SRC-SEW S.B. 1226 77(R)BILL ANALYSIS


Senate Research CenterS.B. 1226
By: Lindsay
Intergovernmental Relations
6/18/2001
Enrolled


DIGEST AND PURPOSE 

Currently, Chapter 375 of the Local Government Code allows for the creation
of municipal management districts in order to promote and benefit
commercial development and commercial areas throughout the state.  S.B.
1226 creates the Energy Corridor Management District encompassing a
commercial area in Houston.  Many energy sector businesses and corporations
have offices in the area, giving the area its nickname "the Energy
Corridor."  Representatives of businesses in the area, together with the
West Houston Association, have joined with their elected representatives to
create this special financing district, which will assess property owners
to finance improvements and services to the area, such as the provision of
additional security services, landscaping and tree planting, street
cleaning, and a coordinated marketing effort for the area. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 376, Local Government Code, by adding Subchapter
K, as follows: 

SUBCHAPTER K. ENERGY CORRIDOR MANAGEMENT DISTRICT

Sec. 376.451.  CREATION OF DISTRICT. Creates the Energy Corridor Management
District (district).  Authorizes the board of directors of the district
(board) by resolution to change the district's name.  

Sec. 376.452.  DECLARATION OF INTENT.  Provides that the creation of the
district is necessary to promote, develop, encourage, and maintain
employment, commerce, transportation, housing, tourism, recreation, arts,
entertainment, economic development, safety, and the public welfare in the
area of the district.  Provides that the creation of the district and this
legislation are not to be interpreted to relieve Harris County (county) or
the City of Houston (municipality) from providing the level of services, as
of the effective date of this subchapter, each entity has to provide to the
area in the district.  Provides that the district is created to supplement
and not supplant the municipal or county services provided in the area in
the district.  Provides that the creation of the district is essential to
accomplish the purposes of Sections 52 (Counties, Cities, or other
Political Corporations or Subdivisions; Lending Credit; Grants; Bonds) and
52-a (Loan or Grant of Public Money for Economic Development), Article III,
and Section 59 (Conservation and Development of Natural Resources:
Conservation and Reclamation Districts), Article XVI, Texas Constitution,
and other public purposes stated in this subchapter. 

Sec. 376.453.  DEFINITIONS.  Defines "board," "county," "district,"
"municipality," and "utility." 
 
  Sec. 376.454.  BOUNDARIES.  Sets forth the boundaries of the district.

Sec. 376.455.  FINDINGS RELATING TO BOUNDARIES.  Provides findings relating
to the boundaries of the district.  

Sec. 376.456.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.  Provides findings
of benefit and purpose. 

Sec. 376.457.  APPLICATION OF OTHER LAW.  Provides that, except as
otherwise provided by this subchapter, Chapter 375 applies to the district. 

Sec. 376.458. CONSTRUCTION OF SUBCHAPTER.  Requires this subchapter to be
liberally construed in conformity with the findings and purposes stated in
this subchapter. 

Sec. 376.459.  BOARD OF DIRECTORS IN GENERAL.  Sets forth guidelines
regarding the district's board of directors. 

Sec. 376.460.  APPOINTMENT OF DIRECTORS.  Sets forth guidelines regarding
the appointment of directors. 

Sec. 376.461.   NONVOTING DIRECTORS. Requires certain persons to serve as
nonvoting directors.  Authorizes the board, if an agency, department, or
division described by this section is consolidated, renamed, or changed, to
appoint a director of the consolidated, renamed, or changed agency,
department, or division, as a nonvoting board member.  Authorizes the
board, if an agency, department, or division described by this section is
abolished, to appoint a representative of another agency, department, or
division of the municipality that performs duties comparable to those
performed by the abolished entity. 

Sec. 376.462.  CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT. (a) Authorizes a
director, except as provided in this section, to participate in all board
votes and decisions and provides that, except as provided in this section,
Chapter 171 governs conflict of interests for board members. 
 
(b)  Provides that Section 171.004 does not apply to the district.
Requires certain directors with certain substantial interests to file a
one-time affidavit declaring the interest.  Provides that an additional
affidavit is not required if the director's interest changes.  Authorizes
the director, after the affidavit is filed with the board secretary, to
participate in a discussion or vote on that action if certain requirements
are met. 
  
(c)  Prohibits a director who is also an officer or employee of a public
entity from participating in the discussion of or vote on a matter
regarding a contract with that same public entity. 

(d)  Provides that, for purposes of this section, a director has a
substantial interest in a charitable entity in the same manner that a
person would have a substantial interest in a business entity under Section
171.002. 

Sec. 376.463.  ELECTRONIC TRANSMISSIONS.  Authorizes the district to
acquire, operate, or charge fees for the use of district conduits for
certain purposes.  Prohibits the district from requiring a person to use a
district conduit.   

Sec.  376.464.  ADDITIONAL POWERS OF DISTRICT. (a)  Authorizes the district
to exercise the powers given to a corporation created under Section 4B,
Development Corporation Act of 1979 (Article 5190.6, V.T.C.S.). 

 (b)  Authorizes the district to exercise the powers given to a housing
finance corporation created under Chapter 394 to provide housing or
residential development projects in the district. 
 
Sec. 376.465.  AGREEMENTS:  GENERAL; DONATIONS, INTERLOCAL AGREEMENTS, AND
LAW ENFORCEMENT SERVICES.  Authorizes the district to make an agreement
with or accept a gift, grant, or loan from any person.  Provides that the
implementation of a project is a governmental function or service for the
purposes of Chapter 791 (Interlocal Cooperation Contracts), Government
Code.  Authorizes the district, to protect the public interest, to contract
with the municipality or the county to provide law enforcement services in
the district for a fee. 

Sec. 376.466.  NONPROFIT CORPORATION.  Sets forth guidelines regarding the
creation of a nonprofit corporation to assist and act on behalf of the
district in implementing a project or providing a service authorized by
this subchapter. 
 
Sec. 376.467.  REQUIREMENTS FOR FINANCING SERVICES AND IMPROVEMENTS.
Prohibits the board from financing a service or improvement project under
this subchapter unless a written petition requesting the improvement or
service has been filed with the board.  Requires the petition to be signed
by certain persons. 
 
Sec. 376.468.  ELECTIONS.  Requires the district, in addition to the
elections the district as required to hold under Chapter 375L, to hold an
election in the manner provided by that subchapter to obtain voter approval
before the district imposes a maintenance tax or issues bonds payable from
ad valorem taxes or assessments.  Authorizes the board to include more than
one purpose in a single proposition at an election. 

Sec. 376.469.  MAINTENANCE TAX.  Authorizes the district, if authorized at
an election held in accordance with Section 376.468. , to impose 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.
Requires the board to determine the tax rate. 

Sec. 376.470.  ASSESSMENTS. Authorizes the board to impose and collect an
assessment for any purpose authorized by this subchapter.  Sets forth
guidelines regarding assessments, reassessments, penalties and interest on
an assessment or reassessment, expenses of collection, and reasonable
attorney's fees incurred by the district.  Provides that the lien is
effective from the date of the resolution of the board imposing 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. 

Sec. 376.471.  UTILITIES.  Prohibits the district from imposing an
assessment or impact fee in certain cases. 

Sec. 376.472. BONDS.  Sets forth guidelines regarding the issuance of
certain bonds or other obligations by the district. 

Sec. 376.473.  MUNICIPAL APPROVAL. (a) Requires the district, except as
provided by Subsection (b), to obtain approval from the municipality's
governing body of certain items. 
  
(b)  Authorizes the district, if the district obtains approval from the
municipality's governing body of a capital improvements budget for a period
not to exceed five years, to finance the capital improvements and issue
bonds specified in the budget without further approval from the
municipality. 
 
 (c)  Provides that, except as provided by Section 375.263, a municipality
is not obligated to pay any bonds, notes, or other obligations of the
district. 

Sec. 376.474.  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.

Sec. 376.475.  COMPETITIVE BIDDING LIMIT.  Provides that Section 375.221
applies to the district only for a contract with a value greater than
$25,000. 

Sec. 376.476.  EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING
DEBTS.  Authorizes the board to vote to dissolve a district that has debt.
Requires the district, if the vote is in favor of dissolution, to remain in
existence solely for the limited purpose of discharging its debts.
Provides that the dissolution is effective when all debts have been
discharged.  Provides that Section 375.264 does not apply to the district. 

Section 376.477.  INITIAL DIRECTORS.  Provides that the initial board
consists of certain persons and sets forth guidelines regarding directors'
terms.  Provides that Section 376.460 does not apply to this section.
Provides that this section expires September 1, 2006. 

SECTION 2.  Presents legislative findings relating to procedural
requirements. 

SECTION 3.  Effective date: upon passage or September 1, 2001.