HBA-SEP H.B. 1439 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1439
By: McClendon
Economic Development
2/25/2001
Introduced



BACKGROUND AND PURPOSE 

Although Texas is currently experiencing low unemployment levels, the
average wage in the workforce may be low.  A city, by using part of its
sales tax revenue to support short and long term economic development
projects such as literacy classes that provide childcare, scholarship
programs in targeted occupational areas, and specific job training programs
to attract high tech companies, may be able to increase the earning
potential of its workforce.  House Bill 1439 authorizes a municipality's
governing body to create a municipal development corporation (MDC) to
develop and implement certain workforce development programs and authorizes
a municipality to levy a sales and use tax for the benefit of the MDC. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the comptroller of public accounts in
SECTION 1 (Section 379A.102, Local Government Code) of this bill. 

ANALYSIS

House Bill 1439 amends the Local Government Code to create the Better Jobs
Act to authorize a municipality's governing body to create a single
municipal development corporation (MDC).  An MDC is governed by a board of
5, 7, 9, or 11 directors, as determined and appointed by the municipality's
governing board.  The bill sets forth provisions regarding a director's
term of service.  The bill requires the board of directors of the MDC
(board) to conduct its meetings in the municipality that created the MDC
and to appoint from its members a presiding officer, a secretary, and other
necessary officers.  For the purposes of open meetings and public
information, the board is treated as a governmental body (Secs. 379A.011,
379A.013, 379A.021--379A.0024, and 379A.055). 

The bill authorizes the MDC to develop and implement programs to directly
facilitate the development of a skilled workforce.  The bill also
authorizes an MDC to acquire, develop, or use land, buildings, equipment,
facilities, and other improvements in connection with  a program.  The bill
also sets forth general powers of the MDC (Secs. 379A.051 and 379A.052). 


The bill authorizes the MDC to issue revenue bonds on behalf of the
municipality, including refunding bonds, or other obligations, and sets
forth provisions for their issuance and repayment (Sec. 379A.053). 

The bill sets forth requirements for the administration of funds provided
by an MDC to an institution of higher education to be used for scholarships
(Sec. 379A.056). 

The bill authorizes a municipality to levy a sales and use tax for the
benefit of the MDC if the tax is authorized by a majority of the voters of
the municipality at an election called for that purpose.   The bill only
authorizes the tax to be levied for a maximum of 20 years after which the
tax may be reauthorized, subject to a payment of indebtedness.  The bill
sets forth authorized tax rates and a cap on the combined local sales and
use tax rate and provides for tax rate increases.  The bill provides that
the Municipal Sales and Use Tax Act governs a tax under these provisions
except as inconsistent with the Better Jobs Act  (Secs. 379A.081 and
379A.082). 

The bill sets forth provisions for the imposition of a tax adopted under
these provisions (Sec. 379A.083). 

The bill requires the board to submit, not later than February 1 of each
year, a report in the form required by the comptroller.  If the MDC fails
to file a report or fails to include significant information, the
comptroller is required to provide written notice, including information on
how to correct the failure, to the MDC.  The bill authorizes the
comptroller to assess an administrative penalty of $200 for each day the
filing of the report is delinquent if the MDC does not correct the failure
before the 31st day after the date the MDC receives the notice. The bill
requires the comptroller, by rule, to prescribe procedures for the
imposition of an administrative penalty that protects the due process
rights of the MDC (Secs. 379A.101 and 379A.102).   

The bill requires the comptroller to submit to the legislature, not later
than November 1 of each evennumbered year, a report on the use of the sales
and use tax imposed under the Better Jobs Act.  The bill also requires the
comptroller to provide, on request, a copy of the report to the MDC created
under the Better Jobs Act (Sec. 379A.103). 

EFFECTIVE DATE

On passage or if the Act does not receive the necessary vote, the Act takes
effect September 1, 2001.