By: Hegar S.B. No. 1534

A BILL TO BE ENTITLED

AN ACT

relating to county assistance districts.

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

SECTION 1. Section 387.003, Local Government Code, is amended to read as follows:

Sec. 387.003. CREATION AND FUNCTIONS OF DISTRICT. (a) The commissioners court of the county may call an election on the question of creating a county assistance district under this chapter. More than one county assistance district may be created in a county.

(a-1) [to] A district may perform the following functions [in the district]:

(1) the construction, maintenance, or improvement of roads or highways;

(2) the provision of law enforcement and detention services;

(3) the maintenance or improvement of libraries, museums, parks, or other recreational facilities;

(4) the provision of services that benefit the public health or welfare, including the provision of firefighting and fire prevention services; or

(5) the promotion of economic development and tourism.

(b) The order calling the election must:

(1) define the boundaries of the district to include any portion of the county in which the combined tax rate of all local sales and use taxes imposed, including the rate to be imposed by the district if approved at the election, would not exceed the limits on the combined rate of sales and use taxes of the county, municipalities, and political subdivisions of this state under Sections 321.101 and 323.101, Tax Code [two percent]; and

(2) call for the election to be held within those boundaries.

(b-1) If the proposed district includes any territory of a municipality, the commissioners court shall send notice by certified mail to the governing body of the municipality of the commissioners court's intent to create the district. If the municipality has created a development corporation under Section 4A or 4B, Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), the commissioners court shall also send the notice to the board of directors of the corporation. The commissioners court must send the notice not later than the 60th day before the date the commissioners court orders the election. The governing body of the municipality may exclude the territory of the municipality from the proposed district by sending notice by certified mail to the commissioners court of the governing body's desire to exclude the municipal territory from the district. The governing body must send the notice not later than the 45th day after the date the governing body receives notice from the commissioners court under this subsection. The territory of a municipality that is excluded under this subsection may subsequently be included in the district in an election held under Subsection (f) with the consent of the municipality or in another district after following the procedures of this subsection.

(c) The ballot at the election must be printed to permit voting for or against the proposition: "Authorizing the creation of the _____________ County Assistance District No. (insert name of district) and the imposition of a sales and use tax at the rate of _____ of one percent (insert one-eighth, one-fourth, three-eighths, or one-half, as appropriate) for the purpose of financing the operations of the district."

(d) The district is created if a majority of the votes received at the election favor the creation of the district.

(e) If a majority of the votes received at the election are against the creation of the district, then the district is not created and the county may call other elections [another election] on the questions [question] of creating [a] county assistance districts [district may not be held in the county before the first anniversary of the most recent election concerning the creation of a district].

(f) The commissioners court may call an election to be held in an area of the county that is not located in a district created under this section to determine whether the area should be included in the district and whether the district's sales and use tax should be imposed in the area. An election may not be held in an area in which the combined tax rate of all local sales and use taxes imposed, including the rate to be imposed by the district if approved at the election, would exceed the limits on the combined rate of sales and use taxes of the county, municipalities, and political subdivisions of this state under Sections 321.101 and 323.101, Tax Code [two percent].

(g) The area in which an election is held under Subsection (f) is included in the district and the sales and use tax is imposed if a majority of the votes received at the election favor inclusion in the district and imposition of the sales and use tax.

(h) If more than one election to authorize a local sales and use tax is held on the same day in the area of a proposed district or an area proposed to be added to a district and if the resulting approval by the voters would cause the imposition of a local sales and use tax in any area to exceed the limits on the combined rate of sales and use taxes of the county, municipalities, and political subdivisions of this state under Sections 321.101 and 323.101, Tax Code [two percent], only a tax authorized at an election under this section may be imposed.

(i) In addition to the authority to include an area in a district under subsection (f), the governing body of a district by order may include an area in the district upon receipt of a petition or petitions signed by a majority in value of the owners of land in the area to be included. If there are no qualified voters residing in the area to be included, then no election is required.

(j) The commissioners court may exclude an area from a district by order if the district has no outstanding bonds payable in whole or in part from sales and use taxes and the exclusion does not impair any outstanding district debt or contractual obligation while any district debt or contractual obligation remains outstanding.

SECTION 2. Section 387.005, Local Government Code, is amended to read as follows:

Sec. 387.005. GOVERNING BODY. (a) The commissioners court of the county in which the district is created shall provide by order that:

(1) the commissioners court is the governing body of the district; or

(2) a governing body of the district shall be appointed by the commissioners court.

(b) A member of the [commissioners court] governing body of the district is not entitled to compensation for service [on the governing body of the district] but is entitled to reimbursement for actual and necessary expenses.

(c) A governing body appointed by the commissioners court under this section shall consist of five directors who serve staggered terms of four years. To be qualified to serve as a director, a person shall be at least 18 years old and a resident citizen of the county in which the district is located. The initial directors shall draw lots to achieve staggered terms, with three of the directors serving two year terms and two of the directors serving four year terms.

SECTION 3. Section 387.006, Local Government Code, is amended to read as follows:

Sec. 387.006. GENERAL POWERS OF DISTRICT. (a) A district may:

(1) perform any act necessary to the full exercise of the district's functions;

(2) accept a grant or loan from:

(A) the United States;

(B) an agency or political subdivision of this state; or

(C) a public or private person;

(3) acquire, sell, lease, convey, or otherwise dispose of property or an interest in property under terms determined by the district;

(4) employ necessary personnel; [and]

(5) adopt rules to govern the operation of the district and its employees and property; and

(6) enter into agreements with municipalities necessary or convenient for the full exercise of the district's functions, including agreements regarding the duration, rate and allocation between the district and the municipality of sales and use taxes.

(b) A district may contract with a public or private person to perform any act the district is authorized to perform under this chapter.

(c) A district may not levy an ad valorem tax.

SECTION 4. Section 387.007, Local Government Code, is amended to read as follows:

Sec. 387.007. SALES AND USE TAX. (a) A district by order may impose a sales and use tax under this chapter to finance the operations of the district only if the tax is approved at an election held under Section 387.003.

(b) A district may not adopt a sales and use tax under this chapter if the adoption of the tax would result in a combined tax rate of all local sales and use taxes that would exceed the limits under Sections 321.101 and 323.101, Tax Code [of more than two percent] in any location in the district.

(c) A district may define areas within the district and impose different rates of sales and use tax within each area, provided that no sales and use tax rate exceeds the rate approved at an election held under Section 387.003.

SECTION 5. Section 387.009, Local Government Code, is amended to read as follows:

Sec. 387.009. TAX RATE. The rate of a tax adopted under this chapter must be in increments of one-eighth, one-fourth, three-eighths, or one-half of one percent.

SECTION 6. Section 387.010, Local Government Code, is amended to read as follows:

Sec. 387.010. REPEAL OR RATE CHANGE. (a) A district that has adopted a sales and use tax under this chapter may, by order and subject to Section 387.007(b), [change] reduce the rate of the tax or repeal the tax without an election, provided that the district may not repeal the sales and use tax or reduce the rate of the sales and use tax below the amount pledged to secure payment of any outstanding district debt or contractual obligation while any district debt or contractual obligation remains outstanding. A district may, by order and subject to Section 387.007(b), increase the rate of the sales and use tax, provided that the increased rate does not exceed the rate approved at an election held under Section 387.003. If the increased rate of the sales and use tax exceeds the rate approved at an election held under Section 387.003, then a district may, by order and subject to Section 387.007(b), increase the rate if the increase [change or repeal] is approved by a majority of the votes received in the district at an election held for that purpose.

(b) The tax may be changed under Subsection (a) in one or more increments of one-eighth of one percent [to a maximum of one-half of one percent].

(c) The ballot for an election to [change] increase the tax shall be printed to permit voting for or against the proposition: "The [change] increase of a sales and use tax for the _____________ County Assistance District No. (insert name of district) from the rate of _____ of one percent (insert in increments of one-eighth, one-fourth, three-eighths, or one-half, as appropriate) to the rate of _____ of one percent (insert in increments of one-eighth, one-fourth, three-eighths, or one-half, as appropriate)."

(d) The ballot for the election to repeal the tax shall be printed to permit voting for or against the proposition. "The repeal of the sales and use tax for financing the _____________ County Assistance District (insert name of district)."

SECTION 7. Section 387.012, Local Government Code, is amended to read as follows:

Sec. 387.012. EFFECTIVE DATE OF TAX. The adoption of the tax, the [change] increase or reduction of the tax rate, or the repeal of the tax takes effect on the first day of the first calendar quarter occurring after the expiration of the first complete quarter occurring after the date the comptroller receives a [notice of the results of the election] copy of the order of the governing body adopting, [changing] increasing, reducing, or repealing the tax.

SECTION 8. 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, 2009.