1-1     By:  Coleman (Senate Sponsor - Ellis)                 H.B. No. 2894
 1-2           (In the Senate - Received from the House April 26, 1999;
 1-3     April 27, 1999, read first time and referred to Committee on
 1-4     Intergovernmental Relations; May 14, 1999, reported adversely, with
 1-5     favorable Committee Substitute by the following vote:  Yeas 5, Nays
 1-6     0; May 14, 1999, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 2894                   By:  Ellis
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the creation of the Midtown Management District;
1-11     providing authority to impose a tax and issue bonds.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Chapter 376, Local Government Code, is amended by
1-14     adding Subchapter H to read as follows:
1-15                 SUBCHAPTER H.  MIDTOWN MANAGEMENT DISTRICT
1-16           Sec. 376.301.  CREATION OF DISTRICT.  (a)  The Midtown
1-17     Management District is created as a special district under Section
1-18     59, Article XVI, Texas Constitution.
1-19           (b)  The board by resolution may change the district's name.
1-20           (c)  The creation of the district is essential to accomplish
1-21     the purposes of Sections 52 and 52-a, Article III, and Section 59,
1-22     Article XVI, Texas Constitution, and other public purposes stated
1-23     in this subchapter.
1-24           Sec. 376.302.  DECLARATION OF INTENT.  (a)  The creation of
1-25     the district is necessary to promote, develop, encourage, and
1-26     maintain employment, commerce, transportation, housing, tourism,
1-27     recreation, arts, entertainment, economic development, safety, and
1-28     the public welfare in the municipality's midtown area.
1-29           (b)  The creation of the district and this legislation are
1-30     not to be interpreted to relieve the county or the municipality
1-31     from providing the level of services, as of the effective date of
1-32     this subchapter, to the area in the district or to release the
1-33     county or the municipality from the obligations each entity has to
1-34     provide services to that area.  The district is created to
1-35     supplement and not supplant the municipal or county services
1-36     provided in the area in the district.
1-37           (c)  By creating the district and in authorizing the
1-38     municipality, county, and other political subdivisions to contract
1-39     with the district, the legislature has established a program to
1-40     accomplish the public purposes set out in Section 52-a, Article
1-41     III, Texas Constitution.
1-42           Sec. 376.303.  DEFINITIONS.  In this subchapter:
1-43                 (1)  "Board" means the board of directors of the
1-44     district.
1-45                 (2)  "County" means Harris County.
1-46                 (3)  "District" means the Midtown Management District.
1-47                 (4)  "Municipality" means the City of Houston.
1-48                 (5)  "Utility" means a person that provides to the
1-49     public gas, electricity, telephone, sewage, or water service.
1-50           Sec. 376.304.  BOUNDARIES.  The district includes all the
1-51     territory contained within the following described area:
1-52           Being all of the following described property in the
1-53     Obedience Smith Survey, Abstract No. 696, and the James S. Holman
1-54     Survey No. 323, City of Houston, Harris County, Texas and being
1-55     more particularly described as follows:
1-56           BEGINNING at the intersection of the westerly line of Bagby
1-57     Street with the southerly line of McGowen Avenue;
1-58           THENCE in a southwesterly direction along the westerly line
1-59     of Bagby Street to its intersection with the southerly line of Tuam
1-60     Street;
1-61           THENCE in a southeasterly direction along the southerly line
1-62     of Tuam Avenue to its intersection with the westerly line of Brazos
1-63     Street;
1-64           THENCE in a southwesterly direction along the westerly line
 2-1     of Brazos Street to its intersection with the northerly line of
 2-2     Elgin Avenue;
 2-3           THENCE in a southeasterly direction along the northerly line
 2-4     of Elgin Avenue to its intersection with the easterly line of
 2-5     Brazos Street which is also the easterly line of Spur 527, a
 2-6     segment of the Southwest Freeway;
 2-7           THENCE in a southerly direction along the easterly line of
 2-8     said Spur 527 to its intersection with the easterly line of Milam
 2-9     Street;
2-10           THENCE in a southwesterly direction along the easterly line
2-11     of Milam Street to its intersection with the easterly line of said
2-12     Spur 527;
2-13           THENCE in a southerly and southwesterly direction along said
2-14     Spur 527 to its intersection with northerly line of US 59 south;
2-15           THENCE easterly along the northerly line of said US 59 South
2-16     to its intersections with the southeasterly line of Austin Street;
2-17           THENCE northeasterly along the southeasterly line of Austin
2-18     Street to its intersection with the northeasterly line of Eagle
2-19     Avenue;
2-20           THENCE northwesterly along northeasterly line of Eagle Avenue
2-21     to the southeasterly line of San Jacinto Street;
2-22           THENCE northeasterly along the southeasterly line of San
2-23     Jacinto Street to the southeasterly line of Alabama Avenue;
2-24           THENCE in a southeasterly direction along the southerly line
2-25     of Alabama Avenue to its intersection with the easterly line of La
2-26     Branch Street;
2-27           THENCE in a northeasterly direction along the easterly
2-28     direction along the easterly line of La Branch Street to its
2-29     intersection with the southerly line of Winbern Avenue;
2-30           THENCE in a southeasterly direction along the southerly line
2-31     of Winbern Avenue to its intersection with the easterly line of
2-32     Crawford Street;
2-33           THENCE in a northeasterly direction along the easterly line
2-34     of Crawford Street to its intersection with the southerly line of
2-35     Stuart Avenue;
2-36           THENCE in a southeasterly direction along the southerly line
2-37     of Stuart Avenue to the intersection with the Easterly line of
2-38     Hamilton Street which is adjacent to US Highway 59/State Highway
2-39     288;
2-40           THENCE in a northeasterly and northerly direction along the
2-41     easterly line of Hamilton Street and westerly line of said US
2-42     Highway 59/State Highway 288 to its intersection with the northerly
2-43     line of West Gray Avenue;
2-44           THENCE in a northwesterly direction along the northerly line
2-45     of West Gray Avenue to its intersection with the easterly line of
2-46     Smith Street;
2-47           THENCE in a northeasterly direction along the easterly line
2-48     of Smith Street to its intersection with the southerly line of
2-49     Interstate Highway No. 45;
2-50           THENCE in a northwesterly and northerly direction along the
2-51     southerly line of said Interstate Highway No. 45 to its
2-52     intersection with the north line of Cleveland Street;
2-53           THENCE in a westerly direction along the northerly line of
2-54     Cleveland Street to its intersection with the westerly line of
2-55     Arthur Street;
2-56           THENCE in a southerly direction along the westerly line of
2-57     Arthur Street to the southerly dead end thereof;
2-58           THENCE in a southeasterly direction at right angles to the
2-59     northwesterly line of Baldwin Street to its intersection with said
2-60     line;
2-61           THENCE in a southwesterly direction along the northwesterly
2-62     line of Baldwin Street to its intersection with the southerly line
2-63     of West Gray Avenue;
2-64           THENCE in a northwesterly and westerly direction along the
2-65     southerly line of West Gray Avenue to its intersection with the
2-66     north line of Webster Avenue;
2-67           THENCE in a southeasterly direction along the northerly line
2-68     of Webster Avenue to its intersection with an easterly projection
2-69     of the north line of West Webster Avenue;
 3-1           THENCE westerly along the northerly line of West Webster
 3-2     Avenue to the westerly line of Bailey Street;
 3-3           THENCE southerly along the westerly line of Bailey Street and
 3-4     a southerly projection thereof to its intersection with the
 3-5     southerly line of McGowen Avenue;
 3-6           THENCE southeasterly along the southerly of McGowen Avenue to
 3-7     its intersection with the westerly line of Bagby Street, which is
 3-8     the place of beginning of the tract herein described.  There is
 3-9     excepted from the boundaries of the district the following tract:
3-10           BEGINNING at the intersection of the center line of Pierce
3-11     Avenue and Bagby Street;
3-12           THENCE in a northeasterly direction with a center line of
3-13     Bagby Street to the westerly right-of-way of Interstate Highway 45;
3-14           THENCE south and southeasterly along the right-of-way of
3-15     Interstate Highway 45 to its intersection with the center line of
3-16     Pierce Avenue;
3-17           THENCE westerly along the center line of Pierce Avenue to the
3-18     intersection with the center line of Bagby Street the point and
3-19     place of beginning;
3-20           SAVE AND EXCEPT all tracts or parcels of land, rights-of-way,
3-21     facilities, and improvements owned by a utility.
3-22           Sec. 376.305.  FINDINGS RELATING TO BOUNDARIES.  The
3-23     boundaries and field notes of the district form a closure.  If a
3-24     mistake is made in the field notes or in copying the field notes in
3-25     the legislative process, it does not affect the district's:
3-26                 (1)  organization, existence, or validity;
3-27                 (2)  right to issue any type of bond for the purposes
3-28     for which the district is created or to pay the principal of and
3-29     interest on a bond;
3-30                 (3)  right to impose or collect an assessment; or
3-31                 (4)  legality or operation.
3-32           Sec. 376.306.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.
3-33     (a)  All the land and other property included in the district will
3-34     be benefited by the improvements and services to be provided by the
3-35     district under powers conferred by Sections 52 and 52-a, Article
3-36     III, and Section 59, Article XVI, Texas Constitution, and other
3-37     powers granted under this subchapter, and the district is created
3-38     to serve a public use and benefit.
3-39           (b)  The creation of the district is in the public interest
3-40     and is essential to:
3-41                 (1)  further the public purposes of the development and
3-42     diversification of the economy of the state; and
3-43                 (2)  eliminate unemployment and underemployment and
3-44     develop or expand transportation and commerce.
3-45           (c)  The district will:
3-46                 (1)  promote the health, safety, and general welfare of
3-47     residents, employers, employees, visitors, consumers in the
3-48     district, and the general public;
3-49                 (2)  provide needed funding for the municipality's
3-50     midtown area to preserve, maintain, and enhance the economic health
3-51     and vitality of the area as a community and business center; and
3-52                 (3)  further promote the health, safety, welfare, and
3-53     enjoyment of the public by providing pedestrian ways and by
3-54     landscaping and developing certain areas in the district, which are
3-55     necessary for the restoration, preservation, and enhancement of
3-56     scenic and aesthetic beauty.
3-57           (d)  Pedestrian ways along or across a street, whether at
3-58     grade or above or below the surface, and street lighting, street
3-59     landscaping, and street art objects are parts of and necessary
3-60     components of a street and are considered to be a street or road
3-61     improvement.
3-62           (e)  The district will not act as the agent or
3-63     instrumentality of any private interest even though many private
3-64     interests will be benefited by the district, as will the general
3-65     public.
3-66           Sec. 376.307.  APPLICATION OF OTHER LAW.  Except as otherwise
3-67     provided by this subchapter:
3-68                 (1)  Chapter 375 applies to the district, its governing
3-69     body, and its employees; and
 4-1                 (2)  the district has rights and powers of a district
 4-2     created under Chapter 375.
 4-3           Sec. 376.308.  LIBERAL CONSTRUCTION OF SUBCHAPTER.  This
 4-4     subchapter shall be liberally construed in conformity with the
 4-5     findings and purposes stated in this subchapter.
 4-6           Sec. 376.309.  BOARD OF DIRECTORS IN GENERAL.  (a)  The
 4-7     district is governed by a board of 17 directors who serve staggered
 4-8     terms of four years, with eight directors' terms expiring June 1 of
 4-9     an odd-numbered year and nine directors' terms expiring June 1 of
4-10     the following odd-numbered year.
4-11           (b)  A director shall receive compensation as provided by
4-12     Section 49.060, Water Code.
4-13           Sec. 376.310.  APPOINTMENT OF DIRECTORS.  (a)  The mayor and
4-14     members of the governing body of the municipality shall appoint
4-15     directors from persons recommended by the board.  A person is
4-16     appointed if a majority of the members and the mayor vote to
4-17     appoint that person.
4-18           (b)  A person may not be appointed to the board if the
4-19     appointment of that person would result in less than two-thirds of
4-20     the directors residing in the municipality.
4-21           (c)  District directors are public officials entitled to
4-22     governmental immunity for their official actions.
4-23           Sec. 376.311.  EX OFFICIO BOARD MEMBERS.  (a)  The following
4-24     persons shall serve as a nonvoting ex officio director:
4-25                 (1)  the director of the following departments of the
4-26     municipality:
4-27                       (A)  parks and recreation;
4-28                       (B)  planning and development;
4-29                       (C)  public works; and
4-30                       (D)  civic center;
4-31                 (2)  the municipality's chief of police;
4-32                 (3)  the county's general manager of the Metropolitan
4-33     Transit Authority; and
4-34                 (4)  the presidents of any institutions of higher
4-35     learning located in the district.
4-36           (b)  If a department described by Subsection (a) is
4-37     consolidated, renamed, or changed, the board may appoint a director
4-38     of the consolidated, renamed, or changed department as a nonvoting
4-39     ex officio board member.  If a department described by Subsection
4-40     (a) is abolished, the board may appoint a representative of another
4-41     department of the municipality that performs duties comparable to
4-42     those performed by the abolished department.
4-43           (c)  The board may appoint the presiding officer of a
4-44     nonprofit corporation that is actively involved in activities in
4-45     the municipality's midtown area to serve as a nonvoting ex officio
4-46     director.
4-47           Sec. 376.312.  CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT.
4-48     (a)  Except as provided in this section:
4-49                 (1)  a director may participate in all board votes and
4-50     decisions; and
4-51                 (2)  Chapter 171 governs conflict of interests for
4-52     board members.
4-53           (b)  Section 171.004 does not apply to the district.  A
4-54     director who has a substantial interest in a business or charitable
4-55     entity that will receive a pecuniary benefit from a board action
4-56     shall file a one-time affidavit declaring the interest.  An
4-57     additional affidavit is not required if the director's interest
4-58     changes.  After the affidavit is filed with the board secretary,
4-59     the director may participate in a discussion or vote on that action
4-60     if:
4-61                 (1)  a majority of the directors have a similar
4-62     interest in the same entity; or
4-63                 (2)  all other similar business or charitable entities
4-64     in the district will receive a similar pecuniary benefit.
4-65           (c)  A director who is also an officer or employee of a
4-66     public entity may not participate in the discussion of or vote on a
4-67     matter regarding a contract with that same public entity.
4-68           (d)  For purposes of this section, a director has a
4-69     substantial interest in a charitable entity in the same manner that
 5-1     a person would have a substantial interest in a business entity
 5-2     under Section 171.002.
 5-3           Sec. 376.313.  ADDITIONAL POWERS OF DISTRICT.  (a)  The
 5-4     district may exercise the powers given to a corporation created
 5-5     under Section 4B, Development Corporation Act of 1979 (Article
 5-6     5190.6, Vernon's Texas Civil Statutes).
 5-7           (b)  The district may exercise the powers given to a housing
 5-8     finance corporation created under Chapter 394 to provide housing or
 5-9     residential development projects in the district.
5-10           (c)  The district may impose an ad valorem tax, assessment,
5-11     or impact fee in accordance with Chapter 375 on all property in the
5-12     district, including industrial, commercial, or residential
5-13     property, to finance an improvement this subchapter authorizes the
5-14     district to construct or acquire or a service this subchapter
5-15     authorizes the district to provide.
5-16           Sec. 376.314.  AGREEMENTS:  GENERAL; DONATIONS, INTERLOCAL
5-17     AGREEMENTS, AND LAW ENFORCEMENT SERVICES.  (a)  The district may
5-18     make an agreement with or accept a donation, grant, or loan from
5-19     any person.
5-20           (b)  The implementation of a project is a governmental
5-21     function or service for the purposes of Chapter 791, Government
5-22     Code.
5-23           (c)  To protect the public interest, the district may
5-24     contract with the municipality or the county for the municipality
5-25     or county to provide law enforcement services in the district for a
5-26     fee.
5-27           Sec. 376.315.  NONPROFIT CORPORATION.  (a)  The board by
5-28     resolution may authorize the creation of a nonprofit corporation to
5-29     assist and act on behalf of the district in implementing a project
5-30     or providing a service authorized by this subchapter.
5-31           (b)  The board shall appoint the board of directors of a
5-32     nonprofit corporation created under this section.  The board of
5-33     directors of the nonprofit corporation shall serve in the same
5-34     manner, term, and conditions as a board of directors of a local
5-35     government corporation created under Chapter 431, Transportation
5-36     Code.
5-37           (c)  A nonprofit corporation created under this section has
5-38     the powers of and is considered for purposes of this subchapter to
5-39     be a local government corporation created under Chapter 431,
5-40     Transportation Code.
5-41           (d)  A nonprofit corporation created under this section may
5-42     implement any project and provide any service authorized by this
5-43     subchapter.
5-44           Sec. 376.316.  ANNEXATION.  The district may:
5-45                 (1)  annex territory as provided by Subchapter C,
5-46     Chapter 375; and
5-47                 (2)  annex territory located inside the boundaries of a
5-48     reinvestment zone created by the municipality under Chapter 311,
5-49     Tax Code, if the governing body of the municipality consents to the
5-50     annexation.
5-51           Sec. 376.317.  PETITION REQUIRED FOR FINANCING SERVICES AND
5-52     IMPROVEMENTS.  The board may not finance a service or improvement
5-53     project under this subchapter unless a written petition requesting
5-54     the improvement or service has been filed with the board.  The
5-55     petition must be signed by:
5-56                 (1)  the owners of a majority of the assessed value of
5-57     real property in the district as determined by the most recent
5-58     certified county property tax rolls; or
5-59                 (2)  at least 25 persons who own land in the district,
5-60     if there are more than 25 persons who own property in the district
5-61     as determined by the most recent certified county property tax
5-62     rolls.
5-63           Sec. 376.318.  ELECTIONS.  (a)  In addition to the elections
5-64     the district must hold under Subchapter L, Chapter 375, the
5-65     district shall hold an election in the manner provided by that
5-66     subchapter to obtain voter approval before the district imposes a
5-67     maintenance tax or issues bonds payable from ad valorem taxes or
5-68     assessments.
5-69           (b)  The board may include more than one purpose in a single
 6-1     proposition at an election.
 6-2           Sec. 376.319.  MAINTENANCE TAX.  (a)  If authorized at an
 6-3     election held in accordance with Section 376.318, the district may
 6-4     impose and collect an annual ad valorem tax on taxable property in
 6-5     the district for the maintenance and operation of the district and
 6-6     the improvements constructed or acquired by the district or for the
 6-7     provision of services.
 6-8           (b)  The board shall determine the tax rate.
 6-9           Sec. 376.320.  ASSESSMENTS.  (a)  The board may impose and
6-10     collect an assessment for any purpose authorized by this
6-11     subchapter.
6-12           (b)  Assessments, including assessments resulting from an
6-13     addition to or correction of the assessment roll by the district,
6-14     reassessments, penalties and interest on an assessment or
6-15     reassessment, expenses of collection, and reasonable attorney's
6-16     fees incurred by the district:
6-17                 (1)  are a first and prior lien against the property
6-18     assessed;
6-19                 (2)  are superior to any other lien or claim other than
6-20     a lien or claim for county, school district, or municipal ad
6-21     valorem taxes; and
6-22                 (3)  are the personal liability of and charge against
6-23     the owners of the property even if the owners are not named in the
6-24     assessment proceedings.
6-25           (c)  The lien is effective from the date of the resolution of
6-26     the board imposing the assessment until the assessment is paid.
6-27     The board may enforce the lien in the same manner that the board
6-28     may enforce an ad valorem tax lien against real property.
6-29           Sec. 376.321.  CERTAIN RESIDENTIAL PROPERTY NOT EXEMPT.
6-30     Section 375.161 does not apply to the district.
6-31           Sec. 376.322.  UTILITIES.  The district may not impose an
6-32     assessment or impact fee on a utility's property.
6-33           Sec. 376.323.  MUNICIPAL APPROVAL.  (a) Except as provided by
6-34     Subsection (b), the district must obtain approval from the
6-35     municipality's governing body of:
6-36                 (1)  the issuance of bonds for an improvement project;
6-37     and
6-38                 (2)  the plans and specifications of an improvement
6-39     project financed by the bonds.
6-40           (b)  If the district obtains approval from the municipality's
6-41     governing body of a capital improvements budget for a period not to
6-42     exceed five years, the district may finance the capital
6-43     improvements and issue bonds specified in the budget without
6-44     further approval from the municipality.
6-45           (c)  The district must obtain approval from the
6-46     municipality's governing body of the plans and specifications of
6-47     any district improvement project related to the use of land owned
6-48     by the municipality, an easement granted by the municipality, or a
6-49     right-of-way of a street, road, or highway.
6-50           (d)  Except as provided by Section 375.263, a municipality is
6-51     not obligated to pay any bonds, notes, or other obligations of the
6-52     district.
6-53           Sec. 376.324.  DISBURSEMENTS OR TRANSFERS OF FUNDS.  The
6-54     board by resolution shall establish the number of directors'
6-55     signatures and the procedure required for a disbursement or
6-56     transfer of the district's money.
6-57           Sec. 376.325.  COMPETITIVE BIDDING LIMIT.  Section 375.221
6-58     does not apply to the district unless the contract is for more than
6-59     $25,000.
6-60           Sec. 376.326.  EXCEPTION FOR DISSOLUTION OF DISTRICT WITH
6-61     OUTSTANDING DEBTS.  (a)  The board may vote to dissolve a district
6-62     that has debt.  If the vote is in favor of dissolution, the
6-63     district shall remain in existence solely for the limited purpose
6-64     of discharging its debts.  The dissolution is effective when all
6-65     debts have been discharged.
6-66           (b)  Section 375.264 does not apply to the district.
6-67           SECTION 2.  The legislature finds that:
6-68                 (1)  proper and legal notice of the intention to
6-69     introduce this Act, setting forth the general substance of this
 7-1     Act, has been published as provided by law, and the notice and a
 7-2     copy of this Act have been furnished to all persons, agencies,
 7-3     officials, or entities to which they are required to be furnished
 7-4     by the constitution and laws of this state, including the governor,
 7-5     who has submitted the notice and Act to the Texas Natural Resource
 7-6     Conservation Commission;
 7-7                 (2)  the Texas Natural Resource Conservation Commission
 7-8     has filed its recommendations relating to this Act with the
 7-9     governor, lieutenant governor, and speaker of the house of
7-10     representatives within the required time;
7-11                 (3)  the general law relating to consent by political
7-12     subdivisions to the creation of districts with conservation,
7-13     reclamation, and road powers and the inclusion of land in those
7-14     districts has been complied with; and
7-15                 (4)  all requirements of the constitution and laws of
7-16     this state and the rules and procedures of the legislature with
7-17     respect to the notice, introduction, and passage of this Act have
7-18     been fulfilled and accomplished.
7-19           SECTION 3.  Notwithstanding Section 376.310, Local
7-20     Governmental Code, as added by this Act:
7-21                 (1)  the initial board of directors of the Midtown
7-22     Management District consists of:
7-23                 Pos. No.    Name of Board Member
7-24                 1.          Gregory Phillips
7-25                 2.          Andy Bynam
7-26                 3.          Blanchard Hollins
7-27                 4.          Suewan Johnson
7-28                 5.          John Gonzales
7-29                 6.          Doug Williams
7-30                 7.          Tran Tian
7-31                 8.          Al Luna
7-32                 9.          Angela Lange
7-33                 10.         John Kirksey
7-34                 11.         Kathy Perry
7-35                 12.         Dan Nip
7-36                 13.         Allen Crosswell
7-37                 14.         Steve Hefner
7-38                 15.         Jim Lang
7-39                 16.         Frank Liu
7-40                 17.         Grant Martin; and
7-41                 (2)  of the initial board members, the members
7-42     appointed for positions 1 through 9 serve until June 1, 2003, and
7-43     the members appointed for positions 10 through 17 serve until June
7-44     1, 2001.
7-45           SECTION 4.  The importance of this legislation and the
7-46     crowded condition of the calendars in both houses create an
7-47     emergency and an imperative public necessity that the
7-48     constitutional rule requiring bills to be read on three several
7-49     days in each house be suspended, and this rule is hereby suspended,
7-50     and that this Act take effect and be in force from and after its
7-51     passage, and it is so enacted.
7-52                                  * * * * *