1982-07-07 Regular Meeting and Public Hearing

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• • Minutes, Regular Meeting and Public Hearing La Porte City Council, July 7, 1982, Page 2 Ayes: Councilpersons Malone, Long ley, Matuszak, Graves, Pfeiffer, Gay, Skelton, Westergren and Mayor Cline Nays: None 4. Mayor Cline declared the public hearing concerning designating the eligible blighted areas as defined in the Act of 1979 arld Chapter 107 of the Rules, Article 5190.6, Vernon's Annotated Texas Civil Statutes now open. City Attorney Askins intro- duced Dan Lyons of Vincent & Elkins. Mr. Lyons attempted to clarify what a blighted area is according to the Act and why the need. Dan Lyons: Industrial Bevelopment Bond funding is essentially a technique whereby users of the facilities, manufacturing, commercial and industrial, can obtain financing from the loan proceeds. The results of this is that cities are able to at- tract industry and commerce and increase their tax base and attract employment and attract business into the area. About 48 or 49 states in the United States have some form of indus- trial bond financing. Texas is relatively new to the program. • The first enabling statute which allowed these types of bonds to be issued was passed in Texas in 1979 Essenti ll h t . a y, w a it provides for is for the use on behalf of either a City or County. A unit such as the Port of Houston, City~of Houston, or even counties have formed Industrial Development Corpora- tions. They then issue Industrial Development Bonds and loan the proceeds of those bonds to companies desiring to build facilities which qualify under the Act. Bonds do not consti- tute any kind of indebtedness of the City or of the unit which develops the Industrial Development Corporation and/or indebt- edness of the Corporation themselves, only in the very limited sense that they are repayable out of revenues which the Industrial Development Corporation make to the users of the facilities. In 1981 the Legislature amended the Act to pro- vide for a different mechanism, whereby these types of bonds can be used for commercial projects. That is the reason for the creation of a "blighted area." Before 1981, you could do commercial projects with these types of .bonds in Texas, only if there was federal grant money to be put into the project to assist it. When the Legislature amended the statute last summer, the Texas Industrial Commission, which is a State agency which has overall supervisory authority for the program, amended its rules in accordance with the amendments of the statute, and now the basic scheme is a City can create an eligible blighted area, designating certain areas within a City a blighted area. Projects located within the blighted • area which are commercial projects may qualify for Industrial Revenue Bond financing upon the makings of certain findings