Office of House Bill AnalysisH.B. 3647
By: Glaze
County Affairs


State law authorizes counties to establish economic development districts,
which have proven effective in boosting economic activity in some regions
of Texas. House Bill 3647 establishes the Smith County Economic Development
District which will promote tourism and business development within a
127-acre development zone in northeastern Smith County.  


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 3647 amends the Local Government Code to establish the Smith
County Economic Development District (district) (Sec. 385.001). The bill
sets forth the boundaries of the district (Sec. 385.003). 

The bill sets forth the powers and duties of the district (Secs.
385.031-385.040). The bill authorizes the district to conduct or authorize
certain types of improvement projects (Sec. 385.032). The bill authorizes
the district to impose, assess, and apply the proceeds from a limited sales
and use tax, borrow money for district purposes, add or exclude territory
to or from the district, and enter into a contract with any person (Sec.
385.033). The bill authorizes the district to adopt, amend, and enforce by
ordinary civil remedies reasonable rules and regulations, for the
administration and operation of the district, for the use, enjoyment,
availability, protection, security, and maintenance of the district's
properties and facilities, and to provide for public safety and security
within the district (Sec. 385.034). The bill prohibits the district from
employing peace officers, yet authorizes the district to  contract for
off-duty peace officers to provide public safety and security services
(Sec. 385.035). The bill authorizes a district to exercise economic
development powers and authority under economic development grants. The
bill prohibits the district from exercising the power of eminent domain or
from imposing an impact fee or assessment on specified residential property
or the property, equipment, or facilities of a utility (Secs. 385.039 and

The bill provides that the district is governed by a board of five
directors (board), sets forth provisions regarding the composition and
administration of the board and the election, qualifications, and terms of
the directors and provides the names of the initial directors. The bill
also sets forth provisions regarding an election to confirm the
establishment of the district (Secs. 385.071-385.080). The bill authorizes
the board, by rule, to regulate the private use of public roadways, open
spaces, parks, sidewalks, and similar public areas within the district
(Sec. 385.037). The bill authorizes the board to employ and establish the
managerial structure of the district (Sec. 385.038). 

The bill authorizes the district to adopt, reduce, or repeal the limited
sales and use tax authorized by this bill at an election in which the
voters of the district approve the adoption or the abolition and sets forth
provisions regarding the application, collection, and administration of
such a tax (Sec. 385.111). 

 The bill authorizes the board to impose, repeal, or increase or decrease a
hotel occupancy tax which may not exceed seven percent of the price paid
for the room (Sec. 385.112). The bill authorizes the district to issue
bonds (Sec. 385.114). The bill authorizes the board to dissolve the
district at any time by a majority vote, but only if the district's
outstanding indebtedness or contractual obligations have been repaid or
discharged (Secs. 385.131 and 385.132). After a board elects to dissolve
the district, the bill requires the board to transfer ownership of all
property and assets of the district to Smith County (Sec. 385.133). 


June 15, 2001.