SRC-JXG S.B. 1807 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1807
By: Bernsen
Intergovernmental Relations
4/12/1999
As Filed


DIGEST

Under Chapter 375, Local Government Code, the Town Center Improvement
District of Montgomery County, Texas (district) is a special district
having the powers of a municipal management district with certain powers
and authority to encourage and promote economic development and business
activity within and adjacent to the downtown area of The Woodlands, in
Montgomery County. S.B. 1807 would broaden and strengthen the powers and
financial capabilities of the district.  

PURPOSE

As proposed, S.B. 1807 sets forth provisions for promoting economic
development in the Town Center Improvement District of Montgomery County,
Texas. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 7, Chapter 289, Acts of the 73rd Legislature,
Regular Session, 1993, as amended by Chapter 255, Acts of the 75th
Legislature, Regular Session, 1997, to authorize the board of directors
(board) of the Town Center Improvement District of Montgomery County, Texas
(district) to levy, assess, and apply the proceeds from the limited sales
and use taxes authorized in Sections 11 and 11C of this Act for authorized
purposes, provided that, during each interval of three calendar years
following the commencement of collection of such tax, the board shall,
consistent with constitutional limitations and the district's authorized
powers and purposes, and in its sound discretion, endeavor to apply an
annual average of no less than 10 percent of the net proceeds of all tax
collections from the tax imposed pursuant to Section 11 of this Act, toward
mitigation of the net negative impact of development within the district on
the impact area. Defines "impact area." Makes conforming and nonsubstantive
changes. 

SECTION 2. Amends Sections 8(a)-(e) and (g), Chapter 289, Acts of the 73rd
Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the
75th Legislature, Regular Session, 1997, to provide that the district is
governed by a board of eleven, rather than eight, directors who shall serve
for staggered terms of four years. Sets forth qualifications to serve as a
board director, including an individual agent, employee, officer, or
director of any individual, corporation, trust, or partnership that owns or
leases real property, provided that no more than three members of the
board, whether elected or appointed, may at any time be agents, employees,
officers or directors of a single individual, corporation, trust, or
partnership that owns or leases real property described by Paragraph (B),
(C), (D), (E), or (F) of this subdivision, and any person filing a ballot
or write in candidate's application or appointment to the board, in order
of the time of filing or appointment, whose election or appointment would
cause such limitation to be exceeded, shall be ineligible for the election
or appointment, except as otherwise provided by this subsection. Requires a
person to be a member of The Woodlands Community Association, Inc., to be
eligible for appointment under Subsection (c)(3). Requires a person to be a
person described in Subdivision (b)(1) of this subsection and a resident of
any county commissioners precinct, to be eligible for appointment under
Subsection (c)(6) of this section. Requires the board to serve as provided
in this Act and to be composed of five elected directors and six appointed
directors. Requires the appointed directors to include certain
individuals. Requires the board directors to serve until their successors
have been elected or appointed and have qualified. Requires a vacancy in
the office of director to be filled by appointment of a qualified
individual by a majority vote on the remaining directors, except if the
number of directors is less than six, rather than five. Requires the board
director to organize or reorganize by electing a chairman, rather than
president, a vice-chairman, and any other officers of the board. Deletes
text regarding Subdivisions (2) and (3). Deletes text regarding the
effective date of this Act. Deletes text regarding appointment of
vacancies. Makes conforming and nonsubstantive changes. 

SECTION 3. Amends Subsections (e) and (i), Section 11, Chapter 289, Acts of
the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255,
Acts of the 75th Legislature, Regular Session, 1997, to provide that a tax
imposed under this Act or the repeal or reduction of a tax under this Act
takes effect on the first day of the calendar quarter. Deletes text
regarding an October 1 deadline. Deletes text regarding a reduction of the
district's sales and use tax and an ordinance. Makes conforming and
nonsubstantive changes. 

SECTION 4. Amends Chapter 289, Acts of the 73rd Legislature, Regular
Session, 1993, as amended by Chapter 255, Acts of the 75th Legislature,
Regular Session, 1997, by adding Section 11C, as follows: 

Sec. 11C. ECONOMIC DEVELOPMENT ZONES. Defines "economic development zone,"
"governing body," "initial development," and "substantial redevelopment."
Provides that the board, on its own motion, or upon receipt of a petition
signed by the owners of all real property within a defined area of the
district, may by resolution create, designate, describe, assign a name, to
and appoint the governing body for an economic development zone within the
district to promote initial development or substantial redevelopment of the
area, if the board finds that the creation of a zone will further certain
public purposes. Requires the board to prepare a preliminary financing plan
for such zone to include certain information, before designating an
economic development zone. Requires the board to call and conduct a public
hearing in the same general procedural manner as provided by Section
311.003, Tax Code, for reinvestment zones designated by a municipality,
before designating an economic development zone on its own motion or, if ad
valorem taxes are to be used, in whole or in part, in payment of
improvement project costs within the economic development zone to be
designated in response to a landowner petition. Prohibits an economic
development zone from being created, if more than 10 percent of the
property in the proposed zone, excluding property that is publicly owned,
is used or planned for use for residential purposes. Provides that property
is used for residential purposes, if it is occupied by a house having fewer
than five living units. Sets forth requirements for a resolution to
designate an area as an economic development zone. Requires members of the
governing body to be appointed for a term of two years, except for the
initial members of the governing body, some of whose terms may be limited
to one year in order to achieve staggered terms of office. Requires any
vacancy on the governing body of the zone to be filled by appointment for
the unexpired term by the district. Requires a member of a governing body
to be a member of the board or must be at least 18 years of age, a citizen
of the state, and a person described in Subsection 2(b) of this Act.
Requires each member to qualify for office by subscribing to the
constitutional oath of office for public officers and furnishing a fidelity
bond issued by a responsible surety in the amount of $10,000 in favor of
the zone to secure faithful performance of the member's duties. Requires
the governing body of the zone to meet and organize by electing a
president, a vice-president, a secretary/treasurer and such other officers
as the governing body of the zone may deem appropriate, following
appointment and qualifications. Provides that the boundaries of an economic
development zone may be reduced or enlarged in the same general manner as
provided herein for creation of a zone. Requires a zone created by the
district pursuant to this section to constitute a body politic and
corporate and a political subdivision of the state, separate and apart from
the district. Requires the district and the zone to have the same power and
authority to carry out this section as are conferred upon a municipality
with respect to a reinvestment zone under Section 311.008, Tax Code,
Authorizes the board by order to delegate, subject in whole or in part to
final approval by the board of the district, any powers and duties relating
to the financing and implementation of the project plan for the zone,
including without limitation, certain powers and authority, in addition to
the powers herein granted to the governing body. Authorizes the board and
the  governing body to enter into such agreements as may be considered
necessary or convenient to implement a project plan and economic
development zone financing plan and achieve their purposes. Provides that
an agreement may provide for the regulation or restriction of the use of
land by imposing conditions, restrictions, or covenants that run with the
land. Authorizes an agreement to dedicate revenue from the tax increment
fund to pay project costs and to provide that a restriction adopted by the
governing body continues in effect after the termination of the zone.
Authorizes the district and the zone to enter into agreements whereby the
district will provide administration, management, investment, accounting,
and other services for the zone in consideration for the benefits to inure
to the district through implementation of the project plan for the zone.
Requires the governing body to prepare and adopt, and may thereafter amend,
a project plan and an economic development zone financing plan for the zone
containing generally the information and estimates described in Section
311.011, Tax Code, with respect to reinvestment zones, together with an
estimate of total and incremental sales and use taxes to be derived from
the zone, subject to approval by resolution of the board. Provides that an
amendment may be adopted only after a public hearing meeting the procedural
requirement of this section has been held, if a plan amendment reduces or
increases the geographic area of the zone, increases the amount of bonded
indebtedness to be incurred, creates or changes a tax increment to be
contributed by a taxing unit, or increases the total estimated project
costs. Requires the provisions of Sections 311.012 and 311.013, Tax Code,
relative to a city or municipality, or its governing body, to apply to the
zone and the governing body of the zone, if the financing plan adopted by
the governing body of the zone uses ad valorem taxes, in whole or in part,
for payment of project costs. Authorizes the district or adopt or repeal
for the use and benefit of one or more economic development zones
previously or thereafter created by the district, an incremental sales and
use tax of no more than one percent, if approved at an election by a
majority of the qualified voters voting in such election. Provides that an
election for the purpose of permitting voting for or against the adoption
or repeal of the maximum rate of incremental sales and use tax specified by
the board in the election proposition to be called and held by the board in
general conformity with the procedural requirements of Section 11 of this
Act for adoption of the limited sales and use tax therein authorized.
Authorizes the governing body to levy, assess, and collect all or any
portion of such incremental sales and use tax, in increments of no less
than one-eight percent, within and for the benefit of the zone, by order of
the governing body, and such incremental sales and use tax shall be in
addition to the limited sales and use tax authorized and levied, assessed,
and collected by the district within and for the entire district pursuant
to Section 11 of this Act, after adoption at an election and if to the
extent authorized by delegation by the district to a zone. Requires the
incremental sales and use tax to become effective on the first day of the
calendar quarter following written notice to the comptroller of the
imposition of same and to be paid into the tax increment fund for such
zone. Requires Section 311.002 and Sections 311.014 through 311.017, Tax
Code, to apply to the district, except if certain condition exist.  

SECTION 5. Amends Section 12A, Chapter 289, Acts of the 73rd Legislature,
Regular Session, 1993, as amended by Chapter 255, Acts of the 75th
Legislature, Regular Session, 1997, to authorize the board of the district
to issue bonds of the district in the manner provided by Chapter 375J,
Local Government Code. Provides that Sections 375.207 and 375.208, Local
Government Code, do not apply to bonds issued by the district  under this
Act. Deletes text regarding repayments to the district by a municipality. 

SECTION 6. Amends Section 13, Chapter 289, Acts of the 73rd Legislature,
Regular Session, 1993, as amended by Chapter 255, Acts of the 75th
Legislature, Regular Session, 1997, to authorize the district and a
municipality situated in whole or in part within the boundaries or impact
area of the district to enter into and carry out interlocal agreements with
such terms and conditions as the parties may deem advisable, for the
accomplishment of improvement projects or the provision of facilities,
services, or equipment to be made or pledged by the municipality to the
district out of any funds collected by the municipality pursuant to Chapter
351, Tax Code, or any other lawfully available funds, in particular. 

SECTION 7. Repealer: Subsection (d), Section 8, Chapter 289, Acts of the
73rdf Legislature, Regular Session, 1993 (regarding four of the initial
directors to serve until the first Saturday in May  1994 or until their
successors have been elected or appointed, and four to serve until the
first Saturday in May 1996); and Subsection (h), Section 11, Chapter 289,
Acts of the 73rd Legislature, Regular Session, 1993 (annexation or
incorporation of a district into a municipality). 

SECTION 8. TERMS OF OFFICE. Requires the additional directors authorized by
this Act to be appointed and qualified as soon as practicable after the
effective date of this Act. Requires one of the additional directors to
serve for a term ending on the first Saturday in May 2000, and the
remaining two additional directors to serve for a term ending on the first
Saturday in May 2002, as determined by the board by lot or by mutual
agreement. Provides that nothing in this Act shall be deemed or construed
to affect the terms of office of the existing directors. 

SECTION 9. NOTICE AND CONSENT. Provides that the legislature finds that the
proper and legal notice and consent of the intention to introduce this Act
has been met. 

SECTION 10. Severability clause.

SECTION 11. Emergency clause.
  Effective date: upon passage.