PAK C.S.H.B. 2731 75(R) BILL ANALYSIS STATE AFFAIRS C.S.H.B. 2731 By: Howard 5-9-97 Committee Report (Substituted) BACKGROUND The area along U.S. 59 in Sugar Land, Texas, has been rapidly developing into a retail and commercial center which now includes the First Colony Mall (the "Mall"), two large power centers and a complex of restaurants, offices and banks with more commercial and retail development planned for the near future. The City of Sugar Land, Texas desires a state-of-the-art security system to supplement city and county police services in this area to discourage the development of criminal activity into this area. The First Colony Management District will provide this additional security by assessing commercial property owners for the costs of such services. PURPOSE As proposed, H.B. 2731 would create a special district in Fort Bend County, Texas which will be a political subdivision of the State of Texas and will operate for the purpose of supplementing the city and county services in within the boundaries of the district. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle A, Title 12, Local Government Code to add Chapter 376 as follows: Section 376.111(a) creates and establishes the district in Fort Bend County, Texas as a political subdivision of the state to supplement the city or county services to land in the district. (b) allows the board of directors of the District to change the name of the district by resolution at any time. (c) declares the creation of the district to be essential to the accomplishment of the purposes of Article III, Sections 52 and 52-a and Article XVI, Section 59 of the Texas Constitution, and the public purposes stated in the Act. Section 376.112(a) declares the creation of the district to be necessary to promote employment, commerce, transportation, housing, tourism, recreation, arts, entertainment, economic development, safety, and the public welfare in the City of Sugar Land (the "municipality"). (b) declares that the creation of the district is not to be interpreted to relieve Fort Bend County (the "county") or the municipality of providing the current level of services which they are providing. c) finds that creation of the district will accomplish the public purposes set out in Article III, Section 52-a of the Texas Constitution. Section 376.113 defines "Board," "District," "Municipality," and "County." Section 376.114 defines the boundaries of the district. Section 376.115 finds that the boundaries and field notes of the district form a closure and states that a mistake made in the field notes or copying of the same in the legislative process in no way affects (i) the organization, existence and the validity of the district, (ii) its rights to issue bonds, pay principal and interest on such bonds, (iii) its rights to levy and collect assessments or taxes, or (iv) the legality or operation of the district or its governing body. Section 376.116(a) finds that all land within the district will be benefited by the improvements and services to be provided by the district and that the district is created to serve a public use and benefit. (b) finds that the creation of the district is in the public interest and essential to further the development and diversification of the economy of the state, the elimination of unemployment and underemployment, and the development or expansion of transportation and commerce. (c) finds that the district will (i) promote the health, safety, and general welfare of the residents, employers, employees, visitors, and consumers within the district and the general public, (ii) will provide needed funding for the municipality to preserve and enhance the economic health and vitality of the area as a community and business center, and will promote the health, safety, welfare and enjoyment of the public by providing pedestrian ways and by landscaping and developing certain areas within the district. (d) finds that pedestrian ways, street lighting, street landscaping, and street art objects are parts of and necessary components of a street and shall be deemed a street or road improvement. (e) provides that the district will not act as the agent or instrumentality of any private interest. Section 376.117 provides that Chapter 375, Texas Local Government Code applies, except as otherwise provided in this subchapter. Section 376.118 requires that this subchapter be liberally construed in conformity with the findings and purposes stated herein. Section 376.119(a) establishes the governing body of the district as a board of 13 directors who shall serve for and staggered terms of four years expiring in June 1 of each odd-numbered year and allows the board to vary the number of directors, provided that it is in the best interest of the district and there are no fewer than 9 and no more than 30. (b) provides that the imposition of a tax, assessment or impact fee requires the vote of a majority of the directors serving. Section 376.120(a) provides that the municipality will appoint the directors from persons recommended by the board, and that a vacancy in office due to death, removal or resignation will be filled by the remaining members of the board. (b) requires that no appointments may result in less than two-thirds of the board being residents of the municipality. (c) allows the owner of a tract of land of 10 acres or more in size to recommend a successor director. (d) establishes the procedures for removing a director for non-attendance at meetings and appealing such a decision to the municipality. Section 376.121 establishes the right of the board to appoint ex-officio non-voting members to the board. Section 376.122 Grants the district (i) all of the powers of necessary or required to accomplish the purposes for which it was created, (ii) the powers of districts created under Chapter 375, Local Government Code, (iii) the powers of industrial development corporations created under Section 4B, Article 5190.6, Vernon's Texas Civil Statutes; (iv) the power to levy taxes, assessments or impact fees to provide any service or improvement that the district is authorized to provide, and (v) the power to correct, add to, or delete assessments from its rolls after notice and hearing. Section 376.123 requires the district to pay (i) all costs associated with the relocation, adjustment, raising, lowering, rerouting, changing of grade, or altering of construction of facilities such as streets, pipes, or lines resulting from a district project, and (ii) all damages suffered by landowners resulting from a district project. Section 376.124 provides that Chapter 376 prevails in the event of a conflict with any provision with any other law cited in Sec. 376.122. Section 376.125 prohibits the district from financing services and improvements unless a written petition signed by a requisite number of landowners requesting those improvements or services has been filed with the board. Section 276.126 authorizes the district to create and appoint the board of directors of a nonprofit corporation pursuant to Chapter 431, Texas Transportation Code, to assist and act on behalf of the district in the implementation of any authorized project or services. Section 376.127 requires the board to establish procedures for disbursement and transfer of the district's money. Section 376.128(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, or any combination thereof, to pay for any authorized purpose of the district. (b) provides the forms in which bonds may be issued. (c) requires the district to obtain approval from the municipality of any bond issue before the bonds may be issued and of plans and specifications of any improvement project financed by bonds. (d) allows the district to obtain the municipality 's approval of a capital improvements budget for a period of up to five years, after which the district may finance capital improvements specified in the budget and issue bonds for such project without further approval from the municipality. (e) requires Attorney General approval of bonds issued by the district. Section 376.129(a) authorizes the district to impose assessments for any of its authorized purposes. (b) establishes assessments, reassessments or assessments resulting from an addition to or correction of the assessment roll by the district as a first and prior lien against property assessed, which is superior to any other lien or claim other than a lien for the county, school district, or municipality and as a personal liability of and charge against the owners of the property. (c) provides for the effective date and enforcement procedures for such liens. (d) establishes categories of property which are exempt from impact fees and assessments without owner consent. (e) authorizes the district to reduce assessments or rebate all or part of an assessment if equipment is installed on the assessed property, at no cost to the district, which reduces the district's cost of providing a service. Section 376.130 requires City approval of the plans and specifications of any improvement project that involves the use of the rights-of-way of streets, roads, or highways or the use of the municipality's land or any easements granted by the municipality. Section 376.131(a) requires the district to hold elections pursuant to the provisions of Subchapter L, Chapter 375, Local Government Code, and requires the district to hold an election before it may levy a maintenance tax or issue bonds payable from ad valorem taxes. or assessments. (b) allows the district to submit multiple proposals in a single proposition at an election. (c) prohibits the district from calling an election unless a petition signed by the requisite number of landowners has been filed with the board. Section 376.132 authorizes the district to impose an impact fee for any authorized purpose. Section 376.133 authorizes the district to levy and collect an annual ad valorem tax for operations and maintenance expenses. Section 376.134(a) authorizes the dissolution of the district as provided in Subchapter M, Chapter 375, Local Government Code, provided that the dissolution is approved by three-fourths of the board and two-thirds of the municipality's governing body. (b) requires the district, if dissolved, to remain in existence solely for the limited purpose of discharging its bonds or other obligations. Section 376.135(a) authorizes the district to contract with the municipality or the county for law enforcement services. (b) authorizes the municipality, the county or any other political subdivision, without further authorization, to contract with the district to implement a project or service of the district and to establish the permissible terms of such contracts. (c) authorizes the district to contract with, or accept or make grants and loans to or from, the United States, the State of Texas and its agencies, public and private corporations, and other persons. (d) authorizes the district to perform all acts necessary for the full exercise of the powers vested in it. Section 376.136 requires the district to award contracts for services, improvements, or the purchase of materials, machinery, equipment, supplies or other property in excess of $50,000 on a competitive bid basis. Section 376.137 allows all or any part of the area within the district to be included in a reinvestment zone. Section 376.138 names the initial board of directors, establishes their terms and provides that this section will expire on September 1, 2002. SECTION 2: Finds that all notice and consent requirements for the enactment of the Act have been met. SECTION 3: Effective date: September 1, 1997. SECTION 4:Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE Changes in SECTION 1. Section 376.113(3) corrects the spelling of Sugar Land. Section 376.120(b) requires two-thirds of the board to be property owners in Sugar Land. Section 376.122(6) allows the city to annex land both in Sugar Land and outside the city limits. Section 376.123(c) requires the district to obtain the approval from the Texas Department of Transportation before changing a TxDOT project. Section 376.129(d)(1) exempts owner occupied condominiums from assessment. Section 376.137(b) is added allowing overlapping taxation districts to participate in tax increment financing districts and/or enter into tax abatements for property within the district. Section 376.138(8) and (10) change directors on the initial board. SECTION 2 changes the effective date to immediate effect.