By: Van de Putte, et al. S.B. No. 607
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of a municipal development corporation to
1-3 provide educational and job training; authorizing the imposition of
1-4 certain local taxes; providing an administrative penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle A, Title 12, Local Government Code, is
1-7 amended by adding Chapter 379A to read as follows:
1-8 CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 379A.001. SHORT TITLE. This chapter may be cited as
1-11 the Better Jobs Act.
1-12 Sec. 379A.002. FINDINGS AND PURPOSES. (a) The legislature
1-13 finds that:
1-14 (1) the right to gainful employment and the general
1-15 welfare of the people of this state require investment in the
1-16 development of a skilled workforce through job training programs,
1-17 early childhood development, after-school programs, scholarships
1-18 for higher education, and literacy programs;
1-19 (2) municipalities in this state have invested
1-20 substantial funds in those programs, but wish to develop additional
1-21 resources so that they can do more; and
1-22 (3) those programs are essential to the economic
1-23 growth and vitality of many municipalities in this state and to the
1-24 elimination of unemployment and underemployment in those
1-25 municipalities.
2-1 (b) The programs authorized by this chapter are in the
2-2 public interest, promote the economic welfare of this state, and
2-3 serve the state public purpose of developing and diversifying the
2-4 economy of this state and eliminating unemployment and
2-5 underemployment in this state.
2-6 (c) This chapter shall be liberally construed in conformity
2-7 with the findings and purposes stated in this section.
2-8 Sec. 379A.003. DEFINITIONS. In this chapter:
2-9 (1) "Board" means the board of directors of a
2-10 municipal development corporation.
2-11 (2) "Corporation" means a municipal development
2-12 corporation created under this chapter.
2-13 Sec. 379A.004. APPLICATION OF NON-PROFIT CORPORATION ACT. A
2-14 corporation created under this chapter is governed by the Texas
2-15 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
2-16 Texas Civil Statutes), except to the extent inconsistent with this
2-17 chapter.
2-18 (Sections 379A.005-379A.010 reserved for expansion
2-19 SUBCHAPTER B. CREATION OF CORPORATION
2-20 Sec. 379A.011. CREATION. The governing body of a
2-21 municipality may create a municipal development corporation under
2-22 this chapter.
2-23 Sec. 379A.012. ARTICLES OF INCORPORATION. The articles of
2-24 incorporation of the corporation must state that the corporation is
2-25 governed by this chapter.
2-26 Sec. 379A.013. NUMBER OF CORPORATIONS. A municipality may
3-1 not create more than one corporation under this chapter.
3-2 Sec. 379A.014. ADOPTION AND APPROVAL OF BYLAWS. The initial
3-3 bylaws of a corporation shall be adopted by its board of directors
3-4 and approved by resolution of the governing body of the
3-5 municipality that created the corporation, and any subsequent
3-6 changes made to the bylaws must be approved by the governing body
3-7 of the municipality that created the corporation.
3-8 (Sections 379A.015-379A.020 reserved for expansion
3-9 SUBCHAPTER C. BOARD OF DIRECTORS
3-10 Sec. 379A.021. COMPOSITION AND APPOINTMENT OF BOARD.
3-11 (a) Except as provided by Subsection (g), the corporation is
3-12 governed by a board of 5, 7, 9, 11, 13, or 15 directors, as
3-13 determined by the governing body of the municipality that created
3-14 the corporation. The number of directors may not exceed the number
3-15 of members, including the mayor, constituting the governing body of
3-16 the municipality.
3-17 (b) The governing body of the municipality that created the
3-18 corporation shall appoint the members of the board.
3-19 (c) Directors serve staggered two-year terms, with as near
3-20 as possible to one-half of the members' terms expiring each year.
3-21 A director serves at the will of the governing body of the
3-22 municipality that created the corporation. Successor directors are
3-23 appointed in the same manner as the original appointees.
3-24 (d) Each director of a corporation created by a municipality
3-25 that has a population of 20,000 or more must be a resident of the
3-26 municipality. Each director of a corporation created by a
4-1 municipality that has a population of less than 20,000 must be a
4-2 resident of the municipality or the county in which the major part
4-3 of the area of the municipality is located.
4-4 (e) A person is disqualified from serving as a director if
4-5 the person is an employee, officer, or member of the governing body
4-6 of the municipality that created the corporation.
4-7 (f) A director may not have a personal interest in a
4-8 contract executed by the corporation.
4-9 (g) In a municipality that has a population of more than one
4-10 million and that creates a corporation under this chapter, the
4-11 board of the corporation is composed of persons appointed to the
4-12 board as required by this subsection. The governing body of the
4-13 municipality shall appoint one director to the board of the
4-14 corporation from each district that elects a member to the
4-15 governing body of the municipality.
4-16 Sec. 379A.022. COMPENSATION. A board member is not entitled
4-17 to compensation, but is entitled to reimbursement for actual and
4-18 necessary expenses incurred in serving as a director.
4-19 Sec. 379A.023. MEETINGS. The board shall conduct its
4-20 meetings in the municipality that created the corporation.
4-21 Sec. 379A.024. OFFICERS. The board shall appoint from its
4-22 members a presiding officer, a secretary, and other officers of the
4-23 corporation that the governing body of the municipality that
4-24 created the corporation considers necessary.
4-25 Sec. 379A.025. ADOPTION AND APPROVAL OF BUDGET; REVIEW OF
4-26 CORPORATE FINANCES. (a) The board shall prepare an annual budget
5-1 for the corporation. To be effective, the budget must be approved
5-2 by the board and presented to and approved by the governing body of
5-3 the municipality that created the corporation. The corporation may
5-4 not make any expenditure authorized by this chapter until the
5-5 budget has been approved as provided by this section. An amendment
5-6 of the budget must be approved in the same manner as the budget.
5-7 (b) The governing body of the municipality that created the
5-8 corporation may amend the corporation's budget with the approval of
5-9 at least two-thirds of the members of the governing body.
5-10 (c) The budget presented to the governing body of the
5-11 municipality that created the corporation must provide a detailed
5-12 description of the proposed expenditures for the corporation's
5-13 fiscal year, including expenditures for each program authorized by
5-14 Subchapter D.
5-15 (d) The board shall annually prepare and present financial
5-16 statements from the preceding fiscal year to the governing body of
5-17 the municipality that created the corporation.
5-18 (e) The governing body of the municipality that created the
5-19 corporation is entitled, at all times, to access to the books and
5-20 records of the corporation.
5-21 (Sections 379A.026-379A.050 reserved for expansion
5-22 SUBCHAPTER D. POWERS OF CORPORATION
5-23 Sec. 379A.051. PROGRAMS. (a) A corporation may develop and
5-24 implement programs for:
5-25 (1) job training, including long-term job training and
5-26 in-training support service grants;
6-1 (2) early childhood development;
6-2 (3) after-school programs for primary and secondary
6-3 schools;
6-4 (4) the provision of funding to institutions of higher
6-5 education to be used to award scholarships;
6-6 (5) the promotion of literacy; and
6-7 (6) any other undertaking that the board determines
6-8 will directly facilitate the development of a skilled workforce.
6-9 (b) A corporation may accept donated property, may develop
6-10 or use land, buildings, equipment, facilities, and other
6-11 improvements in connection with a program described by Subsection
6-12 (a), or may dispose of property or an interest in property under
6-13 terms determined by the corporation.
6-14 (c) A municipality may contract with a community nonprofit
6-15 organization that sponsors job training, long-term job training,
6-16 and related support services.
6-17 Sec. 379A.052. GENERAL POWERS OF CORPORATION. The
6-18 corporation may:
6-19 (1) own or operate a program authorized by this
6-20 chapter;
6-21 (2) perform any act necessary to the full exercise of
6-22 the corporation's powers;
6-23 (3) accept a grant or loan from a:
6-24 (A) department or agency of the United States;
6-25 (B) department, agency, or political subdivision
6-26 of this state; or
7-1 (C) public or private person;
7-2 (4) employ any necessary personnel, who shall be
7-3 employees of the municipality;
7-4 (5) adopt rules to govern the operation of the
7-5 corporation and its employees and property; and
7-6 (6) contract or enter into a memorandum of
7-7 understanding or a similar agreement with a public or private
7-8 person, including local workforce development boards or any
7-9 political subdivision, in connection with a program authorized by
7-10 this chapter.
7-11 Sec. 379A.053. NATURE OF CORPORATE PROPERTY. (a) The
7-12 legislature finds for all constitutional and statutory purposes
7-13 that the corporation owns, uses, and holds its property for public
7-14 purposes.
7-15 (b) Section 25.07(a), Tax Code, does not apply to a
7-16 leasehold or other possessory interest granted by the corporation.
7-17 (c) Property owned by the corporation is exempt from
7-18 taxation under Section 11.11, Tax Code, while the corporation owns
7-19 the property.
7-20 Sec. 379A.054. OPEN RECORDS AND MEETINGS. The board is
7-21 treated as a governmental body for the purposes of Chapters 551 and
7-22 552, Government Code.
7-23 Sec. 379A.055. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In
7-24 providing funds to an institution of higher education to be used
7-25 for scholarships as authorized by Section 379A.051, the corporation
7-26 by agreement with the institution shall ensure that:
8-1 (1) the funds are distributed to individuals as
8-2 scholarships connected with the institution; and
8-3 (2) no more than a maximum amount, as set by the
8-4 corporation, of the funds are spent on administering the award of
8-5 the scholarship.
8-6 (b) An institution of higher education receiving the funds
8-7 for scholarships shall develop, in consultation with the
8-8 corporation, a plan for awarding scholarships with the goal of
8-9 having an eventual beneficial effect on the economic growth and
8-10 vitality of and the elimination of unemployment and underemployment
8-11 in the municipality that created the corporation.
8-12 (c) If the municipality that created the corporation has
8-13 established an education partnership composed of community-based
8-14 organizations, school districts, public or private sector entities,
8-15 or postsecondary institutions for the purpose of distributing
8-16 scholarships to students of local schools, the corporation may
8-17 provide funds to the education partnership to enable the
8-18 partnership to award scholarships to directly facilitate the
8-19 development of a skilled workforce.
8-20 (Sections 379A.056-379A.080 reserved for expansion
8-21 SUBCHAPTER E. SALES AND USE TAX
8-22 Sec. 379A.081. SALES AND USE TAX. (a) A municipality may
8-23 levy a sales and use tax for the benefit of the corporation if the
8-24 tax is authorized by a majority of the voters of the municipality
8-25 voting at an election called for that purpose.
8-26 (b) The ballot for an election to impose the tax shall be
9-1 printed to permit voting for or against the proposition: "Adoption
9-2 of a sales and use tax at the rate of ____ of one percent (insert
9-3 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
9-4 for the purpose of financing authorized programs of the ____
9-5 Municipal Development Corporation (insert the name of the
9-6 corporation)."
9-7 (c) The adoption of the tax may be limited on the ballot to
9-8 any specific program, or the tax may be adopted with general
9-9 language permitting the use of the tax for any purposes authorized
9-10 by this chapter.
9-11 (d) If a sales and use tax is levied, it may be adopted for
9-12 a maximum of 20 years, but may then be reauthorized, subject to a
9-13 payment of indebtedness. The tax may be authorized for a shorter
9-14 period of time or limited to the time necessary to pay any
9-15 indebtedness.
9-16 (e) The rate of a tax adopted under this section must be
9-17 one-eighth, one-fourth, three-eighths, or one-half of one
9-18 percent. A municipality may not adopt a sales and use tax under
9-19 this chapter if the adoption of the tax under this chapter would
9-20 result in a combined tax rate of all local sales and use taxes of
9-21 more than two percent in any location in the municipality.
9-22 (f) Chapter 321, Tax Code, governs a municipality's
9-23 imposition, computation, administration, collection, and remittance
9-24 of a tax authorized by this section except as inconsistent with
9-25 this chapter.
9-26 Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A
10-1 municipality that has adopted a sales and use tax under this
10-2 chapter at a rate of less than one-half of one percent may increase
10-3 or decrease the rate of the tax if the increase or decrease is
10-4 approved by a majority of the voters of the municipality voting at
10-5 an election called and held for that purpose.
10-6 (b) The tax may be increased or decreased under this section
10-7 in one or more increments of one-eighth of one percent, but a
10-8 maximum of one-half of one percent is permitted.
10-9 (c) The ballot for an election to increase or decrease the
10-10 tax shall be printed to permit voting for or against the
10-11 proposition: "The ________ (increase or decrease, as appropriate)
10-12 of a sales and use tax to the rate of ____ of one percent (insert
10-13 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
10-14 for the purpose of financing authorized programs of the ________
10-15 Municipal Development Corporation (insert the name of the
10-16 corporation)."
10-17 Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality
10-18 adopts the tax, a tax is imposed on the receipts from the sale at
10-19 retail of taxable items in the municipality at the rate approved at
10-20 the election, and an excise tax is imposed on the use, storage, or
10-21 other consumption in the municipality of tangible personal property
10-22 purchased, leased, or rented from a retailer during the period that
10-23 the tax is effective in the municipality. The rate of the excise
10-24 tax is the same as the rate of the sales tax portion of the tax and
10-25 is applied to the sale price of the tangible personal property.
10-26 (b) The adoption of the tax or the change of the tax rate
11-1 takes effect on the first day of the first calendar quarter
11-2 occurring after the expiration of the first complete quarter
11-3 occurring after the date the comptroller receives a notice of the
11-4 results of the election adopting, increasing, or decreasing the
11-5 tax.
11-6 (Sections 379A.084-379A.100 reserved for expansion
11-7 SUBCHAPTER F. REPORT TO COMPTROLLER
11-8 Sec. 379A.101. REPORT REQUIRED. (a) Not later than
11-9 February 1 of each year, the board of directors of the corporation
11-10 shall submit to the comptroller a report in the form required by
11-11 the comptroller.
11-12 (b) The reporting form may not exceed one page in length and
11-13 must include:
11-14 (1) a statement of the corporation's primary
11-15 objectives;
11-16 (2) a statement of the corporation's total revenues
11-17 during the preceding fiscal year;
11-18 (3) a statement of the corporation's total
11-19 expenditures during the preceding fiscal year;
11-20 (4) a statement of the corporation's total
11-21 expenditures during the preceding fiscal year in each of the
11-22 following categories:
11-23 (A) administration;
11-24 (B) personnel;
11-25 (C) marketing or promotion;
11-26 (D) direct business incentives;
12-1 (E) job training for the corporation's
12-2 personnel;
12-3 (F) debt service;
12-4 (G) capital costs;
12-5 (H) programs authorized by this chapter; and
12-6 (I) payments to taxing units, including school
12-7 districts;
12-8 (5) a list of the corporation's capital assets,
12-9 including land and buildings; and
12-10 (6) any other information the comptroller requires to
12-11 determine the use of the sales and use tax imposed under this
12-12 chapter.
12-13 Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE
12-14 PENALTY. (a) If the corporation fails to file a report in
12-15 accordance with this subchapter or fails to include sufficient
12-16 information in the report, the comptroller shall provide to the
12-17 corporation a written notice of the failure. The written notice
12-18 must include information on how to correct the failure.
12-19 (b) The comptroller may impose an administrative penalty
12-20 against the corporation if the corporation does not correct the
12-21 failure before the 31st day after the date the corporation receives
12-22 the written notice under Subsection (a). The amount of the penalty
12-23 is $200 a day for each day the filing of the report is delinquent.
12-24 (c) The comptroller by rule shall prescribe the procedures
12-25 for the imposition of an administrative penalty under this section.
12-26 The rules must protect the due process rights of the corporation.
13-1 Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE.
13-2 (a) Not later than November 1 of each even-numbered year, the
13-3 comptroller shall submit to the legislature a report on the use of
13-4 the sales and use tax imposed under this chapter.
13-5 (b) On request, the comptroller shall provide without charge
13-6 a copy of the report required by Subsection (a) to the corporation
13-7 created under this chapter.
13-8 SECTION 2. This Act takes effect immediately if it receives
13-9 a vote of two-thirds of all the members elected to each house, as
13-10 provided by Section 39, Article III, Texas Constitution. If this
13-11 Act does not receive the vote necessary for immediate effect, this
13-12 Act takes effect September 1, 2001.