80R7648 MXM-D

By: West, Royce S.B. No. 1270

A BILL TO BE ENTITLED

AN ACT

relating to county development districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 383.003(a), Local Government Code, is amended to read as follows:

(a) Counties [Small and medium-sized counties] in this state need incentives for the development of public improvements to attract visitors and tourists [to those counties], and [those counties] are at a disadvantage in competing with counties in other states for the location and development of projects that attract visitors by virtue of the availability and prevalent use of financial incentives in other states.

SECTION 2. Section 383.021(a), Local Government Code, is amended to read as follows:

(a) The commissioners court of a county by issuing a proposal approved by a majority of the court or [with a population of 400,000 or less,] on petition of the owners of land in a proposed district, may commence the creation of a county development district.

SECTION 3. Section 383.022, Local Government Code, is amended to read as follows:

Sec. 383.022. PETITION OF LANDOWNERS. To commence the creation of a district by petition [create a district], a petition requesting creation must be filed with the commissioners court of the county in which all of the land in the proposed district is located. The petition must be accompanied by a sworn statement indicating consent to creation signed by the holders of fee simple title of all of the land in the proposed district.

SECTION 4. Section 383.023, Local Government Code, is amended to read as follows:

Sec. 383.023. CONTENTS OF PROPOSAL OR PETITION. The commissioners court's proposal or the petition to create a district must:

(1) describe the boundaries of the proposed district by metes and bounds or by lot and block number, if there is a recorded map or plat and survey of the area;

(2) include a name for the proposed district, which must include the name of the county followed by the words "Development District No.______";

(3) include the names of five persons who are willing and qualified to serve as initial [temporary] directors of the proposed district;

(4) state the general nature of the work proposed to be done and the cost of the project as then estimated by the petitioners; and

(5) state the necessity and feasibility of the proposed district and whether the district will serve the public purpose of attracting visitors and tourists to the county.

SECTION 5. Section 383.024, Local Government Code, is amended to read as follows:

Sec. 383.024. SETTING OF [COMMISSION] HEARING; CONTENTS OF NOTICE. Before the 61st day after the date a proposal is issued or a petition is received, the commissioners court shall set a date, time, and place for a hearing on the creation of the district [at which the petition shall be heard] and shall issue notice of the date, time, place, and subject matter of the hearing. The notice shall inform all persons of their right to appear and present evidence and testify for or against the creation of the district.

SECTION 6. Section 383.025, Local Government Code, is amended to read as follows:

Sec. 383.025. PROVIDING NOTICE OF HEARING. Before the 30th day before the date set for the hearing, the commissioners court shall provide notice of the hearing by:

(1) mailing the notice [shall be mailed] to the [developer who signed the petition and the] landowners of all the land in the district; or

(2) publishing the notice [and shall be published] in a newspaper with general circulation in the county in which the proposed district is located.

SECTION 7. Section 383.026, Local Government Code, is amended to read as follows:

Sec. 383.026. HEARING. At the hearing:

(1) [,] the commissioners court shall examine the proposal or petition to ascertain its sufficiency;[,] and

(2) any interested person may appear before the commissioners court to offer testimony on the sufficiency of the proposal or petition and whether the district should be created.

SECTION 8. Section 383.027, Local Government Code, is amended to read as follows:

Sec. 383.027. GRANTING OR REFUSING PREVIOUS PROPOSAL OR PETITION; CREATION OF DISTRICT. (a) After the hearing, if the commissioners court finds that the petition, if a petition was filed, conforms to the requirements of Section 383.022 and that the creation of the district and the proposed project is feasible and necessary and would serve the public purpose of attracting visitors or tourists to the county, the commissioners court by order may make that finding and create [enter an order creating] the district.

(b) The order creating the district may specify the cost to the county of publishing notice and conducting hearings for the creation of the district together with the cost of conducting the confirmation and sales and use tax election. The county may require the petitioner, if a petition was filed, to pay to the county the amounts specified in the order creating the district at the time the order becomes final.

(c) If the commissioners court finds that the petition does not conform to the requirements of Section 383.022 or that the creation of the district and the proposed project is not feasible and necessary and would not serve the purpose of attracting visitors and tourists to the county, the commissioners court by order shall make that finding [in an order] and deny the creation of the district [petition].

SECTION 9. Section 383.028, Local Government Code, is amended to read as follows:

Sec. 383.028. INITIAL [TEMPORARY] DIRECTORS; VACANCY IN OFFICE. (a) If the commissioners court orders the creation of the district under Section 383.027 [grants the petition], it shall appoint to serve as initial [temporary] directors of the district five persons who are qualified under this chapter to serve as directors.

(b) A vacancy in the office of initial [temporary] director shall be filled by appointment by the commissioners court.

SECTION 10. Section 383.029, Local Government Code, is amended to read as follows:

Sec. 383.029. QUALIFICATION OF INITIAL [TEMPORARY] DIRECTORS; ORGANIZATION. (a) Each initial [temporary] director shall execute a bond in accordance with Section 383.046 and shall take an oath of office.

(b) The board shall meet and organize.

SECTION 11. Section 383.030, Local Government Code, is amended to read as follows:

Sec. 383.030. CONFIRMATION AND SALES AND USE TAX ELECTION. The initial [temporary] board of directors shall conduct an election in the district to confirm the creation of the district and authorize a sales and use tax in conformity with this chapter.

SECTION 12. Section 383.032, Local Government Code, is amended to read as follows:

Sec. 383.032. NOTICE. The initial [temporary] directors shall give notice of the election by publishing a substantial copy of the election order once a week for two consecutive weeks in a newspaper with general circulation in the county in which the proposed district is located. The first publication must appear before the 14th day before the date set for the election.

SECTION 13. Sections 383.034(a) and (b), Local Government Code, are amended to read as follows:

(a) After the election, the presiding judge shall make returns of the result to the initial [temporary] board of directors. The initial [temporary] board of directors shall canvass the returns and declare the results.

(b) If a majority of the votes cast in the election favor the creation of the district and the adoption of the sales and use tax, the initial [temporary] board shall declare that the district is created and shall declare the amount of the local sales and use tax adopted and enter the result in its minutes. If a majority of the votes cast in the election are against the creation of the district and the adoption of the sales and use tax, the initial [temporary] board shall declare that the proposition to create the district was defeated and enter the result in its minutes.

SECTION 14. Section 383.041, Local Government Code, is amended to read as follows:

Sec. 383.041. BOARD OF DIRECTORS; TERMS. (a) A district is governed by a board of five directors appointed by the commissioners court of the county in which the district is located. The initial [temporary] directors appointed under Section 383.028 remain [shall become permanent] directors of the district, if the creation of the district is confirmed at the confirmation election.

(b) Directors serve staggered terms of two [four] years, with two or three members' terms expiring September 1 of each [every other] year. Following confirmation of the district at the election, the initial [temporary] directors shall draw lots to determine:

(1) the two directors to serve terms that expire on September 1 of the first [second] year following creation of the district; and

(2) the three directors to serve terms that expire on September 1 of the second [fourth] year following creation of the district.

SECTION 15. Subchapter D, Chapter 383, Local Government Code, is amended by adding Sections 383.067 and 383.068 to read as follows:

Sec. 383.067. CONTRACTS WITH COUNTY. A district and a county may enter into an interlocal contract under Chapter 791, Government Code, for the county to provide services to the district, including county auditor services.

Sec. 383.068. FINANCING OF INFRASTRUCTURE AND SERVICES. A district may finance government infrastructure and services in the district.

SECTION 16. Section 383.084, Local Government Code, is amended by amending Subsection (b) and adding Subsections (c) and (d) to read as follows:

(b) If the commissioners court unanimously determines from the evidence that the best interests of the persons and property in the district will be served by [adding or] excluding land, the commissioners court shall enter in its records the appropriate findings and order [adding or] excluding land.

(c) The commissioners court shall enter in its records the appropriate findings and order adding the land only if:

(1) all landowners of the land to be added consent to the addition of the land; or

(2) a majority of the voters voting in an election approve the addition of the land.

(d) Only voters who reside on the land proposed to be added may vote in an election held under Subsection (c).

SECTION 17. The heading to Subchapter E, Chapter 383, Local Government Code, is amended to read as follows:

SUBCHAPTER E. BONDS; ADDING OR REMOVING LAND

SECTION 18. Subchapter E, Chapter 383, Local Government Code, is amended by adding Section 383.085 to read as follows:

Sec. 383.085. REMOVAL OF TERRITORY BY MUNICIPALITY. (a) If a municipality completes all other procedures necessary to annex territory in a district, the municipality shall send written notice of that fact to the board. The municipality must send the notice to the board secretary by certified mail, return receipt requested. The territory remains part of the district and does not become part of the municipality until the board secretary receives the notice. On receipt of the notice, the board shall immediately change its records to show that the territory has been disannexed from the district.

(b) The disannexation of territory under this section does not diminish or impair the rights of the holders of any outstanding and unpaid bonds, warrants, or other obligations of the district including loans and lease-purchase agreements.

(c) If a municipality annexes territory in a district, the municipality shall compensate the district immediately after disannexation of the territory under Subsection (a) in an amount equal to the annexed territory's pro rata share of the district's bonded and other indebtedness as computed according to the formula in Subsection (d). The district shall apply compensation received from a municipality under this subsection exclusively to the payment of the annexed territory's pro rata share of the district's bonded and other indebtedness.

(d) The amount of compensation under Subsection (c) is determined by multiplying the district's total indebtedness at the time of the annexation by a fraction the numerator of which is the assessed value of the property to be annexed based on the most recent certified county property tax rolls at the time of annexation and the denominator of which is the total assessed value of the property of the district based on the most recent certified county property tax rolls at the time of annexation.

(e) For purposes of this section, total indebtedness includes loans and lease-purchase agreements but does not include a loan or lease-purchase agreement the district enters into after the district receives notice of the municipality's intent to annex district territory.

SECTION 19. Section 383.101(b), Local Government Code, is amended to read as follows:

(b) If a district adopts the tax, there is imposed a tax on the receipts from the sale at retail of taxable items in the district at a rate of up to [one-half of] one percent. There is also imposed an excise tax on the use, storage, or other consumption in the district of taxable items purchased, leased, or rented from a retailer during the period that the tax is effective in the district. The rate of the excise tax is the same as the rate of the sales tax portion of the tax applied to the sales price of the taxable items and is included in the sales tax.

SECTION 20. Section 383.103, Local Government Code, is amended to read as follows:

Sec. 383.103. TAX RATES. The permissible rates for a local sales and use tax levied under this chapter are one-fourth of one percent, three-eighths of one percent, [and] one-half of one percent, five-eighths of one percent, three-fourths of one percent, seven-eighths of one percent, and one percent.

SECTION 21. The heading to Subchapter B, Chapter 383, Local Government Code, is amended to read as follows:

SUBCHAPTER B. CREATION OF DISTRICT; INITIAL [TEMPORARY] BOARD

SECTION 22. (a) Section 383.041, Local Government Code, as amended by this Act, does not terminate the office of a director serving on a county development district as of the effective date of this Act. The directors shall transition to two-year terms as provided by Subsection (b) of this section.

(b) To comply with Section 383.041, Local Government Code, as amended by this Act, the directors of a county development district shall draw lots to determine which two or three terms expire September 1, 2008. The remaining directors' terms expire September 1, 2009.

SECTION 23. Section 383.085, Local Government Code, as added by this Act, applies only to the annexation of an area for which all parts of the statutory annexation process are begun on or after the effective date of this Act. The annexation of an area for which any part of the statutory annexation process was begun before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 24. This Act takes effect September 1, 2007.