By: Madla S.B. No. 1565
A BILL TO BE ENTITLED
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 into 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 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(2), Development Corporation Act of 1979 (Article 5190.6,
Vernon's Texas Civil Statutes).
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;
(2) within the corporate or extraterritorial
jurisdiction of a municipality with a population of at least 1.1
million; and
(3) that is:
(A) within the corporate limits of such
municipality;
(B) within the extraterritorial jurisdiction of
the municipality and included in the municipal annexation plan
promulgated by such municipality pursuant to Subchapter C, Chapter
43, Local Government Code; or
(C) that has been annexed for limited purposes by
such municipality pursuant to Subchapter F, Chapter 43, Local
Government Code
(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 at least five and not more than fifteen directors.
(b) The municipality, county in which the municipality is
primarily located, and each school district whose boundaries
overlap with an authority shall, in its sole discretion, nominate a
member of the board who shall be appointed by the municipality.
(c) If the number of directors appointed under Subsection
(b) is less than the total number of the directors who serve on the
board, the governing body of the municipality may appoint
additional directors up to the total membership of the board.
(d) Directors are appointed for terms of two years. Terms
of directors may be staggered.
(e) A vacancy on the board is filled for the unexpired term
by nomination of the governing body of the entity that appointed the
director who served in the vacant position and the appointment of
that nominee by the municipality.
(f) Each year the mayor of the municipality shall appoint
one director to serve as presiding officer for a term of one year
that begins on January 1 of the following year. 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.
(g) Sections 375.061, 375.066, 375.068, and the limitations
of 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 a
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 Chapters
378 and 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.
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; or
(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 a authority adopts the tax, there is imposed a tax 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. In the event that the authority's sales and use tax
rate when combined with any other sales and use tax applicable in
the authority exceeds two percent, then 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 not in the
boundaries of a municipality or 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
pursuant to this section shall be designed in such a way that the
school district funding under Title 2 of the 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. Section 378.011(b), Local Government Code, as
added by Chapter 1221, Acts of the 76th Legislature, Regular
Session, 1999, is amended to read as follows:
(b) Section 25.07(a), Tax Code, does not apply [applies] to
a leasehold or other possessory interest in real property granted
by an authority for a project designated under Section 378.009(a)
[in the same manner as it applies to a leasehold or other possessory
interest in real property constituting a project described by
Section 4B(k), Development Corporation Act of 1979 (Article 5190.6,
Vernon's Texas Civil Statutes)]. The project is exempt from
taxation under Section 11.11, Tax Code, for the duration of the
lease or other possessory interest.
SECTION 3. Section 403.302(d), Government Code, is amended
to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted
under Section 11.251, Tax Code;
(6) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(7) the portion of the appraised value of residence
homesteads of the elderly on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(8) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(10) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(11) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; [and]
(12) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section; and
(13) the amount of any exemptions in a defense
adjustment management district authorized by Subchapter O, Chapter
375, Local Government Code.
SECTION 4. 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.