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.


 1-6           SECTION 1.  Subtitle A, Title 12, Local Government Code, is

 1-7     amended by adding Chapter 376 to read as follows:


 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


 2-6           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.