77R10794 ATP-F
By Van de Putte, et al. S.B. No. 607
Substitute the following for S.B. No. 607:
By McClendon C.S.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 the
1-11 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
2-1 vitality of many municipalities in this state and to the
2-2 elimination of unemployment and underemployment in those
2-3 municipalities.
2-4 (b) The programs authorized by this chapter are in the
2-5 public interest, promote the economic welfare of this state, and
2-6 serve the state public purpose of developing and diversifying the
2-7 economy of this state and eliminating unemployment and
2-8 underemployment in this state.
2-9 (c) This chapter shall be liberally construed in conformity
2-10 with the findings and purposes stated in this section.
2-11 Sec. 379A.003. DEFINITIONS. In this chapter:
2-12 (1) "Board" means the board of directors of a
2-13 municipal development corporation.
2-14 (2) "Corporation" means a municipal development
2-15 corporation created under this chapter.
2-16 Sec. 379A.004. APPLICATION OF NON-PROFIT CORPORATION ACT. A
2-17 corporation created under this chapter is governed by the Texas
2-18 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
2-19 Texas Civil Statutes), except to the extent inconsistent with this
2-20 chapter.
2-21 (Sections 379A.005-379A.010 reserved for expansion
2-22 SUBCHAPTER B. CREATION OF CORPORATION
2-23 Sec. 379A.011. CREATION. The governing body of a
2-24 municipality may create a municipal development corporation under
2-25 this chapter.
2-26 Sec. 379A.012. ARTICLES OF INCORPORATION. The articles of
2-27 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. (a)
3-20 Except as provided by Subsection (g), the corporation is governed
3-21 by a board of 5, 7, 9, 11, 13, or 15 directors, as determined by
3-22 the governing body of the municipality that created the
3-23 corporation. The number of directors may not exceed the number of
3-24 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
3-27 corporation shall appoint the members of the board.
4-1 (c) Directors serve staggered two-year terms, with as near
4-2 as possible to one-half of the members' terms expiring each year.
4-3 A director serves at the will of the governing body of the
4-4 municipality that created the corporation. Successor directors are
4-5 appointed in the same manner as the original appointees.
4-6 (d) Each director of a corporation created by a municipality
4-7 that has a population of 20,000 or more must be a resident of the
4-8 municipality. Each director of a corporation created by a
4-9 municipality that has a population of less than 20,000 must be a
4-10 resident of the municipality or the county in which the major part
4-11 of the area of the municipality is located.
4-12 (e) A person is disqualified from serving as a director if
4-13 the person is an employee, officer, or member of the governing body
4-14 of the municipality that created the corporation.
4-15 (f) A director may not have a personal interest in a
4-16 contract executed by the corporation.
4-17 (g) In a municipality that has a population of more than one
4-18 million and that creates a corporation under this chapter, the
4-19 board of the corporation is composed of persons appointed to the
4-20 board as required by this subsection. The governing body of the
4-21 municipality shall appoint one director to the board of the
4-22 corporation from each district that elects a member to the
4-23 governing body of the municipality.
4-24 Sec. 379A.022. COMPENSATION. A board member is not entitled
4-25 to compensation, but is entitled to reimbursement for actual and
4-26 necessary expenses incurred in serving as a director.
4-27 Sec. 379A.023. MEETINGS. The board shall conduct its
5-1 meetings in the municipality that created the corporation.
5-2 Sec. 379A.024. OFFICERS. The board shall appoint from its
5-3 members a presiding officer, a secretary, and other officers of
5-4 the corporation that the governing body of the municipality that
5-5 created the corporation considers necessary.
5-6 Sec. 379A.025. ADOPTION AND APPROVAL OF BUDGET; REVIEW OF
5-7 CORPORATE FINANCES. (a) The board shall prepare an annual budget
5-8 for the corporation. To be effective, the budget must be approved
5-9 by the board and presented to and approved by the governing body of
5-10 the municipality that created the corporation. The corporation may
5-11 not make any expenditure authorized by this chapter until the
5-12 budget has been approved as provided by this section. An amendment
5-13 of the budget must be approved in the same manner as the budget.
5-14 (b) The governing body of the municipality that created the
5-15 corporation may amend the corporation's budget with the approval of
5-16 at least two-thirds of the members of the governing body.
5-17 (c) The budget presented to the governing body of the
5-18 municipality that created the corporation must provide a detailed
5-19 description of the proposed expenditures for the corporation's
5-20 fiscal year, including expenditures for each program authorized by
5-21 Subchapter D.
5-22 (d) The board shall annually prepare and present financial
5-23 statements from the preceding fiscal year to the governing body of
5-24 the municipality that created the corporation.
5-25 (e) The governing body of the municipality that created the
5-26 corporation is entitled, at all times, to access to the books and
5-27 records of the corporation.
6-1 (Sections 379A.026-379A.050 reserved for expansion
6-2 SUBCHAPTER D. POWERS OF CORPORATION
6-3 Sec. 379A.051. PROGRAMS. (a) A corporation may develop and
6-4 implement programs for:
6-5 (1) job training, including long-term job training and
6-6 in-training support service grants;
6-7 (2) early childhood development that prepare each
6-8 child to enter school and make each child ready to learn after
6-9 completing the program and that provide educational services that
6-10 must include services designed to enable a child to:
6-11 (A) develop phonemic, print, and numeracy
6-12 awareness, including the ability to:
6-13 (i) recognize that letters of the alphabet
6-14 are a special category of visual graphics that can be individually
6-15 named;
6-16 (ii) recognize a word as a unit of print;
6-17 (iii) identify at least 10 letters of the
6-18 alphabet; and
6-19 (iv) associate sounds with written words;
6-20 (B) understand and use language to communicate
6-21 for various purposes;
6-22 (C) understand and use an increasingly complex
6-23 and varied vocabulary;
6-24 (D) develop and demonstrate an appreciation of
6-25 books; and
6-26 (E) progress toward mastery of the English
6-27 language, if the child's primary language is a language other than
7-1 English;
7-2 (3) after-school programs for primary and secondary
7-3 schools;
7-4 (4) the provision of funding to accredited
7-5 postsecondary educational institutions, including public and
7-6 private junior colleges, public and private institutions of higher
7-7 education, and public and private technical institutions, to be
7-8 used to award scholarships;
7-9 (5) the promotion of literacy; and
7-10 (6) any other undertaking that the board determines
7-11 will directly facilitate the development of a skilled workforce.
7-12 (b) A corporation may accept donated property, may develop
7-13 or use land, buildings, equipment, facilities, and other
7-14 improvements in connection with a program described by Subsection
7-15 (a), or may dispose of property or an interest in property under
7-16 terms determined by the corporation.
7-17 (c) A municipality may contract with a community nonprofit
7-18 organization that sponsors long-term job training and related
7-19 support services.
7-20 Sec. 379A.052. GENERAL POWERS OF CORPORATION. The
7-21 corporation may:
7-22 (1) own or operate a program authorized by this
7-23 chapter;
7-24 (2) perform any act necessary to the full exercise of
7-25 the corporation's powers;
7-26 (3) accept a grant or loan from a:
7-27 (A) department or agency of the United States;
8-1 (B) department, agency, or political subdivision
8-2 of this state; or
8-3 (C) public or private person;
8-4 (4) employ any necessary personnel, who shall be
8-5 employees of the municipality;
8-6 (5) adopt rules to govern the operation of the
8-7 corporation and its employees and property; and
8-8 (6) contract or enter into a memorandum of
8-9 understanding or a similar agreement with a public or private
8-10 person, including local workforce development boards or any
8-11 political subdivision, in connection with a program authorized by
8-12 this chapter.
8-13 Sec. 379A.053. NATURE OF CORPORATE PROPERTY. (a) The
8-14 legislature finds for all constitutional and statutory purposes
8-15 that the corporation owns, uses, and holds its property for public
8-16 purposes.
8-17 (b) Section 25.07(a), Tax Code, does not apply to a
8-18 leasehold or other possessory interest granted by the corporation.
8-19 (c) Property owned by the corporation is exempt from
8-20 taxation under Section 11.11, Tax Code, while the corporation owns
8-21 the property.
8-22 Sec. 379A.054. OPEN RECORDS AND MEETINGS. The board is
8-23 treated as a governmental body for the purposes of Chapters 551 and
8-24 552, Government Code.
8-25 Sec. 379A.055. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In
8-26 providing funds to an accredited postsecondary educational
8-27 institution to be used for scholarships as authorized by Section
9-1 379A.051, the corporation by agreement with the institution shall
9-2 ensure that:
9-3 (1) the funds are distributed to individuals as
9-4 scholarships connected with the institution; and
9-5 (2) no more than a maximum amount, as set by the
9-6 corporation, of the funds are spent on administering the award of
9-7 the scholarship.
9-8 (b) An accredited postsecondary educational institution
9-9 receiving the funds for scholarships shall develop, in consultation
9-10 with the corporation, a plan for awarding scholarships that will
9-11 have the goal of having an eventual beneficial effect on the
9-12 economic growth and vitality of and the elimination of unemployment
9-13 and underemployment in the municipality that created the
9-14 corporation and that will ensure that the recipient:
9-15 (1) meets financial need requirements as defined by
9-16 the corporation;
9-17 (2) is enrolled in an undergraduate degree or
9-18 certificate program;
9-19 (3) is enrolled for at least three-fourths of a full
9-20 course load for an undergraduate student, as determined by the
9-21 corporation;
9-22 (4) makes satisfactory academic progress toward an
9-23 undergraduate degree or certificate; and
9-24 (5) complies with any additional nonacademic
9-25 requirement adopted by the corporation.
9-26 (c) If the municipality that created the corporation has
9-27 established an education partnership composed of community-based
10-1 organizations, school districts, public or private sector entities,
10-2 or postsecondary institutions for the purpose of distributing
10-3 scholarships to students of local schools, the corporation may
10-4 provide funds to the education partnership to enable the
10-5 partnership to award scholarships to directly facilitate the
10-6 development of a skilled workforce.
10-7 (Sections 379A.056-379A.080 reserved for expansion
10-8 SUBCHAPTER E. SALES AND USE TAX
10-9 Sec. 379A.081. SALES AND USE TAX. (a) A municipality may
10-10 levy a sales and use tax for the benefit of the corporation if the
10-11 tax is authorized by a majority of the voters of the municipality
10-12 voting at an election called for that purpose.
10-13 (b) The ballot for an election to impose the tax shall be
10-14 printed to permit voting for or against the proposition: "Adoption
10-15 of a sales and use tax at the rate of ____ of one percent (insert
10-16 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
10-17 for the purpose of financing authorized programs of the ____
10-18 Municipal Development Corporation (insert the name of the
10-19 corporation)."
10-20 (c) The adoption of the tax may be limited on the ballot to
10-21 any specific program, or the tax may be adopted with general
10-22 language permitting the use of the tax for any purposes authorized
10-23 by this chapter.
10-24 (d) If a sales and use tax is levied, it may be adopted for
10-25 a maximum of 20 years, but may then be reauthorized, subject to a
10-26 payment of indebtedness. The tax may be authorized for a shorter
10-27 period of time or limited to the time necessary to pay any
11-1 indebtedness.
11-2 (e) The rate of a tax adopted under this section must be
11-3 one-eighth, one-fourth, three-eighths, or one-half of one
11-4 percent. A municipality may not adopt a sales and use tax under
11-5 this chapter if the adoption of the tax under this chapter would
11-6 result in a combined tax rate of all local sales and use taxes of
11-7 more than two percent in any location in the municipality.
11-8 (f) Chapter 321, Tax Code, governs a municipality's
11-9 imposition, computation, administration, collection, and remittance
11-10 of a tax authorized by this section except as inconsistent with
11-11 this chapter.
11-12 Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A
11-13 municipality that has adopted a sales and use tax under this
11-14 chapter at a rate of less than one-half of one percent may increase
11-15 or decrease the rate of the tax if the increase or decrease is
11-16 approved by a majority of the voters of the municipality voting at
11-17 an election called and held for that purpose.
11-18 (b) The tax may be increased or decreased under this section
11-19 in one or more increments of one-eighth of one percent, but a
11-20 maximum of one-half of one percent is permitted.
11-21 (c) The ballot for an election to increase or decrease the
11-22 tax shall be printed to permit voting for or against the
11-23 proposition: "The ________ (increase or decrease, as appropriate)
11-24 of a sales and use tax to the rate of ____ of one percent (insert
11-25 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
11-26 for the purpose of financing authorized programs of the ________
11-27 Municipal Development Corporation (insert the name of the
12-1 corporation)."
12-2 Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality
12-3 adopts the tax, a tax is imposed on the receipts from the sale at
12-4 retail of taxable items in the municipality at the rate approved at
12-5 the election, and an excise tax is imposed on the use, storage, or
12-6 other consumption in the municipality of tangible personal property
12-7 purchased, leased, or rented from a retailer during the period that
12-8 the tax is effective in the municipality. The rate of the excise
12-9 tax is the same as the rate of the sales tax portion of the tax and
12-10 is applied to the sale price of the tangible personal property.
12-11 (b) The adoption of the tax or the change of the tax rate
12-12 takes effect on the first day of the first calendar quarter
12-13 occurring after the expiration of the first complete quarter
12-14 occurring after the date the comptroller receives a notice of the
12-15 results of the election adopting, increasing, or decreasing the
12-16 tax.
12-17 (Sections 379A.084-379A.100 reserved for expansion
12-18 SUBCHAPTER F. REPORT TO COMPTROLLER
12-19 Sec. 379A.101. REPORT REQUIRED. (a) Not later than February
12-20 1 of each year, the board of directors of the corporation shall
12-21 submit to the comptroller a report in the form required by the
12-22 comptroller.
12-23 (b) The reporting form may not exceed one page in length and
12-24 must include:
12-25 (1) a statement of the corporation's primary
12-26 objectives;
12-27 (2) a statement of the corporation's total revenues
13-1 during the preceding fiscal year;
13-2 (3) a statement of the corporation's total
13-3 expenditures during the preceding fiscal year;
13-4 (4) a statement of the corporation's total
13-5 expenditures during the preceding fiscal year in each of the
13-6 following categories:
13-7 (A) administration;
13-8 (B) personnel;
13-9 (C) marketing or promotion;
13-10 (D) direct business incentives;
13-11 (E) job training for the corporation's
13-12 personnel;
13-13 (F) debt service;
13-14 (G) capital costs;
13-15 (H) programs authorized by this chapter; and
13-16 (I) payments to taxing units, including school
13-17 districts;
13-18 (5) a list of the corporation's capital assets,
13-19 including land and buildings; and
13-20 (6) any other information the comptroller requires to
13-21 determine the use of the sales and use tax imposed under this
13-22 chapter.
13-23 Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE
13-24 PENALTY. (a) If the corporation fails to file a report in
13-25 accordance with this subchapter or fails to include sufficient
13-26 information in the report, the comptroller shall provide to the
13-27 corporation a written notice of the failure. The written notice
14-1 must include information on how to correct the failure.
14-2 (b) The comptroller may impose an administrative penalty
14-3 against the corporation if the corporation does not correct the
14-4 failure before the 31st day after the date the corporation receives
14-5 the written notice under Subsection (a). The amount of the penalty
14-6 is $200 a day for each day the filing of the report is delinquent.
14-7 (c) The comptroller by rule shall prescribe the procedures
14-8 for the imposition of an administrative penalty under this section.
14-9 The rules must protect the due process rights of the corporation.
14-10 Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE. (a) Not
14-11 later than November 1 of each even-numbered year, the comptroller
14-12 shall submit to the legislature a report on the use of the sales
14-13 and use tax imposed under this chapter.
14-14 (b) On request, the comptroller shall provide without charge
14-15 a copy of the report required by Subsection (a) to the corporation
14-16 created under this chapter.
14-17 SECTION 2. This Act takes effect immediately if it receives
14-18 a vote of two-thirds of all the members elected to each house, as
14-19 provided by Section 39, Article III, Texas Constitution. If this
14-20 Act does not receive the vote necessary for immediate effect, this
14-21 Act takes effect September 1, 2001.