AN ACT 1-1 relating to the creation, administration, powers, duties, 1-2 operation, and financing of library districts; authorizing a tax 1-3 and providing a penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subtitle B, Title 10, Local Government Code, is 1-6 amended by adding Chapter 326 to read as follows: 1-7 CHAPTER 326. LIBRARY DISTRICTS 1-8 SUBCHAPTER A. GENERAL PROVISIONS 1-9 Sec. 326.001. FINDINGS. The legislature finds that: 1-10 (1) children and other residents of many rural and 1-11 suburban areas of the state do not have convenient access to a 1-12 public library; and 1-13 (2) the creation of library districts in underserved 1-14 areas would make valuable information resources more readily 1-15 available to public school students and other residents of the 1-16 state. 1-17 Sec. 326.002. PURPOSE. The purpose of a library district is 1-18 to establish, equip, and maintain one or more public libraries for 1-19 the dissemination of general information relating to the arts, 1-20 sciences, and literature. 1-21 Sec. 326.003. DEFINITIONS. In this chapter: 1-22 (1) "Board" means the board of trustees of a district. 1-23 (2) "District" means a library district created under 2-1 this chapter. 2-2 (3) "Municipal public library" means a library that 2-3 is: 2-4 (A) financed and operated by a municipality; and 2-5 (B) open free of charge to all members of the 2-6 public under identical conditions. 2-7 Sec. 326.004. DISTRICT AUTHORIZATION. (a) A library 2-8 district may be created in a county with a population of more than 2-9 100,000 and, if created, must be maintained, operated, and financed 2-10 as provided by this chapter. 2-11 (b) A district created under this chapter is a governmental 2-12 agency, body politic and corporate, and political subdivision of 2-13 the state. 2-14 (Sections 326.005-326.020 reserved for expansion 2-15 SUBCHAPTER B. CREATION OF DISTRICT 2-16 Sec. 326.021. CONFIRMATION ELECTION. A district may be 2-17 created and a sales and use tax may be authorized only if the 2-18 creation is confirmed and the tax is approved by a majority of the 2-19 qualified voters of the district voting at an election held for 2-20 that purpose. 2-21 Sec. 326.022. TERRITORY INCLUDED IN A DISTRICT. (a) A 2-22 district may include any contiguous territory that, on the date on 2-23 which an election is ordered on the question of creating the 2-24 district, is not in a municipality that operates a municipal public 2-25 library. 3-1 (b) The district may include incorporated or unincorporated 3-2 territory. 3-3 (c) A district may not include territory in more than one 3-4 county. 3-5 (d) After a district is created, the district may not be 3-6 expanded to include additional territory unless the commissioners 3-7 court of the county in which the district is located calls and 3-8 holds an election for that purpose in the territory to be added to 3-9 the district. The commissioners court may not expand the district 3-10 unless a majority of the voters voting at the expansion election 3-11 approve the expansion of the district. 3-12 Sec. 326.023. PETITION FOR CREATION OF DISTRICT. 3-13 (a) Before a district may be created, the commissioners court of 3-14 the county in which the proposed district is located must receive a 3-15 petition signed by at least five percent of the number of voters in 3-16 the territory of the proposed district who voted in the most recent 3-17 gubernatorial election. 3-18 (b) The petition must: 3-19 (1) include a name for the proposed district that 3-20 describes the location of the district followed by the words 3-21 "Library District"; 3-22 (2) describe the boundaries of the proposed district 3-23 by: 3-24 (A) metes and bounds; 3-25 (B) lot and block number, if there is a recorded 4-1 map or plat and survey of the area; or 4-2 (C) other sufficient legal description; 4-3 (3) include the names of five persons who are willing 4-4 and qualified to serve as the initial board of trustees of the 4-5 district if elected at the election to create the district; and 4-6 (4) include the rate of the sales tax that would be 4-7 imposed by the board of the proposed district on approval of the 4-8 district. 4-9 Sec. 326.024. PAYMENT OF ELECTION COSTS. The commissioners 4-10 court may not order the creation of the district or a confirmation 4-11 election until the petitioners deposit with the county clerk an 4-12 amount of money equal to the cost of conducting the creation 4-13 election of the proposed district, as computed by the county. 4-14 Sec. 326.025. FILING OF PETITION; HEARING; ORDERING 4-15 ELECTION. (a) At the next regular or special session of the 4-16 commissioners court held after the petition is filed with the 4-17 commissioners court, the commissioners court shall consider the 4-18 petition. 4-19 (b) The commissioners court shall grant the petition if the 4-20 court finds that the petition is in proper form and conforms to the 4-21 requirements of Section 326.023 and that the requirement of Section 4-22 326.024 is met. 4-23 (c) If a petition is granted, the commissioners court shall 4-24 order an election to confirm the district's creation and to 4-25 authorize the imposition of a sales and use tax. 5-1 (d) The election shall be held on the first authorized 5-2 uniform election date under Chapter 41, Election Code, that occurs 5-3 on or after the 45th day after the date the election is ordered. 5-4 Sec. 326.026. ELECTION ORDER. In addition to the elements 5-5 required to be included by the Election Code, the election order 5-6 must state: 5-7 (1) the ballot proposition stating the measure to be 5-8 voted on; 5-9 (2) the hours that the polls will be open; and 5-10 (3) the location of each polling place. 5-11 Sec. 326.027. NOTICE. (a) The commissioners court shall 5-12 give notice of the election by publishing a substantial copy of the 5-13 election order once a week for two consecutive weeks in a newspaper 5-14 with general circulation in the county in which the proposed 5-15 district is located. 5-16 (b) The notice must be published not earlier than the 30th 5-17 day or later than the 10th day before election day. 5-18 (c) In addition to the elements required to be included by 5-19 the Election Code, the notice of the election must state the names 5-20 of the five board of trustee candidates. 5-21 Sec. 326.028. BALLOT PROPOSITION. (a) The ballot for the 5-22 election shall be printed to permit voting for or against the 5-23 proposition: "The creation of the __________ (name of district) 5-24 and adoption of a local sales and use tax in the (name of district) 5-25 at the rate of _______ (rate) percent to provide revenue for the 6-1 district." 6-2 (b) The ballot shall be printed to permit voting for or 6-3 against each of the five initial trustees listed in the petition 6-4 submitted to the commissioners court under Section 326.023. A 6-5 blank space must be printed after the name of each candidate, in 6-6 each of which a voter may write in the name of another person for 6-7 trustee. 6-8 (c) A voter may not vote for more than five persons for 6-9 trustee. 6-10 Sec. 326.029. RESULTS OF ELECTION. (a) If a majority of 6-11 the votes received in the election favor the creation of the 6-12 district and the adoption of the sales and use tax, the 6-13 commissioners court shall declare that the district is created and 6-14 shall declare the amount of the local sales and use tax adopted and 6-15 enter the result in its minutes. 6-16 (b) If a majority of the votes received in the election are 6-17 against the creation of the district, the commissioners court shall 6-18 declare the measure defeated and enter the result in its minutes. 6-19 (c) The order canvassing the results of the election must: 6-20 (1) contain a description of the district's 6-21 boundaries; and 6-22 (2) be filed in the deed records of the county in 6-23 which the district is located. 6-24 Sec. 326.030. INITIAL TRUSTEES. (a) The commissioners 6-25 court shall declare the five persons receiving the highest number 7-1 of votes for trustee to be elected as trustees. 7-2 (b) The two trustees elected who received the fewest number 7-3 of votes shall serve until the next board of trustees election 7-4 following the confirmation election, and the three trustees who 7-5 received the highest number of votes shall serve until the second 7-6 succeeding trustee election after the confirmation election. 7-7 (Sections 326.031-326.040 reserved for expansion 7-8 SUBCHAPTER C. DISTRICT ADMINISTRATION 7-9 Sec. 326.041. BOARD OF TRUSTEES. A district shall be 7-10 governed by a board of five trustees. 7-11 Sec. 326.042. REGISTERED VOTER REQUIREMENT. A person may 7-12 not be elected to the board of trustees unless the person is a 7-13 resident of the district and a registered voter of the county in 7-14 which the district is located. 7-15 Sec. 326.043. ELECTION OF TRUSTEES; TERM OF OFFICE. 7-16 (a) Trustees shall serve two-year terms. 7-17 (b) The general election for trustees shall be held annually 7-18 on an authorized uniform election date under Chapter 41, Election 7-19 Code. 7-20 (c) Except for the initial members of the board of trustees, 7-21 a candidate for the office of trustee must file an application for 7-22 a place on the ballot in accordance with Chapter 144, Election 7-23 Code, and other applicable provisions of that code. 7-24 Sec. 326.044. BOARD VACANCY. A vacancy in the office of a 7-25 trustee shall be filled by appointment by the remaining trustees. 8-1 Sec. 326.045. OFFICERS. After the trustees have assumed 8-2 office, the trustees shall elect from among the trustees a 8-3 president, a vice president, a secretary, and any other officers 8-4 the board considers necessary. 8-5 Sec. 326.046. QUORUM; OFFICERS' DUTIES. (a) Three trustees 8-6 constitute a quorum and a concurrence of three is sufficient in any 8-7 matter relating to the business of the district. 8-8 (b) The president presides at all board meetings and is the 8-9 chief executive officer of the district. 8-10 (c) The vice president acts as the president if the 8-11 president is incapacitated or absent from a meeting. 8-12 (d) The secretary acts as the president if both the 8-13 president and vice president are incapacitated or absent from a 8-14 meeting. 8-15 (e) The secretary is responsible for ensuring that all the 8-16 records and books of the district are properly kept. 8-17 (f) The board may appoint the library director or an 8-18 employee as assistant or deputy secretary to assist the secretary. 8-19 The assistant or deputy secretary may certify the authenticity of 8-20 any record of the district. 8-21 Sec. 326.047. BYLAWS. The board may adopt bylaws to govern: 8-22 (1) the time, place, and manner of conducting board 8-23 meetings; 8-24 (2) the powers, duties, and responsibilities of the 8-25 board's officers and employees; 9-1 (3) the disbursement of money by a check, draft, or 9-2 warrant; 9-3 (4) the appointment and authority of board committees; 9-4 (5) the keeping of accounts and other records; and 9-5 (6) any other matter the board considers appropriate. 9-6 Sec. 326.048. MEETINGS AND NOTICE. (a) The board may 9-7 establish regular meetings to conduct district business and may 9-8 hold special meetings at other times as the business of the 9-9 district requires. 9-10 (b) The board shall hold its meetings at a designated 9-11 meeting place. 9-12 Sec. 326.049. MANAGEMENT OF DISTRICT. (a) The board has 9-13 control over and shall manage the affairs of the district. 9-14 (b) The board shall employ any person, firm, partnership, or 9-15 corporation the board considers necessary for conducting the 9-16 affairs of the district. 9-17 (c) The board shall determine the term of office and 9-18 compensation of any employee and consultant by contract or by 9-19 resolution of the board. 9-20 (d) The board may remove any employee. 9-21 Sec. 326.050. LIBRARY DIRECTOR. The board may employ a 9-22 library director to administer the affairs of the district under 9-23 policies established by the board. The board shall set the 9-24 compensation of the library director. 9-25 Sec. 326.051. BOND. The board may require an officer or 10-1 employee to execute a bond payable to the district and conditioned 10-2 on the faithful performance of the person's duties. 10-3 Sec. 326.052. TRUSTEE INTERESTED IN CONTRACT. (a) A 10-4 trustee who is financially interested in a contract with the 10-5 district, or a trustee who is an employee of a person that is 10-6 financially interested in a contract with the district, shall 10-7 disclose that fact to the other trustees. The disclosure shall be 10-8 entered into the minutes of the meeting. 10-9 (b) A trustee who is financially interested in a contract 10-10 may not vote on the acceptance of the contract or participate in 10-11 the discussion on the contract. 10-12 (c) The failure of a trustee to disclose the trustee's 10-13 financial interest in a contract and to have the disclosure entered 10-14 in the minutes invalidates the contract. 10-15 (Sections 326.053-326.060 reserved for expansion 10-16 SUBCHAPTER D. POWERS AND DUTIES 10-17 Sec. 326.061. GENERAL POWERS OF DISTRICT. (a) A district 10-18 has all of the powers, authority, rights, and duties that will 10-19 permit the accomplishment of the purposes for which the district 10-20 was created, including the power to borrow money, purchase, 10-21 construct, acquire, own, operate, maintain, repair, or improve any 10-22 works, materials, supplies, improvements, facilities, equipment, 10-23 vehicles, machinery, or appliances as necessary for the district. 10-24 (b) If a district acquires existing improvements, 10-25 facilities, plants, equipment, or appliances, the district may 11-1 assume the contracts and obligations of the previous owner. 11-2 Sec. 326.062. EMPLOYEE PLANS. (a) The board may provide 11-3 for and administer a workers' compensation, health benefit, 11-4 retirement, disability, or death compensation plan for the 11-5 employees of the district. 11-6 (b) The board may adopt a plan to accomplish the purpose of 11-7 this section. 11-8 (c) The board, after notice and a hearing, may change any 11-9 plan or rule adopted under this section. 11-10 Sec. 326.063. SUITS. (a) A district may sue and be sued in 11-11 any court of this state in the name of the district. 11-12 (b) All courts of this state shall take judicial notice of 11-13 the establishment of a district. 11-14 Sec. 326.064. RULES. (a) The board may adopt reasonable 11-15 rules to accomplish the purposes of the district. 11-16 (b) The board may set monetary charges in reasonable amounts 11-17 for the violation of a district rule. 11-18 (c) The board may exclude from the use of the library a 11-19 person who wilfully violates a rule adopted by the board under this 11-20 section. 11-21 Sec. 326.065. FEES. (a) A district may impose any 11-22 necessary charges or fees for providing a district service. 11-23 (b) A district may discontinue a service to enforce payment 11-24 of an unpaid charge or fee that is owed to the district. 11-25 Sec. 326.066. DEPOSITORY. (a) The board shall designate 12-1 one or more banks inside or outside of the district to serve as the 12-2 depository for district money. 12-3 (b) Tax revenue of the district shall be deposited in a 12-4 depository bank. 12-5 Sec. 326.067. INVESTMENTS. (a) Tax revenue of the district 12-6 may be invested in an obligation that is an authorized investment 12-7 for the state. 12-8 (b) District money other than tax revenue may be invested in 12-9 accordance with policies adopted by the board. 12-10 Sec. 326.068. EXPENDITURES. A district's money may be 12-11 disbursed only by check, draft, order, or another instrument that 12-12 must be signed by one or more officers or employees of the district 12-13 as designated by the board of trustees. 12-14 Sec. 326.069. ACCOUNTS AND RECORDS; AUDITS. (a) The 12-15 district shall keep a complete system of accounts. 12-16 (b) The district shall have an annual audit of the affairs 12-17 of the district performed by an independent certified public 12-18 accountant. 12-19 (c) A signed copy of the audit report shall be delivered to 12-20 each trustee not later than the 120th day after the closing date of 12-21 each fiscal year. 12-22 (d) A copy of the audit report shall be kept on file at the 12-23 district office and shall be made available for inspection by any 12-24 interested person during regular business hours. 12-25 Sec. 326.070. FISCAL YEAR. The fiscal year of the district 13-1 is from January 1 to December 31, unless the board adopts another 13-2 fiscal year. 13-3 Sec. 326.071. REPAYMENT OF ORGANIZATIONAL EXPENSES. 13-4 (a) The district may: 13-5 (1) pay all costs and expenses necessarily incurred in 13-6 the creation and organization of the district; and 13-7 (2) reimburse any entity or person for money advanced 13-8 for the costs and expenses described by Subdivision (1). 13-9 (b) Payments under this section may be made from money 13-10 obtained from taxes or other revenue of the district. 13-11 (Sections 326.072-326.090 reserved for expansion 13-12 SUBCHAPTER E. SALES AND USE TAX 13-13 Sec. 326.091. SALES AND USE TAX. (a) If a district adopts 13-14 the tax, there is imposed a tax on the receipts from the sale at 13-15 retail of taxable items in the district at a rate of up to one-half 13-16 of one percent. There is also imposed an excise tax on the use, 13-17 storage, or other consumption in the district of taxable items 13-18 purchased, leased, or rented from a retailer during the period that 13-19 the tax is effective in the district. 13-20 (b) For purposes of this section, "taxable items" includes 13-21 all items subject to any sales and use tax that is imposed by the 13-22 county if the county has imposed a sales and use tax. 13-23 Sec. 326.092. IMPOSITION, COMPUTATION, ADMINISTRATION, AND 13-24 GOVERNANCE OF TAX. (a) Chapter 323, Tax Code, to the extent not 13-25 inconsistent with this chapter, governs the imposition, 14-1 computation, administration, and governance of the tax under this 14-2 subchapter, except that Sections 323.101, 323.105, and 323.404 14-3 through 323.408, Tax Code, do not apply. 14-4 (b) Chapter 323, Tax Code, does not apply to the use and 14-5 allocation of revenue under this chapter. 14-6 (c) In applying the procedures under Chapter 323, Tax Code, 14-7 to the district, the district's name shall be substituted for "the 14-8 county" and "board of trustees" is substituted for "commissioners 14-9 court." 14-10 Sec. 326.093. TAX RATES. The permissible rates for a local 14-11 sales and use tax levied under this chapter are one-eighth of one 14-12 percent, one-fourth of one percent, three-eighths of one percent, 14-13 and one-half of one percent. 14-14 Sec. 326.094. ABOLITION OF OR CHANGE IN TAX RATE. (a) The 14-15 board by order may decrease or abolish the local sales and use tax 14-16 rate or may call an election to increase, decrease, or abolish the 14-17 local sales and use tax rate. 14-18 (b) At the election, the ballots shall be printed to permit 14-19 voting for or against the proposition: "The increase (decrease) in 14-20 the local sales and use tax rate of (name of district) to 14-21 (percentage) to be used for the purposes of the district" or "The 14-22 abolition of the district sales and use tax." The increase or 14-23 decrease in the tax rate is effective if it is approved by a 14-24 majority of the votes cast. In calling and holding the election, 14-25 the board shall use the procedure for the confirmation and tax 15-1 election set forth in this chapter. 15-2 Sec. 326.095. USE OF TAX. Taxes collected under this 15-3 subchapter may be used only for the purposes for which the district 15-4 was created. 15-5 Sec. 326.096. LIMITATION ON ADOPTION OF TAX. A district may 15-6 adopt a tax under this subchapter only if as a result of adoption 15-7 of the tax the combined rate of all local sales and use taxes 15-8 imposed by political subdivisions having territory in the district 15-9 will not exceed two percent. 15-10 SECTION 2. This Act takes effect September 1, 1997. 15-11 SECTION 3. The importance of this legislation and the 15-12 crowded condition of the calendars in both houses create an 15-13 emergency and an imperative public necessity that the 15-14 constitutional rule requiring bills to be read on three several 15-15 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 1674 passed the Senate on April 24, 1997, by a viva-voce vote; and that the Senate concurred in House amendments on May 30, 1997, by a viva-voce vote. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 1674 passed the House, with amendments, on May 28, 1997, by a non-record vote. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor