By Barrientos S.B. No. 1674 75R8353 CLG-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, administration, powers, duties, 1-3 operation, and financing of library districts; authorizing a tax 1-4 and providing a penalty. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subtitle B, Title 10, Local Government Code, is 1-7 amended by adding Chapter 326 to read as follows: 1-8 CHAPTER 326. LIBRARY DISTRICTS 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 326.001. FINDINGS. The legislature finds that: 1-11 (1) children and other residents of many rural and 1-12 suburban areas of the state do not have convenient access to a 1-13 public library; and 1-14 (2) the creation of library districts in underserved 1-15 areas would make valuable information resources more readily 1-16 available to public school students and other residents of the 1-17 state. 1-18 Sec. 326.002. PURPOSE. The purpose of a library district is 1-19 to establish, equip, and maintain one or more public libraries for 1-20 the dissemination of general information relating to the arts, 1-21 sciences, and literature. 1-22 Sec. 326.003. DEFINITIONS. In this chapter: 1-23 (1) "Board" means the board of trustees of a district. 1-24 (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 2-26 territory. 2-27 (c) A district may not include territory in more than one 3-1 county. 3-2 Sec. 326.023. PETITION FOR CREATION OF DISTRICT. 3-3 (a) Before a district may be created, the commissioners court of 3-4 the county in which the proposed district is located must receive a 3-5 petition signed by at least 100 registered voters who reside in the 3-6 territory of the proposed district. 3-7 (b) The petition must: 3-8 (1) include a name for the proposed district that 3-9 describes the location of the district followed by the words 3-10 "Library District"; 3-11 (2) describe the boundaries of the proposed district 3-12 by: 3-13 (A) metes and bounds; 3-14 (B) lot and block number, if there is a recorded 3-15 map or plat and survey of the area; or 3-16 (C) other sufficient legal description; 3-17 (3) include the names of five persons who are willing 3-18 and qualified to serve as the initial board of trustees of the 3-19 district if elected at the election to create the district; and 3-20 (4) include the rate of the sales tax that would be 3-21 imposed by the board of the proposed district on approval of the 3-22 district. 3-23 Sec. 326.024. PAYMENT OF ELECTION COSTS. The commissioners 3-24 court may not order the creation of the district or a confirmation 3-25 election until the petitioners deposit with the county clerk an 3-26 amount of money equal to the cost of conducting the creation 3-27 election of the proposed district, as computed by the county. 4-1 Sec. 326.025. FILING OF PETITION; HEARING; ORDERING 4-2 ELECTION. (a) At the next regular or special session of the 4-3 commissioners court held after the petition is filed with the 4-4 commissioners court, the commissioners court shall consider the 4-5 petition. 4-6 (b) The commissioners court shall grant the petition and 4-7 enter an order creating the district if the court finds that the 4-8 petition is in proper form and conforms to the requirements of 4-9 Section 326.023 and that the requirement of Section 326.024 is met. 4-10 (c) If a petition is granted, the commissioners court shall 4-11 order an election to confirm the district's creation and to 4-12 authorize the imposition of a sales and use tax. 4-13 (d) The election shall be held on the first authorized 4-14 uniform election date under Chapter 41, Election Code, that occurs 4-15 on or after the 45th day after the date the election is ordered. 4-16 Sec. 326.026. ELECTION ORDER. In addition to the elements 4-17 required to be included by the Election Code, the election order 4-18 must state: 4-19 (1) the ballot proposition stating the measure to be 4-20 voted on; 4-21 (2) the hours that the polls will be open; and 4-22 (3) the location of each polling place. 4-23 Sec. 326.027. NOTICE. (a) The commissioners court shall 4-24 give notice of the election by publishing a substantial copy of the 4-25 election order once a week for two consecutive weeks in a newspaper 4-26 with general circulation in the county in which the proposed 4-27 district is located. 5-1 (b) The notice must be published not earlier than the 30th 5-2 day or later than the 10th day before election day. 5-3 (c) In addition to the elements required to be included by 5-4 the Election Code, the notice of the election must state the names 5-5 of the five board of trustee candidates. 5-6 Sec. 326.028. BALLOT PROPOSITION. (a) The ballot for the 5-7 election shall be printed to permit voting for or against the 5-8 proposition: "The creation of the __________ (name of district) 5-9 and adoption of a local sales and use tax in the (name of district) 5-10 at the rate of _______ (rate) percent to provide revenue for the 5-11 district." 5-12 (b) The ballot shall be printed to permit voting for or 5-13 against each of the five initial trustees listed in the petition 5-14 submitted to the commissioners court under Section 326.023. A 5-15 blank space must be printed after the name of each candidate, in 5-16 each of which a voter may write in the name of another person for 5-17 trustee. 5-18 (c) A voter may not vote for more than five persons for 5-19 trustee. 5-20 Sec. 326.029. RESULTS OF ELECTION. (a) If a majority of 5-21 the votes received in the election favor the creation of the 5-22 district and the adoption of the sales and use tax, the 5-23 commissioners court shall declare that the district is created and 5-24 shall declare the amount of the local sales and use tax adopted, 5-25 and enter the result in its minutes. 5-26 (b) If a majority of the votes received in the election are 5-27 against the creation of the district, the commissioners court shall 6-1 declare the measure defeated and enter the result in its minutes. 6-2 (c) The order canvassing the results of the election must: 6-3 (1) contain a description of the district's 6-4 boundaries; and 6-5 (2) be filed in the deed records of the county in 6-6 which the district is located. 6-7 Sec. 326.030. INITIAL TRUSTEES. (a) The commissioners 6-8 court shall declare the five persons receiving the highest number 6-9 of votes for trustee to be elected as trustees. 6-10 (b) The two trustees elected who received the fewest number 6-11 of votes shall serve until the next board of trustees election 6-12 following the confirmation election, and the three trustees who 6-13 received the highest number of votes shall serve until the second 6-14 succeeding trustee election after the confirmation election. 6-15 (Sections 326.031-326.040 reserved for expansion 6-16 SUBCHAPTER C. DISTRICT ADMINISTRATION 6-17 Sec. 326.041. BOARD OF TRUSTEES. A district shall be 6-18 governed by a board of five trustees. 6-19 Sec. 326.042. REGISTERED VOTER REQUIREMENT. A person may 6-20 not be elected to the board of trustees unless the person is a 6-21 registered voter of the county in which the district is located. 6-22 Sec. 326.043. ELECTION OF TRUSTEES; TERM OF OFFICE. (a) 6-23 Trustees shall serve two-year terms. 6-24 (b) The general election for trustees shall be held annually 6-25 on an authorized uniform election date under Chapter 41, Election 6-26 Code. 6-27 (c) Except for the initial members of the board of trustees, 7-1 a candidate for the office of trustee must file an application for 7-2 a place on the ballot in accordance with Chapter 144, Election 7-3 Code, and other applicable provisions of that code. 7-4 Sec. 326.044. BOARD VACANCY. A vacancy in the office of a 7-5 trustee shall be filled by appointment by the remaining trustees. 7-6 Sec. 326.045. OFFICERS. After the trustees have assumed 7-7 office, the trustees shall elect from among the trustees a 7-8 president, a vice president, a secretary, and any other officers 7-9 the board considers necessary. 7-10 Sec. 326.046. QUORUM; OFFICERS' DUTIES. (a) Three trustees 7-11 constitute a quorum and a concurrence of three is sufficient in any 7-12 matter relating to the business of the district. 7-13 (b) The president presides at all board meetings and is the 7-14 chief executive officer of the district. 7-15 (c) The vice president acts as the president if the 7-16 president is incapacitated or absent from a meeting. 7-17 (d) The secretary acts as the president if both the 7-18 president and vice president are incapacitated or absent from a 7-19 meeting. 7-20 (e) The secretary is responsible for ensuring that all the 7-21 records and books of the district are properly kept. 7-22 (f) The board may appoint the library director or an 7-23 employee as assistant or deputy secretary to assist the secretary. 7-24 The assistant or deputy secretary may certify the authenticity of 7-25 any record of the district. 7-26 Sec. 326.047. BYLAWS. The board may adopt bylaws to govern: 7-27 (1) the time, place, and manner of conducting board 8-1 meetings; 8-2 (2) the powers, duties, and responsibilities of the 8-3 board's officers and employees; 8-4 (3) the disbursement of money by a check, draft, or 8-5 warrant; 8-6 (4) the appointment and authority of board committees; 8-7 (5) the keeping of accounts and other records; and 8-8 (6) any other matter the board considers appropriate. 8-9 Sec. 326.048. MEETINGS AND NOTICE. (a) The board may 8-10 establish regular meetings to conduct district business and may 8-11 hold special meetings at other times as the business of the 8-12 district requires. 8-13 (b) The board shall hold its meetings at a designated 8-14 meeting place. 8-15 Sec. 326.049. MANAGEMENT OF DISTRICT. (a) The board has 8-16 control over and shall manage the affairs of the district. 8-17 (b) The board shall employ any person, firm, partnership, or 8-18 corporation the board considers necessary for conducting the 8-19 affairs of the district. 8-20 (c) The board of trustees shall determine the term of office 8-21 and compensation of any employee and consultant by contract or by 8-22 resolution of the board. 8-23 (d) The board may remove any employee. 8-24 Sec. 326.050. LIBRARY DIRECTOR. The board may employ a 8-25 library director to administer the affairs of the district under 8-26 policies established by the board. The board shall set the 8-27 compensation of the library director. 9-1 Sec. 326.051. BOND. The board may require an officer or 9-2 employee to execute a bond payable to the district and conditioned 9-3 on the faithful performance of the person's duties. 9-4 Sec. 326.052. TRUSTEE INTERESTED IN CONTRACT. (a) A 9-5 trustee who is financially interested in a contract with the 9-6 district, or a trustee who is an employee of a person that is 9-7 financially interested in a contract with the district, shall 9-8 disclose that fact to the other trustees. The disclosure shall be 9-9 entered into the minutes of the meeting. 9-10 (b) A trustee who is financially interested in a contract 9-11 may not vote on the acceptance of the contract or participate in 9-12 the discussion on the contract. 9-13 (c) The failure of a trustee to disclose the trustee's 9-14 financial interest in a contract and to have the disclosure entered 9-15 in the minutes invalidates the contract. 9-16 (Sections 326.053-326.060 reserved for expansion 9-17 SUBCHAPTER D. POWERS AND DUTIES 9-18 Sec. 326.061. GENERAL POWERS OF DISTRICT. (a) A district 9-19 has all of the powers, authority, rights, and duties that will 9-20 permit the accomplishment of the purposes for which the district 9-21 was created, including the power to purchase, construct, acquire, 9-22 own, operate, maintain, repair, or improve any works, materials, 9-23 supplies, improvements, facilities, equipment, vehicles, machinery, 9-24 or appliances as necessary for the district. 9-25 (b) If a district acquires existing improvements, 9-26 facilities, plants, equipment, or appliances, the district may 9-27 assume the contracts and obligations of the previous owner. 10-1 Sec. 326.062. EMPLOYEE PLANS. (a) The board may provide 10-2 for and administer a workers' compensation, health benefit, 10-3 retirement, disability, or death compensation plan for the 10-4 employees of the district. 10-5 (b) The board may adopt a plan to accomplish the purpose of 10-6 this section. 10-7 (c) The board, after notice and a hearing, may change any 10-8 plan or rule adopted under this section. 10-9 Sec. 326.063. SUITS. (a) A district may sue and be sued in 10-10 any court of this state in the name of the district. 10-11 (b) All courts of this state shall take judicial notice of 10-12 the establishment of a district. 10-13 Sec. 326.064. RULES. (a) The board may adopt reasonable 10-14 rules to accomplish the purposes of the district. 10-15 (b) The board may set monetary charges in reasonable amounts 10-16 for the violation of a district rule. 10-17 (c) The board may exclude from the use of the library a 10-18 person who wilfully violates a rule adopted by the board under this 10-19 section. 10-20 Sec. 326.065. FEES. (a) A district may impose any 10-21 necessary charges or fees for providing a district service. 10-22 (b) A district may discontinue a service to enforce payment 10-23 of an unpaid charge or fee that is owed to the district. 10-24 Sec. 326.066. DEPOSITORY. (a) The board shall designate 10-25 one or more banks inside or outside of the district to serve as the 10-26 depository for district money. 10-27 (b) Tax revenue of the district shall be deposited in a 11-1 depository bank. 11-2 Sec. 326.067. INVESTMENTS. (a) Tax revenue of the district 11-3 may be invested in an obligation that is an authorized investment 11-4 for the state. 11-5 (b) District money other than tax revenue may be invested in 11-6 accordance with policies adopted by the board. 11-7 Sec. 326.068. EXPENDITURES. A district's money may be 11-8 disbursed only by check, draft, order, or another instrument that 11-9 must be signed by one or more officers or employees of the district 11-10 as designated by the board of trustees. 11-11 Sec. 326.069. ACCOUNTS AND RECORDS; AUDITS. (a) The 11-12 district shall keep a complete system of accounts. 11-13 (b) The district shall have an annual audit of the affairs 11-14 of the district performed by an independent certified public 11-15 accountant. 11-16 (c) A signed copy of the audit report shall be delivered to 11-17 each trustee not later than the 120th day after the closing date of 11-18 each fiscal year. 11-19 (d) A copy of the audit report shall be kept on file at the 11-20 district office and shall be made available for inspection by any 11-21 interested person during regular business hours. 11-22 Sec. 326.070. FISCAL YEAR. The fiscal year of the district 11-23 is from January 1 to December 31, unless the board adopts another 11-24 fiscal year. 11-25 Sec. 326.071. REPAYMENT OF ORGANIZATIONAL EXPENSES. 11-26 (a) The district may: 11-27 (1) pay all costs and expenses necessarily incurred in 12-1 the creation and organization of the district; and 12-2 (2) reimburse any entity or person for money advanced 12-3 for the costs and expenses described by Subdivision (1) of this 12-4 section. 12-5 (b) Payments under this section may be made from money 12-6 obtained from taxes or other revenue of the district. 12-7 (Sections 326.072-326.090 reserved for expansion 12-8 SUBCHAPTER E. SALES AND USE TAX 12-9 Sec. 326.091. SALES AND USE TAX. (a) The sales and use tax, 12-10 if adopted, does not count toward the limitation imposed by Chapter 12-11 323, Tax Code, on any sales and use tax that has been levied by the 12-12 county. 12-13 (b) If a district adopts the tax, there is imposed a tax on 12-14 the receipts from the sale at retail of taxable items in the 12-15 district at a rate of up to one-half of one percent. There is also 12-16 imposed an excise tax on the use, storage, or other consumption in 12-17 the district of taxable items purchased, leased, or rented from a 12-18 retailer during the period that the tax is effective in the 12-19 district. The rate of the excise tax is the same as the rate of 12-20 the sales tax portion of the tax applied to the sales price of the 12-21 taxable items and is included in the sales tax. 12-22 (c) For purposes of this section, "taxable items" includes 12-23 all items subject to any sales and use tax that is imposed by the 12-24 county if the county has imposed a sales and use tax. 12-25 Sec. 326.092. IMPOSITION, COMPUTATION, ADMINISTRATION, AND 12-26 GOVERNANCE OF TAX. (a) Chapter 323, Tax Code, to the extent not 12-27 inconsistent with this chapter, governs the imposition, 13-1 computation, administration, and governance of the tax under this 13-2 subchapter, except that Sections 323.101, 323.105, and 323.404 13-3 through 323.408, Tax Code, do not apply. 13-4 (b) Chapter 323, Tax Code, does not apply to the use and 13-5 allocation of revenue under this chapter. 13-6 (c) In applying the procedures under Chapter 323, Tax Code, 13-7 the district's name shall be substituted for "the county" and 13-8 "board of trustees" is substituted for "commissioners court." 13-9 Sec. 326.093. TAX RATES. The permissible rates for a local 13-10 sales and use tax levied under this chapter are one-eighth of one 13-11 percent, one-fourth of one percent, three-eighths of one percent, 13-12 and one-half of one percent. 13-13 Sec. 326.094. ABOLITION OF OR CHANGE IN TAX RATE. (a) The 13-14 board by order may decrease or abolish the local sales and use tax 13-15 rate or may call an election to increase, decrease, or abolish the 13-16 local sales and use tax rate. 13-17 (b) At the election, the ballots shall be printed to permit 13-18 voting for or against the proposition: "The increase (decrease) in 13-19 the local sales and use tax rate of (name of district) to 13-20 (percentage) to be used for the purposes of the district" or "The 13-21 abolition of the district sales and use tax." The increase or 13-22 decrease in the tax rate is effective if it is approved by a 13-23 majority of the votes cast. In calling and holding the election, 13-24 the board shall use the procedure for the confirmation and tax 13-25 election set forth in this chapter. 13-26 Sec. 326.095. USE OF TAX. Taxes collected under this 13-27 subchapter may be used only for the purposes for which the district 14-1 was created. 14-2 Sec. 326.096. LIMITATION ON ADOPTION OF TAX. (a) A 14-3 district may adopt a tax under this subchapter only if as a result 14-4 of adoption of the tax the combined rate of all local sales and use 14-5 taxes imposed by political subdivisions having territory in the 14-6 district will not exceed two percent. 14-7 (b) If, as a result of the imposition or increase in a sales 14-8 and use tax by a municipality in which there is located a district 14-9 with an existing sales and use tax or as a result of the annexation 14-10 by a municipality of the territory in a district with an existing 14-11 sales and use tax, the overlapping local sales and use taxes in the 14-12 area in the district will exceed two percent, the district's sales 14-13 and use tax rate is automatically reduced to a rate that when added 14-14 to the combined rate of local sales and use taxes will equal two 14-15 percent. 14-16 (c) If a district's tax rate is reduced in accordance with 14-17 Subsection (b), the municipality shall make payments to the 14-18 district equal to the amounts that would have been collected by the 14-19 district had the municipality not imposed or increased its sales 14-20 and use tax or annexed the area in the district, less amounts that 14-21 the district collects following the municipality's levy of or 14-22 increase in its sales and use tax or annexation of the area in the 14-23 district. The payment shall be made by the municipality to the 14-24 district within 10 days after the date of receipt of the money from 14-25 the comptroller's office and shall continue only for so long as any 14-26 bonds of the district are outstanding. 14-27 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.