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S.B. No. 1565
AN ACT
relating to allowing a municipality to create a defense adjustment
management authority; authorizing taxes and bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 375, Local Government Code, is amended
by adding Subchapter O to read as follows:
SUBCHAPTER O. DEFENSE ADJUSTMENT MANAGEMENT AUTHORITY
Sec. 375.301. LEGISLATIVE FINDINGS; PURPOSES. (a) The
legislature finds that:
(1) the closure of certain defense bases has had a
negative impact on the economic development of the areas within the
former defense bases and the areas in the general vicinity of the
former defense bases and that the creation of the specific type of
authority provided for in this subchapter is essential to
accomplish the purposes of Sections 52 and 52-a, Article III, and
Section 59, Article XVI, Texas Constitution;
(2) it is an appropriate role for a municipality to
foster economic opportunity, job generation, and capital
investment by promoting a favorable business climate, preparing the
workforce for productive employment, and supporting infrastructure
development in areas around defense bases that are intended to be
annexed by the municipality; and
(3) the programs designed to create a competent and
qualified workforce are essential both to the economic growth and
vitality of many municipalities in this state and to the
elimination of unemployment and underemployment in those
municipalities.
(b) The programs authorized by this subchapter are in the
public interest, promote the economic welfare of this state, and
serve the public purpose of developing and diversifying the economy
of this state and of eliminating unemployment and underemployment
in this state.
Sec. 375.302. CONSTRUCTION OF SUBCHAPTER. (a) This
subchapter shall be liberally construed in conformity with the
findings and purposes stated in Section 375.301.
(b) Except as provided by this subchapter, the other
provisions of this chapter apply to an authority created under this
subchapter.
Sec. 375.303. DEFINITIONS. In this subchapter:
(1) "Authority" means a defense adjustment management
authority created under this subchapter.
(2) "Eligible project" means a program authorized by
Section 379A.051 and a project as defined by Sections 2(11) and
4B(a)(2), Development Corporation Act of 1979 (Article 5190.6,
Vernon's Texas Civil Statutes). Notwithstanding this definition,
seeking a charter for or operating an open-enrollment charter
school authorized by Subchapter D, Chapter 12, Education Code,
shall not be an eligible project.
Sec. 375.304. ELIGIBILITY FOR CREATION BY MUNICIPALITY.
(a) The governing body of a municipality by resolution or
ordinance may create an authority in an area that is:
(1) in the same county as a military installation or
facility that is:
(A) closed or realigned under the Defense Base
Closure and Realignment Act of 1990 (10 U.S.C. Section 2687 note)
and its subsequent amendments; or
(B) a base efficiency project as defined by
Section 378.001, as added by Chapter 1221, Acts of the 76th
Legislature, Regular Session, 1999; and
(2) in the extraterritorial jurisdiction of a
municipality with a population of at least 1.1 million and that has
been annexed for limited purposes by the municipality under
Subchapter F, Chapter 43.
(b) Subchapter B and Sections 375.041 and 375.042 do not
apply to this subchapter.
Sec. 375.305. HEARING ON CREATION OF AUTHORITY. (a) Not
earlier than the 60th day or later than the 30th day before the date
the governing body of the municipality creates the authority, the
governing body of the municipality shall hold two public hearings
to consider the creation of the proposed authority. The
municipality must publish notice of each public hearing in a
newspaper of general circulation in the area of the proposed
authority at least seven days before each public hearing.
(b) The notice required by Subsection (a) must state:
(1) the date, time, and place for the public hearing;
(2) the boundaries of the proposed authority,
including a map of the proposed authority; and
(3) the powers of the proposed authority, including
the power to levy assessments and to impose a sales and use tax.
Sec. 375.306. BOARD OF DIRECTORS. (a) The board consists
of 15 directors.
(b) The municipality shall appoint six members of the board.
(c) The county in which the municipality is primarily
located shall appoint six members of the board.
(d) School districts whose boundaries overlap with an
authority shall collectively appoint three members of the board.
(e) Directors are appointed for terms of two years. Terms
of directors may be staggered, and directors may serve successive
terms.
(f) A vacancy on the board is filled for the unexpired term
by the governing body of the entity that appointed the director who
served in the vacant position.
(g) The mayor of the municipality and the county judge of
the county in which the authority is primarily located shall,
alternately, appoint one director to serve as presiding officer,
with the first appointment to be made by the mayor of the
municipality. The presiding officers shall serve for a term of four
years beginning on January 1 of the year following the appointment.
The board may elect an assistant presiding officer to preside in the
absence of the presiding officer or when there is a vacancy in that
office. The board may elect other officers as it considers
appropriate.
(h) Sections 375.061, 375.066, and 375.068 and the
limitations of Section 375.072(c) do not apply to this subchapter.
Sec. 375.307. QUALIFICATIONS OF DIRECTORS. (a) Except as
provided by Subsection (b), a majority of the directors of an
authority must meet the qualifications of Section 375.063.
(b) Representatives or agents of a school district whose
boundaries overlap with an authority or of an institution of higher
education that operates facilities within an authority may serve on
the board.
Sec. 375.308. POWERS OF THE AUTHORITY; MUNICIPALITY.
(a) An authority:
(1) may plan, design, implement, develop, construct,
and finance eligible projects as defined in this subchapter; and
(2) has the powers of a municipality under Chapter
378, as added by Chapter 1221, Acts of the 76th Legislature, Regular
Session, 1999, and Chapter 380.
(b) An authority may not:
(1) issue bonds or notes without the prior approval of
the governing body of the municipality that created the authority;
(2) seek a charter for or operate, within the
boundaries of the authority, an open-enrollment charter school
authorized by Subchapter D, Chapter 12, Education Code; or
(3) levy ad valorem property taxes.
(c) A municipality may not seek a charter for or operate an
open-enrollment charter school authorized by Subchapter D, Chapter
12, Education Code, within the boundaries of the authority.
Sec. 375.309. MUNICIPAL ANNEXATION OF AREA IN AN AUTHORITY.
(a) A municipality that creates an authority under this subchapter
may annex all or part of the territory located in the authority
under Chapter 43.
(b) Annexation of territory located in the authority does
not affect the operation of the authority.
(c) Creation of an authority does not:
(1) affect the power of the municipality to designate
all or part of an area in the authority as an industrial authority;
(2) limit a power of the municipality conferred by
Chapter 42; or
(3) impose a duty on or affect the power of the
municipality to provide municipal services to any area in the
municipality or its extraterritorial jurisdiction that is in the
authority.
Sec. 375.310. AUTHORITY MASTER PLAN. (a) An authority may
only develop or construct public improvements or eligible projects
in areas designated in an authority master plan approved by the
board and the governing body of the municipality that created the
authority.
(b) The authority master plan must include the information
required for a municipal reinvestment zone under Sections
311.011(b) and (c), Tax Code, for the area of the authority. For
the purposes of applying those sections, the area of the authority
affected constitutes a zone.
(c) The authority shall generate the authority master plan
based on the economic development needs of the property owners and
constituents in the authority.
(d) After approval by the board, the authority shall submit
the authority master plan to the municipality for approval. Before
taking action to approve or reject the authority master plan, the
municipality shall make a copy of the proposed authority master
plan available to the public and hold hearings and publish notice of
the hearings in the manner required by Section 375.305. The notice
of the public hearings must state where a copy of the proposed
authority master plan is available for inspection.
(e) The board may amend and submit the approved authority
master plan to the governing body of the municipality for approval.
(f) Before approving the authority's master plan or any
amendment, the municipality shall publish notice and hold hearings
as required by Subsection (d).
Sec. 375.311. SALES AND USE TAX. (a) An authority may
impose a sales and use tax to support or finance public
infrastructure projects and eligible projects authorized under
this subchapter if the tax is authorized by a majority of the
qualified voters of the authority voting at an election held for
that purpose in the manner provided by Sections 375.241 and
375.242.
(b) If an authority adopts the tax authorized by Subsection
(a), a tax is imposed on the receipts from the sale at retail of
taxable items within the authority at the rate approved by the
voters. The rate must be equal to one-eighth, one-fourth,
three-eighths, or one-half of one percent.
(c) Chapter 321, Tax Code, governs the imposition,
computation, administration, governance, and abolition of a tax
imposed under this section.
(d) If any territory in the authority is annexed by the
municipality, the municipality's sales and use tax applies in the
annexed area. If the authority's sales and use tax rate, when
combined with any other sales and use tax applicable in the
authority, exceeds two percent, the authority's sales and use tax
is abolished upon annexation.
Sec. 375.312. ZONING AND PLANNING. (a) An authority
created under this subchapter has the power of a municipality under
Chapters 211 and 212 in an area of the authority that is in the
boundaries of the municipality's limited purpose jurisdiction. On
annexation of an area of the authority by a municipality, the
authority's power to regulate the area under Chapter 211 or 212
expires.
(b) The board may divide the authority into distinct areas
as provided by Section 211.005 to accomplish the purposes of this
chapter and Chapter 211.
Sec. 375.313. REGIONAL DEVELOPMENT AGREEMENTS. (a) An
authority may enter into regional development agreements with its
creating municipality, other municipalities, counties, school
districts, institutions of higher education, other political
subdivisions, and private interests to:
(1) promote and advance long-term economic
development in the authority; or
(2) achieve the purposes for the authority's creation
and to implement the powers provided to the authority under this
chapter.
(b) An authority, a municipality, a school district whose
boundary overlaps with a portion of an authority, or an institution
of higher education may enter into an agreement to:
(1) fund improvements to school facilities and teacher
compensation of school districts or institutions of higher
education in the authority; and
(2) develop programs provided for in Section 379A.051.
(c) Any agreement entered into with a school district under
this section shall be designed in such a way that the school
district funding under Title 2, Education Code, shall be not less
than the school district would have received had the school
district not entered into the agreement. This provision may be
waived by a school district board of trustees by specific action
suspending the provisions of this subsection.
Sec. 375.314. DISSOLUTION OF THE AUTHORITY. (a) The
governing body of the municipality that created an authority under
this subchapter may dissolve the authority.
(b) Before dissolution, the municipality shall publish
notice and hold public hearings on the proposed dissolution in the
manner provided in Section 375.305.
(c) On dissolution, the municipality shall assume the
assets, debts, and other obligations of the authority.
(d) Subchapter M does not apply to this subchapter.
SECTION 2. 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.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1565 passed the Senate on
May 1, 2003, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendments on May 27, 2003, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1565 passed the House, with
amendment, on May 23, 2003, by the following vote: Yeas 145,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor