SRC-JRN H.B. 1029 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1029
By: Hawley (Truan)
Intergovernmental Relations
5-12-97
Engrossed


DIGEST 

Currently, there are several examples of districts with specialized
taxation powers.  Some of these districts may be able to offer certain tax
advantages, while others may not.  This bill allows for the creation of
municipal development districts in cities having a population of less than
10,000 and which are located in more than two counties. 

PURPOSE

As proposed, H.B. 1029 allows for the creation of municipal development
districts in cities having a population of less than 10,000 and which are
located in more than two counties. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to a municipality development district in
SECTION 1 (Section 377.072, Local Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Title 12A, Local Government Code, by adding Chapter 377,
as follows: 

 CHAPTER 377. MUNICIPAL DEVELOPMENT DISTRICTS

SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 377.001.  DEFINITIONS.  Defines "board," "district," and "development
project." 

Sec. 377.002.  APPLICATION.  Provides that this chapter applies only to a
municipality with a population of less than 10,000 that is located in more
than two counties, at least one of which borders the Gulf of Mexico. 

SUBCHAPTER B.  MUNICIPAL DEVELOPMENT DISTRICT

Sec. 377.021. CREATION.  Sets forth provisions regarding the authorization
for a municipality to create an election on the question of creating a
municipal development district (district). 

Sec. 377.022. POLITICAL SUBDIVISION; OPEN MEETINGS.  Provides that a
district is a political subdivision and subject to Chapter 551, Government
Code. 

SUBCHAPTER C.  BOARD OF DIRECTORS

Sec. 377.051. COMPOSITION AND APPOINTMENT OF BOARD.  Sets forth provisions
regarding the composition of the board of directors of a district (board). 

Sec. 377.052. COMPENSATION.  Provides that a board member is not entitled
to compensation, but is entitled to reimbursement for actual and necessary
expenses. 

Sec. 377.053. MEETINGS.  Requires the board to conduct its meetings in the
municipality  in which the district is located. 

Sec. 377.054. OFFICERS.  Requires the board to designate from the members
of the board a presiding officer, a secretary, and other officers the
board considers necessary. 

SUBCHAPTER D.  POWERS AND DUTIES

Sec. 377.071. GENERAL POWERS OF DISTRICT.  Sets forth provisions regarding
the powers and duties of the district. 

Sec. 377.072. DEVELOPMENT PROJECT FUND.  Requires a district to establish
by resolution a fund known as the development project fund.  Sets forth
provisions regarding the development project fund. 

Sec. 377.073. BONDS AND OTHER OBLIGATIONS.  Authorizes a district to issue
certain obligations. 

Sec. 377.074. PUBLIC PURPOSE OF PROJECT.  Provides that the legislature
finds that a development project is owned, used, and held for public
purposes.  Sets forth provisions regarding the effect of the Tax Code on
the district. 

SUBCHAPTER E.  SALES AND USE TAX

Sec. 377.101. SALES AND USE TAX.  Authorizes a district to impose a sales
and use tax, only if the tax is approved at an election held under Section
377.021.  Prohibits a district from adopting a sales and use tax under
certain conditions. 

Sec. 377.102. TAX CODE APPLICABLE.  Provides that Chapter 323, Tax Code,
governs the imposition, computation, administration, collection, and
remittance of a tax authorized under this section, except as inconsistent
with this subchapter.  Provides that Section 323.101(b), Tax Code, does
not apply to the tax. 

Sec. 377.103. TAX RATE.  Requires the tax rate adopted under this
subchapter to be oneeighth, one-fourth, three-eighths, or one-half of one
percent. 

Sec. 377.104. REPEAL OR RATE CHANGE.  Sets forth provisions regarding the
authorization of districts to change the tax rate.  Sets forth
requirements for elections for tax rate changes. 

Sec. 377.105. IMPOSITION OF TAX.  Sets forth provisions regarding the
imposition of a tax based on receipt sales of taxable items in the
district. 

Sec. 377.106. EFFECTIVE DATE OF TAX.  Sets forth a provision regarding the
effective date of tax. 

Sec. 377.107. COLLECTION OF TAX TO PAY BONDS OR OTHER OBLIGATIONS.
Authorizes the district to collect certain taxes.  Sets forth a provision
regarding the repeal of taxes. 

Sec. 377.108. DEPOSIT OF TAX REVENUES.  Requires revenue from the tax
imposed under this subchapter to be deposited in the development project
fund of the district imposing the tax. 

SECTION 2. Emergency clause.
  Effective date: upon passage.