82R22002 TJB-F
By: Paxton H.B. No. 3140
Substitute the following for H.B. No. 3140:
By: Vo C.S.H.B. No. 3140
A BILL TO BE ENTITLED
AN ACT
relating to the authority of certain municipalities to create
economic development programs and provide loans or grants for those
programs; providing authority to issue bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1509, Government Code, is amended by
adding Subchapter F to read as follows:
SUBCHAPTER F. REVENUE BONDS FOR ECONOMIC DEVELOPMENT PROGRAMS
Sec. 1509.251. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only to a municipality located in a county with a
population of 750,000 or more that is adjacent to a county that
borders Oklahoma.
Sec. 1509.252. PUBLIC PURPOSE. This subchapter provides
for the creation of one or more programs authorized under Section
52-a, Article III, Texas Constitution, including the following
public purposes:
(1) the development and diversification of the economy
of this state;
(2) the elimination of unemployment or
underemployment in this state; and
(3) the development or expansion of commerce in this
state.
Sec. 1509.253. ECONOMIC DEVELOPMENT PROGRAM; LOANS AND
GRANTS. (a) A municipality may establish and provide for the
administration of one or more programs for loans and grants of
money, including the proceeds of revenue bonds authorized under
this subchapter, to a private entity for use in the promotion of new
manufacturing, industrial, retail, commercial, multifamily
residential, or other business activity or the expansion of that
business activity, including a project for purposes of that
promotion or expansion.
(b) To accomplish a purpose under Section 1509.252, a
municipality may, under the terms and by the methods the
municipality may determine:
(1) acquire land; and
(2) construct or acquire a building or other facility
for the purpose of selling or leasing the land, building, or other
facility to a private entity receiving a loan or grant under this
section.
Sec. 1509.254. AUTHORITY TO ISSUE REVENUE BONDS. (a) A
municipality may issue and sell revenue bonds to finance an action
under Section 1509.253 taken to accomplish a public purpose under
Section 1509.252.
(b) Bonds issued under this subchapter are not general
obligations of the municipality if no tax revenue or other general
revenue of the municipality is pledged to the repayment of the
bonds.
Sec. 1509.255. PROGRAM AGREEMENT REQUIRED. (a) A
municipality may not loan or grant money under this subchapter to a
private entity for a project or activity authorized under Section
1509.253 unless the municipality enters into a program agreement
with the entity.
(b) A program agreement under this section must include:
(1) the terms under which the municipality will loan
or grant the money to the entity;
(2) a provision requiring that a revenue bond issued
by the municipality under this subchapter:
(A) is secured by the credit of the private
entity, by funds, revenue, or assets pledged by one or more
investors for the project, or by a combination of both;
(B) is additionally secured by an encumbrance or
mortgage on any real or personal property acquired, constructed, or
improved with the proceeds of the revenue bond; and
(C) is the obligation of the private entity and
not of the municipality if no municipal revenue is pledged for
repayment of the bonds;
(3) a description of and the amount of the capital
investment that will be made by the entity in this state for the
project or activity;
(4) a schedule of the number and types of jobs that
will be created or retained as a result of the project or activity;
(5) a provision requiring repayment of the loan or
grant or other penalty to be imposed on the entity if the entity
does not meet the job creation or other requirements specified in
the program agreement;
(6) the estimated increase in tax revenue from all
sources to the municipality as a result of the project or activity,
calculated by the municipality;
(7) the designated area where the project or activity
will be located; and
(8) a provision prohibiting the entity from using a
loan or grant for:
(A) a project or activity involving a gambling,
gaming, or adult entertainment enterprise or facility; or
(B) an expenditure for which reporting is
required under Chapter 305.
(c) A municipality may enter into not more than two program
agreements.
(d) A municipality may not enter into a program agreement
with an entity after December 31, 2015.
(e) A program agreement is subject to Chapter 552.
Sec. 1509.256. REVENUE BOND PAYMENTS. (a) Revenue bonds
issued by a municipality under this subchapter may be payable from
and secured by pledging:
(1) all or part of revenue received by the
municipality from a loan made as provided by Section 1509.253;
(2) a portion of revenue collected by the municipality
under Section 321.101(a), Tax Code, not to exceed the lesser of:
(A) one percent of the revenue collected by the
municipality; or
(B) one-half of the revenue collected by the
municipality from the area designated in the applicable program
agreement;
(3) all or part of revenue authorized for the payment
of bonds under Section 351.102(a), Tax Code;
(4) all or part of revenue from the sale or lease of
all or part of the land, building, or other facility financed by the
bonds; or
(5) any combination of the revenue described by
Subdivisions (1)-(4).
(b) A municipality may provide that the revenue pledged to
the bonds issued by the municipality is limited to the revenue
collected from a designated area within the municipality or from a
designated facility.
Sec. 1509.257. ADDITIONAL SECURITY. (a) Bonds issued
under this subchapter must be additionally secured by an
encumbrance or mortgage on any real or personal property acquired,
constructed, or improved with proceeds of bonds or the proceeds of a
loan or grant made from proceeds of bonds.
(b) Bonds issued by a municipality under this subchapter may
be additionally secured by a pledge of any portion of a grant, a
donation, or revenue, or income received or to be received from the
United States or any other public or private source, other than the
municipality itself.
Sec. 1509.258. CONTENTS OF ORDINANCE, ORDER, OR RESOLUTION
AUTHORIZING BONDS. In an ordinance, order, or resolution
authorizing the issuance of bonds under this subchapter, the
governing body of a municipality may:
(1) provide for the deposit and accounting of money;
(2) provide for the establishment and maintenance of
an interest and sinking fund, a reserve fund, or other funds
relating to the bonds or a project funded with bond proceeds; and
(3) make additional covenants relating to the bonds,
the pledged revenue, or the operation and maintenance of any land,
building, or other facility the revenue of which is pledged for bond
payments.
Sec. 1509.259. USE OF BOND PROCEEDS. Proceeds of bonds
issued under this subchapter may be used to:
(1) pay interest on the bonds while the project or
facility is being acquired, constructed, or improved and for the
year after it is acquired, constructed, or improved;
(2) finance other funds relating to the bonds,
including debt service reserve and contingency; and
(3) pay the cost or expense of the issuance of the
bonds.
Sec. 1509.260. MATURITY. Bonds issued under this
subchapter must mature not later than 40 years after the date the
bonds are issued.
Sec. 1509.261. APPLICATION OF OTHER LAW. The provisions of
Chapter 252, Local Government Code, regarding notice, competitive
bids, and the right to referendum do not apply to a municipality
issuing bonds under this subchapter.
Sec. 1509.262. CONFLICT OR INCONSISTENCY WITH OTHER LAW.
To the extent of a conflict or inconsistency between this
subchapter and another law, this subchapter controls.
Sec. 1509.263. CONSTRUCTION OF SUBCHAPTER; CORRECTION OF
INVALID PROCEDURES. (a) This subchapter may not be construed or
interpreted to violate either the constitution of this state or of
the United States, and this subchapter does not authorize an act
that violates those constitutions.
(b) If a court finds that any provision of this subchapter
violates the constitution of this state or of the United States:
(1) a municipality may establish an alternative
procedure that conforms with the constitution; and
(2) the validity of any other provision of this
subchapter is not affected.
SECTION 2. Section 321.506, Tax Code, is amended to read as
follows:
Sec. 321.506. USE OF TAX REVENUE BY MUNICIPALITY. Except as
provided by Sections [Section] 321.507 and 321.5071, the money
received by a municipality under this chapter is for the use and
benefit of the municipality and may be used for any purpose for
which the general funds of the municipality may be used, except that
a municipality may not pledge the revenue received under this
chapter to the payment of bonds or other indebtedness.
SECTION 3. Subchapter F, Chapter 321, Tax Code, is amended
by adding Section 321.5071 to read as follows:
Sec. 321.5071. USE OF TAX REVENUE BY CERTAIN MUNICIPALITIES
FOR BONDS FOR ECONOMIC DEVELOPMENT PROGRAMS. A municipality to
which Subchapter F, Chapter 1509, Government Code, applies may use
money received by the municipality under this chapter to provide
for the payment, in the manner provided by that subchapter, of the
principal of or interest on bonds issued by the municipality as
authorized by that subchapter.
SECTION 4. Section 351.102, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) A municipality to which Subchapter F, Chapter 1509,
Government Code, applies may use money received by the municipality
under this chapter to provide for the payment, in the manner
provided by that subchapter, of the principal of or interest on
bonds issued by the municipality as authorized by that subchapter.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.