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) it is an appropriate role for a municipality to
1-15 foster economic opportunity, job generation, and capital investment
1-16 by promoting a favorable business climate, preparing the workforce
1-17 for productive employment, and supporting infrastructure
1-18 development;
1-19 (2) while some municipalities choose to meet that role
1-20 through the creation of economic development zones and reinvestment
1-21 zones, the core root of all economic development is a competent and
1-22 qualified workforce; and
1-23 (3) the programs designed to create a competent and
1-24 qualified workforce are essential both to the economic growth and
1-25 vitality of many municipalities in this state and to the
2-1 elimination of unemployment and underemployment in those
2-2 municipalities.
2-3 (b) The programs authorized by this chapter are in the
2-4 public interest, promote the economic welfare of this state, and
2-5 serve the state public purpose of developing and diversifying the
2-6 economy of this state and eliminating unemployment and
2-7 underemployment in this state.
2-8 (c) This chapter shall be liberally construed in conformity
2-9 with the findings and purposes stated in this section.
2-10 Sec. 379A.003. DEFINITIONS. In this chapter:
2-11 (1) "Board" means the board of directors of a
2-12 municipal development corporation.
2-13 (2) "Corporation" means a municipal development
2-14 corporation created under this chapter.
2-15 Sec. 379A.004. APPLICATION OF NON-PROFIT CORPORATION ACT. A
2-16 corporation created under this chapter is governed by the Texas
2-17 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
2-18 Texas Civil Statutes), except to the extent inconsistent with this
2-19 chapter.
2-20 (Sections 379A.005-379A.010 reserved for expansion
2-21 SUBCHAPTER B. CREATION OF CORPORATION
2-22 Sec. 379A.011. CREATION. The governing body of a
2-23 municipality may create a municipal development corporation under
2-24 this chapter.
2-25 Sec. 379A.012. ARTICLES OF INCORPORATION. The articles of
2-26 incorporation of the corporation must state that the corporation is
3-1 governed by this chapter.
3-2 Sec. 379A.013. NUMBER OF CORPORATIONS. A municipality may
3-3 not create more than one corporation under this chapter.
3-4 Sec. 379A.014. ADOPTION AND APPROVAL OF BYLAWS. The initial
3-5 bylaws of a corporation shall be adopted by its board of directors
3-6 and approved by resolution of the governing body of the
3-7 municipality that created the corporation, and any subsequent
3-8 changes made to the bylaws must be approved by the governing body
3-9 of the municipality that created the corporation.
3-10 Sec. 379A.015. PERFORMANCE REVIEW AND ASSESSMENT. The
3-11 governing body of the municipality that creates the corporation
3-12 shall undertake a performance review and assessment of the
3-13 corporation once every five years. Based on the performance review
3-14 and assessment, the governing body of the municipality shall issue
3-15 a finding of whether the corporation is satisfying the objectives
3-16 set forth in this chapter.
3-17 (Sections 379A.016-379A.020 reserved for expansion
3-18 SUBCHAPTER C. BOARD OF DIRECTORS
3-19 Sec. 379A.021. COMPOSITION AND APPOINTMENT OF BOARD.
3-20 (a) Except as provided by Subsection (g), the corporation is
3-21 governed by a board of 5, 7, 9, 11, 13, or 15 directors, as
3-22 determined by the governing body of the municipality that created
3-23 the corporation. The number of directors may not exceed the number
3-24 of members, including the mayor, constituting the governing body of
3-25 the municipality.
3-26 (b) The governing body of the municipality that created the
4-1 corporation shall appoint the members of the board.
4-2 (c) Directors serve staggered two-year terms, with as near
4-3 as possible to one-half of the members' terms expiring each year.
4-4 A director serves at the will of the governing body of the
4-5 municipality that created the corporation. Successor directors are
4-6 appointed in the same manner as the original appointees.
4-7 (d) Each director of a corporation created by a municipality
4-8 that has a population of 20,000 or more must be a resident of the
4-9 municipality. Each director of a corporation created by a
4-10 municipality that has a population of less than 20,000 must be a
4-11 resident of the municipality or the county in which the major part
4-12 of the area of the municipality is located.
4-13 (e) A person is disqualified from serving as a director if
4-14 the person is an employee, officer, or member of the governing body
4-15 of the municipality that created the corporation.
4-16 (f) A director may not have a personal interest in a
4-17 contract executed by the corporation.
4-18 (g) In a municipality that has a population of more than one
4-19 million and that creates a corporation under this chapter, the
4-20 board of the corporation is composed of persons appointed to the
4-21 board as required by this subsection. The governing body of the
4-22 municipality shall appoint one director to the board of the
4-23 corporation from each district that elects a member to the
4-24 governing body of the municipality.
4-25 Sec. 379A.022. COMPENSATION. A board member is not entitled
4-26 to compensation, but is entitled to reimbursement for actual and
5-1 necessary expenses incurred in serving as a director.
5-2 Sec. 379A.023. MEETINGS. The board shall conduct its
5-3 meetings in the municipality that created the corporation.
5-4 Sec. 379A.024. OFFICERS. The board shall appoint from its
5-5 members a presiding officer, a secretary, and other officers of
5-6 the corporation that the governing body of the municipality that
5-7 created the corporation considers necessary.
5-8 Sec. 379A.025. ADOPTION AND APPROVAL OF BUDGET; REVIEW OF
5-9 CORPORATE FINANCES. (a) The board shall prepare an annual budget
5-10 for the corporation. To be effective, the budget must be approved
5-11 by the board and presented to and approved by the governing body of
5-12 the municipality that created the corporation. The corporation may
5-13 not make any expenditure authorized by this chapter until the
5-14 budget has been approved as provided by this section. An amendment
5-15 of the budget must be approved in the same manner as the budget.
5-16 (b) The governing body of the municipality that created the
5-17 corporation may amend the corporation's budget with the approval of
5-18 at least two-thirds of the members of the governing body.
5-19 (c) The budget presented to the governing body of the
5-20 municipality that created the corporation must provide a detailed
5-21 description of the proposed expenditures for the corporation's
5-22 fiscal year, including expenditures for each program authorized by
5-23 Subchapter D.
5-24 (d) The board shall annually prepare and present financial
5-25 statements from the preceding fiscal year to the governing body of
5-26 the municipality that created the corporation.
6-1 (e) The governing body of the municipality that created the
6-2 corporation is entitled, at all times, to access to the books and
6-3 records of the corporation.
6-4 (Sections 379A.026-379A.050 reserved for expansion
6-5 SUBCHAPTER D. POWERS OF CORPORATION
6-6 Sec. 379A.051. PROGRAMS. (a) A corporation may develop and
6-7 implement programs for:
6-8 (1) job training, including long-term job training and
6-9 in-training support service grants;
6-10 (2) early childhood development that prepare each
6-11 child to enter school and make each child ready to learn after
6-12 completing the program and that provide educational services that
6-13 must include services designed to enable a child to:
6-14 (A) develop phonemic, print, and numeracy
6-15 awareness, including the ability to:
6-16 (i) recognize that letters of the alphabet
6-17 are a special category of visual graphics that can be individually
6-18 named;
6-19 (ii) recognize a word as a unit of print;
6-20 (iii) identify at least 10 letters of the
6-21 alphabet; and
6-22 (iv) associate sounds with written words;
6-23 (B) understand and use language to communicate
6-24 for various purposes;
6-25 (C) understand and use an increasingly complex
6-26 and varied vocabulary;
7-1 (D) develop and demonstrate an appreciation of
7-2 books; and
7-3 (E) progress toward mastery of the English
7-4 language, if the child's primary language is a language other than
7-5 English;
7-6 (3) after-school programs for primary and secondary
7-7 schools;
7-8 (4) the provision of funding to accredited
7-9 postsecondary educational institutions, including public and
7-10 private junior colleges, public and private institutions of higher
7-11 education, and public and private technical institutions, to be
7-12 used to award scholarships;
7-13 (5) the promotion of literacy; and
7-14 (6) any other undertaking that the board determines
7-15 will directly facilitate the development of a skilled workforce.
7-16 (b) A corporation may accept donated property, may develop
7-17 or use land, buildings, equipment, facilities, and other
7-18 improvements in connection with a program described by Subsection
7-19 (a), or may dispose of property or an interest in property under
7-20 terms determined by the corporation.
7-21 (c) A municipality may contract with a community nonprofit
7-22 organization that sponsors long-term job training and related
7-23 support services.
7-24 Sec. 379A.052. GENERAL POWERS OF CORPORATION. The
7-25 corporation may:
7-26 (1) own or operate a program authorized by this
8-1 chapter;
8-2 (2) perform any act necessary to the full exercise of
8-3 the corporation's powers;
8-4 (3) accept a grant or loan from a:
8-5 (A) department or agency of the United States;
8-6 (B) department, agency, or political subdivision
8-7 of this state; or
8-8 (C) public or private person;
8-9 (4) employ any necessary personnel, who shall be
8-10 employees of the municipality;
8-11 (5) adopt rules to govern the operation of the
8-12 corporation and its employees and property; and
8-13 (6) contract or enter into a memorandum of
8-14 understanding or a similar agreement with a public or private
8-15 person, including local workforce development boards or any
8-16 political subdivision, in connection with a program authorized by
8-17 this chapter.
8-18 Sec. 379A.053. NATURE OF CORPORATE PROPERTY. (a) The
8-19 legislature finds for all constitutional and statutory purposes
8-20 that the corporation owns, uses, and holds its property for public
8-21 purposes.
8-22 (b) Section 25.07(a), Tax Code, does not apply to a
8-23 leasehold or other possessory interest granted by the corporation.
8-24 (c) Property owned by the corporation is exempt from
8-25 taxation under Section 11.11, Tax Code, while the corporation owns
8-26 the property.
9-1 Sec. 379A.054. OPEN RECORDS AND MEETINGS. The board is
9-2 treated as a governmental body for the purposes of Chapters 551 and
9-3 552, Government Code.
9-4 Sec. 379A.055. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In
9-5 providing funds to an accredited postsecondary educational
9-6 institution to be used for scholarships as authorized by Section
9-7 379A.051, the corporation by agreement with the institution shall
9-8 ensure that:
9-9 (1) the funds are distributed to individuals as
9-10 scholarships connected with the institution; and
9-11 (2) no more than a maximum amount, as set by the
9-12 corporation, of the funds are spent on administering the award of
9-13 the scholarship.
9-14 (b) An accredited postsecondary educational institution
9-15 receiving the funds for scholarships shall develop, in consultation
9-16 with the corporation, a plan for awarding scholarships that will
9-17 have the goal of having an eventual beneficial effect on the
9-18 economic growth and vitality of and the elimination of unemployment
9-19 and underemployment in the municipality that created the
9-20 corporation and that will ensure that the recipient:
9-21 (1) meets financial need requirements as defined by
9-22 the corporation;
9-23 (2) is enrolled in an undergraduate degree or
9-24 certificate program;
9-25 (3) is enrolled for at least three-fourths of a full
9-26 course load for an undergraduate student, as determined by the
10-1 corporation;
10-2 (4) makes satisfactory academic progress toward an
10-3 undergraduate degree or certificate; and
10-4 (5) complies with any additional nonacademic
10-5 requirement adopted by the corporation.
10-6 (c) If the municipality that created the corporation has
10-7 established an education partnership composed of community-based
10-8 organizations, school districts, public or private sector entities,
10-9 or postsecondary institutions for the purpose of distributing
10-10 scholarships to students of local schools, the corporation may
10-11 provide funds to the education partnership to enable the
10-12 partnership to award scholarships to directly facilitate the
10-13 development of a skilled workforce.
10-14 (Sections 379A.056-379A.080 reserved for expansion
10-15 SUBCHAPTER E. SALES AND USE TAX
10-16 Sec. 379A.081. SALES AND USE TAX. (a) A municipality may
10-17 levy a sales and use tax for the benefit of the corporation if the
10-18 tax is authorized by a majority of the voters of the municipality
10-19 voting at an election called for that purpose.
10-20 (b) The ballot for an election to impose the tax shall be
10-21 printed to permit voting for or against the proposition: "Adoption
10-22 of a sales and use tax at the rate of ____ of one percent (insert
10-23 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
10-24 for the purpose of financing authorized programs of the ____
10-25 Municipal Development Corporation (insert the name of the
10-26 corporation)."
11-1 (c) The adoption of the tax may be limited on the ballot to
11-2 any specific program, or the tax may be adopted with general
11-3 language permitting the use of the tax for any purposes authorized
11-4 by this chapter.
11-5 (d) If a sales and use tax is levied, it may be adopted for
11-6 a maximum of 20 years, but may then be reauthorized, subject to a
11-7 payment of indebtedness. The tax may be authorized for a shorter
11-8 period of time or limited to the time necessary to pay any
11-9 indebtedness.
11-10 (e) The rate of a tax adopted under this section must be
11-11 one-eighth, one-fourth, three-eighths, or one-half of one
11-12 percent. A municipality may not adopt a sales and use tax under
11-13 this chapter if the adoption of the tax under this chapter would
11-14 result in a combined tax rate of all local sales and use taxes of
11-15 more than two percent in any location in the municipality.
11-16 (f) Chapter 321, Tax Code, governs a municipality's
11-17 imposition, computation, administration, collection, and remittance
11-18 of a tax authorized by this section except as inconsistent with
11-19 this chapter.
11-20 Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A
11-21 municipality that has adopted a sales and use tax under this
11-22 chapter at a rate of less than one-half of one percent may increase
11-23 or decrease the rate of the tax if the increase or decrease is
11-24 approved by a majority of the voters of the municipality voting at
11-25 an election called and held for that purpose.
11-26 (b) The tax may be increased or decreased under this section
12-1 in one or more increments of one-eighth of one percent, but a
12-2 maximum of one-half of one percent is permitted.
12-3 (c) The ballot for an election to increase or decrease the
12-4 tax shall be printed to permit voting for or against the
12-5 proposition: "The ________ (increase or decrease, as appropriate)
12-6 of a sales and use tax to the rate of ____ of one percent (insert
12-7 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
12-8 for the purpose of financing authorized programs of the ________
12-9 Municipal Development Corporation (insert the name of the
12-10 corporation)."
12-11 Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality
12-12 adopts the tax, a tax is imposed on the receipts from the sale at
12-13 retail of taxable items in the municipality at the rate approved at
12-14 the election, and an excise tax is imposed on the use, storage, or
12-15 other consumption in the municipality of tangible personal property
12-16 purchased, leased, or rented from a retailer during the period that
12-17 the tax is effective in the municipality. The rate of the excise
12-18 tax is the same as the rate of the sales tax portion of the tax and
12-19 is applied to the sale price of the tangible personal property.
12-20 (b) The adoption of the tax or the change of the tax rate
12-21 takes effect on the first day of the first calendar quarter
12-22 occurring after the expiration of the first complete quarter
12-23 occurring after the date the comptroller receives a notice of the
12-24 results of the election adopting, increasing, or decreasing the
12-25 tax.
13-1 (Sections 379A.084-379A.100 reserved for expansion
13-2 SUBCHAPTER F. REPORT TO COMPTROLLER
13-3 Sec. 379A.101. REPORT REQUIRED. (a) Not later than
13-4 February 1 of each year, the board of directors of the corporation
13-5 shall submit to the comptroller a report in the form required by
13-6 the comptroller.
13-7 (b) The reporting form may not exceed one page in length and
13-8 must include:
13-9 (1) a statement of the corporation's primary
13-10 objectives;
13-11 (2) a statement of the corporation's total revenues
13-12 during the preceding fiscal year;
13-13 (3) a statement of the corporation's total
13-14 expenditures during the preceding fiscal year;
13-15 (4) a statement of the corporation's total
13-16 expenditures during the preceding fiscal year in each of the
13-17 following categories:
13-18 (A) administration;
13-19 (B) personnel;
13-20 (C) marketing or promotion;
13-21 (D) direct business incentives;
13-22 (E) job training for the corporation's
13-23 personnel;
13-24 (F) debt service;
13-25 (G) capital costs;
13-26 (H) programs authorized by this chapter; and
14-1 (I) payments to taxing units, including school
14-2 districts;
14-3 (5) a list of the corporation's capital assets,
14-4 including land and buildings; and
14-5 (6) any other information the comptroller requires to
14-6 determine the use of the sales and use tax imposed under this
14-7 chapter.
14-8 Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE
14-9 PENALTY. (a) If the corporation fails to file a report in
14-10 accordance with this subchapter or fails to include sufficient
14-11 information in the report, the comptroller shall provide to the
14-12 corporation a written notice of the failure. The written notice
14-13 must include information on how to correct the failure.
14-14 (b) The comptroller may impose an administrative penalty
14-15 against the corporation if the corporation does not correct the
14-16 failure before the 31st day after the date the corporation receives
14-17 the written notice under Subsection (a). The amount of the penalty
14-18 is $200 a day for each day the filing of the report is delinquent.
14-19 (c) The comptroller by rule shall prescribe the procedures
14-20 for the imposition of an administrative penalty under this section.
14-21 The rules must protect the due process rights of the corporation.
14-22 Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE.
14-23 (a) Not later than November 1 of each even-numbered year, the
14-24 comptroller shall submit to the legislature a report on the use of
14-25 the sales and use tax imposed under this chapter.
14-26 (b) On request, the comptroller shall provide without charge
15-1 a copy of the report required by Subsection (a) to the corporation
15-2 created under this chapter.
15-3 SECTION 2. This Act takes effect immediately if it receives
15-4 a vote of two-thirds of all the members elected to each house, as
15-5 provided by Section 39, Article III, Texas Constitution. If this
15-6 Act does not receive the vote necessary for immediate effect, this
15-7 Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 607 passed the Senate on
March 15, 2001, by the following vote: Yeas 30, Nays 0, one
present, not voting; and that the Senate concurred in House
amendment on May 3, 2001, by the following vote: Yeas 30, Nays 0,
one present, not voting.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 607 passed the House, with
amendment, on April 26, 2001, by the following vote: Yeas 146,
Nays 0, two present, not voting.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor