By Hawley H.B. No. 1921 75R6217 CBH-D A BILL TO BE ENTITLED 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 376 to read as follows: 1-8 CHAPTER 376. MUNICIPAL DEVELOPMENT DISTRICTS 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 376.001. 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. 376.002. APPLICATION. This chapter applies only to a 2-3 municipality that is located in more than two counties. 2-4 (Sections 376.003-376.020 reserved for expansion 2-5 SUBCHAPTER B. MUNICIPAL DEVELOPMENT DISTRICT 2-6 Sec. 376.021. CREATION. (a) A municipality may call an 2-7 election on the question of creating a municipal development 2-8 district under this chapter to plan, acquire, establish, develop, 2-9 construct, or renovate one or more development projects in the 2-10 district. 2-11 (b) The order calling the election must: 2-12 (1) define the boundaries of the district to include 2-13 all or part of the boundaries of the municipality; and 2-14 (2) call for the election to be held within those 2-15 boundaries. 2-16 (c) The ballot at an election held under this section must 2-17 be printed to permit voting for or against the proposition: 2-18 "Authorizing the creation of the ____ Municipal Development 2-19 District (insert name of district) and the imposition of a sales 2-20 and use tax at the rate of ____ of one percent (insert one-eighth, 2-21 one-fourth, three-eighths, or one-half, as appropriate) for the 2-22 purpose of financing development projects in the district." 2-23 (d) The district is created if a majority of the registered 2-24 voters of the proposed district voting at the election favor 2-25 creation of the district. 2-26 (e) If a majority of the registered voters of the proposed 2-27 district voting at the election to create the district vote against 3-1 creation of the district, another election on the question of 3-2 creating a municipal development district may not be held in the 3-3 municipality before the first anniversary of the most recent 3-4 election concerning creation of a district. 3-5 (f) The Election Code governs an election held under this 3-6 chapter. 3-7 Sec. 376.022. POLITICAL SUBDIVISION; OPEN MEETINGS. (a) A 3-8 district is a political subdivision of this state and of the 3-9 municipality in which the district is located. 3-10 (b) A district is subject to Chapter 551, Government Code. 3-11 (Sections 376.023-376.050 reserved for expansion 3-12 SUBCHAPTER C. BOARD OF DIRECTORS 3-13 Sec. 376.051. COMPOSITION AND APPOINTMENT OF BOARD. (a) A 3-14 district is governed by a board of at least four directors. 3-15 (b) The board is appointed by the governing body of the 3-16 municipality in which the district is located. 3-17 (c) Directors serve staggered two-year terms. A director 3-18 may be removed by the appointing municipality at any time without 3-19 cause. Successor directors are appointed in the same manner as the 3-20 original appointees. 3-21 (d) To qualify to serve as a director, a person must be a 3-22 resident of the municipality in which the district is located. An 3-23 employee, officer, or member of the governing body of the 3-24 municipality may serve as a director, but may not have a personal 3-25 interest in a contract executed by the district other than as an 3-26 employee, officer, or member of the governing body of the 3-27 municipality. 4-1 Sec. 376.052. COMPENSATION. A board member is not entitled 4-2 to compensation, but is entitled to reimbursement for actual and 4-3 necessary expenses. 4-4 Sec. 376.053. MEETINGS. The board shall conduct its 4-5 meetings in the municipality in which the district is located. 4-6 Sec. 376.054. OFFICERS. The board shall designate from the 4-7 members of the board a presiding officer, a secretary, and other 4-8 officers the board considers necessary. 4-9 (Sections 376.055-376.070 reserved for expansion 4-10 SUBCHAPTER D. POWERS AND DUTIES 4-11 Sec. 376.071. GENERAL POWERS OF DISTRICT. (a) A district 4-12 may: 4-13 (1) perform any act necessary to the full exercise of 4-14 the district's powers; 4-15 (2) accept a grant or loan from a: 4-16 (A) department or agency of the United States; 4-17 (B) department, agency, or political subdivision 4-18 of this state; or 4-19 (C) public or private person; 4-20 (3) acquire, sell, lease, convey, or otherwise dispose 4-21 of property or an interest in property, including a development 4-22 project, under terms and conditions determined by the district; 4-23 (4) employ necessary personnel; and 4-24 (5) adopt rules to govern the operation of the 4-25 district and its employees and property. 4-26 (b) A district may contract with a public or private person 4-27 to: 5-1 (1) plan, acquire, establish, develop, construct, or 5-2 renovate a development project; or 5-3 (2) perform any other act the district is authorized 5-4 to perform under this chapter. 5-5 (c) A district may not levy an ad valorem tax. 5-6 Sec. 376.072. DEVELOPMENT PROJECT FUND. (a) A district 5-7 shall establish by resolution a fund known as the development 5-8 project fund. The district may establish separate accounts within 5-9 the fund. 5-10 (b) The district shall deposit into the development project 5-11 fund: 5-12 (1) the proceeds from any sales and use tax imposed by 5-13 the district; 5-14 (2) all revenue from the sale of bonds or other 5-15 obligations by the district; and 5-16 (3) any other money required by law to be deposited in 5-17 the fund. 5-18 (c) The district may use money in the development project 5-19 fund only to: 5-20 (1) pay the costs of planning, acquiring, 5-21 establishing, developing, constructing, or renovating one or more 5-22 development projects in the district; 5-23 (2) pay the principal of, interest on, and other costs 5-24 relating to bonds or other obligations issued by the district or 5-25 to refund bonds or other obligations; or 5-26 (3) pay the costs of operating or maintaining one or 5-27 more development projects during the planning, acquisition, 6-1 establishment, development, construction, or renovation or while 6-2 bonds or other obligations for the planning, acquisition, 6-3 establishment, development, construction, or renovation are 6-4 outstanding. 6-5 Sec. 376.073. BONDS AND OTHER OBLIGATIONS. (a) A district 6-6 may issue bonds, including revenue bonds and refunding bonds, or 6-7 other obligations to pay the costs of a development project. 6-8 (b) The bonds or other obligations and the proceedings 6-9 authorizing the bonds or other obligations shall be submitted to 6-10 the attorney general for review and approval as required by 6-11 Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called 6-12 Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes). 6-13 (c) The bonds or other obligations must be payable from and 6-14 secured by the revenues of the district. 6-15 (d) The bonds or other obligations may mature serially or 6-16 otherwise not more than 30 years from their date of issuance. 6-17 (e) The bonds or other obligations are not a debt of and do 6-18 not create a claim for payment against the revenue or property of 6-19 the district other than a development project for which the bonds 6-20 are issued. 6-21 Sec. 376.074. PUBLIC PURPOSE OF PROJECT. (a) The 6-22 legislature finds for all constitutional and statutory purposes 6-23 that a development project is owned, used, and held for public 6-24 purposes by the district. 6-25 (b) Section 25.07(a), Tax Code, does not apply to a 6-26 leasehold or other possessory interest granted by the district 6-27 while the district owns the development project. 7-1 (c) The development project is exempt from taxation under 7-2 Section 11.11, Tax Code, while the district owns the project. 7-3 (Sections 376.075-376.100 reserved for expansion 7-4 SUBCHAPTER E. SALES AND USE TAX 7-5 Sec. 376.101. SALES AND USE TAX. (a) A district by order 7-6 may impose a sales and use tax under this subchapter. 7-7 (b) A district by order may repeal or decrease the rate of a 7-8 tax imposed under this subchapter. 7-9 (c) A district may impose a tax under this subchapter only 7-10 if the tax is approved at an election held under Section 376.021. 7-11 (d) 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. 376.102. 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. 376.103. 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. 376.104. RATE INCREASE. (a) A district that has 7-25 adopted a sales and use tax under this subchapter at a rate of less 7-26 than one-half of one percent may by order and subject to Section 7-27 376.101(d) increase the rate of the tax if the increase is approved 8-1 by a majority of the registered voters of that district voting at 8-2 an election called and held for that purpose. 8-3 (b) The tax may be increased 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 increase 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 Sec. 376.105. IMPOSITION OF TAX. (a) If the district 8-11 adopts the tax, a tax is imposed on the receipts from the sale at 8-12 retail of taxable items in the district at the rate approved at the 8-13 election. 8-14 (b) There is also imposed an excise tax on the use, storage, 8-15 or other consumption in the district of tangible personal property 8-16 purchased, leased, or rented from a retailer during the period that 8-17 the tax is effective in the district. The rate of the excise tax 8-18 is the same as the rate of the sales tax portion of the tax and is 8-19 applied to the sale price of the tangible personal property. 8-20 Sec. 376.106. EFFECTIVE DATE OF TAX. The adoption of the 8-21 tax or the change of the tax rate takes effect on the first day of 8-22 the first calendar quarter occurring after the expiration of the 8-23 first complete quarter occurring after the date on which the 8-24 comptroller receives a notice of the results of the election 8-25 adopting or increasing the tax or of the order decreasing the tax. 8-26 Sec. 376.107. DEPOSIT OF TAX REVENUES. Revenue from the tax 8-27 imposed under this subchapter shall be deposited in the development 9-1 project fund of the district imposing the tax. 9-2 SECTION 2. The importance of this legislation and the 9-3 crowded condition of the calendars in both houses create an 9-4 emergency and an imperative public necessity that the 9-5 constitutional rule requiring bills to be read on three several 9-6 days in each house be suspended, and this rule is hereby suspended, 9-7 and that this Act take effect and be in force from and after its 9-8 passage, and it is so enacted.