1-1 By: Tillery (Senate Sponsor - Carona) H.B. No. 782
1-2 (In the Senate - Received from the House March 15, 2001;
1-3 March 19, 2001, read first time and referred to Committee on
1-4 Intergovernmental Relations; April 17, 2001, reported favorably by
1-5 the following vote: Yeas 7, Nays 0; April 17, 2001, sent to
1-6 printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the ability of a development corporation to receive
1-10 funding from a municipality.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 380.002, Local Government Code, is
1-13 amended by amending Subsection (b) and adding Subsection (c) to
1-14 read as follows:
1-15 (b) A home-rule municipality may, under a contract with a
1-16 development corporation created by the municipality under the
1-17 Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
1-18 Civil Statutes), grant public money to the corporation. The
1-19 development corporation shall use the grant money for the
1-20 development and diversification of the economy of the state,
1-21 elimination of unemployment or underemployment in the state, and
1-22 development and expansion of commerce in the state.
1-23 (c) The funds granted by the municipality under this section
1-24 shall be derived from any source lawfully available to the
1-25 municipality under its charter or other law, other than from the
1-26 proceeds of bonds or other obligations of the municipality payable
1-27 from ad valorem taxes.
1-28 SECTION 2. Sections 21 and 22, Development Corporation Act
1-29 of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are
1-30 amended to read as follows:
1-31 Sec. 21. Every unit is hereby authorized to utilize a
1-32 corporation to issue bonds on its behalf to finance the cost of
1-33 projects, including projects in federally designated empowerment
1-34 zones and enterprise communities or enterprise zones designated
1-35 under the Texas Enterprise Zone Act, to promote and develop new and
1-36 expanded business enterprises to promote and encourage employment
1-37 and the public welfare. No unit is or shall be authorized to lend
1-38 its credit or grant any public money or thing of value in aid of a
1-39 corporation, except that a city may grant public money to a
1-40 corporation under a contract authorized by Section 380.002, Local
1-41 Government Code. The unit will approve all programs and
1-42 expenditures of the corporation and annually review any financial
1-43 statements of the corporation, and at all times the unit will have
1-44 access to the books and records of the corporation.
1-45 Sec. 22. Bonds issued under the provisions of this Act shall
1-46 be deemed not to constitute a debt of the state, of the unit, or of
1-47 any other political corporation, subdivision, or agency of this
1-48 state or a pledge of the faith and credit of any of them, but such
1-49 bonds shall be payable solely from the funds herein provided
1-50 therefor from revenues. All such revenue bonds shall contain on
1-51 the face thereof a statement to the effect that neither the state,
1-52 the unit, nor any political corporation, subdivision, or agency of
1-53 the state shall be obligated to pay the same or the interest
1-54 thereon and that neither the faith and credit nor the taxing power
1-55 of the state, the unit, or any other political corporation,
1-56 subdivision, or agency thereof is pledged to the payment of the
1-57 principal of or the interest on such bonds. The corporation shall
1-58 not be authorized to incur financial obligations which cannot be
1-59 paid from proceeds of the bonds, [or] from revenues realized from
1-60 the lease or sale of a project or realized from a loan made by the
1-61 corporation to finance or refinance in whole or in part a project,
1-62 or from revenues from a contract with a city under Section 380.002,
1-63 Local Government Code. The corporation when established and
1-64 created pursuant to the terms of the Act shall be a constituted
2-1 authority and an instrumentality (within the meaning of those terms
2-2 in the regulations of the treasury and the rulings of the Internal
2-3 Revenue Service prescribed and promulgated pursuant to Section 103
2-4 of the Internal Revenue Code of 1954, as amended) and shall be
2-5 authorized to act on behalf of the unit under whose auspices it is
2-6 created for the specific public purpose or purposes authorized by
2-7 such unit; but the corporation is not intended to be and shall not
2-8 be a political subdivision or a political corporation within the
2-9 meaning of the constitution and the laws of the state, including
2-10 without limitation Article III, Section 52, of the Texas
2-11 Constitution, and a unit shall never delegate to a corporation any
2-12 of such unit's attributes of sovereignty, including the power to
2-13 tax, the power of eminent domain, and the police power.
2-14 SECTION 3. This Act takes effect immediately if it receives
2-15 a vote of two-thirds of all the members elected to each house, as
2-16 provided by Section 39, Article III, Texas Constitution. If this
2-17 Act does not receive the vote necessary for immediate effect, this
2-18 Act takes effect September 1, 2001.
2-19 * * * * *