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78R8390 CLG-D
By: Rodriguez H.B. No. 2499
A BILL TO BE ENTITLED
AN ACT
relating to the use of tax proceeds by certain economic development
corporations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2, Development Corporation Act of 1979
(Article 5190.6, Vernon's Texas Civil Statutes), is amended by
adding Subdivision (17) to read as follows:
(17) "Small business" means a legal entity, including
a corporation, partnership, or sole proprietorship, that:
(A) is formed for the purpose of making a profit;
(B) is independently owned and operated; and
(C) has fewer than 25 employees or less than
$500,000 in annual gross receipts.
SECTION 2. Section 4A, Development Corporation Act of 1979
(Article 5190.6, Vernon's Texas Civil Statutes), is amended by
amending Subsection (f) and adding Subsection (f-1) to read as
follows:
(f) On receipt of the proceeds of the sales and use tax
imposed under this section from the comptroller, the city shall
deliver the proceeds to the corporation to use in carrying out its
functions. The corporation shall retain 10 percent of the tax
proceeds it receives each fiscal year to pay for the costs of a
project or other activity of a small business located in the
eligible city. Tax proceeds retained under this subsection may be
used only for the purposes specified in this subsection.
(f-1) Tax proceeds may also be used to pay:
(1) the principal of, interest on, and other costs
relating to the corporation's bonds, but neither the bonds nor any
instrument related to the bonds may give a bondholder a right to
demand payment from tax proceeds in excess of those collected from
the tax imposed by this section; and
(2) [. Tax proceeds may also be used to pay] expenses
incurred by the corporation under Section 38 of this Act relating to
job training.
SECTION 3. Section 4B, Development Corporation Act of 1979
(Article 5190.6, Vernon's Texas Civil Statutes), is amended by
amending Subsection (g) and adding Subsection (g-1) to read as
follows:
(g) On receipt of the proceeds of the sales and use tax
imposed under this section from the comptroller, the eligible city
shall deliver the proceeds to the corporation. The corporation
shall retain 10 percent of the tax proceeds it receives each fiscal
year to pay for the costs of a project or other activity of a small
business located in the eligible city. Tax proceeds retained under
this subsection may be used only for the purposes specified in this
subsection.
(g-1) Tax proceeds may also be used to:
(1) pay the costs of projects of the types added to the
definition of that term by Subsection (a) of this section; or
(2) pay the principal of, interest on, and other costs
relating to bonds or other obligations issued by the corporation to
pay the costs of the projects or to refund bonds or other
obligations issued to pay the costs of projects.
SECTION 4. Section 4C(b), Development Corporation Act of
1979 (Article 5190.6, Vernon's Texas Civil Statutes), is amended
to read as follows:
(b) The reporting form shall not exceed one page in length
and must include:
(1) a statement of the corporation's primary economic
development objectives;
(2) a statement of the corporation's total revenues
during the preceding fiscal year;
(3) a statement of the corporation's total
expenditures during the preceding fiscal year;
(4) a statement of the corporation's total
expenditures during the preceding fiscal year in each of the
following categories:
(A) administration;
(B) personnel;
(C) marketing or promotion;
(D) direct business incentives;
(E) job training;
(F) debt service;
(G) capital costs;
(H) affordable housing; and
(I) payments to taxing units, including school
districts;
(5) a list of the corporation's capital assets,
including land and buildings; [and]
(6) a statement of the total amount of tax proceeds
retained during the preceding fiscal year for projects and
activities of small businesses as required by Sections 4A(f) and
4B(g) of this Act; and
(7) [(6)] any other information the comptroller
requires to determine the use of the sales and use tax imposed under
Section 4A or 4B of this Act to encourage economic development in
this state.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.