TYPE B CORPORATIONS

Tex. LOC. GOV'T Code ch. 505
in effect

Tex. LOC. GOV'T Code § 505.001. DEFINITION.

In this chapter, "authorizing municipality" means the municipality that authorizes the creation of a Type B corporation. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.002. APPLICABILITY OF CHAPTER.

This chapter applies only to: (1) a municipality: (A) that is located in a county with a population of 500,000 or more; and (B) in which the combined rate of all sales and use taxes imposed by the municipality, this state, and other political subdivisions of this state having territory in the municipality does not exceed 8.25 percent on the date of any election held under or made applicable to this chapter; (2) a municipality: (A) that has a population of 400,000 or more; (B) that is located in more than one county; and (C) in which the combined rate of all sales and use taxes imposed by the municipality, this state, and other political subdivisions of this state having territory in the municipality, including taxes imposed under this chapter, does not exceed 8.25 percent; or (3) a municipality to which Chapter 504 applies. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.003. AUTHORITY TO CREATE CORPORATION.

(a) A municipality may authorize the creation under this subtitle of a Type B corporation. (b) A municipality may not authorize the creation of more than one Type B corporation. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.004. CONTENTS OF CERTIFICATE OF FORMATION.

The certificate of formation of a Type B corporation: (1) must state that the corporation is governed by this chapter; and (2) may include in the corporation's name any word or phrase the authorizing municipality specifies. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.005. 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER B. GOVERNANCE OF CORPORATION

Tex. LOC. GOV'T Code § 505.051. BOARD OF DIRECTORS.

(a) The board of directors of a Type B corporation consists of seven directors. (b) A director is appointed by the governing body of the authorizing municipality for a two-year term. (c) A director may be removed by the governing body of the authorizing municipality at any time without cause. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.052. RESTRICTION ON BOARD MEMBERSHIP.

(a) Each director of a Type B corporation authorized to be created by a municipality with a population of 20,000 or more must be a resident of the municipality. (b) Each director of a Type B corporation authorized to be created by a municipality with a population of less than 20,000 must: (1) be a resident of the municipality; (2) be a resident of the county in which the major part of the area of the municipality is located; or (3) reside: (A) within 10 miles of the municipality's boundaries; and (B) in a county bordering the county in which most of the area of the municipality is located. (c) Three directors of a Type B corporation must be persons who are not employees, officers, or members of the governing body of the authorizing municipality. (d) Notwithstanding Subsections (a)-(c), if a municipality terminates a Type A corporation's existence and authorizes the creation of a Type B corporation, a person serving as a director of the Type A corporation at the time of termination may serve on the board of directors of the Type B corporation. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.053. OFFICERS.

The board of directors of a Type B corporation shall appoint: (1) a president; (2) a secretary; and (3) other officers of the corporation the governing body of the authorizing municipality considers necessary. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.054. QUORUM.

A majority of the entire membership of the board of directors of a Type B corporation is a quorum. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.055. LOCATION OF BOARD MEETINGS.

(a) Except as provided by Subsection (b), the board of directors of a Type B corporation shall conduct all meetings within the boundaries of the authorizing municipality. (b) If the authorizing municipality is located in a county with a population of less than 30,000, the board of directors of a Type B corporation may conduct a board meeting within the boundaries of the county. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. Acts 2011, 82nd Leg., R.S., Ch. 473 (H.B. 479 ), Sec. 2, eff. June 17, 2011.

Tex. LOC. GOV'T Code § 505.056. RESTRICTIONS ON REGISTERED AGENT AND OFFICE.

(a) The registered agent of a Type B corporation must be an individual who is a resident of this state. (b) The registered office of a Type B corporation must be located within the boundaries of the authorizing municipality. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER C. POWERS AND DUTIES

Tex. LOC. GOV'T Code § 505.101. APPLICABILITY OF OTHER LAW; CONFLICTS.

A Type B corporation has the powers granted by this chapter and by other chapters of this subtitle and is subject to the limitations of a corporation created under another provision of this subtitle. 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.102. CONTRACT WITH OTHER PRIVATE CORPORATION.

A Type B 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 specified by this subtitle. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.103. LIMITATION ON USE OF REVENUES FOR PROMOTIONAL PURPOSES.

A Type B corporation may spend not more than 10 percent of the corporate revenues for promotional purposes. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.104. BOND REPAYMENT.

(a) Bonds or other obligations that mature in 30 years or less and that are issued to pay the costs of projects of a type added to the definition of "project" by Subchapter D may be made payable from any source of funds available to the Type B corporation, including the proceeds of a sales and use tax imposed under this chapter. (b) Bonds or other obligations that by their terms are payable from the tax proceeds: (1) may not be paid wholly or partly from any property taxes imposed or to be imposed by the authorizing municipality; and (2) are not a debt of and do not give rise to a claim for payment against the authorizing municipality, except as to sales and use tax revenue held by the municipality and required under this chapter to be delivered to the Type B corporation. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.105. EMINENT DOMAIN.

A Type B corporation may exercise the power of eminent domain only: (1) on approval of the action by the governing body of the authorizing municipality; and (2) in accordance with and subject to the laws applicable to the authorizing municipality. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.106. LIABILITY.

(a) The following are not liable for damages arising from the performance of a governmental function of a Type B 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; or (5) an employee of the corporation or municipality. (b) For purposes of Chapter 101 , Civil Practice and Remedies Code, a Type B corporation is a governmental unit and the corporation's actions are governmental functions. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER D. AUTHORIZED PROJECTS

Tex. LOC. GOV'T Code § 505.151. AUTHORIZED PROJECTS.

In this chapter, "project" means land, buildings, equipment, facilities, expenditures, and improvements included in the definition of "project" under Chapter 501 , including: (1) job training as provided by Section 501.162 ; and (2) recycling facilities. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.152. PROJECTS RELATED TO RECREATIONAL OR COMMUNITY FACILITIES.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to be required or suitable for use for professional and amateur sports, including children's sports, athletic, entertainment, tourist, convention, and public park purposes and events, including stadiums, ball parks, auditoriums, amphitheaters, concert halls, parks and park facilities, open space improvements, museums, exhibition facilities, and related store, restaurant, concession, and automobile parking facilities, related area transportation facilities, and related roads, streets, and water and sewer facilities, and other related improvements that enhance any of the items described by this section. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.153. PROJECTS RELATED TO AFFORDABLE HOUSING.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to be required or suitable for the promotion of development and expansion of affordable housing, as described by 42 U.S.C. Section 12745. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.154. PROJECTS RELATED TO WATER SUPPLY FACILITIES AND WATER CONSERVATION PROGRAMS.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to be required or suitable for: (1) the development or improvement of water supply facilities, including dams, transmission lines, well field developments, and other water supply alternatives; or (2) the development and institution of water conservation programs, including incentives to install water-saving plumbing fixtures, educational programs, brush control programs, and programs to replace malfunctioning or leaking water lines and other water facilities. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.155. PROJECTS RELATED TO BUSINESS ENTERPRISES THAT CREATE OR RETAIN PRIMARY JOBS.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to promote or develop new or expanded business enterprises that create or retain primary jobs, including: (1) a project to provide public safety facilities, streets and roads, drainage and related improvements, demolition of existing structures, general municipally owned improvements, and any improvements or facilities related to a project described by this subdivision; and (2) any other project that the board of directors in the board's discretion determines promotes or develops new or expanded business enterprises that create or retain primary jobs. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.156. PROJECTS RELATED TO BUSINESS ENTERPRISES IN CERTAIN MUNICIPALITIES.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to be required or suitable for the development, retention, or expansion of business enterprises if the project is undertaken by a Type B corporation authorized to be created by a municipality: (1) that has not for each of the preceding two fiscal years received more than $50,000 in revenues from sales and use taxes imposed under this chapter; and (2) the governing body of which has authorized the project by adopting a resolution only after giving the resolution at least two separate readings conducted at least one week apart. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.157. PROJECTS RELATED TO BUSINESS ENTERPRISES IN LANDLOCKED COMMUNITIES.

(a) In this section, "landlocked community" means a municipality that: (1) is wholly or partly located in a county with a population of 2.5 million or more; and (2) has within its municipal limits and extraterritorial jurisdiction less than 100 acres that can be used for the development of manufacturing or industrial facilities in accordance with the municipality's zoning laws or land use restrictions. (b) For a landlocked community that authorizes or has authorized the creation of a Type B corporation, "project" also includes expenditures found by the board of directors to be required for the promotion of new or expanded business enterprises in the landlocked community. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.158. PROJECTS RELATED TO BUSINESS DEVELOPMENT IN CERTAIN SMALL MUNICIPALITIES.

(a) For a Type B corporation authorized to be created by a municipality with a population of 20,000 or less, "project" also includes the land, buildings, equipment, facilities, expenditures, targeted infrastructure, and improvements found by the corporation's board of directors to promote new or expanded business development. (b) A Type B corporation may not undertake a project authorized by this section that requires an expenditure of more than $10,000 until the governing body of the corporation's authorizing municipality adopts a resolution authorizing the project after giving the resolution at least two separate readings. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.159. HEARING REQUIRED TO UNDERTAKE PROJECT.

(a) Except as provided by Subsection (b), a Type B corporation shall hold at least one public hearing on a proposed project before spending money to undertake the project. (b) A Type B corporation the creation of which was authorized by a municipality with a population of less than 20,000 is not required to hold a public hearing under this section if the proposed project is defined by Subchapter C , Chapter 501 . Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969 ), Sec. 15.015(a), eff. September 1, 2009.

Tex. LOC. GOV'T Code § 505.160. ELECTION REQUIRED FOR PROJECT; PETITION.

(a) A Type B corporation may undertake a project under this chapter unless, not later than the 60th day after the date notice of the specific project or general type of project is first published, the governing body of the authorizing municipality receives a petition from more than 10 percent of the registered voters of the municipality requesting that an election be held before the specific project or general type of project is undertaken. (b) The governing body of the authorizing municipality is not required to hold an election after the submission of a petition under Subsection (a) if the voters of the municipality have previously approved the undertaking of the specific project or general type of project: (1) at an election ordered for that purpose by the governing body of the municipality; or (2) in conjunction with another election required under this chapter. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.161. PUBLIC PURPOSE DESIGNATION; EXEMPTION FROM TAXATION.

(a) The legislature finds for all constitutional and statutory purposes that: (1) a project of the type added to the definition of "project" by this subchapter is owned, used, and held for a public purpose for and on behalf of the municipality that authorized the creation of the Type B corporation; and (2) except as otherwise provided by this section, Section 501.160 of this subtitle and Section 25.07 (a), Tax Code, do not apply to a leasehold or other possessory interest granted by a Type B corporation during the period the corporation owns projects on behalf of the authorizing municipality. (b) A project is exempt from ad valorem taxation under Section 11.11 , Tax Code, for the period described by Subsection (a)(2) of this section. (c) This subsection applies only if the voters of the authorizing municipality of a Type B corporation have not approved the adoption of a sales and use tax for the benefit of the corporation under Section 505.251 . An ownership, leasehold, or other possessory interest of a person other than the corporation in real property constituting a project of the corporation described by this section: (1) is subject to ad valorem taxation under Section 25.07 (a), Tax Code; or (2) if the interest was created under an agreement entered into by the corporation before September 1, 1999, is covered by the provisions of the law codified by this section that govern ad valorem taxation of the ownership, leasehold, or other possessory interest that were in effect on the date the agreement was executed. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER E. SPORTS VENUE PROJECTS AND RELATED INFRASTRUCTURE

Tex. LOC. GOV'T Code § 505.201. 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 that is primarily used or is planned for primary use for one or more professional or amateur sports or athletics events and 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. The term does not include an arena, coliseum, stadium, or other type of area or facility that is or will be owned and operated by a state-supported institution of higher education. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.202. ELECTION: USE OF TAX PROCEEDS FOR SPORTS VENUE PROJECTS.

(a) An authorizing municipality may submit to the voters of the municipality a ballot proposition that authorizes the Type B corporation to use the sales and use tax, including any amount previously authorized and collected, for a specific sports venue project, including related infrastructure, or for a specific category of sports venue projects, including 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 Type B 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.203. PUBLIC HEARING PRECEDING ELECTION.

Before an election may be held under Section 505.202 , 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 each week until the date of the hearing in a newspaper with general circulation in the municipality in which the project is located. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.204. LIMITATION ON SUBSEQUENT ELECTION.

If a majority of the voters voting on the issue do not approve a specific sports venue project or a specific category of sports venue projects at an election under Section 505.202 , 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.205. SUBSEQUENT APPROVAL OF ADDITIONAL PROJECTS.

Prior approval of a specific sports venue project at an election or completion of a specific sports venue 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 that is used to fund the previously approved sports venue project. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.206. EFFECT OF SUBCHAPTER ON ELECTION AUTHORITY.

This subchapter does not affect an authorizing municipality's authority to call an election under this chapter to impose a sales and use tax for any purpose authorized by this chapter after the sales and use tax described by this subchapter is, in accordance with Section 505.258 , no longer collected. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER F. SALES AND USE TAX

Tex. LOC. GOV'T Code § 505.251. TAX AUTHORIZED.

The governing body of the authorizing municipality by ordinance may adopt a sales and use tax for the benefit of a Type B corporation if the tax is approved by a majority of the voters of the municipality voting at an election held for that purpose in accordance with Chapter 321 , Tax Code. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.252. SALES TAX.

(a) If the authorizing municipality adopts the tax under Section 505.251 , a tax is imposed on the receipts from the sale at retail of taxable items within the municipality at the rate approved at the election. (b) The rate of a tax adopted under this chapter may be any rate that is an increment of one-eighth of one percent, that the authorizing municipality determines is appropriate, and that would not result in a combined rate that exceeds the maximum combined rate prescribed by Section 505.256 (a). Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.253. USE TAX.

(a) If the authorizing municipality adopts the tax under Section 505.251 , an excise tax is imposed on the use, storage, or other consumption within the municipality of tangible personal property 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 sale price of the tangible personal property. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.254. SPECIFICATION OF TAX RATE ON BALLOT.

In an election held to adopt the sales and use tax under this chapter, the ballot proposition must specify the rate of the tax to be adopted. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.255. ADOPTION OF TAX AT ELECTION TO REDUCE OR ABOLISH TAX FOR TYPE A CORPORATION.

A municipality that holds an election to reduce the rate of or abolish a tax imposed under Chapter 504 may in the same proposition or in a separate proposition on the same ballot adopt a tax under this chapter. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.256. APPLICABILITY OF TAX CODE.

(a) Chapter 321 , Tax Code, governs the imposition, computation, administration, collection, and remittance of the sales and use tax, except as inconsistent with this chapter. 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 at any location in the municipality. (b) Except as provided by this subsection, the tax imposed under this chapter takes effect as provided by Section 321.102 (a), Tax Code. If an election is held under this chapter at the same time an election is held to impose or change the rate of the additional municipal sales and use tax, the tax under this chapter and the imposition or change in rate of the additional municipal sales and use tax take effect as provided by Section 321.102 (b), Tax Code. (c) After the effective date of the taxes imposed under this chapter, the adoption of a sales and use tax or the attempted adoption of a sales and use tax by the authorizing municipality or another taxing jurisdiction having territory in the municipality does not impair the taxes imposed under this chapter. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.257. REDUCTION OF TAX WITHIN REGIONAL TRANSPORTATION AUTHORITY.

Notwithstanding any other provision of this chapter, a tax imposed under this chapter 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.258. CESSATION OF COLLECTION OF TAXES.

A sales and use tax imposed under this chapter may not be collected after the last day of the first calendar quarter that occurs after the Type B corporation notifies the comptroller that: (1) all bonds or other obligations of the corporation, including any refunding bonds, payable wholly or partly from the proceeds of the sales and use tax imposed under this chapter, have been paid in full; or (2) the total amount, exclusive of guaranteed interest, necessary to pay in full the bonds and other obligations has been set aside in a trust account dedicated to the payment of the bonds and other obligations. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.259. ELECTION REQUIREMENT FOR CERTAIN MUNICIPALITIES.

For a tax under this subchapter at a rate that does not exceed one-half of one percent, the election requirement under Section 505.251 is satisfied and another election is not required if the voters of the authorizing municipality approved the imposition of an additional one-half cent sales and use tax at an election held before March 28, 1991, under an ordinance calling the election that: (1) was published in a newspaper of general circulation in the municipality at least 14 days before the date of the election; and (2) expressly stated that the election was being held in anticipation of the enactment of enabling and implementing legislation without further elections. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER G. USE OF TAX PROCEEDS

Tex. LOC. GOV'T Code § 505.301. DELIVERY 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 B corporation. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.302. PAYMENT OF PROJECT COSTS, BONDS, OR OTHER OBLIGATIONS.

The proceeds of the sales and use tax imposed under this chapter may be used to: (1) pay the costs of projects of the types added to the definition of "project" by Subchapter D; or (2) pay the principal of, interest on, and other costs relating to bonds or other obligations issued by the Type B corporation to: (A) pay the costs of the projects; or (B) refund bonds or other obligations issued to pay the costs of projects. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.303. 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 taxes 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 B 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 a project. (c) The governing body of the authorizing municipality is not required to hold an election after the submission of a petition under Subsection (b) if the voters of the municipality have previously approved at an election ordered for that purpose by the governing body or in conjunction with another election required under this chapter that: (1) the costs of a publicly owned and operated project purchased or constructed under this chapter include the maintenance and operating costs of the project; and (2) the tax proceeds may be used to pay the maintenance and operating costs of a project. (d) An authorizing municipality is not required to hold an election under this section if the municipality: (1) is located in a county with a population of more than 1.3 million; and (2) has held before February 1, 1993, an election under this chapter at which the additional sales tax was approved. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.304. PAYMENT FOR CERTAIN WATER-RELATED PROJECTS: ELECTION REQUIRED.

(a) A Type B corporation may not use proceeds from the sales and use tax to undertake a project described by Section 505.154 unless the use of tax proceeds for that purpose is authorized by a majority of the voters voting at an election held in the municipality for that purpose. (b) The ballot in an election held under this section shall be printed to provide for voting for or against the proposition: "The use of sales and use tax proceeds for infrastructure relating to __________ (insert water supply facilities or water conservation programs, as appropriate)." (c) An election held under this section may be authorized by the governing body of an authorizing municipality subsequent to an earlier election authorized under Section 505.251 . Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.305. 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 B corporation to use proceeds from the sales and use tax imposed under this chapter for the cleanup of contaminated property. (b) Notwithstanding any other provision of this chapter, a Type B 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 voting at an election held in the authorizing municipality 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009. SUBCHAPTER H. TERMINATION OF CORPORATION

Tex. LOC. GOV'T Code § 505.351. APPLICABILITY OF SUBCHAPTER.

This subchapter applies only to a Type B corporation created on or after September 1, 1999. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.352. ELECTION TO TERMINATE EXISTENCE OF CORPORATION ON PETITION.

(a) The governing body of an authorizing municipality shall order an election on the termination of the existence of the Type B corporation on receipt of a petition requesting the election that is signed by at least 10 percent of the registered voters of the municipality. (b) The authorizing municipality shall hold the election on the first 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 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.353. BALLOT.

The ballot for an election held under Section 505.352 shall be printed to permit voting for or against the proposition: "Termination of the __________ (name of corporation)." Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.354. TERMINATION OF EXISTENCE OF CORPORATION.

(a) If a majority of the votes cast at an election held under Section 505.352 approve the termination, the Type B corporation shall: (1) continue operations only as necessary to meet the obligations the corporation incurred before the date of the election, including paying the principal of and interest on the corporation's bonds; and (2) liquidate the corporation's assets and apply the proceeds to satisfy the corporation's obligations, to the extent practicable. (b) After the Type B corporation has satisfied all of the corporation's obligations, any remaining assets of the corporation shall be transferred to the authorizing municipality, and the existence of the corporation is terminated. (c) The authorizing municipality shall promptly notify the comptroller and the secretary of state of the date the existence of a Type B corporation is terminated under this subchapter. (d) A tax imposed under this chapter may not be collected after the last day of the first calendar quarter that begins after the authorizing municipality provides notice under Subsection (c). Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.355. ELECTION REJECTING TERMINATION.

If less than a majority of the votes cast at an election held under Section 505.352 approve the termination, Section 505.354 has no effect. Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278 ), Sec. 3.01, eff. April 1, 2009.

Tex. LOC. GOV'T Code § 505.1041. APPRAISAL REQUIRED BEFORE PURCHASE OF PROPERTY WITH BOND PROCEEDS.

A Type B corporation may not purchase property for a project wholly or partly with bond proceeds until the corporation obtains an independent appraisal of the property's market value. Added by Acts 2011, 82nd Leg., R.S., Ch. 719 (H.B. 782 ), Sec. 2, eff. September 1, 2011.

Tex. LOC. GOV'T Code § 505.1561. PROJECTS RELATED TO AIRPORT FACILITIES IN CERTAIN MUNICIPALITIES.

For purposes of this chapter, "project" includes land, buildings, equipment, facilities, and improvements found by the board of directors to be required or suitable for the development or expansion of airport or railport facilities, including hangars, maintenance and repair facilities, cargo facilities, and related infrastructure located on or adjacent to an airport or railport facility, if the project is undertaken by a Type B corporation authorized to be created by a municipality: (1) that enters into a development agreement with an entity in which the entity acquires a leasehold or other possessory interest from the corporation and is authorized to sublease the entity's interest for other projects authorized by Sections 505.151 through 505.156 ; and (2) the governing body of which has authorized the development agreement by adopting a resolution at a meeting called as authorized by law. Added by Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969 ), Sec. 15.014(a), eff. September 1, 2009. Acts 2009, 81st Leg., R.S., Ch. 150 (S.B. 2052 ), Sec. 2, eff. September 1, 2009.

Tex. LOC. GOV'T Code § 505.2565. LIMITATION ON DURATION OF TAX.

(a) At an election held under Section 505.251 , 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. (b) An authorizing municipality that has imposed a tax for a limited time under this section 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 in the same manner as an election held under Section 504.257 . Added by Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969 ), Sec. 15.016(a), eff. September 1, 2009.

Tex. LOC. GOV'T Code § 505.2566. 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 reduced or increased to any rate that is an increment of one-eighth of one percent, that the authorizing municipality determines is appropriate, and that would not result in a combined rate that exceeds the maximum combined rate prescribed by Section 505.256 (a). Added by Acts 2017, 85th Leg., R.S., Ch. 882 (H.B. 3045 ), Sec. 1, eff. June 15, 2017.

Tex. LOC. GOV'T Code § 505.2575. LIMITED SALES AND USE TAX FOR SPECIFIC PROJECT.

(a) At an election held under Section 505.251 , 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. (b) A Type B corporation created to perform a specific project as provided by this section may retain its corporate existence and perform any other project approved by the voters of the authorizing municipality at an election held for that purpose in the same manner as Section 504.260 provides for an election held under Section 504.251 . Before spending money to undertake a project, a Type B corporation shall hold a public hearing as otherwise provided by this chapter. Added by Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969 ), Sec. 15.016(a), eff. September 1, 2009.
Source: TX Statutes (Official Site)URL: https://statutes.capitol.texas.gov/Fetched: 6/29/2026

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