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89(R) HB 4308 - Engrossed version - Bill Text
By: Gates, McQueeney, Curry, Guillen,
H.B. No. 4308
Reynolds
A BILL TO BE ENTITLED
AN ACT
relating to the creation of industrial development districts in
certain counties; providing authority to issue bonds; providing
authority to impose assessments, fees, or taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 12, Local Government Code, is
amended by adding Chapter 389 to read as follows:
CHAPTER 389. COUNTY INDUSTRIAL DEVELOPMENT DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 389.001. DEFINITIONS. In this chapter:
(1)
"Board" means the board of directors of the
district.
(2) "Director" means a member of the board.
(3)
"District" means a county industrial development
district created under this chapter.
(4)
"Primary job" has the meaning assigned by Section
501.002.
(5) "Project" includes:
(A)
a project described by Section 501.101, other
than a port;
(B)
the land, buildings, equipment, facilities,
expenditures, targeted infrastructure, and improvements that are:
(i)
for the creation or retention of
primary jobs and found by the board to be required or suitable for
the development, retention, or expansion of advanced
manufacturing, operations, and industrial facilities or advanced
nuclear reactors; or
(ii)
found by the board to be required or
suitable for use for a career center in the area to be benefited by
the district;
(C)
job training required or suitable for the
promotion or development and expansion of business enterprises
described by this chapter; and
(D)
expenditures that are found by the board to
be required or suitable for infrastructure necessary to promote or
develop new or expanded business enterprises, including:
(i)
streets and roads, rail spurs, water
and sewer utilities, electric utilities, gas utilities, drainage,
site improvements, and related improvements; and
(ii)
telecommunications and Internet
service improvements.
Sec.
389.002.
PURPOSE; DECLARATION OF INTENT. (a)
The
creation of a district is essential to accomplish the purposes of
Sections 52 and 52-a, Article III, and Section 59, Article XVI,
Texas Constitution, and other public purposes stated in this
chapter.
(b)
The creation of each district under this chapter is
necessary to promote, develop, encourage, and maintain employment,
commerce, transportation, housing, tourism, recreation, the arts,
entertainment, economic development, safety, and the public
welfare in the district.
(c)
The creation of a district may not be interpreted to
relieve a county or municipality from providing the level of
services provided to the area in the district as of the date the
district is created.
A district is created to supplement and not to
supplant county or municipality services provided in a district.
Sec.
389.003.
FINDINGS OF BENEFIT. (a)
Counties in this
state need incentives for the development of public improvements to
attract major industrial employers because counties are at a
disadvantage in competing with counties in other states for the
location and development of projects that attract major industrial
employers by virtue of the availability and prevalent use of
financial incentives in other states.
(b)
All land and other property included in the boundaries
of a district will benefit from the projects, improvements, and
services to be provided by the district under powers conferred by
Sections 52 and 52-a, Article III, and Section 59, Article XVI,
Texas Constitution, and other powers granted under this chapter.
(c)
The creation of a district is in the public interest and
is essential to further the public purposes of:
(1)
developing and diversifying the economy of this
state;
(2) eliminating unemployment and underemployment; and
(3)
developing or expanding transportation and
commerce.
(d) A district will:
(1)
promote the health, safety, and general welfare of
residents, employers, potential employees, employees, visitors,
and consumers in the district, and of the public; and
(2)
promote the economic welfare of the citizens of
this state by providing incentives for the development of projects
that attract major industrial employers in order to increase
employment and economic activity.
(e)
A district will not act as the agent or instrumentality
of any private interest even though the district might benefit many
private interests as well as the public.
Sec.
389.004.
ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.
All or any part of the area of a district is eligible to be included
in:
(1)
a tax increment reinvestment zone created under
Chapter 311, Tax Code; or
(2)
a tax abatement reinvestment zone created under
Chapter 312, Tax Code.
Sec.
389.005.
GOVERNMENTAL AGENCY; TORT CLAIMS. Sections
375.004 and 383.062 apply to a district created under this chapter.
Sec.
389.006.
CONSTRUCTION OF CHAPTER. This chapter shall
be liberally construed in conformity with the findings and purposes
stated in this chapter.
SUBCHAPTER
B.
CREATION OF DISTRICTS
Sec.
389.051.
CREATION ELECTION. The commissioners court
of a county may order an election on the question of creating a
district under this chapter.
Sec.
389.052.
CONTENTS OF ORDER. The order calling an
election under Section 389.051 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; and
(2)
call for the election to be held within those
boundaries.
Sec.
389.053.
CONDUCT OF ELECTION. (a)
The election must
be held in accordance with the provisions of the Election Code, to
the extent not inconsistent with this chapter.
(b)
The ballot must be printed to permit voting for or
against the proposition: "The creation of the _____________ County
Industrial Development District No.
______."
Sec.
389.054.
RESULTS OF ELECTION. The district is created
if a majority of the votes received at the election favor the
creation of the district. If a majority of the votes received at the
election are against the creation of the district, the district is
not created.
A failure to approve the creation of a district under
this chapter does not affect the authority of the county to call one
or more elections on the question of creating one or more districts.
SUBCHAPTER C. DISTRICT ADMINISTRATION
Sec.
389.101.
BOARD OF DIRECTORS. (a)
A district is
governed by a board of nine directors appointed by the
commissioners court of the county in which the district is located.
(b)
Directors serve staggered four-year terms with four or
five members' terms expiring September 1 of every other year.
(c)
Notwithstanding Subsection (b), the first appointed
directors shall draw lots to determine:
(1)
the four directors to serve terms that expire on
September 1 of the second year following creation of the district;
and
(2)
the five directors to serve terms that expire on
September 1 of the fourth year following creation of the district.
Sec.
389.102.
QUALIFICATIONS FOR DIRECTORS. To serve as a
director, an individual must be:
(1) at least 21 years of age; and
(2)
a qualified voter of the county in which the
district is located.
Sec.
389.103.
PERSONS DISQUALIFIED FROM SERVING. Section
49.052, Water Code, relating to disqualification of directors,
applies to directors of districts created under this chapter.
Sec.
389.104.
BOARD
VACANCY. A vacancy in the office of
director shall be filled by appointment by the commissioners court.
Sec.
389.105.
REMOVAL OF DIRECTOR. The commissioners
court, after notice and hearing, may remove a director for
misconduct or failure to carry out the director's duties on
petition by a majority of the remaining directors.
Sec.
389.106.
OFFICERS. After each appointment of
directors, and after the directors have qualified by taking the
proper oath, the directors shall elect a president, a vice
president, a secretary, and any other officers the board considers
necessary.
Sec.
389.107.
QUORUM; OFFICERS' DUTIES; MANAGEMENT OF
DISTRICT. Sections 49.053, 49.054, 49.057, and 49.058, Water Code,
relating to quorum, officers' duties, and management of the
district, govern the board of a district created under this
chapter.
Sec.
389.108.
DISTRICT OFFICE. The board shall designate
and establish a district office in the county.
Sec.
389.109.
MEETINGS AND NOTICE. (a)
The board may
establish regular meetings to conduct district business and may
hold special meetings at other times as the business of a district
requires.
(b)
Notice of the time, place, and purpose of any meeting of
the board shall be given by posting at a place convenient to the
public within the district.
A copy of the notice shall be furnished
to the clerk or clerks of the county in which the district is
located, who shall post the notice on a bulletin board in the county
courthouse used for that purpose.
(c)
Except as provided by this chapter, Chapter 551,
Government Code, applies to meetings of the board. Any interested
person may attend any meeting of the board.
Sec.
389.110.
DIRECTOR'S COMPENSATION; BOND AND OATH OF
OFFICE. Sections 375.067, 375.069, and 375.070 apply to directors
of a district created under this chapter.
SUBCHAPTER D. POWERS AND DUTIES
Sec.
389.151.
GENERAL POWERS OF DISTRICT. A district has
the powers and duties necessary to accomplish the purposes for
which the district is created.
Sec.
389.152. MUNICIPAL MANAGEMENT DISTRICT POWERS. Except
as otherwise provided by this chapter, a district created under
this chapter has the powers of a municipal management district
created under Chapter 375.
Sec.
389.153.
SPECIFIC POWERS. (a)
A district, using any
money available to the district for the purpose, may:
(1)
provide, design, construct, acquire, improve,
relocate, operate, maintain, or finance a district project;
(2)
provide the necessary infrastructure to attract
major industrial employers to the district and its vicinity, which
may be conducted by the district using financial incentives and
contracts for professional services with persons or organizations
selected by the district;
(3)
acquire, sell, lease, convey, or otherwise dispose
of property or an interest in property under terms determined by the
district;
(4)
plan, acquire, establish, develop, construct,
renovate, and dispose of projects to benefit the district;
(5)
enter agreements with governmental or private
entities, including providers of public utilities and commercial
railways, to develop necessary infrastructure for the purposes of
the district and any other district purpose; and
(6)
adopt rules to govern the operation of the
district and its employees and property.
(b)
The implementation of a district project or service is a
governmental function or service for the purposes of Chapter 791,
Government Code.
Sec.
389.154.
NONPROFIT CORPORATION. (a)
The board by
resolution may authorize the creation of a nonprofit corporation to
assist and act for the district in implementing a project or
providing a service authorized by this chapter.
(b) The nonprofit corporation:
(1)
has each power of and is considered to be a local
government corporation created under Subchapter D, Chapter 431,
Transportation Code; and
(2)
may implement any project and provide any service
authorized by this chapter.
(c)
The board shall appoint the board of directors of the
nonprofit corporation. The board of directors of the nonprofit
corporation shall serve in the same manner as the board of directors
of a local government corporation created under Subchapter D,
Chapter 431, Transportation Code, except that a board member is not
required to reside in the district.
All board members of the
nonprofit corporation must reside in the county that created the
district.
Sec.
389.155.
COMPETITIVE BIDDING; CONTRACT AWARD.
(a)
Sections 375.221 and 375.223 of this code apply to a district
created under this chapter, except that the district may use a
method authorized by Chapter 2269, Government Code, as an
alternative to competitive bidding.
(b)
Notwithstanding any other provision of this chapter, a
contract between the district and a governmental entity or a
nonprofit corporation created under Chapter 501 is not subject to
the requirements described by Subsection (a).
Sec.
389.156.
ECONOMIC DEVELOPMENT PROGRAMS. (a)
A
district may engage in activities that accomplish the economic
development purposes of the district.
(b)
The district may establish and provide for the
administration of one or more programs to promote state or local
economic development and stimulate business and commercial
activity in the district, including programs to:
(1) make loans and grants of public money; and
(2) provide district personnel and services.
(c)
The district may create economic development programs
and exercise the economic development powers provided to
municipalities by:
(1) Chapter 380 of this code; and
(2) Subchapter A, Chapter 1509, Government Code.
Sec.
389.157.
ADDING OR EXCLUDING LAND. A district may add
or exclude land in the manner provided by Subchapter J, Chapter 49,
Water Code, or Subchapter H, Chapter 54, Water Code.
Sec.
389.158.
DISBURSEMENTS AND TRANSFERS OF MONEY. The
board by resolution shall establish the number of directors'
signatures and the procedure required for the disbursement or
transfer of district money.
Sec.
389.159.
REPAYMENT OF ORGANIZATIONAL EXPENSES. (a)
In this section, "cost" has the meaning assigned by Section
501.152.
(b)
A district may reimburse any person for a cost or
expense necessarily incurred in the creation and organization of
the district, including costs of investigation and making plans,
costs of engineer's reports, project designer fees, legal fees, and
other incidental expenses.
(c)
Payments under this section may be made from money
obtained from the issuance of notes or the sale of bonds first
issued by the district or out of other revenues of the district.
SUBCHAPTER E. ASSESSMENTS
Sec.
389.201.
PETITION REQUIRED FOR FINANCING SERVICES AND
IMPROVEMENTS WITH ASSESSMENTS. (a)
The board may not finance a
service or improvement project with assessments under this chapter
unless a written petition requesting that service or improvement
has been filed with the board.
(b)
A petition filed under Subsection (a) must be signed by
the owners of a majority of the assessed value of real property in
the district subject to assessment according to the most recent
certified tax appraisal roll for the county.
Sec.
389.202.
ASSESSMENTS; LIENS FOR ASSESSMENTS. (a)
The
board by resolution may impose and collect an assessment for any
purpose authorized by this chapter in all or any part of the
district.
(b)
An assessment, a reassessment, or an assessment
resulting from an addition to or correction of the assessment roll
by the district, penalties and interest on an assessment or
reassessment, an expense of collection, and reasonable attorney's
fees incurred by the district are:
(1)
a first and prior lien against the property
assessed;
(2)
superior to any other lien or claim other than a
lien or claim for county, school district, or municipal ad valorem
taxes; and
(3)
the personal liability of and a charge against the
owners of the property even if the owners are not named in the
assessment proceedings.
(c)
The lien is effective from the date of the board's
resolution imposing the assessment until the date the assessment is
paid. The board may enforce the lien in the same manner that the
board may enforce an ad valorem tax lien against real property.
(d)
The board may make a correction to or deletion from the
assessment roll that does not increase the amount of assessment of a
parcel of land without providing notice and holding a hearing in the
manner required for additional assessments.
SUBCHAPTER F. TAXES AND BONDS
Sec.
389.251.
TAX ELECTION REQUIRED. (a)
A district must
hold an election in the manner provided by Chapter 49, Water Code,
or, if applicable, Chapter 375 of this code to obtain voter approval
before the district may impose an ad valorem tax.
(b) Section 375.243 does not apply to the district.
Sec.
389.252.
OPERATION AND MAINTENANCE TAX. (a)
If
authorized by a majority of district voters voting in the election
under this section, a district may impose an operation and
maintenance tax on taxable property in the district in the manner
provided by Section 49.107, Water Code, for any district purpose,
including to:
(1) maintain and operate the district;
(2) construct or acquire improvements or projects; or
(3) provide a service.
(b)
The board shall determine the operation and maintenance
tax rate. The rate may not exceed the rate approved at the election.
Sec.
389.253.
AUTHORITY TO BORROW MONEY AND TO ISSUE BONDS
AND OTHER OBLIGATIONS. (a)
A district may borrow money on terms
determined by the board.
(b)
A district may issue bonds, notes, or other obligations
payable wholly or partly from ad valorem taxes, assessments, impact
fees, revenue, contract payments, grants, or other district money,
or any combination of those sources of money, to pay for any
authorized district purpose, including:
(1)
paying interest on district bonds during and after
the period of acquisition or construction of a project;
(2) paying administrative and operating expenses;
(3)
creating a reserve fund for the payment of
principal and interest on district bonds; and
(4)
paying all expenses incurred and to be incurred in
the issuance, sale, and delivery of district bonds.
(c)
The limitation on the outstanding principal amount of
bonds, notes, or other obligations provided by Section 49.4645,
Water Code, does not apply to a district.
Sec.
389.254.
BONDS SECURED BY REVENUE OR CONTRACT
PAYMENTS. A district may issue, without an election, bonds secured
by:
(1)
revenue other than ad valorem taxes, including
contract revenues; or
(2)
contract payments, provided that the requirements
of Section 49.108, Water Code, have been met.
Sec.
389.255.
BONDS SECURED BY AD VALOREM TAXES; ELECTIONS.
(a)
If authorized at an election held under Section 389.251, a
district may issue bonds payable from ad valorem taxes.
(b)
At the time the district issues bonds payable wholly or
partly from ad valorem taxes, the board shall provide for the annual
imposition of a continuing direct annual ad valorem tax, without
limit as to rate or amount, for each year that all or part of the
bonds are outstanding as required and in the manner provided by
Sections 54.601 and 54.602, Water Code.
(c)
All or any part of any project, facility, or improvement
that may be acquired by a district by the issuance of its bonds may
be submitted as a single proposition or as several propositions to
be voted on at an election.
Sec.
389.256.
CONSENT OF MUNICIPALITY REQUIRED. (a)
The
board of a district may not issue bonds until each municipality in
whose corporate limits or extraterritorial jurisdiction the
district is located has consented by ordinance or resolution to the
creation of the district and to the inclusion of land in the
district as required by applicable law.
(b)
This section applies only to the district's first
issuance of bonds payable from ad valorem taxes.
SUBCHAPTER G. SALES AND USE TAX
Sec.
389.301.
APPLICABILITY OF CERTAIN TAX CODE PROVISIONS.
(a)
Chapter 321, Tax Code, governs the imposition, computation,
administration, enforcement, and collection of the sales and use
tax authorized by this subchapter except to the extent Chapter 321,
Tax Code, is inconsistent with this chapter.
(b)
A reference in Chapter 321, Tax Code, to a municipality
or the governing body of a municipality is a reference to the
district or the board, respectively.
Sec.
389.302.
ELECTION; ADOPTION OF TAX. (a)
The district
may adopt a sales and use tax if authorized by a majority of the
voters of the district voting at an election held for that purpose.
(b)
The board by order may call an election to authorize the
adoption of the sales and use tax. The election may be held on any
uniform election date and in conjunction with any other district
election.
(c)
The ballot shall be printed to provide for voting for or
against the proposition: "Authorization of a sales and use tax in
the __________ County Industrial Development District No.
___ at a
rate not to exceed _____ percent" (insert rate of one or more
increments of one-eighth of one percent).
Sec.
389.303.
SALES AND USE TAX RATE. (a)
On or after the
date the results are declared of an election held under Section
389.302 at which the voters authorized the imposition of a tax, the
board shall provide by resolution or order the initial rate of the
tax, which must be in one or more increments of one-eighth of one
percent.
(b)
After the authorization of a tax under Section 389.302,
the board may increase or decrease the rate of the tax by one or more
increments of one-eighth of one percent.
(c)
The board may not decrease the rate of the tax if the
decrease would impair the repayment of any outstanding debt or
obligation payable from the tax.
(d)
The initial rate of the tax or any rate resulting from
subsequent increases or decreases may not exceed the lesser of:
(1)
the maximum rate authorized at an election held
under Section 389.302; or
(2)
a rate that, when added to the rates of all sales
and use taxes imposed by other political subdivisions with
territory in the district, would result in the maximum combined
rate prescribed by Section 321.101(f), Tax Code, at any location in
the district.
(e)
In determining whether the combined sales and use tax
rate under Subsection (d)(2) would exceed the maximum combined rate
prescribed by Section 321.101(f), Tax Code, at any location in the
district, the board shall include:
(1)
any sales and use tax imposed by a political
subdivision whose territory overlaps all or part of the district;
(2)
any sales and use tax to be imposed by a
municipality or county as a result of an election held on the same
date as the election held under Section 389.302; and
(3)
any increase to an existing sales and use tax
imposed by a city or county as a result of an election held on the
same date as the election held under Section 389.302.
(f)
If the district adopts a sales and use tax authorized at
an election held under Section 389.302 and subsequently includes a
new territory in the district, the district:
(1)
is not required to hold another election to
approve the imposition of the sales and use tax in the included
territory; and
(2)
shall impose the sales and use tax in the included
territory as provided by Chapter 321, Tax Code.
(g)
If the district adopts a sales and use tax authorized at
an election held under Section 389.302 and subsequently excludes
territory in the district under this section, the sales and use tax
is inapplicable to the excluded territory as provided by Chapter
321, Tax Code, but is applicable to the territory remaining in the
district.
Sec.
389.304.
NOTIFICATION OF RATE CHANGE. The board shall
notify the comptroller of any changes made to the tax rate under
this subchapter in the same manner the municipal secretary provides
notice to the comptroller under Section 321.405(b), Tax Code.
Sec.
389.305.
USE OF REVENUE. Revenue from the sales and
use tax imposed under this subchapter is for the use and benefit of
the district and may be used for any district purpose. The district
may pledge all or part of the revenue to the payment of bonds,
notes, or other obligations, and that pledge of revenue may be in
combination with other revenue, including tax revenue, available to
the district.
Sec.
389.306.
ABOLITION OF TAX. (a)
Except as provided by
Subsection (b), the board may abolish the tax imposed under this
subchapter without an election.
(b)
The board may not abolish the tax imposed under this
subchapter if the district has any outstanding debt or obligation
secured by the tax, and repayment of the debt or obligation would be
impaired by the abolition of the tax.
(c)
If the board abolishes the tax, the board shall notify
the comptroller of that action in the same manner as the municipal
secretary provides notice to the comptroller under Section
321.405(b), Tax Code.
(d)
If the board abolishes the tax or decreases the tax rate
to zero, a new election to authorize a sales and use tax must be held
under Section 389.302 before the district may subsequently impose
the tax.
SUBCHAPTER H. DISSOLUTION
Sec.
389.351.
DISSOLUTION. (a)
A district may be dissolved
only as provided by this section.
(b)
The board may petition the commissioners court to
dissolve the district if a majority of the board finds at any time:
(1)
before the authorization of bonds or the final
lending of its credit, that a proposed undertaking of the district
is impracticable or cannot be successfully and beneficially
accomplished; or
(2)
that all bonds of the district or other debts of
the district have been paid and the purposes of the district have
been accomplished.
(c)
On receipt of a petition from the board for dissolution
of the district, the commissioners court shall hold a hearing.
(d)
If the commissioners court determines from the evidence
that the best interests of the county and the owners of property and
interests in property within the district will be served by
dissolving the district, the commissioners court shall enter in its
records the appropriate findings and order dissolving the district.
Otherwise the commissioners court shall enter its order providing
that the district has not been dissolved. On dissolution of the
district, funds and property of the district, if any, shall be
transferred to the commissioners court.
(e)
As an alternative to Subsections (b) through (d), the
commissioners court shall dissolve the district on written petition
filed with the commissioners court by the owners of a majority of
the assessed value of the property subject to assessment or
taxation by the district based on the most recent certified county
property tax rolls if all bonds of the district or other debts of
the district have been paid.
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, 2025.