1-1     By:  Galloway                                           S.B. No. 26

 1-2           (In the Senate - Filed April 8, 1997; April 10, 1997, read

 1-3     first time and referred to Committee on Intergovernmental

 1-4     Relations; April 18, 1997, reported favorably, as amended, by the

 1-5     following vote:  Yeas 9, Nays 1; April 18, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                             By:  Galloway

 1-7     Amend S.B. No. 26 in SECTION 4 of the bill by deleting Section 7(3)

 1-8     and inserting the following new Section 7(3):

 1-9           (3)  add or exclude territory in the manner provided by

1-10     Subchapter J[H] Chapter 49, and Section 54.016 [54] Water Code,

1-11     except that Section 42.042, Local Government Code, and Section

1-12     54.016, Water Code, shall not apply to the annexation of land

1-13     restricted primarily to commercial or business use;

1-14                            A BILL TO BE ENTITLED

1-15                                   AN ACT

1-16     relating to the Town Center Improvement District of Montgomery

1-17     County, Texas; authorizing a tax and granting the authority to

1-18     issue bonds.

1-19           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-20           SECTION 1.  Section 1, Chapter 289, Acts of the 73rd

1-21     Legislature, 1993, is amended by adding Subsection (f) to read as

1-22     follows:

1-23           (f)  Except as otherwise provided by this Act, the district

1-24     is not subject to the jurisdiction or supervision of the commission

1-25     under Chapter 49, Water Code, or other law.

1-26           SECTION 2.  Section 2, Chapter 289, Acts of the 73rd

1-27     Legislature, 1993, is amended to read as follows:

1-28           Sec. 2.  DEFINITIONS.  In this Act:

1-29                 (1)  "Board" means the board of directors of the

1-30     district.

1-31                 (2)  "Commission" means the Texas Natural Resource

1-32     Conservation Commission.

1-33                 (3)  "District" means the Town Center Improvement

1-34     District of Montgomery County, Texas.

1-35                 (4) [(3)]  "Improvement  project" means any program or

1-36     project, whether individual, intermittent, or continuing and

1-37     whether located or conducted within or without the district, for

1-38     the planning, design, construction, acquisition, lease, rental,

1-39     installment purchase, improvement, provision of furnishings,

1-40     equipment, rehabilitation, repair, reconstruction, relocation, use,

1-41     management, operation, or maintenance of any works, improvements,

1-42     or facilities or the provision, support, enhancement, improvement,

1-43     extension, or expansion of services, whether provided to, for, by,

1-44     or on behalf of the district, necessary for the accomplishment of

1-45     the public purposes of the district, including:

1-46                       (A)  landscaping; lighting, banners, and signs;

1-47     streets or sidewalks; hike and bike paths and trails, pedestrian

1-48     walkways, skywalks, crosswalks, or tunnels; highway right-of-way or

1-49     transit corridor beautification and improvements; drainage or storm

1-50     water detention improvements; solid waste, water, sewer, or power

1-51     facilities and services, including but not limited to electrical,

1-52     gas, steam, and chilled water facilities; parks, lakes, gardens,

1-53     recreational facilities, open space, scenic areas, and related

1-54     exhibits and preserves; fountains, plazas, and pedestrian malls;

1-55     public art and sculpture and related exhibits and facilities;

1-56     educational and cultural exhibits and facilities; conferences,

1-57     conventions, or exhibitions; manufacturer, consumer, or trade

1-58     shows; civic, community, or institutional events; exhibits,

1-59     displays, attractions, and facilities for special events, holidays,

1-60     and seasonal or cultural celebrations; off-street parking

1-61     facilities, bus terminals, heliports, mass-transit, and

1-62     roadway-borne or water-borne transportation and people-mover

1-63     systems; and any other public improvements, facilities, or services

1-64     similar to the foregoing;

 2-1                       (B)  the removal, razing, demolition, or clearing

 2-2     of land or improvements in connection with any improvement project;

 2-3                       (C)  the acquisition of real or personal property

 2-4     or any interest therein in connection with an authorized

 2-5     improvement project provided that the district shall not have the

 2-6     power of eminent domain; and

 2-7                       (D)  any special or supplemental services for the

 2-8     improvement and promotion of the district or adjacent areas or for

 2-9     the protection of public health and safety within or adjacent to

2-10     the district, including but not limited to advertising, promotion,

2-11     tourism, health and sanitation, public safety, security, fire

2-12     protection and emergency medical services, business recruitment,

2-13     development, elimination of traffic congestion, and recreational,

2-14     educational, and cultural improvements, enhancements, and services.

2-15           SECTION 3.  Subsection (a), Section 6, Chapter 289, Acts of

2-16     the 73rd Legislature, 1993, is amended to read as follows:

2-17           (a)  The district has all of the rights, powers, privileges,

2-18     authority, and functions conferred on municipal management

2-19     districts by Subchapter E, Chapter 375, Local Government Code, and

2-20     by the general laws of the state on conservation and reclamation

2-21     districts created under Article XVI, Section 59, of the Texas

2-22     Constitution, and on road districts and road utility districts

2-23     created pursuant to Article III, Section 52, of the Texas

2-24     Constitution, including those conferred by Chapters 49 and

2-25     [Chapter] 54, Water Code, and Chapter 441, Transportation Code [13,

2-26     Acts of the 68th Legislature, 2nd Called Session, 1984 (Article

2-27     6674r-1, Vernon's Texas Civil Statutes)], together with the

2-28     additional rights, powers, privileges, authority, and functions

2-29     contained in this Act.

2-30           SECTION 4.  Section 7, Chapter 289, Acts of the 73rd

2-31     Legislature, 1993, is amended to read as follows:

2-32           Sec. 7.  Additional Specific Powers and Duties.  In addition

2-33     to the general powers set forth in Section 6 of this Act, the board

2-34     may, subject to the provisions and limitations hereinafter set

2-35     forth:

2-36                 (1)  levy, assess, and apply the proceeds from a

2-37     limited sales and use tax for the district's purposes, provided

2-38     that, during each interval of three calendar years following the

2-39     commencement of collection of such tax, the board shall, consistent

2-40     with the district's authorized powers and purposes and in its sound

2-41     discretion, endeavor to apply an annual average of not less than 10

2-42     percent of the net proceeds of such tax collections, after

2-43     deduction of the general and administrative costs and expenses of

2-44     the district and the costs and expenses of levying, assessing, and

2-45     collecting such taxes, toward mitigation of the impact of

2-46     development within the district on adjacent areas, including

2-47     without limitation effects on public utilities and services, public

2-48     transportation and traffic movement, and scenic and aesthetic

2-49     beauty;

2-50                 (2)  borrow money for the corporate purposes of the

2-51     district;

2-52                 (3)  add or exclude territory in the manner provided by

2-53     Subchapter J [H], Chapter 49 [54], Water Code, except that Section

2-54     42.042, Local Government Code, does not apply to the district;

2-55                 (4)  contract with any person or entity for the

2-56     accomplishment of any of the district's purposes including without

2-57     limitation contracting [contracts] for:

2-58                       (A)  the payment, repayment, or reimbursement,

2-59     out of tax proceeds or any other specified source of funds, of any

2-60     costs and reasonable carrying costs incurred by that person for or

2-61     on behalf of the district, including all or part of the costs of

2-62     any improvement project; or

2-63                       (B)  the use, occupancy, lease, rental,

2-64     operation, maintenance, or management of all or part of a proposed

2-65     or existing improvement project;

2-66                 (5)  make application for and contract with any person

2-67     or entity to receive, administer, and perform the district's duties

2-68     and obligations under any federal, state, local, or private gift,

2-69     grant, loan, conveyance, transfer, bequest, donation, or other

 3-1     financial assistance arrangement relating to the investigation,

 3-2     planning, analysis, study, design, acquisition, construction,

 3-3     improvement, completion, implementation, or operation by the

 3-4     district or others of a proposed or existing improvement project;

 3-5                 (6)  make, adopt, revise, repeal, amend, promulgate,

 3-6     and enforce by ordinary civil remedies reasonable rules and

 3-7     regulations for the administration and operation of the district,

 3-8     the use, enjoyment, availability, protection, security, and

 3-9     maintenance of the district's properties and facilities, and

3-10     providing for public safety and security within the district;

3-11                 (7)  establish, revise, repeal, enforce, collect, and

3-12     apply the proceeds from user fees, concessions, admissions,

3-13     rentals, or other similar fees or charges for the enjoyment, sale,

3-14     rental, or other use of the district's facilities, services,

3-15     properties, or improvement projects; however, because the district

3-16     is created in an area that is devoted primarily to commercial and

3-17     business activity, the district may not impose an impact fee or

3-18     assessment on a single family residential property or a residential

3-19     duplex, triplex, quadruplex, or condominium;

3-20                 (8)  provide or secure the payment or repayment of the

3-21     costs and expenses of the establishment, administration, and

3-22     operation of the district and the district's costs or share of the

3-23     costs of any improvement project, or district contractual

3-24     obligation or indebtedness, by or through a lease, installment

3-25     purchase contract, or other agreement with any person or the levy

3-26     and assessment of taxes, user fees, concessions, rentals, or other

3-27     revenues or resources of the district; [and]

3-28                 (9)  undertake separately or jointly with other persons

3-29     or entities and pay all or part of the cost of improvement

3-30     projects, including improvement projects for improving, enhancing,

3-31     and supporting public safety and security, fire protection and

3-32     emergency medical services, and law enforcement within and adjacent

3-33     to the district and improvement projects that confer a general

3-34     benefit on the entire district and the areas adjacent thereto or a

3-35     special benefit on a definable part of the district, which may be

3-36     the entire district or any part thereof; however, the district

3-37     shall not be authorized to employ peace officers; and

3-38                 (10)  impose, collect, and apply the proceeds from a

3-39     hotel occupancy tax as provided by Sections 11A and 11B of this

3-40     Act.

3-41           SECTION 5.  Subsections (b), (c), (e), and (k), Section (8),

3-42     Chapter 289, Acts of the 73rd Legislature, 1993, are amended to

3-43     read as follows:

3-44           (b)(1)  Except as provided by Subdivisions (2) and (3) of

3-45     this subsection, to be qualified to serve as a director, a person

3-46     must be at least 18 years old and be:

3-47                       (A)  a resident of the district;

3-48                       (B)  an individual owner of real property in the

3-49     district;

3-50                       (C)  an individual owner [of stock], whether

3-51     beneficial or otherwise, of at least 10 percent of the outstanding

3-52     stock of a corporate owner of real property in the district or of a

3-53     corporate lessee of real property in the district with an original

3-54     lease term of five years or more, excluding options;

3-55                       (D)  an individual owner of at least 10 percent

3-56     of the [a] beneficial interest in a trust that:

3-57                             (i)  owns real property in the district; or

3-58                             (ii)  leases real property in the district

3-59     under an original lease term of five years or more, excluding

3-60     options;

3-61                       (E)  an individual lessee of real property in the

3-62     district under an original lease term of five years or more,

3-63     excluding options;

3-64                       (F)  an individual owner of at least 10 percent

3-65     of the outstanding interest in a general or limited partnership

3-66     that:

3-67                             (i)  owns real property in the district; or

3-68                             (ii)  leases real property in the district

3-69     under an original lease term of five years or more, excluding

 4-1     options; or

 4-2                       (G) [(E)]  an individual agent, employee,

 4-3     officer, or director of any individual, corporation, trust, or

 4-4     partnership that owns or leases [owner of] real property described

 4-5     by Paragraph (B), (C), [or] (D), (E), or (F) of this subdivision

 4-6     who is designated by such owner or lessee to serve in that

 4-7     capacity.

 4-8                 (2)  To be eligible for appointment under [Paragraph

 4-9     (F) or (G) of Subdivision (1) of] Subsection (c)(1)(F) or (G) of

4-10     this section, a person must be a resident of the city making the

4-11     appointment [and may not be a person described by Paragraph (B),

4-12     (C), (D), or (E) of Subdivision (1) of this subsection].

4-13                 (3)  To be eligible for appointment under [Paragraph

4-14     (H) of Subdivision (1) of] Subsection (c)(1)(H) of this section, a

4-15     person must be a member of The [the] Woodlands Community

4-16     Association, Inc [and may not be a person described by Paragraph

4-17     (B), (C), (D), or (E) of Subdivision (1) of this subsection.]

4-18                 [(4)  A person or entity that owns an interest in a

4-19     general or limited partnership owning real property in the district

4-20     or who has a lease of real property in the district with a

4-21     remaining term of 10 years or more, excluding options, is

4-22     considered to be an owner of real property for purposes of this

4-23     subsection].

4-24           (c)(1)  On the effective date of this Act, the following

4-25     persons shall constitute the initial board and shall serve as

4-26     provided in this Act:

4-27                       (A)  Vicki D. Armstrong;

4-28                       (B)  Roger L. Galatas;

4-29                       (C)  R. A. Kutsche;

4-30                       (D)  Michael H. Richmond;

4-31                       (E)  Bruce M. Withers, Jr.;

4-32                       (F)  one individual appointed by the city council

4-33     of the City of Oak Ridge North;

4-34                       (G)  one individual appointed by the city council

4-35     of the City of Shenandoah; and

4-36                       (H)  one individual appointed by the board of

4-37     directors of The [the] Woodlands Community Association, Inc.

4-38                 (2)  If one or more of the initial directors listed in

4-39     this subsection fails to qualify for office within 90 days after

4-40     the effective date of this Act, the remaining directors shall

4-41     appoint qualified persons to fill the vacancies for the unexpired

4-42     terms.

4-43           (e)  A vacancy in the office of director shall be filled by

4-44     appointment of a qualified individual by a majority vote of the

4-45     remaining directors, except that if the number of directors for any

4-46     reason is less than five, on petition of a resident of or owner of

4-47     real property in the district, the commission shall appoint the

4-48     required number of qualified individuals to fill the vacancies.

4-49     The board may remove a director for misconduct or failure to carry

4-50     out the director's [his] duties by unanimous vote of all of the

4-51     remaining directors.

4-52           (k)  A person who qualifies to serve on the board [under

4-53     Subsection (b) of this section] shall be qualified to serve as a

4-54     director and participate in all votes pertaining to the business of

4-55     the district regardless of any common-law doctrine or any statutory

4-56     conflict-of-interest, incompatibility, or similar provision

4-57     [provisions] to the contrary.

4-58           SECTION 6.  Section 11, Chapter 289, Acts of the 73rd

4-59     Legislature, 1993, is amended by amending Subsection (h) and adding

4-60     Subsection (j) to read as follows:

4-61           (h)  In the event that all or part of the territory of the

4-62     district is annexed by or incorporated into a municipality that

4-63     [which] has adopted and is imposing a sales and use tax or that

4-64     later adopts and imposes a sales and use tax, the sales and use tax

4-65     imposed by the district in such annexed or incorporated territory

4-66     shall be reduced, if required to comply with the provisions hereof,

4-67     in even multiples of one-half percent, and without the necessity

4-68     for an election, such that the combined rate of all sales and use

4-69     taxes imposed by the county, the [annexing] municipality, and all

 5-1     other political subdivisions within the annexed or incorporated

 5-2     territory of the district will not exceed two percent, provided

 5-3     that:

 5-4                 (1)  the municipality shall reimburse the district for

 5-5     the amount of the tax reduced in the manner provided by Section

 5-6     312.637(h), Tax Code, until the bonds of the district payable or

 5-7     secured, wholly or partly, from the proceeds of the sales and use

 5-8     tax are no longer outstanding;

 5-9                 (2)  a sales and use tax previously adopted by the

5-10     district for such annexed or incorporated territory shall not be

5-11     reduced to less than one-half percent; and

5-12                 (3)  [provided further that] no reduction of the

5-13     district's sales and use tax in the portions of the district not so

5-14     annexed or incorporated shall be required.

5-15           (j)  The district is entitled to examine and receive

5-16     information related to the levy, assessment, and collection of

5-17     sales and use taxes to the same extent as if the district were a

5-18     municipality.

5-19           SECTION 7.  Chapter 289, Acts of the 73rd Legislature, 1993,

5-20     is amended by adding Sections 11A  and 11B to read as follows:

5-21           Sec. 11A.  HOTEL OCCUPANCY TAX.  (a)  In this section,

5-22     "hotel" has the meaning assigned by Section 156.001, Tax Code.

5-23           (b)  The board by order may impose a tax on a person who,

5-24     under a lease, concession, permit, right of access, license,

5-25     contract, or agreement, pays for the use or possession or for the

5-26     right to use or possess a room that is in a hotel located in the

5-27     boundaries of the district, costs $2 or more each day, and is

5-28     ordinarily used for sleeping.  The amount of the tax may not exceed

5-29     seven percent of the price paid for a room in a hotel.

5-30           (c)  A district by order may repeal, increase, or decrease

5-31     the rate of a tax imposed under this section.

5-32           (d)  Except as inconsistent with this section and Section 11B

5-33     of this Act and subject to the limitations prescribed by Sections

5-34     352.002(b) and (c), Tax Code, Subchapter A, Chapter 352, Tax Code,

5-35     governs a hotel occupancy tax authorized under this section,

5-36     including the collection of the tax.

5-37           (e)  The district is entitled to examine and receive

5-38     information related to the levy, assessment, and collection of

5-39     hotel occupancy taxes to the same extent as if the district were a

5-40     municipality.

5-41           (f)  For purposes of this section, a reference in Subchapter

5-42     A, Chapter 352, Tax Code, to a county or the county's officers or

5-43     governing body is a reference to the district or the district's

5-44     officers or governing body, as appropriate.

5-45           Sec. 11B.  USE OF HOTEL OCCUPANCY TAX PROCEEDS.  (a)  The

5-46     district shall apply the proceeds from a hotel occupancy tax

5-47     imposed under Section 11A of this Act for any of the district's

5-48     purposes and for the purposes described by Section 352.1015, Tax

5-49     Code, to the extent considered appropriate by the board.

5-50           (b)  During each interval of three calendar years following

5-51     the date on which a hotel occupancy tax imposed under Section 11A

5-52     of this Act is initially collected, the board may not apply an

5-53     annual average of more than 10 percent of the amount of tax

5-54     collected under that section, excluding any interest earnings or

5-55     investment profits and after a deduction for the costs of imposing

5-56     and collecting the taxes, for the administrative expenses of the

5-57     district or a district purpose other than:

5-58                 (1)  the costs of advertising and promoting tourism;

5-59     and

5-60                 (2)  the costs of business development and commerce,

5-61     including the costs of planning, designing, constructing,

5-62     acquiring, leasing, financing, owning, operating, maintaining,

5-63     managing, improving, repairing, rehabilitating, or reconstructing

5-64     improvement projects for conferences, conventions, and exhibitions,

5-65     manufacturer, consumer, or trade shows, and civic, community, or

5-66     institutional events.

5-67           (c)  For purposes of this section, a reference in Subchapter

5-68     A, Chapter 352, Tax Code, to a county or the county officers or

5-69     governing body means the district or the district's officers or

 6-1     governing body, as appropriate.

 6-2           SECTION 8.  Chapter 289, Acts of the 73rd Legislature, 1993,

 6-3     is amended by adding Section 12A to read as follows:

 6-4           Sec. 12A.  BONDS.  (a)  The board may issue bonds in the

 6-5     manner provided by Subchapter J, Chapter 375, Local Government

 6-6     Code.  Sections 375.207 and 375.208, Local Government Code, do not

 6-7     apply to bonds issued under this section.

 6-8           (b)  If the district issues bonds for the primary purpose of

 6-9     providing water, sewage, or drainage facilities, the district must

6-10     obtain the commission's approval in the manner provided by Chapter

6-11     49, Water Code.

6-12           (c)  In addition to the sources of money described by

6-13     Subchapter J, Chapter 375, Local Government Code, the bonds of the

6-14     district may be secured and made payable, wholly or partly, by a

6-15     pledge of any part of the net proceeds the district receives from:

6-16                 (1)  a specified portion, but not more than one-half

6-17     percent, of the sales and use tax authorized by Section 11 of this

6-18     Act;

6-19                 (2)  the hotel occupancy tax authorized by Section 11A

6-20     of this Act; and

6-21                 (3)  repayments the district receives from a

6-22     municipality because of a required reduction of the district's

6-23     sales and use tax.

6-24           SECTION 9.  Section 14, Chapter 289, Acts of the 73rd

6-25     Legislature, 1993, is amended by adding Subsection (d) to read as

6-26     follows:

6-27           (d)  The district may not be dissolved by a municipality in

6-28     which the district is located.

6-29           SECTION 10.  Section 12, Chapter 289, Acts of the 73rd

6-30     Legislature, 1993, is repealed.

6-31           SECTION 11.  (a)  The proper and legal notice of the

6-32     intention to introduce this Act, setting forth the general

6-33     substance of this Act, has been published as provided by law, and

6-34     the notice and a copy of this Act have been furnished to all

6-35     persons, agencies, officials, or entities to which they are

6-36     required to be furnished by the constitution and other laws of this

6-37     state, including the governor, who has submitted the notice and Act

6-38     to the Texas Natural Resource Conservation Commission.

6-39           (b)  The Texas Natural Resource Conservation Commission has

6-40     filed its recommendations relating to this Act with the governor,

6-41     lieutenant governor, and speaker of the house of representatives

6-42     within the required time.

6-43           (c)  All requirements of the constitution and laws of this

6-44     state and the rules and procedures of the legislature with respect

6-45     to the notice, introduction, and passage of this Act are fulfilled

6-46     and accomplished.

6-47           SECTION 12.  The importance of this legislation and the

6-48     crowded condition of the calendars in both houses create an

6-49     emergency and an imperative public necessity that the

6-50     constitutional rule requiring bills to be read on three several

6-51     days in each house be suspended, and this rule is hereby suspended,

6-52     and that this Act take effect and be in force from and after its

6-53     passage, and it is so enacted.

6-54                                  * * * * *