CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT
CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 379A.001. SHORT TITLE. This chapter may be cited as the
Better Jobs Act.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.002. FINDINGS AND PURPOSES. (a) The legislature
finds that:
(1) it is an appropriate role for a municipality to foster
economic opportunity, job generation, and capital investment by
promoting a favorable business climate, preparing the workforce
for productive employment, and supporting infrastructure
development;
(2) while some municipalities choose to meet that role through
the creation of economic development zones and reinvestment
zones, the core root of all economic development is a competent
and qualified workforce; and
(3) the programs designed to create a competent and qualified
workforce are essential both to the economic growth and vitality
of many municipalities in this state and to the elimination of
unemployment and underemployment in those municipalities.
(b) The programs authorized by this chapter are in the public
interest, promote the economic welfare of this state, and serve
the state public purpose of developing and diversifying the
economy of this state and eliminating unemployment and
underemployment in this state.
(c) This chapter shall be liberally construed in conformity with
the findings and purposes stated in this section.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.003. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of a municipal
development corporation.
(2) "Corporation" means a municipal development corporation
created under this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.004. APPLICATION OF NON-PROFIT CORPORATION ACT. A
corporation created under this chapter is governed by the Texas
Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
Texas Civil Statutes), except to the extent inconsistent with
this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
SUBCHAPTER B. CREATION OF CORPORATION
Sec. 379A.011. CREATION. The governing body of a municipality
may create a municipal development corporation under this
chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.012. ARTICLES OF INCORPORATION. The articles of
incorporation of the corporation must state that the corporation
is governed by this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.013. NUMBER OF CORPORATIONS. A municipality may not
create more than one corporation under this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.014. ADOPTION AND APPROVAL OF BYLAWS. The initial
bylaws of a corporation shall be adopted by its board of
directors and approved by resolution of the governing body of the
municipality that created the corporation, and any subsequent
changes made to the bylaws must be approved by the governing body
of the municipality that created the corporation.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.015. PERFORMANCE REVIEW AND ASSESSMENT. The governing
body of the municipality that creates the corporation shall
undertake a performance review and assessment of the corporation
once every five years. Based on the performance review and
assessment, the governing body of the municipality shall issue a
finding of whether the corporation is satisfying the objectives
set forth in this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
SUBCHAPTER C. BOARD OF DIRECTORS
Sec. 379A.021. COMPOSITION AND APPOINTMENT OF BOARD. (a)
Except as provided by Subsection (g), the corporation is governed
by a board of 5, 7, 9, 11, 13, or 15 directors, as determined by
the governing body of the municipality that created the
corporation. The number of directors may not exceed the number of
members, including the mayor, constituting the governing body of
the municipality.
(b) The governing body of the municipality that created the
corporation shall appoint the members of the board.
(c) Directors serve staggered two-year terms, with as near as
possible to one-half of the members' terms expiring each year. A
director serves at the will of the governing body of the
municipality that created the corporation. Successor directors
are appointed in the same manner as the original appointees.
(d) Each director of a corporation created by a municipality
that has a population of 20,000 or more must be a resident of the
municipality. Each director of a corporation created by a
municipality that has a population of less than 20,000 must be a
resident of the municipality or the county in which the major
part of the area of the municipality is located.
(e) A person is disqualified from serving as a director if the
person is an employee, officer, or member of the governing body
of the municipality that created the corporation.
(f) A director may not have a personal interest in a contract
executed by the corporation.
(g) In a municipality that has a population of more than one
million and that creates a corporation under this chapter, the
board of the corporation is composed of persons appointed to the
board as required by this subsection. The governing body of the
municipality shall appoint one director to the board of the
corporation from each district that elects a member to the
governing body of the municipality.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.022. COMPENSATION. A board member is not entitled to
compensation, but is entitled to reimbursement for actual and
necessary expenses incurred in serving as a director.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.023. MEETINGS. The board shall conduct its meetings
in the municipality that created the corporation.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.024. OFFICERS. The board shall appoint from its
members a presiding officer, a secretary, and other officers of
the corporation that the governing body of the municipality that
created the corporation considers necessary.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.025. ADOPTION AND APPROVAL OF BUDGET; REVIEW OF
CORPORATE FINANCES. (a) The board shall prepare an annual
budget for the corporation. To be effective, the budget must be
approved by the board and presented to and approved by the
governing body of the municipality that created the corporation.
The corporation may not make any expenditure authorized by this
chapter until the budget has been approved as provided by this
section. An amendment of the budget must be approved in the same
manner as the budget.
(b) The governing body of the municipality that created the
corporation may amend the corporation's budget with the approval
of at least two-thirds of the members of the governing body.
(c) The budget presented to the governing body of the
municipality that created the corporation must provide a detailed
description of the proposed expenditures for the corporation's
fiscal year, including expenditures for each program authorized
by Subchapter D.
(d) The board shall annually prepare and present financial
statements from the preceding fiscal year to the governing body
of the municipality that created the corporation.
(e) The governing body of the municipality that created the
corporation is entitled, at all times, to access to the books and
records of the corporation.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
SUBCHAPTER D. POWERS OF CORPORATION
Sec. 379A.051. PROGRAMS. (a) A corporation may develop and
implement programs for:
(1) job training, including long-term job training and
in-training support service grants;
(2) early childhood development that prepare each child to enter
school and make each child ready to learn after completing the
program and that provide educational services that must include
services designed to enable a child to:
(A) develop phonemic, print, and numeracy awareness, including
the ability to:
(i) recognize that letters of the alphabet are a special
category of visual graphics that can be individually named;
(ii) recognize a word as a unit of print;
(iii) identify at least 10 letters of the alphabet; and
(iv) associate sounds with written words;
(B) understand and use language to communicate for various
purposes;
(C) understand and use an increasingly complex and varied
vocabulary;
(D) develop and demonstrate an appreciation of books; and
(E) progress toward mastery of the English language, if the
child's primary language is a language other than English;
(3) after-school programs for primary and secondary schools;
(4) the provision of funding to accredited postsecondary
educational institutions, including public and private junior
colleges, public and private institutions of higher education,
and public and private technical institutions, to be used to
award scholarships;
(5) the promotion of literacy; and
(6) any other undertaking that the board determines will
directly facilitate the development of a skilled workforce.
(b) A corporation may accept donated property, may develop or
use land, buildings, equipment, facilities, and other
improvements in connection with a program described by Subsection
(a), or may dispose of property or an interest in property under
terms determined by the corporation.
(c) A municipality may contract with a community nonprofit
organization that sponsors long-term job training and related
support services.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.052. GENERAL POWERS OF CORPORATION. The corporation
may:
(1) own or operate a program authorized by this chapter;
(2) perform any act necessary to the full exercise of the
corporation's powers;
(3) accept a grant or loan from a:
(A) department or agency of the United States;
(B) department, agency, or political subdivision of this state;
or
(C) public or private person;
(4) employ any necessary personnel, who shall be employees of
the municipality;
(5) adopt rules to govern the operation of the corporation and
its employees and property; and
(6) contract or enter into a memorandum of understanding or a
similar agreement with a public or private person, including
local workforce development boards or any political subdivision,
in connection with a program authorized by this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.053. NATURE OF CORPORATE PROPERTY. (a) The
legislature finds for all constitutional and statutory purposes
that the corporation owns, uses, and holds its property for
public purposes.
(b) Section 25.07(a), Tax Code, does not apply to a leasehold or
other possessory interest granted by the corporation.
(c) Property owned by the corporation is exempt from taxation
under Section 11.11, Tax Code, while the corporation owns the
property.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.054. OPEN RECORDS AND MEETINGS. The board is treated
as a governmental body for the purposes of Chapters 551 and 552,
Government Code.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.055. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In
providing funds to an accredited postsecondary educational
institution to be used for scholarships as authorized by Section
379A.051, the corporation by agreement with the institution shall
ensure that:
(1) the funds are distributed to individuals as scholarships
connected with the institution; and
(2) no more than a maximum amount, as set by the corporation, of
the funds are spent on administering the award of the
scholarship.
(b) An accredited postsecondary educational institution
receiving the funds for scholarships shall develop, in
consultation with the corporation, a plan for awarding
scholarships that will have the goal of having an eventual
beneficial effect on the economic growth and vitality of and the
elimination of unemployment and underemployment in the
municipality that created the corporation and that will ensure
that the recipient:
(1) meets financial need requirements as defined by the
corporation;
(2) is enrolled in an undergraduate degree or certificate
program;
(3) is enrolled for at least three-fourths of a full course load
for an undergraduate student, as determined by the corporation;
(4) makes satisfactory academic progress toward an undergraduate
degree or certificate; and
(5) complies with any additional nonacademic requirement adopted
by the corporation.
(c) If the municipality that created the corporation has
established an education partnership composed of community-based
organizations, school districts, public or private sector
entities, or postsecondary institutions for the purpose of
distributing scholarships to students of local schools, the
corporation may provide funds to the education partnership to
enable the partnership to award scholarships to directly
facilitate the development of a skilled workforce.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
SUBCHAPTER E. SALES AND USE TAX
Sec. 379A.081. SALES AND USE TAX. (a) A municipality may levy
a sales and use tax for the benefit of the corporation if the tax
is authorized by a majority of the voters of the municipality
voting at an election called for that purpose.
(b) The ballot for an election to impose the tax shall be
printed to permit voting for or against the proposition:
"Adoption of a sales and use tax at the rate of ____ of one
percent (insert one-eighth, one-fourth, three-eighths, or
one-half, as appropriate) for the purpose of financing authorized
programs of the ____ Municipal Development Corporation (insert
the name of the corporation)."
(c) The adoption of the tax may be limited on the ballot to any
specific program, or the tax may be adopted with general language
permitting the use of the tax for any purposes authorized by this
chapter.
(d) If a sales and use tax is levied, it may be adopted for a
maximum of 20 years, but may then be reauthorized, subject to a
payment of indebtedness. The tax may be authorized for a shorter
period of time or limited to the time necessary to pay any
indebtedness.
(e) The rate of a tax adopted under this section must be
one-eighth, one-fourth, three-eighths, or one-half of one
percent. A municipality may not adopt a sales and use tax under
this chapter if the adoption of the tax under this chapter would
result in a combined tax rate of all local sales and use taxes of
more than two percent in any location in the municipality.
(f) Chapter 321, Tax Code, governs a municipality's imposition,
computation, administration, collection, and remittance of a tax
authorized by this section except as inconsistent with this
chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A
municipality that has adopted a sales and use tax under this
chapter at a rate of less than one-half of one percent may
increase or decrease the rate of the tax if the increase or
decrease is approved by a majority of the voters of the
municipality voting at an election called and held for that
purpose.
(b) The tax may be increased or decreased under this section in
one or more increments of one-eighth of one percent, but a
maximum of one-half of one percent is permitted.
(c) The ballot for an election to increase or decrease the tax
shall be printed to permit voting for or against the proposition:
"The ________ (increase or decrease, as appropriate) of a sales
and use tax to the rate of ____ of one percent (insert
one-eighth, one-fourth, three-eighths, or one-half, as
appropriate) for the purpose of financing authorized programs of
the ________ Municipal Development Corporation (insert the name
of the corporation)."
(d) Notwithstanding Subsections (a)-(c), in a municipality that
is located within the territorial limits of a regional
transportation authority and was added to the authority under
Section 452.6025, Transportation Code, a sales and use tax
imposed by the municipality under this subchapter is subject to
reduction in the manner prescribed by that section.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001. Amended by Acts 2003, 78th Leg., ch. 915, Sec. 5, eff. June
20, 2003.
Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality
adopts the tax, a tax is imposed on the receipts from the sale at
retail of taxable items in the municipality at the rate approved
at the election, and an excise tax is imposed on the use,
storage, or other consumption in the municipality of tangible
personal property purchased, leased, or rented from a retailer
during the period that the tax is effective in the municipality.
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.
(b) The adoption of the tax or the change of the tax rate takes
effect on the first day of the first calendar quarter occurring
after the expiration of the first complete quarter occurring
after the date the comptroller receives a notice of the results
of the election adopting, increasing, or decreasing the tax.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
SUBCHAPTER F. REPORT TO COMPTROLLER
Sec. 379A.101. REPORT REQUIRED. (a) Not later than February 1
of each year, the board of directors of the corporation shall
submit to the comptroller a report in the form required by the
comptroller.
(b) The reporting form may not exceed one page in length and
must include:
(1) a statement of the corporation's primary 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 for the corporation's personnel;
(F) debt service;
(G) capital costs;
(H) programs authorized by this chapter; 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 this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE PENALTY.
(a) If the corporation fails to file a report in accordance with
this subchapter or fails to include sufficient information in the
report, the comptroller shall provide to the corporation a
written notice of the failure. The written notice must include
information on how to correct the failure.
(b) The comptroller may impose an administrative penalty against
the corporation if the corporation does not correct the failure
before the 31st day after the date the corporation receives the
written notice under Subsection (a). The amount of the penalty is
$200 a day for each day the filing of the report is delinquent.
(c) 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 the corporation.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.
Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE. (a) 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 this chapter.
(b) On request, the comptroller shall provide without charge a
copy of the report required by Subsection (a) to the corporation
created under this chapter.
Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,
2001.