SRC-SEW S.B. 1044 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 1044
77R4026 ATP-DBy: Carona
Intergovernmental Relations
4/8/2001
As Filed


DIGEST AND PURPOSE 

Current law permits an industrial development corporation (IDC) created by
a municipality under the Development Corporation Act of 1979 to issue bonds
to finance the cost of promoting economic development in the state.  While
current law also permits a home-rule municipality of more than 100,000 to
grant public money to certain tax-exempt organizations for certain economic
development purposes, municipalities in general are not authorized to grant
any public money to an IDC.  Thus, cities cannot use tax revenues to help
an IDC retire bonds issued by the ICD to fund economic development
projects.  As proposed, S.B. 1044 authorizes a home-rule municipality of
more than 100,000 to grant any public monies that are derived from any
source lawfully available to the municipality under its charter or other
law, other than from the proceeds of bonds or other obligations of the
municipality payable from ad valorem taxes, to an IDC for certain economic
development purposes. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 380.002, Local Government Code, by amending
Subsection (b) and adding Subsection (c), as follows:  

(b) Authorizes a home-rule municipality with a population of more than
100,000 to, under a contract with a development corporation created by the
municipality under the development Corporation Act of 1979 (Article 5190.6,
V.T.C.S.), grant public money to the corporation.  Authorizes the
development corporation to use the grant money for certain stated purposes. 

(c) Requires the funds granted by the municipality under this section to be
derived from any source lawfully available to the municipality under its
charter or other law, with certain exceptions. 

SECTION 2.  Amends Sections 21 and 22, Development Corporation Act of 1979
(Article 5190.6, V.T.C.S.), as follows: 

Sec. 21.  Prohibits any unit from being authorized to lend its credit or
grant any public money or thing of value in aid of a corporation, except
that a city may grant public money to a corporation under a contract
authorized by Section 380.002 (Economic Development Grants by Certain
Municipalities), Local Government Code. 

Sec. 22.  Prohibits the corporation from being authorized to incur
financial obligations which cannot be paid from proceeds of the bonds, from
revenues realized from the lease or sale of a project or realized from a
loan made by the corporation to finance or refinance in whole or in part a
project, or from revenues from a contract with a city under Section
380.002, Local  Government Code. 

SECTION 3.  Effective date:  upon passage or September 1, 2001.