes collected under this Section may be used only for
16-10 the purposes for which the district was created, and the district
16-11 may pledge the revenue derived from the taxes imposed under this
16-12 Section to the payment of bonds issued by the district.
16-13 Sec. 7.03. Receipt of Incremental Tax Proceeds. (a) The
16-14 district shall receive a payment equal to 100 percent of the
16-15 incremental tax proceeds collected by taxing entities within the
16-16 district during the first twenty years following creation of the
16-17 district.
16-18 (b) For purposes of this section, "tax proceeds" means the
16-19 hotel occupancy taxes and sales and use taxes collected from
16-20 individuals or entities within the boundaries of the district and
16-21 "incremental tax proceeds" means the amount by which the tax
16-22 proceeds collected by the taxing entity in a fiscal year exceeds
16-23 the amount of such tax proceeds collected by such entity during the
16-24 last fiscal year before the district was created.
16-25 (c) Tax increments collected under this section may be used
17-1 only for the purposes for which the district was created, and the
17-2 district may pledge the revenues derived from the taxes imposed
17-3 under this Section to the payment of bonds issued by the district.
17-4 ARTICLE 8. ADDING AND EXCLUDING TERRITORY;
17-5 CONSOLIDATING AND DISSOLVING DISTRICTS
17-6 Sec. 8.01. Adding and Excluding Land from the district.
17-7 (a) Before the board issues bonds, the board may, upon its own
17-8 motion or upon request of a landowner in the district, petition the
17-9 county commissioners for the addition of land to or exclusion of
17-10 land from the district.
17-11 (b) If the commissioners court unanimously determines from
17-12 the evidence that the best interests of the persons and property in
17-13 the district will be served by adding or excluding land, the
17-14 commissioners court shall enter the appropriate findings and order
17-15 in its record adding or excluding land.
17-16 Sec. 8.02. Dissolution of district. (a) A district may be
17-17 dissolved only as provided by this Section.
17-18 (b) The board of directors may petition the commissioners
17-19 court to dissolve the district if a majority of the board finds at
17-20 any time (1) before the authorization of bonds, or the final
17-21 lending of its credit that the proposed undertaking is
17-22 impracticable or cannot be successfully and beneficially
17-23 accomplished, or (2) after all bonds of the district or other debts
17-24 of the district have been paid and the purposes of the district
17-25 shall have been accomplished.
18-1 (c) Upon receipt of a petition from the board for
18-2 dissolution of the district, the county commissioners shall hold a
18-3 hearing as provided in Article 2 of this Act.
18-4 (d) If the commissioners court unanimously determines from
18-5 the evidence that the best interests of the county and the owners
18-6 of property and interests in property within the district will be
18-7 served by dissolving the district, the commissioners court shall
18-8 enter the appropriate findings and order in its records dissolving
18-9 the district. Otherwise the commissioners court shall enter its
18-10 order providing that the district has not been dissolved. Upon
18-11 dissolution of the district, funds and property of the district, if
18-12 any, shall be transferred to the commissioners court.
18-13 SECTION 2. The importance of this legislation and the
18-14 crowded condition of the calendars in both houses create an
18-15 emergency and an imperative public necessity that the
18-16 constitutional rule requiring bills to be read on three several
18-17 days in each house be suspended, and this rule is hereby suspended,
18-18 and that this Act take effect and be in force from and after its
18-19 passage, and it is so enacted.