By Oliveira H.B. No. 2162
75R5709 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration and financing of certain industrial
1-3 development corporations.
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1-21 election held in the city,] the tax is repealed under Subsection
1-22 (o) of this section. [If an earlier abolition election is held,
1-23 Sections 321.102(a) and 321.402(b), Tax Code, apply to the date of
1-24 repeal.] A tax that is approved without a limit on its period of
2-1 imposition is effective until repealed in accordance with
2-2 Subsection (o) of this section [by election]. Before the 60th day
2-3 before the date that a tax is to expire, the governing body shall
2-4 send a notice to the comptroller stating the expiration date of the
2-5 tax. Revenue collected after the expiration of the tax from the
2-6 imposition of the tax after its expiration date shall be forwarded
2-7 by the state to the governing body to be used to pay current bonded
2-8 indebtedness of the municipality. A municipality that has imposed a
2-9 tax under this section may not extend the period of the tax's
2-10 imposition or reimpose the tax unless the extension or reimposition
2-11 is approved by a majority of the qualified voters of the
2-12 municipality voting in an election called and held for that purpose
2-13 [after its expiration date]. If a city reduces the rate of an
2-14 additional sales and use tax under Chapter 321, Tax Code, to impose
2-15 a tax under this section for a limited period as provided under
2-16 this subsection, and does not have an election to change the rate
2-17 of the additional sales and use tax before the expiration date of
2-18 the tax under this section, the rate of the additional sales and
2-19 use tax under Section 321.101(b), Tax Code, in the city returns to
2-20 its previous rate in effect at the time the tax imposed under this
2-21 section was adopted on the expiration date of the tax under this
2-22 section without having to hold an election under Chapter 321, Tax
2-23 Code, to impose the increase in the rate.
2-24 (o) In a city in which a sales and use tax for the benefit
2-25 of a corporation has been imposed under this section, in the same
2-26 manner and by the same procedure the city by majority vote of the
2-27 qualified voters of the city voting at an election called and held
3-1 for the purpose may reduce, [or] increase, or abolish the tax. The
3-2 rate may be reduced in one or more increments of one-eighth of one
3-3 percent to a minimum of one-eighth of one percent or increased in
3-4 one or more increments of one-eighth of one percent to a maximum of
3-5 one-half of one percent. On petition of 10 percent or more of the
3-6 registered voters of the city requesting an election on the
3-7 increase, [or] decrease, or abolition of the tax under this
3-8 section, the governing body of the city shall order an election on
3-9 the issue. The ballot shall be printed in the same manner as the
3-10 ballot under Subsection (m) of this section, except that the ballot
3-11 to abolish the tax shall be printed to provide for voting for or
3-12 against the proposition: "The abolition of the sales and use tax
3-13 for the promotion and development of new and expanded business
3-14 enterprises." Section 321.102(a), Tax Code, applies to the
3-15 abolition of a tax under this subsection. However, if before the
3-16 date of the election the corporation had issued bonds or incurred
3-17 other obligations secured by the tax, the tax shall continue to be
3-18 collected until the bonds or other obligations are paid. The
3-19 corporation shall immediately notify the comptroller when the bonds
3-20 or other obligations have been paid. A tax imposed under this
3-21 section may not be collected after the last day of the first
3-22 calendar quarter beginning after the date of notification to the
3-23 comptroller.
3-24 SECTION 2. Section 4A, Development Corporation Act of 1979
3-25 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
3-26 adding Subsection (s) to read as follows:
3-27 (s)(1) A city that creates or has created a corporation
4-1 governed by this section may submit to the voters of the city, at a
4-2 separate election to be held on an available uniform election date
4-3 or at an election held under another provision of this Act,
4-4 including the election at which the proposition to initially
4-5 authorize the collection of a sales and use tax for the benefit of
4-6 the corporation is submitted, a ballot proposition that authorizes
4-7 the corporation to use the sales and use tax, including any amount
4-8 previously authorized and collected, for a specific project or for
4-9 a specific category of projects that does not qualify under this
4-10 section but qualifies under Section 4B of this Act. Prior approval
4-11 of a specific project at an election or completion of a specific
4-12 project approved at an election does not prohibit a city from
4-13 seeking voter approval of an additional project or category of
4-14 projects under this subsection to be funded from the same sales and
4-15 use tax.
4-16 (2) In the election to authorize the use of the sales
4-17 or use tax for a specific project or for a specific category of
4-18 projects not authorized under this section, the project or category
4-19 of projects must be clearly described on the ballot so that a voter
4-20 will be able to discern the limits of the specific project or
4-21 category of projects authorized by the proposition. If maintenance
4-22 and operating costs of an otherwise authorized facility are to be
4-23 paid from the sales or use tax, the ballot language must clearly
4-24 state that fact.
4-25 (3) Before an election may be held under this
4-26 subsection, the corporation must comply with the public notice and
4-27 hearing requirements prescribed by Section 4B(a-1) of this Act.
5-1 (4) If a majority of the voters voting on the issue do
5-2 not approve a specific project or a specific category of projects
5-3 at an election under this subsection, another election may not be
5-4 held on the same project or category of projects before the first
5-5 anniversary of the date of the most recent election disapproving
5-6 the project or category of projects.
5-7 SECTION 3. Section 4B, Development Corporation Act of 1979
5-8 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
5-9 redesignating Subsection (a-1) as Subsection (a-3) and adding a new
5-10 Subsection (a-1) to read as follows:
5-11 (a-1) A corporation may not undertake or spend money to
5-12 undertake a project unless the city has adopted a sales and use tax
5-13 under this section for the benefit of the corporation. Before
5-14 spending money to undertake a specific project or general type of
5-15 project, a corporation shall publish notice of the project and hold
5-16 at least one public hearing on the proposed project. The
5-17 corporation shall publish notice under this subsection by
5-18 publishing notice of the project in a newspaper of general
5-19 circulation in the city or by posting a written notice of the
5-20 project in a place readily accessible to the general public at all
5-21 times. The corporation shall publish or post the notice not
5-22 earlier than 15 days or later than seven days before the scheduled
5-23 time of the public hearing on the project. Notice required under
5-24 this subsection is in addition to any notice required under Chapter
5-25 551, Government Code.
5-26 (a-3) A corporation may undertake a project under this
5-27 section unless within 60 days after first publishing notice of a
6-1 specific project or type of general project under Subsection (a-1)
6-2 of this section the governing body of the city receives a petition
6-3 from more than 10 percent of the registered voters of the city
6-4 where the petition requests that an election be held before that
6-5 specific project or that general type of project is undertaken. An
6-6 election is not required to be held after the submission of a
6-7 petition if the qualified citizens of the city have previously
6-8 approved the undertaking of a specific project or that general type
6-9 of project at an election called for that purpose by the governing
6-10 body of the city or in conjunction with another election required
6-11 to be held under this section.
6-12 SECTION 4. Section 4B(c), Development Corporation Act of
6-13 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
6-14 read as follows:
6-15 (c) The board of directors of a corporation under this
6-16 section consists of seven directors who are appointed by the
6-17 governing body of the eligible city for two-year terms of office.
6-18 A director may be removed by the governing body of the eligible
6-19 city at any time without cause. Each director must be a resident
6-20 of the eligible city. Three directors shall be persons who are not
6-21 employees, officers, or members of the governing body of the
6-22 eligible city. A majority of the entire membership of the board is
6-23 a quorum. Notwithstanding any other provision of this subsection,
6-24 if a city dissolves a corporation created under Section 4A of this
6-25 Act and creates a corporation under this section, a person serving
6-26 as a director of the corporation created under Section 4A of this
6-27 Act at the time of dissolution may serve on the board of the
7-1 corporation created under this section. The board shall conduct
7-2 all meetings within the boundaries of the eligible city. The board
7-3 shall appoint a president, a secretary, and other officers of the
7-4 corporation that the governing body of the eligible city considers
7-5 necessary. The corporation's registered agent must be an
7-6 individual resident of the state and the corporation's registered
7-7 office must be within the boundaries of the eligible city.
7-8 SECTION 5. Section 4B, Development Corporation Act of 1979
7-9 (Article 5190.6, Vernon's Texas Civil Statutes), as amended by
7-10 Chapters 1022 and 1031, Acts of the 73rd Legislature, Regular
7-11 Session, 1993, is amended by amending Subsections (e) and (f) and
7-12 adding Subsections (i-1), (i-2), and (i-3) to read as follows:
7-13 (e) The rate of a tax adopted under this section must be
7-14 one-eighth, one-fourth, three-eighths, or one-half of one percent.
7-15 The ballot proposition at the election held to adopt the tax must
7-16 clearly state that the voters are voting on the adoption of a new
7-17 sales and use tax, specify the rate of the tax to be adopted, and
7-18 identify the proposed use of or purpose for the tax revenue. In
7-19 addition, if maintenance and operating costs are to be paid from
7-20 the tax, the ballot language must clearly state that fact. A
7-21 corporation that holds an election to reduce or repeal a tax
7-22 imposed under Section 4A of this Act may, in the same or in a
7-23 separate proposition on the same ballot, adopt a tax under this
7-24 section. If an eligible city adopts the tax, a tax is imposed on
7-25 the receipts from the sale at retail of taxable items within the
7-26 eligible city at the rate approved at the election. There is also
7-27 imposed an excise tax on the use, storage, or other consumption
8-1 within the eligible city of tangible personal property purchased,
8-2 leased, or rented from a retailer during the period that the tax is
8-3 effective within the eligible city. The rate of the excise tax is
8-4 the same as the rate of the sales tax portion of the tax and is
8-5 applied to the sale price of the tangible personal property.
8-6 [(e) If an eligible city adopts the tax, a tax is imposed on
8-7 the receipts from the sale at retail of taxable items within the
8-8 eligible city at a rate approved by the governing body of the
8-9 eligible city. The rate must be equal to one-eighth, one-fourth,
8-10 three-eighths, or one-half of one percent. There is also imposed
8-11 an excise tax on the use, storage, or other consumption within the
8-12 eligible city of tangible personal property purchased, leased, or
8-13 rented from a retailer during the period that the tax is effective
8-14 within the eligible city. The rate of the excise tax is the same
8-15 as the rate of the sales tax portion of the tax and is applied to
8-16 the sale price of the tangible personal property.]
8-17 (f) Chapter 321, Tax Code, governs the imposition,
8-18 computation, administration, collection, abolition, and remittance
8-19 of the tax except as inconsistent with this section. The tax
8-20 imposed under this section takes effect as provided by Section
8-21 321.102(a), Tax Code. If, however, an election is held under this
8-22 section at the same time an election is held to impose or change
8-23 the rate of the additional municipal sales and use tax, the tax
8-24 under this section and the imposition or change in rate of the
8-25 additional municipal sales and use tax take effect as provided by
8-26 Section 321.102(b), Tax Code. The ballot proposition for an
8-27 election to impose the tax under this section and to impose or
9-1 change the rate of the additional municipal sales and use tax must
9-2 clearly state that the voters are voting on the adoption of a new
9-3 sales and use tax or the change of an existing tax and include the
9-4 information prescribed by Subsection (e) of this section, as
9-5 appropriate. After the effective date of the taxes imposed under
9-6 this section, the adoption of a sales and use tax or the attempted
9-7 adoption of a sales and use tax by the eligible city or any other
9-8 taxing jurisdiction having territory in the city does not impair
9-9 the taxes imposed under this section.
9-10 (i-1) On petition of 10 percent or more of the registered
9-11 voters of the city requesting an election on the dissolution of
9-12 the corporation, the governing body shall order an election on the
9-13 issue at the next available uniform election date that is not less
9-14 than 45 days after the date that the petition is filed. The
9-15 election must be conducted according to the applicable provisions
9-16 of the Election Code. The ballot for the election shall be printed
9-17 to provide for voting for or against the proposition: "Dissolution
9-18 of the ________________ (name of the corporation)." If a majority
9-19 of voters voting on the issue approve the dissolution, the
9-20 corporation shall continue operations only as necessary to pay the
9-21 principal of and interest on its bonds and to meet obligations
9-22 incurred before the date of the election and, to the extent
9-23 practicable, shall dispose of its assets and apply the proceeds to
9-24 satisfy those obligations. When the last of the obligations is
9-25 satisfied, any remaining assets of the corporation shall be
9-26 transferred to the city, and the corporation is dissolved. A tax
9-27 imposed under this section may not be collected after the last day
10-1 of the first calendar quarter beginning after notification to the
10-2 comptroller by the corporation that the last of its obligations is
10-3 satisfied.
10-4 (i-2) The governing body of an eligible city may call and
10-5 hold an election on the issue of abolishing the tax imposed under
10-6 this section. On petition of 10 percent or more of the registered
10-7 voters of the city requesting an election on the issue of
10-8 abolishing the tax, the governing body shall order an election on
10-9 the issue. The ballot shall be printed to provide for voting for
10-10 or against the proposition: "The abolition of the sales and use
10-11 tax for the promotion and development of new and expanded business
10-12 enterprises." Section 321.102(a), Tax Code, applies to the
10-13 abolition of a tax under this subsection. However, if before the
10-14 date of the election the corporation had issued bonds or incurred
10-15 other obligations secured by the tax, the tax shall continue to be
10-16 collected until the bonds or other obligations are paid. During
10-17 that period, the corporation, to the extent practicable, shall
10-18 dispose of its assets and apply the proceeds to satisfy the bonds
10-19 or other obligations. The corporation shall immediately notify the
10-20 comptroller when the bonds or other obligations have been paid.
10-21 When the last of the bonds or obligations is satisfied, any
10-22 remaining assets of the corporation shall be transferred to the
10-23 city, and the corporation is dissolved. A tax imposed under this
10-24 section may not be collected after the last day of the first
10-25 calendar quarter beginning after the date of notification to the
10-26 comptroller.
10-27 (i-3) At an election held to adopt a sales and use tax under
11-1 this section, the city may also allow the voters to vote to limit
11-2 the time during which the tax may be imposed. The city shall add
11-3 to the end of the ballot proposition prescribed by Subsection (e)
11-4 or (f) of this section: "to be imposed for _____ years" (insert
11-5 number of years). The governing body of the city shall set the
11-6 expiration date of the proposed tax to occur on the appropriate
11-7 anniversary of the effective date of the tax. A sales and use tax
11-8 imposed for a limited period under this subsection expires on the
11-9 date set by the governing body under this section or on an earlier
11-10 date if the corporation is dissolved under Subsection (i-1) of this
11-11 section or the tax is abolished under Subsection (i-2) of this
11-12 section. Before the 60th day before the date the tax is to expire,
11-13 the governing body shall send a notice to the comptroller stating
11-14 the expiration date of the tax. Revenue collected after the
11-15 expiration of the tax from the imposition of the tax after its
11-16 expiration date shall be forwarded by the state to the governing
11-17 body to be used to pay current bonded indebtedness of the city. A
11-18 city that has imposed a tax under this section may not extend the
11-19 period of the tax's imposition or reimpose the tax unless the
11-20 extension or reimposition is approved by a majority of the
11-21 qualified voters of the city voting in an election called and held
11-22 for that purpose.
11-23 SECTION 6. The Development Corporation Act of 1979 (Article
11-24 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
11-25 4C to read as follows:
11-26 Sec. 4C. (a) Not later than April 1 of each year, the board
11-27 of directors of a corporation created under Section 4A or 4B of
12-1 this Act shall submit to the comptroller a report in the form
12-2 required by the comptroller.
12-3 (b) The report must include:
12-4 (1) a statement of the corporation's primary economic
12-5 development objectives;
12-6 (2) a statement of the corporation's total revenues
12-7 during the preceding calendar year;
12-8 (3) a statement of the corporation's total
12-9 expenditures during the preceding calendar year;
12-10 (4) a statement of the corporation's total
12-11 expenditures during the preceding calendar year in each of the
12-12 following categories:
12-13 (A) administration;
12-14 (B) personnel;
12-15 (C) marketing or promotion;
12-16 (D) direct business incentives;
12-17 (E) debt service;
12-18 (F) capital costs; and
12-19 (G) payments to taxing units, including school
12-20 districts;
12-21 (5) a list of the corporation's capital assets,
12-22 including land and buildings; and
12-23 (6) any other information the comptroller requires to
12-24 determine the use of the sales and use tax imposed under Section 4A
12-25 or 4B of this Act to encourage economic development in this state.
12-26 (c) If a corporation fails to file a report in accordance
12-27 with this section or fails to include sufficient information in the
13-1 report, the comptroller shall provide to the corporation written
13-2 notice of this failure. The written notice must include
13-3 information on how to correct the failure.
13-4 (d) If the corporation does not correct the failure before
13-5 the 31st day after the date the corporation receives the written
13-6 notice under Subsection (c) of this section, the comptroller shall
13-7 hold 10 percent of each subsequent distribution of revenue from the
13-8 sales and use tax imposed for the benefit of the corporation until
13-9 the corporation corrects the failure.
13-10 (e) Not later than November 1 of each even-numbered year,
13-11 the comptroller shall submit to the legislature a report on the use
13-12 of the sales and use tax imposed under Sections 4A and 4B of this
13-13 Act to encourage economic development in this state.
13-14 (f) On request, the comptroller shall provide without charge
13-15 a copy of the report required by Subsection (e) of this section to
13-16 a corporation organized under Section 4A or 4B of this Act.
13-17 SECTION 7. Section 4B(n), Development Corporation Act of
13-18 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is repealed.
13-19 SECTION 8. This Act takes effect September 1, 1997.
13-20 SECTION 9. The importance of this legislation and the
13-21 crowded condition of the calendars in both houses create an
13-22 emergency and an imperative public necessity that the
13-23 constitutional rule requiring bills to be read on three several
13-24 days in each house be suspended, and this rule is hereby suspended.