By Van de Putte S.B. No. 607
77R5202 ATP-D
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 and the issuance of local bonds; providing an
1-5 administrative penalty.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Subtitle A, Title 12, Local Government Code, is
1-8 amended by adding Chapter 379A to read as follows:
1-9 CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Sec. 379A.001. SHORT TITLE. This chapter may be cited as the
1-12 Better Jobs Act.
1-13 Sec. 379A.002. FINDINGS AND PURPOSES. (a) The legislature
1-14 finds that:
1-15 (1) the right to gainful employment and the general
1-16 welfare of the people of this state require investment in the
1-17 development of a skilled workforce through job training programs,
1-18 early childhood education, after-school programs, scholarships for
1-19 higher education, and literacy programs;
1-20 (2) municipalities in this state have invested
1-21 substantial funds in those programs, but wish to develop additional
1-22 resources so that they can do more; and
1-23 (3) those programs are essential to the economic
1-24 growth and 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
2-27 governed by this chapter.
3-1 Sec. 379A.013. NUMBER OF CORPORATIONS. A municipality may
3-2 not create more than one corporation under this chapter.
3-3 (Sections 379A.014-379A.020 reserved for expansion
3-4 SUBCHAPTER C. BOARD OF DIRECTORS
3-5 Sec. 379A.021. COMPOSITION AND APPOINTMENT OF BOARD. (a)
3-6 The corporation is governed by a board of 5, 7, 9, or 11 directors,
3-7 as determined by the governing body of the municipality.
3-8 (b) The governing body of the municipality shall appoint the
3-9 members of the board.
3-10 (c) Directors serve staggered two-year terms, with as near
3-11 as possible to one-half of the members' terms expiring each year.
3-12 A director serves at the will of the governing body of the
3-13 municipality. Successor directors are appointed in the same manner
3-14 as the original appointees.
3-15 (d) Each director of a corporation created by a municipality
3-16 with a population of 20,000 or more must be a resident of the
3-17 municipality. Each director of a corporation created by a
3-18 municipality with a population of less than 20,000 must be a
3-19 resident of the municipality or the county in which the major part
3-20 of the area of the municipality is located.
3-21 (e) A person is not disqualified from serving as a director
3-22 because the person is an employee, officer, or member of the
3-23 governing body of the municipality.
3-24 (f) A director may not have a personal interest in a
3-25 contract executed by the corporation.
3-26 Sec. 379A.022. COMPENSATION. A board member is not entitled
3-27 to compensation, but is entitled to reimbursement for actual and
4-1 necessary expenses incurred in serving as a director.
4-2 Sec. 379A.023. MEETINGS. The board shall conduct its
4-3 meetings in the municipality that created the corporation.
4-4 Sec. 379A.024. OFFICERS. The board shall appoint from its
4-5 members a presiding officer, a secretary, and other officers of
4-6 the corporation that the governing body of the municipality
4-7 considers necessary.
4-8 (Sections 379A.025-379A.050 reserved for expansion
4-9 SUBCHAPTER D. POWERS OF CORPORATION
4-10 Sec. 379A.051. PROGRAMS. (a) A corporation may develop and
4-11 implement programs for:
4-12 (1) job training;
4-13 (2) early childhood education;
4-14 (3) after-school programs for primary and secondary
4-15 schools;
4-16 (4) the provision of funding to institutions of higher
4-17 education to be used to award scholarships;
4-18 (5) the promotion of literacy; and
4-19 (6) any other undertaking that the board determines
4-20 will directly facilitate the development of a skilled workforce.
4-21 (b) A corporation may acquire, develop, or use land,
4-22 buildings, equipment, facilities, and other improvements in
4-23 connection with a program described by Subsection (a).
4-24 Sec. 379A.052. GENERAL POWERS OF CORPORATION. The
4-25 corporation may:
4-26 (1) own or operate a program authorized by this
4-27 chapter;
5-1 (2) perform any act necessary to the full exercise of
5-2 the corporation's powers;
5-3 (3) accept a grant or loan from a:
5-4 (A) department or agency of the United States;
5-5 (B) department, agency, or political subdivision
5-6 of this state; or
5-7 (C) public or private person;
5-8 (4) acquire, sell, lease, convey, or otherwise dispose
5-9 of property or an interest in property under terms determined by
5-10 the corporation;
5-11 (5) employ necessary personnel;
5-12 (6) adopt rules to govern the operation of the
5-13 corporation and its employees and property; and
5-14 (7) contract or enter into a memorandum of
5-15 understanding or a similar agreement with a public or private
5-16 person, including local workforce development boards or any
5-17 political subdivision, in connection with a program authorized by
5-18 this chapter.
5-19 Sec. 379A.053. BONDS AND OTHER OBLIGATIONS. (a) The
5-20 corporation may issue revenue bonds on behalf of the municipality,
5-21 including refunding bonds, or other obligations to pay the costs of
5-22 an authorized program or to refund bonds or other obligations.
5-23 (b) The bonds or other obligations and the proceedings
5-24 authorizing the bonds or other obligations shall be submitted to
5-25 the attorney general for review and approval as required by Section
5-26 1202.003, Government Code.
5-27 (c) The bonds or other obligations must be payable from and
6-1 secured by the revenues of the corporation.
6-2 (d) The bonds or other obligations may mature serially or
6-3 otherwise not more than 30 years after the date of issuance.
6-4 (e) The bonds or other obligations are not a debt of and do
6-5 not create a claim for payment against the revenue or property of
6-6 the municipality other than a program for which the bonds are
6-7 issued.
6-8 Sec. 379A.054. NATURE OF CORPORATE PROPERTY. (a) The
6-9 legislature finds for all constitutional and statutory purposes
6-10 that the corporation owns, uses, and holds its property for public
6-11 purposes.
6-12 (b) Section 25.07(a), Tax Code, does not apply to a
6-13 leasehold or other possessory interest granted by the corporation.
6-14 (c) Property owned by the corporation is exempt from
6-15 taxation under Section 11.11, Tax Code, while the corporation owns
6-16 the property.
6-17 Sec. 379A.055. OPEN RECORDS AND MEETINGS. The board is
6-18 treated as a governmental body for the purposes of Chapters 551 and
6-19 552, Government Code.
6-20 Sec. 379A.056. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In
6-21 providing funds to an institution of higher education to be used
6-22 for scholarships as authorized by Section 379A.051, the corporation
6-23 by agreement with the institution shall ensure that:
6-24 (1) the funds are distributed to individuals as
6-25 scholarships connected with the institution; and
6-26 (2) no more than a maximum amount, as set by the
6-27 corporation, of the funds are spent on administering the award of
7-1 the scholarship.
7-2 (b) An institution of higher education receiving the funds
7-3 for scholarships shall develop, in consultation with the
7-4 corporation, a plan for awarding scholarships with the goal of
7-5 having an eventual beneficial effect on the economic growth and
7-6 vitality of and the elimination of unemployment and underemployment
7-7 in the municipality that created the corporation.
7-8 (Sections 379A.057-379A.080 reserved for expansion
7-9 SUBCHAPTER E. SALES AND USE TAX
7-10 Sec. 379A.081. SALES AND USE TAX. (a) A municipality may
7-11 levy a sales and use tax for the benefit of the corporation if the
7-12 tax is authorized by a majority of the voters of the municipality
7-13 voting at an election called for that purpose.
7-14 (b) The ballot for an election to impose the tax shall be
7-15 printed to permit voting for or against the proposition: "Adoption
7-16 of a sales and use tax at the rate of ____ of one percent (insert
7-17 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
7-18 for the purpose of financing authorized programs of the ____
7-19 Municipal Development Corporation (insert the name of the
7-20 corporation)."
7-21 (c) The adoption of the tax may be limited on the ballot to
7-22 any specific program, or the tax may be adopted with general
7-23 language permitting the use of the tax for any purposes authorized
7-24 by this chapter.
7-25 (d) If a sales and use tax is levied, it may be adopted for
7-26 a maximum of 20 years, but may then be reauthorized, subject to a
7-27 payment of indebtedness. The tax may be authorized for a shorter
8-1 period of time or limited to the time necessary to pay any
8-2 indebtedness.
8-3 (e) The rate of a tax adopted under this section must be
8-4 one-eighth, one-fourth, three-eighths, or one-half of one
8-5 percent. A municipality may not adopt a sales and use tax under
8-6 this chapter if the adoption of the tax under this chapter would
8-7 result in a combined tax rate of all local sales and use taxes of
8-8 more than two percent in any location in the municipality.
8-9 (f) Chapter 321, Tax Code, governs a municipality's
8-10 imposition, computation, administration, collection, and remittance
8-11 of a tax authorized by this section except as inconsistent with
8-12 this chapter.
8-13 Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A
8-14 municipality that has adopted a sales and use tax under this
8-15 chapter at a rate of less than one-half of one percent may increase
8-16 or decrease the rate of the tax if the increase or decrease is
8-17 approved by a majority of the voters of the municipality voting at
8-18 an election called and held for that purpose.
8-19 (b) The tax may be increased or decreased under this section
8-20 in one or more increments of one-eighth of one percent, but a
8-21 maximum of one-half of one percent is permitted.
8-22 (c) The ballot for an election to increase or decrease the
8-23 tax shall be printed to permit voting for or against the
8-24 proposition: "The ________ (increase or decrease, as appropriate)
8-25 of a sales and use tax to the rate of ____ of one percent (insert
8-26 one-eighth, one-fourth, three-eighths, or one-half, as appropriate)
8-27 for the purpose of financing authorized programs of the ________
9-1 Municipal Development Corporation (insert the name of the
9-2 corporation)."
9-3 Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality
9-4 adopts the tax, a tax is imposed on the receipts from the sale at
9-5 retail of taxable items in the municipality at the rate approved at
9-6 the election, and an excise tax is imposed on the use, storage, or
9-7 other consumption in the municipality of tangible personal property
9-8 purchased, leased, or rented from a retailer during the period that
9-9 the tax is effective in the municipality. The rate of the excise
9-10 tax is the same as the rate of the sales tax portion of the tax and
9-11 is applied to the sale price of the tangible personal property.
9-12 (b) The adoption of the tax or the change of the tax rate
9-13 takes effect on the first day of the first calendar quarter
9-14 occurring after the expiration of the first complete quarter
9-15 occurring after the date the comptroller receives a notice of the
9-16 results of the election adopting, increasing, or decreasing the
9-17 tax.
9-18 (Sections 379A.084-379A.100 reserved for expansion
9-19 SUBCHAPTER F. REPORT TO COMPTROLLER
9-20 Sec. 379A.101. REPORT REQUIRED. (a) Not later than February
9-21 1 of each year, the board of directors of the corporation shall
9-22 submit to the comptroller a report in the form required by the
9-23 comptroller.
9-24 (b) The reporting form may not exceed one page in length and
9-25 must include:
9-26 (1) a statement of the corporation's primary
9-27 objectives;
10-1 (2) a statement of the corporation's total revenues
10-2 during the preceding fiscal year;
10-3 (3) a statement of the corporation's total
10-4 expenditures during the preceding fiscal year;
10-5 (4) a statement of the corporation's total
10-6 expenditures during the preceding fiscal year in each of the
10-7 following categories:
10-8 (A) administration;
10-9 (B) personnel;
10-10 (C) marketing or promotion;
10-11 (D) direct business incentives;
10-12 (E) job training for the corporation's
10-13 personnel;
10-14 (F) debt service;
10-15 (G) capital costs;
10-16 (H) programs authorized by this chapter; and
10-17 (I) payments to taxing units, including school
10-18 districts;
10-19 (5) a list of the corporation's capital assets,
10-20 including land and buildings; and
10-21 (6) any other information the comptroller requires to
10-22 determine the use of the sales and use tax imposed under this
10-23 chapter.
10-24 Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE
10-25 PENALTY. (a) If the corporation fails to file a report in
10-26 accordance with this subchapter or fails to include sufficient
10-27 information in the report, the comptroller shall provide to the
11-1 corporation a written notice of the failure. The written notice
11-2 must include information on how to correct the failure.
11-3 (b) The comptroller may impose an administrative penalty
11-4 against the corporation if the corporation does not correct the
11-5 failure before the 31st day after the date the corporation receives
11-6 the written notice under Subsection (a). The amount of the penalty
11-7 is $200 a day for each day the filing of the report is delinquent.
11-8 (c) The comptroller by rule shall prescribe the procedures
11-9 for the imposition of an administrative penalty under this section.
11-10 The rules must protect the due process rights of the corporation.
11-11 Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE. (a) Not
11-12 later than November 1 of each even-numbered year, the comptroller
11-13 shall submit to the legislature a report on the use of the sales
11-14 and use tax imposed under this chapter.
11-15 (b) On request, the comptroller shall provide without charge
11-16 a copy of the report required by Subsection (a) to the corporation
11-17 created under this chapter.
11-18 SECTION 2. This Act takes effect immediately if it receives
11-19 a vote of two-thirds of all the members elected to each house, as
11-20 provided by Section 39, Article III, Texas Constitution. If this
11-21 Act does not receive the vote necessary for immediate effect, this
11-22 Act takes effect September 1, 2001.