1-1 By: Oliveira, et al. (Senate Sponsor - Brown) H.B. No. 3029
1-2 (In the Senate - Received from the House May 5, 1999;
1-3 May 6, 1999, read first time and referred to Committee on Economic
1-4 Development; May 14, 1999, reported favorably by the following
1-5 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to certain industrial development corporations, projects
1-9 of industrial development corporations, and the taxes levied for
1-10 projects.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 2(10), Development Corporation Act of
1-13 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
1-14 read as follows:
1-15 (10) "Project" shall mean the land, buildings,
1-16 equipment, facilities, targeted infrastructure, and improvements
1-17 (one or more) to promote new and expanded business development or
1-18 found by the board of directors to be required or suitable for the
1-19 promotion of development and expansion of manufacturing and
1-20 industrial facilities, job creation and retention, job training,
1-21 educational facilities, transportation facilities (including but
1-22 not limited to airports, ports, mass commuting facilities, and
1-23 parking facilities), sewage or solid waste disposal facilities,
1-24 recycling facilities, air or water pollution control facilities,
1-25 facilities for the furnishing of water to the general public,
1-26 distribution centers, and small warehouse facilities capable of
1-27 serving as decentralized storage and distribution centers, and for
1-28 the promotion of development or redevelopment and expansion,
1-29 including costs of administration and operation, of a military base
1-30 closed or realigned pursuant to recommendation of the Defense
1-31 Closure and Realignment Commission pursuant to the Defense Base
1-32 Closure and Realignment Act of 1990 (10 U.S.C. Section 2687 note)
1-33 as amended, and of facilities which are related to any of the
1-34 foregoing, and in furtherance of the public purposes of this Act,
1-35 all as defined in the rules of the department, irrespective of
1-36 whether in existence or required to be identified, acquired, or
1-37 constructed thereafter. As used in this Act, the term "development
1-38 areas" shall mean any area or areas of a city that the city finds
1-39 and determines, after a public hearing, should be developed in
1-40 order to meet the development objectives of the city. In addition,
1-41 in blighted or economically depressed areas, development areas,
1-42 federally designated empowerment zones and enterprise communities
1-43 designated under Section 1391, Internal Revenue Code of 1986, or
1-44 federally assisted new communities located within a home-rule city
1-45 or a federally designated economically depressed county of less
1-46 than 50,000 persons according to the last federal decennial census,
1-47 a project may include the land, buildings, equipment, facilities,
1-48 and improvements (one or more) found by the board of directors to
1-49 be required or suitable for the promotion of commercial development
1-50 and expansion and in furtherance of the public purposes of this
1-51 Act, or for use by commercial enterprises, all as defined in the
1-52 rules of the department, irrespective of whether in existence or
1-53 required to be acquired or constructed thereafter. As used in this
1-54 Act, the term blighted or economically depressed areas shall mean
1-55 those areas and areas immediately adjacent thereto within a city
1-56 which by reason of the presence of a substantial number of
1-57 substandard, slum, deteriorated, or deteriorating structures, or
1-58 which suffer from a high relative rate of unemployment, or which
1-59 have been designated and included in a tax incremental district
1-60 created under Chapter 695, Acts of the 66th Legislature, Regular
1-61 Session, 1979 (Article 1066d, Vernon's Texas Civil Statutes), or
1-62 any combination of the foregoing, the city finds and determines,
1-63 after a hearing, substantially impair or arrest the sound growth of
1-64 the city, or constitute an economic or social liability and are a
2-1 menace to the public health, safety, or welfare in their present
2-2 condition and use. The department shall adopt guidelines that
2-3 describe the kinds of areas that may be considered to be blighted
2-4 or economically depressed. The city shall consider these
2-5 guidelines in making its findings and determinations. Notice of
2-6 the hearing at which the city considers establishment of a
2-7 development area or an economically depressed or blighted area
2-8 shall be posted at the city hall before the hearing.
2-9 "Federally assisted new communities" shall mean those
2-10 federally assisted areas which have received or will receive
2-11 assistance in the form of loan guarantees under Title X of the
2-12 National Housing Act and a portion of the federally assisted area
2-13 has received grants under Section 107(a)(1) of the Housing and
2-14 Community Development Act of 1974, as amended.
2-15 SECTION 2. Section 4A, Development Corporation Act of 1979
2-16 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
2-17 adding Subsection (c-1) to read as follows:
2-18 (c-1) The costs of a publicly owned and operated project
2-19 that is purchased or constructed under this section include the
2-20 maintenance and operating costs of the project. The proceeds of
2-21 taxes imposed under this section may be used to pay the maintenance
2-22 and operating costs of a project, unless not later than the 60th
2-23 day after the date notice of this specific use of the tax proceeds
2-24 is first published, the governing body of the city receives a
2-25 petition from more than 10 percent of the registered voters of the
2-26 city requesting that an election be held before the tax proceeds
2-27 may be used to pay the maintenance and operating costs of a
2-28 project.
2-29 SECTION 3. Section 4B(a)(1), Development Corporation Act of
2-30 1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended to
2-31 read as follows:
2-32 (1) "Eligible city" means a city:
2-33 (A) that is located in a county with a
2-34 population of 750,000 or more, according to the most recent federal
2-35 decennial census and in which the combined rate of all sales and
2-36 use taxes imposed by the city, the state, and other political
2-37 subdivisions of the state having territory in the city does not
2-38 exceed 8.25 [7.25] percent on the date of any election held under
2-39 or made applicable to this section;
2-40 (B) that has a population of 400,000 or more,
2-41 according to the most recent federal decennial census, and that is
2-42 located in more than one county, and in which the combined rate of
2-43 all sales and use taxes imposed by the city, the state, and other
2-44 political subdivisions of the state having territory in the city,
2-45 including taxes under this section, does not exceed 8.25 percent;
2-46 (C) that is located in a county with a
2-47 population of more than 1,100,000 according to the most recent
2-48 federal decennial census, in which there are more than 29
2-49 incorporated municipalities according to the most recent federal
2-50 decennial census, and in which the combined rate of all sales and
2-51 use taxes imposed by the city, the state, and other political
2-52 subdivisions of the state having territory in the city does not
2-53 exceed 7.75 percent on the date of any election held under or made
2-54 applicable to this section; or
2-55 (D) to which Section 4A of this Act applies.
2-56 (E) Paragraph (C) of this subdivision expires
2-57 September 1, 1999.
2-58 SECTION 4. Section 4B, Development Corporation Act of 1979
2-59 (Article 5190.6, Vernon's Texas Civil Statutes), is amended by
2-60 adding Subsection (e-1) and amending Subsection (i) to read as
2-61 follows:
2-62 (e-1) In a city in which a sales and use tax for the benefit
2-63 of a corporation has been imposed under this section, in the same
2-64 manner and by the same procedure the city by majority vote of the
2-65 qualified voters of the city voting at an election called and held
2-66 for the purpose may reduce or increase the tax. The rate may be
2-67 reduced in one or more increments of one-eighth of one percent to a
2-68 minimum of one-eighth of one percent or increased in one or more
2-69 increments of one-eighth of one percent to a maximum of one-half of
3-1 one percent. On petition of 10 percent or more of the registered
3-2 voters of the city requesting an election on the increase or
3-3 reduction of the tax under this section, the governing body of the
3-4 city shall order an election on the issue. In an election to
3-5 increase or reduce the tax under this section, the ballot shall be
3-6 printed to provide for voting for or against the proposition: "The
3-7 _________ (insert "increase in" or "reduction of", as appropriate)
3-8 a sales and use tax adopted for the promotion and development of
3-9 new and expanded business from a rate of __________ (insert
3-10 applicable tax rate) to a rate of __________ (insert proposed tax
3-11 rate).
3-12 (i) On petition of 10 percent or more of the registered
3-13 voters of the city requesting an election on the dissolution of the
3-14 corporation, the governing body shall order an election on the
3-15 issue at the next available uniform election date that is not later
3-16 than the 45th day after the date on which the petition is filed.
3-17 The election must be conducted according to the applicable
3-18 provisions of the Election Code. The ballot for the election shall
3-19 be printed to provide for voting for or against the proposition:
3-20 "Dissolution of the ___________________ (name of the corporation)."
3-21 If a majority of voters voting on the issue approve the
3-22 dissolution, the corporation shall continue operations only as
3-23 necessary to pay the principal of and interest on its bonds and to
3-24 meet obligations incurred before the date of the election and, to
3-25 the extent practicable, shall dispose of its assets and apply the
3-26 proceeds to satisfy those obligations. When the last of the
3-27 obligations is satisfied, any remaining assets of the corporation
3-28 shall be transferred to the city, and the corporation is dissolved.
3-29 A [sales and use] tax imposed under this section may not be
3-30 collected after the last day of the first calendar quarter
3-31 beginning [occurring] after notification to the comptroller by the
3-32 corporation that the last of its obligations is satisfied [all
3-33 bonds or other obligations of the corporation that are payable in
3-34 whole or in part from the proceeds of the sales and use tax under
3-35 this section, including any refunding bonds or other obligations,
3-36 have been paid in full or the full amount of money, exclusive of
3-37 guaranteed interest, necessary to pay in full the bonds and other
3-38 obligations has been set aside in a trust account dedicated to the
3-39 payment of the bonds and other obligations].
3-40 SECTION 5. The Development Corporation Act of 1979 (Article
3-41 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
3-42 4D to read as follows:
3-43 Sec. 4D. The legislature finds for all constitutional and
3-44 statutory purposes that projects as defined by Section 2(10) of
3-45 this Act are owned, used, and held for public purposes for and on
3-46 behalf of the eligible city incorporating the corporation, and
3-47 Section 23(b) of this Act and Section 25.07(a), Tax Code, are not
3-48 applicable to leasehold or other possessory interests granted by
3-49 the corporation during the period projects are owned by the
3-50 corporation on behalf of the eligible city. Projects are exempt
3-51 from taxation under Section 11.11, Tax Code, for that period.
3-52 SECTION 6. The Development Corporation Act of 1979 (Article
3-53 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
3-54 4E to read as follows:
3-55 Sec. 4E. DEVELOPMENT CORPORATION FOR SPACEPORT FACILITIES.
3-56 (a) In this section:
3-57 (1) "Eligible entity" means any county or combination
3-58 of municipalities and counties.
3-59 (2) "Project" means land, buildings, equipment,
3-60 facilities, and improvements included in the definition of that
3-61 term under Section 2 of this Act, including land, buildings,
3-62 equipment, facilities, and improvements found by the board of
3-63 directors to:
3-64 (A) be required or suitable for use for the
3-65 promotion or development of a spaceport, related area
3-66 transportation facilities, automobile parking facilities, and
3-67 related roads, streets, and water and sewer facilities, and other
3-68 related improvements that enhance any of those items;
3-69 (B) promote or develop new or expanded business
4-1 enterprises relating to a spaceport;
4-2 (C) promote or develop educational programs and
4-3 job training in connection with a spaceport;
4-4 (D) be required or suitable for the promotion of
4-5 development and expansion of affordable housing, as defined by 42
4-6 U.S.C. Section 12745, in connection with a spaceport.
4-7 (3) "Spacecraft" includes a satellite.
4-8 (4) "Spaceport" includes:
4-9 (A) an area intended to be used to launch or
4-10 land a spacecraft;
4-11 (B) a spaceport building or facility located on
4-12 an area appurtenant to a launching or landing area;
4-13 (C) an area appurtenant to a launching or
4-14 landing area that is intended for use for a spaceport building or
4-15 facility; and
4-16 (D) a right-of-way related to a launching or
4-17 landing area, building facility, or other area that is appurtenant
4-18 to a launching or landing area.
4-19 (b) An eligible entity may create a corporation under this
4-20 Act governed by this section. The corporation has the powers
4-21 granted by this section and by other sections of this Act and is
4-22 subject to the limitations of a corporation created under other
4-23 provisions of this Act. To the extent of a conflict between this
4-24 section and another provision of this Act, this section prevails.
4-25 The articles of incorporation of a corporation under this section
4-26 must state that the corporation is governed by this section and may
4-27 include within its name any words and phrases specified by the
4-28 eligible entity.
4-29 (c) A corporation may:
4-30 (1) acquire, convey, mortgage, or otherwise dispose of
4-31 property; and
4-32 (2) exercise the power of eminent domain to acquire
4-33 property for a spaceport, including the power to:
4-34 (A) acquire fee title in land condemned;
4-35 (B) relocate or modify a railroad, utility line,
4-36 pipeline, or other facility that may interfere with a spaceport; or
4-37 (C) impose a reasonable restriction on using the
4-38 surface of the property for mineral development if the corporation
4-39 does not own the mineral rights.
4-40 (d) A corporation may not issue a bond or acquire property
4-41 unless a site in the territory of the eligible entity that
4-42 established the corporation has been designated as the site for a
4-43 spaceport.
4-44 (e) Before exercising the power of eminent domain under this
4-45 section, a corporation must obtain a resolution approving the
4-46 proposed condemnation from the governing body of a county or
4-47 municipality in which the property is located. For purposes of
4-48 this section, territory in the extraterritorial jurisdiction of a
4-49 municipality is considered to be in the jurisdiction of the
4-50 municipality. The exercise of the power of eminent domain by the
4-51 corporation is governed by Chapter 21, Property Code.
4-52 (f) A corporation may make an agreement with or accept a
4-53 donation, grant, or loan from any person. A corporation may enter
4-54 into an interlocal contract under Chapter 791, Government Code. A
4-55 corporation may not contract to operate a spaceport unless the
4-56 agreement provides that the person contracting with the corporation
4-57 must assume the corporation's liability for a cause of action
4-58 arising from environmental damage. A corporation may sue and be
4-59 sued.
4-60 (g) A corporation is governed by a board of seven directors.
4-61 For a corporation established by a single county, the commissioners
4-62 court of the county shall appoint the directors. If more than one
4-63 public entity creates the corporation the board must be appointed
4-64 by written agreement between the governing bodies of those
4-65 entities. Each director serves a two-year term that expires June 1
4-66 of each odd-numbered year except that the terms of three or four of
4-67 the initial directors may be for a one-year term so that the terms
4-68 can be staggered for future two-year terms. A board shall elect a
4-69 presiding officer from among its members. A board by rule may
5-1 provide for the election of other officers. The board shall meet
5-2 at least once every three months and at the call of the presiding
5-3 officer or a majority of the directors.
5-4 (h) A board by rule may develop a plan for higher education
5-5 courses and degree programs to be offered at or near a spaceport.
5-6 These planned courses and degree programs must be related to the
5-7 purposes of this chapter. The Texas Aerospace Commission and the
5-8 Texas Higher Education Coordinating Board shall cooperate with and
5-9 advise a board in carrying out this section.
5-10 (i) A corporation may:
5-11 (1) impose a charge for using a spaceport or a service
5-12 the corporation provides;
5-13 (2) issue a bond as provided by this section;
5-14 (3) borrow money;
5-15 (4) loan money to fund a spaceport; and
5-16 (5) invest money under its control in an investment
5-17 permitted by Chapter 2256, Government Code.
5-18 (j) A corporation's property, income, and operations are
5-19 exempt from taxes imposed by the state or a political subdivision
5-20 of the state. In lieu of taxes, a corporation shall make a payment
5-21 to each political subdivision of the state in an amount equal to
5-22 the ad valorem taxes that would be paid on the land of the
5-23 corporation if the land were privately owned. Tangible personal
5-24 property such as a spacecraft or other property necessary to launch
5-25 the spacecraft is not taxable under Section 11.01, Tax Code, if it
5-26 is located in the spaceport. Chapter 151, Tax Code, does not apply
5-27 to tangible personal property purchased by a person for use in a
5-28 spaceport.
5-29 (k) A corporation may issue bonds. The bonds are not an
5-30 obligation or a pledge of the faith and credit of the state, a
5-31 sponsoring entity or other political subdivision or agency of the
5-32 state. A bond issued under this section must:
5-33 (1) be payable solely from the revenue of a spaceport
5-34 developed by the corporation issuing the bond;
5-35 (2) mature not later than 50 years after its date of
5-36 issuance;
5-37 (3) state on its face that the bond is not an
5-38 obligation of the State of Texas or a political subdivision of the
5-39 state, other than the corporation that issued the bond; and
5-40 (4) be approved by the governing body of each entity
5-41 that established the corporation.
5-42 (l) Section 24 of this Act does not apply to a corporation
5-43 under this section.
5-44 SECTION 7. The Development Corporation Act of 1979 (Article
5-45 5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
5-46 30A to read as follows:
5-47 Sec. 30A. (a) For purposes of this section, a "defense base
5-48 development corporation" means a corporation established under
5-49 Section 4B of this Act, for the purpose of promoting projects
5-50 regarding a military base closure or realignment under the Defense
5-51 Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687)
5-52 and its subsequent amendments.
5-53 (b) Each of the following acts of a defense base development
5-54 corporation is validated and confirmed as of the date it occurred:
5-55 (1) each act or proceeding of the corporation taken
5-56 before March 1, 1999;
5-57 (2) the election or appointment and each act of a
5-58 director or other official of the corporation who took office
5-59 before the effective date of this Act;
5-60 (3) each act or proceeding relating to a bond or other
5-61 obligation of the corporation authorized before the effective date
5-62 of this Act; and
5-63 (4) each act or proceeding relating to the entity's
5-64 incorporation under this Act.
5-65 (c) This section does not apply to:
5-66 (1) an act, proceeding, bond, or obligation the
5-67 validity of which is the subject of litigation that is pending on
5-68 the effective date of this Act;
5-69 (2) an election or appointment of a director or
6-1 official the validity of which is the subject of litigation that is
6-2 pending on the effective date of this Act;
6-3 (3) an act or proceeding that was void or that, under
6-4 a statute of this state at the time the action or proceeding
6-5 occurred, was a misdemeanor or felony; or
6-6 (4) an act or proceeding that has been held invalid by
6-7 a final judgment of a court.
6-8 SECTION 8. This Act takes effect September 1, 1999.
6-9 SECTION 9. The importance of this legislation and the
6-10 crowded condition of the calendars in both houses create an
6-11 emergency and an imperative public necessity that the
6-12 constitutional rule requiring bills to be read on three several
6-13 days in each house be suspended, and this rule is hereby suspended.
6-14 * * * * *