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 * * * * *