HBA-TYH C.S.H.B. 2614 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2614 By: Counts Economic Development 4/12/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, Article 5190.6 (Development Corporation Act of 1979), V.T.C.S., allows a county or municipal corporation to charter a development corporation. There is no provision in the statute to allow a group of counties to charter a development corporation. C.S.H.B. 2614 creates a county alliance, with the same powers, functions, and authorities as currently granted to an individual county or municipality, to jointly authorize the creation of a development corporation. 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 2, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to define "county alliance" and redesignate Subdivisions (8)-(14) to (9)-(15). SECTION 2. Amends Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Section 4D, as follows: Sec. 4D. (a) Authorizes two or more counties that are adjacent or are in close proximity, as determined by the governing bodies of the counties involved, to create a county alliance to authorize the creation of a corporation. Provides that the county alliance is a single unit for the purposes of this Act. Provides that the other provisions of this Act apply to the county alliance and a corporation authorized by the county alliance, except to the extent inconsistent with this section or another provision of this Act that is expressly applicable to the county alliance or corporation. (b) Provides that the board of directors (board) of a corporation authorized by a county alliance consists of members appointed by the commissioners court of each county in the alliance. Provides that the board consists of three members from each county if the alliance includes 10 or fewer counties or two members from each county if the alliance includes more than 10 counties. Prohibits a member of the board from serving more than six years and authorizes a member to be removed at the will of the appointing county. Provides that the member serves without compensation but is entitled to reimbursement for expenses incurred in the performance of the member's duties. (c) Authorizes a county to become a member of an established county alliance that has authorized the creation of a corporation. Provides that to become a member of an established county alliance: _the commissioner's court of the county wanting to join the alliance must petition the board for admission; _the board must approve the admission of the petitioning county; _the petitioning county must agree to abide by the bylaws of the county alliance corporation; _the petitioning county must pay a fee to the county alliance as determined by the county alliance corporation's board; and _the petitioning county must meet any other requirements established by the board. (d) Authorizes any net earnings to be distributed among the counties in the county alliance as a percentage of the per capita contributions made by each of the counties, if the board determines that sufficient provisions have been made to pay a county alliance corporation's financial obligations. (e) Authorizes a county to leave a county alliance if all of the county's obligations and entitlements in relation to the county alliance corporation have been properly settled. Prohibits the departing county from receiving any funds, assets, or property of the county alliance corporation until the dissolution of the corporation as provided under Subsection (f). Provides that a county that leaves the county alliance is entitled to receive a distribution as provided under Subsection (f) that is reduced by one percent for each year the corporation operated without the county's membership in the alliance. (f) Requires any assets of the corporation remaining after all the corporation's obligations have been met, on dissolution of a corporation authorized by a county alliance, to be distributed among the counties in the county alliance as a percentage of the per capita contributions made by each of the counties during the existence of the corporation subject to Subsection (e). (g) Provides that a county alliance corporation is not required to dissolve because a county leaves the county alliance if at least two counties remain in the county alliance. SECTION 3. Amends Section 7(b), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to require a certificate of incorporation granted to a county alliance corporation and the original of the articles of incorporation that is required to be delivered to the governing body of the county alliance under whose auspices the corporation was created to be delivered to the commissioners court of any county in the county alliance. Requires that county to provide photocopies of the certificate of incorporation and the articles of incorporation to each other member of the county alliance. SECTION 4. Amends Section 17, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Subsection (c), to prohibit an amendment of the articles of incorporation of a county alliance corporation from being adopted unless approved by the governing body of each member of the county alliance under whose auspices the corporation was created. SECTION 5. Amends Section 20(e), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to require a restated certificate of incorporation granted to a county alliance corporation and the originals of the restated articles of incorporation that are required to be delivered to the governing body of the county alliance under whose auspices the corporation was created to be delivered to the commissioners court of any county in the county alliance. Requires that county to provide photocopies of the certificate of incorporation and the articles of incorporation to each other member of the county alliance. SECTION 6. Amends Section 25(f), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to provide that if the corporation is authorized by a county alliance, the resolution required by this subsection must be adopted by the commissioners courts of at least three-fifths of the members of the county alliance. SECTION 7. Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill by adding SECTIONS 1, 3, 4, 5, and 6, and redesignating proposed SECTIONS 1 and 2 to SECTIONS 2 and 7, respectively. The substitute further modifies the original bill as follows: SECTION 1. Amends Section 2, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to define "county alliance" and redesignate Subdivisions (8)-(14) to (9)-(15). SECTION 2. Modifies proposed Section 4D, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), as follows: Sed. 4D. (a) Authorizes two or more counties that are adjacent or are in close proximity, rather than that have a commonality of interest, as determined by the governing bodies of the counties involved, to create a county alliance to authorize the creation of a corporation. Provides that the other provisions of this Act apply to the county alliance and a corporation authorized by the county alliance, except to the extent inconsistent with either this section or another provision of this Act that is expressly applicable to the county alliance or corporation, rather than to the extent inconsistent with only this section. (b) Redesignated from original Subsection (c). Adds a provision specifying that the board consists of three members from each county if the alliance includes 10 or fewer counties, or two members from each county if the alliance includes more than 10 counties. Makes nonsubstantive changes. (c) Redesignated from original Subsection (b). Provides that to become a member of an established county alliance: _the commissioner's court of the county wanting to join the alliance must petition the board for admission; _the board must approve the admission of the petitioning county; _the petitioning county must agree to abide by the bylaws of the county alliance corporation; _the petitioning county must pay a fee to the county alliance as determined by the county alliance corporation's board; and _the petitioning county must meet any other requirements established by the board. (d) Authorizes any net earnings to be distributed among the counties in the county alliance as a percentage of the per capita contributions made by each of the counties, if the board determines that sufficient provisions have been made to pay a county alliance corporation's financial obligations. (e) Redesignated from Subsection (b). Authorizes a county to leave a county alliance if all of the county's obligations and entitlements in relation to the county alliance corporation, rather than county alliance, have been properly settled. Prohibits the departing county from receiving any funds, assets, or property of the county alliance corporation until the dissolution of the corporation as provided under Subsection (f). Provides that a county that leaves the county alliance is entitled to receive a distribution as provided under Subsection (f) that is reduced by one percent for each year the corporation operated without the county's membership in the alliance. (f) Redesignated from Subsection (d). Requires any assets of the corporation remaining after all the corporation's obligations have been met, on dissolution of a corporation authorized by a county alliance, to be distributed among the counties in the county alliance as a percentage of the per capita contributions made by each of the counties during the existence of the corporation subject to Subsection (e). The original bill required any remaining assets of the corporation to be distributed among the counties in the county alliance on a per capita basis, on dissolution of a corporation authorized by a county alliance. (g) Provides that a county alliance corporation is not required to dissolve because a county leaves the county alliance if at least two counties remain in the county alliance. SECTION 3. Amends Section 7(b), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to require a certificate of incorporation granted to a county alliance corporation and the original of the articles of incorporation that is required to be delivered to the governing body of the county alliance under whose auspices the corporation was created to be delivered to the commissioners court of any county in the county alliance. Require that county to provide photocopies of the certificate of incorporation and the articles of incorporation to each other member of the county alliance. SECTION 4. Amends Section 17, Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Subsection (c), to prohibit an amendment of the articles of incorporation of a county alliance corporation from being adopted unless approved by the governing body of each member of the county alliance under whose auspices the corporation was created. SECTION 5. Amends Section 20(e), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to require a restated certificate of incorporation granted to a county alliance corporation and the originals of the restated articles of incorporation that are required to be delivered to the governing body of the county alliance under whose auspices the corporation was created to be delivered to the commissioners court of any county in the county alliance. Requires that county to provide photocopies of the certificate of incorporation and the articles of incorporation to each other member of the county alliance. SECTION 6. Amends Section 25(f), Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), to provide that if the corporation is authorized by a county alliance, the resolution required by this subsection must be adopted by the commissioners courts of at least three-fifths of the members of the county alliance. SECTION 7. Makes no change.