BSM H.B. 1880 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1880 By: Swinford Agriculture & Livestock 3/7/2001 Committee Report (Amended) BACKGROUND AND PURPOSE Currently, there is no statute that allows for a district to be created for the purpose of processing an agricultural commodity. The benefit of creating these districts is that they may aid the prosperity of Texas agricultural producers by enabling them to process their own products. This may allow producers to compete with corporations by providing a mechanism for producers to acquire capital to process agricultural products locally and exempting these districts from property taxes. House Bill 1880, titled the Agricultural Development Act, authorizes agricultural producers to petition the commissioners court of a county to create Texas Agricultural Development Districts. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1880 amends the Agriculture Code to authorize the commissioners court of a county, on petition of at least 10 residents of a county included within a proposed Texas Agricultural Development District (district), to commence the creation of a district to provide incentives for the development of agricultural operations and facilities (Secs. 60.002 and 60.021). The bill sets forth provisions regarding the petition to establish a district, a hearing to consider the petition, as well as notice of the hearing (Secs. 60.021-60.025). The bill requires the commissioners court to enter an order granting the petition and creating the district if the petition conforms to the requirements and the creation of the district and the proposed development is feasible and necessary and would serve the public purpose of economic development (Sec. 60.026). H.B. 1880 provides that a district is governed by a board of directors and sets forth provisions regarding the composition, powers, duties, and operation of the board, and the appointment, election, and qualification of directors (Secs. 60.027--60.033 and 60.081--60.088). H.B. 1880 sets forth provisions regarding the powers and duties of the district and authorizes the district to exercise the power of eminent domain within the boundaries of the district for the purpose of acquiring an agricultural facility (Secs. 60.051-- 60.065). H.B. 1880 sets forth provisions regarding the financial powers and duties of a district and authorizes a district to impose charges, borrow money, loan money, invest money, select a depositor, establish a system of accounts, and set a fiscal year (Secs. 60.101--60.106 and 60.121--60.134). The bill authorizes a district to issue bonds and sets forth provisions regarding the bonds (Secs.60.103--60.105). The bill authorizes a district to use tax increment financing (Sec. 60.106). The bill authorizes a district to impose assessments and sets forth provisions regarding the assessments (Secs. 60.121--60.134). H.B. 1880 provides that a petition to create a district must include a pledge that the district will make payments in lieu of taxes based on the value of the property in the year of the district's creation to any school district and county in which any real property to be owned by the district is located, and if the district employs more than 50 persons, the district will make payments in lieu of taxes to any school district in an amount negotiated between the district and the school district (Sec. 60.022). The bill sets forth provisions regarding the dissolution of a district (Secs. 60.151 and 60.152). EFFECTIVE DATE September 1, 2001. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 requires that a certified copy of the order creating the district, including the legal description of the district, be filed in the real property records in the county in which the district is located. The amendment also provides that written notice to the purchaser is not required by any person who proposes to sell or convey real property located in a district, unless a certified copy of the order creating the district has been recorded in the real property records in the county in which the land is located, and such order contains the legal description of the district. The amendment also provides that a purchaser, seller, lender, real estate broker, title insurance company, and title insurance agent may conclusively rely on the recorded certified copy of the order.