HBA-MPA C.S.H.B. 1543 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1543 By: Keffer Economic Development 3/18/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, a 4A development corporation may only be established in a city with a population under 50,000 or a county with a population of 500,000 or less. A 4B development corporation may only be established in a city with a population over 400,000 or a county with a population of 750,000 or more. Both entities were created by the Development Corporation Act of 1979 (Article 5190.6, V.T.C.S.). The population restrictions set out in the Act have been changed by the legislature over time. Some corporations classified as 4A and 4B corporations would not qualify as a 4A and 4B under the current guidelines. An individual must be a "city resident" to qualify to serve as a director of a 4B development corporation. This contrasts with the qualifications for a 4A development corporation, which is not limited to residents of the city. This requirement can be burdensome for small rural communities in which many of the business owners and those with a stake in the community do not actually reside within the city limits. These persons are currently disqualified from serving on a 4B development corporation board, limiting the availability of qualified candidates. C.S.H.B. 1543 changes the requirements so that a person may serve on the board of directors of a development corporation created under Section 4B if the person lives either in the city that created the corporation or in the county where the majority of the city is located. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 4B(c), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to provide that each director of an industrial development corporation organized under this section created by an eligible city with a population of 10,000 or more must be a resident of the city. Provides that each director of an industrial development corporation organized under this section created by an eligible city with a population of less than10,000 must be a resident of the city or the county in which the major part of the eligible city is located. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1543 differs from the original bill in SECTION 1 by specifying that in eligible cities with a population of 10,000 or more each director of an industrial development corporation organized under this section must be a resident of the city, but in a city with a population less than 10,000 a director must be a resident of the city or the county in which the largest part of the city is located. The original bill deleted the requirement that each director be a resident of the eligible city. C.S.H.B. 1543 differs from the original bill in SECTION 2 by adding an effective date of September 1, 1999. Redesignates SECTION 2 to SECTION 3.