By:  Cain                                              S.B. No. 658

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the creation and dissolution of county development

 1-2     districts in certain counties.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 312.604, Tax Code, is amended by amending

 1-5     Subdivision (8) and adding Subdivision (9) to read as follows:

 1-6                 (8)  "Bonds" means bonds, notes, lease purchase

 1-7     contracts, and other obligations authorized by the provisions of

 1-8     Sections 375.201, 375.202, 375.203, and 375.204, Local Government

 1-9     Code, the provisions of which are incorporated herein as if set out

1-10     in full.

1-11                 (9)  "Visitors" means persons visiting for business or

1-12     governmental purposes; recreational or entertainment purposes;

1-13     personal or family purposes; health or educational purposes;

1-14     shopping, commerce, trade, or economic development purposes; or any

1-15     other lawful purpose.

1-16           SECTION 2.  Subchapter D, Chapter 312, Tax Code, is amended

1-17     by adding Section 312.6065 to read as follows:

1-18           Sec. 312.6065.  CONSENT OF MUNICIPALITY.  No land within the

1-19     corporate limits of a municipality or within the extraterritorial

1-20     jurisdiction of a municipality shall be included in a district

1-21     unless the municipality grants its written consent, by resolution

1-22     or ordinance approved by two-thirds of the voting members of the

1-23     governing body of the municipality, to the inclusion of the land

 2-1     within the district.  Petitioners for creation shall submit to the

 2-2     governing body of the municipality a petition for consent to

 2-3     creation of the district which shall have attached a copy of the

 2-4     petition for creation.  At least 14 days prior to the adoption of

 2-5     the resolution or ordinance granting written consent to the

 2-6     inclusion of the land within the district, the governing body of

 2-7     the municipality shall conduct a public hearing.  Notice of the

 2-8     public hearing shall be mailed to the petitioner and the holders of

 2-9     fee simple title to all of the land in the proposed district and

2-10     shall be published in a newspaper with general circulation in the

2-11     county in which the proposed district is located.

2-12           SECTION 3.  Section 312.608, Tax Code, is amended to read as

2-13     follows:

2-14           Sec. 312.608.  NOTICE OF HEARING.  At least 30 days before

2-15     the date set for the hearing, notice of the hearing shall be mailed

2-16     to the petitioner, the holders of fee simple title [developer who

2-17     signed the petition and the landowners] of all the land in the

2-18     proposed district, and the municipality within whose city limits or

2-19     extraterritorial jurisdiction the proposed district is located, if

2-20     any, and shall be published in a newspaper with general circulation

2-21     in the county in which the proposed district is located.

2-22           SECTION 4.  Subsection (a), Section 312.610, Tax Code, is

2-23     amended to read as follows:

2-24           (a)  After the hearing, if it is found that the petition

2-25     conforms to the requirements of Section 312.6055 and that the

 3-1     creation of the district and the proposed project is feasible and

 3-2     necessary and would serve the public purpose of attracting visitors

 3-3     and tourists to the county, the commissioners court may, by the

 3-4     affirmative vote of two-thirds of the members of the commissioners

 3-5     court, [shall] so find and enter an order creating the district.

 3-6     If no appeal of the order creating the district is filed with the

 3-7     district court of the county in which the proposed district is

 3-8     located within 30 days after the entry of the order creating the

 3-9     district, the order creating the district shall become final and

3-10     nonappealable and all of the findings included in the order entered

3-11     by the commissioners court shall become incontestable.  Any order

3-12     entered by a commissioners court prior to January 1, 1997, creating

3-13     a county development district which has not been made the subject

3-14     of a lawsuit prior to June 3, 1997, is hereby determined to be

3-15     final and nonappealable, and all of the findings included in the

3-16     order entered by the commissioners court shall be incontestable.

3-17     After the order creating the district becomes final, the district

3-18     may exercise any right, power, and authority granted to it in the

3-19     manner deemed necessary or appropriate by the board.  The

3-20     commissioners court shall have the right to include property in

3-21     more than one county development district, with the prior written

3-22     consent of the owner of fee simple title to the property.

3-23           SECTION 5.  Section 312.620, Tax Code, is amended to read as

3-24     follows:

3-25           Sec. 312.620.  PERSONS DISQUALIFIED TO SERVE.  Section 49.052

 4-1     [50.026], Water Code, relating to disqualification of directors,

 4-2     shall apply to directors of districts created under this

 4-3     subchapter.  In addition, a director shall be disqualified if the

 4-4     director has a financial interest in the land within the district

 4-5     or in any project undertaken by the district.  Each person seeking

 4-6     to be appointed as a director shall file an affidavit with the

 4-7     commissioners court prior to being appointed to serve on the board

 4-8     which states that the person meets the qualifications set forth in

 4-9     Section 312.619 and that the person is not disqualified under this

4-10     section.

4-11           SECTION 6.  Subsection (a), Section 312.625, Tax Code, is

4-12     amended to read as follows:

4-13           (a)  The board shall designate and establish an [a district]

4-14     office in the county and may establish an office outside the

4-15     county.

4-16           SECTION 7.  Section 312.626, Tax Code, is amended to read as

4-17     follows:

4-18           Sec. 312.626.  DIRECTOR'S COMPENSATION; BOND AND OATH OF

4-19     OFFICE.  A director is [not] entitled to receive fees of office and

4-20     reimbursement of expenses established by the board, not to exceed

4-21     those authorized by Section 49.060, Water Code [compensation for

4-22     service on the board].  Section [Sections] 375.067[, 375.069, and

4-23     375.070], Local Government Code, applies [apply] to directors of a

4-24     district created under this subchapter.

4-25           SECTION 8.  Subsections (a) and (c), Section 312.637, Tax

 5-1     Code, are amended to read as follows:

 5-2           (a)  A district may levy a sales and use tax for the benefit

 5-3     of the district if authorized by a majority of the qualified voters

 5-4     of the district voting at an election called for that purpose only

 5-5     if, as a result of adoption of the tax, the combined rate of all

 5-6     local sales and use taxes imposed by the county and political

 5-7     subdivisions having territory in the district will not exceed two

 5-8     percent.  The sales and use tax, if adopted by the district, counts

 5-9     [does not count] toward the two percent limitation imposed by this

5-10     section and Chapter 323 on any sales and use tax that has been

5-11     levied by the county.

5-12           (c)  Chapter 323, to the extent not inconsistent with this

5-13     subchapter, governs the imposition, computation, administration,

5-14     and governance of the tax under this section, except that Section

5-15     [Sections] 323.101(b) [and (e),] and Sections 323.209, 323.401

5-16     through 323.406, and 323.505 do not apply.  Chapter 323 does not

5-17     apply to the use and allocation of revenues under this subchapter.

5-18     In applying the procedures under Chapter 323, the district's name

5-19     shall be substituted for "the county" and "board of directors" is

5-20     substituted for "commissioners court."

5-21           SECTION 9.  Subsection (a), Section 312.638, Tax Code, is

5-22     amended to read as follows:

5-23           (a)  Before the board issues bonds, a petition executed by

5-24     the holders of fee simple title of all of the land described in the

5-25     petition may be filed with the commissioners court requesting that

 6-1     the land described in the petition be added to, or excluded from,

 6-2     the boundaries of the district.  If the petition requests that the

 6-3     property be added to the boundaries of the district, the petition

 6-4     shall set forth the general nature of the work proposed to be done,

 6-5     the cost of the project as then estimated by the petitioner, the

 6-6     necessity and feasibility of the addition of the lands, and the

 6-7     manner in which the project will serve the public purpose of

 6-8     attracting visitors or tourists to the county [the board may, on

 6-9     its own motion or on request of a landowner in the district,

6-10     petition the county commissioners for the addition of land to or

6-11     exclusion of land from the district].

6-12           SECTION 10.  Section 312.639, Tax Code, is amended by adding

6-13     Subsections (e), (f), and (g) to read as follows:

6-14           (e)  If a petition signed within the previous 30 days by

6-15     registered voters equal to at least five percent of the registered

6-16     voters of the district who voted in the previous gubernatorial

6-17     election is presented to the commissioners court to dissolve the

6-18     district, the commissioners court shall order a dissolution

6-19     referendum.

6-20           (f)  If all liabilities of the district and all liabilities

6-21     associated with the district have been retired, the ballot must be

6-22     printed to permit voting for or against the proposition:  "The

6-23     _____________ County Development District No. _______ should be

6-24     dissolved."  If a majority of the voters in the election favor the

6-25     proposition, the commissioners court by order shall dissolve the

 7-1     district.

 7-2           (g)  If all liabilities of the district and all liabilities

 7-3     associated with the district have not been retired, the ballot must

 7-4     be printed to permit voting for or against the proposition:

 7-5     "Whether the _____________ County Development District No. _______

 7-6     should be dissolved when all liabilities of the district and all

 7-7     liabilities associated with the district have been retired."  If a

 7-8     majority of votes in the election favor the proposition, the

 7-9     commissioners court by order shall:

7-10                 (1)  limit the district's actions to satisfying

7-11     existing liabilities and obligations, collecting and liquidating

7-12     assets, and activities required for winding up its business and

7-13     affairs; and

7-14                 (2)  dissolve the district when all of the district's

7-15     liabilities and liabilities associated with the district have been

7-16     retired.

7-17           SECTION 11.  Subchapter D, Chapter 312, Tax Code, is amended

7-18     by adding Sections 312.641 and 312.642 to read as follows:

7-19           Sec. 312.641.  DIVISION OF DISTRICTS IN CERTAIN COUNTIES.

7-20     (a)  County development districts located in a county with a

7-21     population of less than 75,000 may divide into two or more

7-22     districts in accordance with the provisions of this section.

7-23           (b)  The district must have no outstanding debt and not be

7-24     levying an ad valorem tax.

7-25           (c)  The board may order a special election for the division

 8-1     of the district on its own motion.

 8-2           (d)  The order calling the division election must set forth

 8-3     the metes and bounds of the boundaries of the proposed new

 8-4     districts.

 8-5           (e)  The division election shall be called, conducted, and

 8-6     canvassed and notice of the election shall be given by the board in

 8-7     the manner, on the dates, within the times, and otherwise as

 8-8     specified for bond elections by water control and improvement

 8-9     districts, all in accordance with Chapter 51, Water Code, and the

8-10     Election Code.

8-11           (f)  Simultaneous with calling the division election, the

8-12     board shall include a statement that if the election results in

8-13     division of the district, the new districts shall each be governed

8-14     by a board of five directors elected in the same election.  To be

8-15     qualified for election as a director of one of the proposed new

8-16     districts, a person must meet the qualifications which apply to a

8-17     director of a water control and improvement district.  A qualified

8-18     person may have his name printed on the ballot by filing a written

8-19     application in the manner required by the Election Code.  The

8-20     election of directors shall be called, conducted, and canvassed and

8-21     notice of the election shall be given in the manner, on the dates,

8-22     within the times, and otherwise as specified for the election of

8-23     the first board of directors of a water control and improvement

8-24     district, all in accordance with Chapter 51, Water Code, and the

8-25     Election Code.

 9-1           (g)  The board shall furnish the ballots and election

 9-2     supplies necessary to hold the election.  The board shall pay for

 9-3     the ballots, election supplies, and other expenses of the election

 9-4     from district funds.

 9-5           (h)  The board shall appoint a presiding judge and other

 9-6     election officials in the manner specified in the Election Code.

 9-7           (i)  Immediately after the election is held, the presiding

 9-8     judge shall make out and deliver the returns to the board, and the

 9-9     board shall then canvass the returns and declare the result.

9-10           (j)  If the election results in the division of the district,

9-11     the five candidates for the board of directors receiving the most

9-12     votes in each new district shall be declared elected.  The elected

9-13     directors shall immediately qualify by taking the constitutional

9-14     oath of office and shall file the oath with the county clerk.

9-15           (k)  If, for any reason, a full board of directors of each of

9-16     the districts is not elected, the board of the original district

9-17     shall appoint persons to serve as directors.

9-18           (l)  Each district created by the division of an existing

9-19     district into two or more districts has all of the powers and

9-20     duties given by this subchapter, and incorporated by reference by

9-21     this subchapter, to county development districts.

9-22           (m)  Each new district is a conservation and reclamation

9-23     district created under Section 59, Article XVI, Texas Constitution,

9-24     and may, by following the provisions of Sections 51.040-51.044,

9-25     Water Code, convert into a water control and improvement district

 10-1    and may continue to exercise all necessary specific powers under

 10-2    any specific conditions provided by this subchapter under which the

 10-3    district was operating before conversion.

 10-4          (n)  The procedure for dividing into two or more districts

 10-5    may be utilized as many times as the board deems appropriate.

 10-6          Sec. 312.642.  DISSOLUTION OF DORMANT DISTRICT.  A district

 10-7    shall be dissolved if, prior to the first anniversary of the date

 10-8    of the canvassing of the election approving the local sales and use

 10-9    tax in accordance with Section 312.617, the district has not

10-10    entered into binding agreements requiring expenditures for the

10-11    purpose of implementing a project authorized by this subchapter.

10-12    The commissioners court shall conduct a hearing in the first full

10-13    calendar month following the first anniversary of the date of the

10-14    canvassing of the election approving the local sales and use tax

10-15    election in accordance with Section 312.617.  Notice of the hearing

10-16    shall be mailed at least 14 days prior to the hearing to the

10-17    holders of fee simple title to all of the land within the district

10-18    and to the municipality, if any, within whose boundaries or

10-19    extraterritorial jurisdiction the district is located.  If no

10-20    evidence is presented to the commissioners court that the district

10-21    has entered into a binding agreement requiring expenditures for the

10-22    purpose of implementing a project authorized by this subchapter and

10-23    if the district has no outstanding bonds or other debts, the

10-24    commissioners court shall enter in its records the appropriate

10-25    findings and the order dissolving the district.  The order

 11-1    dissolving the district shall become final in the same manner as

 11-2    the order creating the district.

 11-3          SECTION 12.  The importance of this legislation and the

 11-4    crowded condition of the calendars in both houses create an

 11-5    emergency and an imperative public necessity that the

 11-6    constitutional rule requiring bills to be read on three several

 11-7    days in each house be suspended, and this rule is hereby suspended,

 11-8    and that this Act take effect and be in force from and after its

 11-9    passage, and it is so enacted.