1-1 AN ACT
1-2 relating to the creation of municipal development districts;
1-3 authorizing the imposition of certain local taxes and the issuance
1-4 of local bonds.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle A, Title 12, Local Government Code, is
1-7 amended by adding Chapter 377 to read as follows:
1-8 CHAPTER 377. MUNICIPAL DEVELOPMENT DISTRICTS
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 377.001. DEFINITIONS. In this chapter:
1-11 (1) "Board" means the board of directors of a
1-12 municipal development district.
1-13 (2) "District" means a municipal development district
1-14 created under this chapter.
1-15 (3) "Development project":
1-16 (A) means:
1-17 (i) a "project" as that term is defined by
1-18 Section 4B(a), Development Corporation Act of 1979 (Article 5190.6,
1-19 Vernon's Texas Civil Statutes); and
1-20 (ii) a convention center facility or
1-21 related improvement such as a convention center, civic center,
1-22 civic center building, civic center hotel, or auditorium; and
1-23 (B) includes parking areas or facilities that
1-24 are used to park vehicles and that are located at or in the
2-1 vicinity of other convention center facilities.
2-2 Sec. 377.002. APPLICATION. This chapter applies only to a
2-3 municipality with a population of less than 10,000 that is located
2-4 in more than two counties, at least one of which borders the Gulf
2-5 of Mexico.
2-6 (Sections 377.003-377.020 reserved for expansion
2-7 SUBCHAPTER B. MUNICIPAL DEVELOPMENT DISTRICT
2-8 Sec. 377.021. CREATION. (a) A municipality may call an
2-9 election on the question of creating a municipal development
2-10 district under this chapter to plan, acquire, establish, develop,
2-11 construct, or renovate one or more development projects in the
2-12 district.
2-13 (b) The order calling the election must:
2-14 (1) define the boundaries of the district to include
2-15 all or part of the boundaries of the municipality; and
2-16 (2) call for the election to be held within those
2-17 boundaries.
2-18 (c) The ballot at an election held under this section must
2-19 be printed to permit voting for or against the proposition:
2-20 "Authorizing the creation of the ____ Municipal Development
2-21 District (insert name of district) and the imposition of a sales
2-22 and use tax at the rate of ____ of one percent (insert one-eighth,
2-23 one-fourth, three-eighths, or one-half, as appropriate) for the
2-24 purpose of financing development projects in the district."
2-25 (d) The district is created if a majority of the registered
2-26 voters of the proposed district voting at the election favor
2-27 creation of the district.
3-1 (e) If a majority of the registered voters of the proposed
3-2 district voting at the election to create the district vote against
3-3 creation of the district, another election on the question of
3-4 creating a municipal development district may not be held in the
3-5 municipality before the first anniversary of the most recent
3-6 election concerning creation of a district.
3-7 (f) The Election Code governs an election held under this
3-8 chapter.
3-9 Sec. 377.022. POLITICAL SUBDIVISION; OPEN MEETINGS. (a) A
3-10 district is a political subdivision of this state and of the
3-11 municipality in which the district is located.
3-12 (b) A district is subject to Chapter 551, Government Code.
3-13 (Sections 377.023-377.050 reserved for expansion
3-14 SUBCHAPTER C. BOARD OF DIRECTORS
3-15 Sec. 377.051. COMPOSITION AND APPOINTMENT OF BOARD. (a) A
3-16 district is governed by a board of at least four directors.
3-17 (b) The board is appointed by the governing body of the
3-18 municipality in which the district is located.
3-19 (c) Directors serve staggered two-year terms. A director
3-20 may be removed by the appointing municipality at any time without
3-21 cause. Successor directors are appointed in the same manner as the
3-22 original appointees.
3-23 (d) To qualify to serve as a director, a person must be a
3-24 resident of the municipality in which the district is located. An
3-25 employee, officer, or member of the governing body of the
3-26 municipality may serve as a director, but may not have a personal
3-27 interest in a contract executed by the district other than as an
4-1 employee, officer, or member of the governing body of the
4-2 municipality.
4-3 Sec. 377.052. COMPENSATION. A board member is not entitled
4-4 to compensation, but is entitled to reimbursement for actual and
4-5 necessary expenses.
4-6 Sec. 377.053. MEETINGS. The board shall conduct its
4-7 meetings in the municipality in which the district is located.
4-8 Sec. 377.054. OFFICERS. The board shall designate from the
4-9 members of the board a presiding officer, a secretary, and other
4-10 officers the board considers necessary.
4-11 (Sections 377.055-377.070 reserved for expansion
4-12 SUBCHAPTER D. POWERS AND DUTIES
4-13 Sec. 377.071. GENERAL POWERS OF DISTRICT. (a) A district
4-14 may:
4-15 (1) perform any act necessary to the full exercise of
4-16 the district's powers;
4-17 (2) accept a grant or loan from a:
4-18 (A) department or agency of the United States;
4-19 (B) department, agency, or political subdivision
4-20 of this state; or
4-21 (C) public or private person;
4-22 (3) acquire, sell, lease, convey, or otherwise dispose
4-23 of property or an interest in property, including a development
4-24 project, under terms and conditions determined by the district;
4-25 (4) employ necessary personnel; and
4-26 (5) adopt rules to govern the operation of the
4-27 district and its employees and property.
5-1 (b) A district may contract with a public or private person
5-2 to:
5-3 (1) plan, acquire, establish, develop, construct, or
5-4 renovate a development project; or
5-5 (2) perform any other act the district is authorized
5-6 to perform under this chapter.
5-7 (c) A district may not levy an ad valorem tax.
5-8 Sec. 377.072. DEVELOPMENT PROJECT FUND. (a) A district
5-9 shall establish by resolution a fund known as the development
5-10 project fund. The district may establish separate accounts within
5-11 the fund.
5-12 (b) The district shall deposit into the development project
5-13 fund:
5-14 (1) the proceeds from any sales and use tax imposed by
5-15 the district;
5-16 (2) all revenue from the sale of bonds or other
5-17 obligations by the district; and
5-18 (3) any other money required by law to be deposited in
5-19 the fund.
5-20 (c) The district may use money in the development project
5-21 fund only to:
5-22 (1) pay the costs of planning, acquiring,
5-23 establishing, developing, constructing, or renovating one or more
5-24 development projects in the district;
5-25 (2) pay the principal of, interest on, and other costs
5-26 relating to bonds or other obligations issued by the district or
5-27 to refund bonds or other obligations; or
6-1 (3) pay the costs of operating or maintaining one or
6-2 more development projects during the planning, acquisition,
6-3 establishment, development, construction, or renovation or while
6-4 bonds or other obligations for the planning, acquisition,
6-5 establishment, development, construction, or renovation are
6-6 outstanding.
6-7 Sec. 377.073. BONDS AND OTHER OBLIGATIONS. (a) A district
6-8 may issue bonds, including revenue bonds and refunding bonds, or
6-9 other obligations to pay the costs of a development project.
6-10 (b) The bonds or other obligations and the proceedings
6-11 authorizing the bonds or other obligations shall be submitted to
6-12 the attorney general for review and approval as required by
6-13 Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called
6-14 Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes).
6-15 (c) The bonds or other obligations must be payable from and
6-16 secured by the revenues of the district.
6-17 (d) The bonds or other obligations may mature serially or
6-18 otherwise not more than 30 years from their date of issuance.
6-19 (e) The bonds or other obligations are not a debt of and do
6-20 not create a claim for payment against the revenue or property of
6-21 the district other than a development project for which the bonds
6-22 are issued.
6-23 Sec. 377.074. PUBLIC PURPOSE OF PROJECT. (a) The
6-24 legislature finds for all constitutional and statutory purposes
6-25 that a development project is owned, used, and held for public
6-26 purposes by the district.
6-27 (b) Section 25.07(a), Tax Code, does not apply to a
7-1 leasehold or other possessory interest granted by the district
7-2 while the district owns the development project.
7-3 (c) The development project is exempt from taxation under
7-4 Section 11.11, Tax Code, while the district owns the project.
7-5 (Sections 377.075-377.100 reserved for expansion
7-6 SUBCHAPTER E. SALES AND USE TAX
7-7 Sec. 377.101. SALES AND USE TAX. (a) A district by order
7-8 may impose a sales and use tax under this subchapter.
7-9 (b) A district may impose a tax under this subchapter only
7-10 if the tax is approved at an election held under Section 377.021.
7-11 (c) A district may not adopt a sales and use tax under this
7-12 subchapter if the adoption of the tax under this subchapter would
7-13 result in a combined tax rate of all local sales and use taxes of
7-14 more than two percent in any location in the district.
7-15 Sec. 377.102. TAX CODE APPLICABLE. (a) Chapter 323, Tax
7-16 Code, governs the imposition, computation, administration,
7-17 collection, and remittance of a tax authorized under this
7-18 subchapter except as inconsistent with this subchapter.
7-19 (b) Section 323.101(b), Tax Code, does not apply to the tax
7-20 authorized by this subchapter.
7-21 Sec. 377.103. TAX RATE. The rate of a tax adopted under
7-22 this subchapter must be one-eighth, one-fourth, three-eighths, or
7-23 one-half of one percent.
7-24 Sec. 377.104. REPEAL OR RATE CHANGE. (a) A district that
7-25 has adopted a sales and use tax under this subchapter may by order
7-26 and subject to Section 377.101(c), change the rate of the tax or
7-27 repeal the tax if the change or repeal is approved by a majority of
8-1 the registered voters of that district voting at an election called
8-2 and held for that purpose.
8-3 (b) The tax may be changed under Subsection (a) in one or
8-4 more increments of one-eighth of one percent to a maximum of
8-5 one-half of one percent.
8-6 (c) The ballot for an election to change the tax shall be
8-7 printed to permit voting for or against the proposition: "The
8-8 adoption of a sales and use tax at the rate of ____ of one percent
8-9 (insert one-fourth, three-eighths, or one-half, as appropriate)."
8-10 (d) The ballot for the election to repeal the tax shall be
8-11 printed to permit voting for or against the proposition: "The
8-12 repeal of the sales and use tax for financing development projects
8-13 in the __________ Municipal Development District (insert name of
8-14 district)."
8-15 Sec. 377.105. IMPOSITION OF TAX. (a) If the district
8-16 adopts the tax, a tax is imposed on the receipts from the sale at
8-17 retail of taxable items in the district at the rate approved at the
8-18 election.
8-19 (b) There is also imposed an excise tax on the use, storage,
8-20 or other consumption in the district of tangible personal property
8-21 purchased, leased, or rented from a retailer during the period that
8-22 the tax is effective in the district. The rate of the excise tax
8-23 is the same as the rate of the sales tax portion of the tax and is
8-24 applied to the sale price of the tangible personal property.
8-25 Sec. 377.106. EFFECTIVE DATE OF TAX. Except as provided by
8-26 Section 377.107, the adoption of the tax, the change of the tax
8-27 rate, or the repeal of the tax takes effect on the first day of the
9-1 first calendar quarter occurring after the expiration of the first
9-2 complete quarter occurring after the date on which the comptroller
9-3 receives a notice of the results of the election adopting,
9-4 changing, or repealing the tax.
9-5 Sec. 377.107. COLLECTION OF TAX TO PAY BONDS OR OTHER
9-6 OBLIGATIONS. (a) If the district votes to repeal the sales and
9-7 use tax under Section 377.104, and the district had issued bonds or
9-8 incurred other obligations secured by the tax before the date of
9-9 the election, the district shall continue to collect the tax until
9-10 the bonds or other obligations are paid.
9-11 (b) The district shall immediately notify the comptroller
9-12 when the bonds or other obligations have been paid.
9-13 (c) The repeal of the tax takes effect on the first day of
9-14 the first calendar quarter occurring after the expiration of the
9-15 first complete quarter occurring after the date on which the
9-16 comptroller receives the notice under Subsection (b).
9-17 Sec. 377.108. DEPOSIT OF TAX REVENUES. Revenue from the tax
9-18 imposed under this subchapter shall be deposited in the development
9-19 project fund of the district imposing the tax.
9-20 SECTION 2. The importance of this legislation and the
9-21 crowded condition of the calendars in both houses create an
9-22 emergency and an imperative public necessity that the
9-23 constitutional rule requiring bills to be read on three several
9-24 days in each house be suspended, and this rule is hereby suspended,
9-25 and that this Act take effect and be in force from and after its
9-26 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1029 was passed by the House on May
2, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1029 was passed by the Senate on May
17, 1997, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor