AN ACT 1-1 relating to the creation of the East Montgomery County Improvement 1-2 District; authorizing a tax. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. CREATION OF DISTRICT. (a) A special district to 1-5 be known as the "East Montgomery County Improvement District" 1-6 exists as a governmental agency, body politic and corporate, and 1-7 political subdivision of the state. 1-8 (b) The district is a governmental unit for purposes of 1-9 Chapter 101, Civil Practice and Remedies Code, and operations of 1-10 the district are considered for all purposes, including the 1-11 application of that chapter, to be essential governmental functions 1-12 and not proprietary functions. 1-13 (c) The name of the district may be changed by resolution of 1-14 the board. 1-15 SECTION 2. DECLARATION OF INTENT. (a) The creation of the 1-16 district is: 1-17 (1) essential to accomplish the purposes of Section 1-18 52, Article III, and Section 59, Article XVI, Texas Constitution, 1-19 and other public purposes stated in this Act; and 1-20 (2) necessary to promote, develop, encourage, and 1-21 maintain employment, commerce, economic development, and the public 1-22 welfare in the eastern area of Montgomery County. 1-23 (b) The district is created to supplement and not to 2-1 supplant the county, governmental agency, political subdivision, or 2-2 municipal services provided in the district. This Act does not: 2-3 (1) relieve the county or a governmental agency, 2-4 political subdivision, or municipality from providing the level of 2-5 services the entity provides in the district as of August 31, 1997; 2-6 or 2-7 (2) release the county or a governmental agency, 2-8 political subdivision, or municipality from the obligations the 2-9 entity has to provide services to that area. 2-10 SECTION 3. DEFINITIONS. In this Act: 2-11 (1) "Board" means the board of directors of the 2-12 district. 2-13 (2) "District" means the East Montgomery County 2-14 Improvement District. 2-15 (3) "County" means Montgomery County, Texas. 2-16 SECTION 4. BOUNDARIES. The boundaries of the district are 2-17 coextensive with the boundaries of the New Caney Independent School 2-18 District and the Splendora Independent School District as those 2-19 boundaries existed on January 1, 1997, but the district does not 2-20 include any portion of the City of Houston as it existed on January 2-21 1, 1997. 2-22 SECTION 5. FINDINGS RELATING TO BOUNDARIES. The boundaries 2-23 and field notes of the district form a closure. If a mistake is 2-24 made in the field notes or in copying the field notes in the 2-25 legislative process, the mistake does not in any way affect the: 3-1 (1) organization, existence, and validity of the 3-2 district; 3-3 (2) right or power of the district to enter into a 3-4 contract for the purposes for which the district is created; 3-5 (3) right of the district to impose, assess, and 3-6 collect taxes, fees, or charges; or 3-7 (4) legality or operations of the district or its 3-8 governing body. 3-9 SECTION 6. FINDING OF BENEFIT AND PUBLIC PURPOSE. (a) All 3-10 the land and other property included in the district will be 3-11 benefited by the works, projects, improvements, and services to be 3-12 provided by the district under powers granted by Section 52, 3-13 Article III, and Section 59, Article XVI, Texas Constitution, and 3-14 other powers granted by this Act. 3-15 (b) The district is created to serve a public use and 3-16 benefit. The creation of the district is in the public interest 3-17 and is essential to: 3-18 (1) further the public purposes of the development and 3-19 diversification of the economy of the state; and 3-20 (2) eliminate unemployment and underemployment and 3-21 develop or expand transportation and commerce. 3-22 (c) The district will: 3-23 (1) promote the health, safety, and general welfare of 3-24 residents, employers, employees, and consumers in the district and 3-25 of the general public; 4-1 (2) promote and develop public transportation and 4-2 pedestrian facilities and systems by new and alternative means, 4-3 including securing expanded and improved transportation and 4-4 pedestrian facilities and systems; 4-5 (3) provide needed money for the area in the district 4-6 to preserve, maintain, and enhance the economic health and vitality 4-7 of the area as a community and business center; and 4-8 (4) promote the health, safety, welfare, education, 4-9 convenience, and enjoyment of the public by: 4-10 (A) improving, landscaping, and developing 4-11 certain areas in and adjacent to the district; and 4-12 (B) providing public services and facilities in 4-13 and adjacent to the district that are necessary for the 4-14 restoration, preservation, enhancement, and enjoyment of scenic and 4-15 aesthetic beauty. 4-16 (d) Each improvement project authorized by this Act is 4-17 essential to carry out a public purpose. 4-18 (e) The district will not act as the agent or 4-19 instrumentality of any private interest even though many private 4-20 interests will be benefited by the district, as will the general 4-21 public. 4-22 SECTION 7. INITIAL DIRECTORS. (a) The Commissioners Court 4-23 of Montgomery County shall appoint eight initial directors. To be 4-24 qualified for appointment as a director, a person must have the 4-25 qualifications specified in Section 12 of this Act. 5-1 (b) In making appointments, the commissioners court shall 5-2 attempt to compose the board of persons who reflect the residents 5-3 in the area of the district. 5-4 SECTION 8. CONFIRMATION ELECTION. (a) The initial 5-5 directors shall meet as soon as practicable after all initial 5-6 directors have qualified for office. The board shall call a 5-7 confirmation election to determine if the proposed district shall 5-8 be established. The board shall call the confirmation election at 5-9 the first meeting unless the board calls a hearing to exclude 5-10 territory from the district. 5-11 (b) The confirmation election shall be held in the manner 5-12 provided by Section 49.102, Water Code. The election must be held 5-13 on the next uniform election date provided by Section 41.001, 5-14 Election Code, that falls on or after the 45th day after the date 5-15 of the order calling the election. 5-16 (c) If a majority of the votes cast in the election are 5-17 against the creation of the district, the board may not call or 5-18 hold another confirmation election until the expiration of six 5-19 months after the date of the most recent confirmation election. 5-20 (d) Before the creation of the district is confirmed, the 5-21 district may not borrow money or impose taxes. The district may 5-22 carry on other business as the board determines. 5-23 SECTION 9. ELECTION OF DIRECTORS. (a) As soon as 5-24 practicable after the first anniversary of the date on which the 5-25 creation of the district is confirmed, the board shall call and 6-1 hold an election to elect the initial permanent directors. 6-2 (b) The election shall be held in the manner provided by 6-3 Section 49.102, Water Code. 6-4 (c) The election must be held on the next uniform election 6-5 date provided by Section 41.001, Election Code, that falls on or 6-6 after the 45th day after the date of the order calling the 6-7 election. The directors elected at the first election shall draw 6-8 lots to determine their terms so that four serve terms expiring on 6-9 the first July 1 of an even-numbered year after the election and 6-10 four serve terms expiring July 1 of the second year after the year 6-11 in which the first terms expire. 6-12 (d) An election to elect the appropriate number of successor 6-13 directors shall be held on the uniform election date, established 6-14 by the Election Code, in May of each even-numbered year. 6-15 SECTION 10. BOARD OF DIRECTORS; TERMS. The district is 6-16 governed by a board of eight directors who serve staggered 6-17 four-year terms, with four members' terms expiring July 1 of each 6-18 even-numbered year. 6-19 SECTION 11. ADMINISTRATION OF BOARD. Sections 375.066 6-20 through 375.070, Local Government Code, apply to the board as if it 6-21 were established under Chapter 375, Local Government Code. 6-22 SECTION 12. QUALIFICATIONS OF DIRECTOR. (a) To be 6-23 qualified to serve as a director, a person must be at least 18 6-24 years old and: 6-25 (1) a resident of the district; 7-1 (2) an owner of real property in the district; 7-2 (3) an owner of stock, whether beneficial or 7-3 otherwise, of a corporate owner of real property in the district; 7-4 (4) an owner of a beneficial interest in a trust that 7-5 owns real property in the district; or 7-6 (5) an agent, employee, or tenant of a person covered 7-7 by Subdivision (2), (3), or (4) of this subsection. 7-8 (b) A person or entity that owns an interest in a general or 7-9 limited partnership owning real property in the district or that 7-10 has a lease of real property in the district with a remaining term 7-11 of 10 years or more, excluding options, is considered to be an 7-12 owner of real property for purposes of this section. 7-13 SECTION 13. QUORUM. Five directors constitute a quorum, and 7-14 a concurrence of a majority of a quorum of directors is required 7-15 for any official action of the district. 7-16 SECTION 14. PARTICIPATION IN VOTING. A person who qualifies 7-17 to serve on the board is qualified to serve as a director and 7-18 participate in all votes pertaining to the business of the district 7-19 regardless of any other statutory provision to the contrary. 7-20 SECTION 15. GENERAL POWERS. The district has: 7-21 (1) all powers necessary or required to accomplish the 7-22 purposes for which the district was created; 7-23 (2) the rights, powers, privileges, and other 7-24 functions of a municipal management district under Subchapter E, 7-25 Chapter 375, Local Government Code; and 8-1 (3) the powers given to an industrial development 8-2 corporation organized under the Development Corporation Act of 1979 8-3 (Article 5190.6, Vernon's Texas Civil Statutes). 8-4 SECTION 16. SPECIFIC POWERS AND LIMITATIONS. (a) The 8-5 district may: 8-6 (1) impose and collect, and apply the proceeds from, a 8-7 limited sales and use tax for the district's purposes; 8-8 (2) borrow money for the corporate purposes of the 8-9 district; 8-10 (3) add or exclude territory in the manner provided by 8-11 Subchapter J, Chapter 49, Water Code; 8-12 (4) contract with an individual or entity to 8-13 accomplish the district's purposes, including entering into a 8-14 contract for the payment, repayment, or reimbursement of costs 8-15 incurred by the person or entity on behalf of the district, 8-16 including all or part of the costs of an improvement project, from 8-17 tax proceeds or any other specified source of money; 8-18 (5) make application for and contract with an 8-19 individual or entity to receive, administer, and perform the 8-20 district's duties under a federal, state, local, or private gift, 8-21 grant, loan, conveyance, transfer, bequest, donation, or other 8-22 financial arrangement relating to the investigation, planning, 8-23 analysis, acquisition, construction, completion, implementation, or 8-24 operation of a proposed or existing improvement project; 8-25 (6) establish and collect only at the district's 9-1 facilities user fees, concession fees, admission fees, rental fees, 9-2 or other similar fees or charges and apply the proceeds from those 9-3 fees or charges for the enjoyment, sale, rental, or other use of 9-4 the district's facilities, services, properties, or improvement 9-5 projects; 9-6 (7) adopt rules for: 9-7 (A) the administration and operation of the 9-8 district; 9-9 (B) the use, enjoyment, availability, 9-10 protection, security, and maintenance of the district's properties 9-11 and facilities; and 9-12 (C) the provision of public safety and security 9-13 in the district; 9-14 (8) provide or secure the payment or repayment of: 9-15 (A) an expense of the establishment, 9-16 administration, or operation of the district; 9-17 (B) a district cost relating to an improvement 9-18 project; 9-19 (C) a district contractual obligation or 9-20 indebtedness, because of a lease, installment purchase contract, or 9-21 other agreement; and 9-22 (D) a tax, user fee, concession fee, rental fee, 9-23 or other revenue or resources of the district; and 9-24 (9) undertake improvement projects separately or 9-25 jointly with other persons or entities and pay all or part of the 10-1 costs of improvement projects, including improvement projects that: 10-2 (A) improve, enhance, or support public safety 10-3 and security, fire protection, emergency medical services, or law 10-4 enforcement in the district; 10-5 (B) confer a general benefit on the entire 10-6 district and the areas adjacent to the district; or 10-7 (C) confer a special benefit on all or part of 10-8 the district. 10-9 (b) The district may not employ peace officers. 10-10 (c) The district may not impose ad valorem taxes on property 10-11 in the district. 10-12 SECTION 17. SPECIFIC POWERS RELATING TO IMPROVEMENTS. An 10-13 improvement project or service provided by the district may 10-14 include: 10-15 (1) the construction, acquisition, lease, rental, 10-16 installment purchase, improvement, rehabilitation, repair, 10-17 relocation, and operation of: 10-18 (A) landscaping; lighting, banners, or signs; 10-19 streets or sidewalks, pedestrian or bicycle paths and trails; 10-20 pedestrian walkways, skywalks, crosswalks, or tunnels; highway 10-21 right-of-way or transit corridor beautification and improvements; 10-22 (B) drainage or storm water detention 10-23 improvements; solid waste, water, sewer, or power facilities and 10-24 services, including electrical, gas, steam, and chilled water 10-25 facilities and services; 11-1 (C) parks, lakes, gardens, recreational 11-2 facilities, open space, scenic areas, and related exhibits and 11-3 preserves; fountains, plazas, or pedestrian malls; public art or 11-4 sculpture and related exhibits and facilities; educational or 11-5 cultural exhibits and facilities; exhibits, displays, attractions, 11-6 or facilities for special events, holidays, or seasonal or cultural 11-7 celebrations; 11-8 (D) off-street parking facilities, bus 11-9 terminals, heliports, mass-transit, or roadway-borne or water-borne 11-10 transportation systems; and 11-11 (E) other public improvements, facilities, or 11-12 services similar to the improvements, facilities, or services 11-13 described by Paragraphs (A) through (D) of this subdivision; 11-14 (2) the cost of removal, razing, demolition, or 11-15 clearing of land or improvements in connection with providing an 11-16 improvement project; 11-17 (3) the acquisition of real or personal property or an 11-18 interest in the property that is made in connection with an 11-19 authorized improvement project; and 11-20 (4) the provision of special or supplemental services 11-21 to improve or promote the area in the district or to protect the 11-22 public health and safety in the district, including advertising, 11-23 promotion, tourism, health and sanitation, public safety, security, 11-24 fire protection or emergency medical services, business 11-25 recruitment, development, elimination of traffic congestion, and 12-1 recreational, educational, or cultural improvements, enhancements, 12-2 or services. 12-3 SECTION 18. RELATION TO OTHER LAW. If a provision of a law 12-4 referenced in Section 15 of this Act or referenced in Subchapter E, 12-5 Chapter 375, Local Government Code, is in conflict with or 12-6 inconsistent with this Act, this Act prevails. A law referenced in 12-7 Section 15 of this Act or referenced in Subchapter E, Chapter 375, 12-8 Local Government Code, that is not in conflict with or inconsistent 12-9 with this Act is adopted and incorporated by reference and may be 12-10 used by the district independently of each other. 12-11 SECTION 19. NO EMINENT DOMAIN POWER. The district may not 12-12 exercise the power of eminent domain. 12-13 SECTION 20. CERTAIN RESIDENTIAL PROPERTY EXEMPT. The 12-14 district may not impose an impact fee or assessment on a single 12-15 family residential property or a residential duplex, triplex, 12-16 quadruplex, or condominium. 12-17 SECTION 21. SALES AND USE TAX; EXCISE TAX. (a) The 12-18 district may impose a sales and use tax for the benefit of the 12-19 district if authorized by a majority of the qualified voters of the 12-20 district voting at an election called for that purpose. 12-21 (b) If the district adopts the tax: 12-22 (1) a tax is imposed on the receipts from the sale at 12-23 retail of taxable items in the district; and 12-24 (2) an excise tax is imposed on the use, storage, or 12-25 other consumption in the district of taxable items purchased, 13-1 leased, or rented from a retailer during the period that the tax is 13-2 effective in the district. 13-3 (c) The rate of the excise tax is the same as the rate of 13-4 the sales tax portion of the tax applied to the sales price of the 13-5 taxable items and is included in the sales tax. 13-6 (d) For purposes of this section: 13-7 (1) "taxable items" includes all items subject to any 13-8 sales and use tax that is imposed by the county if the county has 13-9 imposed a sales and use tax; and 13-10 (2) "use," with respect to a taxable service, means 13-11 the derivation in the district of direct or indirect benefit from 13-12 the service. 13-13 SECTION 22. TAX ELECTION PROCEDURES. (a) The board by 13-14 order may call an election to adopt, change the rate of, or abolish 13-15 a sales and use tax. The election may be held at the same time and 13-16 in conjunction with a confirmation or directors election. 13-17 (b) The election must be held on the next uniform election 13-18 date that falls on or after the 45th day after the date the order 13-19 calling the election is adopted. 13-20 (c) Notice of the election shall be given and the election 13-21 shall be held and conducted in the manner prescribed for bond 13-22 elections under Subchapter D, Chapter 49, Water Code. 13-23 (d) In an election to adopt the tax, the ballot shall be 13-24 prepared to permit voting for or against the proposition: "The 13-25 adoption of a local sales and use tax in the East Montgomery County 14-1 Improvement District at the rate of (proposed tax rate)." 14-2 (e) In an election to change the rate of the tax, the ballot 14-3 shall be prepared to permit voting for or against the proposition: 14-4 "The (increase or decrease, as applicable) in the rate of the local 14-5 sales and use tax imposed in the East Montgomery County Improvement 14-6 District from (tax rate on election date) percent to (proposed tax 14-7 rate) percent." 14-8 (f) In an election to abolish the tax, the ballot shall be 14-9 prepared to permit voting for or against the proposition: "The 14-10 abolition of the local sales and use tax in the East Montgomery 14-11 County Improvement District." 14-12 SECTION 23. IMPOSITION, COMPUTATION, ADMINISTRATION, AND 14-13 GOVERNANCE OF TAX. (a) Chapter 323, Tax Code, to the extent not 14-14 inconsistent with this Act, governs the application, collection, 14-15 and administration of the tax under this Act, except Sections 14-16 323.401 through 323.406, and 323.505, Tax Code, do not apply. 14-17 Subtitles A and B, Title 2, and Chapter 151, Tax Code, govern the 14-18 administration and enforcement of the taxes under this Act. 14-19 (b) Chapter 323, Tax Code, does not apply to the use and 14-20 allocation of revenues under this Act. 14-21 (c) In applying Chapter 323, Tax Code, the district's name 14-22 shall be substituted for references in that chapter to "the county" 14-23 and the board of directors of the district is substituted for 14-24 references in that chapter to "commissioners court." 14-25 SECTION 24. EFFECTIVE DATE OF TAX OR TAX CHANGE. The 15-1 adoption of a tax rate or change in the tax rate takes effect after 15-2 the expiration of the first complete calendar quarter occurring 15-3 after the date on which the comptroller receives a notice of the 15-4 results of the election. 15-5 SECTION 25. TAX RATES. The district may impose the sales 15-6 and use tax under this Act in increments of one-eighth of one 15-7 percent, with a minimum tax of one-half percent and a maximum tax 15-8 of one percent. 15-9 SECTION 26. ABOLITION OF TAX RATE. The board by order may 15-10 abolish the local sales and use tax rate without an election. 15-11 SECTION 27. USE OF TAX. Taxes collected under this Act may 15-12 be used only for the purposes for which the district was created. 15-13 SECTION 28. SUBMISSION OF ANNEXATION INFORMATION. Not later 15-14 than the 10th day after the date on which the district annexes or 15-15 excludes territory, the board shall send to the comptroller a 15-16 certified copy of any resolution, order, or ordinance relating to 15-17 the annexation or exclusion. 15-18 SECTION 29. APPLICATION OF CERTAIN TAX PROCEEDS. 15-19 (a) During each interval of three calendar years following the 15-20 date on which a tax imposed under this Act is collected for the 15-21 first time, the board shall apply an annual average of not less 15-22 than 10 percent of the net proceeds of the tax collection to 15-23 mitigate the impact of development in the district on adjacent 15-24 areas, including effects on public utilities and services, public 15-25 transportation and traffic movement, and scenic and aesthetic 16-1 beauty. 16-2 (b) In this section, "net proceeds" means the difference 16-3 between the amount of tax collected and the total amount of the 16-4 general and administrative expenses of the district, including the 16-5 cost of imposing and collecting the tax. 16-6 SECTION 30. LIMITATION ON INDEBTEDNESS. The district may 16-7 borrow money for a term of less than one year to finance the 16-8 district's purposes and evidence the indebtedness by a contract, 16-9 promissory note, or similar instrument. Before the district 16-10 borrows money, the board must find that the district's taxes and 16-11 other net revenue to be collected by the district during the 16-12 one-year period following the creation of the debt and money 16-13 available to the district from other sources will be sufficient to 16-14 repay or discharge the debt before that one-year period expires. 16-15 SECTION 31. CONTRACTING AUTHORITY. (a) The district may 16-16 contract with a municipality, a county, another political 16-17 subdivision, a corporation, or another person to carry out the 16-18 purposes of this Act on terms and for the period of time the board 16-19 determines. 16-20 (b) Notwithstanding any other law or charter provision to 16-21 the contrary, a state agency, a municipality, a county, another 16-22 political subdivision, a corporation, an individual, or another 16-23 entity is authorized to contract with the district to carry out the 16-24 purposes of this Act. 16-25 SECTION 32. DISSOLUTION BY BOARD ORDER. The board by order 17-1 may dissolve the district at any time unless the district has 17-2 outstanding indebtedness or contractual obligations. 17-3 SECTION 33. DISSOLUTION BY PETITION OF OWNERS. (a) The 17-4 board by order shall dissolve the district if the board receives a 17-5 written petition signed by the owners of 75 percent or more of the 17-6 real property acreage in the district. 17-7 (b) After the date the district is dissolved, the district 17-8 may not levy taxes. 17-9 (c) If on the date the district is dissolved the district 17-10 has outstanding liabilities, the board shall, not later than the 17-11 30th day after the dissolution, adopt a resolution certifying each 17-12 outstanding liability. The county in which the district is located 17-13 shall assume the outstanding liabilities. The county shall collect 17-14 the sales and use tax for the district for the remainder of the 17-15 calendar year. The county may continue to collect the tax for an 17-16 additional calendar year if the commissioners court finds that the 17-17 tax revenue is needed to retire the district liabilities that were 17-18 assumed by the county. 17-19 (d) The district and the board may continue to operate for a 17-20 period not to exceed two months after carrying out the 17-21 responsibilities required by Subsection (c) of this section. The 17-22 board and the district are continued in effect for the purpose of 17-23 satisfying these responsibilities. 17-24 (e) If the board and the district are continued in effect 17-25 under Subsection (d) of this section, the board and district are 18-1 dissolved entirely on the first day of the month following the 18-2 month in which the board certifies to the secretary of state that 18-3 no responsibilities of Subsection (c) of this section are left 18-4 unsatisfied. 18-5 SECTION 34. ADMINISTRATION OF DISTRICT PROPERTY FOLLOWING 18-6 DISSOLUTION. (a) After the board orders the dissolution of the 18-7 district, the board shall transfer ownership of all property and 18-8 assets of the district to the county, except as provided by 18-9 Subsection (b) of this section. 18-10 (b) If on the date on which the board orders the dissolution 18-11 of the district more than 50 percent of the territory in the 18-12 district is in the corporate limits of a municipality, the board 18-13 shall transfer ownership of the district's property and assets to 18-14 the municipality. 18-15 SECTION 35. NOTICE AND CONSENT. The legislature finds that: 18-16 (1) the proper and legal notice of the intention to 18-17 introduce this Act, setting forth the general substance of this 18-18 Act, has been published as provided by law, and the notice and a 18-19 copy of this Act have been furnished to all persons, agencies, 18-20 officials, or entities to which they are required to be furnished 18-21 by the constitution and laws of this state, including the governor, 18-22 who has submitted the notice and a copy of this Act to the Texas 18-23 Natural Resource Conservation Commission; 18-24 (2) the Texas Natural Resource Conservation Commission 18-25 has filed its recommendations relating to this Act with the 19-1 governor, lieutenant governor, and speaker of the house of 19-2 representatives within the required time; 19-3 (3) the general law relating to consent by political 19-4 subdivisions to the creation of districts with conservation, 19-5 reclamation, and road powers and the inclusion of land in those 19-6 districts has been complied with; and 19-7 (4) all requirements of the constitution and laws of 19-8 this state and the rules and procedures of the legislature with 19-9 respect to the notice, introduction, and passage of this Act have 19-10 been fulfilled and accomplished. 19-11 SECTION 36. EMERGENCY. The importance of this legislation 19-12 and the crowded condition of the calendars in both houses create an 19-13 emergency and an imperative public necessity that the 19-14 constitutional rule requiring bills to be read on three several 19-15 days in each house be suspended, and this rule is hereby suspended, 19-16 and that this Act take effect and be in force from and after its 19-17 passage, and it is so enacted. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 921 passed the Senate on April 23, 1997, by the following vote: Yeas 31, Nays 0. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 921 passed the House on May 28, 1997, by the following vote: Yeas 135, Nays 1, two present not voting. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor