Invisible Government: Special Purpose Districts in Texas - Senate

Research
SPOTLIGHT
ffCounty Development Districts
Section 383.002 (Legislative Intent), Local Government
Code, states that Chapter 383 (County Development
Districts) “furthers the public purpose of developing
and diversifying the economy of this state by providing
incentives for the location and development of projects
in certain counties to attract visitors and tourists.” The
chapter sets forth legislative findings providing that
small and medium-sized counties need incentives for
the development of public improvements that attract
visitors and tourists and that result in employment and
economic activity, which is in the public interest, serves
a public purpose, and promotes the economic welfare
of Texans.
Chapter 383 authorizes the commissioners court of a
county with a population of 400,000 or less to create
a county development district (CDD). On petition
of landowners, accompanied by a sworn statement
indicating consent to creation signed by the holders
in fee simple title to all of the land in the proposed
district, the commissioners court shall set a date and
time for a hearing for considering the creation of the
proposed district. If the commissioners court finds that
the petition meets the requirements listed in the statute
and that the creation of the district and the proposed
project is feasible and necessary and would serve
the public purpose of attracting visitors or tourists
to the county, the commissioners court shall make
an order creating the district. The commissioners
court is required to appoint a five-member temporary
board of directors, who must conduct an election to
confirm the creation of the district and authorize the
imposition of a sales and use tax. The temporary board
of directors becomes permanent if the creation of the
district is confirmed.
A CDD is authorized to acquire and dispose of projects
and is granted all of the other powers, authority,
rights, and duties that will permit accomplishment
of the purposes for which the district was created,
including providing for general promotion and tourist
advertising. Chapter 383 explicitly provides that
a CDD has the powers of an MMD. Furthermore,
a CDD may sue and be sued and is authorized to
exercise the power of eminent domain. A CDD
is funded through the issuance of bonds and the
imposition of a sales and use tax.
Special Purpose Districts
A CDD may be dissolved upon petition by the board
of directors and by order of the commissioners court
if a majority of the board believes that the proposed
undertaking is impracticable or cannot be successfully
and beneficially accomplished or if all bonds and other
debts of the district have been paid and the purposes of
the district have been accomplished.
Section 352.107 (Hotel Tax Authorized for County
Development Districts), Tax Code, authorizes a
county through its commissioners court to impose a
hotel occupancy tax within the boundaries of a county
development district.
ffCounty Assistance Districts
Chapter 387 (County Assistance District), Local
Government Code, sets forth provisions relating to
the creation and functions of a county assistance
district (CAD). The statute authorizes the county
commissioners court to call an election on the
question of creating a CAD to perform certain
functions, including the construction, maintenance, or
improvement of roads or highways, the provision of law
enforcement and detention services, the maintenance
or improvement of libraries, museums, parks, or other
recreational facilities, or the promotion of economic
development and tourism. If the proposed county
assistance district includes territory of a municipality,
including a municipality that has created a development
corporation, the commissioners court must provide
notice of the court’s intent to create a CAD to the
governing body of the municipality or to the board of
directors of the corporation.
The commissioners court of a county acts as the
governing body of a CAD. The CAD is authorized
to perform any act necessary to the full exercise
of the CAD’s functions; accept grants or loans;
acquire, sell, lease, convey, or otherwise dispose of
property; employ necessary personnel; adopt rules;
and contract with public or private persons to perform
any act authorized in the statute. A CAD may impose
a sales and use tax, if it is approved at the election;
however, a CAD is prohibited from levying an ad
valorem tax.
Page 34 October 2008