HBA-CCH, MPM, SEP H.B. 782 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 782
By: Tillery
Urban Affairs
2/20/2001
Introduced



BACKGROUND AND PURPOSE 

Current law permits an industrial development corporation (IDC) created by
a municipality under the Development Corporation Act of 1979 to issue bonds
to finance the cost of promoting economic development in the state.  While
current law also permits a home-rule municipality of more than 100,000 to
grant public money to certain tax-exempt organizations for certain economic
development purposes, municipalities in general are not authorized to grant
any public money to an IDC.  Thus, cities cannot use tax revenues to help
an IDC retire bonds issued by the IDC to fund economic development
projects. House Bill 782 authorizes a home-rule municipality of more than
100,000 to grant public money to an IDC for certain economic development
purposes.  The public money granted by the municipality is derived from any
source lawfully available to the municipality under its charter or other
law, other than from the proceeds of bonds or other obligations of the
municipality payable from ad valorem taxes. 

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. 

ANALYSIS

House Bill 782 amends the Local Government Code and the Development
Corporation Act of 1979 to authorize a home-rule municipality with a
population of more than 100,000, under a contract with an industrial
development corporation (IDC) created by the municipality under the
Development Corporation Act of 1979, to grant public money to the IDC.  The
IDC is authorized to use the grant money to finance projects or to repay
bonds issued by the IDC for the development and diversification of the
state economy, the elimination of unemployment or underemployment in the
state, and the development and expansion of state commerce.   

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.