CHAPTER 504. TYPE A CORPORATIONS - Texas Statutes

LOCAL GOVERNMENT CODE

TITLE 12. PLANNING AND DEVELOPMENT

SUBTITLE C1. ADDITIONAL PLANNING AND DEVELOPMENT PROVISIONS

APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT

CHAPTER 504. TYPE A CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 504.001. DEFINITION. In this chapter, "authorizing

municipality" means the municipality that authorizes the creation

of a Type A corporation.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.002. APPLICABILITY OF CHAPTER. This chapter applies

only to a municipality that:

(1) is located in a county that has a population of 500,000 or

less; or

(2) has a population of less than 50,000 and:

(A) is located in two or more counties, one of which has a

population of 500,000 or more;

(B) is located within the territorial limits of, but has not

elected to become a part of, a metropolitan rapid transit

authority:

(i) the principal municipality of which has a population of less

than 1.9 million; and

(ii) that was created before January 1, 1980, under Chapter 141,

Acts of the 63rd Legislature, Regular Session, 1973, and is

operating under Chapter 451, Transportation Code; or

(C) is located within the territorial limits of, but has not

elected to become a part of, a regional transportation authority:

(i) the principal municipality of which has a population of more

than 750,000; and

(ii) that was created under Chapter 683, Acts of the 66th

Legislature, Regular Session, 1979, or Chapter 452,

Transportation Code, and is operating under Chapter 452,

Transportation Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.003. AUTHORITY TO CREATE CORPORATION. (a) A

municipality may authorize the creation under this subtitle of a

Type A corporation.

(b) A municipality may not authorize the creation of more than

one Type A corporation.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.004. CONTENTS OF CERTIFICATE OF FORMATION. The

certificate of formation of a Type A corporation must state that

the corporation is governed by this chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.005. CORPORATION NOT SUBJECT TO CERTAIN PROVISIONS.

Sections 501.203, 501.205, 501.251-501.254, 501.255(a) and (b),

501.256, and 501.257 do not apply to a corporation under this

chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 504.051. BOARD OF DIRECTORS. (a) The board of directors

of a Type A corporation consists of at least five directors.

(b) A director is appointed by the governing body of the

authorizing municipality, serves at the pleasure of that

governing body, and may be removed by that governing body at any

time without cause.

(c) The governing body of the authorizing municipality shall

determine the number of directors and the length of each

director's term, except that the length of a director's term may

not exceed six years.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.052. OFFICERS. The board of directors of a Type A

corporation shall appoint:

(1) a president;

(2) a secretary; and

(3) other officers of the corporation that the governing body of

the authorizing municipality considers necessary.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.053. QUORUM. A majority of the entire membership of

the board of directors of a Type A corporation is a quorum.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.054. LOCATION OF BOARD MEETINGS. The board of

directors of a Type A corporation shall conduct each board

meeting within the boundaries of the authorizing municipality.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.055. RESTRICTIONS ON REGISTERED AGENT AND OFFICE. (a)

The registered agent of a Type A corporation must be an

individual who is a resident of this state.

(b) The registered office of a Type A corporation must be

located within the boundaries of the authorizing municipality.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER C. GENERAL POWERS AND DUTIES

Sec. 504.101. APPLICABILITY OF OTHER LAW; CONFLICTS. A Type A

corporation has the powers and is subject to the limitations of a

corporation created under another provision of this subtitle

outside of this chapter. To the extent of a conflict between

this chapter and another provision of this subtitle, this chapter

prevails.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.102. CONTRACT WITH OTHER PRIVATE CORPORATION. A Type A

corporation may contract with another private corporation to:

(1) carry out an industrial development program or objective; or

(2) assist with the development or operation of an economic

development program or objective consistent with the purposes and

duties provided by this subtitle.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.103. LIMITATION ON PRIMARY PURPOSE OF PROJECT;

EXCEPTIONS. (a) Except as otherwise provided by this section, a

Type A corporation may not undertake a project the primary

purpose of which is to provide:

(1) a transportation facility;

(2) a solid waste disposal facility;

(3) a sewage facility;

(4) a facility for furnishing water to the general public; or

(5) an air or water pollution control facility.

(b) A Type A corporation may provide a facility described by

Subsection (a) to benefit property acquired for a project that

has another primary purpose.

(c) A Type A corporation may undertake a project the primary

purpose of which is to provide:

(1) a general aviation business service airport that is an

integral part of an industrial park;

(2) a port-related facility to support waterborne commerce; or

(3) an airport-related facility, if the authorizing

municipality:

(A) is wholly or partly located within 25 miles of an

international border; and

(B) has, at the time the project is approved by the corporation

as provided by this subtitle:

(i) a population of less than 50,000; or

(ii) an average rate of unemployment that is greater than the

state average rate of unemployment during the most recent

12-month period for which data is available that precedes the

date the project is approved.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.104. ASSUMPTION OR PAYMENT OF PREEXISTING DEBT

PROHIBITED. A Type A corporation may not:

(1) assume a debt that existed before the date the authorizing

municipality authorized the creation of the corporation; or

(2) make an expenditure to pay the principal of or interest on a

debt that existed before the date prescribed by Subdivision (1).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.105. LIMITATION ON USE OF REVENUES FOR PROMOTIONAL

PURPOSE. (a) Except as provided by Subsection (b), a Type A

corporation may spend not more than 10 percent of the corporate

revenues for promotional purposes.

(b) A Type A corporation may spend not more than 25 percent of

the corporate revenues for promotional purposes if the

authorizing municipality:

(1) is located in two counties;

(2) has a population of less than 24,250 according to the 1990

federal census; and

(3) is located wholly or partly within 10 miles of a federal

military reservation.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.106. EMINENT DOMAIN. A Type A corporation may not

exercise the power of eminent domain except by action of the

governing body of the authorizing municipality.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.107. LIABILITY. (a) The following are not liable for

damages arising from the performance of a governmental function

of a Type A corporation or the authorizing municipality:

(1) the corporation;

(2) a director of the corporation;

(3) the municipality;

(4) a member of the governing body of the municipality; and

(5) an employee of the corporation or municipality.

(b) For purposes of Chapter 101, Civil Practice and Remedies

Code (Texas Tort Claims Act), a Type A corporation is a

governmental unit and the corporation's actions are governmental

functions.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER D. AUTHORIZATION FOR ADDITIONAL PROJECTS

Sec. 504.151. DEFINITIONS. In this subchapter:

(1) "Related infrastructure" has the meaning assigned by Section

334.001.

(2) "Sports venue" means an arena, coliseum, stadium, or other

type of area or facility:

(A) that is primarily used or is planned for primary use for one

or more professional or amateur sports or athletics events; and

(B) for which a fee is charged or is planned to be charged for

admission to the sports or athletics events, other than

occasional civic, charitable, or promotional events.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.152. ELECTION TO AUTHORIZE PROJECTS APPLICABLE TO TYPE

B CORPORATIONS. (a) An authorizing municipality may submit to

the voters of the municipality a ballot proposition that

authorizes the Type A corporation to use the sales and use tax

imposed under this chapter, including any amount previously

authorized and collected, for a specific project or for a

specific category of projects that do not qualify under this

chapter but qualify under Chapter 505, including a sports venue

and related infrastructure.

(b) The project or category of projects described by Subsection

(a) must be clearly described on the ballot so that a voter is

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 and use tax, the ballot language must clearly

state that fact.

(c) The authorizing municipality may submit the ballot

proposition at:

(1) an election held under another provision of this subtitle,

including the election at which the proposition to initially

approve the adoption of a sales and use tax for the benefit of

the corporation is submitted; or

(2) a separate election to be held on a uniform election date.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.153. PUBLIC HEARING PRECEDING ELECTION. Before an

election may be held under Section 504.152, a public hearing must

be held in the authorizing municipality to inform the

municipality's residents of the cost and impact of the project or

category of projects. At least 30 days before the date set for

the hearing, notice of the date, time, place, and subject of the

hearing must be published in a newspaper with general circulation

in the municipality in which the project is located. The notice

should be published on a weekly basis until the date of the

hearing.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.154. LIMITATION ON SUBSEQUENT ELECTION. If a majority

of the voters voting on the issue do not approve a specific

project or a specific category of projects at an election under

Section 504.152, another election concerning the same project or

category of projects may not be held before the first anniversary

of the date of the most recent election disapproving the project

or category of projects.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.155. SUBSEQUENT APPROVAL OF ADDITIONAL PROJECTS. Prior

approval of a specific project at an election or completion of a

specific project approved at an election does not prevent an

authorizing municipality from seeking voter approval of an

additional project or category of projects under this subchapter

to be funded from the same sales and use tax.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.156. APPLICABILITY OF CHAPTER TO ADDITIONAL PROJECT. A

project undertaken under this subchapter is governed by this

chapter, including the provisions of this chapter relating to the

authorization and expiration of a sales and use tax.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER E. INVESTMENT AGREEMENTS

Sec. 504.201. DEFINITIONS. In this subchapter:

(1) "Base taxable value" means the taxable value of property

located in the defined area of a project as of January 1 of the

year in which the agreement is entered into under Section

504.202.

(2) "Corresponding taxing unit" means another taxing unit that:

(A) is of the same type of political subdivision as a taxing

unit that enters into an agreement under Section 504.202; and

(B) taxes property located in the defined area of a project that

is the subject of the agreement.

(3) "Taxing unit" has the meaning assigned by Section 1.04, Tax

Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.202. AGREEMENT TO INVEST IN EXTRATERRITORIAL PROJECT.

(a) A taxing unit may enter into an agreement with a Type A

corporation to invest in a project that is undertaken by the

corporation and that is not located in the territory of the

taxing unit. A Type A corporation may enter into an agreement

under this section with more than one taxing unit.

(b) Before entering into the agreement, the Type A corporation

undertaking the project must designate a defined area that

includes the territory where the project is to be located.

(c) The agreement must state the base taxable value of the

property in the defined area of the project.

(d) The agreement may provide that the taxing unit is entitled

to receive from the Type A corporation, in exchange for the

investment, an amount equal to a specified percentage of the tax

revenue from taxes imposed by the corresponding taxing unit on

the taxable value of the property in the defined area that

exceeds the base taxable value, during the period the

corresponding taxing unit imposes taxes on that property.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.203. REQUIRED AGREEMENT WITH CORRESPONDING TAXING UNIT.

A Type A corporation that enters into an agreement under Section

504.202 shall enter into an agreement with a corresponding taxing

unit to recover the amount paid by the corporation to a taxing

unit as provided by Section 504.202(d).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.204. EFFECT ON AUTHORITY UNDER OTHER LAW. (a) This

subchapter does not affect a taxing unit's authority to grant a

tax abatement.

(b) This subchapter does not affect a Type A corporation's

authority to invest in a project or recover its total investment

by contract under Section 501.159.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER F. SALES AND USE TAX

Sec. 504.251. TAX AUTHORIZED. The authorizing municipality may

adopt a sales and use tax for the benefit of a Type A corporation

if the tax is approved by a majority of the voters of the

municipality voting at an election held for that purpose.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.252. SALES TAX. (a) If the authorizing municipality

adopts the tax under Section 504.251, a tax is imposed on the

receipts from the sale at retail of taxable items within the

municipality at the rate approved by the voters.

(b) The rate of the tax imposed under Subsection (a) must be

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

one percent.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.253. USE TAX. (a) If the authorizing municipality

adopts the tax under Section 504.251, an excise tax is imposed on

the use, storage, or other consumption within the municipality of

taxable items purchased, leased, or rented from a retailer during

the period that the tax is effective within the municipality.

(b) The rate of the excise tax is the same as the rate of the

sales tax portion of the sales and use tax and is applied to the

sales price of the taxable items.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.254. COMBINED TAX RATE. (a) An authorizing

municipality may not adopt a rate under this chapter that, when

added to the rates of all other sales and use taxes imposed by

the authorizing municipality and other political subdivisions of

this state having territory in the authorizing municipality,

would result in a combined rate exceeding two percent.

(b) An election adopting a rate that would result in a rate

exceeding the combined rate limit under Subsection (a) has no

effect.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.255. APPLICABILITY OF TAX CODE. (a) Chapter 321, Tax

Code, governs an election to approve the adoption of the sales

and use tax under this chapter and governs the imposition,

computation, administration, governance, use, and abolition of

the tax except as inconsistent with this chapter.

(b) The tax imposed under this chapter takes effect as provided

by Section 321.102(a), Tax Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.256. BALLOT. In an election to adopt the sales and use

tax under this chapter, the ballot shall be printed to provide

for voting for or against the proposition: "The adoption of a

sales and use tax for the promotion and development of new and

expanded business enterprises at the rate of __________ of one

percent" (one-eighth, one-fourth, three-eighths, or one-half to

be inserted as appropriate).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.257. LIMITATION ON DURATION OF TAX. (a) At an

election held under Section 504.251 or 504.258, the authorizing

municipality may also allow the voters to vote on a ballot

proposition to limit the period for imposition of a sales and use

tax. If an authorizing municipality elects to limit the period

for imposition of the tax, the following phrase shall be added to

the end of the ballot proposition prescribed by Section 504.256:

"to be imposed for __________ years" (the number of years to be

inserted as appropriate). The governing body of the municipality

shall set the expiration date of the proposed tax to occur on the

appropriate anniversary of the effective date of the tax.

(b) A sales and use tax imposed for a limited period under this

section expires on the date set by the governing body of the

authorizing municipality under Subsection (a) unless the tax is

repealed on an earlier date by a majority of the voters voting in

an election held in the municipality. If an election to abolish

the tax is held, Sections 321.102(a) and 321.402(b), Tax Code,

apply to the date of repeal.

(c) If an authorizing municipality reduces the rate of an

additional sales and use tax under Chapter 321, Tax Code, to

impose a tax under this chapter for a limited period as provided

by this section, and the municipality does not have an election

to change the rate of the additional sales and use tax before the

tax under this chapter expires, on the date the tax under this

chapter expires, the rate of the municipality's additional sales

and use tax returns to the rate in effect immediately before the

tax under this chapter was adopted. The municipality is not

required to hold an election under Chapter 321, Tax Code, to

impose the additional sales and use tax at that rate.

(d) A sales and use tax that is approved without limiting the

period during which the tax is imposed remains in effect until

repealed by election.

(e) An authorizing municipality that has imposed a tax under

this chapter may extend the period of the tax's imposition or

reimpose the tax only if the extension or reimposition is

approved by a majority of the voters of the municipality voting

at an election held for that purpose.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.258. ELECTION TO REDUCE OR INCREASE TAX RATE. (a) An

authorizing municipality that has imposed a sales and use tax

under this chapter may, in the same manner and by the same

procedure as the municipality imposed the tax, reduce or increase

the tax rate by a majority of the voters of the municipality

voting at an election held for that purpose.

(b) On petition of 10 percent or more of the registered voters

of the authorizing municipality requesting an election to reduce

or increase the tax rate under this chapter, the governing body

of the municipality shall order an election on the issue.

(c) The tax rate may be:

(1) reduced in one or more increments of one-eighth of one

percent, to a minimum rate of one-eighth of one percent; or

(2) increased in one or more increments of one-eighth of one

percent, to a maximum rate of one-half of one percent.

(d) The ballot for an election under this section shall be

printed in the same manner as the ballot under Section 504.256.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.259. REDUCTION OF TAX WITHIN REGIONAL TRANSPORTATION

AUTHORITY. Notwithstanding any other provision of this chapter,

a tax under this chapter imposed by an authorizing municipality

that is located within the territorial limits of a regional

transportation authority and that has been added to the territory

of the authority under Section 452.6025, Transportation Code, is

subject to reduction in the manner prescribed by Section

452.6025, Transportation Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.260. LIMITED SALES AND USE TAX FOR SPECIFIC PROJECT.

(a) At an election held under Section 504.251 or 504.258, the

authorizing municipality may also allow the voters to vote on a

ballot proposition to limit the use of the sales and use tax to a

specific project. If an authorizing municipality elects to limit

the use of the tax to a specific project, in the ballot

proposition prescribed by Section 504.256 or 504.261 a

description of the project shall be substituted for the words

"new and expanded business enterprises."

(b) When the last of a Type A corporation's obligations have

been satisfied regarding the specific project for which the sales

and use tax was limited, the corporation shall send to the

comptroller a notice stating that the sales and use tax imposed

for the specific project may not be collected after the last day

of the first calendar quarter beginning after the date of

notification. A sales and use tax imposed for a specific project

under this section may not be collected after the last day of the

first calendar quarter beginning after the date of the

notification to the comptroller. The state shall forward revenue

collected after the obligations for the specific project have

been satisfied to the governing body of the authorizing

municipality to be used to pay current bonded indebtedness of the

municipality.

(c) A Type A corporation created to perform a specific project

under this section may retain its corporate existence and perform

any other project approved by the voters of the authorizing

municipality at an election held under Section 504.251 or

504.258.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.261. CONCURRENT ELECTION WITH ELECTION UNDER TAX CODE.

(a) At an election to adopt, reduce, increase, or abolish the

sales and use tax under this chapter, the authorizing

municipality may also allow voters to vote on the same ballot on

a proposition to impose, reduce, increase, or abolish the

additional sales and use tax imposed under Section 321.101(b),

Tax Code, if the municipality is authorized by Chapter 321, Tax

Code, to impose, reduce, increase, or abolish the additional

sales and use tax. Except as provided by Subsection (b), the

municipality must follow the procedures of Chapter 321, Tax Code,

in relation to the imposition, reduction, increase, or

abolishment of the additional sales and use tax imposed under

Section 321.101(b), Tax Code.

(b) In an election to impose, reduce, increase, or abolish the

tax under this chapter and the additional sales and use tax, the

ballot shall be printed to provide for voting for or against the

proposition: "The adoption of a sales and use tax within the

municipality for the promotion and development of new and

expanded business enterprises at the rate of __________ of one

percent (one-eighth, one-fourth, three-eighths, or one-half to be

inserted as appropriate) and the adoption of an additional sales

and use tax within the municipality at the rate of __________ of

one percent to be used to reduce the property tax rate"

(one-eighth, one-fourth, three-eighths, or one-half to be

inserted as appropriate).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.262. PROCEDURES ON EXPIRATION OF TAX. (a) Before the

60th day before the date that a sales and use tax imposed under

this chapter is to expire, the governing body of the authorizing

municipality imposing the tax shall send to the comptroller a

notice stating the expiration date of the tax.

(b) The state shall forward revenue collected from the

imposition of the tax after the tax's expiration date to the

governing body of the authorizing municipality to be used to pay

current bonded indebtedness of the municipality.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER G. USE OF TAX PROCEEDS

Sec. 504.301. DELIVERY AND GENERAL USE OF TAX PROCEEDS. On the

authorizing municipality's receipt from the comptroller of the

proceeds of the sales and use tax imposed under this chapter, the

authorizing municipality shall deliver the proceeds to the Type A

corporation for use in carrying out the corporation's functions.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.302. PAYMENT OF MAINTENANCE AND OPERATING COSTS;

ELECTION. (a) The costs of a publicly owned and operated

project purchased or constructed under this chapter include the

maintenance and operating costs of the project.

(b) The proceeds of the sales and use tax imposed under this

chapter may be used to pay the maintenance and operating costs of

a project unless, not later than the 60th day after the date

notice of the specific use of the tax proceeds is first

published, the governing body of the authorizing municipality of

the Type A corporation undertaking the project receives a

petition from more than 10 percent of the registered voters of

the municipality requesting that an election be held before the

tax proceeds may be used to pay the maintenance and operating

costs of the project.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.303. PAYMENT OF BONDS. The proceeds of the sales and

use tax imposed under this chapter may be used to pay the

principal of, interest on, and other costs relating to the Type A

corporation's bonds, but the bonds or any instrument related to

the bonds may not give a bondholder a right to demand payment

from tax proceeds in excess of the proceeds collected from the

tax imposed under this chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.304. PAYMENT FOR CLEANUP OF CONTAMINATED PROPERTY;

ELECTION. (a) The economic development office, with the

assistance of the Texas Commission on Environmental Quality, may

encourage a Type A corporation to use proceeds from the sales and

use tax imposed under this chapter for the cleanup of

contaminated property.

(b) A Type A corporation may use proceeds from the sales and use

tax for the cleanup of contaminated property only if the use of

tax proceeds for that purpose is authorized by a majority of the

voters of the authorizing municipality voting at an election 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 the

cleanup of contaminated property."

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.305. PAYMENT FOR JOB TRAINING. The proceeds of the

sales and use tax imposed under this chapter may also be used to

pay expenses relating to job training incurred by the Type A

corporation under Section 501.162.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

SUBCHAPTER H. TERMINATION OF CORPORATION

Sec. 504.351. ELECTION TO TERMINATE EXISTENCE OF CORPORATION ON

PETITION. (a) On petition of 10 percent or more of the

registered voters of an authorizing municipality requesting an

election on the termination of the existence of the Type A

corporation, the governing body of the municipality shall order

an election on the issue.

(b) The authorizing municipality shall hold the election on the

next available uniform election date that occurs after the time

required by Section 3.005, Election Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.352. BALLOT. The ballot for an election held under

Section 504.351 shall be printed to provide for voting for or

against the proposition: "Termination of the __________ (name of

the corporation)."

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.

Sec. 504.353. TERMINATION OF EXISTENCE OF CORPORATION. (a) If

a majority of voters voting on the issue at an election held

under Section 504.351 approve the termination, the Type A

corporation shall:

(1) continue operations only as necessary to pay the principal

of and interest on the corporation's bonds and to meet

obligations incurred before the date of the election; and

(2) dispose of the corporation's assets and apply the proceeds

to satisfy obligations described by Subdivision (1), to the

extent practicable.

(b) When the last of the Type A corporation's obligations are

satisfied, any remaining assets of the corporation shall be

transferred to the authorizing municipality, and the existence of

the corporation is terminated.

(c) A tax imposed under this chapter may not be collected after

the last day of the first calendar quarter that begins after the

Type A corporation notifies the comptroller that the last of the

corporation's obligations has been satisfied.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.01, eff. April 1, 2009.