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Home My WebLink About01-03-05 Special Called City Council and La Porte Development Corporation Joint Meeting Minutes 2. MINUTES OF SPECIAL CALLED CITY COUNCIL AND LA PORTE DEVELOPMENT CORPORATION JOINT MEETING January 3, 2005 1. CALL TO ORDER The meeting was called to order by Mayor Alton Porter at 6:03 p.m. Members of City Council Present: Councilmembers Chuck Engelken, Tommy Moser, Barry Beasley, Peter Griffiths, Louis Rigby, Mike Clausen, Howard Ebow, Mike Mosteit, and Mayor Alton Porter Members od La Porte Development Corporation Present: Pat Muston, Bill Love, Ed Matuszak, Tommy Moser, Chuck Engelken, Deborah Johnson and Mike Clausen. Members of Council Absent: None Members of City Executive Staff and City Employees Present: City Manager Debra Feazelle, Assistant City Manager John Joerns, Assistant City Manager Cynthia Alexander, City Attorney, Knox Askins and City Secretary Martha Gillett. Others Present: Police Officers Robyn Gallion and Mark Gallion. 2. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW, CHAPTER 551.071 THROUGH 551.076,551.087, TEXAS GOVERNMENT CODE, (CONSULTATION WITH ATTORNEY, DELIBERATION REGARDING REAL PROPERTY, DELIBERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS) 551-087 - (ECONOMIC DEVELOPMENT) MEET WITH CITY MANAGER AND LA PORTE DEVELOPMENT CORPORATION TO DISCUSS ECONOMIC DEVELOPMENT MATTER Council retired to Executive Session at 6:05 p.m. 3. Considerations and possible action on items considered in Executive Session. Council returned to the table at 8:57 p.m. with no action taken. 4. There being no further business to come before Council, the Regular Meeting was duly adjourned at 8:58 p,m. Respectfully submitted, t'-/l7~t4atI Martha Gillett, TRMC City Secretary ~I ed and a.pproved on th~~4th day of January 2005, Cur' . at Mus n,lpresiaent _ 3. THE STATE OF TEXAS COUNTY OF HARRIS CITY OF LA PORTE PUBUC HEARING NOTICE Notice is hereby given that a public hearing of the La Porte Development Corporation will be held at 5:00 P.M. on Monday, January 24, 2005, in the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas. The Public is invited to attend the public hearing and make comments regarding the following proposed project: Loan leveraging with the State of Texas Economic Development Office for the promotion of a new business enterprise related to Headquarters and Hub operations for Automotive Remanufacturing Center to be constructed near the intersection of Old Underwood Road and State Highway 225 (Underwood Business Park). Project information is available Monday through Friday from 8:00 a.m. to 5:00 p.m. in the ~ity Secretary's Office, 604 W. Fairmont Parkway, La Porte, Texas. If you have any questions, please contact the City Manager's Office at 281-470-5015. All interested persons are invited to attend and express any comments they have regarding the proposed project and the plan.of financial participation relating to the La Porte Development Corporation, A regular meeting of the La Porte Development Corporation will follow the public hearing for the purpose of considering the public hearing item and to conduct other matters pertaining to the Corporation. Citizens wishing to address the Corporation pro or con during the Public Hearing will be required to sign in before the meeting is convened. CITY OF LA PORTE vfr/ fU.{I!t/r!It~ctl Martha Gillett City Secretary A quOrum of City Council members may be present and participate in discussions during this meeting, however, no action will be taken by Council. '- This facility has disability accommodations available. Requests for accommodations or interpretive services meetings should be made 48 hours prior to the meeting, Please contact the City Secretary's OffICe at (281) 471-5020 or TDD Une (281) 471-5030 for further information. City of La Porte Talking Points Project "Fixit" These talking points are to be used for general information purposes only. This is a project to remanufacture automobiles in the city of La Porte This company will have a central plant and corporate headquarters in La Porte The City of La Porte is under serious consideration due to our support of the project and the availability of a good location near to the Beltway 8. This project is projected to create over 250 skilled technician positions and 50 corporate roles by the end of the first year of operation. This project is projected to create over 400 skilled technician positions and 70 corporate roles by the forth year of operation. This has been a joint effort from the City of La Porte, San Jacinto College, Harris County, The City of Houston as well as the State of Texas The final commitment to locate in Texas and La Porte is based on the State's support of this effort Final decisions on the location will be determined over the next 6 weeks. "- ... ~ aJ ~ rI:J. o I.- ~ "" ~ = QJ. 5 ~ o I QJ ~ aJ Q ~ .- 5 o = o ~ ~ = < . . . ~ gf ~ ] .9 8. 5 rh '0 is .~ ] ~:a !;l ... .5S'" ~ l:: I\) ....... , <<I ::s ... '" u 0 8 !;l.~ S 8 d ~ =].s':~ u ~ '3 ~ 'iU'iU.g] ~..... 0 g c::: ~ u :f ~..s s ~ u ... c::: "'::s '" <.Ej..s <'I ~ ~ -= Q....... 'g S I\)S~c::: .:~,,;S"'<<I'tlI\)~ 1j .s.~ I\) 5 'Eu:a ~ S ,g .8 a ~ u ~",,,,ca::o,,, "'~. c:::~ u.s ::s = c:::..... J;! ..... 0 0 c::: <::so=5~SC.t1O.uS ~ .t:.S ~ 8 u ~~. 'r.;;:i .S is.. 8 >'-d' J;! J;! ~ ~:::: ~ sa J;! t: a .~ ';l ';l 'tl..s g 'U 'Q ~ ';l cf go ~ :3.S ~ .: 5 ~ ~ c:::..... 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City of La Porte Interoffice Memorandum To: Mayor City Council La Porte Development Corpor 'on Board of Directors From: Debra Feazel/e, City Manager Date: January 18, 2005 Subject: Project "Fix-It" Attached with the authorizing resolution is a copy of the certification of application (agreement) that will be completed by the City of La Porte and the Office of the Governor, Economic Development and Tourism Division Office upon approval by the La Porte Development Corporation Board of Directors, and ratification by City Council. Please review the attached calendar concerning deadlines; action should be taken to avoid delays. Thank you, RESOLUTION NO. 2005-~DI A RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA PORTE DEVELOPMENT CORPORATION, APPROVING AND AUTHORIZING THE CERTIFICATION OF APPLICATION BY THE LA PORTE DEVELOPMENT CORPORATION TO THE OFFICE OF THE GOVERNOR, ECONOMIC AND TOURISM DIVISION, FOR A TEXAS LEVERAGE FUND (TLF) LOAN TO FUND AN ELIGIBLE PROJECT UNDER THE DEVELOPMENT CORPORATION ACT, KAICING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT, FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW, AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE LA PORTE DEVELOPMENT CORPORATION: Sect ion 1 . The La Porte Development Corporation hereby approves and authorizes the contract, agreement or other undertaking described in the title of this resolution, copy of which is attached hereto as Exhibit "A" and incorporated by reference herein. The President of the Board is hereby authorized to execute such document and all related documents on behalf of the La Porte Development Corporation. The Secretary is hereby authorized to attest all such signatures and affix the seal of the corporation on all such documents. Section 2. The President of the Board is hereby authorized to execute any further contracts and agreements in the furtherance of the application, and all related documents on behalf of the La Porte Development Corporation. The Secretary is hereby authorized to attest to all such signatures and to affix the seal of the corporation to all such documents. Section 3. The La Porte Development Corporation Officially finds, determines, recites, and declares that a sufficient written notice of the date, hour, place and subject of this meeting of the La Porte Development Corporation was posted at a place convenient to the public at the City Hall of the City of La Porte for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has been open to the public as required by law at all times during which this resolution and the subject matter thereof has been discussed, considered and formally acted upon. The La Porte Development Corporation further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 4. This Resolution shall be effective from and after its passage and approval. PASSED AND APPROVED this 24th day of January, 2005. By: T CORPORATION ,ATTEST: ;-1r;tltL~!1/pI~ Secretary 2 Office of the Governor Economic Development and Tourism Texas Leverage Fund Application CERTIFICATION OF APPLICATION City Certification and Request First Name: Alton Last Name: Porter Title: Mavor Organization: City of La Porte Street Address: 604 West Fairmont Parkwav Mailing Address: 604 West Fairmont Parkway City: La Porte State: TX Zip: 77571 Phone Number: 281471-5020 Fax Number: 281 471 7168 Email Address: Dortera(Qlci.la-oorte.tx.us The La Porte Development Corporation (IDe) hereby applies for a Texas Leverage Fund (TLF) loan in the amount of $1,000,000 for a term of 10 years from the Texas Leverage Fund. The proceeds of this loan are intended to fund an eligible project defined under the Development Corporation Act. The proceeds of this loan will be used to fund a Program Loan to Cartegra (User - if applicable). I understand and acknowledge that all underwriting responsibilities are those of the City and the IDC, and the State of Texas assumes no responsibility for loan repayment, and that the Texas Leverage Fund loan, if approved, will be repaid directly by our local option sales and use tax for economic development. I certify that the representations made, the facts stated in this application and all supplemental documents are true, and that no relevant facts have been intentionally omitted, as evidenced by my signature below. Signature: Mayor Date: January 25. 2005 GIVEN under my hand and seal of office this day of Notary Public, State of Texas (Notary Seal) My commission expires: Page 3 of 24 ~ J)~~~,~- March 2004 Office of the Governor Economic Development and Tourism Texas Leverage Fund Application CERTIFICATION OF APPLICATION Industrial Development Corporation (IDC) Certification and Request First Name: Patricia Last Name: Muston Title: Chairman Organization: La Porte Development Corooration Street Address: 604 W. Fairmont Parkway Mailing Address: Same City: La Porte State: TX Zip: 77571 Phone Number: 281-471-1537 Fax Number: Email Address: The La Porte Development Corporation (IDC) hereby applies for a Texas Leverage Fund (TLF) loan in the amount of $1,000,000 for a term of 10 years from the Texas Leverage Fund. The proceeds of this loan are intended to fund an eligible project defined under the Development Corporation Act. The proceeds of this loan will be used to fund a Program Loan to Cartegra (User - if applicable). I understand and acknowledge that all underwriting responsibilities are those of the City and the IDC, and the State of Texas assumes no responsibility for loan repayment, and that the Texas Leverage Fund loan, if approved, will be repaid directly by our local option sales and use tax for economic development. I certify that the representations made, the facts stated in this application and all supplemental documents are true, and that no relevant facts have been intentionally omitted, as evidenced by my signature below. The IDC agrees to comply with the reporting requirements and will provide other documentation as requested. H ~. i (, ." Signature: .! ~ t( (IDC epresentatlve) I /~i;f/I7~ Date: GIVEN under my hand and seal of office this day of Notary Public, State of Texas (Notary Seal) My commission expires: Page 4 of 24 "* J)~~N~. 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City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Working Capital 9/30/03 2,499,2] 8 Plus Estimated 03-04 Revenues 936,403 Less 03-04 Expenditures and Commitments 1,259,498 Equals Estimated Working Capital 9/30/04 2,] 76, 123 Plus 04-05 Revenues: 1/2 Cent Sales Tax Interest Income 965,000 4],070 Total Revenues 1,006,070 Equals Total Resources 3,182,]93 Less 04-05 Expenditures: Debt Service Transfer Contingency 280,050 Total Expenditures 280,050 Equals Estimated Working Capital 9/30/05 2,902, ] 43 Revenues Expenditures & Commitments Estimated Fund Balance Usage Estimated 2003-04 936,403 ] ,259,498 (323,095) Projected 2004-05 ] ,006,070 280,050 726,020 City of La Porte La Porte Development Corporation Fund (038) Statement of Revenues Actual Budget Revised Projected Object Description 2002-03 2003-04 2003-04 2004-05 Charges for Services: 403.02-00 1/2 Cent Sales Tax 921,625 929,880 902,261 965,000 Charges for Services Subtotal 921,625 929,880 902,261 965,000 Interest: 483.01-00 Interest Income 34,209 33,910 34,142 41,070 Interest Subtotal 34,209 33,9] 0 34. ]42 41.070 Total La Porte Development Corp Fund Revenues 955,834 963,790 936,403 1,006,070 NLf) E-< 0 OV>c.'J 00 00 0 0 OUlOUl Lf) Lf) Lf) Lf) 0 0 N N N N N N N 01 , "" 010 00 00 0 0 0000 0 0 0 0 c.'J 00 00 0 0 Olf"lOlf'l Lf) Lf) Lf) Lf) <(0 01 0.0 ~[j ['- ['- ['- ['- ['- ['- H "" "" "" "" "" "" Po: ~~ 0 0 0 0 0 0 01 0 0 0 0 0 0 0. 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'"'"'" H .,. 0 .,. 0 ..:lWUZZOW,"W :E :E ..:l 0 H Ct:u:lH::r:HO::O<O:: H..:lH ..:l en CfJ Z N W Z ~U"""""'E-<><UC/)o..U......... '-<l;,- U <l; ::0 ::0 0 ~~ t--< 0 f--tH:><HtLlWO en;.. E-<E-<E-< H E-< ..:l0 ..:l0 ..:lH '" 23S5~b~~~5 enHen ~ H <l;H <l;H <l;E- E-<> E-<en O()<l; enco~ ..:l ~::o OI..Dr---COr<")<QI~ o . 00 00 0 .. OOOCfJ Nr4n..-iC\lN+: 00 . '" '" 00 ~~g, M 00 M O[>l NNNNNNNN ririri '" 0 <l;~ ..:l .q+.q+.q+o;;fl.q+.q+.q+o;:;fl """ '"~>< q[>l E-< 0 [>l0E-< ~<l;gj 0" " 0 > '" ~ ~~H OJ OJ OJ OJ H [>l '"'"U r..~en "" " " 0 0 r.. 6. CITY OF LA PORTE PUBLIC WORKS DEPARTMENT Memo To: Debra Feazelle, City Manager From:Steve Gillett, Director of Public Works CC: John Joerns, Assistant City Manager Cynthia Alexander, Assistant City Manager Date: 1/11/2005 Re: CIP Status Report - Bay Area Blvd. and Canada Road The following is a brief status report of the projects funded by Section 4B Sales Tax (Fund 38). Bay Area Blvd. - The design for this Project is complete. Harris County is responsible for construction of roadway and drainage improvements, including adjustment of pipelines. The City is responsible for acquisition of all right of way and drainage easements. Acquisition of all ROWand easements has been completed. Harris County has issued work orders for pipeline adjustments. Harris County anticipates bid award for construction in October. However, this timeline could slip, depending on timing of the pipeline adjustments. . Bay Area Blvd. Trunk Sewer - This Project is approximately 50% complete. Anticipate completion by late November. . Canada Road - All design is complete, and Harris County is currently reviewing plans. A cost- sharing agreement has been approved by both parties, with the County participation up to $1.87M. Nine (9) contractors have been prequalified for the Project. Once the Agreement with Harris County is executed, the City will advertise for bids, with bid award expected in early November 2004. Two pipelines, as well as electrical transmissions facilities, require relocation. Relocation ios complete for one company (Kinder-Morgan) and currently underway for the other (ExxonMobil). Completion is expected by early October 2004. Electrical transmission relocation will not begin until the contract for construction is awarded, to take advantage of survey and clearing for construction. If you have any questions, please advise. . Page 1 ASKINS & ARMSTRONG, P. C, ATTORNEYS AT LAW 702 W. FAIRMONT PARKWAY P.O. BOX 1218 LA PORTE, TEXAS 77572-1218 KNOX W. ASKINS JOHN D. ARMSTRONG CLARK T. ASKINS TELEPHONE 281 471-1886 TELECOPIER 281 471-2047 KWASKINS@AOL.COM JOHN-A@SWBElL.NET eTA SKIN S@SWBELl.NET December 6, 2004 Ms. Cynthia Alexander Assistant City Manager City of La Porte City Hall La Porte, Texas Re: Section 4B Sales Tax Dear Ms. Alexander: You have requested my opinion on whether Section 4B sales tax revenue may be expended on a City marina, and also on "Main Street projects". Article 5190.6, of the Development Corporation Act of 1979, was extensively amended in the 2003 Session of the Texas Legislature, which restricted the uses of section 4B sales tax revenue. I enclose copies of the portions of the Act, which defines a "Project". I have bracketed three paragraphs which define the main possible uses of Section 4B sales tax proceeds. A marina might be deemed to be included, if it was within the definition of "parks and park facilities". The use of Section 4B sales tax for "Main Street projects" would have to fit in with these definitions. If the projects are for retailing, that would be problematic. I enclose copy of a Newsletter from TML, which describes how the 2003 Legislature has greatly restricted the use of 4B sales tax, particularly for commercial, retail, and service businesses. Please review, and let's discuss further. !/ You~;:_ ver. y. 7~~Y. i/ ' ~. ;f /I[ 1, ') . <./----.... . . V /1,..' 1/ , .' -t./ I, '~/' Knox W. Askins City Attorney City of La Porte KWA: sw Enclosures / ....-~-7-. \ r'o-., .'''' _ ) . I. ! _ _--- \ ..i ! .- f---- ---'; . ,~ TEXAS CITY ATTORNEYS ASSOCIATION E...., L.. E.. .T. TE ~, , .' c , ! q, " -, >It(, ,'c.?"'!.'!' . , .~-i:' -c. __~~;'-Y ;~. _ _. - ',__.;~-",; i ! [ i' , / ',j 4N4B Sales Tax: Any Use After H.B. 2912? Bennett Sandlin, TML Legal Services Director Introduction The Texas Legislature created economic development corporations (EDCs) in 1979. At the time, the concept of economic development as a legitimate governmental function was in its infancy. In fact, city expendi- tures to attract business were arguably unconstitutional under Article III, S 52 of the Texas Constitution. As a result, early EDCs were reliant on donations and were largely ineffective until a 1987 amendment that stat- ed economic development pursuits serve a public purpose. Legislation passed in 1989 and 1991 gave EDCs teeth by authorizing the 4A and 4B sales ta..xes. The sales tax was initially envisioned by the legis- lators who created it as a vehicle for fostering manufacturing and indus- trial jobs. After their initial involvement in creating the tax, the attention of many of these legislators turned to other matters for the ne).,'! decade. Meanwhile, every legislative session thereafter saw a gradual expansion of the permissible uses of 4A and 4B ta..xes. First, 4B EDCs \vere given gen- eral authority to attract commercial and retail business. Next, 4B EDCs, and to a lesser extent 4A. EDCs, were given authority to fund certain municipal improvements such as parks and city buildings. . Finally, 41\.$ were later given the same broad commercial and retail business authori- ty that their 4B cousins already possessed. ' Prior to the 2003 regular session, some of the legislators who had a hand in creating the initial EDC sales !:Lxes were motivated to refocus on the issue based on alleged "abuses" of the !:Lx. In reality, it is more likely that these legislators were simply shocked by the broad, but legal, expansion of the two taxes over the past decade. Some of these legislators sent out warning shots that the very existence of the !:Lx was in jeopardy. In a sort of preemptive strike, professional economic development organizations took the lead in drafting legislation designed to placate the legislature. The result was House Bill 2912. H.B. 2912, passed during the 2003 reg- ular session, is essentially a restrictive rewrite of 4A and 4B laws. Goodbye to Commercial, Retail, and Service'" Among many important changes, the main significance of H.B.'2912 is that it effectively cancels the authority of both 4A and 4B EDCs to' engage in direct commercial and retail economic development. For 4As, the can- cellation \vas straightforward. The phrase "to promote new and expand- ed business development" was struck from an introductory section of the law that defined eligible projects. It was this section that had essentially added commercial and retail authority to 4As in the late 1990s. For 4Bs, there is still language that permits expenditures to "promote or develop new or expanded business enterprises." However, H.B. 29121imited such expenditures for both 4A and 4B to projects that create "primary jobs." Primary jobs are a new concept introduced by the bill, and are defined in a way that includes jobs mostly related to "blue collar" and financial type industries: crop production, animal production, forestry and logging, commercial fishing, support activities for agriculture and forestry, mining, utilities, manufacturing, wholesale trade, transportation and warehousing, information, securities, commodity contracts, certain financial investments and related activities, insurance carriers and relat- ed activities, scientific research and development semces, and manage- ment of companies and enterprises. Conspicuously absent from this list are jobs related to basic commercial, retail, and services industries. Unless a 4A or 4B project creates a "primary job," as defined above, the project is likely prohibited. Thus, both 4A and 4B EDCs are no longer permitted to engage in attracting commercial, retail, or service business- es (existing projects were grandfathered). Other Limitations H.B. 2912 cancelled the authority of 4B EDes to spend sales tax proceeds on learning centers or city buildings. The bill also restricted the ability of any EDC to provide a direct financial incentive to a business prospect (as opposed to preparing land or infrastructure for use by the business) unless the incentive is pursuant to a performance agreement. Finally, the bill limited who can offer required training in 4N4B laws to city officials. What Good Now? City officials are only now coming to grips with the question of ~hether 4A and 4B sales taxes are desirable in the aftermath of H.B. 2912. A great many of the EDCs created over the years were created after the var- ious expansions in the use of the tax. It is arguable that given the limita- tions of H.B. 2912, city officials would not today have voted to create the TCAA Texas City Attorneys Association 4N4B Sales Tax: Any Use After H.B. 2912? Winter 2004 tax in the first place, particularly considering the fact that each optional sales tax takes up precious room under the two percent local "tax cap." What authority remains? At a minimum, EDCs are fully authorized to con- tinue attracting industrial and manufacturing firms to a city. The only dife ference post-H.B. 2912 is the limitation on direct financial incentives absent a performance agreement. EDCs also continue to possess author- ity to improve city infrastructure in preparati?n for new business, which may include commercial and retail in some cases. Authorized infra- structure for retail or commercial development is limited to streets and roads, rail spurs, water and electric utilities, gas utilities, drainage and related improvements, and telecommunications and Internet improve- ments. The interesting question, then, is how much practical damage was done to the sales illx by removing commercial and retail incentive authority. The loudest complaints so far have come from cities that define them- selves as "land-locked." These are typically smaller cities, surrounded by other cities, that are unable to expand or identify undeveloped land for industrial use. The argument of L.1ese cities is that the promotion of industry or manufacturing is uniquely tied to the availability of large tracts of undeveloped land which can be tailored to the unique needs of a given industry. Commercial development, on the other hand, is not so depend- ent on the existence of undeveloped land. A fully developed city, there- fore, has limited prospects to attract a new factory or manufacturing plant. Even smaller cities that are not land-locked will no doubt find it difficult to attract any manufacturing or industry. Such businesses often require a workforce of a minimum size, which small and rural communities can rarely offer. To many very small cities, it is accurate to say that a real eco- nomic development "coup" has simply been a hotel, restaurant, or small retail shop where none has existed before. Such a city may literally find itself with nothing on which to spend its sales tax dollars. Finally, some cities will argue that retreating from cOlnmercial and retail back to industry and manufacturing ignores the overall direction of the Texas economy. Like agriculture before it, most economists believe that manufacturing is on the wane, to be replaced by more service-intensive jobs. H.B. 2912 may have the ironic effect of forcing cities to pursue the types of jobs that will not last. Announcements Papers from TCM Semi-Annuai Meeting in San Antonio Available TCAA has binders containing all of the papers from the recent Semi- Annual Meeting in San Antonio. Topics include: (1) 1v1ilitary Reservists and Veterans' Right~ in the Workplace; (2) In the Eye of the Beholder - Municipal Regulation of Aesthetic Harm; (3) Sovereign Immunity in Breach of Contract Cases; (4) Recent State Cases of Interest to Cities; (5) Emergency Preparedness Planning; (6) Recent Federal Cases of Interest to Cities; (6) Practical Considerations of the First Amendment in an Employment Conte11; and (7) Ethics for City Attorneys. Binders are $40.00. Please contact L1ura Salcedo at 512- 231-7400 to order. Riley Fletcher Basic Municipal Law Seminar The 5th Annual Riley Fletcher Basic i;1uI1icipal La\V Semh'1ar is sched- uled for February 27,2004. Topics include types of city governments, open government, economic development, ethics for city attorneys, ordinance drafting, Tort Claims Act, personnel, and purchasing. See the agenda in this newsletter [or more infonnation. reM Semi-AilnualMeetings The TCAA Summer meeting will be held June 9 - 11, 2004, in South Padre Island and the TCAA Fall meeting in conjunction with the TML Annual Conference will be held October 27-29,2004, in Corpus Christi. If you are interested in presenting a paper, please contact Scott Houston at 512-231-7400 or shouston@tmLorg. Newsletter Articles TCAA is always looking for lead articles for inclusion in the newsletter. Please submit articles or suggestions to shouston@tml.org. IMLA Conference in San Antonio The L'V1L<\ Annual Conference will be held in San Antonio on October 3-6, 2004. Please plan to attend the conference and join TCAA in wel- comi.rlg ~Ui fello"'~ city attorneys. l\.ti L\1I.A. aInicus update is included in this newsletter. Electronic Version of Newsletter Coming Soon TeM is in the process of developing a Web site. When the Web site comes online, TCAf\ will phase out the printed version of this newsletter and move to an exclusively electronic fonnat with e-mail notification. Thus, it is essential that we have the correct e-mail address for each of our members. If you have not already provided an email address, please do so to Laura Salcedo at salcedo@tml.org. Vernon's Ann,Texas Civ,St, Art. 5190.6 tL'1 '".~ ,0,(,., ("/.' ,""i\ { , ~ -:-t "-'-.:~..- ~ ( \ )':J...t' I......v--. v y t./ ~'"~ ..... '7 . }.... - C1"f Vernon's Texas Statutes and Codes Annotated Currentness Civil Statutes (Refs & Annos) Title 83, Labor (Refs & Annos) "'eChaDter Ten, Economic Development "Art. 5190.6. Development Corporation Act of 1979 Short title Sec. 1. This Act may be cited as the "Development Corporation Act of 1979," Definitions Sec. 2, Wherever used in this Act unless a different meaning clearly appears in the context, the following terms, whether singular or plural, shall mean as follows: (1) "Board of directors" shall mean the board of directors of any corporation organized pursuant to the provisions of this Act. (2) "Department" shall mean the Texas Department of Commerce. .LE.N1l (3) "Corporation" shall mean any industrial development corporation organized pursuant to the provisions of this Act. (4) "Cost" as applied to a project shall mean and embrace the cost of acquisition, cleanup, construction, reconstruction, improvement, and expansion, including the cost of the acquisition of all land, rights-of-way, property rights, easements, and interests, the cost of all machinery and equipment, financing charges, inventory, raw materials and other supplies, research and development costs, interest prior to and during construction and for one year after completion of construction whether or not capitalized, necessary reserve funds, cost of estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenue, other expenses necessary or incident to determining the feasibility and practicability of acquiring, cieaning, constructing, reconstructing, improving, and expanding any such project, administrative expense and such other expense as may be necessary or incident to the acquisition, cleanup, construction, reconstruction, improvement, and expansion thereof, the placing of the same in operation, and the financing or refinancing of any such project, including the refunding of any outstanding obligations, mortgages, or advances issued, made or given by any person for any of the aforementioned costs. (5) "City" shall mean any municipality of the state incorporated under the provisions of (i) any general or special law or (ii) the home-rule amendment to the constitution. (6) "County" shall mean a county of this state. (7) "County alliance" means two or more counties that jointly authorize the creation of a corporation under this Act, (8) "District" shall mean a conservation and reclamation district established under authority of Article XVI. Section 59, of the Texas Constitution. (9) "Governing body" shall mean the board, council, commission, commissioners court, or legislative body of the unit, (10) "Industrial development corporation" shall mean a corporation created and existing under the provisions of this Act as a constituted authority for the purpose of financing one or more projects, (11)(.4) "Project" shall mean the land, buildings, equipment, facilities, expenditures, targeted infrastructure, and improvements (one or more) that are for the creation or retention of primary jobs and that are found by the board of directors to be required or suitable for the development, retention, or expansion of manufacturing and industrial facilities, research and development facilities, transportation facilities (including but not limited to airports, ports, mass commuting facilities, and parking facilities), sewage or solid waste disposal facilities, recycling facilities, air or water pollution control facilities, facilities for the furnishing of water to the general public, distribution centers, small warehouse facilities capable of serving as decentralized storage and distribution centers, primary job training facilities for use by institutions of higher education, and / regional or national corporate headquarters facilities. / .' \ \ \ \ \ \ \ \ / / .' J / "Project" also includes job training required or suitable for the promotion of development and expansion of business enterprises and other enterprises described by this Act, as provided by Section 38 of this Act, "Project" also 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 limited to streets and roads, rail spurs, water and electric utilities, gas utilities, drainage and related improvements, and telecommunications and Internet improvements, (B), (C) Repealed by Aets 2003, 78th Leg., eh. 1132, ~ 13, "Federally assisted new communities" shall mean those federally assisted areas which have received or will receive assistance in the form of loan guarantees under Title X of the National Housing Act and a portion of the federally assisted area has received grants under Section 107(a)(1) of the Housing and Community Development Act of 1974, as amended. (12) "Resolution" shall mean the resolution, order, ordinance, or other official action by the governing body of a unit. (13) "Unit" shall mean a city, county, or district which may create and utilize a corporation, (14) "Bonds" includes bonds, notes, and other evidences of indebtedness, <Text of subsec, (15) as added by Acts 1999, 76th Leg" ch. 296, 9 2> (15) "Institution of higher education" has the meaning assigned by Section 61.003. Education Code, <Text of subsec. (15) as added by Acts 1999, 76th Leg" ch, 973, 9 1> (15) "User" means an individual, partnership, corporation, or any other private entity, whether organized for profit or not for profit, or a city, county, district, or any other political subdivision, public entity, or agency of the state or federal government. (17) rFN21 "Primary job" means a job that is: (A) 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 (B) included in one of the following sectors of the North American Industry Classification System (NAICS): NAICS Sector 111 112 113 11411 115 211-213 221 311-339 42 48-49 51 (excluding 512131 and 512132) 523-525 5413, 5415, 5416, 5417, and 5419 551 922140 # Description Crop Production Animal Production Forestry and Logging Commercial Fishing Support Activities for Agriculture and Forestry Mining Utilities Manufacturing Wholesale Trade Transportation and Warehousing Information (excluding movie theaters and drive-in theaters) Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds, Trusts, and Other Financial Vehicles Scientific Research and Development Services Management of Companies and Enterprises Correctional Institutions (18) "Corporate headquarters facilities" means buildings proposed for construction or occupancy as the principal office for a business enterprise's administrative and management services. c' \(0 " \--" J. ~'"""",,"""-l v"" " 'l\' ,l~v i~; r /") .~.-") '" , I Ii" ,.J ,;:>\S. '1 . '1. . - /) tJ- ,- t:......... ",d Sec, 4B. (a) In this section: (1) "Eligible city" means a city: (A) that is located in a county with a population of 500,000 or more, according to the most recent federal decennial census and in which the combined rate of all sales and use taxes imposed by the city, the state, and other political subdivisions of the state having territory in the city does not exceed 8.25 percent on the date of any election held under or made applicable to this section; (B) that has a population of 400,000 or more, according to the most recent federal decennial census, and that is located in more than one county, and in which the combined rate of all sales and use taxes imposed by the city, the state, and other political subdivisions of the state having territory in the city, including taxes under this section, does not exceed 8. 25 percent; or (C) to which Section 404 of this Act applies. I ,/ ~ (2) nproject" means land, buildings, equipment, facilities, expenditures, and improvements ", / included in the definition of that term under Section 2 of this Act, and includes job training as\ ~/ / ,proVided by Section 38 of this Act, For purposes of ,@.~, the term includes recycling \ facilities, and land, buildings, equipment, facilities, and improvements found by the board of /,0__/) directors to: ......--- " (A) be required or suitable for use for professional and amateur (including children's) sports, athletic, entertainment, tourist, convention, and public park purposes and events, including stadiums, ball parks, auditoriums, amphitheaters, concert halls, parks and park facilities, gJ)~JL ~pac~ ilTlR.r:2.Y..em~s, museums, exhibition facilities, and related store, restaurant, concession, and automobile parking facilities, related area transportation facilities, and related roads, streets, and water and sewer facilities, and other related improvements that enhance any of those items; / (B) promote or develop new or expanded business enterprises that create or retain primary jobs, including a project to provide public safety facilities, streets and roads, drainage and related \ improvements, demolition of existing structures, general municipally owned improvements, as well as any improvements or facilities that are related to any of those projects and any other project that the board in its discretion determines promotes or develops new or expanded b"sinoss enro"'pr'lsos rhar ,....oato "r ror::>'ln n...im::>ry J'OhS' U 111'-' I \......... '-... I ......., '- '-..... '-'....... II 1-'1' I...... '-' I I (C) be required or suitable for the promotion of development and expansion of affordable housing, as defined by 42 U.S.c. Section 12745; (D) be required or suitable for the development or improvement of water supply facilities, including dams, transmission lines, well field developments, and other water supply alternatives; or (E) be required or suitable for the development and institution of water conservation programs, including incentives to install water-saving plumbing fixtures, educational programs, brush control programs, and programs to replace malfunctioning or leaking water lines and other water facilities, (a-1) A corporation may undertake a project under this section unless within 60 days after first publishing notice of a specific project or type of general project the governing body of the city receives a petition from more than 10 percent of the registered voters of the city where the petition requests that an election be held before that specific project or that general type of project is undertaken, An election is not required to be held after the submission of a petition if the qualified citizens of the city have previously approved the undertaking of a specific project or that general type of project at an election called for that purpose by the governing body of the city or in conjunction with another election required to be held under this section. (a-2) The costs of a publicly owned and operated project that is purchased or constructed under this section include the maintenance and operating costs of the project, and the proceeds of taxes may be used to pay the maintenance and operating costs of a project, unless within 60 days after first publishing notice of this specific use of the proceeds of the taxes the governing body of the city receives a petition from more than 10 percent of the registered voters of the city where the petition requests that an election be held before the proceeds of taxes imposed under this section may be used to pay the maintenance and operating costs of a project, An election is not required to be held after the submission of a petition if the qualified citizens of the city have previously approved that the costs of a publicly owned and operated project purchased or constructed under this section include the maintenance and operating costs of the project and that the proceeds of taxes may be used to pay the maintenance and operating costs of a project, at an election called for that purpose by the governing body of the city or in conjunction with another election required to be held under this section. The election in this subsection shall not be required in a municipality located in a county with a population in excess of 1.3 million that has held an election prior to February 1, 1993, under this section and at which election the additional sales tax was approved. (a-3)(1) A city that creates or has created a corporation governed by this section may submit to thevoters of the city, at a separate election to be held on a uniform election date or at an election held under another provision of this Actl including the election at which the proposition to initially authorize the collection of a sales and use tax for the benefit of the corporation is submitted, a ballot proposition that authorizes the corporation to use the sales and use tax, including any amount previously authorized and collected, for a specific sports venue project, including related infrastructure, or for a specific category of sports venue projects, including related infrastructure. Prior approval of a specific sports venue project at an election or completion of a specific sports venue project approved at an election does not prohibit a city from seeking voter approval of an additional project or category of projects under this subsection to be funded from the same sales and use tax that is used to fund the previously approved sports venue project, This subsection does not affect the authority of a municipality to call an election under this section to levy a sales and use tax for any purpose authorized by this section after the sales and use tax described by this subsection is no longer collected as provided by Subsection (i) of this section. (2) In the election to authorize the use of the sales or use tax for a specific sports venue project or for a specific category of sports venue projects, the project or category of projects must be clearly described on the ballot so that a voter will be able to discern the limits of the specific project or category of projects authorized by the proposition, If maintenance and operating costs of an otherwise authorized faCility are to be paid from the sales or use tax, the ballot language must clearly state that fact. (3) Before an election may be held under this subsection, a public hearing shall be held in the city to inform the residents of the city of the cost and impact of the project or category of projects. At least 30 days before the date set for the hearing, a notice of the date, time, place, and subject of the hearing shall be published in a newspaper with general circulation in the city in which the project is located, The notice shall be published on a weekly basis until the date of the hearing, (4) If a majority of the voters voting on the issue do not approve a specific sports venue project or a specific category of sports venue projects at an election under this subsection, another election may not be held on the same project or category of projects before the first anniversary of the date of the most recent election disapproving the project or category of projects, (a-4) In this section: (1) "Related infrastructure" has the meaning assigned by Section 334,001. Local Government Code, (2) "Sports venue" means an arena, coliseum, stadium, or other type of area or facility that is primarily used or is planned for primary use for one or more professional or amateur sports or athletics events and for which a fee for admission to the sports or athletics events, other than occasional civic, charitable, or promotional events, is charged or is planned to be charged, The term does not include an arena, coliseum, stadium, or other type of area or facility that is or will be owned and operated by a state-supported institution of higher education, (a-5)(1) Notwithstanding any other provision of this section, a corporation created under this section may use proceeds from the sales and use tax to undertake a project described by Subsection (a)(2)(D) or (E) of this section only if the use of tax proceeds for that purpose is authorized by a majority of the qualified voters of the city voting in an election called and held for that purpose, The ballot in an election held under this subsection shall be printed to provide for voting for or against the proposition: "The use of sales and use tax proceeds for infrastructure relating to (insert water supply facilities or water conservation progra ms, as appropriate)," (2) An election held under Subdivision (1) of this subsection may be authorized by the governing body of an eligible city subsequent to an earlier election authorized under Subsection (d) of this section. (b) An eligible city may create a corporation under this Act governed by this section, The corporation has the powers granted by this section and by other sections of this Act and is subject to the limitations of a corporation created under other provisions of this Act, To the extent of a conflict between this section and another provision of this Act, this section prevails. The articles of incorporation of a corporation under this section must state that the corporation is governed by this section and may include within its name any words and phrases specified by the eligible city. An eligible city may not create more than one corporation governed by this section. A corporation created under this section may spend no more than 10 percent of the corporate revenues for promotional purposes and may contract with another existing private corporation to carry out an industrial development program or objective or to assist with the development or operation of an economic development program or objective consistent with the purposes and duties specified in this Act. (c) The board of directors of a corporation under this section consists of seven directors who are appointed by the governing body of the eligible city for two-year terms of office, A director may be removed by the governing body of the eligible city at any time without cause, Each director of a corporation created by an eligible city with a population of 20,000 or more must be a resident of the eligible city, Each director of a corporation created by an eligible city with a population of less than 20,000 must be a resident of the eligible city, be a resident of the county in which the major part of the area of the eligible city is located, or reside at a place that is within 10 miles of the eligible city's boundaries and is in a county bordering the county in which the major part of the area of the eligible city is located, Three directors shall be persons who are not employees, officers, or members of the governing body of the eligible city, A majority of the entire membership of the board is a quorum, The board shall conduct all meetings within the boundaries of the eligible city. The board shall appoint a president, a secretary, and other officers of the corporation that the governing body of the eligible city considers necessary, The corporation's registered agent must be an individual resident of the state and the corporation's registered office must be within the boundaries of the eligible city. (d) The governing body of an eligible city by ordinance may levy a sales and use tax for the benefit of the corporation under this section if the tax is authorized by a majority of the qualified voters of the eligible city voting at an election called and held for that purpose in accordance with Chapter 321, Tax Code, This election requirement is satisfied and another election is not required if the voters of the eligible city approved the levy and collection of an additional one-half cent sales and use tax at an election held before the effective date of this section under an ordinance calling the election that was published in a newspaper of general circulation within the eligible city at least 14 days in advance of the election and that expressly stated that the election was held in anticipation of the enactment of enabling and implementing legislation without further elections, An election described by this section and held before the effective date of this section is validated as of the date on which the election occurred, (e) The rate of a tax adopted under this section must be one-eighth, one- fourth, three-eighths, or one-half of one percent, The ballot proposition at the election held to adopt the tax must specify the rate of the tax to be adopted. A corporation that holds an election to reduce or abolish a tax imposed under Section 4A of this Act may in the same or in a separate proposition on the same ballot adopt a tax under this section, If an eligible city adopts the tax, a tax is imposed on the receipts from the sale at retail of taxable items within the eligible city at the rate approved at the election, There is also imposed an excise tax on the use, storage, or other consumption within the eligible city of tangible personal property purchased, leased, or rented from a retailer during the period that the tax is effective within the eligible city. 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. (e-1) Notwithstanding any other provision of this section, if a city dissolves a corporation created under Section 4A of this Act and creates a corporation under this section, a person serving as a director of the corporation created under Section 4A of this Act at the time of dissolution may serve on the board of directors of the corporation created under this section. (f) Chapter 321, Tax Code, governs the imposition, computation, administration, collection, and remittance of the tax except as inconsistent with this section, The tax imposed under this section takes effect as provided by Section 321.102(a). Tax Code, If, however, an election is held under this section at the same time an election is held to impose or change the rate of the additional municipal sales and use tax, the tax under this section and the imposition or change in rate of the additional municipal sales and use tax take effect as provided by Section 321.102(b). Tax Code, After the effective date of the taxes imposed under this section, the adoption of a sales and use tax or the attempted adoption of a sales and use tax by the eligible city or any other taxing jurisdiction having territory in the city does not impair the taxes imposed under this section, (g) On receipt of the proceeds of the sales and use tax imposed under this section from the comptroller, the eligible city shall deliver the proceeds to the corporation. Tax proceeds may be used to: (1) pay the costs of projects of the types added to the definition of that term by Subsection (a) of this section; or (2) pay the principal of, interest on, and other costs relating to bonds or other obligations issued by the corporation to pay the costs of the projects or to refund bonds or other obligations issued to pay the costs of projects. (h) Bonds or other obligations having a maturity not longer than 30 years and issued to pay the costs of projects of the types added to the definition of that term by Subsection (a) of this section may be made payable from any source of funds available to the corporation, including the proceeds of a sales and use tax imposed under this section. The bonds or other obligations that by their terms are payable from the tax may not be paid in whole or in part from any property taxes raised or to be raised by the eligible city and are not a debt of and do not give rise to a claim for payment against the eligible city except as to sales and use tax revenue held by a city and required under this section to be paid over to the corporation. (i) A sales and use tax imposed under this section may not be collected after the last day of the first calendar quarter occurring after notification to the comptroller by the corporation that all bonds or other obligations of the corporation that are payable in whole or in part from the proceeds of the sales and use tax under this section, including any refunding bonds or other obligations, have been paid in full or the full amount of money, exclusive of guaranteed interest, necessary to pay in full the bonds and other obligations has been set aside in a trust account dedicated to the payment of the bonds and other obligations, (j) The corporation may exercise the power of eminent domain only on approval of the action by the governing body of the eligible city. The power must be exercised in accordance with and subject to the laws applicable to the eligible city, (k) The legislature finds for all constitutional and statutory purposes that projects of the types added to the definition of that term by Subsection (a) of this section are owned, used, and held for public purposes for and on behalf of the eligible city incorporating the corporation, and except as otherwise provided by this subsection, Section 23(b) of this Act and Section 25.07(a), Tax Code, are not applicable to leasehold or other possessory interests granted by the corporation during the period projects are owned by the corporation on behalf of the eligible city. Projects are exempt from taxation under Section 11.11. Tax Code, for that period, For a corporation governed by this section in which the voters of the eligible city that created the corporation have not authorized the levy of a sales and use tax for the benefit of the corporation under Subsection (d) of this section, an ownership, leasehold, or other possessory interest of a person other than the corporation in real property constituting a project of the corporation described by this subsection is subject to ad valorem taxation under Section 25,07(a), Tax Code, except that an ownership, leasehold, or other possessory interest of a person other than the corporation in real property described by this subsection that is created under an agreement entered into by the corporation before September 1, 1999, is covered by the provisions of this subsection governing ad valorem taxation of the ownership, leasehold, or other possessory interest that were in effect on the date on which the agreement was executed. (I) Section 24 of this Act does not apply to a corporation under this section, (m) The corporation, a director of the corporation, the eligible city creating the corporation, a member of the governing body of the eligible city, or an employee of the corporation or eligible city is not liable for damages arising from the performance of a governmental function of the corporation or eligible city, For the purposes of Chapter 101, Civil Practice and Remedies Code, the corporation is a governmental unit and its actions are governmental functions. (n) Before expending funds to undertake a project, a corporation under this section shall hold at least one public hearing on the proposed project, (n-l) This subsection applies only to a city that is located within the territorial limits of a regional transportation authority that has been added to the territory of the authority under Section 452,6025, Transportation Code, Notwithstanding any other provision of this section, a tax imposed by the city under this section is subject to reduction in the manner prescribed by Section 452.6025, Transportation Code, (0)(1) The governing body of a city creating a corporation under this section shall order an election on the dissolution of the corporation on receipt of a petition requesting the election that is signed by at least 10 percent of the registered voters of the city, The election must be held on the first available uniform election date that occurs on or after the 45th day after the date the petition is filed with the city, (2) At the election the ballot shall be printed to permit voting for or against the proposition: "Dissolution of the (name of corporation)." (3) If a majority of the votes cast are in favor of the dissolution, the corporation shall continue operations only as necessary to meet obligations the corporation incurred before the date of the election, including paying the principal of and interest on bonds, To the extent practicable, the corporation shall liquidate assets of the corporation and apply the proceeds to satisfy the corporation's obligations, After all of the obligations are satisfied, any remaining assets of the corporation shall be transferred to the city, and the corporation is dissolved, The city shall promptly notify the comptroller and the secretary of state of the date a corporation is dissolved under this subsection, (4) A tax imposed under this section may not be collected after the last day of the first calendar quarter that begins after the city provides notice under Subdivision (3) of this section.