Amend CSHB 2001 by adding the following appropriately numbered sections: SECTION 1. CREATION OF DISTRICT. (a) A special district to be known as the "East Montgomery County Improvement District" exists as a governmental agency, body politic and corporate, and political subdivision of the state. (b) The district is a governmental unit for purposes of Chapter 101, Civil Practice and Remedies Code, and operations of the district are considered for all purposes, including the application of that chapter, to be essential governmental functions and not proprietary functions. (c) The name of the district may be changed by resolution of the board. SECTION 2. DECLARATION OF INTENT. (a) The creation of the district is: (1) essential to accomplish the purposes of Section 52, Article III, and Section 59, Article XVI, Texas Constitution, and other public purposes stated in this Act; and (2) necessary to promote, develop, encourage, and maintain employment, commerce, economic development, and the public welfare in the eastern area of Montgomery County. (b) The district is created to supplement and not to supplant the county, governmental agency, political subdivision, or municipal services provided in the district. This Act does not: (1) relieve the county or a governmental agency, political subdivision, or municipality from providing the level of services the entity provides in the district as of August 31, 1997; or (2) release the county or a governmental agency, political subdivision, or municipality from the obligations the entity has to provide services to that area. SECTION 3. DEFINITIONS. In this Act: (1) "Board" means the board of directors of the district. (2) "District" means the East Montgomery County Improvement District. (3) "County" means Montgomery County, Texas. SECTION 4. BOUNDARIES. The boundaries of the district are coextensive with the boundaries of the New Caney Independent School District and the Splendora Independent School District as those boundaries existed on January 1, 1997, but the district does not include any portion of the City of Houston as it existed on January 1, 1997. SECTION 5. FINDINGS RELATING TO BOUNDARIES. The boundaries and field notes of the district form a closure. If a mistake is made in the field notes or in copying the field notes in the legislative process, the mistake does not in any way affect the: (1) organization, existence, and validity of the district; (2) right or power of the district to enter into a contract for the purposes for which the district is created; (3) right of the district to impose, assess, and collect taxes, fees, or charges; or (4) legality or operations of the district or its governing body. SECTION 6. FINDING OF BENEFIT AND PUBLIC PURPOSE. (a) All the land and other property included in the district will be benefited by the works, projects, improvements, and services to be provided by the district under powers granted by Section 52, Article III, and Section 59, Article XVI, Texas Constitution, and other powers granted by this Act. (b) The district is created to serve a public use and benefit. The creation of the district is in the public interest and is essential to: (1) further the public purposes of the development and diversification of the economy of the state; and (2) eliminate unemployment and underemployment and develop or expand transportation and commerce. (c) The district will: (1) promote the health, safety, and general welfare of residents, employers, employees, and consumers in the district and of the general public; (2) promote and develop public transportation and pedestrian facilities and systems by new and alternative means, including securing expanded and improved transportation and pedestrian facilities and systems; (3) provide needed money for the area in the district to preserve, maintain, and enhance the economic health and vitality of the area as a community and business center; and (4) promote the health, safety, welfare, education, convenience, and enjoyment of the public by: (A) improving, landscaping, and developing certain areas in and adjacent to the district; and (B) providing public services and facilities in and adjacent to the district that are necessary for the restoration, preservation, enhancement, and enjoyment of scenic and aesthetic beauty. (d) Each improvement project authorized by this Act is essential to carry out a public purpose. (e) 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. INITIAL DIRECTORS. (a) The Commissioners Court of Montgomery County shall appoint eight initial directors. To be qualified for appointment as a director, a person must have the qualifications specified in Section 12 of this Act. (b) In making appointments, the commissioners court shall attempt to compose the board of persons who reflect the residents in the area of the district. SECTION 8. CONFIRMATION ELECTION. (a) The initial directors shall meet as soon as practicable after all initial directors have qualified for office. The board shall call a confirmation election to determine if the proposed district shall be established. The board shall call the confirmation election at the first meeting unless the board calls a hearing to exclude territory from the district. (b) The confirmation election shall be held in the manner provided by Section 49.102, Water Code. The election must be held on the next uniform election date provided by Section 41.001, Election Code, that falls on or after the 45th day after the date of the order calling the election. (c) If a majority of the votes cast in the election are against the creation of the district, the board may not call or hold another confirmation election until the expiration of six months after the date of the most recent confirmation election. (d) Before the creation of the district is confirmed, the district may not borrow money or impose taxes. The district may carry on other business as the board determines. SECTION 9. ELECTION OF DIRECTORS. (a) As soon as practicable after the first anniversary of the date on which the creation of the district is confirmed, the board shall call and hold an election to elect the initial permanent directors. (b) The election shall be held in the manner provided by Section 49.102, Water Code. (c) The election must be held on the next uniform election date provided by Section 41.001, Election Code, that falls on or after the 45th day after the date of the order calling the election. The directors elected at the first election shall draw lots to determine their terms so that four serve terms expiring on the first July 1 of an even-numbered year after the election and four serve terms expiring July 1 of the second year after the year in which the first terms expire. (d) An election to elect the appropriate number of successor directors shall be held on the uniform election date, established by the Election Code, in May of each even-numbered year. SECTION 10. BOARD OF DIRECTORS; TERMS. The district is governed by a board of eight directors who serve staggered four-year terms, with four members' terms expiring July 1 of each even-numbered year. SECTION 11. ADMINISTRATION OF BOARD. Sections 375.066 through 375.070, Local Government Code, apply to the board as if it were established under Chapter 375, Local Government Code. SECTION 12. QUALIFICATIONS OF DIRECTOR. (a) To be qualified to serve as a director, a person must be at least 18 years old and: (1) a resident of the district; (2) an owner of real property in the district; (3) an owner of stock, whether beneficial or otherwise, of a corporate owner of real property in the district; (4) an owner of a beneficial interest in a trust that owns real property in the district; or (5) an agent, employee, or tenant of a person covered by Subdivision (2), (3), or (4) of this subsection. (b) A person or entity that owns an interest in a general or limited partnership owning real property in the district or that has a lease of real property in the district with a remaining term of 10 years or more, excluding options, is considered to be an owner of real property for purposes of this section. SECTION 13. QUORUM. Five directors constitute a quorum, and a concurrence of a majority of a quorum of directors is required for any official action of the district. SECTION 14. PARTICIPATION IN VOTING. A person who qualifies to serve on the board is qualified to serve as a director and participate in all votes pertaining to the business of the district regardless of any other statutory provision to the contrary. SECTION 15. GENERAL POWERS. The district has: (1) all powers necessary or required to accomplish the purposes for which the district was created; (2) the rights, powers, privileges, and other functions of a municipal management district under Subchapter E, Chapter 375, Local Government Code; and (3) the powers given to an industrial development corporation organized under the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes). SECTION 16. SPECIFIC POWERS AND LIMITATIONS. (a) The district may: (1) impose and collect, and apply the proceeds from, a limited sales and use tax for the district's purposes; (2) borrow money for the corporate purposes of the district; (3) add or exclude territory in the manner provided by Subchapter J, Chapter 49, Water Code; (4) contract with an individual or entity to accomplish the district's purposes, including entering into a contract for the payment, repayment, or reimbursement of costs incurred by the person or entity on behalf of the district, including all or part of the costs of an improvement project, from tax proceeds or any other specified source of money; (5) make application for and contract with an individual or entity to receive, administer, and perform the district's duties under a federal, state, local, or private gift, grant, loan, conveyance, transfer, bequest, donation, or other financial arrangement relating to the investigation, planning, analysis, acquisition, construction, completion, implementation, or operation of a proposed or existing improvement project; (6) establish and collect only at the district's facilities user fees, concession fees, admission fees, rental fees, or other similar fees or charges and apply the proceeds from those fees or charges for the enjoyment, sale, rental, or other use of the district's facilities, services, properties, or improvement projects; (7) adopt rules for: (A) the administration and operation of the district; (B) the use, enjoyment, availability, protection, security, and maintenance of the district's properties and facilities; and (C) the provision of public safety and security in the district; (8) provide or secure the payment or repayment of: (A) an expense of the establishment, administration, or operation of the district; (B) a district cost relating to an improvement project; (C) a district contractual obligation or indebtedness, because of a lease, installment purchase contract, or other agreement; and (D) a tax, user fee, concession fee, rental fee, or other revenue or resources of the district; and (9) undertake improvement projects separately or jointly with other persons or entities and pay all or part of the costs of improvement projects, including improvement projects that: (A) improve, enhance, or support public safety and security, fire protection, emergency medical services, or law enforcement in the district; (B) confer a general benefit on the entire district and the areas adjacent to the district; or (C) confer a special benefit on all or part of the district. (b) The district may not employ peace officers. (c) The district may not impose ad valorem taxes on property in the district. SECTION 17. SPECIFIC POWERS RELATING TO IMPROVEMENTS. An improvement project or service provided by the district may include: (1) the construction, acquisition, lease, rental, installment purchase, improvement, rehabilitation, repair, relocation, and operation of: (A) landscaping; lighting, banners, or signs; streets or sidewalks, pedestrian or bicycle paths and trails; pedestrian walkways, skywalks, crosswalks, or tunnels; highway right-of-way or transit corridor beautification and improvements; (B) drainage or storm water detention improvements; solid waste, water, sewer, or power facilities and services, including electrical, gas, steam, and chilled water facilities and services; (C) parks, lakes, gardens, recreational facilities, open space, scenic areas, and related exhibits and preserves; fountains, plazas, or pedestrian malls; public art or sculpture and related exhibits and facilities; educational or cultural exhibits and facilities; exhibits, displays, attractions, or facilities for special events, holidays, or seasonal or cultural celebrations; (D) off-street parking facilities, bus terminals, heliports, mass-transit, or roadway-borne or water-borne transportation systems; and (E) other public improvements, facilities, or services similar to the improvements, facilities, or services described by Paragraphs (A) through (D) of this subdivision; (2) the cost of removal, razing, demolition, or clearing of land or improvements in connection with providing an improvement project; (3) the acquisition of real or personal property or an interest in the property that is made in connection with an authorized improvement project; and (4) the provision of special or supplemental services to improve or promote the area in the district or to protect the public health and safety in the district, including advertising, promotion, tourism, health and sanitation, public safety, security, fire protection or emergency medical services, business recruitment, development, elimination of traffic congestion, and recreational, educational, or cultural improvements, enhancements, or services. SECTION 18. RELATION TO OTHER LAW. If a provision of a law referenced in Section 15 of this Act or referenced in Subchapter E, Chapter 375, Local Government Code, is in conflict with or inconsistent with this Act, this Act prevails. A law referenced in Section 15 of this Act or referenced in Subchapter E, Chapter 375, Local Government Code, that is not in conflict with or inconsistent with this Act is adopted and incorporated by reference and may be used by the district independently of each other. SECTION 19. NO EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain. SECTION 20. CERTAIN RESIDENTIAL PROPERTY EXEMPT. The district may not impose an impact fee or assessment on a single family residential property or a residential duplex, triplex, quadruplex, or condominium. SECTION 21. SALES AND USE TAX; EXCISE TAX. (a) The district may impose a sales and use tax for the benefit of the district if authorized by a majority of the qualified voters of the district voting at an election called for that purpose. (b) If the district adopts the tax: (1) a tax is imposed on the receipts from the sale at retail of taxable items in the district; and (2) an excise tax is imposed on the use, storage, or other consumption in the district of taxable items purchased, leased, or rented from a retailer during the period that the tax is effective in the district. (c) The rate of the excise tax is the same as the rate of the sales tax portion of the tax applied to the sales price of the taxable items and is included in the sales tax. (d) For purposes of this section: (1) "taxable items" includes all items subject to any sales and use tax that is imposed by the county if the county has imposed a sales and use tax; and (2) "use," with respect to a taxable service, means the derivation in the district of direct or indirect benefit from the service. SECTION 22. TAX ELECTION PROCEDURES. (a) The board by order may call an election to adopt, change the rate of, or abolish a sales and use tax. The election may be held at the same time and in conjunction with a confirmation or directors election. (b) The election must be held on the next uniform election date that falls on or after the 45th day after the date the order calling the election is adopted. (c) Notice of the election shall be given and the election shall be held and conducted in the manner prescribed for bond elections under Subchapter D, Chapter 49, Water Code. (d) In an election to adopt the tax, the ballot shall be prepared to permit voting for or against the proposition: "The adoption of a local sales and use tax in the East Montgomery County Improvement District at the rate of (proposed tax rate)." (e) In an election to change the rate of the tax, the ballot shall be prepared to permit voting for or against the proposition: "The (increase or decrease, as applicable) in the rate of the local sales and use tax imposed in the East Montgomery County Improvement District from (tax rate on election date) percent to (proposed tax rate) percent." (f) In an election to abolish the tax, the ballot shall be prepared to permit voting for or against the proposition: "The abolition of the local sales and use tax in the East Montgomery County Improvement District." SECTION 23. IMPOSITION, COMPUTATION, ADMINISTRATION, AND GOVERNANCE OF TAX. (a) Chapter 323, Tax Code, to the extent not inconsistent with this Act, governs the application, collection, and administration of the tax under this Act, except Sections 323.401 through 323.406, and 323.505, Tax Code, do not apply. Subtitles A and B, Title 2, and Chapter 151, Tax Code, govern the administration and enforcement of the taxes under this Act. (b) Chapter 323, Tax Code, does not apply to the use and allocation of revenues under this Act. (c) In applying Chapter 323, Tax Code, the district's name shall be substituted for references in that chapter to "the county" and the board of directors of the district is substituted for references in that chapter to "commissioners court." SECTION 24. EFFECTIVE DATE OF TAX OR TAX CHANGE. The adoption of a tax rate or change in the tax rate takes effect after the expiration of the first complete calendar quarter occurring after the date on which the comptroller receives a notice of the results of the election. SECTION 25. TAX RATES. The district may impose the sales and use tax under this Act in increments of one-eighth of one percent, with a minimum tax of one-half percent and a maximum tax of one percent. SECTION 26. ABOLITION OF TAX RATE. The board by order may abolish the local sales and use tax rate without an election. SECTION 27. USE OF TAX. Taxes collected under this Act may be used only for the purposes for which the district was created. SECTION 28. SUBMISSION OF ANNEXATION INFORMATION. Not later than the 10th day after the date on which the district annexes or excludes territory, the board shall send to the comptroller a certified copy of any resolution, order, or ordinance relating to the annexation or exclusion. SECTION 29. APPLICATION OF CERTAIN TAX PROCEEDS. (a) During each interval of three calendar years following the date on which a tax imposed under this Act is collected for the first time, the board shall apply an annual average of not less than 10 percent of the net proceeds of the tax collection to mitigate the impact of development in the district on adjacent areas, including effects on public utilities and services, public transportation and traffic movement, and scenic and aesthetic beauty. (b) In this section, "net proceeds" means the difference between the amount of tax collected and the total amount of the general and administrative expenses of the district, including the cost of imposing and collecting the tax. SECTION 30. LIMITATION ON INDEBTEDNESS. The district may borrow money for a term of less than one year to finance the district's purposes and evidence the indebtedness by a contract, promissory note, or similar instrument. Before the district borrows money, the board must find that the district's taxes and other net revenue to be collected by the district during the one-year period following the creation of the debt and money available to the district from other sources will be sufficient to repay or discharge the debt before that one-year period expires. SECTION 31. CONTRACTING AUTHORITY. (a) The district may contract with a municipality, a county, another political subdivision, a corporation, or another person to carry out the purposes of this Act on terms and for the period of time the board determines. (b) Notwithstanding any other law or charter provision to the contrary, a state agency, a municipality, a county, another political subdivision, a corporation, an individual, or another entity is authorized to contract with the district to carry out the purposes of this Act. SECTION 32. DISSOLUTION BY BOARD ORDER. The board by order may dissolve the district at any time unless the district has outstanding indebtedness or contractual obligations. SECTION 33. DISSOLUTION BY PETITION OF OWNERS. (a) The board by order shall dissolve the district if the board receives a written petition signed by the owners of 75 percent or more of the real property acreage in the district. (b) After the date the district is dissolved, the district may not levy taxes. (c) If on the date the district is dissolved the district has outstanding liabilities, the board shall, not later than the 30th day after the dissolution, adopt a resolution certifying each outstanding liability. The county in which the district is located shall assume the outstanding liabilities. The county shall collect the sales and use tax for the district for the remainder of the calendar year. The county may continue to collect the tax for an additional calendar year if the commissioners court finds that the tax revenue is needed to retire the district liabilities that were assumed by the county. (d) The district and the board may continue to operate for a period not to exceed two months after carrying out the responsibilities required by Subsection (c) of this section. The board and the district are continued in effect for the purpose of satisfying these responsibilities. (e) If the board and the district are continued in effect under Subsection (d) of this section, the board and district are dissolved entirely on the first day of the month following the month in which the board certifies to the secretary of state that no responsibilities of Subsection (c) of this section are left unsatisfied. SECTION 34. ADMINISTRATION OF DISTRICT PROPERTY FOLLOWING DISSOLUTION. (a) After the board orders the dissolution of the district, the board shall transfer ownership of all property and assets of the district to the county, except as provided by Subsection (b) of this section. (b) If on the date on which the board orders the dissolution of the district more than 50 percent of the territory in the district is in the corporate limits of a municipality, the board shall transfer ownership of the district's property and assets to the municipality. SECTION 35. NOTICE AND CONSENT. The legislature finds that: (1) the proper and legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished by the constitution and laws of this state, including the governor, who has submitted the notice and a copy of this Act to the Texas Natural Resource Conservation Commission; (2) the Texas Natural Resource Conservation Commission has filed its recommendations relating to this Act with the governor, lieutenant governor, and speaker of the house of representatives within the required time; (3) the general law relating to consent by political subdivisions to the creation of districts with conservation, reclamation, and road powers and the inclusion of land in those districts has been complied with; and (4) all requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act have been fulfilled and accomplished. SECTION 36. EMERGENCY. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.