HomeMy WebLinkAboutPO 5504: SPECIAL ELECTIONinteroffice
MEMORANDUM
To:
From:
Date:
Subject:
Mayor, City Council, City Manager
Mark T. Sokolow, City Attorney ~ ~
March 4, 2005
P. O. No. 5504; Special Council Meeting March 7, 2005
Attached is P. O. NO.
5504 providing for the conduct of a May
7, 2005 Special Election for the purpose of submitting to the
qualified voters of the City propositions as to whether or not the
existing Section 4A Sales Tax shall be utilized for various
categories of projects as described in Section 4B of Article
5190.6, Vernon's Texas Code Annotated, calling for a public
hearing, and providing for publication of the Election Notice. At
least 30 days before the date set for the hearing, a notice of the
date, time, place and subject of the hearing shall be published in
a newspaper with general circulation in the city in which the
project is located. The notice should be published on a weekly
basis until the date of the hearing. The proposed resolution has a
public hearing scheduled for April 26, at 9:00 a.m.
If a majority of the voters do not approved a category of
projects at the May 2005 election, another election may not be held
on the same project or category of projects before the first
anniversary of the date of the most recent election disapproving
the project or category of projects.
MTS:ts
Attachment
CC:
Director of Finance
City Secretary
Assistant Director of Finance
Frank McCreary
VINSON & ELKINS
z.po5504.memo
ORDINANCE NO.
P. O. No. 5504
03/04/05 bp
AN ORDINANCE PROVIDING FOR THE CONDUCT OF A M~Y 7,
2005 SPECIAL ELECTION FOR THE PURPOSE OF SUBMITTING
TO THE QUALIFIED VOTERS OF THE CITY PROPOSITIONS AS
TO WHETHER OR NOT THE EXISTING SECTION 4A S~?~$ TAX
SHALL BE UTILIZED FOR VARIOUS CATEGORIES OF
PROJECTS AS DESCRIBED IN SECTION 4B OF ARTICLE
5190.6, VERNON'S TEXAS CODE ANNOTATED, CALLING FOR
A PUBLIC HEARING AND PROVIDING FOR pUBLICATION OF
THE ELECTION NOTICE
~, the City of Port Arthur is a home rule City that has
by a Special Election held on November 7, 1995, adopted a one-half
of one percent sales tax to be used for the promotion and
development of new and expanded Section 4A business enterprises as
authorized by Section 4A, Article 5190.6 V.T.C.S., as amended; and
WHEREAS, the results of this Election were approved by
Ordinance 95-90 on November 14, 1995; and
WHEREAS, on February 13, 1996, the City Council, per Ordinance
96-08, approved the Articles of Incorporation and Bylaws of the new
Section 4A Economic Development Corporation comprised of five (5)
Directors and four (4) Advisory Directors; and
WHEREAS, pursuant to Section 4A {s) of Article 5190.6 Vernon's
Texas Code Statutes, the City Council is authorized to call an
Election on the usage of Section 4A, sales tax for categories of
projects under Section 4B Article 5190.6 Vernon's Texas Code
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Statutes; and
~ER~-~, the City Council desires to submit propositions to
the voters thereon and herein orders a Special Election, said Order
being attached as Exhibit ~A"; and,
W~ER~, a public hearing is needed to be scheduled as to the
cost and impact of the proposed category of projects.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR, TEXAS:
Section 1. That
correct.
Section 2.
the facts in the preamble are true and
That pursuant to the provisions of Article
5190.6 Vernon's Texas Code Statutes and pursuant to Section
41.001 Election Code Vernon's Texas Code Statutes, at a May 7,
2005 Special Election, there shall be submitted to the resident
qualified voters of said City for their action thereupon, the
following propositions regarding the usage of Section 4A sales
tax for Section 4B Article 5190.6 Projects:
PROPOSITION NO. ONE:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for professional and
amateur (including
purposes and events,
and related store,
children's) sports, and athletic
including stadiums and ball parks,
restaurant, concession, and automobile
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parking facilities, related area transportation
facilities and related roads, streets, and water and
sewer facilities, which is a category of projects under
Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. TWO:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for tourist and
convention purposes and events including concert halls,
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,
which is a category of projects under Section 4B of
Article 5190.6 Vernon's Texas Code Statutes?
PROPOSITION NO. THP~E:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for public park
purposes and events including parks and park facilities,
and related store, restaurant, concession,
parking facilities, related area
facilities and related roads, streets,
and automobile
transportation
and water and
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sewer facilities, which is a category of projects under
Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. FOUR:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized to promote or develop
new or expanded business enterprises that create or
retain primary jobs, including a project to provide
public safety facilities, streets and roads, drainage and
related improvements, demolition of existing structures,
general municipality owned improvements as well as any
improvements or facilities that are related to any of
those projects and any other project that the Section 4A
board in its discretion determines promotes or develops
new or expanded business enterprises that create or
retain jobs, which is a category of projects under
Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. FIVE:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for the promotion of
development and expansion of affordable housing as
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defined under by 42 U.S.C. Section 12745, which is a
category of projects under Section 4B of Article 5190.6
Vernon's Texas Code Statutes?
PROPOSITION NO. SIX:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for the development
or improvement of water supply facilities, including
dams, transmission lines, well field developments, and
other water supply alternatives, which is a category of
projects under Section 4B of Article 5190.6 Vernon's
Texas Code Statutes?
PROPOSITION NO. SEVEN:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for 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, which is a category of
projects under Section 4B of Article 5190.6 Vernon's
Texas Code Statutes?
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PROPOSITION NO. EIGHT:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for the cleanup of
contaminated property which is a category of projects
under Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
Section 3. That as required by Section 52.072 of the Texas
Election Code, said questions shall appear on the ballot as
propositions and said ballot shall conform to the requirements of
the Texas Election Code.
Section 4. That one voting
shown in Exhibit
place shall be provided (as
"B") within each of the precincts or combined
precincts into which the City is divided for voting purposes.
Section 5. That all persons are qualified to vote at said
election who are qualified voters under the Constitution and Laws
of the State of Texas and the City Charter.
Section 6. That the election procedures shall be as
delineated in Ordinance No. 05-08.
Section 7. That the Mayor shall cause notice of this
election to be given in accordance with Section 4.003 of the Texas
Election Code by publishing a copy of the Notice of Election in the
official newspaper of the City of Port Arthur at least one (1)
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time, not earlier than the thirtieth (30th) day nor later than the
tenth (10th) day before election day; and a copy of this Ordinance
together with a copy of said Notice shall be filed in the office of
the City Secretary and another copy of said notice shall be posted
on the bulletin board used for posting notices of the meetings of
the City Council of the City of
<21) days before the election.
include the location of each polling place
Exhibit "A" attached and made part hereof.
Section 8. That a public hearing
the 26tn day of April 2005 at 9:00 a.m. as
Port Arthur at least twenty-one
The Notice of Election shall
and shall comply with
is herein scheduled for
to review the proposed
costs and impact of the categories of the projects. The City
Secretary shall publish the notice on a weekly basis until the date
of the hearing. The notice shall have the date, time, place and
subject of the hearing.
Section 9. That this Ordinance
immediately from and after its passage.
READ, ADOPTED and APPROVED this the __
A.D., 2005, at a
the City Council of the City of Port Arthur,
following vote: AYES: Mayor
shall take effect
day of
Special Meeting of
Texas, by the
Councilmembers
NOES:
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ATTEST:
MAYOR
CITY SECRETARY
APPROVED AS TO FORM:
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
STEVE FITZGIBBONS, CITY MANAGER
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EXHIBIT "A"
O~DER ~ NOTICE OF A SPECIAL ELECTION
IN THE CITY OF PORT ARTh~JR, TEY-~S
I, Oscar G. Ortiz, Mayor of the City of Port Arthur, Texas, as authorized
by the City Council, do hereby Order and give Notice of a Special Election to be
held in the City of Port Arthur, Texas, on Saturday, May 7, 2005, between the
hours of 7:00 o'clock a.m. and 7:00 o'clock p.m., for the purpose of submitting
propositions to the voters, as delineated in Exhibit "A-I".
Said election shall be by Electronic Voting System as provided in Section
123.001 of the Election Code, Section 9.004, et. seq., Local Government Code and
the City Charter. The location of each polling place is shown on Exhibit "B".
Early voting by personal appearance will be conducted each weekday at the
following locations between the hours of 8:00 A.M. and 5:00 P.M. beginning on
April 20, 2005 and ending on May 3, 2005:
City Hall, 444 Fourth Street
Port Arthur Public Library, 4615 Ninth Avenue
Fire Station No. 1, 1215 Woodworth
Fire Station No. 2, 1201 Grannis Avenue (at Thomas Blvd.)
Fire Station No. 3, 2232 Canal
Sabine Pass Fire Station %4, 5030 S. Gulfway Drive
Early voting by personal appearance will also be conducted on Sunday,
May 1, 2005, between the hours of 8:00 a.m. and 1:00 p.m. at the following
location:
St. Joseph's Hall, 800 Ninth Avenue
In addition, early voting by personal appearance will also be conducted
on Sunday, May 1, 2005, between the hours of 1:00 p.m. and 4:00 p.m. at the
following locations:
City Hall, 444 Fourth Street
Port Arthur Public Library, 4615 Ninth Avenue
Fire Station No. 1, 1215 Woodworth
Fire Station No. 2, 1201 Grannis Avenue (at Thomas Blvd.)
Fire Station No. 3, 2232 Canal
Applications for mail ballots shall be mailed to:
City Secretary of the City of Port Arthur
P. O. Box 1089
Port Arthur, Texas 77641-1089
-or-
City Secretary of the City of Port Arthur
444 Fourth Street
Port Arthur, Texas 77640
Applications for mail ballots must be received no later than the close
of business on Friday, April 29, 2005.
Issued this day of , 2005.
Mayor Oscar G. Ortiz
City of Port Arthur
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EXHIBIT ~A-I"
PROPOSITION NO. ONE:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for professional and
amateur
purposes
and related store,
parking facilities,
facilities and related
sewer facilities,
Section 4B of
(including children's) sports, and athletic
and events, including stadiums and ball parks,
restaurant, concession, and automobile
related area transportation
roads, streets, and water and
which is a category of projects under
Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. TWO:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for tourist and
convention purposes and events including concert halls,
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,
which is a category of projects under Section 4B of
Article 5190.6 Vernon's Texas Code Statutes?
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PROPOSITION NO. THREE:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for public park
purposes and events including parks and park facilities,
and related store, restaurant, concession,
parking facilities, related area
facilities and related roads, streets,
and automobile
transportation
and water and
sewer facilities, which is a category of projects under
Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. FOUR:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized to promote or develop
new or expanded business enterprises that create or
retain primary jobs, including a project to provide
public safety facilities, streets and roads, drainage and
related improvements, demolition of existing structures,
general municipality owned improvements as well as any
improvements or facilities that are related to any of
those projects and any other project that the Section 4A
board in its discretion determines promotes or develops
new or expanded business enterprises that create or
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retain jobs, which is a category of projects under
Section 4B of Article 5190.6 Vernon's Texas Code
Statutes?
PROPOSITION NO. FIVE:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for the promotion of
development and expansion of affordable housing as
defined under by 42 U.S.C. Section 12745, which is a
category of projects under Section 4B of Article 5190.6
Vernon's Texas Code Statutes?
PROPOSITION NO. SIX:
Shall the existing Section
the City of Port Arthur be
or improvement of water
dams, transmission lines,
4A Sales and Use Tax within
utilized for the development
supply facilities, including
well field developments, and
other water supply alternatives, which is a category of
projects under Section 4B of Article 5190.6 Vernon's
Texas Code Statutes?
PROPOSITION NO. SEVEN:
Shall the existing Section 4A Sales and Use Tax within
the City of Port Arthur be utilized for the development
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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, which is a category of
projects under Section 4B of Article 5190.6 Vernon's
Texas Code Statutes?
PROPOSITION NO. EIGHT:
Shall the existing Section 4A Sales and Use
the City of Port Arthur be utilized for the
contaminated property which
under Section 4B of Article
Tax within
cleanup of
is a category of projects
5190.6 Vernon's Texas Code
Statutes?
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CITY ELECTION PRECINCTS
SABINE PASS FIRE STATION NO. 4
(All or a portion of Jefferson County
Election Precinct 32 )
STEPHEN F. AUSTIN SCHOOL
(All or a port[on of Jefferson County
Election Precincts 33, 34, 106, 111, 112, 113, 114
PAISD 35, 80 & 107 & PAPORT 101 & 103)
TYRRELL ELEMENTARY SCHOOL
(All or e podion of Jefferson County
Election Precincts 44, 47, 93, 102
PAISD & PAPORT 60 & 61 )
STILWELL TECHNICAL CENTER
(All or a portion of Jefferson County Election
Precincts 45, 46, 70, 82, 95, 96, 98, 105, 109
PAISD 80 & PAISD & PAPORT 43 & 110 )
ROBERT E. LEE ELEMENTARY SCHOOL
(All or a portion of Jefferson County Election
Precincts 48, 49 & 76 )
THOMAS EDISON MIDDLE SCHOOL
(All or a portion of Jefferson County Election
Precincts 50 & 51 )
DEQUEEN ELEMENTARY SCHOOL
(All or a portion of Jefferson County Election
Precincts 52 & 53 )
WOODROW WILSON MIDDLE SCHOOL
(All or a portion of Jefferson County Election
Precincts 54, 55, 57 & 81 )
MEMORIAL HIGH SCHOOL
9TM GRADE CENTER
(FORMERLY LINCOLN HIGH SCHOOL)
(All or a portion of Jefferson County Election
Precincts 58, 59 & 94 )
TAFT ELEMENTARY SCHOOL
(All or a portion of Jefferson County Election
Precinct 71 And a portion of
Orange County Election Precinct 28 )
Exhiblt"B"
POLLING PLACES
5030 South Gulfway Drive
2441 - 61st Street
4401 Ferndale
4801 Ninth Avenue
3939 Delaware
3501 - 12th Street
710 DeQueen Boulevard
1500 Lakeshore Drive
1023 Abe Lincoln
2500 Taft Avenue
3'0: St~ve ~itzgibbons, City Hanager
FROM:
DATE: March 4~ :2005
Texas Cit~s EconO,hie Oeve~opn~ent Corporations
Economic Oevelopment Corporations by classifications, This
~nforma~on was ~mpi~ed fro~ the ~¢ono~c
Texas Comptroller of Public A~n~ dated November
and g2 r~e~ve both aA and 4B sales
CITY ' 4A i ' 4B 4A & 4B
BB RADY
RECKENRIDGE
CiTY 4A 4B 4A & 4B
~BROW~FIELD
LB f~SViLLE
CHILDRESS
COMANCHE
COVE
4RISTI
CITY 4A 4B 4A & 4B
DE KALB
DECATUR
DENISON
~PRING
EDINBURG
FAIRFIELD
CITY 4A & 4B
~IER
4A 4B
HALE CENTER
HAMLIN
HARLINGEN
DERSON
CITY 4A
4B
4A & 4B
KAUFMAN
KILGORE
JE
iD
CITY
4A 4B
4A & 4B
FALLS
CITY
4A
4B 4A & 4B
EESHOE
PALAClOS
PENI~AS
PERRYTON
4A '" 4B rT~ 4A & 4B
ROTAN
ILLE
CITY
4A
4B 4A & 4B
UTH PADRE ISLAND
CiTY
4A 4B 4A & 4B
TERRELL
TEXAS CITY
POINT
CiTy
TOTAL: 508
......4A 4B 4A & 4B
~24 ~ ?292 92
Economic Development Sales Tax (96:302)
Texas Taxes
Tax ¢ blications
Economic Development Sales Tax
June 2004
Voters in many Texas cities have the option of imposing a local sales and use tax to help finance their
communities' economic development efforts.
These cities may adopt an economic development sales tax rate of 1/8, 1/4, 3/8 or 1/2 of 1 percent if the
new total rate of all local sales and use taxes would not exceed 2 percent. They also may limit the
duration of the tax and the use of the funds.
Who is eligible?
§4A Sales Tax
All cities located in a county with a population of less than 500,000 may impose the tax under §4A if
the new combined local sales tax rate would not exceed 2 percent.
Some cities located in counties with a population of 500,000 or more (Bexar, Dallas, E1 Paso, Harris,
Hidalgo, Tan'ant and Travis), also may use §4A for economic development efforts but a city's eligibility
varies from county to county. For information on which cities are eligible in these counties, call the
Comptroller's Local Government Assistance section toll free at 1-800-531-5441, ext. 3-4679.
§4B Sales Tax
As of 2001, all cities are eligible to adopt the §4B tax if the combined local sales tax rate would not
exceed 2 percent.
How is the tax administered?
Development Corporations
Under both §4A and §4B, the Development Corporation Act has a unique provision that requires cities
to establish a corporation to administer the sales and use tax funds.
The corporation must file articles of incorporation with the Secretary of State. The articles of
incorporation must state that the corporation is governed under Vemon's Ann. Civ. St. art. 5190.6, §4A
or art. 5190.6, §4B of the Development Corporation Act of 1979.
Board of Directors
The composition of the corporation s board of d~rectors and the length of a member's term differ
between §4A and §4B.
Under §4A: The city's governing body must appoint a five-member board. Each member is appointed
http://www.window, state .tx.us/t axinfo/taxpubs/tx96_302 .hwal 3/4/2005
Economic Development Sales Tax (96-302)
to a term not to exceed six years.
Under §4B: The city's governing body must appoint seven directors. Three of the seven directors
cannot be employees, officers or members of the city's govenfing body. The other four directors may be
- but are not required to be - members of the governing body or city employees. All directors are
appointed to a two-year tem~ under §4B.
The directors of a corporation authorized under §4B must be residents of the city authorizing the sales
tax if the city's population is 20,000 or more. There is no city residency requirement for §4B directors in
cities with fewer than 20,000 population as long as the director is a resident of the county in which the
majority of the city is located, or resides within 10 miles of the city and is in a county which borders the
county in which a majority of the city is located.
The board of directors authorized under §4A and §4B serves at the pleasure of the governing body and
must conduct meetings w~thm the city boundaries.
A corporation's registered agent must be a Texas resident, and the corporation's registered office must
be within the city's boundaries.
How can tax revenue be used?
§4A Sales Tax
The tax is primarily intended for manufacturing and industrial development~ and cities may use the
money raised by this sales tax to acquire land, buildings, equipment, fhcilities, expenditures, targeted
infrastructure and improvements for purposes related to:
. manufacturing and industrial facilities, recycling facilities, distribution centers, small warehouse
facilities;
· research and development facilities, regional or national corporate headquarters facilities, primary
job training facilities for use by institutions of higher education, job training classes;
· a general aviation business service airport that is an integral part of an industrial park;
· certain infrastructure improvements, which promote or develop new or expanded business
enterprises;
e port-related facilities to support waterborne commerce; and
, maintenance and operating costs associated with projects.
After a public hearing and voter approval, §4A corporations may use their revenue to undertake projects
eligible under §4B, without voting to abolish the §4A tax and impose the §4B tax. The law specifies the
§4A corporation's requirements for publishing notice of a proposed §4B project and the procedures for
holding at least one public hearing on the proposed project before the election. The ballot must clearly
describe the §4B projects that wilt be funded from the §4A tax.
§4A corporations may, following a separate election to gain voter approval, spend their §4A sales tax to
clean up contaminated project sites.
A corporation created under §4A cannot assume, or pay principal or interest on, debts that existed
before the city- created the corporation.
§4B Sales Tax
The tax provides cities with a wider range of uses for the tax revenues because it is intended to give
communities an opportunity to undertake a project for quality' of life improvements, including economic
development that will attract and retain primary employers.
http://www.window, state .tx.us/taxinfo/taxpubs/tx96_302 .html
3/4/2005
~s tax ior/i Wide variety of ~roject~including land, buildings,
equipment, facilities expenditures and improvements related to projects defined in Section 2 of the Act
(same uses as authorized for §4A) or found by the board of directors to be required or suitable for use
for:
professional and amateur sports (including children's sports) and athletic facilities; tourism and
entertainment facilities; convention and public park purposes amd events, (including stadiun~s,
ballparks, auditoriums, amphitheaters, concert halls, parks and open space improvements,
museums, exhibition facilities);
related store, restaurant, concession, parking and transportation facilities;
related street, water and sewer facilities; and
affordable housing.
To promote and develop new and expanded business enterprises that create or retain primary jobs, a city
may provide:
public safety facilities;
recycli~g facilities;
streets and roads;
drainage and related improvements;
demolition of existing structures;
general municipally owned inaprovements;
maintenance and operating costs associated with projects; and
any other project that the board determines will contribute to the promotion or development of
new or expanded business enterprises that create or retain primary jobs.
Before spending §4B sales tax revenue, a corporation is required to hold at least one public hearing on
the proposed project that will be funded by this mx.
§4B corporations may, following a separate election to gain voter approval, spend their §4B sales tax
for a water supply, water conservation program or to clean up contaminated project sites.
Reporting Requirements of §4A and §4B Corporations
The 1997 Legislature added §4C to the Development Corporation Act requiting §4A and §4B
corporations to file an annual report with the Texas Comptroller of Public Accounts by February 1. The
report must include the corporation's economic development objectives, total revenues and expenditures
for the preceding fiscal year, a breakdown of these expenditures and a list of the corporation's assets.
The report form and instructions for submitting the report are available through the Comptroller's office
or online at: http://www.window, state.tx.ns/laga/edcform.html.
The Comptroller will use this information to report to the Legislature each biennium about the use of
§4A and §4B sales tax revenues to encourage economic development.
Can you undertake projects outside city limits?
An economic development corporation may undertake projects outside city limits so long as it is clear
that the city benefits from the project. Ifa city undertakes a project outside its limits, it must receive
permission to do so from the governing body of the entity with jurisdiction in that area. For example, if
a city locates a project beyond city limits, it should receive approval from the county's commissioners
court.
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3/4/2005
Economic Development Sales Tax (96-302)
How do yon impose the tax?
City voters must approve this special, dedicated tax - just like all other sales tax options.
Page 4 0f7
Call for an Election
Cities may call for this election in two ways:
· the governing body may' call an election on its own; or
· the city must call for the election if petitioned by at least 20 percent of the number of voters who
cast ballots in the most recent regular municipal election.
The city's governing body must adopt an ordinance calling for the election at least 62 days before it is
held.
The election must be held on one of the uniform election dates according to V.T.C.A., Election Code
§41.001:
the first Saturday in Febnmry;
the first Saturday in May;
the second Saturday in September; or
the first Tuesday after the first Monday in November.
How long is the tax effective?
Under §4A
A mx approved without a limit on its duration is effective until repealed by an election. A city may call
an election to repeal the tax in the same way as an election to change the rate of the tax.
A tax imposed for a specified period expires at the end of that period. A city imposing a tax for a
specified period may extend the period or reimpose the tax after its expiration date only with voter
approval.
A mx for a specific project expires when all debts related to the project and obligations from the mx
proceeds have been paid in full. A tax imposed for a specific project may also be reimposed by an
election.
Under §4B
The §4B tax is effective until the city notifies the Revenue Accounting, Tax Allocation Section of the
Comptroller's Office to stop collecting the tax. A city can, on its own action or as a result of an election,
dissolve a §4B corporation. A city must continue assessing the tax until all obligations incurred by the
corporation, including principal and interest on bonds, are satisfied.
What about tax increases or tax decreases?
Initiating Ordinance
If a city is already imposing a mx under this Act, the city's governing body may adopt an ordinance
calling for an election to increase or reduce the mx rate.
The ordinance may be initiated in either of two ways:
· by a majority vote of the governing body; or
· by petition of registered voters.
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Page 5 of 7
Economic Development Sales Tax (96-302)
Petition Requirements
In order to change the rate ofa §4A lax, 10 percent or more of the registered voters, must petition the
city to call an election for that purpose.
Procedm'es for tax rate changes are not addressed under §4B, however, general provisions of the Tax
Code for calling an election may be used. Under these provisions, the city council must call an election
if a number of qualified voters of the municipality equal to at least 20 percent of the number of votes
cast in the most recent regular municipal election petitions the governing body for a vote.
Certifying Petitions
If the election to adopt or change the tax rate is by petition, the governing body must determine if the
petition is sufficient within 30 days of receiving it. If the petition is sufficient, the city must adopt the
ordinance calling for the election within 60 days after receiving it. (Refer to V.T.C.A., Tax Code
§321.402)
Required Tax Rate Changes
As with adoption, the sales and use tax must be increased or decreased in increments of 1/8 of 1 percent
with a minimum of 1/8 of 1 percent and a maximum of 1/2 percent. However, a city may not adopt a tax
rate resulting in a combined rate of all local sales and use taxes exceeding 2 percent.
Reducing or Abolishing a §4A Tax and Adopting a §4B Tax
Ifa city wants to hold an election to reduce or abolish its §4A sales tax and adopt a sales tax under §4B,
the city may address the two issues in a single ballot proposition.
Ballot Language for the
Economic Development Sales Tax
Under §4A
Following is ballot language specified under §4A of the Development Corporation Act:
For a city to adopt, increase or reduce the tax, the ballot must state:
The adoption ora sales and use tax for the promotion and development of new and
expanded business enterprises at the rate of. __ of one percent. (Insert 1/8, 1/4,
3/8 or 1/2 as appropriate for the proposed tax rate.)
2. A city may also hold an election to adopt, increase, reduce or repeal the §4A sales tax and
the sales tax to reduce the property tax rate on the same ballot:
The adoption of a sales and use tax within the city for the promotion and development of
new and expanded business enterprises at the rate of__ of one percent (insert
1/8, 1/4, 3/8 or 1/2 as appropriate for the proposed tax rate) and the adoption of an
additional sales and use tax within the city at the rate of of one percent to be
used to reduce the property tax rate. (Insert 1/8, 1/4, 3/8 or 1/2 as appropriate for the
proposed tax rate.)
3. A city may also allow a vote on a ballot proposition limiting the length of time a sales and
use tax may be imposed. The following language should be added to #1:
to be imposed for _
years.
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Economic Development Sales Tax (96-302)
4. A city may also indicate a specific project on the ballot to be funded with the sales tax
revenue. In this case, a description of the project is substituted in #I or #2 in place of the
following ballot language:
new and expanded business enterprises.
5. For a city to repeal, the ballot should state:
Dissolution of the (name of development corporation).
Under §4B
The Development Corporation Act does not provide specific ballot language for §4B. City
officials should consult with their city attorneys when drafting the ballot language under this
section.
When do tax collections and allocations start?
Certifying Election Results
If voters approve the tax, the governing body must adopt a resolution or ordinance declaring the
election results in meeting minutes not earlier than the third day, nor later than the sixth day, following
the election.
The city secretary must send the certified copy of the resolution or ordinance with the election results to
the Revenue Accounting, Tax Allocation Section of the Comptroller's office. The information sent to
the Comptroller must include:
· the date the election was held;
, the proposition voted on;
, number of votes cast for adoption;
· number of votes cast against adoption;
· number of votes by which the proposition was approved; and
· a statement that the proposition did pass.
The law states that the Comptroller's office must receive this information from the city secretary
through U.S. certified or registered mail. The Comptroller's office will later notify the city secretary
when it is ready to handle the administration of the mx.
Effective Date
The tax becomes effective after one complete calendar quarter elapses from the date the Comptroller's
office receives notification of voter approval. For example, if voters approve the tax in February 2004,
and the Comptroller's office receives notification in March, then the tax becomes effective on July 1,
2004, after the calendar quarter of April-May-June has elapsed. The Comptroller's office will notify
area merchants to begin collecting the new tax rote on July 1. The city will then begin receiving revenue
from the tax in September 2004.
Propositions and Effective Dates for a §4A Tax or §4B Tax With a Tax to Reduce the
Property Tax Rate
Ifa city wants to adopt the §4A sales tax and a sales mx to reduce the property tax rate in the same
election, the city may address them in a single ballot proposition. If the proposition passes, the sales mx
to reduce the property tax rate must take effect on October 1 after one complete calendar quarter has
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Economic Development Sales Tax (96-302)
elapsed. The §4A tax would start at the beginning of the first calendar quarter after the completion of
one full calendar quarter.
Ifa city wants to adopt a sales tax under §4B and a sales tax to reduce the property mx rate in the same
election, the city must address them as two separate ballot propositions. If voters approve both of these
propositions, they both become effective on October 1.
Method of Payment
The Comptroller's office will issue a payment for the total city tax and a letter with the first payment
(that includes the economic development sales tax) with instructions explaining how to calculate the
portion due the city and what is due the development corporation. After a city receives the sales and use
tax revenues from the Comptroller's office, the city must deliver the revenue to the development
corporation.
Need more information on the economic development sales tax?
Comptroller representatives can provide presentations on matters related to the local sales tax, including
§4A and §4B sales taxes. Representatives can also meet in forums with city officials and the public to
help them assess possible effects of the tax on their local communities, including effects on revenue.
For more information about the sales tax, or to request a speaker to present information about the sales
tax to your community, call toll free 1-800-531-5441, ext. 3-4679.
Need More Assistance?
Email us at Ca us toll free. Visit one of our oca fed offices.
tax.~ help@cpa .state,tx.us.
In compliance with the Americans with Disabilities Act, this document may be requested in alternative formats by calling one of our toll-
free numbers listed above, 512/475-0900 (FAX), or 1-800-RELAy-TX [TDD).
96-302
(09/2003)
Carole Keeton Strayhorn
Texas Comptroller of PubLic Accounts
W ndow oo State Government
Contac_t Us
Pr vac~v and Securitypolic~y
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