01-08-07 Special Called Regular Meeting La Porte Development Corporation and City Council Minutes

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(. ,.' I. The Sales Tax for Economic Development Public Hearing Requirement for Expending Section 48 Tax Proceeds A Section 48 corporation must hold at least one public hearing on a proposed project, including a proposal to expend funds on maintenance cmd _operating expenses of a project.188 This hearing must be held before the corporation expends any Section 48 funds on th~ project. There is nothing in the Act that prohibits the~Section 48 corporation from holding one public hearing to consider a group of Section 48 projects. After the projects have been considered at a public hearing and 60 days have"passed since the first public notice of the nature of the projects, the development corporation is free to make expenditures related to the projects pursuant to the adopted budget. Public Notice Requirement and the GO-Day Right to Petition ./ The public has a right to gather a petition objecting to a particular Section 48 project.189 The petition must be submitted within 60 days of the first published notice of a specific project or type of project and must be signed by more than 10 percent of the registered voters of the city. State law does not indicate what would constitute the first published notice of a project. A city should ensure that it provides 60 days notice of the specific project or the category of projects. If a petition is pursued by the public, the petition can ask that the city hold an election on the issue before that specific project or type of project is undertaken. If the petition is submitted in a timely manner and an election is required, the corporation may not undertake the project until the voters approve the project at an election on the issue. If the voters disapprove the project at the election, the Section 48 tax proceeds may not be used for that purpose. 0t is important to note that a petition cannot force an election on a project if the voters have .' previously approved the specific project or that general category of projects at an earlier election called under the Act. Cities that know what types of projects they want to "'undertake may be well advised to specifically list each of these types of projects in the ballot wording when the Section 48 tax is first considered by the voters. If the city includes each of these types of projects in the original ballot proposition, it can assert that the public has already approved that type of project at a prior election. In this scenario, the city arguably would not be required to call an additional election even if a petition were submitted regarding the project. Specific Costs of a Section 48 Project That May be Funded Cities must understand what general categories are available for expenditures. They additionally need to know what types of specific expenditures are contemplated within each of these categories. For assistance in understanding what is permitted under the Act, cities should review the definition of the term "cost" under Section 2(4) of the Act. Section 2(4) of the Act defines what costs may be applied to a Section 48 project. It states in pertinent part that costs for a project may include: a) Land and facility improvements: the cost of acquisition. construction, improvement, expansion ofland, buildings, and acquisition of right-of-way. HANDBOOK on ECONOMIC DEVELOPMENT LAWSfor TEXAS CITIES 39