VERNON'S TEXAS CIVIL STATUTES
TITLE 83. LABOR
CHAPTER 10. ECONOMIC DEVELOPMENT
Art. 5190.6. Development Corporation Act of 1979
Short title
Sec. 1. This Act may be cited as the "Development Corporation Act of
1979."
Definitions
Sec. 2. Wherever used in this Act unless a different meaning clearly
appears in the context, the following terms, whether singular or
plural, shall mean as follows:
(1) "Board of directors" shall mean the board of directors of any
corporation organized pursuant to the provisions of this Act.
(2) "Department" shall mean the Texas Department of Commerce.
(3) "Corporation" shall mean any industrial development
corporation organized pursuant to the provisions of this Act.
(4) "Cost" as applied to a project shall mean and embrace the cost
of acquisition, cleanup, construction, reconstruction,
improvement, and expansion, including the cost of the acquisition
of all land, rights-of-way, property rights, easements, and
interests, the cost of all machinery and equipment, financing
charges, inventory, raw materials and other supplies, research and
development costs, interest prior to and during construction and
for one year after completion of construction whether or not
capitalized, necessary reserve funds, cost of estimates and of
engineering and legal services, plans, specifications, surveys,
estimates of cost and of revenue, other expenses necessary or
incident to determining the feasibility and practicability of
acquiring, cleaning, constructing, reconstructing, improving, and
expanding any such project, administrative expense and such other
expense as may be necessary or incident to the acquisition,
cleanup, construction, reconstruction, improvement, and expansion
thereof, the placing of the same in operation, and the financing or
refinancing of any such project, including the refunding of any
outstanding obligations, mortgages, or advances issued, made or
given by any person for any of the aforementioned costs.
(5) "City" shall mean any municipality of the state incorporated
under the provisions of (i) any general or special law or (ii) the
home-rule amendment to the constitution.
(6) "County" shall mean a county of this state.
(7) "County alliance" means two or more counties that jointly
authorize the creation of a corporation under this Act.
(8) "District" shall mean a conservation and reclamation district
established under authority of Article XVI, Section 59, of the
Texas Constitution.
(9) "Governing body" shall mean the board, council, commission,
commissioners court, or legislative body of the unit.
(10) "Industrial development corporation" shall mean a corporation
created and existing under the provisions of this Act as a
constituted authority for the purpose of financing one or more
projects.
(11)(A) "Project" shall mean the land, buildings, equipment,
facilities, expenditures, targeted infrastructure, and
improvements (one or more) that are for the creation or retention of
primary jobs and that are found by the board of directors to be
required or suitable for the development, retention, or expansion
of manufacturing and industrial facilities, research and
development facilities, transportation facilities (including but
not limited to airports, ports, mass commuting facilities, and
parking facilities), sewage or solid waste disposal facilities,
recycling facilities, air or water pollution control facilities,
facilities for the furnishing of water to the general public,
distribution centers, small warehouse facilities capable of
serving as decentralized storage and distribution centers, primary
job training facilities for use by institutions of higher
education, and regional or national corporate headquarters
facilities.
"Project" also includes job training required or suitable for the
promotion of development and expansion of business enterprises and
other enterprises described by this Act, as provided by Section 38
of this Act.
"Project" also includes expenditures found by the board of
directors to be required or suitable for infrastructure necessary
to promote or develop new or expanded business enterprises limited
to streets and roads, rail spurs, water and electric utilities, gas
utilities, drainage and related improvements, and
telecommunications and Internet improvements.
(B), (C) Repealed by Acts 2003, 78th Leg., ch. 1132, Sec. 13.
"Federally assisted new communities" shall mean those federally
assisted areas which have received or will receive assistance in
the form of loan guarantees under Title X of the National Housing
Act and a portion of the federally assisted area has received grants
under Section 107(a)(1) of the Housing and Community Development
Act of 1974, as amended.
(12) "Resolution" shall mean the resolution, order, ordinance, or
other official action by the governing body of a unit.
(13) "Unit" shall mean a city, county, or district which may create
and utilize a corporation.
(14) "Bonds" includes bonds, notes, and other evidences of
indebtedness.
Text of subsec. (15) as added by Acts 1999, 76th Leg., ch. 296, Sec.
2
(15) "Institution of higher education" has the meaning assigned by
Section 61.003, Education Code.
Text of subsec. (15) as added by Acts 1999, 76th Leg., ch. 973, Sec.
1
(15) "User" means an individual, partnership, corporation, or any
other private entity, whether organized for profit or not for
profit, or a city, county, district, or any other political
subdivision, public entity, or agency of the state or federal
government.
(17) "Primary job" means a job that is:
(A) available at a company for which a majority of the products or
services of that company are ultimately exported to regional,
statewide, national, or international markets infusing new dollars
into the local economy; and
(B) included in one of the following sectors of the North American
Industry Classification System (NAICS):NAICS Sector # Description
111 Crop Production
112 Animal Production
113 Forestry and Logging
11411 Commercial Fishing
115 Support Activities for
Agriculture and Forestry
211-213 Mining
221 Utilities
311-339 Manufacturing
42 Wholesale Trade
48-49 Transportation and Warehousing
51 (excluding 512131 Information (excluding movie
and 512132) theaters and drive-in theaters)
523-525 Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities;
Insurance Carriers and Related
Activities; Funds, Trusts, and
Other Financial Vehicles
5413, 5415, 5416, Scientific Research and
5417, and 5419 Development Services
551 Management of Companies and
Enterprises
922140 Correctional Institutions
(18) "Corporate headquarters facilities" means buildings proposed
for construction or occupancy as the principal office for a
business enterprise's administrative and management services.
Sec. 2(2), (4), (10) amended by Acts 1987, 70th Leg., ch. 374, Sec.
6(b), eff. Sept. 1, 1987; Sec. 2(14) added by Acts 1987, 70th Leg.,
ch. 374, Sec. 6(c), eff. Sept. 1, 1987; Sec. 2(10) amended by Acts
1993, 73rd Leg., ch. 899, Sec. 1.06, eff. Aug. 30, 1993; Sec. 2(14)
amended by Acts 1993, 73rd Leg., ch. 1022, Sec. 1, eff. Sept. 1,
1993; Sec. 2(10) amended by Acts 1995, 74th Leg., ch. 985, Sec. 15,
eff. Sept. 1, 1995; Sec. 2(10) amended by Acts 1997, 75th Leg., ch.
353, Sec. 1, eff. Sept. 1, 1997; Sec. 2(7) to (9) amended by Acts
1999, 76th Leg., ch. 973, Sec. 1, eff. June 18, 1999; Sec. 2(10)
amended by Acts 1999, 76th Leg., ch. 296, Sec. 2, eff. May 29, 1999;
amended by Acts 1999, 76th Leg., ch. 865, Sec. 1, eff. Aug. 30,
1999; amended by Acts 1999, 76th Leg., ch. 973, Sec. 1, eff. June
18, 1999; amended by Acts 1999, 76th Leg., ch. 1458, Sec. 1, eff.
Sept. 1, 1999; Sec. 2(11) to (14) amended by Acts 1999, 76th Leg.,
ch. 973, Sec. 1, eff. June 18, 1999; Sec. 2(15) added by Acts 1999,
76th Leg., ch. 296, Sec. 2, eff. May 29, 1999; added by Acts 1999,
76th Leg., ch. 973, Sec. 1, eff. June 18, 1999; Sec. 2(4) amended by
Acts 2001, 77th Leg., ch. 483, Sec. 1, eff. Sept. 1, 2001; Sec.
2(11)(A) amended by Acts 2001, 77th Leg., ch. 850, Sec. 1, eff. June
14, 2001; Sec. 2(11)(A) amended by Acts 2003, 78th Leg., ch. 1132,
Sec. 1, eff. June 20, 2003; Sec. 2(11)(B), (C) repealed by Acts
2003, 78th Leg., ch. 1132, Sec. 13, eff. June 20, 2003; Sec. 2(17),
(18) added by Acts 2003, 78th Leg., ch. 1132, Sec. 2, eff. June 20,
2003.
Findings and Construction
Sec. 3. (a) It is hereby found, determined, and declared:
(1) that the present and prospective right to gainful employment
and general welfare of the people of this state require as a public
purpose the promotion and development of new and expanded business
enterprises and the promotion and development of job training:
Text of subsec. (a)(2) as amended by Acts 1999, 76th Leg., ch. 296,
Sec. 3
(2) that the existence, development, and expansion of business,
commerce, industry, and higher education are essential to the
economic growth of the state and to the full employment, welfare,
and prosperity of its citizens;
Text of subsec. (a)(2) as amended by Acts 1999, 76th Leg., ch. 865,
Sec. 2
(2) that the existence, development, and expansion of business,
commerce, industry, and job training are essential to the economic
growth of the state and to the full employment, welfare, and
prosperity of its citizens;
(3) that the assistance provided by industrial development
corporations in promoting higher education opportunities will
encourage and foster the development and diversification of the
economy of the state and the elimination of unemployment and
underemployment in the state;
(4) that the means and measures authorized by this Act and the
assistance provided in this Act, especially with respect to
financing, are in the public interest and serve a public purpose of
the state in promoting the welfare of the citizens of the state
economically by the securing and retaining of business enterprises
and the resulting maintenance of a higher level of employment,
economic activity, and stability;
(5) that community industrial development corporations in Texas
have themselves invested substantial funds in successful
industrial development projects and have experienced difficulty in
undertaking such additional projects by reason of the partial
inadequacy of their own funds or funds potentially available from
local subscription sources and by reason of limitations of local
financial institutions in providing additional and sufficiently
sizable first mortgage loans; and
(6) that communities in this state are at a critical disadvantage in
competing with communities in other states for the location or
expansion of such enterprises by virtue of the availability and
prevalent use in all other states of financing and other special
incentives; therefore, the issuance of revenue bonds by
corporations on behalf of political subdivisions of the state as
hereinafter provided for the promotion and development of new and
expanded business enterprises to provide and encourage employment
and the public welfare is hereby declared to be in the public
interest and a public purpose.
(b) This Act shall be construed in conformity with the intention of
the legislature herein expressed.
Sec. 3 amended by Acts 1987, 70th Leg., ch. 374, Sec. 6(d), eff.
Sept. 1, 1987; amended by Acts 1999, 76th Leg., ch. 296, Sec. 3,
eff. May 29, 1999; amended by Acts 1999, 76th Leg., ch. 865, Sec. 2,
eff. Aug. 30, 1999; Sec. 3(b) amended by Acts 2003, 78th Leg., ch.
1132, Sec. 3, eff. June 20, 2003.
Creation of Corporation; Texas Small Business Industrial
Development Corporation
Sec. 4. (a) Any number of natural persons, not less than three, each
of whom is at least 18 years of age and a qualified elector of the
unit may file with the governing body of a unit a written
application requesting that the unit authorize and approve creation
of a corporation to act on behalf of the unit. The governing body of
the unit may not charge a filing fee for the application. If the
governing body by appropriate resolution finds and determines that
it is advisable that the corporation be authorized and created and
approves the articles of incorporation proposed to be used in
organizing the corporation, then the articles of incorporation for
the corporation may be filed as hereinafter provided. A unit may
authorize and approve creation of one or more corporations,
provided that the resolution approving the creation of each
corporation shall specify the public purpose or purposes of the
unit which the corporation may further on behalf of the unit, which
purpose or purposes shall be limited to the promotion and
development of industrial and manufacturing enterprises to promote
and encourage employment and the public welfare. No corporation
may be formed unless the unit has properly adopted a resolution as
herein described.
(b) There is hereby created the Texas Small Business Industrial
Development Corporation which shall act on behalf of the state to
carry out the public purposes of this Act. The Texas Small Business
Industrial Development Corporation shall be considered to be a
corporation within the meaning of this Act, shall be organized and
governed in accordance with the provisions of this Act, and shall
have all of the powers, and shall be subject to all of the
limitations, provided for corporations by this Act, except as
otherwise provided by this section. For purposes of this Act, the
state shall be considered to be the unit under whose auspices the
Texas Small Business Industrial Development Corporation is
created. To the extent that the provisions of this section are
inconsistent with other provisions of this Act, the provisions of
this section shall control as to the existence, powers,
limitations, organization, administration, operation, and affairs
of the Texas Small Business Industrial Development Corporation.
(c) All bonds issued and delivered by the Texas Small Business
Industrial Development Corporation before September 1, 1987, and
all proceedings authorizing those bonds are validated, ratified,
confirmed, and approved in all respects, and they are
incontestable.
(d) The governor shall appoint the board of directors of the Texas
Small Business Industrial Development Corporation. The governor or
the governor's designee and the executive director of the Texas
Economic Development and Tourism Office serve as nonvoting ex
officio members of the board.
(e) A director, officer, employee, or member of the department
acting on behalf of the Texas Small Business Industrial Development
Corporation is not personally liable for damage, loss, or injury
resulting from the performance of the person's duties under this
Act or on any contract, commitment, or agreement executed on behalf
of the Texas Small Business Industrial Development Corporation
under this Act.
(f) All programs and expenditures of the Texas Small Business
Industrial Development Corporation must be approved on behalf of
the state by the Texas Economic Development Bank. Expenses incurred
by the Texas Small Business Industrial Development Corporation in
the operation and administration of its programs and affairs,
including expenditures for employees and program assistance or
development, shall be paid out of fees collected or revenues
generated under this Act.
(g) The revenues and funds of the Texas Small Business Industrial
Development Corporation shall be deposited with one or more
financial institutions chosen for that purpose by the board of
directors. Funds of the Texas Small Business Industrial
Development Corporation may not be used or made available for use by
the Texas Economic Development Bank except to reimburse the bank
for expenses it incurs in its official capacity on behalf of the
Texas Small Business Industrial Development Corporation.
(h) In addition to the powers provided for corporations by this Act,
the Texas Small Business Industrial Development Corporation may:
(A) make loans through the purchase of or participation in, and
pledge, hypothecate, negotiate, and sell, bonds, notes, and other
evidences of indebtedness incurred by users to finance projects
that represent a direct loan, grant, or loan participation, or the
repayment of which is totally or partially insured or otherwise
guaranteed, by the United States of America, by the state, or by any
agency, department, or instrumentality of either; and
(B) otherwise provide financing for users, either directly or
indirectly, in the manner that the Texas Small Business Industrial
Development Corporation determines to be necessary or convenient
for the performance of its public purposes, functions, and duties
under this Act.
(i) Notwithstanding any other provision of this Act, "project"
includes any use of amounts financed through the purchase by the
Texas Small Business Industrial Development Corporation of bonds,
notes, or other evidences of indebtedness of users under this
subsection if the uses are found by the board of directors of the
Texas Small Business Industrial Development Corporation to be
required or suitable for the promotion of economic development in
the state. Those findings may be based solely on a review by the
board of directors of the Texas Small Business Industrial
Development Corporation of the criteria used to determine
eligibility of a user for obtaining a direct loan, grant, loan
participation, insurance, or any other guarantee from the United
States of America, the state, or any agency or instrumentality of
either. Proceeds of bonds issued before September 1, 1987, may be
used to pay all or part of the costs of a project regardless of
whether the costs or project were within the definition of those
terms under the Texas Department of Commerce Act before that date,
or for any other purposes authorized by this Act.
(j) The Texas Small Business Industrial Development Corporation may
not issue bonds for any purpose after September 1, 1987.
Sec. 4(b) amended by Acts 1987, 70th Leg., ch. 374, Sec. 6(e), eff.
Sept. 1, 1987; Sec. 4(c) to (j) added by Acts 1987, 70th Leg., ch.
374, Sec. 6(f), eff. Sept. 1, 1987; Sec. 4(b), (d), (f), (g)
amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.62, eff. Sept. 1,
2003.
Cities located in counties with population of 500,000 or fewer or
with population of fewer than 50,000 in certain cases
Sec. 4A. (a) This section applies only to a city:
(1) located in a county with a population of 500,000 or fewer; or
(2) with a population of fewer than 50,000 that:
(A) is located in two or more counties, one of which has a
population of 500,000 or greater;
(B) is located within the territorial limits but has not elected to
become a part of a metropolitan rapid transit authority that has a
principal city with a population of less than 1.9 million with such
authority being created before January 1, 1980, under Chapter 141,
Acts of the 63rd Legislature, Regular Session, 1973 (Article 1118x,
Vernon's Texas Civil Statutes); or
(C) is located within the territorial limits but has not elected to
become a part of a metropolitan rapid transit authority that has a
principal city with a population of more than 750,000 with such
authority being created under Chapter 683, Acts of the 66th
Legislature, Regular Session, 1979 (Article 1118y, Vernon's Texas
Civil Statutes).
(b)(1) A city may create a corporation under this Act governed by
this section. The corporation has the powers and is subject to the
limitations of a corporation created under other provisions of this
Act. To the extent of a conflict between this section and another
provision of this Act, this section prevails. The articles of
incorporation of a corporation under this section must state that
the corporation is governed by this section. A city may not create
more than one corporation governed by this section. A corporation
created under this section may spend no more than 10 percent of the
corporate revenues for promotional purposes and may contract with
other existing private corporations to carry out industrial
development programs or objectives or to assist with the
development or operation of an economic development program or
objective consistent with the purposes and duties as set out in this
Act.
(2) Notwithstanding Subdivision (1), a corporation created under
this section may spend no more than 25 percent of the corporate
revenues for promotional purposes if the corporation was created by
a city:
(i) the municipal limits of which include two counties;
(ii) that has less than 24,250 population according to the 1990
federal census; and
(iii) any part of which is located within ten miles of a federal
military reservation.
(c) The board of directors of a corporation under this section
consists of five directors who are appointed by the governing body
of the city and who serve at the pleasure of the governing body. A
majority of the entire membership of the board constitutes a
quorum. The board shall conduct each of its meetings within the
boundaries of the city. The board shall appoint a president, a
secretary, and other officers of the corporation that the governing
body of the city considers necessary. The corporation's registered
agent must be an individual resident of the state and the
corporation's registered office must be within the boundaries of
the city.
(c-1) The costs of a publicly owned and operated project that is
purchased or constructed under this section include the maintenance
and operating costs of the project. The proceeds of taxes imposed
under this section may be used to pay the maintenance and operating
costs of a project, unless not later than the 60th day after the
date notice of this specific use of the tax proceeds is first
published, the governing body of the city receives a petition from
more than 10 percent of the registered voters of the city requesting
that an election be held before the tax proceeds may be used to pay
the maintenance and operating costs of a project.
(d) The city may levy a sales and use tax for the benefit of a
corporation under this section if the tax is authorized by a
majority of the qualified voters of the city voting at an election
called and held for that purpose. If the city adopts the tax, there
is imposed a tax on the receipts from the sale at retail of taxable
items within the city 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. The city may not adopt a rate that would result in a
combined rate of all sales and use taxes, including the tax under
this section, imposed by the city and other political subdivisions
of this state having territory in the city that exceeds two percent.
An election adopting a rate that exceeds the limit on the combined
rate has no effect. There is also imposed an excise tax on the use,
storage, or other consumption within the city of taxable items
purchased, leased, or rented from a retailer during the period that
the tax is effective within the city. The rate of the excise tax is
the same as the rate of the sales tax portion of the tax and is
applied to the sales price of the taxable items.
(e) The Municipal Sales and Use Tax Act (Chapter 321, Tax Code)
governs an election to authorize the imposition of the sales and use
tax under this section and governs the imposition, computation,
administration, governance, abolition, and use of the tax except as
inconsistent with this section. The tax imposed under this section
takes effect as provided by Section 321.102(a), Tax Code.
(f) On receipt of the proceeds of the sales and use tax imposed
under this section from the comptroller, the city shall deliver the
proceeds to the corporation to use in carrying out its functions.
Tax proceeds may be used to pay the principal of, interest on, and
other costs relating to the corporation's bonds, but neither the
bonds nor any instrument related to the bonds may give a bondholder
a right to demand payment from tax proceeds in excess of those
collected from the tax imposed by this section. Tax proceeds may
also be used to pay expenses incurred by the corporation under
Section 38 of this Act relating to job training.
(g) The corporation may not exercise the power of eminent domain
except by action of the governing body of the city that created the
corporation.
(h) Section 24 of this Act does not apply to a corporation under
this section.
(i) Except as provided by this subsection, the corporation may not
undertake a project the primary purpose of which is to provide
transportation facilities, solid waste disposal facilities, sewage
facilities, facilities for furnishing water to the general public,
or air or water pollution control facilities. However, the
corporation may provide those facilities to benefit property
acquired for a project having another primary purpose. The
corporation may undertake a project the primary purpose of which is
to provide:
(1) a general aviation business service airport that is an integral
part of an industrial park; or
(2) port-related facilities to support waterborne commerce.
(j) The corporation, a director of the corporation, the city
creating the corporation, a member of the governing body of the
city, or an employee of the corporation or city is not liable for
damages arising from the performance of a governmental function of
the corporation or city. For the purposes of the Texas Tort Claims
Act (Subchapter A, Chapter 101, Civil Practice and Remedies Code),
the corporation is a governmental unit and its actions are
governmental functions.
(k) On petition of 10 percent or more of the registered voters of
the city requesting an election on the dissolution of the
corporation, the governing body shall order an election on the
issue at the next available uniform election date that is not less
than 45 days after the date that the petition is filed. The
election must be conducted according to the applicable provisions
of the Election Code. The ballot for the election shall be printed
to provide for voting for or against the proposition: "Dissolution
of the __________ (name of the corporation)." If a majority of
voters voting on the issue approve the dissolution, the corporation
shall continue operations only as necessary to pay the principal of
and interest on its bonds and to meet obligations incurred before
the date of the election and, to the extent practicable, shall
dispose of its assets and apply the proceeds to satisfy those
obligations. When the last of the obligations is satisfied, any
remaining assets of the corporation shall be transferred to the
city, and the corporation is dissolved. A tax imposed under this
section may not be collected after the last day of the first
calendar quarter beginning after notification to the comptroller by
the corporation that the last of its obligations is satisfied.
(l) On approval of the governing body of each unit and corporation
involved, a corporation created under this Act that is not created
under this section may transfer all of its assets to a corporation
governed by this section and dissolve as provided by this Act.
(m) In an election to adopt the tax under this section, the ballot
shall be printed to provide for voting for or against the
proposition: "The adoption of a sales and use tax for the promotion
and development of new and expanded business enterprises at the
rate of __________ of one percent" (one-eighth, one-fourth,
three-eighths, or one-half to be inserted as appropriate).
(n) At an election called and held under Subsection (d) or (o) of
this section, the city may also allow the voters to vote on a ballot
proposition that limits the length of time that a sales and use tax
may be imposed. If a city elects to limit the period the sales and
use tax may be imposed, there shall be added to the end of the ballot
proposition prescribed by Subsection (m) of this section: "to be
imposed for __________ years" (the number of years to be inserted as
appropriate). The governing body of the city shall set the
expiration date of the proposed tax to occur on the appropriate
anniversary of the effective date of the tax. A sales and use tax
imposed for a limited period under this subsection expires on the
date set by the governing body under this section or on an earlier
date if, by a majority of the voters voting in an election held in
the city, the tax is repealed. If an earlier abolition election is
held, Sections 321.102(a) and 321.402(b), Tax Code, apply to the
date of repeal. A tax that is approved without a limit on its period
of imposition is effective until repealed by election. Before the
60th day before the date that a tax is to expire, the governing body
shall send a notice to the comptroller stating the expiration date
of the tax. Revenue collected after the expiration of the tax from
the imposition of the tax after its expiration date shall be
forwarded by the state to the governing body to be used to pay
current bonded indebtedness of the municipality. A municipality
that has imposed a tax under this section may not extend the period
of the tax's imposition or reimpose the tax unless the extension or
reimposition is authorized by a majority of the qualified voters of
the municipality voting in an election called and held for that
purpose. If a city reduces the rate of an additional sales and use
tax under Chapter 321, Tax Code, to impose a tax under this section
for a limited period as provided under this subsection, and does not
have an election to change the rate of the additional sales and use
tax before the expiration date of the tax under this section, the
rate of the additional sales and use tax under Section 321.101(b),
Tax Code, in the city returns to its previous rate in effect at the
time the tax imposed under this section was adopted on the
expiration date of the tax under this section without having to hold
an election under Chapter 321, Tax Code, to impose the increase in
the rate.
(o) In a city in which a sales and use tax for the benefit of a
corporation has been imposed under this section, in the same manner
and by the same procedure the city by majority vote of the qualified
voters of the city voting at an election called and held for the
purpose may reduce or increase the tax. The rate may be reduced in
one or more increments of one-eighth of one percent to a minimum of
one-eighth of one percent or increased in one or more increments of
one-eighth of one percent to a maximum of one-half of one percent.
On petition of 10 percent or more of the registered voters of the
city requesting an election on the increase or decrease of the tax
under this section, the governing body of the city shall order an
election on the issue. The ballot shall be printed in the same
manner as the ballot under Subsection (m) of this section.
(o-1) Notwithstanding Subsection (a), this subsection applies only
to a city that is located within the territorial limits of a
regional transportation authority and has been added to the
territory of the authority under Section 452.6025, Transportation
Code. Notwithstanding any other provision of this section, a tax
imposed by the city under this section is subject to reduction in
the manner prescribed by Section 452.6025, Transportation Code.
(p) A city that is authorized by this section to impose, reduce,
increase, or abolish the tax under this section may, at the same
time and on the same ballot, impose, reduce, increase, or abolish
the additional sales and use tax imposed under Section 321.101(b),
Tax Code, if the city is authorized by Chapter 321, Tax Code, to
impose, reduce, increase, or abolish the additional sales and use
tax. The city must follow, in relation to the imposition,
reduction, increase, or abolishment of the additional sales and use
tax imposed under Section 321.101(b), Tax Code, the procedures of
that chapter, except that in an election to impose, reduce,
increase, or abolish the tax under this section and the additional
sales and use tax the ballot shall be printed to provide for voting
for or against the proposition: "The adoption of a sales and use
tax within the city for the promotion and development of new and
expanded business enterprises at the rate of __________ of one
percent (one-eighth, one-fourth, three-eighths, or one-half to be
inserted as appropriate) and the adoption of an additional sales
and use tax within the city at the rate of __________ of one percent
to be used to reduce the property tax rate" (one-eighth,
one-fourth, three-eighths, or one-half to be inserted as
appropriate).
(q) A corporation under this section may not assume a debt or make
any expenditure to pay principal or interest on a debt if the debt
existed before the date the city created the corporation.
(r) At an election called or held under Subsection (d) or (o) of
this section, the city may also allow the voters to vote on a ballot
proposition that limits the use of the sales and use tax to a
specific project. If a city elects to limit the use to a specific
project, in the ballot proposition prescribed by Subsection (m) or
(p) a description of the project shall be substituted in place of
the words "new and expanded business enterprises." When the last of
its obligations for the specific project have been satisfied, the
corporation shall send a notice to the comptroller stating that the
sales and use tax imposed for the specific project may not be
collected after the last day of the first calendar quarter
beginning after the date of notification. A sales and use tax
imposed for a specific project under this subsection may not be
collected after the last day of the first calendar quarter
beginning after the date of the notification to the comptroller.
Revenue collected after the obligations for the specific project
have been satisfied shall be forwarded by the state to the governing
body to be used to pay current bonded indebtedness of the
municipality. A corporation that has been created to perform a
specific project under this subsection may retain its corporate
existence and perform other projects as may be approved by the
voters of the city under an election called and held under
Subsection (d) or (o) of this section.
(s)(1) A city that creates or has created a corporation governed by
this section may submit to the voters of the city, at a separate
election to be held on a uniform election date or at an election
held under another provision of this Act, including the election at
which the proposition to initially authorize the collection of a
sales and use tax for the benefit of the corporation is submitted, a
ballot proposition that authorizes the corporation to use the sales
and use tax, including any amount previously authorized and
collected, for a specific project or for a specific category of
projects, including a sports venue and related infrastructure, that
does not qualify under this section but qualifies under Section 4B
of this Act. Prior approval of a specific project at an election or
completion of a specific project approved at an election does not
prohibit a city from seeking voter approval of an additional
project or category of projects under this subsection to be funded
from the same sales and use tax.
(2) In the election to authorize the use of the sales or use tax for
a specific project or for a specific category of projects not
authorized under this section, including a sports venue and related
infrastructure, the project or category of projects must be clearly
described on the ballot so that a voter will be able to discern the
limits of the specific project or category of projects authorized
by the proposition. If maintenance and operating costs of an
otherwise authorized facility are to be paid from the sales or use
tax, the ballot language must clearly state that fact.
Text of subd. (3) as added by Acts 1997, 75th Leg., ch. 551, Sec. 2
(3) Before an election may be held under this subsection, a public
hearing shall be held in the city to inform the residents of the
city of the cost and impact of the project or category of projects.
At least 30 days before the date set for the hearing, a notice of the
date, time, place, and subject of the hearing shall be published in
a newspaper with general circulation in the city in which the
project is located. The notice shall be published on a weekly basis
until the date of the hearing.
Text of subd. (3) as added by Acts 1997, 75th Leg., ch. 958, Sec. 1
(3) Before an election may be held under this subsection, a public
hearing shall be held in the city to inform the residents of the
city of the cost and impact of the project or category of projects.
At least 30 days before the date set for the hearing, a notice of the
date, time, place, and subject of the hearing shall be published in
a newspaper with general circulation in the city in which the
project is located. The notice should be published on a weekly
basis until the date of the hearing.
(4) If a majority of the voters voting on the issue do not approve a
specific project or a specific category of projects at an election
under this subsection, another election may not be held on the same
project or category of projects before the first anniversary of the
date of the most recent election disapproving the project or
category of projects.
Text of subd. (5) as added by Acts 1997, 75th Leg., ch. 551, Sec. 2
(5) In this subsection:
(A) "Related infrastructure" has the meaning assigned by Section
334.001, Local Government Code.
(B) "Sports venue" means an arena, coliseum, stadium, or other type
of area or facility:
(i) that is primarily used or is planned for primary use for one or
more professional or amateur sports or athletics events; and
(ii) for which a fee for admission to the sports or athletics
events, other than occasional civic, charitable, or promotional
events, is charged or is planned to be charged.
Text of subd. (5) as added by Acts 1997, 75th Leg., ch. 958, Sec. 1
(5) Projects undertaken under this subsection are governed by the
provisions of this section including the provisions relating to the
authorization and expiration of any sales and use tax.
(t) The department, with the assistance of the Texas Commission on
Environmental Quality, may encourage the cleanup of contaminated
property by corporations created under this section through the use
of sales and use tax proceeds. A corporation created under this
section may use proceeds from the sales and use tax to undertake the
cleanup of contaminated property only if the use of tax proceeds for
that purpose is authorized by a majority of the qualified voters of
the city voting in an election called and held for that purpose.
The ballot in an election held under this subsection shall be
printed to provide for voting for or against the proposition: "The
use of sales and use tax proceeds for the cleanup of contaminated
property."
(u)(1) In this subsection:
(A) "Base taxable value" means the taxable value of property
located in the defined area of a project as of January 1 of the year
in which the agreement is entered into under this subsection.
(B) "Corresponding taxing unit" means another taxing unit of the
same type of political subdivision as a taxing unit that enters into
an agreement under this subsection.
(C) "Taxing unit" has the meaning assigned by Section 1.04, Tax
Code.
(2) Before entering into an agreement under this subsection, the
corporation undertaking the project must designate a defined area
that includes the territory where the project is to be located.
(3) A taxing unit may enter into an agreement with a corporation
created under this section to invest in a project that is undertaken
by the corporation and that is not located in the territory of the
taxing unit. A corporation may enter into an agreement under this
subsection with more than one taxing unit.
(4) An agreement entered into under this subsection shall state the
base taxable value of the property in the defined area of the
project.
(5) The agreement may provide that the taxing unit is entitled to
receive from the corporation, in exchange for the investment, an
amount equal to a specified percentage of the tax revenue from taxes
imposed by the corresponding taxing unit that taxes property
located in the defined area of the project on the taxable value of
the property in the defined area that exceeds the base taxable
value, for so long as the corresponding taxing unit imposes taxes on
that property.
(6) If a corporation enters into an agreement under this
subsection, the corporation shall enter into an agreement with a
corresponding taxing unit that taxes property located in the
defined area of the project to recover the amount paid by the
corporation to a taxing unit as provided by Subdivision (5).
(7) This subsection does not affect a taxing unit's authority to
grant a tax abatement.
(8) This subsection does not affect a corporation's authority to
invest in a project or recover its total investment by contract
under Section 23(a) of this Act.
Sec. 4A added by Acts 1989, 71st Leg., ch. 877, Sec. 2, eff. June 14,
1989. Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 1, eff. May 24,
1991. Sec. 4A(c) amended by Acts 1991, 72nd Leg., ch. 634, Sec. 1,
eff. June 16, 1991; Acts 1991, 72nd Leg., ch. 705, Sec. 36, eff.
Sept. 1, 1991; Sec. 4A(h) amended by and Sec. 4A(l) added by Acts
1991, 72nd Leg., ch. 634, Sec. 1, eff. June 16, 1991; Sec. 4A(b)
amended by Acts 1993, 73rd Leg., ch. 1001, Sec. 1, eff. Sept. 1,
1993; Sec. 4A(i) amended by Acts 1993, 73rd Leg., ch. 12, Sec. 3,
eff. March 25, 1993; amended by Acts 1993, 73rd Leg., ch. 1022,
Sec. 2, eff. Sept. 1, 1993; Sec. 4A(k) amended by Acts 1993, 73rd
Leg., ch. 1022, Sec. 2, eff. Sept. 1, 1993; Sec. 4A(l) repealed by
Acts 1993, 73rd Leg., ch. 1022, Sec. 4, eff. Sept. 1, 1993; Sec.
4A(n) amended by Acts 1993, 73rd Leg., ch. 12, Sec. 5, eff. March
25, 1993; amended by Acts 1993, 73rd Leg., ch. 1022, Sec. 2, eff.
Sept. 1, 1993; Sec. 4A(p), amended by Acts 1993, 73rd Leg., ch.
1031, Sec. 11, eff. Sept. 1, 1993; Sec. 4A(q), (r) added by Acts
1993, 73rd Leg., ch. 1022, Sec. 2, eff. Sept. 1, 1993; Sec. 4A(e)
amended by Acts 1995, 74th Leg., ch. 1000, Sec. 68, eff. Oct. 1,
1995; Sec. 4A(n) amended by Acts 1997, 75th Leg., ch. 749, Sec. 1,
eff. Sept. 1, 1997; Sec. 4A(s) added by Acts 1997, 75th Leg., ch.
551, Sec. 2, eff. Sept. 1, 1997; Sec. 4A(s) added by Acts 1997, 75th
Leg., ch. 958, Sec. 1, eff. Sept. 1, 1997; Sec. 4A(c-1) added by
Acts 1999, 76th Leg., ch. 1458, Sec. 2, eff. Sept. 1, 1999; Sec.
4A(f) amended by Acts 1999, 76th Leg., ch. 865, Sec. 3, eff. Aug.
30, 1999; Sec. 4A(a) amended by Acts 2001, 77th Leg., ch. 669, Sec.
161, eff. Sept. 1, 2001; Sec. 4A(b)(1) amended by Acts 2001, 77th
Leg., ch. 888, Sec. 1, eff. June 14, 2001; Sec. 4A(t) added by Acts
2001, 77th Leg., ch. 483, Sec. 2, eff. Sept. 1, 2001; Sec. 4A(u)
added by Acts 2003, 78th Leg., ch. 724, Sec. 1, eff. June 20, 2003;
Sec. 4A(o-1) added by Acts 2003, 78th Leg., ch. 915, Sec. 2, eff.
June 20, 2003; Sec. 4A(i) amended by Acts 2003, 78th Leg., ch.
1132, Sec. 4, eff. June 20, 2003; Sec. 4A(t) amended by Acts 2003,
78th Leg., ch. 1132, Sec. 5, eff. June 20, 2003.
Corporation in City Located in County With Population of 500,000 or
More, or 400,000 or More; Application of Section 4A
Sec. 4B. (a) In this section:
(1) "Eligible city" means a city:
(A) that is located in a county with a population of 500,000 or
more, according to the most recent federal decennial census and in
which the combined rate of all sales and use taxes imposed by the
city, the state, and other political subdivisions of the state
having territory in the city does not exceed 8.25 percent on the
date of any election held under or made applicable to this section;
(B) that has a population of 400,000 or more, according to the most
recent federal decennial census, and that is located in more than
one county, and in which the combined rate of all sales and use
taxes imposed by the city, the state, and other political
subdivisions of the state having territory in the city, including
taxes under this section, does not exceed 8. 25 percent; or
(C) to which Section 4A of this Act applies.
(2) "Project" means land, buildings, equipment, facilities,
expenditures, and improvements included in the definition of that
term under Section 2 of this Act, and includes job training as
provided by Section 38 of this Act. For purposes of this section,
the term includes recycling facilities, and land, buildings,
equipment, facilities, and improvements found by the board of
directors to:
(A) be required or suitable for use for professional and amateur
(including children's) sports, athletic, entertainment, tourist,
convention, and public park purposes and events, including
stadiums, ball parks, auditoriums, amphitheaters, concert halls,
parks and park facilities, open space improvements, museums,
exhibition facilities, and related store, restaurant, concession,
and automobile parking facilities, related area transportation
facilities, and related roads, streets, and water and sewer
facilities, and other related improvements that enhance any of
those items;
(B) promote or develop new or expanded business enterprises that
create or retain primary jobs, including a project to provide
public safety facilities, streets and roads, drainage and related
improvements, demolition of existing structures, general
municipally owned improvements, as well as any improvements or
facilities that are related to any of those projects and any other
project that the board in its discretion determines promotes or
develops new or expanded business enterprises that create or retain
primary jobs;
(C) be required or suitable for the promotion of development and
expansion of affordable housing, as defined by 42 U.S.C. Section
12745;
(D) be required or suitable for the development or improvement of
water supply facilities, including dams, transmission lines, well
field developments, and other water supply alternatives; or
(E) be required or suitable for the development and institution of
water conservation programs, including incentives to install
water-saving plumbing fixtures, educational programs, brush
control programs, and programs to replace malfunctioning or leaking
water lines and other water facilities.
(a-1) A corporation may undertake a project under this section
unless within 60 days after first publishing notice of a specific
project or type of general project the governing body of the city
receives a petition from more than 10 percent of the registered
voters of the city where the petition requests that an election be
held before that specific project or that general type of project is
undertaken. An election is not required to be held after the
submission of a petition if the qualified citizens of the city have
previously approved the undertaking of a specific project or that
general type of project at an election called for that purpose by
the governing body of the city or in conjunction with another
election required to be held under this section.
(a-2) The costs of a publicly owned and operated project that is
purchased or constructed under this section include the maintenance
and operating costs of the project, and the proceeds of taxes may be
used to pay the maintenance and operating costs of a project, unless
within 60 days after first publishing notice of this specific use of
the proceeds of the taxes the governing body of the city receives a
petition from more than 10 percent of the registered voters of the
city where the petition requests that an election be held before the
proceeds of taxes imposed under this section may be used to pay the
maintenance and operating costs of a project. An election is not
required to be held after the submission of a petition if the
qualified citizens of the city have previously approved that the
costs of a publicly owned and operated project purchased or
constructed under this section include the maintenance and
operating costs of the project and that the proceeds of taxes may be
used to pay the maintenance and operating costs of a project, at an
election called for that purpose by the governing body of the city
or in conjunction with another election required to be held under
this section. The election in this subsection shall not be required
in a municipality located in a county with a population in excess of
1.3 million that has held an election prior to February 1, 1993,
under this section and at which election the additional sales tax
was approved.
(a-3)(1) A city that creates or has created a corporation governed
by this section may submit to the voters of the city, at a separate
election to be held on a uniform election date or at an election
held under another provision of this Act, including the election at
which the proposition to initially authorize the collection of a
sales and use tax for the benefit of the corporation is submitted, a
ballot proposition that authorizes the corporation to use the sales
and use tax, including any amount previously authorized and
collected, for a specific sports venue project, including related
infrastructure, or for a specific category of sports venue
projects, including related infrastructure. Prior approval of a
specific sports venue project at an election or completion of a
specific sports venue project approved at an election does not
prohibit a city from seeking voter approval of an additional
project or category of projects under this subsection to be funded
from the same sales and use tax that is used to fund the previously
approved sports venue project. This subsection does not affect the
authority of a municipality to call an election under this section
to levy a sales and use tax for any purpose authorized by this
section after the sales and use tax described by this subsection is
no longer collected as provided by Subsection (i) of this section.
(2) In the election to authorize the use of the sales or use tax for
a specific sports venue project or for a specific category of sports
venue projects, the project or category of projects must be clearly
described on the ballot so that a voter will be able to discern the
limits of the specific project or category of projects authorized
by the proposition. If maintenance and operating costs of an
otherwise authorized facility are to be paid from the sales or use
tax, the ballot language must clearly state that fact.
(3) Before an election may be held under this subsection, a public
hearing shall be held in the city to inform the residents of the
city of the cost and impact of the project or category of projects.
At least 30 days before the date set for the hearing, a notice of the
date, time, place, and subject of the hearing shall be published in
a newspaper with general circulation in the city in which the
project is located. The notice shall be published on a weekly basis
until the date of the hearing.
(4) If a majority of the voters voting on the issue do not approve a
specific sports venue project or a specific category of sports
venue projects at an election under this subsection, another
election may not be held on the same project or category of projects
before the first anniversary of the date of the most recent election
disapproving the project or category of projects.
(a-4) In this section:
(1) "Related infrastructure" has the meaning assigned by Section
334.001, Local Government Code.
(2) "Sports venue" means an arena, coliseum, stadium, or other type
of area or facility that is primarily used or is planned for primary
use for one or more professional or amateur sports or athletics
events and for which a fee for admission to the sports or athletics
events, other than occasional civic, charitable, or promotional
events, is charged or is planned to be charged. The term does not
include an arena, coliseum, stadium, or other type of area or
facility that is or will be owned and operated by a state-supported
institution of higher education.
(a-5)(1) Notwithstanding any other provision of this section, a
corporation created under this section may use proceeds from the
sales and use tax to undertake a project described by Subsection
(a)(2)(D) or (E) of this section only if the use of tax proceeds for
that purpose is authorized by a majority of the qualified voters of
the city voting in an election called and held for that purpose.
The ballot in an election held under this subsection shall be
printed to provide for voting for or against the proposition: "The
use of sales and use tax proceeds for infrastructure relating to
__________ (insert water supply facilities or water conservation
programs, as appropriate)."
(2) An election held under Subdivision (1) of this subsection may be
authorized by the governing body of an eligible city subsequent to
an earlier election authorized under Subsection (d) of this
section.
(b) An eligible city may create a corporation under this Act
governed by this section. The corporation has the powers granted by
this section and by other sections of this Act and is subject to the
limitations of a corporation created under other provisions of this
Act. To the extent of a conflict between this section and another
provision of this Act, this section prevails. The articles of
incorporation of a corporation under this section must state that
the corporation is governed by this section and may include within
its name any words and phrases specified by the eligible city. An
eligible city may not create more than one corporation governed by
this section. A corporation created under this section may spend no
more than 10 percent of the corporate revenues for promotional
purposes and may contract with another existing private corporation
to carry out an industrial development program or objective or to
assist with the development or operation of an economic development
program or objective consistent with the purposes and duties
specified in this Act.
(c) The board of directors of a corporation under this section
consists of seven directors who are appointed by the governing body
of the eligible city for two-year terms of office. A director may
be removed by the governing body of the eligible city at any time
without cause. Each director of a corporation created by an
eligible city with a population of 20,000 or more must be a resident
of the eligible city. Each director of a corporation created by an
eligible city with a population of less than 20,000 must be a
resident of the eligible city, be a resident of the county in which
the major part of the area of the eligible city is located, or
reside at a place that is within 10 miles of the eligible city's
boundaries and is in a county bordering the county in which the
major part of the area of the eligible city is located. Three
directors shall be persons who are not employees, officers, or
members of the governing body of the eligible city. A majority of
the entire membership of the board is a quorum. The board shall
conduct all meetings within the boundaries of the eligible city.
The board shall appoint a president, a secretary, and other
officers of the corporation that the governing body of the eligible
city considers necessary. The corporation's registered agent must
be an individual resident of the state and the corporation's
registered office must be within the boundaries of the eligible
city.
(d) The governing body of an eligible city by ordinance may levy a
sales and use tax for the benefit of the corporation under this
section if the tax is authorized by a majority of the qualified
voters of the eligible city voting at an election called and held
for that purpose in accordance with Chapter 321, Tax Code. This
election requirement is satisfied and another election is not
required if the voters of the eligible city approved the levy and
collection of an additional one-half cent sales and use tax at an
election held before the effective date of this section under an
ordinance calling the election that was published in a newspaper of
general circulation within the eligible city at least 14 days in
advance of the election and that expressly stated that the election
was held in anticipation of the enactment of enabling and
implementing legislation without further elections. An election
described by this section and held before the effective date of this
section is validated as of the date on which the election occurred.
(e) The rate of a tax adopted under this section must be one-eighth,
one-fourth, three-eighths, or one-half of one percent. The ballot
proposition at the election held to adopt the tax must specify the
rate of the tax to be adopted. A corporation that holds an election
to reduce or abolish a tax imposed under Section 4A of this Act may
in the same or in a separate proposition on the same ballot adopt a
tax under this section. If an eligible city adopts the tax, a tax is
imposed on the receipts from the sale at retail of taxable items
within the eligible city at the rate approved at the election.
There is also imposed an excise tax on the use, storage, or other
consumption within the eligible city of tangible personal property
purchased, leased, or rented from a retailer during the period that
the tax is effective within the eligible city. The rate of the
excise tax is the same as the rate of the sales tax portion of the
tax and is applied to the sale price of the tangible personal
property.
(e-1) Notwithstanding any other provision of this section, if a
city dissolves a corporation created under Section 4A of this Act
and creates a corporation under this section, a person serving as a
director of the corporation created under Section 4A of this Act at
the time of dissolution may serve on the board of directors of the
corporation created under this section.
(f) Chapter 321, Tax Code, governs the imposition, computation,
administration, collection, and remittance of the tax except as
inconsistent with this section. The tax imposed under this section
takes effect as provided by Section 321.102(a), Tax Code. If,
however, an election is held under this section at the same time an
election is held to impose or change the rate of the additional
municipal sales and use tax, the tax under this section and the
imposition or change in rate of the additional municipal sales and
use tax take effect as provided by Section 321.102(b), Tax Code.
After the effective date of the taxes imposed under this section,
the adoption of a sales and use tax or the attempted adoption of a
sales and use tax by the eligible city or any other taxing
jurisdiction having territory in the city does not impair the taxes
imposed under this section.
(g) On receipt of the proceeds of the sales and use tax imposed
under this section from the comptroller, the eligible city shall
deliver the proceeds to the corporation. Tax proceeds may be used
to:
(1) pay the costs of projects of the types added to the definition
of that term by Subsection (a) of this section; or
(2) pay the principal of, interest on, and other costs relating to
bonds or other obligations issued by the corporation to pay the
costs of the projects or to refund bonds or other obligations issued
to pay the costs of projects.
(h) Bonds or other obligations having a maturity not longer than 30
years and issued to pay the costs of projects of the types added to
the definition of that term by Subsection (a) of this section may be
made payable from any source of funds available to the corporation,
including the proceeds of a sales and use tax imposed under this
section. The bonds or other obligations that by their terms are
payable from the tax may not be paid in whole or in part from any
property taxes raised or to be raised by the eligible city and are
not a debt of and do not give rise to a claim for payment against the
eligible city except as to sales and use tax revenue held by a city
and required under this section to be paid over to the corporation.
(i) A sales and use tax imposed under this section may not be
collected after the last day of the first calendar quarter
occurring after notification to the comptroller by the corporation
that all bonds or other obligations of the corporation that are
payable in whole or in part from the proceeds of the sales and use
tax under this section, including any refunding bonds or other
obligations, have been paid in full or the full amount of money,
exclusive of guaranteed interest, necessary to pay in full the
bonds and other obligations has been set aside in a trust account
dedicated to the payment of the bonds and other obligations.
(j) The corporation may exercise the power of eminent domain only on
approval of the action by the governing body of the eligible city.
The power must be exercised in accordance with and subject to the
laws applicable to the eligible city.
(k) The legislature finds for all constitutional and statutory
purposes that projects of the types added to the definition of that
term by Subsection (a) of this section are owned, used, and held for
public purposes for and on behalf of the eligible city
incorporating the corporation, and except as otherwise provided by
this subsection, Section 23(b) of this Act and Section 25.07(a),
Tax Code, are not applicable to leasehold or other possessory
interests granted by the corporation during the period projects are
owned by the corporation on behalf of the eligible city. Projects
are exempt from taxation under Section 11.11, Tax Code, for that
period. For a corporation governed by this section in which the
voters of the eligible city that created the corporation have not
authorized the levy of a sales and use tax for the benefit of the
corporation under Subsection (d) of this section, an ownership,
leasehold, or other possessory interest of a person other than the
corporation in real property constituting a project of the
corporation described by this subsection is subject to ad valorem
taxation under Section 25.07(a), Tax Code, except that an
ownership, leasehold, or other possessory interest of a person
other than the corporation in real property described by this
subsection that is created under an agreement entered into by the
corporation before September 1, 1999, is covered by the provisions
of this subsection governing ad valorem taxation of the ownership,
leasehold, or other possessory interest that were in effect on the
date on which the agreement was executed.
(l) Section 24 of this Act does not apply to a corporation under
this section.
(m) The corporation, a director of the corporation, the eligible
city creating the corporation, a member of the governing body of the
eligible city, or an employee of the corporation or eligible city is
not liable for damages arising from the performance of a
governmental function of the corporation or eligible city. For the
purposes of Chapter 101, Civil Practice and Remedies Code, the
corporation is a governmental unit and its actions are governmental
functions.
(n) Before expending funds to undertake a project, a corporation
under this section shall hold at least one public hearing on the
proposed project.
(n-1) This subsection applies only to a city that is located within
the territorial limits of a regional transportation authority that
has been added to the territory of the authority under Section
452.6025, Transportation Code. Notwithstanding any other
provision of this section, a tax imposed by the city under this
section is subject to reduction in the manner prescribed by Section
452.6025, Transportation Code.
(o)(1) The governing body of a city creating a corporation under
this section shall order an election on the dissolution of the
corporation on receipt of a petition requesting the election that
is signed by at least 10 percent of the registered voters of the
city. The election must be held on the first available uniform
election date that occurs on or after the 45th day after the date
the petition is filed with the city.
(2) At the election the ballot shall be printed to permit voting for
or against the proposition: "Dissolution of the __________ (name
of corporation)."
(3) If a majority of the votes cast are in favor of the dissolution,
the corporation shall continue operations only as necessary to meet
obligations the corporation incurred before the date of the
election, including paying the principal of and interest on bonds.
To the extent practicable, the corporation shall liquidate assets
of the corporation and apply the proceeds to satisfy the
corporation's obligations. After all of the obligations are
satisfied, any remaining assets of the corporation shall be
transferred to the city, and the corporation is dissolved. The city
shall promptly notify the comptroller and the secretary of state of
the date a corporation is dissolved under this subsection.
(4) A tax imposed under this section may not be collected after the
last day of the first calendar quarter that begins after the city
provides notice under Subdivision (3) of this section.
(5) If less than a majority of the votes cast at the election favor
the dissolution, Subdivisions (3) and (4) of this subsection have
no effect.
(p) The department, with the assistance of the Texas Commission on
Environmental Quality, may encourage the cleanup of contaminated
property by corporations created under this section through the use
of sales and use tax proceeds. Notwithstanding any other provision
of this section, a corporation created under this section may use
proceeds from the sales and use tax to undertake the cleanup of
contaminated property only if the use of tax proceeds for that
purpose is authorized by a majority of the qualified voters of the
city voting in an election called and held for that purpose. The
ballot in an election held under this subsection shall be printed to
provide for voting for or against the proposition: "The use of
sales and use tax proceeds for the cleanup of contaminated
property."
Sec. 4B added by Acts 1991, 72nd Leg., ch. 11, Sec. 2, eff. March 28,
1991; Sec. 4B(c) amended by Acts 1991, 72nd Leg., ch. 634, Sec. 2,
eff. June 16, 1991; Sec. 4B(a) amended by Acts 1993, 73rd Leg., ch.
1022, Sec. 3, eff. Sept. 1, 1993; Sec. 4B(a)(1) amended by Acts
1993, 73rd Leg., ch. 12, Sec. 1, eff. March 25, 1993; Sec. 4B(a)(2)
amended by Acts 1993, 73rd Leg., ch. 899, Sec. 1.07, eff. Aug. 30,
1993; Sec. 4B(a-1), (a-2) added by Acts 1993, 73rd Leg., ch. 1022,
Sec. 3, eff. Sept. 1, 1993; Sec. 4B(c) amended by Acts 1993, 73rd
Leg., ch. 12, Sec. 2, eff. March 25, 1993; Sec. 4B(e) amended by
Acts 1993, 73rd Leg., ch. 1022, Sec. 3, eff. Sept. 1, 1993; amended
by Acts 1993, 73rd Leg., ch. 1031, Sec. 12, eff. Sept. 1, 1993; Sec.
4B(f) amended by Acts 1993, 73rd Leg., ch. 12, Sec. 2, eff. March
25, 1993; Sec. 4B(n) added by Acts 1993, 73rd Leg., ch. 1022, Sec.
3, eff. Sept. 1, 1993; Sec. 4B(a)(1) amended by Acts 1995, 74th
Leg., ch. 1030, Sec. 1, eff. June 17, 1995; Sec. 4B(a)(1) amended
by Acts 1997, 75th Leg., ch. 85, Sec. 1, eff. Sept. 1, 1997; Sec.
4B(a)(2) amended by Acts 1997, 75th Leg., ch. 1237, Sec. 1, eff.
June 20, 1997; Sec. 4B(a-3), (a-4) added by Acts 1997, 75th Leg.,
ch. 551, Sec. 3, eff. Sept. 1, 1997; Sec. 4B(a)(1) amended by Acts
1999, 76th Leg., ch. 1458, Sec. 3, eff. Sept. 1, 1999; Sec.
4B(a)(2) amended by Acts 1999, 76th Leg., ch. 865, Sec. 4, eff. Aug.
30, 1999; Sec. 4B(c) amended by Acts 1999, 76th Leg., ch. 808, Sec.
1, eff. Sept. 1, 1999; Sec. 4B(e) amended by Acts 1999, 76th Leg.,
ch. 21, Sec. 1, eff. Sept. 1, 1999; amended by Acts 1999, 76th Leg.,
ch. 1467, Sec. 2.75, eff. Oct. 1, 1999; Sec. 4B(e-1) added by Acts
1999, 76th Leg., ch. 21, Sec. 1, eff. Sept. 1, 1999; Sec. 4B(k)
amended by Acts 1999, 76th Leg., ch. 1458, Sec. 4, eff. Sept. 1,
1999; Sec. 4B(o) added by Acts 1999, 76th Leg., ch. 21, Sec. 1, eff.
Sept. 1, 1999; Sec. 4B(a)(1) amended by Acts 2001, 77th Leg., ch.
309, Sec. 1, eff. May 23, 2001; Sec. 4B(a)(2) amended by Acts 2001,
77th Leg., ch. 1105, Sec. 1, eff. June 15, 2001; Sec. 4B(a-2)
amended by Acts 2001, 77th Leg., ch. 669, Sec. 163, eff. Sept. 1,
2001; Sec. 4B(a-3)(1) amended by Acts 2001, 77th Leg., ch. 1044,
Sec. 8, eff. Sept. 1, 2001; Sec. 4B(a-5) added by Acts 2001, 77th
Leg., ch. 1105, Sec. 2, eff. June 15, 2001; Sec. 4B(b) amended by
Acts 2001, 77th Leg., ch. 888, Sec. 2, eff. June 14, 2001; Sec.
4B(h) amended by Acts 2001, 77th Leg., ch. 1044, Sec. 9, eff. Sept.
1, 2001; Sec. 4B(p) added by Acts 2001, 77th Leg., ch. 483, Sec. 3,
eff. Sept. 1, 2001; Sec. 4B(n-1) added by Acts 2003, 78th Leg., ch.
915, Sec. 3, eff. June 20, 2003; Sec. 4B(a)(2) amended by Acts
2003, 78th Leg., ch. 1132, Sec. 6, eff. June 20, 2003; Sec. 4B(a-5)
amended by Acts 2003, 78th Leg., ch. 1132, Sec. 7, eff. June 20,
2003; Sec. 4B(c) amended by Acts 2003, 78th Leg., ch. 1132, Sec. 8,
eff. June 20, 2003; Sec. 4B(p) amended by Acts 2003, 78th Leg., ch.
1132, Sec. 9, eff. June 20, 2003.
Report to Comptroller
Sec. 4C. (a) Not later than February 1 of each year, the board of
directors of a corporation created under Section 4A or 4B of this
Act shall submit to the comptroller a report in the form required by
the comptroller.
(b) The reporting form shall not exceed one page in length and must
include:
(1) a statement of the corporation's primary economic development
objectives;
(2) a statement of the corporation's total revenues during the
preceding fiscal year;
(3) a statement of the corporation's total expenditures during the
preceding fiscal year;
(4) a statement of the corporation's total expenditures during the
preceding fiscal year in each of the following categories:
(A) administration;
(B) personnel;
(C) marketing or promotion;
(D) direct business incentives;
(E) job training;
(F) debt service;
(G) capital costs;
(H) affordable housing; and
(I) payments to taxing units, including school districts;
(5) a list of the corporation's capital assets, including land and
buildings; and
(6) any other information the comptroller requires to determine the
use of the sales and use tax imposed under Section 4A or 4B of this
Act to encourage economic development in this state.
(c) If a corporation fails to file a report in accordance with this
section or fails to include sufficient information in the report,
the comptroller shall provide to the corporation written notice of
this failure. The written notice must include information on how to
correct the failure.
(d) The comptroller may impose an administrative penalty of $200
against a corporation that does not correct the failure before the
31st day after the date the corporation receives the written notice
under Subsection (c) of this section.
(e) The comptroller by rule shall prescribe the procedures for the
imposition of an administrative penalty under this section. The
rules must protect the due process rights of a corporation.
(f) Not later than November 1 of each even-numbered year, the
comptroller shall submit to the legislature a report on the use of
the sales and use tax imposed under Sections 4A and 4B of this Act to
encourage economic development in this state.
(g) On request, the comptroller shall provide without charge a copy
of the report required by Subsection (f) of this section to a
corporation organized under Section 4A or 4B of this Act.
Sec. 4C added by Acts 1997, 75th Leg., ch. 1237, Sec. 2, eff. June
20, 1997; Sec. 4C(b) amended by Acts 1999, 76th Leg., ch. 865, Sec.
5, eff. Aug. 30, 1999.
Text of Sec. 4D as added by Acts 1999, 76th Leg., ch. 973, Sec. 2
County alliance corporations
Sec. 4D. (a) Two or more counties that are adjacent or are in close
proximity, as determined by the governing bodies of the counties
involved, may create a county alliance to authorize the creation of
a corporation. The county alliance is a single unit for the
purposes of this Act. The other provisions of this Act apply to the
county alliance and a corporation authorized by the county
alliance, except to the extent inconsistent with this section or
another provision of this Act that is expressly applicable to the
county alliance or corporation.
(b) The board of directors of a corporation authorized by a county
alliance under this section consists of members appointed by the
commissioners court of each county in the alliance. The board
consists of three members from each county if the alliance includes
10 or fewer counties or two members from each county if the alliance
includes more than 10 counties. A member of the board of directors
may not serve more than six years and may be removed at the will of
the appointing county. The member serves without compensation but
is entitled to reimbursement for expenses incurred in the
performance of the member's duties.
(c) A county may become a member of an established county alliance
that has authorized the creation of a corporation. To become a
member of an established county alliance:
(1) the commissioners court of the county wanting to join the
alliance must petition the board of directors of the established
county alliance corporation for admission;
(2) the board of directors of the county alliance corporation must
approve the admission of the petitioning county;
(3) the petitioning county must agree to abide by the bylaws of the
county alliance corporation;
(4) the petitioning county must pay a fee to the county alliance as
determined by the county alliance corporation's board of directors;
and
(5) the petitioning county must meet any other requirements
established by the county alliance corporation's board of
directors.
(d) If the county alliance corporation's board of directors
determines that sufficient provisions have been made to pay a
county alliance corporation's expenses, bonds, and other
obligations, any net earnings may be distributed among the counties
in the county alliance as a percentage of the per capita
contributions made by each of the counties during the existence of
the corporation.
(e) A county may leave a county alliance if all of the county's
obligations and entitlements in relation to the county alliance
corporation have been properly settled. The departing county may
not receive any funds, assets, or property of the county alliance
corporation until the dissolution of the corporation as provided
under Subsection (f). A county that leaves the county alliance is
entitled to receive a distribution as provided under Subsection (f)
that is reduced by one percent for each year the corporation
operated without the county's membership in the alliance.
(f) On dissolution of a corporation authorized by a county
alliance, any assets of the corporation remaining after all the
corporation's obligations have been met shall be distributed among
the counties in the county alliance as a percentage of the per
capita contributions made by each of the counties during the
existence of the corporation subject to Subsection (e).
(g) A county alliance corporation is not required to dissolve
because a county leaves the county alliance if at least two counties
remain in the county alliance.
Sec. 4D added by Acts 1999, 76th Leg., ch. 973, Sec. 2, eff. June 18,
1999.
Text of Sec. 4D as added by Acts 1999, 76th Leg., ch. 1537, Sec. 1
Text of section effective until September 1, 2003, or the secretary
of state receives articles of incorporation
Development corporation for spaceport facilities
Sec. 4D. (a) In this section:
(1) "Eligible entity" means a county or combination of
municipalities and counties.
(2) "Project" means land, buildings, equipment, facilities, and
improvements included in the definition of that term under Section
2 of this Act, including land, buildings, equipment, facilities,
and improvements found by the board of directors to:
(A) be required or suitable for use for the promotion or development
of a spaceport, related area transportation facilities, automobile
parking facilities, and related roads, streets, and water and sewer
facilities, and other related improvements that enhance any of
those items;
(B) promote or develop new or expanded business enterprises
relating to a spaceport;
(C) promote or develop educational programs and job training
relating to a spaceport; or
(D) be required or suitable for the promotion of development and
expansion of affordable housing, as defined by 42 U.S.C. Section
12745, relating to a spaceport.
(3) "Spacecraft" includes a satellite.
(4) "Spaceport" includes:
(A) an area intended to be used to launch or land a spacecraft;
(B) a spaceport building or facility located on an area appurtenant
to a launching or landing area;
(C) an area appurtenant to a launching or landing area that is
intended for use for a spaceport building or facility; and
(D) a right-of-way related to a launching or landing area,
building, facility, or other area that is appurtenant to a
launching or landing area.
(b) To the extent of a conflict between this section and another
provision of this Act, this section prevails.
(c) An eligible entity may create a corporation under this Act
governed by this section. The corporation has the powers granted by
this section and by other sections of this Act and is subject to the
limitations of a corporation created under other provisions of this
Act. The articles of incorporation of a corporation under this
section must state that the corporation is governed by this section
and may include within its name any words and phrases specified by
the eligible entity.
(d) A corporation is governed by a board of seven directors. For a
corporation created by a single county, the commissioners court of
the county shall appoint the directors. If more than one political
subdivision creates the corporation the board must be appointed by
written agreement between the governing bodies of those political
subdivisions. Each director serves a two-year term that expires
June 1 of each odd-numbered year except that the terms of three or
four of the initial directors may be for a one-year term so that the
terms may be staggered for future two-year terms. A board shall
elect a presiding officer from among its members. A board by rule
may provide for the election of other officers. The board shall
meet at least once every three months and at the call of the
presiding officer or a majority of the directors.
(e) A corporation may:
(1) acquire, convey, mortgage, or otherwise dispose of property;
and
(2) exercise the power of eminent domain to acquire property for a
spaceport, including the power to:
(A) acquire fee title in land condemned;
(B) relocate or modify a railroad, utility line, pipeline, or other
facility that may interfere with a spaceport; or
(C) impose a reasonable restriction on using the surface of the
property for mineral development if the corporation does not own
the mineral rights.
(f) A corporation may not acquire property or issue a bond unless a
site in the territory of the eligible entity that created the
corporation has been designated as the site for a spaceport.
(g) Before exercising the power of eminent domain under this
section, a corporation must obtain a resolution approving the
proposed condemnation from the governing body of a county or
municipality in which the property is located. For purposes of this
section, territory in the extraterritorial jurisdiction of a
municipality is considered to be in the jurisdiction of the
municipality. The exercise of the power of eminent domain by the
corporation is governed by Chapter 21, Property Code.
(h) A corporation may make an agreement with or accept a donation,
grant, or loan from any person. A corporation may enter into an
interlocal contract under Chapter 791, Government Code. A
corporation may not contract to operate a spaceport unless the
agreement provides that the person contracting with the corporation
assumes the corporation's liability for a cause of action arising
from environmental damage.
(i) A corporation may sue and be sued.
(j) A board of directors by rule may develop a plan for higher
education courses and degree programs to be offered at or near a
spaceport. Those courses and degree programs must be related to the
purposes of this section. The Texas Aerospace Commission and the
Texas Higher Education Coordinating Board shall cooperate with and
advise a board of directors in carrying out this subsection.
(k) A corporation may:
(1) impose a charge for using a spaceport or a service the
corporation provides;
(2) issue a bond as provided by this section;
(3) borrow money;
(4) loan money to fund a spaceport; and
(5) invest money under its control in an investment permitted by
Chapter 2256, Government Code.
(l) A corporation's property, income, and operations are exempt
from taxes imposed by the state or a political subdivision of the
state. In lieu of taxes, a corporation shall make a payment to each
political subdivision of the state in which land owned by the
corporation is located in an amount equal to the ad valorem taxes
that would be paid on that land if the land were privately owned.
Tangible personal property, such as a spacecraft or other property
necessary to launch the spacecraft, is not taxable under Section
11.01, Tax Code, if the property is located in the spaceport.
Chapter 151, Tax Code, does not apply to tangible personal property
purchased by a person for use in a spaceport.
(m) A corporation may issue bonds. The bonds are not an obligation
or a pledge of the faith and credit of the state, an eligible
entity, or any other political subdivision of the state. A bond
issued under this section must:
(1) be payable solely from the revenue of a spaceport developed by
the corporation issuing the bond;
(2) mature not later than 50 years after its date of issuance;
(3) state on its face that the bond is not an obligation of the State
of Texas or a political subdivision of the state; and
(4) be approved by the governing body of each entity that created
the corporation.
(n) Section 24 of this Act does not apply to a corporation created
under this section.
(o) This section expires on September 1, 2003, unless the secretary
of state has received articles of incorporation from a corporation
created under this section before that date.
Sec. 4D added by Acts 1999, 76th Leg., ch. 1537, Sec. 1, eff. June
18, 1999.
Development Corporation for Spaceport Facilities
Sec. 4E. (a) In this section:
(1) "Eligible entity" means any county or combination of
municipalities and counties.
(2) "Project" means land, buildings, equipment, facilities, and
improvements included in the definition of that term under Section
2 of this Act, including land, buildings, equipment, facilities,
and improvements found by the board of directors to:
(A) be required or suitable for use for the promotion or development
of a spaceport, related area transportation facilities, automobile
parking facilities, and related roads, streets, and water and sewer
facilities, and other related improvements that enhance any of
those items;
(B) promote or develop new or expanded business enterprises
relating to a spaceport;
(C) promote or develop educational programs and job training in
connection with a spaceport;
(D) be required or suitable for the promotion of development and
expansion of affordable housing, as defined by 42 U.S.C. Section
12745, in connection with a spaceport.
(3) "Spacecraft" includes a satellite.
(4) "Spaceport" includes:
(A) an area intended to be used to launch or land a spacecraft;
(B) a spaceport building or facility located on an area appurtenant
to a launching or landing area;
(C) an area appurtenant to a launching or landing area that is
intended for use for a spaceport building or facility; and
(D) a right-of-way related to a launching or landing area, building
facility, or other area that is appurtenant to a launching or
landing area.
(b) An eligible entity may create a corporation under this Act
governed by this section. The corporation has the powers granted by
this section and by other sections of this Act and is subject to the
limitations of a corporation created under other provisions of this
Act. To the extent of a conflict between this section and another
provision of this Act, this section prevails. The articles of
incorporation of a corporation under this section must state that
the corporation is governed by this section and may include within
its name any words and phrases specified by the eligible entity.
(c) A corporation may:
(1) acquire, convey, mortgage, or otherwise dispose of property;
and
(2) exercise the power of eminent domain to acquire property for a
spaceport, including the power to:
(A) acquire fee title in land condemned;
(B) relocate or modify a railroad, utility line, pipeline, or other
facility that may interfere with a spaceport; or
(C) impose a reasonable restriction on using the surface of the
property for mineral development if the corporation does not own
the mineral rights.
(d) A corporation may not issue a bond or acquire property unless a
site in the territory of the eligible entity that established the
corporation has been designated as the site for a spaceport.
(e) Before exercising the power of eminent domain under this
section, a corporation must obtain a resolution approving the
proposed condemnation from the governing body of a county or
municipality in which the property is located. For purposes of this
section, territory in the extraterritorial jurisdiction of a
municipality is considered to be in the jurisdiction of the
municipality. The exercise of the power of eminent domain by the
corporation is governed by Chapter 21, Property Code.
(f) A corporation may make an agreement with or accept a donation,
grant, or loan from any person. A corporation may enter into an
interlocal contract under Chapter 791, Government Code. A
corporation may not contract to operate a spaceport unless the
agreement provides that the person contracting with the corporation
must assume the corporation's liability for a cause of action
arising from environmental damage. A corporation may sue and be
sued.
(g) A corporation is governed by a board of seven directors. For a
corporation established by a single county, the commissioners court
of the county shall appoint the directors. If more than one public
entity creates the corporation the board must be appointed by
written agreement between the governing bodies of those entities.
Each director serves a two-year term that expires June 1 of each
odd-numbered year except that the terms of three or four of the
initial directors may be for a one-year term so that the terms can
be staggered for future two-year terms. A board shall elect a
presiding officer from among its members. A board by rule may
provide for the election of other officers. The board shall meet at
least once every three months and at the call of the presiding
officer or a majority of the directors.
(h) A board by rule may develop a plan for higher education courses
and degree programs to be offered at or near a spaceport. These
planned courses and degree programs must be related to the purposes
of this chapter. The Texas Aerospace Commission and the Texas
Higher Education Coordinating Board shall cooperate with and advise
a board in carrying out this section.
(i) A corporation may:
(1) impose a charge for using a spaceport or a service the
corporation provides;
(2) issue a bond as provided by this section;
(3) borrow money;
(4) loan money to fund a spaceport; and
(5) invest money under its control in an investment permitted by
Chapter 2256, Government Code.
(j) A corporation's property, income, and operations are exempt
from taxes imposed by the state or a political subdivision of the
state. In lieu of taxes, a corporation shall make a payment to each
political subdivision of the state in an amount equal to the ad
valorem taxes that would be paid on the land of the corporation if
the land were privately owned. Tangible personal property such as a
spacecraft or other property necessary to launch the spacecraft is
not taxable under Section 11.01, Tax Code, if it is located in the
spaceport. Chapter 151, Tax Code, does not apply to tangible
personal property purchased by a person for use in a spaceport.
(k) A corporation may issue bonds. The bonds are not an obligation
or a pledge of the faith and credit of the state, a sponsoring
entity or other political subdivision or agency of the state. A
bond issued under this section must:
(1) be payable solely from the revenue of a spaceport developed by
the corporation issuing the bond;
(2) mature not later than 50 years after its date of issuance;
(3) state on its face that the bond is not an obligation of the State
of Texas or a political subdivision of the state, other than the
corporation that issued the bond; and
(4) be approved by the governing body of each entity that
established the corporation.
(l) Section 24 of this Act does not apply to a corporation under
this section.
Sec. 4E added by Acts 1999, 76th Leg., ch. 1458, Sec. 5, eff. Sept.
1, 1999.
Form of corporation
Sec. 5. The corporation shall be a nonmember, nonstock corporation.
Articles of incorporation
Sec. 6. The articles of incorporation shall set forth:
(1) the name of the corporation;
(2) a statement that the corporation is a nonprofit corporation;
(3) the period of duration which may be perpetual;
(4) the specific purpose or purposes for which the corporation is
organized and may issue bonds on behalf of the unit;
(5) that the corporation has no members and is a nonstock
corporation;
(6) any provision not inconsistent with law, including any
provision which under this Act is required or permitted to be set
forth in the bylaws, for the regulation of the internal affairs of
the corporation;
(7) the street address of its initial registered office and the name
of its initial registered agent at such street address;
(8) the number of directors constituting the initial board of
directors and the names and addresses of the persons who are to
serve as the initial directors;
(9) the name and street address of each incorporator; and
(10) a recital that the unit has specifically authorized the
corporation by resolution to act on its behalf to further the public
purpose or purposes stated in the resolution and in the articles of
incorporation and has approved the articles of incorporation.
Certificate of Incorporation
Sec. 7. (a) Triplicate originals of the articles of incorporation
shall be delivered to the secretary of state. If the secretary of
state finds that the articles of incorporation conform to the
requirements of this Act, he shall:
(1) endorse on each original the word "Filed" and the month, day,
and year of the filing thereof;
(2) file one of such originals in his office; and
(3) issue two certificates of incorporation to each of which he
shall affix one of such originals.
(b) A certificate of incorporation together with an original of the
articles of incorporation affixed thereto by the secretary of state
shall be delivered to the incorporators or their representatives
and to the governing body of the unit under whose auspices the
corporation was created. A certificate of incorporation granted to
a county alliance corporation and the original of the articles of
incorporation that is required to be delivered under this
subsection to the governing body of the county alliance under whose
auspices the corporation was created shall be delivered to the
commissioners court of any county in the county alliance and that
county shall provide photocopies of the certificate of
incorporation and the articles of incorporation to each other
member of the county alliance.
(c) Upon the issuance of the certificate of incorporation, the
corporate existence shall begin. After the issuance of the
certificate of incorporation, the incorporation of the corporation
shall be incontestable for any cause, and such certificate of
incorporation shall be conclusive evidence that all conditions
precedent required to be performed by the incorporators and by the
unit have been complied with and that the corporation has been
incorporated under this Act.
Sec. 7(a) amended by Acts 1989, 71st Leg., ch. 877, Sec. 3, eff.
June 14, 1989; Sec. 7(b) amended by Acts 1999, 76th Leg., ch. 973,
Sec. 3, eff. June 18, 1999.
Registered office and agent
Sec. 8. Each corporation shall have and continuously maintain in
this state:
(1) a registered office which may be, but need not be, the same as
its principal office; and
(2) a registered agent, which agent may be an individual resident in
this state whose business office is identical with such registered
office, or a domestic corporation, whether for profit or not for
profit, or a foreign corporation, whether for profit or not for
profit, authorized to transact business or to conduct its affairs
in this state which has a principal or business office identical
with such registered office.
Change of registered office or agent
Sec. 9. (a) A corporation may change its registered office or change
its registered agent or both upon filing in the office of the
secretary of state a statement setting forth:
(1) the name of the corporation;
(2) the post-office address of its then registered office;
(3) if the post-office address of its registered office is to be
changed, the post-office address to which the registered office is
to be changed;
(4) the name of its then registered agent;
(5) if its registered agent is to be changed, the name of its
successor registered agent;
(6) that the post-office address of its registered office and the
post-office address of the business office of its registered agent
as changed will be identical; and
(7) that such change was authorized by its board of directors or by
an officer of the corporation so authorized by the board of
directors.
(b) Duplicate originals of such statement shall be executed by the
corporation by its president or vice-president and verified by him
and delivered to the secretary of state. If the secretary of state
finds that such statement conforms to the requirements of this Act,
he shall, when a fee of $25 has been paid:
(1) endorse on each of such originals the word "Filed" and the
month, day, and year of the filing thereof;
(2) file one of such originals in his office; and
(3) return the other original to the corporation or its
representative.
(c) Upon such filing, the change of address of the registered office
or the appointment of a new registered agent or both, as the case
may be, shall become effective.
(d) Any registered agent of a corporation may resign:
(1) by giving written notice to the corporation at its last known
address; and
(2) by giving written notice in triplicate to the secretary of state
within 10 days after mailing or delivery of said notice to the
corporation.
Such notice shall include the last known address of the corporation
and shall include the statement that written notice of resignation
has been given to the corporation and the date thereof. Upon
compliance with the requirements as to written notice, the
appointment of such agent shall terminate upon the expiration of 30
days after receipt of such notice by the secretary of state.
(e) If the secretary of state finds that such written notice
conforms to the provisions of this Act, he shall:
(1) endorse on each of such originals the word "Filed" and the
month, day, and year of the filing thereof;
(2) file one of such originals in his office;
(3) return one original to such resigning registered agent; and
(4) return one original to the corporation at the last known address
of the corporation as shown in such written notice.
Service of process on president or vice-president; service on
secretary of state
Sec. 10. (a) The president and all vice-presidents of the
corporation and the registered agent of the corporation shall be
agents of such corporation upon whom any process, notice, or demand
required or permitted by law to be served upon the corporation may
be served.
(b) Whenever a corporation shall fail to appoint or maintain a
registered agent in this state or whenever its registered agent
cannot with reasonable diligence be found at the registered office,
then the secretary of state shall be an agent of such corporation
upon whom any such process, notice, or demand may be served.
Service on the secretary of state of any process, notice, or demand
shall be made by delivering to and leaving with him or with the
assistant secretary of state or with any clerk having charge of the
corporation department of his office duplicate copies of such
process, notice, or demand. In the event any such process, notice,
or demand is served on the secretary of state, he shall immediately
cause one of the copies thereof to be forwarded by registered mail,
addressed to the corporation at its registered office. Any service
so had on the secretary of state shall be returnable in not less
than 30 days.
(c) The secretary of state shall keep a record of all processes,
notices, and demands served upon him under this article and shall
record therein the time of such service and his action with
reference thereto.
Board of directors
Sec. 11. (a) The corporation shall have a board of directors in
which all powers of the corporation shall be vested and which shall
consist of any number of directors, not less than three, each of
whom shall be appointed by the governing body of the unit under
whose auspices the corporation was created for a term of no more
than six years, and each of whom shall be removable by the unit for
cause or at will. The directors shall serve as such without
compensation except that they shall be reimbursed for their actual
expenses incurred in the performance of their duties hereunder.
(b) The board of directors is subject to the open meetings act,
Chapter 271, Acts of the 60th Legislature, Regular Session, 1967,
as amended (Article 6252-17, Vernon's Texas Civil Statutes).
Organizational meeting of board
Sec. 12. After the issuance of the certificate of incorporation, an
organizational meeting of the board of directors named in the
articles of incorporation shall be held within this state for the
purpose of adopting bylaws, electing officers, and for such other
purposes as may come before the meeting. The incorporators calling
the meeting shall give at least three days' notice thereof by mail
to each director named in the articles of incorporation, which
notice shall state the time and place of the meeting.
Adoption and approval of initial bylaws
Sec. 13. The initial bylaws of a corporation shall be adopted by its
board of directors and approved by resolution of the governing body
of the unit under whose auspices the corporation was created.
Quorum; actions of majority at meeting; action without meeting
Sec. 14. (a) A quorum for the transaction of business by the board
of directors shall be whichever is less:
(1) a majority of the number of directors fixed by the bylaws or in
the absence of a bylaw fixing the number of directors a majority of
the number of directors stated in the articles of incorporation; or
(2) any number, not less than three, fixed as a quorum by the
articles of incorporation or the bylaws.
(b) The act of the majority of the directors present at a meeting at
which a quorum is present shall be the act of the board of
directors, unless the act of a greater number is required by the
articles of incorporation or the bylaws.
(c) Any action required by this Act to be taken at a meeting of the
directors of a corporation or any action which may be taken at a
meeting of the directors may be taken without a meeting if a consent
in writing, setting forth the action to be taken, shall be signed by
all of the directors. Such consent shall have the same force and
effect as a unanimous vote and may be stated as such in any articles
or document filed with the secretary of state under this Act.
Application of Open Records Act
Sec. 14A. The board of directors is subject to the open records act,
Chapter 424, Acts of the 63rd Legislature, Regular Session, 1973,
as amended (Article 6252-17a, Vernon's Texas Civil Statutes).
Indemnification of directors and officers; notice of meetings;
waiver of notice
Sec. 15. (a) The corporation shall have the power to indemnify any
director or officer or former director or officer of the
corporation for expenses and costs (including attorneys' fees)
actually and necessarily incurred by him in connection with any
claim asserted against him by action in court or otherwise by reason
of his being or having been such director or officer, except in
relation to matters as to which he shall have been guilty of
negligence or misconduct in respect of the matter in which
indemnity is sought.
(b) If the corporation has not fully indemnified him, the court in
the proceeding in which any claim against such director or officer
has been asserted or any court having the requisite jurisdiction of
an action instituted by such director or officer on his claim for
indemnity may assess indemnity against the corporation, its
receiver, or trustee for the amount paid by such director or officer
(including attorneys' fees) in satisfaction of any judgment or in
compromise of any such claim (exclusive in either case of any amount
paid to the corporation), actually and necessarily incurred by him
in connection therewith to the extent that the court shall deem
reasonable and equitable; provided, nevertheless, that indemnity
may be assessed under this section only if the court finds that the
person indemnified was not guilty of negligence or misconduct in
respect of the matter in which indemnity is sought.
(c) Regular meetings of the board of directors may be held within
the state with or without notice as prescribed in the bylaws.
Special meetings of the board of directors shall be held upon such
notice as is prescribed in the bylaws. Attendance of a director at
a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened. Neither the business to
be transacted at nor the purpose of any regular or special meeting
of the board of directors need be specified in the notice or waiver
of notice of such meeting, unless required by the bylaws.
(d) Whenever any notice is required to be given to any member or
director of a corporation under the provisions of this Act or under
the provisions of the articles of incorporation or bylaws of the
corporation, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Officers
Sec. 16. The officers of a corporation shall consist of a president,
one or more vice-presidents, a secretary, a treasurer, and such
other officers and assistant officers as may be deemed necessary,
each of whom shall be elected or appointed at such time and in such
manner and for such terms not exceeding three years as may be
prescribed in the articles of incorporation or the bylaws. In the
absence of any such provisions, all officers shall be elected or
appointed annually by the board of directors. One person may hold
more than one office, except that the president may not hold the
office of secretary.
Amendment of articles
Sec. 17. (a) The articles of incorporation may at any time and from
time to time be amended, provided that the board of directors files
with the governing body of the unit under whose auspices the
corporation was created a written application requesting that the
unit approve such amendment to the articles of incorporation,
specifying in such application the amendment or amendments proposed
to be made. If the governing body by appropriate resolution finds
and determines that it is advisable that the proposed amendment be
made, authorizes the same to be made, and approves the form of the
proposed amendment, the board of directors shall proceed
