1-1     By:  Barrientos                                       S.B. No. 1674

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Finance; April 21, 1997,

 1-4     reported adversely, with favorable Committee Substitute by the

 1-5     following vote:  Yeas 12, Nays 0; April 21, 1997, sent to printer.)

 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1674              By:  Barrientos

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to the creation, administration, powers, duties,

1-10     operation, and financing of library districts; authorizing a tax

1-11     and providing a penalty.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Subtitle B, Title 10, Local Government Code, is

1-14     amended by adding Chapter 326 to read as follows:

1-15                       CHAPTER 326.  LIBRARY DISTRICTS

1-16                      SUBCHAPTER A.  GENERAL PROVISIONS

1-17           Sec. 326.001.  FINDINGS.  The legislature finds that:

1-18                 (1)  children and other residents of many rural and

1-19     suburban areas of the state do not have convenient access to a

1-20     public library; and

1-21                 (2)  the creation of library districts in underserved

1-22     areas would make valuable information resources more readily

1-23     available to public school students and other residents of the

1-24     state.

1-25           Sec. 326.002.  PURPOSE.  The purpose of a library district is

1-26     to establish, equip, and maintain one or more public libraries for

1-27     the dissemination of general information relating to the arts,

1-28     sciences, and literature.

1-29           Sec. 326.003.  DEFINITIONS.  In this chapter:

1-30                 (1)  "Board" means the board of trustees of a district.

1-31                 (2)  "District" means a library district created under

1-32     this chapter.

1-33                 (3)  "Municipal public library" means a library that

1-34     is:

1-35                       (A)  financed and operated by a municipality; and

1-36                       (B)  open free of charge to all members of the

1-37     public under identical conditions.

1-38           Sec. 326.004.  DISTRICT AUTHORIZATION.  (a)  A library

1-39     district may be created and, if created, must be maintained,

1-40     operated, and financed as provided by this chapter.

1-41           (b)  A district created under this chapter is a governmental

1-42     agency, body politic and corporate, and political subdivision of

1-43     the state.

1-44              (Sections 326.005-326.020 reserved for expansion

1-45                     SUBCHAPTER B.  CREATION OF DISTRICT

1-46           Sec. 326.021.  CONFIRMATION ELECTION.  A district may be

1-47     created and a sales and use tax may be authorized only if the

1-48     creation is confirmed and the tax is approved by a majority of the

1-49     qualified voters of the district voting at an election held for

1-50     that purpose.

1-51           Sec. 326.022.  TERRITORY INCLUDED IN A DISTRICT.  (a)  A

1-52     district may include any contiguous territory that, on the date on

1-53     which an election is ordered on the question of creating the

1-54     district, is not in a municipality that operates a municipal public

1-55     library.

1-56           (b)  The district may include incorporated or unincorporated

1-57     territory.

1-58           (c)  A district may not include territory in more than one

1-59     county.

1-60           Sec. 326.023.  PETITION FOR CREATION OF DISTRICT.

1-61     (a)  Before a district may be created, the commissioners court of

1-62     the county in which the proposed district is located must receive a

1-63     petition signed by at least 100 registered voters who reside in the

1-64     territory of the proposed district.

 2-1           (b)  The petition must:

 2-2                 (1)  include a name for the proposed district that

 2-3     describes the location of the district followed by the words

 2-4     "Library District";

 2-5                 (2)  describe the boundaries of the proposed district

 2-6     by:

 2-7                       (A)  metes and bounds;

 2-8                       (B)  lot and block number, if there is a recorded

 2-9     map or plat and survey of the area; or

2-10                       (C)  other sufficient legal description;

2-11                 (3)  include the names of five persons who are willing

2-12     and qualified to serve as the initial board of trustees of the

2-13     district if elected at the election to create the district; and

2-14                 (4)  include the rate of the sales tax that would be

2-15     imposed by the board of the proposed district on approval of the

2-16     district.

2-17           Sec. 326.024.  PAYMENT OF ELECTION COSTS.  The commissioners

2-18     court may not order the creation of the district or a confirmation

2-19     election until the petitioners deposit with the county clerk an

2-20     amount of money equal to the cost of conducting the creation

2-21     election of the proposed district, as computed by the county.

2-22           Sec. 326.025.  FILING OF PETITION; HEARING; ORDERING

2-23     ELECTION.  (a)  At the next regular or special session of the

2-24     commissioners court held after the petition is filed with the

2-25     commissioners court, the commissioners court shall consider the

2-26     petition.

2-27           (b)  The commissioners court shall grant the petition if the

2-28     court finds that the petition is in proper form and conforms to the

2-29     requirements of Section 326.023 and that the requirement of Section

2-30     326.024 is met.

2-31           (c)  If a petition is granted, the commissioners court shall

2-32     order an election to confirm the district's creation and to

2-33     authorize the imposition of a sales and use tax.

2-34           (d)  The election shall be held on the first authorized

2-35     uniform election date under Chapter 41, Election Code, that occurs

2-36     on or after the 45th day after the date the election is ordered.

2-37           Sec. 326.026.  ELECTION ORDER.  In addition to the elements

2-38     required to be included by the Election Code, the election order

2-39     must state:

2-40                 (1)  the ballot proposition stating the measure to be

2-41     voted on;

2-42                 (2)  the hours that the polls will be open; and

2-43                 (3)  the location of each polling place.

2-44           Sec. 326.027.  NOTICE.  (a)  The commissioners court shall

2-45     give notice of the election by publishing a substantial copy of the

2-46     election order once a week for two consecutive weeks in a newspaper

2-47     with general circulation in the county in which the proposed

2-48     district is located.

2-49           (b)  The notice must be published not earlier than the 30th

2-50     day or later than the 10th day before election day.

2-51           (c)  In addition to the elements required to be included by

2-52     the Election Code, the notice of the election must state the names

2-53     of the five board of trustee candidates.

2-54           Sec. 326.028.  BALLOT PROPOSITION.  (a)  The ballot for the

2-55     election shall be printed to permit voting for or against the

2-56     proposition:  "The creation of the __________ (name of district)

2-57     and adoption of a local sales and use tax in the (name of district)

2-58     at the rate of _______ (rate) percent to provide revenue for the

2-59     district."

2-60           (b)  The ballot shall be printed to permit voting for or

2-61     against each of the five initial trustees listed in the petition

2-62     submitted to the commissioners court under Section 326.023.  A

2-63     blank space must be printed after the name of each candidate, in

2-64     each of which a voter may write in the name of another person for

2-65     trustee.

2-66           (c)  A voter may not vote for more than five persons for

2-67     trustee.

2-68           Sec. 326.029.  RESULTS OF ELECTION.  (a)  If a majority of

2-69     the votes received in the election favor the creation of the

 3-1     district and the adoption of the sales and use tax, the

 3-2     commissioners court shall declare that the district is created and

 3-3     shall declare the amount of the local sales and use tax adopted and

 3-4     enter the result in its minutes.

 3-5           (b)  If a majority of the votes received in the election are

 3-6     against the creation of the district, the commissioners court shall

 3-7     declare the measure defeated and enter the result in its minutes.

 3-8           (c)  The order canvassing the results of the election must:

 3-9                 (1)  contain a description of the district's

3-10     boundaries; and

3-11                 (2)  be filed in the deed records of the county in

3-12     which the district is located.

3-13           Sec. 326.030.  INITIAL TRUSTEES.  (a)  The commissioners

3-14     court shall declare the five persons receiving the highest number

3-15     of votes for trustee to be elected as trustees.

3-16           (b)  The two trustees elected who received the fewest number

3-17     of votes shall serve until the next board of trustees election

3-18     following the confirmation election, and the three trustees who

3-19     received the highest number of votes shall serve until the second

3-20     succeeding trustee election after the confirmation election.

3-21              (Sections 326.031-326.040 reserved for expansion

3-22                   SUBCHAPTER C.  DISTRICT ADMINISTRATION

3-23           Sec. 326.041.  BOARD OF TRUSTEES.  A district shall be

3-24     governed by a board of five trustees.

3-25           Sec. 326.042.  REGISTERED VOTER REQUIREMENT.  A person may

3-26     not be elected to the board of trustees unless the person is a

3-27     registered voter of the county in which the district is located.

3-28           Sec. 326.043.  ELECTION OF TRUSTEES; TERM OF OFFICE.

3-29     (a)  Trustees shall serve two-year terms.

3-30           (b)  The general election for trustees shall be held annually

3-31     on an authorized uniform election date under Chapter 41, Election

3-32     Code.

3-33           (c)  Except for the initial members of the board of trustees,

3-34     a candidate for the office of trustee must file an application for

3-35     a place on the ballot in accordance with Chapter 144, Election

3-36     Code, and other applicable provisions of that code.

3-37           Sec. 326.044.  BOARD VACANCY.  A vacancy in the office of a

3-38     trustee shall be filled by appointment by the remaining trustees.

3-39           Sec. 326.045.  OFFICERS.  After the trustees have assumed

3-40     office, the trustees shall elect from among the trustees a

3-41     president, a vice president, a secretary, and any other officers

3-42     the board considers necessary.

3-43           Sec. 326.046.  QUORUM; OFFICERS' DUTIES.  (a)  Three trustees

3-44     constitute a quorum and a concurrence of three is sufficient in any

3-45     matter relating to the business of the district.

3-46           (b)  The president presides at all board meetings and is the

3-47     chief executive officer of the district.

3-48           (c)  The vice president acts as the president if the

3-49     president is incapacitated or absent from a meeting.

3-50           (d)  The secretary acts as the president if both the

3-51     president and vice president are incapacitated or absent from a

3-52     meeting.

3-53           (e)  The secretary is responsible for ensuring that all the

3-54     records and books of the district are properly kept.

3-55           (f)  The board may appoint the library director or an

3-56     employee as assistant or deputy secretary to assist the secretary.

3-57     The assistant or deputy secretary may certify the authenticity of

3-58     any record of the district.

3-59           Sec. 326.047.  BYLAWS.  The board may adopt bylaws to govern:

3-60                 (1)  the time, place, and manner of conducting board

3-61     meetings;

3-62                 (2)  the powers, duties, and responsibilities of the

3-63     board's officers and employees;

3-64                 (3)  the disbursement of money by a check, draft, or

3-65     warrant;

3-66                 (4)  the appointment and authority of board committees;

3-67                 (5)  the keeping of accounts and other records; and

3-68                 (6)  any other matter the board considers appropriate.

3-69           Sec. 326.048.  MEETINGS AND NOTICE.  (a)  The board may

 4-1     establish regular meetings to conduct district business and may

 4-2     hold special meetings at other times as the business of the

 4-3     district requires.

 4-4           (b)  The board shall hold its meetings at a designated

 4-5     meeting place.

 4-6           Sec. 326.049.  MANAGEMENT OF DISTRICT.  (a)  The board has

 4-7     control over and shall manage the affairs of the district.

 4-8           (b)  The board shall employ any person, firm, partnership, or

 4-9     corporation the board considers necessary for conducting the

4-10     affairs of the district.

4-11           (c)  The board shall determine the term of office and

4-12     compensation of any employee and consultant by contract or by

4-13     resolution of the board.

4-14           (d)  The board may remove any employee.

4-15           Sec. 326.050.  LIBRARY DIRECTOR.  The board may employ a

4-16     library director to administer the affairs of the district under

4-17     policies established by the board.  The board shall set the

4-18     compensation of the library director.

4-19           Sec. 326.051.  BOND.  The board may require an officer or

4-20     employee to execute a bond payable to the district and conditioned

4-21     on the faithful performance of the person's duties.

4-22           Sec. 326.052.  TRUSTEE INTERESTED IN CONTRACT.  (a)  A

4-23     trustee who is financially interested in a contract with the

4-24     district, or a trustee who is an employee of a person that is

4-25     financially interested in a contract with the district, shall

4-26     disclose that fact to the other trustees.  The disclosure shall be

4-27     entered into the minutes of the meeting.

4-28           (b)  A trustee who is financially interested in a contract

4-29     may not vote on the acceptance of the contract or participate in

4-30     the discussion on the contract.

4-31           (c)  The failure of a trustee to disclose the trustee's

4-32     financial interest in a contract and to have the disclosure entered

4-33     in the minutes invalidates the contract.

4-34              (Sections 326.053-326.060 reserved for expansion

4-35                      SUBCHAPTER D.  POWERS AND DUTIES

4-36           Sec. 326.061.  GENERAL POWERS OF DISTRICT.  (a)  A district

4-37     has all of the powers, authority, rights, and duties that will

4-38     permit the accomplishment of the purposes for which the district

4-39     was created, including the power to borrow money, purchase,

4-40     construct, acquire, own, operate, maintain, repair, or improve any

4-41     works, materials, supplies, improvements, facilities, equipment,

4-42     vehicles, machinery, or appliances as necessary for the district.

4-43           (b)  If a district acquires existing improvements,

4-44     facilities, plants, equipment, or appliances, the district may

4-45     assume the contracts and obligations of the previous owner.

4-46           Sec. 326.062.  EMPLOYEE PLANS.  (a)  The board may provide

4-47     for and administer a workers' compensation, health benefit,

4-48     retirement, disability, or death compensation plan for the

4-49     employees of the district.

4-50           (b)  The board may adopt a plan to accomplish the purpose of

4-51     this section.

4-52           (c)  The board, after notice and a hearing, may change any

4-53     plan or rule adopted under this section.

4-54           Sec. 326.063.  SUITS.  (a)  A district may sue and be sued in

4-55     any court of this state in the name of the district.

4-56           (b)  All courts of this state shall take judicial notice of

4-57     the establishment of a district.

4-58           Sec. 326.064.  RULES.  (a)  The board may adopt reasonable

4-59     rules to accomplish the purposes of the district.

4-60           (b)  The board may set monetary charges in reasonable amounts

4-61     for the violation of a district rule.

4-62           (c)  The board may exclude from the use of the library a

4-63     person who wilfully violates a rule adopted by the board under this

4-64     section.

4-65           Sec. 326.065.  FEES.  (a)  A district may impose any

4-66     necessary charges or fees for providing a district service.

4-67           (b)  A district may discontinue a service to enforce payment

4-68     of an unpaid charge or fee that is owed to the district.

4-69           Sec. 326.066.  DEPOSITORY.  (a)  The board shall designate

 5-1     one or more banks inside or outside of the district to serve as the

 5-2     depository for district money.

 5-3           (b)  Tax revenue of the district shall be deposited in a

 5-4     depository bank.

 5-5           Sec. 326.067.  INVESTMENTS.  (a)  Tax revenue of the district

 5-6     may be invested in an obligation that is an authorized investment

 5-7     for the state.

 5-8           (b)  District money other than tax revenue may be invested in

 5-9     accordance with policies adopted by the board.

5-10           Sec. 326.068.  EXPENDITURES.  A district's money may be

5-11     disbursed only by check, draft, order, or another instrument that

5-12     must be signed by one or more officers or employees of the district

5-13     as designated by the board of trustees.

5-14           Sec. 326.069.  ACCOUNTS AND RECORDS; AUDITS.  (a)  The

5-15     district shall keep a complete system of accounts.

5-16           (b)  The district shall have an annual audit of the affairs

5-17     of the district performed by an independent certified public

5-18     accountant.

5-19           (c)  A signed copy of the audit report shall be delivered to

5-20     each trustee not later than the 120th day after the closing date of

5-21     each fiscal year.

5-22           (d)  A copy of the audit report shall be kept on file at the

5-23     district office and shall be made available for inspection by any

5-24     interested person during regular business hours.

5-25           Sec. 326.070.  FISCAL YEAR.  The fiscal year of the district

5-26     is from January 1 to December 31, unless the board adopts another

5-27     fiscal year.

5-28           Sec. 326.071.  REPAYMENT OF ORGANIZATIONAL EXPENSES.

5-29     (a)  The district may:

5-30                 (1)  pay all costs and expenses necessarily incurred in

5-31     the creation and organization of the district; and

5-32                 (2)  reimburse any entity or person for money advanced

5-33     for the costs and expenses described by Subdivision (1).

5-34           (b)  Payments under this section may be made from money

5-35     obtained from taxes or other revenue of the district.

5-36              (Sections 326.072-326.090 reserved for expansion

5-37                       SUBCHAPTER E. SALES AND USE TAX

5-38           Sec. 326.091.  SALES AND USE TAX.  (a)  If a district adopts

5-39     the tax, there is imposed a tax on the receipts from the sale at

5-40     retail of taxable items in the district at a rate of up to one-half

5-41     of one percent.  There is also imposed an excise tax on the use,

5-42     storage, or other consumption in the district of taxable items

5-43     purchased, leased, or rented from a retailer during the period that

5-44     the tax is effective in the district.  The rate of the excise tax

5-45     is the same as the rate of the sales tax portion of the tax applied

5-46     to the sales price of the taxable items and is included in the

5-47     sales tax.

5-48           (b)  For purposes of this section, "taxable items" includes

5-49     all items subject to any sales and use tax that is imposed by the

5-50     county if the county has imposed a sales and use tax.

5-51           Sec. 326.092.  IMPOSITION, COMPUTATION, ADMINISTRATION, AND

5-52     GOVERNANCE OF TAX.  (a)  Chapter 323, Tax Code, to the extent not

5-53     inconsistent with this chapter, governs the imposition,

5-54     computation, administration, and governance of the tax under this

5-55     subchapter, except that Sections 323.101, 323.105, and 323.404

5-56     through 323.408, Tax Code, do not apply.

5-57           (b)  Chapter 323, Tax Code, does not apply to the use and

5-58     allocation of revenue under this chapter.

5-59           (c)  In applying the procedures under Chapter 323, Tax Code,

5-60     to the district, the district's name shall be substituted for "the

5-61     county" and "board of trustees" is substituted for "commissioners

5-62     court."

5-63           Sec. 326.093.  TAX RATES.  The permissible rates for a local

5-64     sales and use tax levied under this chapter are one-eighth of one

5-65     percent, one-fourth of one percent, three-eighths of one percent,

5-66     and one-half of one percent.

5-67           Sec. 326.094.  ABOLITION OF OR CHANGE IN TAX RATE.  (a)  The

5-68     board by order may decrease or abolish the local sales and use tax

5-69     rate or may call an election to increase, decrease, or abolish the

 6-1     local sales and use tax rate.

 6-2           (b)  At the election, the ballots shall be printed to permit

 6-3     voting for or against the proposition:  "The increase (decrease) in

 6-4     the local sales and use tax rate of (name of district) to

 6-5     (percentage) to be used for the purposes of the district" or "The

 6-6     abolition of the district sales and use tax." The increase or

 6-7     decrease in the tax rate is effective if it is approved by a

 6-8     majority of the votes cast.  In calling and holding the election,

 6-9     the board shall use the procedure for the confirmation and tax

6-10     election set forth in this chapter.

6-11           Sec. 326.095.  USE OF TAX.  Taxes collected under this

6-12     subchapter may be used only for the purposes for which the district

6-13     was created.

6-14           Sec. 326.096.  LIMITATION ON ADOPTION OF TAX.  A district may

6-15     adopt a tax under this subchapter only if as a result of adoption

6-16     of the tax the combined rate of all local sales and use taxes

6-17     imposed by political subdivisions having territory in the district

6-18     will not exceed two percent.

6-19           SECTION 2.  This Act takes effect September 1, 1997.

6-20           SECTION 3.  The importance of this legislation and the

6-21     crowded condition of the calendars in both houses create an

6-22     emergency and an imperative public necessity that the

6-23     constitutional rule requiring bills to be read on three several

6-24     days in each house be suspended, and this rule is hereby suspended.

6-25                                  * * * * *