By Carona S.B. No. 1044
77R4026 ATP-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the ability of a development corporation to receive
1-3 funding from a municipality.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 380.002, Local Government Code, is
1-6 amended by amending Subsection (b) and adding Subsection (c) to
1-7 read as follows:
1-8 (b) A home-rule municipality with a population of more than
1-9 100,000 may, under a contract with a development corporation
1-10 created by the municipality under the Development Corporation Act
1-11 of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), grant
1-12 public money to the corporation. The development corporation may
1-13 use the grant money for the development and diversification of the
1-14 economy of the state, elimination of unemployment or
1-15 underemployment in the state, and development and expansion of
1-16 commerce in the state.
1-17 (c) The funds granted by the municipality under this section
1-18 shall be derived from any source lawfully available to the
1-19 municipality under its charter or other law, other than from the
1-20 proceeds of bonds or other obligations of the municipality payable
1-21 from ad valorem taxes.
1-22 SECTION 2. Sections 21 and 22, Development Corporation Act
1-23 of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), are
1-24 amended to read as follows:
2-1 Sec. 21. Every unit is hereby authorized to utilize a
2-2 corporation to issue bonds on its behalf to finance the cost of
2-3 projects, including projects in federally designated empowerment
2-4 zones and enterprise communities or enterprise zones designated
2-5 under the Texas Enterprise Zone Act, to promote and develop new and
2-6 expanded business enterprises to promote and encourage employment
2-7 and the public welfare. No unit is or shall be authorized to lend
2-8 its credit or grant any public money or thing of value in aid of a
2-9 corporation, except that a city may grant public money to a
2-10 corporation under a contract authorized by Section 380.002, Local
2-11 Government Code. The unit will approve all programs and
2-12 expenditures of the corporation and annually review any financial
2-13 statements of the corporation, and at all times the unit will have
2-14 access to the books and records of the corporation.
2-15 Sec. 22. Bonds issued under the provisions of this Act shall
2-16 be deemed not to constitute a debt of the state, of the unit, or of
2-17 any other political corporation, subdivision, or agency of this
2-18 state or a pledge of the faith and credit of any of them, but such
2-19 bonds shall be payable solely from the funds herein provided
2-20 therefor from revenues. All such revenue bonds shall contain on
2-21 the face thereof a statement to the effect that neither the state,
2-22 the unit, nor any political corporation, subdivision, or agency of
2-23 the state shall be obligated to pay the same or the interest
2-24 thereon and that neither the faith and credit nor the taxing power
2-25 of the state, the unit, or any other political corporation,
2-26 subdivision, or agency thereof is pledged to the payment of the
2-27 principal of or the interest on such bonds. The corporation shall
3-1 not be authorized to incur financial obligations which cannot be
3-2 paid from proceeds of the bonds, [or] from revenues realized from
3-3 the lease or sale of a project or realized from a loan made by the
3-4 corporation to finance or refinance in whole or in part a project,
3-5 or from revenues from a contract with a city under Section 380.002,
3-6 Local Government Code. The corporation when established and
3-7 created pursuant to the terms of the Act shall be a constituted
3-8 authority and an instrumentality (within the meaning of those terms
3-9 in the regulations of the treasury and the rulings of the Internal
3-10 Revenue Service prescribed and promulgated pursuant to Section 103
3-11 of the Internal Revenue Code of 1954, as amended) and shall be
3-12 authorized to act on behalf of the unit under whose auspices it is
3-13 created for the specific public purpose or purposes authorized by
3-14 such unit; but the corporation is not intended to be and shall not
3-15 be a political subdivision or a political corporation within the
3-16 meaning of the constitution and the laws of the state, including
3-17 without limitation Article III, Section 52, of the Texas
3-18 Constitution, and a unit shall never delegate to a corporation any
3-19 of such unit's attributes of sovereignty, including the power to
3-20 tax, the power of eminent domain, and the police power.
3-21 SECTION 3. This Act takes effect immediately if it receives
3-22 a vote of two-thirds of all the members elected to each house, as
3-23 provided by Section 39, Article III, Texas Constitution. If this
3-24 Act does not receive the vote necessary for immediate effect, this
3-25 Act takes effect September 1, 2001.