CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS

State Codes and Statutes

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LOCAL GOVERNMENT CODE

TITLE 12. PLANNING AND DEVELOPMENT

SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT

CHAPTER 379A. MUNICIPAL DEVELOPMENT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 379A.001. SHORT TITLE. This chapter may be cited as the

Better Jobs Act.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.002. FINDINGS AND PURPOSES. (a) The legislature

finds that:

(1) it is an appropriate role for a municipality to foster

economic opportunity, job generation, and capital investment by

promoting a favorable business climate, preparing the workforce

for productive employment, and supporting infrastructure

development;

(2) while some municipalities choose to meet that role through

the creation of economic development zones and reinvestment

zones, the core root of all economic development is a competent

and qualified workforce; and

(3) the programs designed to create a competent and qualified

workforce are essential both to the economic growth and vitality

of many municipalities in this state and to the elimination of

unemployment and underemployment in those municipalities.

(b) The programs authorized by this chapter are in the public

interest, promote the economic welfare of this state, and serve

the state public purpose of developing and diversifying the

economy of this state and eliminating unemployment and

underemployment in this state.

the findings and purposes stated in this section.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.003. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of a municipal

development corporation.

(2) "Corporation" means a municipal development corporation

created under this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.004. APPLICATION OF NON-PROFIT CORPORATION ACT. A

corporation created under this chapter is governed by the Texas

Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's

Texas Civil Statutes), except to the extent inconsistent with

this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

SUBCHAPTER B. CREATION OF CORPORATION

Sec. 379A.011. CREATION. The governing body of a municipality

may create a municipal development corporation under this

chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.012. ARTICLES OF INCORPORATION. The articles of

incorporation of the corporation must state that the corporation

is governed by this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.013. NUMBER OF CORPORATIONS. A municipality may not

create more than one corporation under this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.014. ADOPTION AND APPROVAL OF BYLAWS. The initial

bylaws of a corporation shall be adopted by its board of

directors and approved by resolution of the governing body of the

municipality that created the corporation, and any subsequent

changes made to the bylaws must be approved by the governing body

of the municipality that created the corporation.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.015. PERFORMANCE REVIEW AND ASSESSMENT. The governing

body of the municipality that creates the corporation shall

undertake a performance review and assessment of the corporation

once every five years. Based on the performance review and

assessment, the governing body of the municipality shall issue a

finding of whether the corporation is satisfying the objectives

set forth in this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

SUBCHAPTER C. BOARD OF DIRECTORS

Sec. 379A.021. COMPOSITION AND APPOINTMENT OF BOARD. (a)

Except as provided by Subsection (g), the corporation is governed

by a board of 5, 7, 9, 11, 13, or 15 directors, as determined by

the governing body of the municipality that created the

corporation. The number of directors may not exceed the number of

members, including the mayor, constituting the governing body of

the municipality.

(b) The governing body of the municipality that created the

corporation shall appoint the members of the board.

possible to one-half of the members' terms expiring each year. A

director serves at the will of the governing body of the

municipality that created the corporation. Successor directors

are appointed in the same manner as the original appointees.

(d) Each director of a corporation created by a municipality

that has a population of 20,000 or more must be a resident of the

municipality. Each director of a corporation created by a

municipality that has a population of less than 20,000 must be a

resident of the municipality or the county in which the major

part of the area of the municipality is located.

(e) A person is disqualified from serving as a director if the

person is an employee, officer, or member of the governing body

of the municipality that created the corporation.

(f) A director may not have a personal interest in a contract

executed by the corporation.

(g) In a municipality that has a population of more than one

million and that creates a corporation under this chapter, the

board of the corporation is composed of persons appointed to the

board as required by this subsection. The governing body of the

municipality shall appoint one director to the board of the

corporation from each district that elects a member to the

governing body of the municipality.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.022. COMPENSATION. A board member is not entitled to

compensation, but is entitled to reimbursement for actual and

necessary expenses incurred in serving as a director.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.023. MEETINGS. The board shall conduct its meetings

in the municipality that created the corporation.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.024. OFFICERS. The board shall appoint from its

members a presiding officer, a secretary, and other officers of

the corporation that the governing body of the municipality that

created the corporation considers necessary.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.025. ADOPTION AND APPROVAL OF BUDGET; REVIEW OF

CORPORATE FINANCES. (a) The board shall prepare an annual

budget for the corporation. To be effective, the budget must be

approved by the board and presented to and approved by the

governing body of the municipality that created the corporation.

The corporation may not make any expenditure authorized by this

chapter until the budget has been approved as provided by this

section. An amendment of the budget must be approved in the same

manner as the budget.

(b) The governing body of the municipality that created the

corporation may amend the corporation's budget with the approval

of at least two-thirds of the members of the governing body.

municipality that created the corporation must provide a detailed

description of the proposed expenditures for the corporation's

fiscal year, including expenditures for each program authorized

by Subchapter D.

(d) The board shall annually prepare and present financial

statements from the preceding fiscal year to the governing body

of the municipality that created the corporation.

(e) The governing body of the municipality that created the

corporation is entitled, at all times, to access to the books and

records of the corporation.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

SUBCHAPTER D. POWERS OF CORPORATION

Sec. 379A.051. PROGRAMS. (a) A corporation may develop and

implement programs for:

(1) job training, including long-term job training and

in-training support service grants;

(2) early childhood development that prepare each child to enter

school and make each child ready to learn after completing the

program and that provide educational services that must include

services designed to enable a child to:

(A) develop phonemic, print, and numeracy awareness, including

the ability to:

(i) recognize that letters of the alphabet are a special

category of visual graphics that can be individually named;

(ii) recognize a word as a unit of print;

(iii) identify at least 10 letters of the alphabet; and

(iv) associate sounds with written words;

(B) understand and use language to communicate for various

purposes;

vocabulary;

(D) develop and demonstrate an appreciation of books; and

(E) progress toward mastery of the English language, if the

child's primary language is a language other than English;

(3) after-school programs for primary and secondary schools;

(4) the provision of funding to accredited postsecondary

educational institutions, including public and private junior

colleges, public and private institutions of higher education,

and public and private technical institutions, to be used to

award scholarships;

(5) the promotion of literacy; and

(6) any other undertaking that the board determines will

directly facilitate the development of a skilled workforce.

(b) A corporation may accept donated property, may develop or

use land, buildings, equipment, facilities, and other

improvements in connection with a program described by Subsection

(a), or may dispose of property or an interest in property under

terms determined by the corporation.

organization that sponsors long-term job training and related

support services.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.052. GENERAL POWERS OF CORPORATION. The corporation

may:

(1) own or operate a program authorized by this chapter;

(2) perform any act necessary to the full exercise of the

corporation's powers;

(3) accept a grant or loan from a:

(A) department or agency of the United States;

(B) department, agency, or political subdivision of this state;

(4) employ any necessary personnel, who shall be employees of

the municipality;

(5) adopt rules to govern the operation of the corporation and

its employees and property; and

(6) contract or enter into a memorandum of understanding or a

similar agreement with a public or private person, including

local workforce development boards or any political subdivision,

in connection with a program authorized by this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.053. NATURE OF CORPORATE PROPERTY. (a) The

legislature finds for all constitutional and statutory purposes

that the corporation owns, uses, and holds its property for

public purposes.

(b) Section 25.07(a), Tax Code, does not apply to a leasehold or

other possessory interest granted by the corporation.

under Section 11.11, Tax Code, while the corporation owns the

property.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.054. OPEN RECORDS AND MEETINGS. The board is treated

as a governmental body for the purposes of Chapters 551 and 552,

Government Code.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.055. ADMINISTRATION OF SCHOLARSHIP FUND. (a) In

providing funds to an accredited postsecondary educational

institution to be used for scholarships as authorized by Section

379A.051, the corporation by agreement with the institution shall

ensure that:

(1) the funds are distributed to individuals as scholarships

connected with the institution; and

(2) no more than a maximum amount, as set by the corporation, of

the funds are spent on administering the award of the

scholarship.

(b) An accredited postsecondary educational institution

receiving the funds for scholarships shall develop, in

consultation with the corporation, a plan for awarding

scholarships that will have the goal of having an eventual

beneficial effect on the economic growth and vitality of and the

elimination of unemployment and underemployment in the

municipality that created the corporation and that will ensure

that the recipient:

(1) meets financial need requirements as defined by the

corporation;

(2) is enrolled in an undergraduate degree or certificate

program;

(3) is enrolled for at least three-fourths of a full course load

for an undergraduate student, as determined by the corporation;

(4) makes satisfactory academic progress toward an undergraduate

degree or certificate; and

(5) complies with any additional nonacademic requirement adopted

by the corporation.

established an education partnership composed of community-based

organizations, school districts, public or private sector

entities, or postsecondary institutions for the purpose of

distributing scholarships to students of local schools, the

corporation may provide funds to the education partnership to

enable the partnership to award scholarships to directly

facilitate the development of a skilled workforce.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

SUBCHAPTER E. SALES AND USE TAX

Sec. 379A.081. SALES AND USE TAX. (a) A municipality may levy

a sales and use tax for the benefit of the corporation if the tax

is authorized by a majority of the voters of the municipality

voting at an election called for that purpose.

(b) The ballot for an election to impose the tax shall be

printed to permit voting for or against the proposition:

"Adoption of a sales and use tax at the rate of ____ of one

percent (insert one-eighth, one-fourth, three-eighths, or

one-half, as appropriate) for the purpose of financing authorized

programs of the ____ Municipal Development Corporation (insert

the name of the corporation)."

specific program, or the tax may be adopted with general language

permitting the use of the tax for any purposes authorized by this

chapter.

(d) If a sales and use tax is levied, it may be adopted for a

maximum of 20 years, but may then be reauthorized, subject to a

payment of indebtedness. The tax may be authorized for a shorter

period of time or limited to the time necessary to pay any

indebtedness.

(e) The rate of a tax adopted under this section must be

one-eighth, one-fourth, three-eighths, or one-half of one

percent. A municipality may not adopt a sales and use tax under

this chapter if the adoption of the tax under this chapter would

result in a combined tax rate of all local sales and use taxes of

more than two percent in any location in the municipality.

(f) Chapter 321, Tax Code, governs a municipality's imposition,

computation, administration, collection, and remittance of a tax

authorized by this section except as inconsistent with this

chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.082. ELECTION TO CHANGE RATE OF TAX. (a) A

municipality that has adopted a sales and use tax under this

chapter at a rate of less than one-half of one percent may

increase or decrease the rate of the tax if the increase or

decrease is approved by a majority of the voters of the

municipality voting at an election called and held for that

purpose.

(b) The tax may be increased or decreased under this section in

one or more increments of one-eighth of one percent, but a

maximum of one-half of one percent is permitted.

shall be printed to permit voting for or against the proposition:

"The ________ (increase or decrease, as appropriate) of a sales

and use tax to the rate of ____ of one percent (insert

one-eighth, one-fourth, three-eighths, or one-half, as

appropriate) for the purpose of financing authorized programs of

the ________ Municipal Development Corporation (insert the name

of the corporation)."

(d) Notwithstanding Subsections (a)-(c), in a municipality that

is located within the territorial limits of a regional

transportation authority and was added to the authority under

Section 452.6025, Transportation Code, a sales and use tax

imposed by the municipality under this subchapter is subject to

reduction in the manner prescribed by that section.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001. Amended by Acts 2003, 78th Leg., ch. 915, Sec. 5, eff. June

20, 2003.

Sec. 379A.083. IMPOSITION OF TAX. (a) If the municipality

adopts the tax, a tax is imposed on the receipts from the sale at

retail of taxable items in the municipality at the rate approved

at the election, and an excise tax is imposed on the use,

storage, or other consumption in the municipality of tangible

personal property purchased, leased, or rented from a retailer

during the period that the tax is effective in the municipality.

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.

(b) The adoption of the tax or the change of the tax rate takes

effect on the first day of the first calendar quarter occurring

after the expiration of the first complete quarter occurring

after the date the comptroller receives a notice of the results

of the election adopting, increasing, or decreasing the tax.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

SUBCHAPTER F. REPORT TO COMPTROLLER

Sec. 379A.101. REPORT REQUIRED. (a) Not later than February 1

of each year, the board of directors of the corporation shall

submit to the comptroller a report in the form required by the

comptroller.

(b) The reporting form may not exceed one page in length and

must include:

(1) a statement of the corporation's primary objectives;

(2) a statement of the corporation's total revenues during the

preceding fiscal year;

(3) a statement of the corporation's total expenditures during

the preceding fiscal year;

(4) a statement of the corporation's total expenditures during

the preceding fiscal year in each of the following categories:

(A) administration;

(B) personnel;

(D) direct business incentives;

(E) job training for the corporation's personnel;

(F) debt service;

(G) capital costs;

(H) programs authorized by this chapter; and

(I) payments to taxing units, including school districts;

(5) a list of the corporation's capital assets, including land

and buildings; and

(6) any other information the comptroller requires to determine

the use of the sales and use tax imposed under this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.102. FAILURE TO FILE REPORT; ADMINISTRATIVE PENALTY.

(a) If the corporation fails to file a report in accordance with

this subchapter or fails to include sufficient information in the

report, the comptroller shall provide to the corporation a

written notice of the failure. The written notice must include

information on how to correct the failure.

(b) The comptroller may impose an administrative penalty against

the corporation if the corporation does not correct the failure

before the 31st day after the date the corporation receives the

written notice under Subsection (a). The amount of the penalty is

$200 a day for each day the filing of the report is delinquent.

the imposition of an administrative penalty under this section.

The rules must protect the due process rights of the corporation.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

Sec. 379A.103. COMPTROLLER'S REPORT TO LEGISLATURE. (a) Not

later than November 1 of each even-numbered year, the comptroller

shall submit to the legislature a report on the use of the sales

and use tax imposed under this chapter.

(b) On request, the comptroller shall provide without charge a

copy of the report required by Subsection (a) to the corporation

created under this chapter.

Added by Acts 2001, 77th Leg., ch. 149, Sec. 1, eff. May 16,

2001.

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