By: Wentworth S.B. No. 1879
Substitute the following for S.B. No. 1879:
By: Puente C.S.S.B. No. 1879
A BILL TO BE ENTITLED
AN ACT
relating to the creation of special districts for improvements in
certain counties, including authority to acquire, construct, and
improve water, wastewater, and drainage improvements; providing
authority to impose a tax and issue bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 372, Local Government Code, is amended
by adding Subchapter C to read as follows:
SUBCHAPTER C. IMPROVEMENT DISTRICTS IN CERTAIN COUNTIES
Sec. 372.101. DEFINITIONS. In this subchapter:
(1) "Board" means the board of directors of a
district.
(2) "Commissioners court" means the governing body of
the county in which a district is located.
(3) "County" means the county in which the district is
located.
(4) "District" means a public improvement district
created under this subchapter.
(5) "Hotel" has the meaning assigned by Section
156.001, Tax Code, and includes a timeshare, overnight lodging
unit, or condominium during the time the timeshare, overnight
lodging unit, or condominium is rented by a person who is not the
owner of the timeshare, overnight lodging unit, or condominium.
(6) "Municipality" means a municipality in whose
extraterritorial Jurisdiction the district is located.
Sec. 372.102. PURPOSE. By enacting this subchapter, the
legislature has created a program for economic development as
provided in Section 52a, Article III, Texas Constitution. A
district created under this subchapter is created to serve a public
use and benefit.
Sec. 372.103. NATURE OF DISTRICT. A district created under
this subchapter is a political subdivision of this state.
Sec. 372.104. APPLICABILITY; CONFLICT OF LAWS. In the
event of a conflict between this subchapter and Subchapter A, this
subchapter controls.
Sec. 372.105. CREATION OF DISTRICT. (a) After a county
with a population of one million or more, within 200 miles of an
international border, receives a petition satisfying the
requirements of Section 372.005, the commissioners court of that
county may by order create a district located in the
extraterritorial jurisdiction of a municipality in that county.
(b) The order must:
(1) describe the district's territory;
(2) specifically authorize the district to exercise
the powers of this subchapter; and
(3) state whether the petition provides for
improvements to be financed and paid for with taxes authorized by
this subchapter instead of or in addition to assessments.
Sec. 372.106. GOVERNING BODY; TERMS. A district is
governed by a board of seven directors who serve staggered terms of
two years, except that the first three initial directors' terms
shall expire June 1 of the first odd-numbered year following the
creation of the district and the remaining four initial directors'
terms shall expire June 1 of the first even numbered year following
the creation of the district. There is no requirement for the
County to appoint an advisory board for a district created under the
provisions of the subchapter.
Sec. 372.107. ELIGIBILITY. (a) A director must be at least
18 years old.
(b) If the population of the district is more than 1,000
residents, a director must be 18 years old, a resident of the
district and meet the qualifications of Chapter 375.063 Local
Government Code.
Sec. 372.108. APPOINTMENT OF DIRECTORS. Directors are
appointed by position as follows:
(1) the commissioners court shall appoint the
directors.
Sec. 372.109. VACANCIES; QUORUM. (a) A board vacancy is
filled in the same manner as the original appointment. Subsequent
directors are appointed in the same manner as the original
directors.
(b) A vacant board position is not counted for the purposes
of establishing a quorum of the board.
Sec. 372.110. CONFLICTS OF INTEREST. Chapter 171 governs
conflicts of interest for directors.
Sec. 372.111. COMPENSATION. (a) In this section,
"performs the duties of a director" means substantial performance
of the management of the district's business, including
participation in board and committee meetings and other activities
involving the substantive deliberation of district business and in
pertinent educational programs, but does not include routine or
ministerial activities such as the execution of documents or
self-preparation for meetings.
(b) A director is entitled to compensation of $50 a day for
each day that the director actually performs the duties of a
director.
Sec. 372.112. OATH AND BOND; OFFICER ELECTIONS. As soon as
practicable, a board member shall give the bond and take the oath of
office in accordance with Chapter 375.067, Local Government Code,
and the board shall elect officers in accordance with Chapter
375.068, Local Government Code.
Sec. 372.113. POWERS AND DUTIES. (a) A district has the
powers and duties of:
(1) a county development district under Chapter 383,
Local Government Code, excluding Sec. 383.066;
(2) a road district created by a county under Section
52, Article III, Texas Constitution; and
(3) Chapters 380 and 381, Local Government Code,
including the acquisition, construction, or improvement of water,
wastewater, or drainage facilities or improvements under Section
372.003(b)(9).
(b) A district may not exercise the powers and duties of a
road district or provide water, wastewater, or drainage facilities
under this section unless the municipality and county both consent
by resolution.
Sec. 372.114. DEVELOPMENT AGREEMENTS. A district may enter
into a development agreement with owners of land in the district on
such terms and conditions and for such a term, not to exceed 30
years as the board of directors deem advisable. The agreement may
be amended by the parties.
Sec. 372.115. ECONOMIC DEVELOPMENT AGREEMENT; ELECTION;
TAXES. (a) With the approval of county, a district may enter into
an agreement, on terms and conditions the board and commissioners
court considers advisable, to make a grant or loan of public money
to promote state or local economic development and to stimulate
business and commercial activity in the district, including a grant
or loan to induce the construction of a tourist destination or
attraction in accordance with Chapter 380 or 381.
(b) If the grant or loan agreement has been approved by the
voters of the district at an election held in the district for that
purpose, the grant or loan may be payable over a term of years and be
binding and enforceable on the district in accordance with the
terms of the agreement and the conditions of the election, which may
subject to the requirements of Section 372.125(c) and Section
372.129(b), include the irrevocable obligation to impose an ad
valorem tax, sales and use tax, or hotel occupancy tax over a term
of years not to exceed 30 years, and if authorized at the election,
the district may contract and covenant to pay the taxes to the
recipient of the grant or loan in accordance with the agreement.
(c) If the property owners petitioning a county to create a
district under this subchapter propose that the district be created
only to provide economic development grants or loans and road
improvements and not be authorized to impose assessments, than the
district does not need to prepare a feasibility report as otherwise
required by Sec. 372.007 nor prepare a service plan or assessment
plan as otherwise required by Sec. 372.013 and Sec. 372.014,
respectively or prepare an assessment roll as required by Sec.
372.016.
Sec. 372.116. CONTRACTS; GENERAL. (a) A district may
contract with any person, including the municipality or county, on
the terms and conditions and for a period of time the board
determines, to:
(1) accomplish any district purpose authorized or
limited by this act, including a contract to pay, repay, or
reimburse from tax proceeds or another specified source of money
any costs, including reasonable interest, incurred by a person on
the district's behalf, including all or part of the costs of an
improvement project; and
(2) receive, administer, and perform the district's
duties and obligations under a gift, grant, loan, conveyance, or
other financial assistance arrangement relating to the
investigation, planning, analysis, study, design, acquisition,
construction, improvement, completion, implementation, or
operation by the district or another person of an improvement
project or proposed improvement project.
(b) A state agency, municipality, county, other political
subdivision, corporation, or other person may contract with the
district to carry out the purposes of this subchapter.
Sec. 372.117. PROCUREMENT CONTRACTS. A district may
contract for materials, supplies, and construction:
(1) in accordance with the laws applicable to
counties; or
(2) in the same manner that a county local government
corporation created pursuant to Chapter 431, Transportation Code,
is authorized to contract.
Sec. 372.118. RULES; ENFORCEMENT. The board may adopt
rules:
(1) to administer and operate the district;
(2) for the use, enjoyment, availability, protection,
security, and maintenance of the district's property and
facilities; or
(3) to provide for public safety and security in the
district.
Sec. 372.119. FEES. A district may establish, revise,
repeal, enforce, collect, and apply the proceeds from user fees or
charges for the enjoyment, sale, rental, or other use of the
district's facilities or other property, or for services or
improvement projects.
Sec. 372.120. ELECTIONS. Notice of all elections shall be
provided in accordance with the Election Code. For any election
ordered before December 31, 2005, the uniform election dates in
effect on January 1, 2005 apply. For any election ordered after
December 31, 2005, the election date must comply with the uniform
election dates in effect as of the date of such order.
Sec. 372.121. RULES; REGULATION OF ROADS AND OTHER PUBLIC
AREAS. (a) A board may adopt rules to regulate the private use of
public roadways, open spaces, parks, sidewalks, and similar public
areas in the area of the district, provided such use serves a public
purpose.
(b) To the extent rules adopted under this section conflict
with a rule, order, ordinance, or regulation of the county or
municipality, the county or municipality rule, order, ordinance, or
regulation controls.
(c) A rule adopted under this section may provide for the
safe and orderly use of public roadways, open spaces, parks,
sidewalks, and similar public areas in the area of the district.
(d) Notwithstanding the foregoing, this subchapter does not
grant a district any right-of-way management authority over public
utilities. To the extent the construction, maintenance, or
operation of any district project requires the relocation or
extension of public utility facilities, the district shall
reimburse the public utility for all costs associated with the
relocation, removal, extension, or other adjustment of the
facilities from district taxes, grants, or revenues.
Sec. 372.122. SERVICE PLAN REQUIRED. A district must
annually prepare and present to the commissioners court a service
plan, as provided for by Section 372.013, for the commissioners
court's review and approval.
Sec. 372.123. NO EMINENT DOMAIN. Notwithstanding Section
383.063, Local Government Code, a district does not have the power
of eminent domain.
Sec. 372.124. BONDS; NOTES. (a) A district may, subject to
the commissioners court prior approval, issue bonds. If the
population of the district is more than 1,000 residents, a bond
issuance must be approved by a majority of those voting in an
election held for that purpose. Such a bond election does not
affect prior issuances and is not required for refunding bond
issuances.
(b) A district may, subject to the commissioners court prior
approval, issue a negotiable promissory note or notes.
(c) Bonds, notes, and other district obligations may be
secured by district revenue or any type of district taxes or
assessments.
Sec. 372.125. AUTHORITY TO IMPOSE ASSESSMENTS AND AD
VALOREM, SALES AND USE, AND HOTEL OCCUPANCY TAXES; ELECTION. (a) A
district may accomplish its purposes and pay the cost of services
and improvements by:
(1) imposing an assessment;
(2) levying an ad valorem tax;
(3) imposing a sales and use tax; or
(4) imposing a hotel occupancy tax.
(b) If approved at an election called by the board, and in
accordance with Section 372.129(b), a district may impose an ad
valorem tax, hotel occupancy tax, and sales and use tax to
accomplish the economic development purposes prescribed by Section
52a, Article III, Texas Constitution.
(c) The rate at which the district imposes a hotel occupancy
tax, sales and use tax, or ad valorem tax must first be approved by
the commissioners court. A tax rate approved by the commissioners
court and pledged to secure bonds, notes, grant agreements, or
development agreements may not be reduced until the obligations of
those instruments have been satisfied.
Sec. 372.126. USE OF REVENUE FROM TAXES. (a) A tax imposed
under this subchapter may be used
(i) to accomplish any improvement project or provide any
service authorized by:
(1) this chapter;
(2) Chapter 380, Local Government Code;
(3) Chapter 381, Local Government Code;
(4) Chapter 383, Local Government Code; or
(ii) for a road project. To the extent authorized by
Section 52, Article III, Texas Constitution, the district may
construct, acquire, improve, maintain, or operate macadamized,
graveled, or paved roads or turnpikes, or improvements in aid of
those roads or turnpikes, inside the district.
(b) A road project must meet or exceed all applicable
construction standards, zoning and subdivision requirements, and
regulatory ordinances of each municipality in whose corporate
limits or extraterritorial jurisdiction the district is located.
If the district is located outside the extraterritorial
jurisdiction of a municipality, a road project must meet all
applicable construction standards, zoning and subdivision
requirements, and regulatory ordinances of each county in which the
district is located.
Sec. 372.127. HOTEL OCCUPANCY TAX. (a) A district may
impose a hotel occupancy tax on a person who pays for the use or
possession of or for the right to the use or possession of a room
that is ordinarily used for sleeping in a hotel in the district.
(b) The district shall impose a hotel occupancy tax as
provided by Chapter 383, Local Government Code, and Section
352.107, Tax Code, except that a hotel occupancy tax:
(1) may be used for any district purpose; and
(2) is imposed by the district.
(c) The hotel occupancy tax rate is the greater of nine
percent or the rate imposed by the municipality.
(d) A hotel occupancy tax may not be imposed on the
occupants of a hotel unless the owner of the hotel agrees to the
imposition of the hotel occupancy tax. After the owner of the hotel
agrees to the imposition of the hotel occupancy tax, the agreement
is irrevocable by the owner of the hotel and any subsequent owner of
the hotel and the district may impose hotel occupancy taxes as
provided in this subchapter.
Sec. 372.128. SALES AND USE TAX. (a) A district may
subject to commissioners court prior approval, impose a sales and
use tax in increments of 1/8 of one percent up to a rate of two
percent.
(b) Except as otherwise provided in this subchapter, a sales
and use tax must be imposed in accordance with Chapter 383, Local
Government Code, and Chapter 323, Tax Code.
Sec. 372.129. AD VALOREM TAX. (a) A district may impose an
ad valorem tax on property in the district in accordance with
Chapter 257, Transportation Code.
(b) Before imposing an ad valorem tax for district
operations, or to pay bonds, notes, or other obligations, the
district must obtain the approval of the commissioners court.
Sec. 372.130. BORROWING. A district may, subject to the
commissioners court prior approval, borrow money for any district
purpose, including for a development agreement that authorizes the
district to borrow money.
Sec. 372.131. REPAYMENT OF COSTS. A district may, by a
lease, lease-purchase agreement, installment purchase contract, or
other agreement, or by the imposition or assessment of a tax, user
fee, concession, rental, or other revenue or resource of the
district, provide for or secure the payment or repayment of:
(1) the costs and expenses of the establishment,
administration, and operation of the district;
(2) the district's costs or share of costs of an
improvement project; or
(3) the district's contractual obligations or
indebtedness.
Sec. 372.132. LIABILITIES; ASSUMPTION OF ASSETS AFTER
COMPLETE ANNEXATION. (a) If the municipality annexes the entire
district territory, the municipality shall succeed to the
district's assets, but is not liable for the district's debt or
other obligations.
(b) If the district has debt or other obligations, the
district remains in existence after the territory is annexed by the
municipality for the purpose of collecting any taxes or assessments
levied by the district prior to the annexation which shall be used
by the district solely for the purpose of satisfying any
preexisting district debt or other obligations. After the debt or
other obligations have been discharged, or two years have expired
since the date of the annexation, the district is dissolved and any
outstanding debt or obligations are extinguished.
Sec. 372.133. AUTHORITY TO IMPOSE TAXES OR ASSESSMENTS
AFTER PARTIAL OR COMPLETE ANNEXATION. (a) After a district has
been annexed by a municipality wholly or partly for general
purposes, the district may not impose an ad valorem tax, hotel
occupancy tax, or sales and use tax, or collect an assessment in the
area that the municipality overlaps the district, except as
provided by Section 372.132(b) or 372.133(b).
(b) A district may continue to impose a tax in an area that
the municipality annexes for limited purposes and in which the
municipality does not impose taxes. If the municipality annexes an
area for limited purposes and only imposes some of the taxes which
the district is levying but not all of them, the district may
continue to levy taxes only to the extent that the level of taxation
of the municipality and the district combined (as to each of the
hotel tax, the sales tax and the ad valorem tax calculated
independently) is equal to or less than the tax level of the
municipality as to fully annexed areas. It is the intent of the
Legislature that the level of taxation of areas of
district/municipality overlap be no greater than the level of
taxation of fully annexed areas.
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, 2005.