S.B. No. 1373 AN ACT 1-1 relating to the creation, administration, powers, including taxing 1-2 powers, duties, operations, financing, and dissolution of the Town 1-3 Center Improvement District of Montgomery County, Texas, and the 1-4 power of certain entities to contract with the district. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. CREATION; LEGISLATIVE DECLARATION. 1-7 (a) Notwithstanding the general law relating to consent by 1-8 political subdivisions to the creation of conservation and 1-9 reclamation districts and the inclusion of land in those districts, 1-10 there is hereby created and established within Montgomery County, 1-11 Texas, in the form and manner hereinafter set forth, a special 1-12 district, to be known as the Town Center Improvement District of 1-13 Montgomery County, Texas, which shall be a governmental agency, a 1-14 body politic and corporate, and a political subdivision of the 1-15 state. 1-16 (b) The district is a unit of government for purposes of the 1-17 Texas Tort Claims Act (Chapter 101, Civil Practice and Remedies 1-18 Code), and operations of the district are considered to be 1-19 essential governmental functions and not proprietary functions for 1-20 all purposes, including the application of the Texas Tort Claims 1-21 Act. 1-22 (c) The name of the district may be changed by resolution of 1-23 the board of directors of the district at any time. 2-1 (d) The creation of the district is declared to be essential 2-2 to the accomplishment of the purposes of Article III, Section 52, 2-3 and Article XVI, Section 59, of the Texas Constitution and to the 2-4 accomplishment of the several other public purposes stated in this 2-5 Act. 2-6 (e) The legislature finds, determines, and declares that the 2-7 creation of the district is necessary to promote, develop, 2-8 encourage, and maintain employment, commerce, economic development, 2-9 and the public welfare in the Town Center area of Montgomery 2-10 County. It is the legislature's intent that the creation of the 2-11 district and this legislation not be interpreted to relieve 2-12 Montgomery County or any other governmental agency, political 2-13 subdivision, or municipality from providing the present level of 2-14 services to the area included within the district or to release the 2-15 obligations each entity has or may hereafter have to provide 2-16 services to that area. The district is created to supplement and 2-17 not supplant such services in the area included within the 2-18 district. 2-19 SECTION 2. DEFINITIONS. In this Act: 2-20 (1) "Board" means the board of directors of the 2-21 district. 2-22 (2) "District" means the Town Center Improvement 2-23 District of Montgomery County, Texas. 2-24 (3) "Improvement project" means any program or 2-25 project, whether individual, intermittent, or continuing and 3-1 whether located or conducted within or without the district, for 3-2 the construction, acquisition, lease, rental, installment purchase, 3-3 improvement, rehabilitation, repair, relocation, operation, or 3-4 maintenance of any works, improvements, or facilities or the 3-5 provision, support, enhancement, improvement, extension, or 3-6 expansion of services, whether provided to, for, by, or on behalf 3-7 of the district, necessary for the accomplishment of the public 3-8 purposes of the district, including: 3-9 (A) landscaping; lighting, banners, and signs; 3-10 streets or sidewalks; hike and bike paths and trails, pedestrian 3-11 walkways, skywalks, crosswalks, or tunnels; highway right-of-way or 3-12 transit corridor beautification and improvements; drainage or storm 3-13 water detention improvements; solid waste, water, sewer, or power 3-14 facilities and services, including but not limited to electrical, 3-15 gas, steam, and chilled water facilities; parks, lakes, gardens, 3-16 recreational facilities, open space, scenic areas, and related 3-17 exhibits and preserves; fountains, plazas, and pedestrian malls; 3-18 public art and sculpture and related exhibits and facilities; 3-19 educational and cultural exhibits and facilities; exhibits, 3-20 displays, attractions, and facilities for special events, holidays, 3-21 and seasonal or cultural celebrations; off-street parking 3-22 facilities, bus terminals, heliports, mass-transit, and 3-23 roadway-borne or water-borne transportation and people-mover 3-24 systems; and any other public improvements, facilities, or services 3-25 similar to the foregoing; 4-1 (B) the removal, razing, demolition, or clearing 4-2 of land or improvements in connection with any improvement project; 4-3 (C) the acquisition of real or personal property 4-4 or any interest therein in connection with an authorized 4-5 improvement project provided that the district shall not have the 4-6 power of eminent domain; and 4-7 (D) any special or supplemental services for the 4-8 improvement and promotion of the district or adjacent areas or for 4-9 the protection of public health and safety within or adjacent to 4-10 the district, including but not limited to advertising, promotion, 4-11 tourism, health and sanitation, public safety, security, fire 4-12 protection and emergency medical services, business recruitment, 4-13 development, elimination of traffic congestion, and recreational, 4-14 educational, and cultural improvements, enhancements, and services. 4-15 SECTION 3. BOUNDARIES. The district shall include all of 4-16 the territory contained within the following described area: 4-17 Being a 802.95 acre tract of land situated in Montgomery County, 4-18 Texas in the Walker County School Land Survey, A-599, John Taylor 4-19 Survey, A-547, and the Montgomery County School Land Survey, A-350, 4-20 and being more particularly described by metes and bounds as 4-21 follows with all control referred to the Texas State Plan 4-22 Coordinate System, Lambert Projection, South Central Zone: 4-23 BEGINNING at a point for corner in the south right-of-way line of 4-24 Woodlands Parkway, as recorded in Volume 823, Page 224, of the 4-25 Montgomery County Deed Records, located in the west right-of-way 5-1 line of Interstate Highway No. 45 having a Texas State Plane 5-2 Coordinate Value of X= 3,121,407.94, Y= 861,543.52 and being S 5-3 4154'27" E, 7,443.73 from the northwest corner of said Walker 5-4 County School Land Survey, A-599; 5-5 THENCE along the south right-of-way line of said Woodlands Parkway 5-6 as follows: 5-7 N 7036'26" W, 91.17 feet to a point, 5-8 S 8551'45" W, 577.61 feet to a point, 5-9 S 8548'56" W, 525.94 feet to a point, 5-10 S 8244'32" W, 186.58 feet to a point, 5-11 S 8346'10" W, 810.17 feet to a point, 5-12 S 8439'07" W, 195.75 feet to a point, 5-13 S 8143'27" W, 874.67 feet to a point, 5-14 S 8250'02" W, 630.85 feet to a point, 5-15 S 8632'35" W, 308.58 feet to a point, 5-16 S 8622'47" W, 1,194.19 feet to a point, 5-17 S 8428'14" W, 600.33 feet to a point, 5-18 And S 7428'07" W, 745.32 feet to a point for corner at its 5-19 intersection with the east right-of-way line of Grogan's Mill Road; 5-20 THENCE S 3248'58" W, 187.55 feet to a point for corner; 5-21 THENCE N 7918'19" W, 210.00 feet to a point for corner; 5-22 THENCE N 2212'11" W, 78.06 feet to a point for corner; 5-23 THENCE N 1755'38" E, 654.45 feet to a point for corner; 5-24 THENCE N 4007'24" E, 529.39 feet to a point for corner; 5-25 THENCE N 2732'47" E, 1,121.03 feet to a point for corner; 6-1 THENCE N 2150'09" E, 150.75 feet to a point for corner; 6-2 THENCE N 2732'47" E, 43.97 feet to a point for corner; 6-3 THENCE N 6227'13" W, 584.03 feet to a point for corner; 6-4 THENCE N 2732'47" E, 382.16 feet to a point for corner; 6-5 THENCE northwesterly along a curve to the right an arc distance of 6-6 21.26 feet based on a radius of 270.00 feet, a central angle of 6-7 0430'45" and having a chord which bears N 6442'35" W a chord 6-8 distance of 21.26 feet to a point of tangency; 6-9 THENCE N 6227'13" W, 352.65 feet to a point of curvature; 6-10 THENCE along a curve to the right an arc distance of 194.65 feet 6-11 based on a radius of 720.00 feet, a central angle of 1529'24" and 6-12 having a chord which bears N 5442'31" W a chord distance of 194.06 6-13 feet to a point of tangency; 6-14 THENCE N 4657'49" W, 154.37 feet to a point for corner; 6-15 THENCE N 4302'11" E, 50.00 feet to a point of curvature; 6-16 THENCE along a curve to the left an arc distance of 200.28 feet 6-17 based on a radius of 425.00 feet, a central angle of 2700'00" and 6-18 having a chord which bears N 2932'11" E a chord distance of 198.43 6-19 feet to a point of tangency; 6-20 THENCE N 1602'11" E, 295.95 feet to a point of curvature; 6-21 THENCE along a curve to the left an arc distance of 212.31 feet 6-22 based on a radius of 1,450.00 feet, a central angle of 0823'21" 6-23 and having a chord which bears N 1150'30" E a chord distance of 6-24 212.12 feet to a point of tangency; 6-25 THENCE N 0738'50" E, 130.20 feet to a point for corner; 7-1 THENCE N 5111'04" W, 374.66 feet to a point for corner; 7-2 THENCE N 4800'30" W, 634.11 feet to a point for corner; 7-3 THENCE N 5917'39" W, 62.45 feet to a point for corner; 7-4 THENCE N 1823'46" W, 93.02 feet to a point for corner; 7-5 THENCE N 1752'41" E, 59.29 feet to a point for corner; 7-6 THENCE N 4534'13" E, 97.61 feet to a point for corner; 7-7 THENCE N 1737'12" E, 183.70 feet to a point for corner; 7-8 THENCE N 1417'46" W, 108.32 feet to a point for corner; 7-9 THENCE N 1918'14" E, 72.16 feet to a point for corner; 7-10 THENCE N 3337'34" E, 104.17 feet to a point for corner; 7-11 THENCE S 7557'49" E, 12.49 feet to a point of curvature; 7-12 THENCE along a curve to the right an arc distance of 974.72 feet 7-13 based on a radius of 2,080.00 feet, a central angle of 2650'59" 7-14 and having a chord which bears S 6232'20" E a chord distance of 7-15 965.83 feet to a point of tangency; 7-16 THENCE S 4906'50" E, 142.10 feet to a point for corner; 7-17 THENCE N 3640'50" E, 828.08 feet to a point for corner; 7-18 THENCE S 4908'52" E, 346.64 feet to a point for corner; 7-19 THENCE N 8731'24" E, 536.99 feet to a point for corner; 7-20 THENCE S 0229'55" E, 115.53 feet to a point for corner; 7-21 THENCE S 0225'00" E, 590.05 feet to a point for corner; 7-22 THENCE S 4718'01" E, 244.25 feet to a point for corner; 7-23 THENCE S 8441'11" E, 194.52 feet to a point for corner; 7-24 THENCE N 8900'34" E, 555.28 feet to a point for corner; 7-25 THENCE N 8047'31" E, 300.00 feet to a point for corner; 8-1 THENCE N 1102'00" W, 190.00 feet to a point for corner; 8-2 THENCE N 0208'49" W, 975.00 feet to a point for corner; 8-3 THENCE N 8751'11" E, 580.00 feet to a point for corner; 8-4 THENCE S 0208'49" E, 126.11 feet to a point for corner; 8-5 THENCE N 8751'11" E, 440.00 feet to a point for corner; 8-6 THENCE N 0208'49" W, 486.11 feet to a point for corner; 8-7 THENCE N 8751'11" E, 32.96 feet to a point of curvature; 8-8 THENCE along a curve to the right an arc distance of 528.31 feet 8-9 based on a radius of 5,045.00 feet, a central angle of 0600'00" 8-10 and having a chord which bears S 8908'49" E a chord distance of 8-11 528.07 feet to a point of tangency; 8-12 THENCE S 8608'49" E, 99.85 feet to a point for corner; 8-13 THENCE N 4851'11" E, 14.14 feet to a point for corner; 8-14 THENCE N 0351'11" E, 39.31 feet to a point of curvature; 8-15 THENCE along a curve to the right an arc distance of 372.34 feet 8-16 based on a radius of 1,255.00 feet, a central angle of 1659'56" 8-17 and having a chord which bears N 1221'09" E a chord distance of 8-18 370.98 feet to a point of tangency; 8-19 THENCE N 2051'07" E 416.95 feet to a point for corner; 8-20 THENCE N 2408'53" W, 35.36 feet to a point for corner; 8-21 THENCE N 6908'53" W, 10.41 feet to a point for corner; 8-22 THENCE N 2051'07" E, 110.00 feet to a point for corner; 8-23 THENCE S 6908'53" E, 5.41 feet to a point for corner; 8-24 THENCE N 6551'07" E, 35.36 feet to a point for corner; 8-25 THENCE S 6908'53" E, 115.00 feet to a point for corner; 9-1 THENCE S 2408'53" E, 35.36 feet to a point for corner; 9-2 THENCE S 6908'53" E, 73.98 feet to a point of curvature; 9-3 THENCE along a curve to the left an arc distance of 379.33 feet 9-4 based on a radius of 945.00 feet, a central angle of 2259'56" and 9-5 having a chord which bears S 8038'51" E a chord distance of 376.79 9-6 feet to a point of tangency; 9-7 THENCE N 8751'11" E, 478.87 feet to a point of curvature; 9-8 THENCE along a curve to the left an arc distance of 135.57 feet 9-9 based on a radius of 1,945.00 feet, a central angle of 0359'37" 9-10 and having a chord which bears N 8551'22" E a chord distance of 9-11 135.54 feet to a point of tangency; 9-12 THENCE N 8351'34" E, 330.58 feet to a point for corner; 9-13 THENCE S 0608'26" E, 251.66 feet to a point for corner; 9-14 THENCE S 0619'08" E, 104.20 feet to a point for corner; 9-15 THENCE S 0534'08" E, 335.41 feet to a point for corner; 9-16 THENCE S 0629'11" E, 327.06 feet to a point for corner; 9-17 THENCE S 0744'55" E, 239.82 feet to a point for corner; 9-18 THENCE S 8821'10" W, 186.42 feet to a point for corner; 9-19 THENCE S 0208'52" E, 436.57 feet to a point for corner; 9-20 THENCE N 8722'38" E, 220.97 feet to a point for corner; 9-21 THENCE S 0637'09" E, 662.44 feet to a point for corner; 9-22 THENCE S 0647'16" E, 337.68 feet to a point for corner; 9-23 THENCE S 0639'37" E, 500.77 feet to a point for corner; 9-24 THENCE S 0646'14" E, 576.28 feet to a point for corner; 9-25 THENCE S 0856'30" E, 493.48 feet to a point for corner; 10-1 THENCE S 0842'03" E, 450.64 feet to a point for corner; 10-2 THENCE S 0848'51" E, 498.47 feet to a point for corner; 10-3 THENCE S 0849'00" E, 368.85 feet to a point for corner; 10-4 THENCE S 2016'52" E, 209.35 feet to a point for corner; 10-5 THENCE S 0453'48" E, 289.23 feet to a point for corner; 10-6 THENCE S 7841'39" W, 528.50 feet to a point for corner; 10-7 THENCE N 1121'21" W, 49.94 feet to the POINT OF BEGINNING and 10-8 containing 802.95 acres of land. 10-9 SECTION 4. FINDINGS RELATING TO BOUNDARIES. The legislature 10-10 finds that the boundaries and field notes of the district form a 10-11 closure. If any mistake is made in the field notes or in copying 10-12 the field notes in the legislative process, it in no way affects 10-13 the organization, existence, and validity of the district or the 10-14 right, power, or authority of the district to enter into any type 10-15 of contract for the purposes for which the district is created or 10-16 the right of the district to levy, assess, and collect taxes, fees, 10-17 or charges, as herein provided, and in no other manner affects the 10-18 legality or operations of the district or its board. 10-19 SECTION 5. FINDING OF BENEFIT AND PUBLIC PURPOSE. (a) The 10-20 legislature finds that all of the land and other property included 10-21 within the boundaries of the district will be benefited by the 10-22 works, projects, improvements, and services that are to be 10-23 accomplished by the district under powers conferred by Article III, 10-24 Section 52, and Article XVI, Section 59, of the Texas Constitution 10-25 and other powers granted under this Act and that the district is 11-1 created to serve a public use and benefit. 11-2 (b) The legislature finds that the creation of the district 11-3 is essential to further the public purposes of the economic 11-4 development and diversification of the state, the elimination of 11-5 unemployment and underemployment, and the stimulation and 11-6 development of transportation and commerce; that it is in the 11-7 public interest; and that it will promote the health, safety, and 11-8 general welfare of residents, employers, employees, and consumers 11-9 in the district and of the general public. The present and 11-10 prospective traffic congestion in the district and the safety of 11-11 pedestrians and the limited availability of funds require the 11-12 promotion and development of public transportation and pedestrian 11-13 facilities and systems by new and alternative means, and the 11-14 district will serve the public purpose of securing expanded and 11-15 improved transportation and pedestrian facilities and systems. The 11-16 district will provide needed funding for the Town Center area to 11-17 preserve, maintain, and enhance the economic health and vitality of 11-18 the area as a community and business and commerce center. The 11-19 district will further promote the health, safety, welfare, 11-20 education, convenience, and enjoyment of the public by improving, 11-21 landscaping, and developing certain areas within and adjacent to 11-22 the district and providing public services and facilities within 11-23 and adjacent to the district which are necessary for the 11-24 restoration, preservation, enhancement, and enjoyment of scenic and 11-25 aesthetic beauty. Each and all of the improvement projects 12-1 authorized by this Act are hereby found and declared to be 12-2 essential to carrying out a public purpose. The district will not 12-3 act as the agent or instrumentality of any private interests, even 12-4 though many private interests will be benefited by the district as 12-5 will the general public. 12-6 (c) This Act shall be liberally construed in conformity with 12-7 the legislative findings and purposes set forth herein. 12-8 SECTION 6. GENERAL POWERS. (a) The district has all of the 12-9 rights, powers, privileges, authority, and functions conferred on 12-10 municipal management districts by Subchapter E, Chapter 375, Local 12-11 Government Code, and by the general laws of the state on 12-12 conservation and reclamation districts created under Article XVI, 12-13 Section 59, of the Texas Constitution, and on road districts and 12-14 road utility districts created pursuant to Article III, Section 52, 12-15 of the Texas Constitution, including those conferred by Chapter 54, 12-16 Water Code, and Chapter 13, Acts of the 68th Legislature, 2nd 12-17 Called Session, 1984 (Article 6674r-1, Vernon's Texas Civil 12-18 Statutes), together with the additional rights, powers, privileges, 12-19 authority, and functions contained in this Act. 12-20 (b) If any provision of the general law is in conflict or 12-21 inconsistent with this Act, this Act prevails. Any general law 12-22 which supplements the power and authority of the district, to the 12-23 extent not in conflict or inconsistent with this Act, is adopted 12-24 and incorporated by reference. 12-25 SECTION 7. ADDITIONAL SPECIFIC POWERS AND DUTIES. In 13-1 addition to the general powers set forth in Section 6 of this Act, 13-2 the board may, subject to the provisions and limitations 13-3 hereinafter set forth: 13-4 (1) levy, assess, and apply the proceeds from a 13-5 limited sales and use tax for the district's purposes, provided 13-6 that, during each interval of three calendar years following the 13-7 commencement of collection of such tax, the board shall, consistent 13-8 with the district's authorized powers and purposes and in its sound 13-9 discretion, endeavor to apply an annual average of not less than 10 13-10 percent of the net proceeds of such tax collections, after 13-11 deduction of the general and administrative costs and expenses of 13-12 the district and the costs and expenses of levying, assessing, and 13-13 collecting such taxes, toward mitigation of the impact of 13-14 development within the district on adjacent areas, including 13-15 without limitation effects on public utilities and services, public 13-16 transportation and traffic movement, and scenic and aesthetic 13-17 beauty; 13-18 (2) borrow money for the corporate purposes of the 13-19 district; 13-20 (3) add or exclude territory in the manner provided by 13-21 Subchapter H, Chapter 54, Water Code; 13-22 (4) contract with any person or entity for the 13-23 accomplishment of any of the district's purposes including without 13-24 limitation contracts for the payment, repayment, or reimbursement, 13-25 out of tax proceeds or any other specified source of funds, of any 14-1 costs and reasonable carrying costs incurred by that person for or 14-2 on behalf of the district, including all or part of the costs of 14-3 any improvement project; 14-4 (5) make application for and contract with any person 14-5 or entity to receive, administer, and perform the district's duties 14-6 and obligations under any federal, state, local, or private gift, 14-7 grant, loan, conveyance, transfer, bequest, donation, or other 14-8 financial assistance arrangement relating to the investigation, 14-9 planning, analysis, study, design, acquisition, construction, 14-10 improvement, completion, implementation, or operation by the 14-11 district or others of a proposed or existing improvement project; 14-12 (6) make, adopt, revise, repeal, amend, promulgate, 14-13 and enforce by ordinary civil remedies reasonable rules and 14-14 regulations for the administration and operation of the district, 14-15 the use, enjoyment, availability, protection, security, and 14-16 maintenance of the district's properties and facilities, and 14-17 providing for public safety and security within the district; 14-18 (7) establish, revise, repeal, enforce, collect, and 14-19 apply the proceeds from user fees, concessions, admissions, 14-20 rentals, or other similar fees or charges for the enjoyment, sale, 14-21 rental, or other use of the district's facilities, services, 14-22 properties, or improvement projects; however, because the district 14-23 is created in an area that is devoted primarily to commercial and 14-24 business activity, the district may not impose an impact fee or 14-25 assessment on a single family residential property or a residential 15-1 duplex, triplex, quadruplex, or condominium; 15-2 (8) provide or secure the payment or repayment of the 15-3 costs and expenses of the establishment, administration, and 15-4 operation of the district and the district's costs or share of the 15-5 costs of any improvement project, or district contractual 15-6 obligation or indebtedness, by or through a lease, installment 15-7 purchase contract, or other agreement with any person or the levy 15-8 and assessment of taxes, user fees, concessions, rentals, or other 15-9 revenues or resources of the district; and 15-10 (9) undertake separately or jointly with other persons 15-11 or entities and pay all or part of the cost of improvement 15-12 projects, including improvement projects for improving, enhancing, 15-13 and supporting public safety and security, fire protection and 15-14 emergency medical services, and law enforcement within and adjacent 15-15 to the district and improvement projects that confer a general 15-16 benefit on the entire district and the areas adjacent thereto or a 15-17 special benefit on a definable part of the district, which may be 15-18 the entire district or any part thereof; however, the district 15-19 shall not be authorized to employ peace officers. 15-20 SECTION 8. BOARD OF DIRECTORS. (a) The district is 15-21 governed by a board of eight directors who shall serve for 15-22 staggered terms of four years. 15-23 (b)(1) Except as provided by Subdivisions (2) and (3) of 15-24 this subsection, to be qualified to serve as a director, a person 15-25 must be at least 18 years old and be: 16-1 (A) a resident of the district; 16-2 (B) an individual owner of real property in the 16-3 district; 16-4 (C) an individual owner of stock, whether 16-5 beneficial or otherwise, of a corporate owner of real property in 16-6 the district; 16-7 (D) an individual owner of a beneficial interest 16-8 in a trust that owns real property in the district; or 16-9 (E) an agent, employee, officer, or director of 16-10 any owner of real property described by Paragraph (B), (C), or (D) 16-11 of this subdivision. 16-12 (2) To be eligible for appointment under Paragraph (F) 16-13 or (G) of Subdivision (1) of Subsection (c) of this section, a 16-14 person must be a resident of the city making the appointment and 16-15 may not be a person described by Paragraph (B), (C), (D), or (E) of 16-16 Subdivision (1) of this subsection. 16-17 (3) To be eligible for appointment under Paragraph (H) 16-18 of Subdivision (1) of Subsection (c) of this section, a person must 16-19 be a member of the Woodlands Community Association and may not be a 16-20 person described by Paragraph (B), (C), (D), or (E) of Subdivision 16-21 (1) of this subsection. 16-22 (4) A person or entity that owns an interest in a 16-23 general or limited partnership owning real property in the district 16-24 or who has a lease of real property in the district with a 16-25 remaining term of 10 years or more, excluding options, is 17-1 considered to be an owner of real property for purposes of this 17-2 subsection. 17-3 (c)(1) On the effective date of this Act, the following 17-4 persons shall constitute the initial board and shall serve as 17-5 provided in this Act: 17-6 (A) Vicki D. Armstrong; 17-7 (B) Roger L. Galatas; 17-8 (C) R. A. Kutsche; 17-9 (D) Michael H. Richmond; 17-10 (E) Bruce M. Withers, Jr.; 17-11 (F) one individual appointed by the city council 17-12 of the City of Oak Ridge North; 17-13 (G) one individual appointed by the city council 17-14 of the City of Shenandoah; and 17-15 (H) one individual appointed by the board of 17-16 directors of the Woodlands Community Association. 17-17 (2) If one or more of the initial directors listed in 17-18 this subsection fails to qualify for office within 90 days after 17-19 the effective date of this Act, the remaining directors shall 17-20 appoint qualified persons to fill the vacancies for the unexpired 17-21 terms. 17-22 (d) Of the initial directors, four shall serve until the 17-23 first Saturday in May, 1994, or until their successors have been 17-24 elected or appointed and have qualified, and four shall serve until 17-25 the first Saturday in May, 1996, or until their successors have 18-1 been elected or appointed and have qualified. The board shall 18-2 determine the terms of the initial directors by mutual agreement or 18-3 by lot. 18-4 (e) A vacancy in the office of director shall be filled by 18-5 appointment by a majority vote of the remaining directors. The 18-6 board may remove a director for misconduct or failure to carry out 18-7 his duties by unanimous vote of all of the remaining directors. 18-8 (f) As soon as practicable after a director is elected or 18-9 appointed, such person shall execute a bond for $10,000 payable to 18-10 the district and conditioned on the faithful performance of his 18-11 duties. All bonds of the directors shall be approved by the board, 18-12 and each director shall take the oath of office prescribed by the 18-13 constitution for public officers. The bond and oath shall be filed 18-14 with the district and retained in its records. 18-15 (g) After directors have been appointed or elected and have 18-16 qualified by executing a bond and taking the proper oath, they 18-17 shall organize or reorganize by electing a president, a 18-18 vice-president, a secretary, and any other officers as in the 18-19 judgment of the board are necessary. 18-20 (h) A position on the board may not be construed to be a 18-21 civil office of emolument for any purpose, including those purposes 18-22 described in Article XVI, Section 40, of the Texas Constitution. 18-23 (i) A director is not entitled to compensation for service 18-24 on the board but is entitled to be reimbursed for necessary 18-25 expenses incurred in carrying out the duties and responsibilities 19-1 of a director. 19-2 (j) Except as provided in Subsection (e) of this section, 19-3 five directors constitute a quorum for the consideration of matters 19-4 pertaining to the purposes of the district, and a concurrence of a 19-5 majority of a quorum of directors shall be required for any 19-6 official action of the district. 19-7 (k) A person who qualifies to serve on the board under 19-8 Subsection (b) of this section shall be qualified to serve as a 19-9 director and participate in all votes pertaining to the business of 19-10 the district regardless of any statutory provisions to the 19-11 contrary. 19-12 SECTION 9. CONFIRMATION AND DIRECTORS ELECTIONS. (a) As 19-13 soon as practicable after all initial directors have qualified for 19-14 office, the initial directors shall file the statement and take the 19-15 oath of office required of appointed officials and meet in an 19-16 organizational session. If the board does not determine to call 19-17 hearings to exclude territory from the district, the board at the 19-18 organizational meeting shall call a confirmation election to be 19-19 held on the next lawfully available uniform election date occurring 19-20 not less than 45 days after the date of such organizational 19-21 meeting. 19-22 (b) The confirmation election shall be called and held to 19-23 confirm the establishment of the district in the manner provided by 19-24 general law applicable to municipal utility districts. In the 19-25 event a majority of the votes cast at a confirmation election is 20-1 against the creation of the district, the board shall not call 20-2 another confirmation election for six months after the date the 20-3 former confirmation election is held. Prior to a successful 20-4 confirmation election, the district may not borrow money or levy or 20-5 assess taxes; however, the district shall have the power to carry 20-6 on such other business as the board may determine. 20-7 (c) An election to authorize or to discontinue the levy and 20-8 assessment of taxes may be held at the same time and in conjunction 20-9 with a confirmation or directors election. 20-10 (d) An election for directors shall be held on the first 20-11 Saturday in May in each even-numbered year in the manner provided 20-12 by general law applicable to municipal utility districts, and the 20-13 appropriate number of directors shall be elected for four-year 20-14 terms. 20-15 SECTION 10. OPEN MEETINGS AND RECORDS. The district is a 20-16 political subdivision for purposes of the open meetings law, 20-17 Chapter 271, Acts of the 60th Legislature, Regular Session, 1967 20-18 (Article 6252-17, Vernon's Texas Civil Statutes), and the open 20-19 records law, Chapter 424, Acts of the 63rd Legislature, Regular 20-20 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes), 20-21 and shall solely for the purposes thereof be considered a municipal 20-22 utility district. 20-23 SECTION 11. LIMITED SALES AND USE TAX. (a) The words and 20-24 phrases used in this section and defined by Chapters 151 and 321, 20-25 Tax Code, have the meanings assigned by Chapters 151 and 321, Tax 21-1 Code. 21-2 (b) Except as otherwise provided in this section, Subtitles 21-3 A and B, Title 2, and Chapter 151, Tax Code, apply to the taxes and 21-4 to the administration and enforcement of the taxes imposed by this 21-5 district pursuant to this Act in the same manner that those laws 21-6 apply to state taxes. 21-7 (c) The district may adopt or repeal the limited sales and 21-8 use tax authorized by this section at an election in which a 21-9 majority of the qualified voters of the district voting in such 21-10 election approve the adoption or the abolition of the tax, as 21-11 applicable. 21-12 (d) The provisions of Subchapters C, D, E, and F, Chapter 21-13 323, Tax Code, relating to county sales and use taxes shall apply 21-14 to the application, collection, and administration of a sales and 21-15 use tax imposed under this Act, to the extent not inconsistent with 21-16 the provisions of this Act, and with the same effect as if 21-17 references therein to a county or a commissioners court referred to 21-18 the district or its board; provided that Sections 323.401 through 21-19 323.404 and Section 323.505, Tax Code, do not apply. 21-20 (e) A tax imposed under this Act or the repeal or reduction 21-21 of a tax under this Act takes effect on October 1 after the 21-22 expiration of the first complete calendar quarter occurring after 21-23 the date on which the comptroller receives the notice required by 21-24 Subsection (b), Section 323.405, Tax Code, or Subsection (i) of 21-25 this section. 22-1 (f) On adoption of the tax authorized by this Act, there is 22-2 imposed a tax on the receipts from the sale at retail of taxable 22-3 items within the district at the rate of one percent, as well as an 22-4 excise tax on the use, storage, or other consumption within the 22-5 district of taxable items purchased, leased, or rented from a 22-6 retailer during the period that the tax is effective within the 22-7 district. The rate of the excise tax is the same as the rate of 22-8 the sales tax portion of the tax and is applied to the sales price 22-9 of the taxable item. With respect to a taxable service, "use" 22-10 means the derivation in the district of direct or indirect benefit 22-11 from the service. 22-12 (g) An election to authorize or repeal a limited sales and 22-13 use tax may be called by order of the board and must be held on the 22-14 next lawfully available uniform election date occurring not less 22-15 than 45 days after the date on which the order calling the election 22-16 was passed. Notice of the election shall be given and the election 22-17 shall be held and conducted in the manner prescribed by general law 22-18 for bond elections for municipal utility districts. The ballots 22-19 shall be printed to provide for voting for or against the 22-20 proposition "Adoption of a one percent district sales and use tax 22-21 within the district" or "Abolition of the district sales and use 22-22 tax within the district," as appropriate. 22-23 (h) In the event that all or part of the territory of the 22-24 district is annexed by a municipality which has adopted and is 22-25 imposing a sales and use tax, the sales and use tax imposed by the 23-1 district in such annexed territory shall be reduced, if required to 23-2 comply with the provisions hereof, in even multiples of one-half 23-3 percent, and without the necessity for an election, such that the 23-4 combined rate of all sales and use taxes imposed by the county, the 23-5 annexing municipality, and all other political subdivisions within 23-6 the annexed territory of the district will not exceed two percent, 23-7 provided that a sales and use tax previously adopted by the 23-8 district for such annexed territory shall not be reduced to less 23-9 than one-half percent and provided further that no reduction of the 23-10 district's sales and use tax in the portions of the district not so 23-11 annexed shall be required. 23-12 (i) Within 10 days after the annexation or exclusion of 23-13 territory by the district or the annexation of all or part of the 23-14 territory of the district by a municipality requiring a reduction 23-15 of the district's sales and use tax, as provided in Subsection (h) 23-16 of this section, the board shall send to the comptroller by United 23-17 States certified or registered mail certified copies of all 23-18 resolutions, orders, or ordinances pertaining to such events. 23-19 SECTION 12. LIMITATIONS ON INDEBTEDNESS. The district may 23-20 borrow money for its corporate purposes and evidence such 23-21 indebtedness by one or more contracts, promissory notes, or similar 23-22 instruments provided that no such indebtedness shall be incurred by 23-23 the district unless the taxes and other net revenues to be realized 23-24 by the district during the one-year period following the incurrence 23-25 of such indebtedness are projected by the board to be sufficient, 24-1 together with funds on hand and available or projected to be on 24-2 hand and available to the district from other sources, including 24-3 gifts, grants, loans, conveyances, transfers, bequests, donations, 24-4 or other financial assistance, to repay or discharge such 24-5 indebtedness within such one-year period. 24-6 SECTION 13. CONTRACTS WITH DISTRICT. The district is 24-7 authorized to contract with a city, county, other political 24-8 subdivision, corporation, or other persons to carry out the 24-9 purposes of this Act on such terms and conditions and for such 24-10 period of time as the board may determine. A state agency, city, 24-11 county, other political subdivision, corporation, individual, or 24-12 other entity may contract with the district to carry out the 24-13 purposes of this Act without any further authorization, 24-14 notwithstanding any other law or charter provision to the contrary. 24-15 SECTION 14. DISSOLUTION. (a) The board may elect by 24-16 majority vote to dissolve the district at any time, and the board 24-17 shall dissolve the district on written petition of the owners of 75 24-18 percent, in terms of acreage, of the real property in the district; 24-19 however, the district may not be dissolved by the board if the 24-20 district has any outstanding indebtedness or contractual 24-21 obligations until such indebtedness or contractual obligations have 24-22 been repaid or discharged. 24-23 (b) After the board elects to dissolve the district, the 24-24 board shall transfer ownership of all property and assets of the 24-25 district to Montgomery County, except as provided by Subsection (c) 25-1 of this section. 25-2 (c) If on the date of the vote to dissolve the district more 25-3 than 50 percent of the territory within the district is within the 25-4 corporate limits of a municipality, the board shall transfer 25-5 ownership of the district's property and assets to that 25-6 municipality. 25-7 SECTION 15. NOTICE AND CONSENT. The legislature finds that 25-8 the proper and legal notice of the intention to introduce this Act, 25-9 setting forth the general substance of this Act, has been published 25-10 as provided by law, and the notice and a copy of this Act have been 25-11 furnished to all persons, agencies, officials, or entities to which 25-12 they are required to be furnished by the constitution and laws of 25-13 this state, including the governor, who has submitted the notice 25-14 and Act to the Texas Water Commission. The legislature further 25-15 finds that the Texas Water Commission has filed its recommendations 25-16 relating to this Act with the governor, lieutenant governor, and 25-17 speaker of the house of representatives within the required time. 25-18 All requirements of the constitution and laws of this state and the 25-19 rules and procedures of the legislature with respect to the notice, 25-20 introduction, and passage of this Act have been fulfilled and 25-21 accomplished. 25-22 SECTION 16. SEVERABILITY. The provisions of this Act are 25-23 severable. If any word, phrase, clause, sentence, section, 25-24 provision, or part of this Act is held invalid or unconstitutional, 25-25 it shall not affect the validity of the remaining portions, and it 26-1 is declared to be the legislative intent that this Act would have 26-2 been passed as to the remaining portions regardless of the 26-3 invalidity of any part. 26-4 SECTION 17. EMERGENCY. The importance of this legislation 26-5 and the crowded condition of the calendars in both houses create an 26-6 emergency and an imperative public necessity that the 26-7 constitutional rule requiring bills to be read on three several 26-8 days in each house be suspended, and this rule is hereby suspended, 26-9 and that this Act take effect and be in force from and after its 26-10 passage, and it is so enacted.