75R11484 E
By Oliveira H.B. No. 2162
Substitute the following for H.B. No. 2162:
By Oliveira C.S.H.B. No. 2162
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration and financing of certain industrial
1-3 development corporations; providing an administrative penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 4A(n) and (o), Development Corporation
1-6 Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are
1-7 amended to read as follows:
1-8 (n) At an election called and held under Subsection (d) or
1-9 (o) of this section, the city may also allow the voters to vote on
1-10 a ballot proposition that limits the length of time that a sales
1-11 and use tax may be imposed. If a city elects to limit the period
1-12 the sales and use tax may be imposed, there shall be added to the
1-13 end of the ballot proposition prescribed by Subsection (m) of this
1-14 section: "to be imposed for ________ years" (the number of years
1-15 to be inserted as appropriate). The governing body of the city
1-16 shall set the expiration date of the proposed tax to occur on the
1-17 appropriate anniversary of the effective date of the tax. A sales
1-18 and use tax imposed for a limited period under this subsection
1-19 expires on the date set by the governing body under this section or
1-20 on an earlier date if[, by a majority of the voters voting in an
1-21 election held in the city,] the tax is abolished under Subsection
1-22 (o) of this section [repealed]. [If an earlier abolition election
1-23 is held, Sections 321.102(a) and 321.402(b), Tax Code, apply to the
1-24 date of repeal.] A tax that is approved without a limit on its
2-1 period of imposition is effective until abolished in accordance
2-2 with Subsection (o) of this section [repealed by election].
2-3 Before the 60th day before the date that a tax is to expire, the
2-4 governing body shall send a notice to the comptroller stating the
2-5 expiration date of the tax. Revenue collected after the
2-6 expiration of the tax from the imposition of the tax after its
2-7 expiration date shall be forwarded by the state to the governing
2-8 body to be used to pay current bonded indebtedness of the
2-9 municipality. A municipality that has imposed a tax under this
2-10 section may not extend the period of the tax's imposition or
2-11 reimpose the tax unless the extension or reimposition is approved
2-12 by a majority of the qualified voters of the municipality voting in
2-13 an election called and held for that purpose [after its expiration
2-14 date]. If a city reduces the rate of an additional sales and use
2-15 tax under Chapter 321, Tax Code, to impose a tax under this section
2-16 for a limited period as provided under this subsection, and does
2-17 not have an election to change the rate of the additional sales and
2-18 use tax before the expiration date of the tax under this section,
2-19 the rate of the additional sales and use tax under Section
2-20 321.101(b), Tax Code, in the city returns to its previous rate in
2-21 effect at the time the tax imposed under this section was adopted
2-22 on the expiration date of the tax under this section without having
2-23 to hold an election under Chapter 321, Tax Code, to impose the
2-24 increase in the rate.
2-25 (o) In a city in which a sales and use tax for the benefit
2-26 of a corporation has been imposed under this section, in the same
2-27 manner and by the same procedure the city by majority vote of the
3-1 qualified voters of the city voting at an election called and held
3-2 for the purpose may reduce, [or] increase, or abolish the tax. The
3-3 rate may be reduced in one or more increments of one-eighth of one
3-4 percent to a minimum of one-eighth of one percent or increased in
3-5 one or more increments of one-eighth of one percent to a maximum of
3-6 one-half of one percent. On petition of 10 percent or more of the
3-7 registered voters of the city requesting an election on the
3-8 increase, [or] decrease, or abolition of the tax under this
3-9 section, the governing body of the city shall order an election on
3-10 the issue. The ballot shall be printed in the same manner as the
3-11 ballot under Subsection (m) of this section, except that the ballot
3-12 to abolish the tax shall be printed to provide for voting for or
3-13 against the proposition: "The abolition of the sales and use tax
3-14 for the promotion and development of new and expanded business
3-15 enterprises." Section 321.102(a), Tax Code, applies to the
3-16 abolition of a tax under this subsection. However, if before the
3-17 date of the election the corporation had issued bonds or incurred
3-18 other obligations secured by the tax, the tax shall continue to be
3-19 collected until the bonds or other obligations are paid. The
3-20 corporation shall immediately notify the comptroller when the bonds
3-21 or other obligations have been paid. A tax imposed under this
3-22 section may not be collected after the last day of the first
3-23 calendar quarter beginning after the date of notification to the
3-24 comptroller.
3-25 SECTION 2. Section 4A, Development Corporation Act of 1979
3-26 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
3-27 adding Subsection (p-1) to read as follows:
4-1 (p-1) A city that has imposed the additional sales and use
4-2 tax under Section 321.101(b), Tax Code, and is authorized by this
4-3 section to impose, reduce, increase, or abolish the tax under this
4-4 section may, at the same time and on the same ballot, reduce,
4-5 increase, or abolish the additional sales and use tax imposed under
4-6 Section 321.101(b), Tax Code, if the city is authorized by Chapter
4-7 321, Tax Code, to reduce, increase, or abolish the additional sales
4-8 and use tax. The city must follow, in relation to the reduction,
4-9 increase, or abolishment of the additional sales and use tax
4-10 imposed under Section 321.101(b), Tax Code, the procedures of that
4-11 chapter, except that in an election to impose, reduce, increase, or
4-12 abolish the tax under this section and the additional sales and use
4-13 tax the ballot shall be printed to provide for voting for or
4-14 against the proposition: "The transfer at the rate of ______ of
4-15 one percent (one-eighth, one-fourth, three-eighths, or one-half to
4-16 be inserted as appropriate) from the ______ of one percent
4-17 (one-eighth, one-fourth, three-eighths, or one-half to be inserted
4-18 as appropriate) additional sales and use tax within the city used
4-19 to reduce the property tax rate to a sales and use tax within the
4-20 city for the promotion and development of new and expanded business
4-21 enterprises at a rate of ______ of one percent" (one-eighth,
4-22 one-fourth, three-eighths, or one-half to be inserted as
4-23 appropriate).
4-24 SECTION 3. Section 4A, Development Corporation Act of 1979
4-25 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
4-26 adding Subsection (s) to read as follows:
4-27 (s)(1) A city that creates or has created a corporation
5-1 governed by this section may submit to the voters of the city, at a
5-2 separate election to be held on an available uniform election date
5-3 or at an election held under another provision of this Act,
5-4 including the election at which the proposition to initially
5-5 authorize the collection of a sales and use tax for the benefit of
5-6 the corporation is submitted, a ballot proposition that authorizes
5-7 the corporation to use the sales and use tax, including any amount
5-8 previously authorized and collected, for a specific project or for
5-9 a specific category of projects that does not qualify under this
5-10 section but qualifies under Section 4B of this Act. Prior approval
5-11 of a specific project at an election or completion of a specific
5-12 project approved at an election does not prohibit a city from
5-13 seeking voter approval of an additional project or category of
5-14 projects under this subsection to be funded from the same sales and
5-15 use tax.
5-16 (2) In the election to authorize the use of the sales
5-17 and use tax for a specific project or for a specific category of
5-18 projects not authorized under this section, the project or category
5-19 of projects must be clearly described on the ballot so that a voter
5-20 will be able to discern the limits of the specific project or
5-21 category of projects authorized by the proposition. If maintenance
5-22 and operating costs of an otherwise authorized facility are to be
5-23 paid from the sales and use tax, the ballot language must clearly
5-24 state that fact.
5-25 (3) Before an election may be held under this
5-26 subsection, the corporation must comply with the public notice and
5-27 hearing requirements prescribed by Section 4B(a-1) of this Act.
6-1 (4) If a majority of the voters voting on the issue do
6-2 not approve a specific project or a specific category of projects
6-3 at an election under this subsection, another election may not be
6-4 held on the same project or category of projects before the first
6-5 anniversary of the date of the most recent election disapproving
6-6 the project or category of projects.
6-7 SECTION 4. Section 4B, Development Corporation Act of 1979
6-8 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
6-9 redesignating Subsection (a-1) as Subsection (a-3) and adding a new
6-10 Subsection (a-1) to read as follows:
6-11 (a-1) A corporation may not undertake or spend money to
6-12 undertake a project unless the city has adopted a sales and use tax
6-13 under this section for the benefit of the corporation. Before
6-14 spending money to undertake a specific project or general type of
6-15 project, a corporation shall publish notice of the project and hold
6-16 at least one public hearing on the proposed project. The
6-17 corporation shall publish notice under this subsection by
6-18 publishing notice of the project in a newspaper of general
6-19 circulation in the city or by posting a written notice of the
6-20 project in a place readily accessible to the general public at all
6-21 times. The corporation shall publish or post the notice not
6-22 earlier than 15 days or later than seven days before the scheduled
6-23 time of the public hearing on the project. Notice required under
6-24 this subsection is in addition to any notice required under Chapter
6-25 551, Government Code.
6-26 (a-3) A corporation may undertake a project under this
6-27 section unless within 60 days after first publishing notice of a
7-1 specific project or type of general project under Subsection (a-1)
7-2 of this section the governing body of the city receives a petition
7-3 from more than 10 percent of the registered voters of the city
7-4 where the petition requests that an election be held before that
7-5 specific project or that general type of project is undertaken. An
7-6 election is not required to be held after the submission of a
7-7 petition if the qualified citizens of the city have previously
7-8 approved the undertaking of a specific project or that general type
7-9 of project at an election called for that purpose by the governing
7-10 body of the city or in conjunction with another election required
7-11 to be held under this section.
7-12 SECTION 5. Section 4B(c), Development Corporation Act of
7-13 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
7-14 read as follows:
7-15 (c) The board of directors of a corporation under this
7-16 section consists of seven directors who are appointed by the
7-17 governing body of the eligible city for two-year terms of office.
7-18 A director may be removed by the governing body of the eligible
7-19 city at any time without cause. Each director must be a resident
7-20 of the eligible city. Three directors shall be persons who are not
7-21 employees, officers, or members of the governing body of the
7-22 eligible city. A majority of the entire membership of the board is
7-23 a quorum. Notwithstanding any other provision of this subsection,
7-24 if a city dissolves a corporation created under Section 4A of this
7-25 Act and creates a corporation under this section, a person serving
7-26 as a director of the corporation created under Section 4A of this
7-27 Act at the time of dissolution may serve on the board of the
8-1 corporation created under this section. The board shall conduct
8-2 all meetings within the boundaries of the eligible city. The board
8-3 shall appoint a president, a secretary, and other officers of the
8-4 corporation that the governing body of the eligible city considers
8-5 necessary. The corporation's registered agent must be an
8-6 individual resident of the state and the corporation's registered
8-7 office must be within the boundaries of the eligible city.
8-8 SECTION 6. Section 4B, Development Corporation Act of 1979
8-9 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
8-10 Chapters 1022 and 1031, Acts of the 73rd Legislature, Regular
8-11 Session, 1993, is amended by amending Subsections (e) and (f) and
8-12 adding Subsections (i-1), (i-2), and (i-3) to read as follows:
8-13 (e) The rate of a tax adopted under this section must be
8-14 one-eighth, one-fourth, three-eighths, or one-half of one percent.
8-15 The ballot proposition at the election held to adopt the tax must
8-16 clearly state that the voters are voting on the adoption of a new
8-17 sales and use tax, specify the rate of the tax to be adopted, and
8-18 identify the proposed use of or purpose for the tax revenue. In
8-19 addition, if maintenance and operating costs are to be paid from
8-20 the tax, the ballot language must clearly state that fact. A
8-21 corporation that holds an election to reduce or abolish a tax
8-22 imposed under Section 4A of this Act may, in the same or in a
8-23 separate proposition on the same ballot, adopt a tax under this
8-24 section. If an eligible city adopts the tax, a tax is imposed on
8-25 the receipts from the sale at retail of taxable items within the
8-26 eligible city at the rate approved at the election. There is also
8-27 imposed an excise tax on the use, storage, or other consumption
9-1 within the eligible city of tangible personal property purchased,
9-2 leased, or rented from a retailer during the period that the tax is
9-3 effective within the eligible city. The rate of the excise tax is
9-4 the same as the rate of the sales tax portion of the tax and is
9-5 applied to the sale price of the tangible personal property.
9-6 [(e) If an eligible city adopts the tax, a tax is imposed on
9-7 the receipts from the sale at retail of taxable items within the
9-8 eligible city at a rate approved by the governing body of the
9-9 eligible city. The rate must be equal to one-eighth, one-fourth,
9-10 three-eighths, or one-half of one percent. There is also imposed
9-11 an excise tax on the use, storage, or other consumption within the
9-12 eligible city of tangible personal property purchased, leased, or
9-13 rented from a retailer during the period that the tax is effective
9-14 within the eligible city. The rate of the excise tax is the same
9-15 as the rate of the sales tax portion of the tax and is applied to
9-16 the sale price of the tangible personal property.]
9-17 (f) Chapter 321, Tax Code, governs the imposition,
9-18 computation, administration, collection, abolition, and remittance
9-19 of the tax except as inconsistent with this section. The tax
9-20 imposed under this section takes effect as provided by Section
9-21 321.102(a), Tax Code. If, however, an election is held under this
9-22 section at the same time an election is held to impose or change
9-23 the rate of the additional municipal sales and use tax, the tax
9-24 under this section and the imposition or change in rate of the
9-25 additional municipal sales and use tax take effect as provided by
9-26 Section 321.102(b), Tax Code. The ballot proposition for an
9-27 election to impose the tax under this section and to impose or
10-1 change the rate of the additional municipal sales and use tax must
10-2 clearly state that the voters are voting on the adoption of a new
10-3 sales and use tax or the change of an existing tax, or both, and
10-4 include the information prescribed by Subsection (e) of this
10-5 section, as appropriate. An election to impose the tax under this
10-6 section and to impose or change the rate of the additional
10-7 municipal sales and use tax may be held on the same day, and voters
10-8 may vote on the issues in the same proposition or in separate
10-9 propositions on the same ballot. After the effective date of the
10-10 taxes imposed under this section, the adoption of a sales and use
10-11 tax or the attempted adoption of a sales and use tax by the
10-12 eligible city or any other taxing jurisdiction having territory in
10-13 the city does not impair the taxes imposed under this section.
10-14 (i-1) On petition of 10 percent or more of the registered
10-15 voters of the city requesting an election on the dissolution of
10-16 the corporation, the governing body shall order an election on the
10-17 issue at the next available uniform election date that is not less
10-18 than 45 days after the date that the petition is filed. The
10-19 election must be conducted according to the applicable provisions
10-20 of the Election Code. The ballot for the election shall be printed
10-21 to provide for voting for or against the proposition: "Dissolution
10-22 of the ________________ (name of the corporation)." If a majority
10-23 of voters voting on the issue approve the dissolution, the
10-24 corporation shall continue operations only as necessary to pay the
10-25 principal of and interest on its bonds and to meet obligations
10-26 incurred before the date of the election and, to the extent
10-27 practicable, shall dispose of its assets and apply the proceeds to
11-1 satisfy those obligations. When the last of the obligations is
11-2 satisfied, any remaining assets of the corporation shall be
11-3 transferred to the city, and the corporation is dissolved. A tax
11-4 imposed under this section may not be collected after the last day
11-5 of the first calendar quarter beginning after notification to the
11-6 comptroller by the corporation that the last of its obligations is
11-7 satisfied.
11-8 (i-2) The governing body of an eligible city may call and
11-9 hold an election on the issue of abolishing the tax imposed under
11-10 this section. On petition of 10 percent or more of the registered
11-11 voters of the city requesting an election on the issue of
11-12 abolishing the tax, the governing body shall order an election on
11-13 the issue. The ballot shall be printed to provide for voting for
11-14 or against the proposition: "The abolition of the sales and use
11-15 tax for the promotion and development of new and expanded business
11-16 enterprises." Section 321.102(a), Tax Code, applies to the
11-17 abolition of a tax under this subsection. However, if before the
11-18 date of the election the corporation had issued bonds or incurred
11-19 other obligations secured by the tax, the tax shall continue to be
11-20 collected until the bonds or other obligations are paid. During
11-21 that period, the corporation, to the extent practicable, shall
11-22 dispose of its assets and apply the proceeds to satisfy the bonds
11-23 or other obligations. The corporation shall immediately notify the
11-24 comptroller when the bonds or other obligations have been paid.
11-25 When the last of the bonds or obligations is satisfied, any
11-26 remaining assets of the corporation shall be transferred to the
11-27 city, and the corporation is dissolved. A tax imposed under this
12-1 section may not be collected after the last day of the first
12-2 calendar quarter beginning after the date of notification to the
12-3 comptroller.
12-4 (i-3) At an election held to adopt a sales and use tax under
12-5 this section, the city may also allow the voters to vote to limit
12-6 the time during which the tax may be imposed. The city shall add
12-7 to the end of the ballot proposition prescribed by Subsection (e)
12-8 or (f) of this section: "to be imposed for _____ years" (insert
12-9 number of years). The governing body of the city shall set the
12-10 expiration date of the proposed tax to occur on the appropriate
12-11 anniversary of the effective date of the tax. A sales and use tax
12-12 imposed for a limited period under this subsection expires on the
12-13 date set by the governing body under this section or on an earlier
12-14 date if the corporation is dissolved under Subsection (i-1) of this
12-15 section or the tax is abolished under Subsection (i-2) of this
12-16 section. Before the 60th day before the date the tax is to expire,
12-17 the governing body shall send a notice to the comptroller stating
12-18 the expiration date of the tax. Revenue collected after the
12-19 expiration of the tax from the imposition of the tax after its
12-20 expiration date shall be forwarded by the state to the governing
12-21 body to be used to pay current bonded indebtedness of the city. A
12-22 city that has imposed a tax under this section may not extend the
12-23 period of the tax's imposition or reimpose the tax unless the
12-24 extension or reimposition is approved by a majority of the
12-25 qualified voters of the city voting in an election called and held
12-26 for that purpose.
12-27 SECTION 7. The Development Corporation Act of 1979 (Article
13-1 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
13-2 4C to read as follows:
13-3 Sec. 4C. (a) Not later than February 1 of each year, the
13-4 board of directors of a corporation created under Section 4A or 4B
13-5 of this Act shall submit to the comptroller a report in the form
13-6 required by the comptroller.
13-7 (b) The reporting form shall not exceed one page in length
13-8 and must include:
13-9 (1) a statement of the corporation's primary economic
13-10 development objectives;
13-11 (2) a statement of the corporation's total revenues
13-12 during the preceding fiscal year;
13-13 (3) a statement of the corporation's total
13-14 expenditures during the preceding fiscal year;
13-15 (4) a statement of the corporation's total
13-16 expenditures during the preceding fiscal year in each of the
13-17 following categories:
13-18 (A) administration;
13-19 (B) personnel;
13-20 (C) marketing or promotion;
13-21 (D) direct business incentives;
13-22 (E) debt service;
13-23 (F) capital costs; and
13-24 (G) payments to taxing units, including school
13-25 districts;
13-26 (5) a list of the corporation's capital assets,
13-27 including land and buildings; and
14-1 (6) a statement of the corporation's other assets,
14-2 including deposits and securities.
14-3 (c) If a corporation fails to file a report in accordance
14-4 with this section or fails to include sufficient information in the
14-5 report, the comptroller shall provide to the corporation written
14-6 notice of this failure. The written notice must include
14-7 information on how to correct the failure.
14-8 (d) The comptroller may impose an administrative penalty of
14-9 $200 against a corporation that does not correct the failure before
14-10 the 31st day after the date the corporation receives the written
14-11 notice under Subsection (c) of this section.
14-12 (e) The comptroller by rule shall prescribe the procedures
14-13 for the imposition of an administrative penalty under this section.
14-14 The rules must protect the due process rights of a corporation.
14-15 (f) Not later than November 1 of each even-numbered year,
14-16 the comptroller shall submit to the legislature a report on the use
14-17 of the sales and use tax imposed under Sections 4A and 4B of this
14-18 Act to encourage economic development in this state.
14-19 (g) On request, the comptroller shall provide without charge
14-20 a copy of the report required by Subsection (f) of this section to
14-21 a corporation organized under Section 4A or 4B of this Act.
14-22 SECTION 8. (a) An election held before the effective date
14-23 of this Act to impose a sales and use tax for a limited period
14-24 under Section 4B, Development Corporation Act of 1979 (Article
14-25 5190.6, Vernon's Texas Civil Statutes), is valid and the
14-26 municipality may impose the tax in accordance with the election if:
14-27 (1) the election is otherwise held in accordance with
15-1 Section 4B, Development Corporation Act of 1979 (Article 5190.6,
15-2 Vernon's Texas Civil Statutes), as it existed on the date of the
15-3 election;
15-4 (2) the ballot proposition at the election held to
15-5 impose the tax prescribes the number of years for which the tax may
15-6 be imposed; and
15-7 (3) a majority of the voters voting at the election
15-8 vote in favor of the proposition to impose the tax.
15-9 (b) This section does not apply to an election held before
15-10 the effective date of this Act or to the imposition of a sales and
15-11 use tax in accordance with that election if the validity of the tax
15-12 is the subject of a lawsuit pending on the effective date of this
15-13 Act.
15-14 SECTION 9. This Act does not affect the authority of an
15-15 industrial development corporation created before the effective
15-16 date of this Act to continue a project that the corporation had
15-17 undertaken before the effective date of this Act.
15-18 SECTION 10. Section 4B(n), Development Corporation Act of
15-19 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is repealed.
15-20 SECTION 11. This Act takes effect September 1, 1997.
15-21 SECTION 12. The importance of this legislation and the
15-22 crowded condition of the calendars in both houses create an
15-23 emergency and an imperative public necessity that the
15-24 constitutional rule requiring bills to be read on three several
15-25 days in each house be suspended, and this rule is hereby suspended.