HBA-SEP H.B. 1439 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1439 By: McClendon Economic Development 2/25/2001 Introduced BACKGROUND AND PURPOSE Although Texas is currently experiencing low unemployment levels, the average wage in the workforce may be low. A city, by using part of its sales tax revenue to support short and long term economic development projects such as literacy classes that provide childcare, scholarship programs in targeted occupational areas, and specific job training programs to attract high tech companies, may be able to increase the earning potential of its workforce. House Bill 1439 authorizes a municipality's governing body to create a municipal development corporation (MDC) to develop and implement certain workforce development programs and authorizes a municipality to levy a sales and use tax for the benefit of the MDC. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts in SECTION 1 (Section 379A.102, Local Government Code) of this bill. ANALYSIS House Bill 1439 amends the Local Government Code to create the Better Jobs Act to authorize a municipality's governing body to create a single municipal development corporation (MDC). An MDC is governed by a board of 5, 7, 9, or 11 directors, as determined and appointed by the municipality's governing board. The bill sets forth provisions regarding a director's term of service. The bill requires the board of directors of the MDC (board) to conduct its meetings in the municipality that created the MDC and to appoint from its members a presiding officer, a secretary, and other necessary officers. For the purposes of open meetings and public information, the board is treated as a governmental body (Secs. 379A.011, 379A.013, 379A.021--379A.0024, and 379A.055). The bill authorizes the MDC to develop and implement programs to directly facilitate the development of a skilled workforce. The bill also authorizes an MDC to acquire, develop, or use land, buildings, equipment, facilities, and other improvements in connection with a program. The bill also sets forth general powers of the MDC (Secs. 379A.051 and 379A.052). The bill authorizes the MDC to issue revenue bonds on behalf of the municipality, including refunding bonds, or other obligations, and sets forth provisions for their issuance and repayment (Sec. 379A.053). The bill sets forth requirements for the administration of funds provided by an MDC to an institution of higher education to be used for scholarships (Sec. 379A.056). The bill authorizes a municipality to levy a sales and use tax for the benefit of the MDC if the tax is authorized by a majority of the voters of the municipality at an election called for that purpose. The bill only authorizes the tax to be levied for a maximum of 20 years after which the tax may be reauthorized, subject to a payment of indebtedness. The bill sets forth authorized tax rates and a cap on the combined local sales and use tax rate and provides for tax rate increases. The bill provides that the Municipal Sales and Use Tax Act governs a tax under these provisions except as inconsistent with the Better Jobs Act (Secs. 379A.081 and 379A.082). The bill sets forth provisions for the imposition of a tax adopted under these provisions (Sec. 379A.083). The bill requires the board to submit, not later than February 1 of each year, a report in the form required by the comptroller. If the MDC fails to file a report or fails to include significant information, the comptroller is required to provide written notice, including information on how to correct the failure, to the MDC. The bill authorizes the comptroller to assess an administrative penalty of $200 for each day the filing of the report is delinquent if the MDC does not correct the failure before the 31st day after the date the MDC receives the notice. The bill requires the comptroller, by rule, to prescribe procedures for the imposition of an administrative penalty that protects the due process rights of the MDC (Secs. 379A.101 and 379A.102). The bill requires the comptroller to submit to the legislature, not later than November 1 of each evennumbered year, a report on the use of the sales and use tax imposed under the Better Jobs Act. The bill also requires the comptroller to provide, on request, a copy of the report to the MDC created under the Better Jobs Act (Sec. 379A.103). EFFECTIVE DATE On passage or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.