BILL ANALYSIS
C.S.S.B. 1620
By: Ellis
Intergovernmental Relations
04-18-95
Committee Report (Substituted)
BACKGROUND
In 1990, Houston City Council approved the creation of the Houston
Downtown Management Corporation, which created a Public Improvement
District over downtown Houston. By July 1991, the corporation
drafted a service plan for the downtown area and Houston City
Council levied a tax of 6 cents per $100 of land and improvement
value to be paid to the corporation in five equal installments to
fund the services to be provided by the corporation. In 1992, the
corporation began its services to the area, including coordinating
efforts with the Metropolitan Transit Authority for the
reconstruction of major downtown streets to improve lighting,
signal, and other fixtures.
PURPOSE
As proposed, C.S.S.B. 1620 sets forth provisions relating to the
creation, administration, powers, and duties of the Houston
Downtown Management District.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. CREATION; LEGISLATIVE DECLARATION. (a) Provides that
a special district to be known as the Houston Downtown Management
District (district) exists as a governmental agency, a body politic
and corporate, and a political subdivision of the state.
(b) Authorizes the name of the district to be changed by
resolution of the board of directors (board) of the Houston
Downtown Management District.
(c) Provides that the creation of the district is essential
to the accomplishment of the purposes of Section 52, Article
III, Section 59, Article XVI, and Section 52-a, Article III,
Texas Constitution, and other public purposes stated in this
Act.
SECTION 2. LEGISLATIVE DECLARATION. (a) Sets forth the findings
of the legislature on the creation of the district.
(b) Provides that the legislature's intent is not to be
interpreted to relieve Harris County or the City of Houston
from providing the present level of services to the area
included within the district or to release the county or city
from obligations each entity has to provide services to the
area. Provides that the district is created to supplement and
not supplant the city or county services in the area included
within the district.
(e) Provides that the legislature finds and intends that by
creating the district and in authorizing the city, county, and
other political subdivisions to contract with the district it
has established a program to accomplish the public purposes
set out in Section 52-a, Article III, Texas Constitution.
SECTION 3. DEFINITIONS. Defines "board," "district," "city," and
"county."
SECTION 4. BOUNDARIES. Sets forth the boundaries of the territory
contained within the district.
SECTION 5. FINDINGS RELATING TO BOUNDARIES. Provides that the
legislature finds that the boundaries and field notes of the
district form a closure. Provides that a mistake made in the field
notes or in copying the field notes in the legislative process does
not in any way affect the organization, existence, and validity of
the district, right of the district to issue any type of bonds or
refunding bonds for the purposes for which the district is created
or to pay the principal and interest on the bonds, the right of the
district to levy and collect assessments or taxes, or legality or
operation of the district or its governing body.
SECTION 6. FINDING OF BENEFIT AND PUBLIC PURPOSE. (a) Provides
that the legislature finds that all of the land and other property
included within the boundaries of the district will be benefited by
the improvements, services, and powers granted under this Act.
Provides that the district is created to serve a public use and
benefit.
(b) Sets forth legislative findings that:
(1) the creation of the district is in the public interest
and is essential to development and diversification of the
economy of the state and eliminating unemployment and
underemployment and develop or expand transportation and
commerce;
(2) the district will promote the health, safety, and
general welfare of residents, employers, employees,
visitors, consumers in the district, and the general public;
(3) the district will provide needed funding for the city's
downtown area to preserve, maintain, and enhance the
economic health and vitality of the area as a community and
business center; and
(4) the district will further promote the health, safety,
welfare, and enjoyment of the public by providing pedestrian
ways and by landscaping and developing certain areas within
the district.
(c) Sets forth the findings of the legislature that
pedestrian ways, street lighting, street landscaping, and
street art objects are parts of and necessary components of a
street and are considered to be a street or road improvement.
(d) Provides that the district will not act as the agent or
instrumentality of any private interest even though many
private interests will be benefited by the district, as will
the general public.
SECTION 7. APPLICATION OF OTHER LAW. Provides that Chapter 375,
Local Government Code, applies to the district, except as otherwise
provided by this Act.
SECTION 8. CONSTRUCTION OF ACT. Requires this Act to be liberally
construed in conformity with the legislative findings and purposes
stated in this Act.
SECTION 9. BOARD OF DIRECTORS IN GENERAL. (a) Provides that the
district is governed by a board with 30 directors who serve
staggered four-year terms.
(b) Provides that Chapter 375D, Local Government Code,
applies to the board to the extent that the subchapter does
not conflict with this Act.
SECTION 10. INITIAL DIRECTORS. (a) Sets forth certain named
persons who are to serve on the initial board of directors.
(b) Sets forth the length of time the initial directors are
to serve on the board.
SECTION 11. SUBSEQUENT DIRECTORS. (a) Requires the mayor and
city council to appoint subsequent directors from persons
recommended by the board. Requires a vacancy in the office of
director because of the death, resignation, or removal of a
director to be filled by the remaining members of the board by
appointing a qualified person for the unexpired term.
(b) Prohibits a person from being appointed to the board if
the appointment would result in less than two-thirds of the
board members being residents of the city.
SECTION 12. EX OFFICIO MEMBERS OF BOARD OF DIRECTORS. (a)
Requires the directors of certain municipal departments and the
general manager of the Metropolitan Transit Authority to each serve
as a nonvoting ex officio member of the board.
(b) Authorizes the board to appoint a representative of
another department of the city that performs duties comparable
to those performed by the abolished department if any of the
departments described by Subsection (a) are consolidated,
renamed, changed, or abolished.
(c) Authorizes the board to appoint the chairpersons of other
nonprofit corporations actively involved in downtown
activities in the city to serve as nonvoting ex officio
members of the board.
SECTION 13. POWERS OF DISTRICT. (a) Provides that the district
has all powers necessary or required to accomplish the purposes for
which the district was created.
(b) Provides that the district has the rights, powers,
privileges, authorities, and functions of a district created
under Chapter 375, Local Government Code.
(c) Provides that the district has the powers conferred on a
corporation under Section 4B, Article 5190.6, V.T.C.S.
(Development Corporation Act of 1979). Authorizes the
district to own, operate, acquire, construct, lease, improve,
and maintain projects, other than a domed football stadium,
described by that section.
(d) Authorizes the district to exercise the power of a
housing finance corporation created under Chapter 394, Local
Government Code, to provide housing or residential development
projects within the district.
(e) Authorizes the district to levy ad valorem taxes,
assessments, or impact fees in accordance with Chapter 375,
Local Government Code, to provide improvements and services
for a project or activity the district is authorized to
acquire, construct, improve, or provide under this Act; and
correct, add to, or delete assessments from its assessment
roll after notice and hearing as provided by Chapter 375F,
Local Government Code.
(f) Prohibits the district from levying a sales and use tax.
(g) Prohibits the district from acquiring property through
eminent domain.
(h) Requires certain actions, relating to certain utilities,
taken by the district, in its exercise of power, under this
Act to be accomplished at the sole cost and expense of the
district and the district to bear damages that are suffered by
owners of property or facilities.
SECTION 14. CONFLICTS WITH OTHER LAW. Provides that this Act
prevails if any provision of a law referenced in Section 13 of this
Act is in conflict with or inconsistent with this Act. Provides
that any law referenced in this Act that is not in conflict or
inconsistent with this Act is adopted and incorporated by
reference.
SECTION 15. REQUIREMENTS FOR FINANCING SERVICES AND
IMPROVEMENTS. Prohibits the board from financing services and
improvement projects unless a written petition requesting those
improvements or services has been filed with the board. Requires
the petition to be signed by the owners of a majority of the
assessed value of real property in the district or at least 50
person who own land within the district, if there are more than 50
persons who own property in the district as determined by the most
recent certified county property tax rolls.
SECTION 16. EXEMPTIONS. Prohibits a single family residential
property or residential duplex, triplex, quadruplex, or condominium
from being exempt from the imposition of a tax, an impact fee, or
an assessment if the tax, impact fee, or assessment is imposed in
accordance with this Act.
SECTION 17. NONPROFIT CORPORATION. (a) Authorizes the board,
by resolution, to authorize the creation of a nonprofit corporation
to aid, assist, and act on behalf of the district in implementing
a project or providing a service authorized by this Act.
(b) Requires the board to appoint the board of directors of
a nonprofit corporation created under this section. Requires
the board of directors of the nonprofit corporation to serve
in the same manner as, for the same term as, and on the
conditions of the board of directors of a local government
corporation created under Article 15281, V.T.C.S. (Texas
Transportation Corporation Act).
(c) Provides that a nonprofit corporation created under this
section has the powers of and is considered for purposes of
this Act to be a local government corporation created under
Article 15281, V.T.C.S.
(d) Authorizes a nonprofit corporation created under this
section to implement any project and provide any services
authorizes by this Act.
SECTION 18. DISBURSEMENTS OR TRANSFERS OF FUNDS. Requires the
board, by resolution, to establish the number of directors'
signatures and the procedure required for a disbursement or
transfer of the district's money.
SECTION 19. BONDS. (a) Authorizes the district to issue bonds
or other obligations payable in whole or in part from ad valorem
taxes, assessments, impact fees, revenues, grants, or other funds
of the district, to pay for any authorized purpose of the district,
other than to finance a domed football stadium.
(b) Authorizes bonds or other obligations of the district to
be issued in certain forms evidencing a proportionate interest
in payments to be made by the district, or other obligations
that are issued in the exercise of the district's borrowing
power and may be issued in bearer or registered form or not
represented by an instrument but the transfer of which is
registered on books maintained by or on behalf of the
district.
(c) Requires the district to obtain the city's approval of
the issuance of bonds for an improvement project and the plans
and specifications of the improvement project to be financed
by the bonds, except as provided by Subsection (d) of this
section.
(d) Authorizes the district to finance the capital
improvements and issue bonds specified in the budget without
further city approval if the district obtains the city's
approval of a capital improvements budget for a specified
period not to exceed five years.
(e) Requires the district to submit the bonds and the record
of proceedings of the district relating to authorization of
the bonds to the attorney general for approval as provided by
Article 717k-8, V.T.C.S., before the district issues bonds.
SECTION 20. ASSESSMENTS. (a) Authorizes the board to levy and
collect an assessment for any purpose authorized by this Act.
(b) Provides that certain assessments, reassessments,
collection expenses, penalties and interest, and attorney's
fees incurred by the district are a first and prior lien
against the property assessed, are superior to any other lien
or claim for county, school district, or municipal ad valorem
taxes, and are the personal liability of and charge against
the owners of the property even if the owners are not named in
the assessment proceedings.
(c) Provides that the lien is effective from the date of the
resolution of the board levying the assessment until the
assessment is paid. Authorizes the board to enforce the lien
in the same manner that the board may enforce an ad valorem
tax lien against real property.
SECTION 21. APPROVAL OF CERTAIN IMPROVEMENT PROJECTS. Requires
the district to obtain the city's approval of the plans and
specifications of any district improvement project related to the
use of land owned by the city, an easement granted by the city, or
a right-of-way of a street, road, or highway.
SECTION 22. ELECTIONS. (a) Requires the district, in addition
to the elections the district must hold under Chapter 375L, Local
Government Code, to hold an election to obtain voter approval
before the district imposes a maintenance tax or issues bonds
payable from ad valorem taxes or assessments.
(b) Authorizes the board to submit multiple purposes in a
single proposition at an election.
(c) Prohibits the board from calling an election under this
Act unless a written petition requesting an election has been
filed with the board. Makes a conforming change.
SECTION 23. IMPACT FEES. Authorizes the district to impose an
impact fee for an authorized purpose as provided by Chapter 375G,
Local Government Code.
SECTION 24. MAINTENANCE TAX. (a) Authorizes the district to
levy and collect an annual ad valorem tax on taxable property in
the district for maintenance, operation, upkeep, improvements, and
services to businesses, residents, and property owners, if
authorized at an election held in accordance with Section 22 of
this Act.
(b) Requires the board to determine the tax rate.
SECTION 25. DISSOLUTION OF THE DISTRICT. (a) Authorizes the
district to be dissolved as provided in Chapter 375M, Local
Government Code.
(b) Authorizes the district that has debt to be dissolved as
provided by Chapter 375M, Local Government Code,
notwithstanding Section 375.264, Local Government Code.
Requires the district to remain in existence, if the district
has debt and is dissolved, solely for the limited purpose of
discharging its bonds or other obligations according to their
terms.
SECTION 26. CONTRACTS. (a) Authorizes the district to contract
with the city or county for the provision of law enforcement
services by the county or the city in the district on a fee basis
to protect the public interest.
(b) Authorizes the city, county, or other political
subdivision of the state to contract with the district to
implement a project of the district or to aid and assist the
district in providing the services authorized under this Act.
Authorizes a contract under this subsection to be for a period
and include terms on which the parties agree, be payable from
taxes or any other sources of revenue that may be available
for such purpose, or provide that taxes or other revenue
collected at a district project may be paid or rebated to the
district under the terms in the contract.
(c) Authorizes the district to enter into a contract, lease,
or agreement with or make accept grants and loans to or from
certain governmental bodies and public or private
corporations, and any other person.
(d) Authorizes the district to perform all acts necessary for
the full exercise of the powers vested in the district on
terms and conditions and for the term the board may determine
to be advisable.
SECTION 27. COMPETITIVE BIDDING. Authorizes the district to
enter a contract for more than $10,000 for services, improvements,
or the purchase of certain goods and property as provided by
Chapter 375K, Local Government Code.
SECTION 28. REINVESTMENT ZONES. Provides that all or any part
of the area of the district is eligible to be included in a tax
incremental reinvestment zone created by the city Chapter 311, Tax
Code, or included in a tax abatement reinvestment zone created by
the city under Chapter 312, Tax Code.
SECTION 29. NOTICE AND CONSENT. Sets forth the findings of the
legislature relating to proper notice of the intention to introduce
this Act to and consent by certain persons, agencies, officials, or
entities required by law to be notified and all requirements,
rules, and procedures of the constitution and laws of this state
have been fulfilled and accomplished.
SECTION 30. Emergency clause.
Effective date: upon passage.