HBA-NLM H.B. 2894 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2894 By: Coleman County Affairs 4/3/1999 Introduced BACKGROUND AND PURPOSE Midtown Houston is currently being revitalized by the Midtown Redevelopment Authority, in conjunction with a tax increment reinvestment zone established by the city. The purpose of this bill is to create a public improvement district to expand revitalization efforts in the area. H.B. 2894 creates the Midtown Municipal Management District to assess the needs of commercial property owners in the area to finance improvements and services, in accordance with Chapter 375 (Municipal Management Districts in General), Local Government Code. In addition, this bill sets forth the intent and findings of the legislature relating to the public benefit and purpose of the creation of the district. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. CREATION OF DISTRICT. Establishes a special district to be known as the "Midtown Municipal Management District." Authorizes the name of the district to be changed by resolution of the board of directors of the district (board). Specifies that the creation of the district is essential to accomplish the purposes of Section 52 (Counties, Cities or Other Political Corporations or Subdivisions; Lending Credit; Grants; Bonds) and 52-a (Loan or Grant of Public Money for Economical Development), Article III, and Section 59 (Conservation and Development of Natural Resources; Conservation and Reclamation Districts), Article XVI, Texas Constitution. SECTION 2. LEGISLATIVE DECLARATION. Set forth the declaration of the legislature relating to the creation of the district. SECTION 3. DEFINITIONS. Defines "board," "district," "city," and "county," for the purposes of this Act. SECTION 4. BOUNDARIES. Specifies the territory contained in the district. . SECTION 5. FINDINGS RELATING TO BOUNDARIES. Sets forth the findings of the legislature relating to the boundaries. SECTION 6. FINDING OF BENEFIT AND PUBLIC PURPOSE. Sets forth the findings of the legislature relating to public benefit and purpose. 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. Applies Chapter 375 (Municipal Management Districts in General), Local Government Code, to the district and its governing body and employees, 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 of 11 directors who shall serve staggered four-year terms. (b) Applies Subchapter D (Administrative Provisions; Board of Directors), Chapter 375, Local Government Code, to the board to the extent that subchapter does not conflict with this Act. (c) Requires the directors to be entitled to receive compensation in accordance with Section 49.060 (Fees of Office; Reimbursement), Water Code. (d) Provides that a person who qualifies to serve on the board is qualified to serve as a director and participate in all votes and decisions pertaining to the business of the district regardless of any other statutory provision to the contrary. Requires a director who has a beneficial interest in a business entity that will receive a pecuniary benefit from or has a substantial interest in an action of the board to file a one-time affidavit to that effect, and additional affidavits regarding such beneficial interest shall not be required. Authorizes the director to participate in discussion and vote on that action if a majority of the board has a similar interest in the same action or if all other similar business entities in the district will receive a similar pecuniary benefit, after such affidavit is filed. Authorizes an employee of a public entity to serve on the board of directors of the district, but prohibits the public employee from participating in the discussion of or voting on any matter regarding contracts with the public entity of which the director is an employee. (e) Requires the directors of the district to be public officials and to be entitled to governmental immunity for their actions in their capacity as directors and officers of the district. SECTION 10. INITIAL DIRECTORS. Provides that the initial board consists of certain persons to be named in this subsection. Provides that of the initial directors, the directors appointed for positions 1 through 6 serve until June 1, 2003, and the directors appointed for positions 7 through 11 serve until June 1, 2001. SECTION 11. SUBSEQUENT DIRECTORS. Requires the mayor and city council of the city to appoint subsequent directors from persons recommended by the board. Prohibits a person from being appointed to the board if the appointment of that person 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. Requires the directors of certain entities described by this section to serve as non-voting ex officio members of the board. Authorizes the board to appoint the directors of the consolidated, renamed or changed departments as non-voting ex officio members of the board or the board may appoint a representative of another department of the city that performs duties comparable to those performed by the abolished department, if any of the entities described by this section are consolidated, renamed, changed, or abolished. Authorizes the board to appoint the chairpersons of other non-profit corporations actively involved in Midtown activities in the city to serve as non-voting ex officio members of the board. SECTION 13. POWERS OF DISTRICT. Establishes that the district has all powers necessary or required to accomplish the purposes for which the district was created. Specifies that the district has the rights, powers, privileges, authorities, and functions of a district created under Chapter 375, Local Government Code. Specifies 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 described by that section. Authorizes the district to exercise the power of a housing finance corporation created under Chapter 394 (Housing Financing Corporations in Municipalities and Counties), Local Government Code, to provide housing or residential development projects within the district. Authorizes the district to levy certain taxes and correct, add to, or delete assessments from its assessment rolls after notice and hearing as provided by Subchapter F (Assessments), Chapter 375, Local Government Code. Authorizes the district to acquire property through eminent domain. Requires the district to bear damages that are suffered by owners of property or facilities if the district, in exercising a power conferred by this Act, requires a relocation, adjustment, raising, lowering, rerouting, or changing the grade of or altering the construction of certain roadways or utility structures. 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 is inconsistent with this Act. Specifies 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 under this Act unless a written petition requesting those improvements or services has been filed with the board. Provides that the petition must be signed by certain persons described by this section. SECTION 16. EXEMPTIONS. Prohibits certain properties described by the section 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 Subchapter D (Local Government Corporations), Chapter 431, Transportation Code. (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 Subchapter D, Chapter 431, Transportation Code. (d) Authorizes a nonprofit corporation created under this section to implement any project and provide any services authorized 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, or any combination of those funds, to pay for any authorized purpose of the district. (b) Authorizes bonds or other obligations of the district to be issued in the form of bonds, notes, certificates of participation, including other instruments 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 to 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) Provides that the district must 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 before the district issues bonds for approval. SECTION 20. ASSESSMENTS. (a) Authorizes the board to levy and collect an assessment for any purpose authorized by this Act. (b) Provides that assessments, reassessments or assessments resulting from an addition to or correction of the assessment roll by the district, penalties and interest on an assessment or reassessment, expenses of collection, and reasonable attorney's fees incurred by the district: (1) are a first and prior lien against the property assessed; (2) are superior to any other lien or claim other than a lien or claim for county, school district, or municipal ad valorem taxes; and (3) 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) Establishes 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. (d) Prohibits the district from imposing an assessment on the property, equipment, or facilities of a public utility, as defined by the Public Utility Regulatory Act of 1995. SECTION 21. APPROVAL OF CERTAIN IMPROVEMENT PROJECTS. Provides that the district must 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. Requires the district to hold an election in the manner provided by Subchapter L (Elections), Chapter 375, Government Code, to obtain voter approval before the district imposes a maintenance tax or issues bonds payable from ad valorem taxes or assessments in addition to other necessary elections. Authorizes the board to submit multiple purposes in a single proposition at an election SECTION 23. IMPACT FEES. (a) Authorizes the district to impose an impact fee for an authorized purpose as provided by Subchapter G (Impact Fees), Chapter 375, Local Government Code. Prohibits the district from imposing an impact fee on the property, equipment, or facilities of a public utility. SECTION 24. MAINTENANCE TAX. Authorizes the district, to levy and collect an annual ad valorem tax on taxable property in the district for the maintenance and operation of the district and the improvements constructed or acquired by the district or for the provision of services to industrial and commercial businesses, residents, or property owners, if authorized at an election held in accordance with Section 22 of this Act. Requires the board to determine the tax rate. SECTION 25. DISSOLUTION OF DISTRICT. Authorizes the district to be dissolved as provided in Subchapter M (Dissolution), Chapter 375, Local Government Code. Authorizes a district that has debt to be dissolved as provided by Subchapter M, Chapter 375, Local Government Code, notwithstanding other provisions of that code. Requires the district to remain in existence solely for the limited purpose of discharging its bonds or other obligations according to their terms, if the district has debt and is dissolved. SECTION 26. CONTRACTS. Authorizes the district to contract with the city or county for the provision of law enforcement services by the county or city in the district on a fee basis to protect the public interest. Authorizes the city, county, or any other political subdivision of the state, without further authorization, to contract with the district to implement a project of the district or aid and assist the district in providing the services authorized under this Act. Authorizes a contract under this subsection to: _be for a period on which the parties agree; _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 or from a person using or purchasing a commodity or service at a district project may be paid or rebated to the district under the terms of the contract. Authorizes the district to enter into a contract, lease, or agreement with or make or accept grants and loans to or from certain entities and persons. 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 $25,000 for certain services, improvements, or purchases. SECTION 28. ANNEXATION. Authorizes the district, without further authorization, to annex land located within the boundaries of a reinvestment zone created by the city under Chapter 311 (Tax Increment Financing Act), Tax Code, with the consent of the city council of the city, in addition to annexing land in accordance with Subchapter C (Boundaries), Chapter 375, Local Government Code. SECTION 29. NOTICE AND CONSENT. Sets forth the findings of the legislature relating to the proper and legal notice of the intention to introduce this Act, recommendations filed by the Texas Natural Resource Conservation Commission, and compliance with the constitution and other state laws. SECTION 30. Effective date: September 1, 1999. SECTION 31. Emergency clause.