CHAPTER 501. PROVISIONS GOVERNING DEVELOPMENT CORPORATIONS
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE C1. ADDITIONAL PLANNING AND DEVELOPMENT PROVISIONS
APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT
CHAPTER 501. PROVISIONS GOVERNING DEVELOPMENT CORPORATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 501.001. SHORT TITLE. This subtitle may be cited as the
Development Corporation Act.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.002. DEFINITIONS. In this subtitle:
(1) "Authorizing unit" means the unit that authorizes the
creation of a corporation under this subtitle.
(2) "Board of directors" means the board of directors of a
corporation.
(3) "Bonds" includes evidences of indebtedness, including bonds
and notes.
(4) "Corporate headquarters facilities" means buildings proposed
for construction or occupancy as the principal office for a
business enterprise's administrative and management services.
(5) "Corporation" means a corporation organized under this
subtitle.
(6) "Cost," with respect to a project, has the meaning assigned
by Section 501.152.
(7) "County alliance" means two or more counties that jointly
authorize the creation of a corporation under this subtitle.
(8) "District" means a conservation and reclamation district
established under Section 59, Article XVI, Texas Constitution.
(9) "Economic development office" means the Texas Economic
Development and Tourism Office within the office of the governor.
(10) "Governing body" means the commissioners court of a county
or the governing body of a municipality or district.
(11) "Institution of higher education" has the meaning assigned
by Section 61.003, Education Code.
(12) "Primary job" means:
(A) a job that is:
(i) 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
(ii) 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 and 512132)
Information (excluding motion picture theaters and drive-in
motion picture 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, 5417, and 5419
Architectural, Engineering, and Related Services; Computer
System Design and Related Services; Management, Scientific,
and Technical Consulting Services; Scientific Research and
Development Services; Other Professional, Scientific, and
Technical Services
551
Management of Companies and Enterprises
56142
Telephone Call Centers
922140
Correctional Institutions; or
(B) a job that is included in North American Industry
Classification System (NAICS) sector number 928110, National
Security, for the corresponding index entries for Armed Forces,
Army, Navy, Air Force, Marine Corps, and Military Bases.
(13) "Project" means a project specified as such under
Subchapter C.
(14) "Resolution" means a resolution, order, ordinance, or other
official action by the governing body of a unit.
(15) "Type A corporation" means a corporation governed by
Chapter 504.
(16) "Type B corporation" means a corporation governed by
Chapter 505.
(17) "Unit" means a municipality, county, or district that may
create and use a corporation under this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.003. WHO MAY BE USER. The following may be a user
under this subtitle:
(1) an individual, a partnership, a corporation, or any other
private entity organized for profit or not for profit; or
(2) a municipality, county, district, other political
subdivision, public entity, or agency of this state or the
federal government.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.004. LEGISLATIVE FINDINGS; CONSTRUCTION OF SUBTITLE.
(a) The legislature finds that:
(1) the present and prospective right to gainful employment and
the general welfare of the people of this state require as a
public purpose the promotion and development of new and expanded
business enterprises and of job training;
(2) the existence, development, and expansion of business,
commerce, industry, higher education, and job training are
essential to the economic growth of this state and to the full
employment, welfare, and prosperity of residents of this state;
(3) the assistance provided by corporations in promoting higher
education opportunities encourages and fosters the development
and diversification of the economy of this state and the
elimination of unemployment and underemployment in this state;
(4) the means authorized by this subtitle and the assistance
provided by this subtitle, especially with respect to financing,
are in the public interest and serve a public purpose of this
state in promoting the welfare of the residents of this state
economically by securing and retaining business enterprises and
as a result maintaining a higher level of employment, economic
activity, and stability;
(5) community industrial development corporations in this state
have invested substantial money in successful industrial
development projects and have experienced difficulty in
undertaking additional industrial development projects because of
the partial inadequacy of the community industrial development
corporations' money or money potentially available from local
subscription sources and the limitations of local financial
institutions in providing additional and sufficiently large first
mortgage loans; and
(6) communities in this state have been at a critical
disadvantage in competing with communities in other states for
the location or expansion of business enterprises because of the
availability and prevalent use in all other states of financing
and other special incentives, and, for that reason, the issuance
of revenue bonds under this subtitle by a corporation on behalf
of political subdivisions of this state for the promotion and
development of new and expanded business enterprises to provide
and encourage employment and the public welfare is in the public
interest and is a public purpose.
(b) This subtitle shall be construed in conformity with the
intention of the legislature expressed in this section.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.005. ADOPTION OF ALTERNATE PROCEDURE. If a court holds
that a procedure under this subtitle violates the federal or
state constitution, a corporation by resolution may provide an
alternate procedure that conforms to the constitution.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.006. USE OF CORPORATION TO FINANCE PROJECT. A unit may
use a corporation to issue bonds on the unit's behalf to finance
the cost of a project, including a project in a federally
designated empowerment zone or enterprise community or in an
enterprise zone designated under Chapter 2303, Government Code,
to promote and develop new and expanded business enterprises for
the promotion and encouragement of employment and the public
welfare.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.007. LENDING CREDIT OR GRANTING PUBLIC MONEY. (a)
Except as provided by Subsection (b), a unit may not lend its
credit or grant public money or another thing of value in aid of
a corporation.
(b) A municipality may grant public money to a corporation under
a contract authorized by Section 380.002.
(c) The grants, loans, expenditures, and tax exemptions
authorized by this subtitle in connection with a project and
authorized by a corporation in accordance with this subtitle
constitute the making of loans or grants of public money or
constitute other actions authorized by Section 52-a, Article III,
Texas Constitution.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 15.011(a), eff. September 1, 2009.
Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION. A corporation
may not incur a financial obligation that cannot be paid from:
(1) bond proceeds;
(2) revenue realized from the lease or sale of a project;
(3) revenue realized from a loan made by the corporation to
wholly or partly finance or refinance a project; or
(4) money granted under a contract with a municipality under
Section 380.002.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.009. POLICE POWERS NOT AFFECTED. This subtitle does
not deprive this state or a governmental subdivision of this
state of its police powers over a corporation's property and does
not impair any police power over the property that is otherwise
provided by law to any official or agency of this state or its
governmental subdivisions.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.010. DELEGATION OF UNIT'S SOVEREIGN POWERS PROHIBITED.
A unit may not delegate to a corporation any of the unit's
attributes of sovereignty, including the power to tax, the power
of eminent domain, and the police power.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.011. REFERENCE TO ARTICLES OF INCORPORATION OR
CERTIFICATE OF FORMATION. (a) With respect to a corporation
created under the Development Corporation Act of 1979 (Article
5190.6, Vernon's Texas Civil Statutes) before January 1, 2006, a
reference in any law of this state or in the corporation's
governing documents to "articles of incorporation" means, for
purposes of this subtitle, the corporation's certificate of
formation.
(b) With respect to a corporation that is created under the
Development Corporation Act of 1979 (Article 5190.6, Vernon's
Texas Civil Statutes) before January 1, 2006, and continues to
operate under articles of incorporation, a reference in this
subtitle or any other law of this state or in the corporation's
governing documents to "certificate of formation" means the
corporation's articles of incorporation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION
Sec. 501.051. AUTHORITY TO CREATE. (a) Three or more
individuals who are qualified voters of a unit may file with the
unit's governing body a written application requesting the unit
to authorize creation of a corporation to act on behalf of the
unit. The governing body may not charge a filing fee for the
application.
(b) A corporation may be created only if the governing body of
the unit by resolution:
(1) determines that the creation of the corporation is
advisable; and
(2) approves the certificate of formation proposed to be used in
organizing the corporation.
(c) A unit may authorize the creation of one or more
corporations if the resolution authorizing the creation of each
corporation specifies the public purpose of the unit to be
furthered by the corporation. The specified public purpose must
be limited to the promotion and development under this subtitle
of enterprises to promote and encourage employment and the public
welfare.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.052. NONMEMBER, NONSTOCK FORM OF CORPORATION. A
corporation is a nonmember, nonstock corporation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.053. CORPORATION NONPROFIT; NET EARNINGS. (a) A
corporation is nonprofit, and the corporation's net earnings
remaining after payment of its expenses may not benefit an
individual, firm, or corporation, except as provided by
Subsection (b).
(b) If the board of directors determines that sufficient
provision has been made for the full payment of the corporation's
expenses, bonds, and other obligations, any net earnings of the
corporation subsequently accruing shall be paid to the
corporation's authorizing unit.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.054. GENERAL POWERS, PRIVILEGES, AND FUNCTIONS. (a) A
corporation has the powers, privileges, and functions of a
nonprofit corporation incorporated under the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes) or formed under the Texas Nonprofit Corporation Law, as
described by Section 1.008, Business Organizations Code. To the
extent that the provisions governing powers, privileges, and
functions of a nonprofit corporation under those laws are in
conflict with or inconsistent with provisions of this subtitle
governing powers, privileges, and functions of a nonprofit
corporation, the provisions of this subtitle prevail.
(b) A corporation:
(1) has all powers incidental to or necessary for the
performance of the powers provided by Sections 501.059, 501.060,
501.064, 501.153-501.155, 501.159, 501.201(a), 501.208, 501.209,
501.214, and 501.402; and
(2) with respect to a project, may exercise all powers necessary
or appropriate to effect a purpose for which the corporation is
organized, subject to the control of the governing body of the
corporation's authorizing unit.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.055. CONSTITUTED AUTHORITY OR INSTRUMENTALITY. (a) A
corporation is a constituted authority and an instrumentality,
within the meaning of the United States Department of the
Treasury regulations and the Internal Revenue Service rulings
adopted under Section 103, Internal Revenue Code of 1986, as
amended, including regulations and rulings adopted under Section
103, Internal Revenue Code of 1954, and may act on behalf of the
corporation's authorizing unit for the specific public purpose
authorized by the unit.
(b) A corporation is not a political subdivision or a political
corporation for purposes of the laws of this state, including
Section 52, Article III, Texas Constitution.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.056. CONTENTS OF CERTIFICATE OF FORMATION. The
certificate of formation of a corporation must state:
(1) the name of the corporation;
(2) that the corporation is a nonprofit corporation;
(3) the duration of the corporation, which may be perpetual;
(4) the specific purpose 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 consistent with law for the regulation of the
corporation's internal affairs, including any provision required
or permitted by this subtitle to be stated in the bylaws;
(7) the street address of the corporation's initial registered
office and the name of the corporation's initial registered agent
at that address;
(8) the number of directors of the initial board of directors
and the name and address of each initial director;
(9) the name and street address of each organizer; and
(10) that the unit has:
(A) by resolution specifically authorized the corporation to act
on the unit's behalf to further the public purpose stated in the
resolution and the certificate of formation; and
(B) approved the certificate of formation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.057. FILING OF CERTIFICATE OF FORMATION AND DELIVERY OF
CERTIFICATE EVIDENCING FILING. (a) If the unit's governing body
adopts a resolution under Section 501.051, the certificate of
formation may be filed as provided by this section.
(b) Three originals of the certificate of formation shall be
delivered to the secretary of state. If the secretary of state
determines that the certificate of formation conforms to this
subchapter, the secretary of state shall:
(1) endorse the word "Filed" and the date of the filing on each
original certificate of formation;
(2) file one of the original certificates of formation in the
secretary of state's office;
(3) issue two certificates evidencing the filing of the
certificate of formation;
(4) attach to each certificate evidencing the filing of the
certificate of formation an original of the certificate of
formation; and
(5) deliver a certificate evidencing the filing of the
certificate of formation and the attached certificate of
formation to:
(A) the organizers or the organizers' representatives; and
(B) the governing body of:
(i) the corporation's authorizing unit; or
(ii) any county in the county alliance that authorized the
creation of the corporation, for a county alliance corporation.
(c) The governing body of a county to which a certificate
evidencing the filing of the certificate of formation and the
attached certificate of formation are delivered under Subsection
(b)(5)(B)(ii) shall provide photocopies of the certificate
evidencing the filing of the certificate of formation and the
attached certificate of formation to each other member of the
county alliance.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.058. EFFECT OF ISSUANCE OF CERTIFICATE EVIDENCING
FILING. (a) A corporation's existence begins when the
certificate evidencing the filing of its certificate of formation
is issued.
(b) After the issuance of the certificate evidencing the filing
of the certificate of formation, the formation of the corporation
may not be contested for any reason.
(c) A certificate evidencing the filing of the certificate of
formation is conclusive evidence that:
(1) the organizers and the unit have performed all conditions
precedent for the formation of the corporation; and
(2) the corporation is formed under this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.059. CORPORATE SEAL. A corporation may have a
corporate seal and with respect to a project may impress, affix,
or otherwise reproduce the seal or a facsimile of the seal on an
instrument required to be executed by the corporation's
appropriate officers.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.060. MAY SUE AND BE SUED. With respect to a project, a
corporation may sue, be sued, complain, and defend in the
corporation's name.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.061. CORPORATION'S ORGANIZATION NOT RESTRICTED. Except
as provided by this subtitle, no proceeding, notice, or approval
is required for the organization of a corporation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.062. BOARD OF DIRECTORS. (a) All of the powers of a
corporation are vested in a board of directors consisting of
three or more directors appointed by the governing body of the
corporation's authorizing unit.
(b) A director serves for a term of not more than six years.
(c) The governing body of the corporation's authorizing unit may
remove a director for cause or at will.
(d) A director serves without compensation, but is entitled to
reimbursement for actual expenses incurred in the performance of
the director's duties under this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.063. ORGANIZATIONAL MEETING. (a) After issuance of
the certificate evidencing the filing of the certificate of
formation, the board of directors named in the certificate of
formation shall hold an organizational meeting in this state to
adopt bylaws and elect officers and for other purposes.
(b) Not later than the third day before the date of the meeting,
the organizers who call the meeting shall give notice by mail of
the time and place of the meeting to each director named in the
certificate of formation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.064. BYLAWS. (a) A corporation may adopt and amend
bylaws for the administration and regulation of the corporation's
affairs.
(b) The board of directors shall adopt a corporation's initial
bylaws.
(c) The bylaws and each amendment of the bylaws must:
(1) be consistent with state law and with the certificate of
formation of the corporation; and
(2) be approved by resolution of the governing body of the
corporation's authorizing unit.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.065. OFFICERS. (a) A corporation has the following
officers:
(1) a president;
(2) at least one vice president;
(3) a secretary;
(4) a treasurer; and
(5) other officers or assistant officers considered necessary.
(b) An officer of the corporation is elected or appointed at the
time, in the manner, and for the term prescribed by the
certificate of formation or bylaws, except that an officer's term
may not exceed three years. In the absence of provisions in the
certificate of formation or the bylaws prescribing the selection
or terms of officers, the board of directors shall annually elect
or appoint officers.
(c) A person may hold more than one office, except that the same
person may not hold the offices of president and secretary.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.066. INDEMNIFICATION. (a) In this section, "director
or officer" includes a former director or officer.
(b) Except as provided by Subsection (d), a corporation may
indemnify a director or officer of the corporation for necessary
expenses and costs, including attorney's fees, actually incurred
by the director or officer in connection with a claim asserted
against the director or officer, by action in court or another
forum, by reason of the director's or officer's being or having
been a director or officer of the corporation.
(c) Except as provided by Subsection (d), if a corporation has
not fully indemnified a director or officer under Subsection (b),
the court in a proceeding in which a claim is asserted against
the director or officer or a court having jurisdiction over an
action brought by the director or officer on a claim for
indemnity may assess indemnity against the corporation or the
corporation's receiver or trustee. The assessment must equal the
amount that the director or officer paid to satisfy the judgment
or compromise the claim, including attorney's fees and not
including any amount paid to the corporation, to the extent that:
(1) the amount paid was actually and necessarily incurred; and
(2) the court considers the amount paid reasonable and
equitable.
(d) A corporation may not indemnify a director or officer for a
matter in which the director or officer is guilty of negligence
or misconduct. A court may assess indemnity against the
corporation only if the court finds that the director or officer
was not guilty of negligence or misconduct in the matter for
which indemnity is sought.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.067. INSURANCE AND BENEFITS. (a) Notwithstanding any
law to the contrary and with the consent of the corporation's
authorizing unit, a corporation may obtain:
(1) health benefits coverage, liability coverage, workers'
compensation coverage, and property coverage under the
authorizing unit's insurance policies, through self-funded
coverage, or under coverage provided under an interlocal
agreement with a political subdivision; or
(2) retirement benefits under a retirement program the
authorizing unit participates in or operates.
(b) Health benefits coverage may be extended to the
corporation's directors and employees, and to the dependents of
the directors and employees.
(c) Workers' compensation benefits may be extended to the
corporation's directors, employees, and volunteers.
(d) Liability coverage may be extended to protect the
corporation and the corporation's directors and employees.
(e) Retirement benefits may be extended to the corporation's
employees.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.068. BOARD MEETINGS; NOTICE OF MEETING. (a) A board
of directors may hold a regular meeting in this state with or
without notice as prescribed by the corporation's bylaws.
(b) A board of directors may hold a special meeting with notice
as prescribed by the corporation's bylaws.
(c) A director's attendance at a board meeting constitutes a
waiver of notice of the meeting, unless the director attends the
meeting for the express purpose of objecting to the transaction
of any business at the meeting because the meeting has not been
lawfully called or convened.
(d) Unless required by the corporation's bylaws, notice or
waiver of notice of a board meeting is not required to specify
the business to be transacted at the meeting or the purpose of
the meeting.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.069. WAIVER OF NOTICE. If a notice is required to be
given to a director of a corporation under this subtitle or the
corporation's certificate of formation or bylaws, a written
waiver of the notice signed by the person entitled to the notice
is equivalent to giving the required notice. The waiver may be
given before or after the time that would have been stated in the
notice.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.070. ACTION OF BOARD; QUORUM. (a) A quorum of a board
of directors is the lesser of:
(1) a majority of the number of directors:
(A) established by the corporation's bylaws; or
(B) stated in the corporation's certificate of formation, if the
bylaws do not establish the number of directors; or
(2) the number of directors, not less than three, established as
a quorum by the certificate of formation or bylaws.
(b) The act of a majority of the directors present at a meeting
at which a quorum is present is an act of the board of directors,
unless the act of a larger number is required by the certificate
of formation or bylaws of the corporation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.071. ACTION WITHOUT MEETING. (a) An action that may
be taken at a meeting of a board of directors, including an
action required by this subtitle to be taken at a meeting, may be
taken without a meeting if each director signs a written consent
providing the action to be taken.
(b) The consent has the same effect as a unanimous vote and may
be stated as such in a document filed with the secretary of state
under this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.072. OPEN MEETINGS AND PUBLIC INFORMATION. A board of
directors is subject to the open meetings law, Chapter 551,
Government Code, and the public information law, Chapter 552,
Government Code.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.073. SUPERVISION BY AUTHORIZING UNIT. (a) The
corporation's authorizing unit will approve all programs and
expenditures of a corporation and annually review any financial
statements of the corporation.
(b) A corporation's authorizing unit is entitled to access to
the corporation's books and records at all times.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.074. PURCHASING. A corporation may use the reverse
auction procedure defined by Section 2155.062(d), Government
Code, for purchasing.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.075. EXEMPTION FROM TAXATION. (a) The activities of a
corporation affect all the residents of the corporation's
authorizing unit by the corporation's assuming to a material
extent what otherwise might be an obligation or duty of the
authorizing unit, and therefore the corporation is an institution
of purely public charity within the tax exemption of Section 2,
Article VIII, Texas Constitution.
(b) A corporation is exempt from the tax imposed by Chapter 171,
Tax Code, only if the corporation is exempted by that chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
SUBCHAPTER C. AUTHORIZED PROJECTS
Sec. 501.101. PROJECTS RELATED TO CREATION OR RETENTION OF
PRIMARY JOBS. In this subtitle, "project" includes the land,
buildings, equipment, facilities, expenditures, targeted
infrastructure, and improvements that are:
(1) for the creation or retention of primary jobs; and
(2) found by the board of directors to be required or suitable
for the development, retention, or expansion of:
(A) manufacturing and industrial facilities;
(B) research and development facilities;
(C) military facilities, including closed or realigned military
bases;
(D) transportation facilities, including airports, hangars,
railports, rail switching facilities, maintenance and repair
facilities, cargo facilities, related infrastructure located on
or adjacent to an airport or railport facility, marine ports,
inland ports, mass commuting facilities, and parking facilities;
(E) sewage or solid waste disposal facilities;
(F) recycling facilities;
(G) air or water pollution control facilities;
(H) facilities for furnishing water to the public;
(I) distribution centers;
(J) small warehouse facilities capable of serving as
decentralized storage and distribution centers;
(K) primary job training facilities for use by institutions of
higher education; or
(L) regional or national corporate headquarters facilities.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 15.012(a), eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
150, Sec. 1, eff. September 1, 2009.
Sec. 501.102. PROJECTS RELATED TO CERTAIN JOB TRAINING. In this
subtitle, "project" includes job training required or suitable
for the promotion of development and expansion of business
enterprises and other enterprises described by this subtitle, as
provided by Section 501.162.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.103. CERTAIN INFRASTRUCTURE IMPROVEMENT PROJECTS. In
this subtitle, "project" includes expenditures that are 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:
(1) streets and roads, rail spurs, water and sewer utilities,
electric utilities, or gas utilities, drainage, site
improvements, and related improvements;
(2) telecommunications and Internet improvements; or
(3) beach remediation along the Gulf of Mexico.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.104. PROJECTS RELATED TO CERTAIN MILITARY BASES OR
MISSIONS. In this subtitle, "project" includes the
infrastructure, improvements, land acquisition, buildings, or
expenditures that:
(1) are for the creation or retention of primary jobs or jobs
that are included in North American Industry Classification
System (NAICS) sector number 926120, Regulation and
Administration of Transportation Programs, for the corresponding
index entry for Coast Guard (except the Coast Guard Academy); and
(2) are found by the board of directors to be required or
suitable for:
(A) promoting or supporting a military base in active use to
prevent the possible future closure or realignment of the base;
(B) attracting new military missions to a military base in
active use; or
(C) redeveloping a military base that has been closed or
realigned, including a military base closed or realigned
according to the recommendation of the Defense Base Closure and
Realignment Commission under the Defense Base Closure and
Realignment Act of 1990 (10 U.S.C. Section 2687 note).
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.105. CAREER CENTER PROJECTS OUTSIDE OF JUNIOR COLLEGE
DISTRICT. In this subtitle, "project" includes the land,
buildings, equipment, facilities, improvements, and expenditures
found by the board of directors to be required or suitable for
use for a career center, if the area to be benefited by the
career center is not located in the taxing jurisdiction of a
junior college district.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.106. AIRPORT FACILITIES OR OTHER PROJECTS BY
CORPORATIONS AUTHORIZED BY CERTAIN BORDER MUNICIPALITIES. (a)
This section applies only to a corporation authorized to be
created by a municipality, any part of which is located within 25
miles of an international border.
(b) For a corporation to which this section applies, in this
subtitle, "project" includes the land, buildings, facilities,
infrastructure, and improvements that:
(1) the corporation's board of directors finds are required or
suitable for the development or expansion of airport facilities;
or
(2) are undertaken by the corporation if the municipality that
authorized the creation of the corporation has, at the time the
corporation approves the project as provided by this subtitle:
(A) a population of less than 50,000; or
(B) an average rate of unemployment that is greater than the
state average rate of unemployment during the most recent
12-month period for which data is available that precedes the
date the project is approved.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.107. INFRASTRUCTURE PROJECTS BY CORPORATIONS AUTHORIZED
BY MUNICIPALITIES IN CERTAIN BORDER COUNTIES. (a) This section
applies only to a corporation that:
(1) is authorized to be created by a municipality wholly or
partly located in a county that:
(A) is bordered by the Rio Grande;
(B) has a population of at least 500,000; and
(C) has wholly or partly within its boundaries at least four
municipalities each of which has a population of at least 25,000;
and
(2) does not support a project, as defined by this subchapter,
with sales and use tax revenue collected under Chapter 504 or
505.
(b) For a corporation to which this section applies, in this
subtitle, "project" 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,
including airports, ports, and sewer or solid waste disposal
facilities.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
SUBCHAPTER D. CORPORATE POWERS AND LIMITATIONS RELATING TO
PROJECTS
Sec. 501.151. AUTHORITY TO FINANCE PROJECT. A corporation is a
constituted authority for the purpose of financing one or more
projects.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.152. DEFINITION OF COST WITH RESPECT TO PROJECT. In
this subtitle, "cost," with respect to a project, means the cost
of the acquisition, cleanup, construction, reconstruction,
improvement, or expansion of a project, including:
(1) the cost of acquiring all land, rights-of-way, property
rights, easements, and interests;
(2) the cost of all machinery and equipment;
(3) financing charges;
(4) the cost of inventory, raw materials, and other supplies;
(5) research and development costs;
(6) interest accruing before and during construction and until
the first anniversary of the date the construction is completed,
regardless of whether capitalized;
(7) necessary reserve funds;
(8) the cost of estimates, including estimates of cost and
revenue;
(9) the cost of engineering or legal services;
(10) the cost of plans, specifications, or surveys;
(11) other expenses necessary or incident to determining the
feasibility and practicability of acquiring, cleaning,
constructing, reconstructing, improving, and expanding the
project;
(12) administrative expenses; and
(13) other expenditures necessary or incident to:
(A) acquiring, cleaning, constructing, reconstructing,
improving, and expanding the project;
(B) placing the project in operation; and
(C) financing or refinancing the project, including refunding
any outstanding obligations, mortgages, or advances issued, made,
or given by a person for a cost described by this section.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.153. LEASE OR SALE OF PROJECT. (a) A corporation may:
(1) lease all or any part of a project to a user, for the rental
and on the terms that the corporation's board of directors
considers advisable and not in conflict with this subtitle; or
(2) sell, by installment payments or otherwise, and convey all
or any part of a project to a user for the purchase price and on
the terms the corporation's board of directors considers
advisable and not in conflict with this subtitle.
(b) A corporation may grant a lessee an option to purchase all
or any part of a project when all bonds of the corporation
delivered to provide those facilities have been paid or provision
has been made for the bonds' final payment. This subsection is
procedurally exclusive for authority to convey or grant an option
to purchase all or part of a project, and reference to another
law is not required.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.154. CONVEYANCE OF PROPERTY TO INSTITUTION OF HIGHER
EDUCATION. With respect to a project, a corporation may donate,
exchange, convey, sell, or lease land, improvements, or any other
interest in real property, fixtures, furnishings, equipment, or
personal property to an institution of higher education for a
legal purpose of the institution, on the terms the corporation's
board of directors considers advisable and not in conflict with
this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.155. LOAN TO FINANCE PROJECT. (a) A corporation may
make a secured or unsecured loan to a user for the purpose of
providing temporary or permanent financing or refinancing of all
or part of the cost of a project, including the refunding of an
outstanding obligation, mortgage, or advance issued, made, or
given by a person for the cost of a project.
(b) For a loan made under this section, a corporation may charge
and collect interest on the terms the corporation's board of
directors considers advisable and not in conflict with this
subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.156. AGREEMENT MUST BENEFIT CORPORATION. An agreement
relating to a project must be for the benefit of the corporation.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.157. DEFAULT ON AGREEMENT; ENFORCEMENT. An agreement
relating to a project must provide that if a default occurs in
the payment of the principal of or the interest or premium on the
bonds or in the performance of any agreement contained in a
proceeding, mortgage, or instrument, the payment or performance
may be enforced by:
(1) mandamus; or
(2) the appointment of a receiver in equity with the power to:
(A) charge and collect rents, purchase price payments, and loan
payments; and
(B) apply the revenue from the project in accordance with the
resolution, mortgage, or instrument.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.158. PERFORMANCE AGREEMENTS. (a) A corporation may
not provide a direct incentive to or make an expenditure on
behalf of a business enterprise under a project as defined by
Subchapter C of this chapter or by Subchapter D, Chapter 505,
unless the corporation enters into a performance agreement with
the business enterprise.
(b) A performance agreement between a corporation and business
enterprise must:
(1) provide, at a minimum, for a schedule of additional payroll
or jobs to be created or retained and capital investment to be
made as consideration for any direct incentives provided or
expenditures made by the corporation under the agreement; and
(2) specify the terms under which repayment must be made if the
business enterprise does not meet the performance requirements
specified in the agreement.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.159. POWERS CONCERNING PROJECTS; JURISDICTION. (a) A
corporation may acquire, by construction, devise, purchase, gift,
lease, or otherwise, or any one or more of those methods and may
construct, improve, maintain, equip, and furnish one or more
projects undertaken by another corporation or located within this
state, including within the coastal waters of this state, and
within or partially within the limits of the authorizing unit of
the corporation or within the limits of another unit, if the
governing body of the other corporation or the unit requests the
corporation to exercise its powers within that unit.
(b) A corporation may recover the costs of an investment under
Subsection (a) from a unit or another corporation under a
contract with a limited or unlimited duration.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.160. OWNING OR OPERATING PROJECT AS BUSINESS. (a)
Except as provided by Subsection (d), a corporation may not own
or operate a project as a business other than:
(1) as a lessor, seller, or lender; or
(2) according to the requirements of any trust agreement
securing the credit transaction.
(b) The user under a lease, sale, or loan agreement relating to
a project is considered the owner of the project for purposes of
ad valorem taxes, sales and use taxes, or any other taxes imposed
by this state or a political subdivision of this state.
(c) Purchasing and holding a mortgage, deed of trust, or other
security interest or contracting for the servicing of a mortgage,
deed of trust, or other security interest is not considered the
operation of a project.
(d) A corporation has all the powers necessary to own and
operate a project as a business if the project is a military
installation or military facility that has been closed or
realigned, including a military installation or facility closed
or realigned under the Defense Base Closure and Realignment Act
of 1990 (10 U.S.C. Section 2687 note), as amended.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.161. CERTAIN ECONOMIC INCENTIVES PROHIBITED. (a) In
this section, "related party" means a person who owns at least 80
percent of the business enterprise to which the sales and use tax
would be rebated as part of an economic incentive.
(b) Notwithstanding any other provision of this subtitle, a
corporation may not offer to provide an economic incentive for a
business enterprise whose business consists primarily of
purchasing taxable items using a resale certificate and then
reselling those items to a related party.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.162. USE OF TAX REVENUE FOR JOB TRAINING. A
corporation may spend tax revenue received under this subtitle
for job training offered through a business enterprise only if
the business enterprise has committed in writing to:
(1) create new jobs that pay wages that are at least equal to
the prevailing wage for the applicable occupation in the local
labor market area; or
(2) increase its payroll to pay wages that are at least equal to
the prevailing wage for the applicable occupation in the local
labor market area.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
SUBCHAPTER E. CORPORATE POWERS AND LIMITATIONS RELATING TO BONDS
Sec. 501.201. AUTHORITY TO ISSUE BONDS. (a) A corporation may
issue bonds to defray all or part of the cost of a project,
regardless of whether the bonds are wholly or partly exempt from
federal income taxation.
(b) Except as limited by this subtitle or rules and guidelines
of the economic development office, a corporation has full
authority with respect to bonds.
(c) Except as otherwise provided by this subtitle, a corporation
may issue bonds under this subtitle without obtaining the consent
or approval of any department, division, or agency of this state,
other than the attorney general under Chapter 1202, Government
Code.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.202. TERMS. Bonds issued by a corporation must be
dated and must mature in not more than 40 years.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.203. SECURITIES COMMISSIONER PERMIT TO SELL SECURITIES
REQUIRED. A corporation may not sell or offer for sale bonds or
other securities until the securities commissioner grants a
permit authorizing the corporation to offer and sell the bonds or
other securities under the registration provisions of The
Securities Act (Article 581-1 et seq., Vernon's Texas Civil
Statutes), except as exempted from registration by rule or order
of the State Securities Board. Appeal from an adverse decision
of the securities commissioner or the State Securities Board is
under the administrative procedure law, Chapter 2001, Government
Code. The substantial evidence rule applies in an appeal under
this subsection.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.204. AUTHORIZING UNIT'S APPROVAL OF BONDS. (a) A
corporation may not deliver bonds, including refunding bonds,
unless the governing body of the corporation's authorizing unit
adopts a resolution, not earlier than the 60th day before the
date the bonds are delivered, specifically approving the
corporation's resolution providing for the issuance of the bonds.
(b) If the corporation is authorized to be created by a county
alliance, the resolution required by Subsection (a) must be
adopted by the commissioners courts of at least three-fifths of
the members of the county alliance.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.205. BOND COUNSEL AND FINANCIAL ADVISORS. Bond counsel
and financial advisors participating in a bond issue must be
mutually acceptable to the corporation and the user.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.206. MONEY USED TO PAY BONDS. The principal of and
interest on bonds issued by a corporation are payable only from
the money provided for that payment and from the revenue of the
project or projects for which the bonds were authorized.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.207. BONDS NOT DEBT OF STATE OR AUTHORIZING UNIT. (a)
Bonds issued under this subtitle are not a debt or pledge of the
faith and credit of this state, the authorizing unit of the
corporation issuing the bonds, or any other political
corporation, subdivision, or agency of this state.
(b) The revenue bonds issued under this subtitle must contain on
their face a statement to the effect that:
(1) neither this state, the authorizing unit of the corporation
issuing the bonds, nor any other political corporation,
subdivision, or agency of this state is obligated to pay the
principal of or the interest on the bonds; and
(2) neither the faith and credit nor the taxing power of this
state, the authorizing unit of the corporation issuing the bonds,
or any other political corporation, subdivision, or agency of
this state is pledged to the payment of the principal of or the
interest on the bonds.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.208. BOND SECURITY; DEFAULT. (a) The principal of and
interest on any bonds issued by a corporation shall be secured by
a pledge of the revenues and receipts derived by the corporation
from the lease or sale of the project financed by the bonds or
from the loan made by the corporation with respect to the project
financed or refinanced by the bonds.
(b) As security for the payment of the principal of and interest
on any bonds issued by a corporation and any agreements made in
connection with the issuance of bonds, the corporation may:
(1) mortgage and pledge any or all of the corporation's projects
or any part of a project, including the project financed or
refinanced and any enlargements of and additions to the project,
owned before or acquired after the time of the mortgage or
pledge; and
(2) assign any mortgage and repledge any security conveyed to
the corporation to secure any loan made by the corporation, and
pledge the revenues and receipts from the assigned mortgage or
security.
(c) The resolution authorizing the issuance of bonds and any
mortgage covering all or part of the project financed may include
any agreement or provision that the board of directors considers
advisable and not in conflict with this subtitle and that relates
to:
(1) the maintenance of the project covered by the bonds or
mortgage;
(2) the fixing and collection of rents;
(3) purchase price payments;
(4) loan payments;
(5) the creation and maintenance of special funds from those
revenues; or
(6) the rights and remedies available in the event of a default.
(d) A mortgage to secure bonds may also provide that, in the
event of a default in the payment of the bonds or a violation of
another agreement contained in the mortgage, the mortgage may be
foreclosed and the mortgaged property may be sold in any manner
permitted by law. The mortgage may provide that a trustee under
the mortgage or the holder of any of the bonds secured by the
mortgage may purchase property at a foreclosure sale if the
trustee or holder is the highest bidder.
(e) A pledge, agreement, or mortgage made for the benefit or
security of any of the corporation's bonds continues in effect
until the principal of and interest on the bonds benefited or
secured by the pledge, agreement, or mortgage have been fully
paid.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.209. TRUST AGREEMENT. (a) Bonds issued under this
subtitle may be secured by a trust agreement between the
corporation and a trust company or bank having the powers of a
trust company. The trust company or bank may be located in or
outside of this state.
(b) The trust agreement may:
(1) pledge or assign the lease, sale, or loan revenues to be
received with respect to a project from a lessee, purchaser, or
borrower for the payment of the principal of and interest and any
premium on the bonds as the bonds become due and payable;
(2) provide for the creation and maintenance of reserves for a
purpose described by Subdivision (1);
(3) state the rights and remedies of the bondholders and the
trustee;
(4) restrict the individual right of action by bondholders in a
manner that is customary in trust agreements or trust indentures
securing bonds and debentures of private corporations; and
(5) include any additional provision that the corporation
considers reasonable and proper for the security of the
bondholders.
(c) The trust agreement or a resolution approving the issuance
of the bonds may provide for the protection and enforcement of
the rights and remedies of the bondholders as may be reasonable
and proper and not in violation of law, including covenants
providing the duties relating to:
(1) the acquisition of property and the construction,
improvement, maintenance, repair, operation, and insurance of the
project in connection with which the bonds are authorized; and
(2) the custody, protection, and application of all money.
(d) A bank or trust company incorporated under the laws of this
state that acts as depository of the bond proceeds or of revenues
may furnish indemnifying bonds or pledge securities as required
by the corporation.
(e) All expenses incurred in carrying out the trust agreement
may be treated as a part of the cost of operating the project.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.210. FINANCIAL ASSURANCE OR RESPONSIBILITY REQUIREMENTS
FOR CERTAIN PROJECTS. (a) The resolution or mortgage described
by Section 501.208(c) may contain any agreement or provision for
satisfying the financial assurance or responsibility requirements
applicable to a project for which a permit is required under
Chapter 361, Health and Safety Code, or Chapter 27, Water Code,
including a requirement relating to construction, proper
operation, liability coverage, emergency response capability,
well plugging, closure, and post-closure care.
(b) Evidence of the passage of a resolution by a governing body
approving or agreeing to approve the issuance of bonds for the
purpose of satisfying the financial assurance or responsibility
requirements applicable to the project is an adequate
demonstration that sufficient financial resources will be
available to comply with all existing financial assurance or
responsibility requirements.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.211. USE OF BOND PROCEEDS. (a) The proceeds of the
bonds of each issue shall be:
(1) used to pay or make a loan in the amount of all or part of
the cost of the project or projects for which the bonds were
authorized; and
(2) disbursed in the manner and under any restrictions provided
in the resolution authorizing the issuance of the bonds or in any
trust agreement securing the bonds.
(b) Bond proceeds may be used to:
(1) pay all costs incurred in issuing the bonds;
(2) pay interest on the bonds for any time determined by the
board of directors of the corporation issuing the bonds; and
(3) establish reserve funds and sinking funds for the bonds.
(c) If the proceeds of the bonds of any series issued for a
project exceed the cost of the project for which the bonds were
issued, the surplus shall be:
(1) deposited to the credit of the sinking fund for the bonds;
or
(2) used to purchase bonds in the open market.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.212. INTERIM BONDS. (a) Before the preparation of
definitive bonds, the corporation may, under like restrictions,
issue interim bonds that may be exchanged for definitive bonds
when the definitive bonds are executed and available for
delivery.
(b) The corporation may issue interim bonds with or without
coupons.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.213. REFUNDING BONDS. (a) A corporation may provide
by resolution for the issuance of refunding bonds:
(1) to refund outstanding bonds issued under this subtitle for a
project, including the payment of any redemption premium on the
bonds and the interest accrued or to accrue to the date of
redemption; and
(2) if considered advisable by the corporation, additionally to
finance improvements, extensions, or enlargements to the project
for which the bonds being refunded were issued or for another
project.
(b) The provisions of this subtitle relating to other bonds
govern the issuance, maturities, and other details of the
refunding bonds, the rights of the holders of the refunding
bonds, and the rights, duties, and obligations of the corporation
with respect to the same to the extent those provisions may be
applicable.
(c) The corporation may issue the refunding bonds in exchange
for outstanding bonds or may sell the refunding bonds and use the
proceeds to redeem outstanding bonds.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.214. SALE OR EXCHANGE OF BONDS. With respect to a
project, a corporation may:
(1) sell bonds; or
(2) exchange bonds for property, labor, services, material, or
equipment comprising a project or incidental to the acquisition
of a project.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
SUBCHAPTER F. ADMINISTRATION BY ECONOMIC DEVELOPMENT OFFICE
Sec. 501.251. STATE STANDARDS FOR PROJECT ELIGIBILITY. The
economic development office shall adopt rules providing minimum
standards for project eligibility.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.252. STATE STANDARDS AND GUIDELINES FOR LEASE, SALE, OR
LOAN AGREEMENTS. (a) The economic development office shall
adopt rules:
(1) providing minimum standards for lease, sale, and loan
agreements entered into under this subtitle; and
(2) providing guidelines with respect to the business
experience, financial resources, and responsibilities of the
lessee, purchaser, or borrower under a lease, sale, or loan
agreement entered into under this subtitle.
(b) The economic development office may adopt rules governing
the terms of a loan made by a corporation to a bank or other
lending institution the proceeds of which are reloaned as
permanent or temporary financing of a project.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.253. RULES FOR SMALL BUSINESS PROGRAMS. The economic
development office shall adopt rules governing programs for small
businesses receiving loans guaranteed wholly or partly by the
United States Small Business Administration or another federal
agency.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.254. FILING OF RULES AND GUIDELINES WITH SECRETARY OF
STATE. Rules and guidelines adopted by the economic development
office and amendments to the rules and guidelines take effect
only after the filing of the rules and guidelines or amendments
with the secretary of state.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.01, eff. April 1, 2009.
Sec. 501.255. APPROVAL OF LEASE, SALE, OR LOAN AGREEMENT. (a)
A lease, sale, or loan agreement entered into under this subtitle
must be approved by the economic development office. The
economic development office may not approve an agreement unless
the office affirmatively finds that the project sought to be
financed furthers the public purposes of this subtitle.
(b) The corporation may appeal an adverse ruling or decision of
the economic development office under Subsection (a) to a
district court of Travis County. The substantial evidence rule
applies in an appeal under this subsection.
(c) A corporation:
(1) may enter into a lease, sale, or loan agreement under this
subtitle without obtaining the consent or approval of any
department, division, or agency of this state except as otherwise
provided by this subtitle; and