HBA-DMD, TYH H.B. 3029 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3029 By: Oliveira Economic Development 10/19/1999 Enrolled BACKGROUND AND PURPOSE The sales tax for economic development has been an effective tool used by cities throughout the state to promote economic development. Although authorization for the local option tax has been in effect only since 1989, over 378 cities have levied an economic development sales tax. The cities that have voted to adopt this tax have cumulatively raised in excess of $200 million dollars annually, which is dedicated to the promotion of local economic development. The purpose of this bill is to clarify and strengthen the Development Corporation Act of 1979. H.B. 3029 redefines "project" to include targeted infrastructure and improvements to promote new and expanded business development, job creation and retention, job training, and educational facilities. This bill provides that the costs of a publicly owned and operated project that is purchased or constructed under this section include the maintenance and operating costs of the project. This bill also authorizes an eligible entity to create a corporation that has the authority to acquire, convey, mortgage, or otherwise dispose of property, and to exercise the power of eminent domain to acquire property for a spaceport. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2(10), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by redefining "project" to include targeted infrastructure and improvements to promote new and expanded business development, job creation and retention, job training, and educational facilities. SECTION 2. Amends Section 4A, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Subsection (c-1), as follows: (c-1) Provides that the costs of a publicly owned and operated project that is purchased or constructed under this section include the maintenance and operating costs of the project. Authorizes the proceeds of taxes imposed under this section to be used to pay the maintenance and operating costs of a project, unless within 60 days of the date notice of this specific use of the tax proceeds is first published, the governing body of the city receives a petition from more than 10 percent of the registered voters of the city requesting that an election be held before the tax proceeds may be used to pay the maintenance and operating costs of a project. SECTION 3. Amends Section 4B(a)(1), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to redefine "eligible city" as a specified city in which the combined rates of all sales and use taxes imposed by the city, the state, and other political subdivisions of the state does not exceed 8.25, rather than 7.25, percent. SECTION 4. Amends Section 4B(k), Development Corporation Act of 1979 (Article 5190.6, V.T.C.S.), to add to existing legislative findings. SECTION 5. Amends Article 5190.6, V.T.C.S. (The Development Corporation Act of 1979), by adding Section 4E, as follows: Sec. 4E. DEVELOPMENT CORPORATION FOR SPACEPORT FACILITIES. (a) Defines "eligible entity," "project," "spacecraft," and "spaceport." (b) Authorizes an eligible entity to create a corporation under this article governed by this section. Provides that the corporation has the powers granted by this section and by other sections of this article and is subject to the limitations of a corporation created under other provisions of this article. Provides that to the extent of a conflict between this section and another provision of this article, this section prevails. Provides that the articles of incorporation of a corporation must state that the corporation is governed by this section and may include within its name any words and phrases specified by the eligible entity. (c) Authorizes a corporation to acquire, convey, mortgage, or otherwise dispose of property, and to exercise the power of eminent domain to acquire property for a spaceport, including the enumerated powers. (d) Prohibits a corporation from issuing a bond or acquiring property unless a site in the territory of the eligible entity that established the corporation has been designated as the site for a spaceport. (e) Provides that before exercising the power of eminent domain, a corporation must obtain a resolution approving the proposed condemnation from the governing body of a county or municipality in which the property is located. Provides that for purposes of this section, territory in the extraterritorial jurisdiction of a municipality is considered to be in the jurisdiction of the municipality. Provides that the exercise of the power of eminent domain by the corporation is governed by Chapter 21 (Eminent Domain), Property Code. (f) Authorizes a corporation to make an agreement with or accept a donation, grant, or loan from any person. Authorizes a corporation to enter into an interlocal contract under Chapter 791 (Interlocal Cooperation Contracts), Government Code. Prohibits a corporation from contracting to operate a spaceport unless the agreement provides that the person contracting with the corporation must assume the corporation's liability for a cause of action arising from environmental damage. Authorizes a corporation to sue and be sued. (g) Provides that a corporation is governed by a board of seven directors. Requires the commissioners court of a county, for a corporation established by a single county, to appoint the directors. Provides that if more than one public entity creates the corporation the board must be appointed by written agreement between the governing bodies of those entities. Sets forth the term of each director. Requires a board to elect a presiding officer from among its members. Authorizes a board, by rule, to provide for the election of other officers. Requires the board to meet at least once every three months and at the call of the presiding officer or a majority of the directors. (h) Authorizes a board, by rule, to develop a plan for higher education courses and degree programs to be offered at or near a spaceport. Provides that the planned courses and degree programs must be related to the purposes of this chapter. Requires the Texas Aerospace Commission and the Texas Higher Education Coordinating Board to cooperate with and advise a board in carrying out this section. (i) Authorizes a corporation to perform the enumerated financial transactions. (j) Provides that a corporation's property, income, and operations are exempt from taxes imposed by the state or a political subdivision of the state. Requires a corporation, in lieu of taxes, to make a payment to each political subdivision of the state in an amount equal to the ad valorem taxes that would be paid on the land of the corporation if the land were privately owned. Provides that tangible property such as a spacecraft or other property necessary to launch the spacecraft is not taxable under Section 11.01 (Taxable Property and Exemptions), Tax Code, if it is located in the spaceport. Provides that Chapter 151 (Limited Sales, Excise, and Use Tax), Tax Code, does not apply to tangible personal property purchased by a person for use in a spaceport. (k) Authorizes a corporation to issue bonds. Provides that the bonds are not an obligation or a pledge of the faith and credit of the state, a sponsoring entity or other political subdivision or agency of the state. Provides that a bond issued must meet the enumerated conditions. (l) Provides that Section 24 (Procedures, Rules and Regulations) of this article does not apply to a corporation under this section. SECTION 6. Amends Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Section 30A to define "defense base development corporation" (corporation). Provides that each of the enumerated acts of a corporation is validated and confirmed as of the date it occurred. Provides that this section does not apply to: _an act, proceeding, bond, or obligation the validity of which is the subject of litigation that is pending on the effective date of this article; _an election or appointment of a director or official the validity of which is the subject of litigation that is pending on the effective date of this article; _an act or proceeding that was void or that, under a statute of this state at the time the action or proceeding occurred, was a misdemeanor or felony; or _an act or proceeding that has been held invalid by a final judgment of a court. SECTION 7.Effective date: September 1, 1999. SECTION 8. Emergency clause.