By: Barrientos, Wentworth S.B. No. 1674 A BILL TO BE ENTITLED 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 and, if created, must be maintained, 2-9 operated, and financed as provided by this chapter. 2-10 (b) A district created under this chapter is a governmental 2-11 agency, body politic and corporate, and political subdivision of 2-12 the state. 2-13 (Sections 326.005-326.020 reserved for expansion 2-14 SUBCHAPTER B. CREATION OF DISTRICT 2-15 Sec. 326.021. CONFIRMATION ELECTION. A district may be 2-16 created and a sales and use tax may be authorized only if the 2-17 creation is confirmed and the tax is approved by a majority of the 2-18 qualified voters of the district voting at an election held for 2-19 that purpose. 2-20 Sec. 326.022. TERRITORY INCLUDED IN A DISTRICT. (a) A 2-21 district may include any contiguous territory that, on the date on 2-22 which an election is ordered on the question of creating the 2-23 district, is not in a municipality that operates a municipal public 2-24 library. 2-25 (b) The district may include incorporated or unincorporated 3-1 territory. 3-2 (c) A district may not include territory in more than one 3-3 county. 3-4 Sec. 326.023. PETITION FOR CREATION OF DISTRICT. 3-5 (a) Before a district may be created, the commissioners court of 3-6 the county in which the proposed district is located must receive a 3-7 petition signed by at least 100 registered voters who reside in the 3-8 territory of the proposed district. 3-9 (b) The petition must: 3-10 (1) include a name for the proposed district that 3-11 describes the location of the district followed by the words 3-12 "Library District"; 3-13 (2) describe the boundaries of the proposed district 3-14 by: 3-15 (A) metes and bounds; 3-16 (B) lot and block number, if there is a recorded 3-17 map or plat and survey of the area; or 3-18 (C) other sufficient legal description; 3-19 (3) include the names of five persons who are willing 3-20 and qualified to serve as the initial board of trustees of the 3-21 district if elected at the election to create the district; and 3-22 (4) include the rate of the sales tax that would be 3-23 imposed by the board of the proposed district on approval of the 3-24 district. 3-25 Sec. 326.024. PAYMENT OF ELECTION COSTS. The commissioners 4-1 court may not order the creation of the district or a confirmation 4-2 election until the petitioners deposit with the county clerk an 4-3 amount of money equal to the cost of conducting the creation 4-4 election of the proposed district, as computed by the county. 4-5 Sec. 326.025. FILING OF PETITION; HEARING; ORDERING 4-6 ELECTION. (a) At the next regular or special session of the 4-7 commissioners court held after the petition is filed with the 4-8 commissioners court, the commissioners court shall consider the 4-9 petition. 4-10 (b) The commissioners court shall grant the petition if the 4-11 court finds that the petition is in proper form and conforms to the 4-12 requirements of Section 326.023 and that the requirement of Section 4-13 326.024 is met. 4-14 (c) If a petition is granted, the commissioners court shall 4-15 order an election to confirm the district's creation and to 4-16 authorize the imposition of a sales and use tax. 4-17 (d) The election shall be held on the first authorized 4-18 uniform election date under Chapter 41, Election Code, that occurs 4-19 on or after the 45th day after the date the election is ordered. 4-20 Sec. 326.026. ELECTION ORDER. In addition to the elements 4-21 required to be included by the Election Code, the election order 4-22 must state: 4-23 (1) the ballot proposition stating the measure to be 4-24 voted on; 4-25 (2) the hours that the polls will be open; and 5-1 (3) the location of each polling place. 5-2 Sec. 326.027. NOTICE. (a) The commissioners court shall 5-3 give notice of the election by publishing a substantial copy of the 5-4 election order once a week for two consecutive weeks in a newspaper 5-5 with general circulation in the county in which the proposed 5-6 district is located. 5-7 (b) The notice must be published not earlier than the 30th 5-8 day or later than the 10th day before election day. 5-9 (c) In addition to the elements required to be included by 5-10 the Election Code, the notice of the election must state the names 5-11 of the five board of trustee candidates. 5-12 Sec. 326.028. BALLOT PROPOSITION. (a) The ballot for the 5-13 election shall be printed to permit voting for or against the 5-14 proposition: "The creation of the __________ (name of district) 5-15 and adoption of a local sales and use tax in the (name of district) 5-16 at the rate of _______ (rate) percent to provide revenue for the 5-17 district." 5-18 (b) The ballot shall be printed to permit voting for or 5-19 against each of the five initial trustees listed in the petition 5-20 submitted to the commissioners court under Section 326.023. A 5-21 blank space must be printed after the name of each candidate, in 5-22 each of which a voter may write in the name of another person for 5-23 trustee. 5-24 (c) A voter may not vote for more than five persons for 5-25 trustee. 6-1 Sec. 326.029. RESULTS OF ELECTION. (a) If a majority of 6-2 the votes received in the election favor the creation of the 6-3 district and the adoption of the sales and use tax, the 6-4 commissioners court shall declare that the district is created and 6-5 shall declare the amount of the local sales and use tax adopted and 6-6 enter the result in its minutes. 6-7 (b) If a majority of the votes received in the election are 6-8 against the creation of the district, the commissioners court shall 6-9 declare the measure defeated and enter the result in its minutes. 6-10 (c) The order canvassing the results of the election must: 6-11 (1) contain a description of the district's 6-12 boundaries; and 6-13 (2) be filed in the deed records of the county in 6-14 which the district is located. 6-15 Sec. 326.030. INITIAL TRUSTEES. (a) The commissioners 6-16 court shall declare the five persons receiving the highest number 6-17 of votes for trustee to be elected as trustees. 6-18 (b) The two trustees elected who received the fewest number 6-19 of votes shall serve until the next board of trustees election 6-20 following the confirmation election, and the three trustees who 6-21 received the highest number of votes shall serve until the second 6-22 succeeding trustee election after the confirmation election. 6-23 (Sections 326.031-326.040 reserved for expansion 6-24 SUBCHAPTER C. DISTRICT ADMINISTRATION 6-25 Sec. 326.041. BOARD OF TRUSTEES. A district shall be 7-1 governed by a board of five trustees. 7-2 Sec. 326.042. REGISTERED VOTER REQUIREMENT. A person may 7-3 not be elected to the board of trustees unless the person is a 7-4 registered voter of the county in which the district is located. 7-5 Sec. 326.043. ELECTION OF TRUSTEES; TERM OF OFFICE. 7-6 (a) Trustees shall serve two-year terms. 7-7 (b) The general election for trustees shall be held annually 7-8 on an authorized uniform election date under Chapter 41, Election 7-9 Code. 7-10 (c) Except for the initial members of the board of trustees, 7-11 a candidate for the office of trustee must file an application for 7-12 a place on the ballot in accordance with Chapter 144, Election 7-13 Code, and other applicable provisions of that code. 7-14 Sec. 326.044. BOARD VACANCY. A vacancy in the office of a 7-15 trustee shall be filled by appointment by the remaining trustees. 7-16 Sec. 326.045. OFFICERS. After the trustees have assumed 7-17 office, the trustees shall elect from among the trustees a 7-18 president, a vice president, a secretary, and any other officers 7-19 the board considers necessary. 7-20 Sec. 326.046. QUORUM; OFFICERS' DUTIES. (a) Three trustees 7-21 constitute a quorum and a concurrence of three is sufficient in any 7-22 matter relating to the business of the district. 7-23 (b) The president presides at all board meetings and is the 7-24 chief executive officer of the district. 7-25 (c) The vice president acts as the president if the 8-1 president is incapacitated or absent from a meeting. 8-2 (d) The secretary acts as the president if both the 8-3 president and vice president are incapacitated or absent from a 8-4 meeting. 8-5 (e) The secretary is responsible for ensuring that all the 8-6 records and books of the district are properly kept. 8-7 (f) The board may appoint the library director or an 8-8 employee as assistant or deputy secretary to assist the secretary. 8-9 The assistant or deputy secretary may certify the authenticity of 8-10 any record of the district. 8-11 Sec. 326.047. BYLAWS. The board may adopt bylaws to govern: 8-12 (1) the time, place, and manner of conducting board 8-13 meetings; 8-14 (2) the powers, duties, and responsibilities of the 8-15 board's officers and employees; 8-16 (3) the disbursement of money by a check, draft, or 8-17 warrant; 8-18 (4) the appointment and authority of board committees; 8-19 (5) the keeping of accounts and other records; and 8-20 (6) any other matter the board considers appropriate. 8-21 Sec. 326.048. MEETINGS AND NOTICE. (a) The board may 8-22 establish regular meetings to conduct district business and may 8-23 hold special meetings at other times as the business of the 8-24 district requires. 8-25 (b) The board shall hold its meetings at a designated 9-1 meeting place. 9-2 Sec. 326.049. MANAGEMENT OF DISTRICT. (a) The board has 9-3 control over and shall manage the affairs of the district. 9-4 (b) The board shall employ any person, firm, partnership, or 9-5 corporation the board considers necessary for conducting the 9-6 affairs of the district. 9-7 (c) The board shall determine the term of office and 9-8 compensation of any employee and consultant by contract or by 9-9 resolution of the board. 9-10 (d) The board may remove any employee. 9-11 Sec. 326.050. LIBRARY DIRECTOR. The board may employ a 9-12 library director to administer the affairs of the district under 9-13 policies established by the board. The board shall set the 9-14 compensation of the library director. 9-15 Sec. 326.051. BOND. The board may require an officer or 9-16 employee to execute a bond payable to the district and conditioned 9-17 on the faithful performance of the person's duties. 9-18 Sec. 326.052. TRUSTEE INTERESTED IN CONTRACT. (a) A 9-19 trustee who is financially interested in a contract with the 9-20 district, or a trustee who is an employee of a person that is 9-21 financially interested in a contract with the district, shall 9-22 disclose that fact to the other trustees. The disclosure shall be 9-23 entered into the minutes of the meeting. 9-24 (b) A trustee who is financially interested in a contract 9-25 may not vote on the acceptance of the contract or participate in 10-1 the discussion on the contract. 10-2 (c) The failure of a trustee to disclose the trustee's 10-3 financial interest in a contract and to have the disclosure entered 10-4 in the minutes invalidates the contract. 10-5 (Sections 326.053-326.060 reserved for expansion 10-6 SUBCHAPTER D. POWERS AND DUTIES 10-7 Sec. 326.061. GENERAL POWERS OF DISTRICT. (a) A district 10-8 has all of the powers, authority, rights, and duties that will 10-9 permit the accomplishment of the purposes for which the district 10-10 was created, including the power to borrow money, purchase, 10-11 construct, acquire, own, operate, maintain, repair, or improve any 10-12 works, materials, supplies, improvements, facilities, equipment, 10-13 vehicles, machinery, or appliances as necessary for the district. 10-14 (b) If a district acquires existing improvements, 10-15 facilities, plants, equipment, or appliances, the district may 10-16 assume the contracts and obligations of the previous owner. 10-17 Sec. 326.062. EMPLOYEE PLANS. (a) The board may provide 10-18 for and administer a workers' compensation, health benefit, 10-19 retirement, disability, or death compensation plan for the 10-20 employees of the district. 10-21 (b) The board may adopt a plan to accomplish the purpose of 10-22 this section. 10-23 (c) The board, after notice and a hearing, may change any 10-24 plan or rule adopted under this section. 10-25 Sec. 326.063. SUITS. (a) A district may sue and be sued in 11-1 any court of this state in the name of the district. 11-2 (b) All courts of this state shall take judicial notice of 11-3 the establishment of a district. 11-4 Sec. 326.064. RULES. (a) The board may adopt reasonable 11-5 rules to accomplish the purposes of the district. 11-6 (b) The board may set monetary charges in reasonable amounts 11-7 for the violation of a district rule. 11-8 (c) The board may exclude from the use of the library a 11-9 person who wilfully violates a rule adopted by the board under this 11-10 section. 11-11 Sec. 326.065. FEES. (a) A district may impose any 11-12 necessary charges or fees for providing a district service. 11-13 (b) A district may discontinue a service to enforce payment 11-14 of an unpaid charge or fee that is owed to the district. 11-15 Sec. 326.066. DEPOSITORY. (a) The board shall designate 11-16 one or more banks inside or outside of the district to serve as the 11-17 depository for district money. 11-18 (b) Tax revenue of the district shall be deposited in a 11-19 depository bank. 11-20 Sec. 326.067. INVESTMENTS. (a) Tax revenue of the district 11-21 may be invested in an obligation that is an authorized investment 11-22 for the state. 11-23 (b) District money other than tax revenue may be invested in 11-24 accordance with policies adopted by the board. 11-25 Sec. 326.068. EXPENDITURES. A district's money may be 12-1 disbursed only by check, draft, order, or another instrument that 12-2 must be signed by one or more officers or employees of the district 12-3 as designated by the board of trustees. 12-4 Sec. 326.069. ACCOUNTS AND RECORDS; AUDITS. (a) The 12-5 district shall keep a complete system of accounts. 12-6 (b) The district shall have an annual audit of the affairs 12-7 of the district performed by an independent certified public 12-8 accountant. 12-9 (c) A signed copy of the audit report shall be delivered to 12-10 each trustee not later than the 120th day after the closing date of 12-11 each fiscal year. 12-12 (d) A copy of the audit report shall be kept on file at the 12-13 district office and shall be made available for inspection by any 12-14 interested person during regular business hours. 12-15 Sec. 326.070. FISCAL YEAR. The fiscal year of the district 12-16 is from January 1 to December 31, unless the board adopts another 12-17 fiscal year. 12-18 Sec. 326.071. REPAYMENT OF ORGANIZATIONAL EXPENSES. 12-19 (a) The district may: 12-20 (1) pay all costs and expenses necessarily incurred in 12-21 the creation and organization of the district; and 12-22 (2) reimburse any entity or person for money advanced 12-23 for the costs and expenses described by Subdivision (1). 12-24 (b) Payments under this section may be made from money 12-25 obtained from taxes or other revenue of the district. 13-1 (Sections 326.072-326.090 reserved for expansion 13-2 SUBCHAPTER E. SALES AND USE TAX 13-3 Sec. 326.091. SALES AND USE TAX. (a) If a district adopts 13-4 the tax, there is imposed a tax on the receipts from the sale at 13-5 retail of taxable items in the district at a rate of up to one-half 13-6 of one percent. There is also imposed an excise tax on the use, 13-7 storage, or other consumption in the district of taxable items 13-8 purchased, leased, or rented from a retailer during the period that 13-9 the tax is effective in the district. 13-10 (b) For purposes of this section, "taxable items" includes 13-11 all items subject to any sales and use tax that is imposed by the 13-12 county if the county has imposed a sales and use tax. 13-13 Sec. 326.092. IMPOSITION, COMPUTATION, ADMINISTRATION, AND 13-14 GOVERNANCE OF TAX. (a) Chapter 323, Tax Code, to the extent not 13-15 inconsistent with this chapter, governs the imposition, 13-16 computation, administration, and governance of the tax under this 13-17 subchapter, except that Sections 323.101, 323.105, and 323.404 13-18 through 323.408, Tax Code, do not apply. 13-19 (b) Chapter 323, Tax Code, does not apply to the use and 13-20 allocation of revenue under this chapter. 13-21 (c) In applying the procedures under Chapter 323, Tax Code, 13-22 to the district, the district's name shall be substituted for "the 13-23 county" and "board of trustees" is substituted for "commissioners 13-24 court." 13-25 Sec. 326.093. TAX RATES. The permissible rates for a local 14-1 sales and use tax levied under this chapter are one-eighth of one 14-2 percent, one-fourth of one percent, three-eighths of one percent, 14-3 and one-half of one percent. 14-4 Sec. 326.094. ABOLITION OF OR CHANGE IN TAX RATE. (a) The 14-5 board by order may decrease or abolish the local sales and use tax 14-6 rate or may call an election to increase, decrease, or abolish the 14-7 local sales and use tax rate. 14-8 (b) At the election, the ballots shall be printed to permit 14-9 voting for or against the proposition: "The increase (decrease) in 14-10 the local sales and use tax rate of (name of district) to 14-11 (percentage) to be used for the purposes of the district" or "The 14-12 abolition of the district sales and use tax." The increase or 14-13 decrease in the tax rate is effective if it is approved by a 14-14 majority of the votes cast. In calling and holding the election, 14-15 the board shall use the procedure for the confirmation and tax 14-16 election set forth in this chapter. 14-17 Sec. 326.095. USE OF TAX. Taxes collected under this 14-18 subchapter may be used only for the purposes for which the district 14-19 was created. 14-20 Sec. 326.096. LIMITATION ON ADOPTION OF TAX. A district may 14-21 adopt a tax under this subchapter only if as a result of adoption 14-22 of the tax the combined rate of all local sales and use taxes 14-23 imposed by political subdivisions having territory in the district 14-24 will not exceed two percent. 14-25 SECTION 2. This Act takes effect September 1, 1997. 15-1 SECTION 3. The importance of this legislation and the 15-2 crowded condition of the calendars in both houses create an 15-3 emergency and an imperative public necessity that the 15-4 constitutional rule requiring bills to be read on three several 15-5 days in each house be suspended, and this rule is hereby suspended. 15-6 COMMITTEE AMENDMENT NO. 1 15-7 Amend SB 1674 as follows: 15-8 (1) On page 2, line 8, add the following phrase between 15-9 "created" and "and:" in a county with a population or more than 15-10 500,000 15-11 (2) On page 3, lines 7 and 8, strike "100 registered voters 15-12 who reside in the territory of the proposed district" and 15-13 substitute "5 percent of the number of voters in the territory of 15-14 the proposed district who voted in the most recent gubernatorial 15-15 election". 15-16 (3) On page 7, line 4, add the following phrase before the 15-17 word "registered:" resident of the district and a. 15-18 Hunter