HB 4308

relating to the creation of industrial development districts in
certain counties; providing authority to issue bonds; and providing
authority to impose assessments, fees, or taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle B, Title 12, Local Government Code, is
amended by adding Chapter 389 to read as follows:
Chapter 389.  COUNTY INDUSTRIAL DEVELOPMENT DISTRICTS
Sec. 1.01.  SHORT TITLE.  This Act may be cited as the County
Industrial Development District Act.
Sec. 1.02.  DEFINITIONS.  In this Act:
(1)  "Board" means the board of directors of the
(2)  "Bonds" means bonds, notes, and other obligations.
(3)  "Commissioners court" means the governing body of
the county in which the district is located.
(4)  "Cost" has the same meaning as that term is defined
(5)  "County" means the county in which the district is
(6)  "Director" means a member of the board.
(7)  "District" means a county industrial opportunity
district created under this Act.
(8)  "Project" includes the land, buildings,
equipment, facilities, expenditures, targeted infrastructure, and
(A)  for the creation or retention of primary
(B)  found by the board of directors to be
required or suitable for the development, retention, or expansion
(i)  advanced manufacturing, operations and
(ii)  research and development facilities;
(iii)  transportation facilities, including
airports, hangars, railports, rail switching
facilities, maintenance and repair
facilities, cargo facilities, related
infrastructure located on or adjacent to an
airport or railport facility, mass commuting
facilities, and parking facilities;
(iv)  sewage or solid waste disposal
facilities; recycling facilities;
(v)  air or water pollution control
(vi)  facilities for furnishing water to the
(viii)  small warehouse facilities capable
of serving as decentralized storage and
(ix)  primary job training facilities for
use by institutions of higher education;
(x)  regional or national corporate
(xi)  Advanced Nuclear Reactors.
(C)  "Project" includes job training required or
suitable for the promotion or development and expansion of business
enterprises described in this chapter
(D)  In this chapter, project includes
expenditures that are found by the board of directors to be required
or suitable for infrastructure necessary to promote or development
new or expanded business enterprises, including but not limited to:
(i)  Streets and roads, rail spurs, water
and sewer utilities, electric utilities, or
gas utilities, drainage, site improvements,
(ii)  Telecommunications and Internet
(E)  In this chapter, "Project" includes the land,
buildings, equipment, facilities, improvements, and expenditures
found by the board of directors to be required or suitable for use
for a career center in the area to be benefited by the district.
Sec. 1.03.  NATURE OF DISTRICT.  A district authorized under
this Act will be a special district created under Section 59,
Article XVI, Texas Constitution.
Sec. 1.04.  PURPOSE; DECLARATION OF INTENT.  (a)  The
creation of a district is essential to accomplish the purposes of
Section 52 and 52-a, Article III, Texas Constitution, and Section
59, Article XVI, Texas Constitution, and other purposes stated in
(b)  By authorizing the creation of districts under this
chapter, and authorizing the counties, cities, and other political
subdivisions to contract with the districts, the legislature has
established a program to accomplish the purposes set out in Section
52-a, Article III, Texas Constitution.
(c)  Authorizing the creation of districts under this
chapter is necessary to promote, develop, encourage, and maintain
employment, commerce, transportation, housing, tourism,
recreation, the arts, entertainment, economic development, safety,
and the public welfare in the districts.
(d)  This chapter and the authorization to create industrial
development districts may not be interpreted to relieve counties or
cities from providing the level of services provided as of the
effective date of the Act enacting this chapter to the area in the
district.  The districts are created to supplement and not to
supplant county or city services provided in a district.
Sec. 1.05.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.  (a)
Small and medium-sized counties in Texas are in need of incentives
for the development of public improvements to attract major
industrial employers to such counties, and that such counties are
at a disadvantage in competing with counties in other states for the
location and development of projects that attract major industrial
employers by virtue of the availability and prevalent use in other
states of financial incentives;
(b)  All land and other property included in a district
created under this Act will benefit from the improvements and
services to be provided by the district under powers conferred by
Sections 52 and 52-a, Article III, and Section 59, Article XVI,
Texas Constitution, and other powers granted under this chapter.
(c)  The means and measures authorized by this Act are in the
public interest and essential to further the public purposes of:
(1)  developing and diversifying the economy of the
(2)  eliminating unemployment and underemployment; and
(3)  developing or expanding transportation and
(d)  Districts created under this Act will:
(1)  promote the health, safety, and general welfare of
residents, employers, potential employees, employees, visitors,
and consumers in the district, and of the public;
(2)  promote the economic welfare of the citizens of
the state by providing incentives for the location and development
in certain Texas counties of projects that attract major industrial
employers and that result in employment and economic activity; and
(e)  Districts created authorized for creation under this
chapter will not act as the agent or instrumentality of any private
interest even though the districts will benefit many private
interests as well as the public.
Sec. 1.06.  COUNTIES AUTHORIZED TO CREATE DISTRICTS.  The
commissioners court in a county with a population of more than
800,000 that borders a county with a population of more than four
million according to the most recent federal decennial census may,
call an election on the question of creating a county industrial
development district under this chapter.
Sec. 1.07.  ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.  All
or any part of the area of a district created under this Act is
(a)  a tax increment reinvestment zone created under Chapter
(b)  a tax abatement reinvestment zone created under Chapter
Sec. 1.08.  APPLICABILITY OF MUNICIPAL MANAGEMENT DISTRICTS
LAW.  Except as otherwise provided by this chapter, a district
created under this chapter shall have the powers of a municipal
management district created under Chapter 375, Local Government
Sec. 1.09.  CONSTRUCTION OF CHAPTER.  This chapter shall be
liberally construed in conformity with the findings and purposes
ARTICLE 2.  CREATION OF DISTRICTS
Sec. 2.01.  CALLING AN ELECTION.  The commissioners court of
the county may call an election on the question of creating a county
industrial development district under this chapter and to obtain
voter approval to impose an ad valorem tax or issue bonds payable
Sec. 2.02.  CONTENTS OF ORDER.  The order calling the
(1)  describe the boundaries of the proposed district
by metes and bounds or by lot and block number, if there is a
recorded map or plat and survey of the area;
(2)  call for the election to be held within those
(3)  call for the imposition of an ad valorem tax or
issuance of bonds payable from ad valorem taxes.
Sec. 2.03.  CONDUCT OF ELECTION.  (a)  The election shall be
held in accordance with the provisions of the Election Code, to the
extent not inconsistent with this Act.
(b)  The ballot shall be printed to permit voting for or
against the proposition: "The creation of _____________ County
Industrial Development District No. ______ ; the adoption of a
proposed local sales and use tax rate of ____ (the rate specified in
the election order); and the imposition of an ad valorem tax to be
used for the promotion and development of industrial
Sec. 2.04.  RESULTS OF ELECTION.  The district is created if
a majority of the votes received at the election favor the creation
of the district.  If a majority of the votes received at the
election are against the creation of the district, the district is
not created.  The failure to approve the creation of a district
under this subsection does not affect the authority of the county to
call one or more elections on the question of creating one or more
county industrial opportunity districts.
ARTICLE 3.  DISTRICT ADMINISTRATION
Sec. 3.01.  BOARD OF DIRECTORS.  (a)  A district is governed
by a board of nine directors.  Positions One and Two on the board of
directors shall be filled by the State Senator, or his or her
designee, of the State Senate district in which the majority of the
district is located.  Positions Two Three and Four on the board
shall be filled by State Representative, or his or her designee, of
the House district in which the majority of the district is located.
The commissioners court of the county in which the district is
located shall be authorized to nominate and appoint five directors
to fill Positions Five through Nine
(b)  Directors serve staggered four-year terms that expire
September 1.  The directors shall draw lots to determine:
(1)  the four directors to serve terms that expire on
September 1 of the second year following creation of the district;
(2)  the five directors to serve terms that expire on
September 1 of the fourth year following creation of the district.
Sec. 3.02.  QUALIFICATIONS FOR DIRECTORS.  To be qualified
to serve as a director, a person shall be at least 21 years old, a
resident citizen of the State of Texas, and a qualified voter within
the county in which the district is located.
Sec. 3.03.  PERSONS DISQUALIFIED FROM SERVING.  Section
50.026, Water Code, relating to disqualification of directors,
shall apply to directors of districts created under this Act.
Sec. 3.04.  VACANCIES ON THE BOARD.  A vacancy in the office
of director shall be filled by appointment by the office or
governing body authorized to fill the respective Position of
Sec. 3.05.  REMOVAL OF DIRECTOR.  The governing body of the
commissioners court, after notice and hearing, may remove a
director for misconduct or failure to carry out the director's
duties on petition by a majority of the remaining directors.
Sec. 3.06.  ORGANIZATION OF BOARD.  After each appointment
of directors, and after the directors have qualified by taking the
proper oath, they shall organize by electing a president, a vice
president, a secretary, and any other officers as in the judgment of
the board are considered necessary.
Sec. 3.07.  QUORUM; OFFICERS' DUTIES; MANAGEMENT OF
DISTRICT.  Sections 54.107, 54.108, 54.111, and 54.118, Water Code,
relating to quorum, officers' duties, and management of the
district, shall govern the board of directors of a district created
Sec. 3.08.  MEETINGS AND NOTICE.  (a)  The board shall
designate and establish a district office in the county.
(b)  The board may establish regular meetings to conduct
district business and may hold special meetings at other times as
the business of a district requires.
(c)  Notice of the time, place, and purpose of any meeting of
the board shall be given by posting at a place convenient to the
public within the district.  A copy of the notice shall be furnished
to the clerk or clerks of the county in which the district is
located, who shall post them on a bulletin board in the county
courthouse used for such purpose.
(d)  Except as herein provided the provisions of the open
meetings law, Chapter 551, Government Code, shall be applicable to
meetings of the board of directors.  Any interested person may
attend any meeting of the board.
Sec. 3.09.  DIRECTOR'S COMPENSATION; BOND AND OATH OF
OFFICE.  A director is not entitled to receive compensation for
service on the board.  Sections 375.067, 375.069, and 375.070,
Local Government Code, apply to directors of a district created
Sec. 3.10.  GOVERNMENTAL AGENCY; SUITS.  (a)  A district,
when created and confirmed, may, through its directors, sue and be
sued in any and all courts of this state in the name of the district.
Service of process in any suit may be had by serving any two
(b)  A district is a governmental agency, a body politic and
corporate, and a political subdivision of the state.  Section
375.004, Local Government Code, applies to a district created under
Sec. 4.01.  GENERAL POWERS OF DISTRICT.  (a)  A district
created under this chapter has the powers and duties necessary to
accomplish the purposes for which the district is created.
Sec. 4.02.  IMPROVEMENT PROJECTS AND SERVICES.  (a)  A
district created under this chapter, using any money available to
the district for the purpose, may:
(1)  provide, design, construct, acquire, improve,
relocate, operate, maintain, or finance an improvement project or
service authorized under this chapter or Chapter 375, Local
(2)  provide the necessary infrastructure to attract
major industrial employers to the district and its vicinity, which
may be conducted by the district pursuant to financial incentives
and contracts for professional services with persons or
organizations selected by the district.
(3)  acquire, sell, lease, or convey, or otherwise
dispose of property or an interest in property under terms
(4)  employ necessary personnel; and
(5)  adopt rules to govern the operation of the
district and its employees and property.
(b)  The district shall have the power to plan, acquire,
establish, develop, construct, renovate, and dispose of projects to
benefit the district, and shall have the power, authority, rights,
and duties which will permit accomplishment of the purposes for
which the district was created.
(c)  A district shall have the power to enter agreements with
governmental or private entities, including the providers of public
utilities and commercial railways, to develop the necessary
infrastructure and to perform any act the district is authorized to
(d)  The implementation of a district project or service is a
governmental function or service for the purposes of Chapter 791,
Sec. 4.03.  NONPROFIT CORPORATION.  (a)  The board by
resolution may authorize the creation of a nonprofit corporation to
assist and act for the district in implementing a project or
providing a service authorized by this chapter.
(b)  The nonprofit corporation:
(1)  has each power of and is considered to be a local
government corporation created under Subchapter D, Chapter 431,
(2)  may implement any project and provide any service
(c)  The board shall appoint the board of directors of the
nonprofit corporation.  The board of directors of the nonprofit
corporation shall serve in the same manner as the board of directors
of a local government corporation created under Subchapter D,
Chapter 431, Transportation Code, except that a board member is not
required to reside in the district.
Sec. 4.04.  COMPETITIVE BIDDING; CONTRACT AWARD.  Sections
375.221 and 375.223, Local Government Code, apply to a district
created under this Act.  The district shall have the authority to
use a method authorized by Chapter 2269, Government Code for as an
alternative to competitive bidding.  Notwithstanding any other
provision of this Act to the contrary, any contract between the
district and a governmental entity or nonprofit corporation created
under the Development Corporation Act of Subtitle C1, Title 12,
Chapter 501, Texas Local Government Code shall not be subject to the
competitive bidding requirement of this Act.
Sec. 4.05.  ECONOMIC DEVELOPMENT PROGRAMS.  (a)  A district
created under this chapter may engage in activities that accomplish
the economic development purposes of the district.
(b)  The district may establish and provide for the
administration of one or more programs to promote state or local
economic development and stimulate business and commercial
activity in the district, including programs to:
(1)  make loans and grants of public money; and
(2)  provide district personnel and services.
(c)  The district may create economic development programs
and exercise the economic development powers provided to
(1)  Chapter 380, Local Government Code; and
(2)  Subchapter A, Chapter 1509, Government Code.
Sec. 4.06.  ADDING OR EXCLUDING LAND.  A district created
under this chapter may add or exclude land in the manner provided by
Subchapter J, Chapter 49, Water Code, or by Subchapter H, Chapter
Sec. 4.07.  DISBURSEMENTS AND TRANSFERS OF MONEY.  The board
by resolution shall establish the method of disbursement of the
districts funds and the number of directors' signatures and the
procedure required for the disbursement or transfer of district
Sec. 4.08.  REPAYMENT OF ORGANIZATIONAL EXPENSES.  The
district's directors are authorized to pay all costs and expenses
necessarily incurred in the creation and organization of a
district, the cost of investigation and making plans, the cost of
the engineer's report, project designer fees, legal fees, and other
incidental expenses and to reimburse any person for money advanced
for these purposes.  These payments may be made from money obtained
from the issuance of notes or the sale of bonds first issued by the
district or out of other revenues of the district.
Sec. 5.01.  PETITION REQUIRED FOR FINANCING SERVICES AND
IMPROVEMENTS WITH ASSESSMENTS.  (a)  The board may not finance a
service or improvement project with assessments under this chapter
unless a written petition requesting that service or improvement
(b)  A petition filed under Subsection (a) must be signed by
the owners of a majority of the assessed value of real property in
the district subject to assessment according to the most recent
certified tax appraisal roll for the county.
Sec. 5.02.  ASSESSMENTS; LIENS FOR ASSESSMENTS.  (a)  The
board by resolution may impose and collect an assessment for any
purpose authorized by this chapter in all or any part of the
(b)  An assessment, a reassessment, or an assessment
resulting from an addition to or correction of the assessment roll
by the district, penalties and interest on an assessment or
reassessment, an expense of collection, and reasonable attorney's
(1)  are a first and prior lien against the property
(2)  are superior to any other lien or claim other than
a lien or claim for county, school district, or municipal ad valorem
(3)  or the personal liability of and a charge against
the owners of the property even if the owners are not named in the
(c)  The lien is effective from the date of the board's
resolution imposing the assessment until the date the assessment is
paid.  The board may enforce the lien in the same manner that the
board may enforce an ad valorem tax lien against real property.
(d)  The board may make a correction to or deletion from the
assessment roll that does not increase the amount of assessment of
any parcel of land without providing notice and holding a hearing in
the manner required for additional assessments.
Sec. 6.01.  TAX ELECTION REQUIRED.  The district must hold an
election in the manner provided by Chapter 49, Water Code, or if
applicable, Chapter 375, Local Government Code, to obtain voter
approval before the district may impose an ad valorem tax.
Sec. 6.02.  OPERATION AND MAINTENANCE TAX.  (a)  If
authorized by a majority of the district voters voting in the
election under Section 6.02., the district may impose an operation
and maintenance tax on taxable property in the district in the
manner provided by Section 49.107, Water Code, for any district
(1)  maintain and operate the district;
(2)  construct or acquire improvements; or
(b)  The board shall determine the tax rate.  The rate may not
exceed the rate approved at the election.
Sec. 6.03.  AUTHORITY TO BORROW MONEY AND TO ISSUE BONDS AND
OTHER OBLIGATIONS.  (a)  The district created under this chapter may
borrow money on terms determined by the board.
(b)  The district may issue bonds, notes, or other
obligations payable wholly or partly from ad valorem taxes,
assessments, impact fees, revenue contract payments, grants, or
other district money, or any combination of those sources of money,
to pay for any authorized district purpose, including but not
(1)  pay interest on the bonds during and after the
period of the acquisition or construction of a project;
(2)  pay administrative and operating expenses;
(3)  create a reserve fund for the payment of principal
(4)  pay all expenses incurred and to be incurred in the
issuance, sale, and delivery of the bonds.
(c)  The limitation on the outstanding principal amount of
bonds, notes, or other obligations provided by Section 49.4645,
Water Code, does not apply to the district.
Sec. 6.04.  BONDS SECURED BY REVENUE OR CONTRACT PAYMENTS.  A
district created under this chapter may issue, without an election,
(1)  revenue other than ad valorem taxes, including
(2)  contract payments, provided that the requirements
of Section 49.108, Water Code, have been met.
Sec. 6.05.  BONDS SECURED BY AD VALOREM TAXES; ELECTIONS.
(a)  If authorized at an election under Section 6.01., a district
created under this chapter may issue bonds payable from ad valorem
(b)  Section 375.243, Local Government Code, does not apply
(c)  At the time the district issues bonds payable wholly or
partly from ad valorem taxes, the board shall provide for the annual
imposition of a continuing directs annual ad valorem tax, without
limit as to rate or amount, for each year that all or part of the
bonds are outstanding as required and in the manner provided by
Sections 54.601 and 54.602, Water Code.
(d)  All or any part of any facilities or improvements that
may be acquired by a district by the issuance of its bonds may be
submitted as a single proposition or as several propositions to be
Sec. 6.06.  CONSENT OF MUNICIPALITY REQUIRED.  (a)  The board
may not issue bonds until each municipality in whose corporate
limits or extraterritorial jurisdiction the district is located has
consented by ordinance or resolution to the creation of the
district and to the inclusion of land in the district.
(b)  This section applies only to the district's first
issuance of bonds payable from ad valorem taxes.
ARTICLE 7.  SALES AND USE TAXES
Sec. 7.01.  APPLICABILITY OF CERTAIN TAX CODE PROVISIONS.
(a)  Chapter 321, Tax Code, governs the imposition, computation,
administration, enforcement, and collection of the sales and use
tax authorized by this subchapter except to the extent Chapter 321,
Tax Code is inconsistent with this chapter.
(b)  For the purposes of section, a reference in Chapter 321,
Tax Code, to a municipality or the governing body of a municipality
is a reference to the district or the board, respectively.
Sec. 7.02.  ELECTION; ADOPTION OF TAX.  (a)  The district may
adopt a sales and use tax if authorized by a majority of the voters
of the district voting at an election held for that purpose.
(b)  The board by order may call an election to authorize the
adoption of the sales and use tax.  The election may be held on any
uniform election date and in conjunction with any other district
(c)  The district shall provide notice of the election and
shall hold the election in the manner prescribed by Section 2.01.
(d)  The ballot shall be printed to provide for voting for or
against the proposition: "Authorization of a sales and use tax in
the [__________] County Industrial Development District No. [___]
at a rate not to exceed [_____] percent" (insert rate of one or more
increments of one-eighth of one percent in accordance with Section
Sec. 7.03.  SALES AND USE TAX RATE.  (a)  After the date the
results are declared of an election held under Section 7.02 at which
the voters authorized imposition of a tax, the board shall provide
by resolution or order the initial tax of the tax, which must be in
one or more increments of one-eighth of one percent.
(b)  After the authorization of a tax under Section 7.02, the
board may increase or decrease the rate of the tax by one or more
increments of one-eighth of one percent.
(c)  The board may not decrease the rate of the tax if the
decrease would impair the repayment of any outstanding debt or
obligation payable from the tax.
(d)  The initial rate of the tax or any rate resulting from
subsequent increases or decreases may not exceed the lesser of:
(1)  the maximum rate authorized at an election held
(2)  a rate that, when added to the rates of all sales
and use taxes imposed by other political subdivisions with
territory in the district, would result in the maximum combined
rate prescribed Section 321.101(f), Tax Code, at any location in
(e)  In determining whether the combined sales and use tax
rate under Subsection (d) (2) would exceed the maximum combined
rate prescribed by Section 321.0101(f), Tax Code, at any location
in the district, the board shall include:
(1)  any sales and use tax imposed by a political
subdivision whose territory overlaps all or part of the district;
(2)  any sales and use tax to be imposed by the city or
the county as a result of an election held on the same date as the
election held under Section 7.02; and
(3)  any increase to an existing sales and use tax
imposed by the city of the county as a result of an election held on
the same date as the election held under Section 7.02.
(f)  If the district adopts a sales and use tax authorized at
an election under Section 7.02 and subsequently includes a new
territory in the district, the district:
(1)  is not required to hold another election to
approve the imposition of the sales and use tax in the included
(2)  shall impose the sales and use tax in the included
territory as provided in Chapter 321, Tax Code.
(g)  If the district adopts a sales and use tax authorized at
an election held under Section 7.02 and subsequently excludes
territory in the district under this section, the sales and use tax
is inapplicable to the excluded territory as provided by Chapter
321, Tax Code, but is applicable to the territory remaining in the
Sec. 7.04.  NOTIFICATION OF RATE CHANGE.  The board shall
notify the comptroller of any changes made to the tax rate under
this subchapter in the same manner the municipal secretary provides
notice to the comptroller under Section 321.405(b), Tax Code.
Sec. 7.05.  USE OF REVENUE.  Revenue from the sales and use
tax imposed under this subchapter is for the use and benefit of the
district and may be used for any district purpose.  The district may
pledge all or part of the revenue to the payment of bonds, notes, or
other obligations, and that pledge of revenue may be in combination
with other revenue, including tax revenue, available to the
Sec. 7.06.  ABOLITION OF TAX.  (a)  Except as provided by
Subsection (b), the board may abolish the tax imposed under this
subchapter without an election.
(b)  The board may not abolish the tax imposed under this
section if the district has any outstanding debt or obligation
secured by the tax, and repayment of the debt or obligation would be
impaired by the abolition of the tax.
(c)  If the board abolishes the tax, the board shall notify
the comptroller of that action in the same manner as the municipal
secretary provides notice to the comptroller under Section
(d)  If the board abolishes the tax or decreases the tax rate
to zero, a new election to authorize a sales and use tax must be held
under Section 2.01. before the district may subsequently impose the
Sec. 8.01.  DISSOLUTION.  (a)  A district created under this
chapter may be dissolved only as provided in this section.
(b)  The board of directors may petition the commissioners
court to dissolve the district if a majority of the board finds at
any time (1) before the authorization of bonds or the final lending
of its credit, that the proposed undertaking is impracticable or
cannot be successfully and beneficially accomplished, or (2) that
all bonds of the district or other debts of the district have been
paid and the purposes of the district have been accomplished.
(c)  On receipt of a petition from the board for dissolution
of the district, the county commissioners shall hold a hearing.
(d)  If the commissioners court determines from the evidence
that the best interests of the county and the owners of property and
interests in property within the district will be served by
dissolving the district, the commissioners court shall enter in its
records the appropriate findings and order dissolving the district.
Otherwise the commissioners court shall enter its order providing
that the district has not been dissolved.  On dissolution of the
district, funds and property of the district, if any, shall be
transferred to the commissioners court.
SECTION 2.  (a)  The legal notice of the intention to
introduce this Act, setting forth the general substance of this
Act, has been published as provided by law, and the notice and a
copy of this Act have been furnished to all persons, agencies,
officials, or entities to which they are required to be furnished
under Section 59, Article XVI, Texas Constitution, and Chapter 313,
(b)  All requirements of the constitution and laws of this
state and the rules of procedure of the legislature with respect to
the notice, introduction, and passage of this Act have been
SECTION 3.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.