C.S.H.B. 3575 78(R)    BILL ANALYSIS


C.S.H.B. 3575
By: Hegar
Urban Affairs
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Committee Substitute House Bill 3575 creates the Katy Towne Centre
Development District as a political subdivision of the State of Texas to
administer and provide funding for community improvement projects and
services in certain commercial areas of Katy.  The District will be a
municipal management district similar to those operating pursuant to
Chapter 375 and 376, Local Government Code. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  CREATION OF DISTRICT.  (a)  Creates the Katy Towne Centre
Development District (the "district") as a special district under Section
52, Article III, Section 59, Article XVI, Texas Constitution, and Section
1-g, Article VIII, Texas Constitution. 
(b)  Authorizes the Board of Directors of the district (the "board") by
resolution to change the name of the district. 
SECTION 2.  DECLARATION OF INTENT. (a) Sets forth findings regarding the
necessity of the creation of the district. 
(b) Sets forth findings that the creation of the district is essential to
accomplish certain purposes. 
SECTION 3.  DEFINITIONS.  Defines "board and "district."
SECTION 4.  BOUNDARIES.  Sets forth the metes and bounds of the district.
SECTION 5.  FINDINGS RELATING TO BOUNDARIES.  Provides that the boundaries
and field notes of the district form a closure.  Provides that if a
mistake is made in the field notes or in copying the field notes in the
legislative process, the mistake does not in any way affect the district's
organization, existence, or validity, its right to issue any type of bond
for the purposes for which the district is created or to pay the principal
of and interest on a bond, its right to impose or collect an assessment or
a tax, or its legality or operation. 
SECTION 6.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.  (a) Provides that the
district is created to serve a public use and benefit, and that all land
and other property in the District will benefit from the improvements and
services to be provided by the District. Provides that the creation of the
district is in the public interest and is essential to further the public
purposes of the development and diversification of the economy of the
state, eliminate unemployment and underemployment, and develop or expand
transportation and commerce. Provides that the district will serve the
public purpose of promoting the health, safety and general welfare and
provide necessary funding for the economic health and vitality of the
district as a community and business center.  Provides that pedestrian
ways along or across a street, whether at grade or above or below the
surface, and street lighting, street landscaping, and street art objects
are part of and necessary components of a street and are considered to be
a street or road improvement. Provides that the  district will not act as
the agent or instrumentality of any private interest even though many
private interests will be benefitted by the district, as will the general
public. 
SECTION 7.  FINDINGS RELATED TO REDEVELOPMENT. Provides findings that the
area within the district is unproductive, underdeveloped or blighted;
development or redevelopment would not occur solely through private
investment in the reasonably foreseeable future; the area within the
district substantially arrests and impairs the sound growth of the City of
Katy retards the provision of housing accommodations, and constitutes an
economic and social liability and is a menace to the public health,
safety, morals, and welfare in its present condition and use; and the area
within the district is predominately open and, because pf obsolete
platting, deterioration of structures or site improvements, or other
factors, substantially impairs or arrests the sound growth of the City of
Katy. 
SECTION 8.  ELIGIBILITY FOR REINVESTMENT ZONES. Provides that all or any
part of the district is eligible to be included in a tax incremental
reinvestment zone created by the municipality under Chapter 311, Tax Code,
regardless of other statutory criteria 
SECTION 9.  APPLICATION OF OTHER LAW.  Provides that Chapter 311,
Government Code (Code Construction Act) applies to the Act. 
SECTION 10.  CONSTRUCTION OF ACT.  Provides for liberal construction of
Act, and supremacy over general law. 
SECTION 11.  BOARD OF DIRECTORS; TERMS.  Sets forth number and terms of
directors. 
SECTION 12.  APPOINTMENT.  Provides for directors' appointment; provides
that Section 49.052, Water Code and Section 375.063, Local Government
Code, do not apply to directors of the district. 
SECTION 13.  VACANCIES.  Provides that vacancies on the board shall be
filled by the remaining directors. 
SECTION 14.  POWERS OF THE DISTRICT.  Provides that the district has all
the powers and authority provided by the general laws of this state on (1)
road districts and road utility districts created under Section 52,
Article III, Texas Constitution, and (2) conservation and reclamation
districts and municipal management districts created under Section 59,
Article XVI, Texas Constitution; which includes Chapters 257 and 441,
Transportation Code, Chapter 375, Local Government Code, and Chapters 54
and 49, Water Code. 
SECTION 15.  AGREEMENTS; GRANTS.  (a) Provides that the district may make
an agreement with or accept a gift, grant, or loan from any person. 
(b) Provides that the implementation of a project is a governmental
function or service for the purposes of Chapter 791, Government Code,
allowing interlocal contracts. 
SECTION 16.  LAW ENFORCEMENT SERVICES.   Provides that the district may
contract for law enforcement services with a municipality or a county for
a fee to protect the public interest. 
SECTION 17.  AUTHORITY TO IMPOSE AD VALOREM TAXES, ASSESSMENTS, AND IMPACT
FEES. Provides that the district may impose ad valorem taxes, assessments,
and impact fees and apply all the proceeds of the taxes, assessments or
impact fees to the payment of debt, to contract payments, or to
maintenance and operating expenses. 
SECTION 18.  ELECTIONS REGARDING TAXES OR BONDS.  (a) Requires the
district to hold an election in a manner provided by Chapters 49 and 54,
Water Code, to obtain voter approval before the district may impose a
maintenance tax or issue bonds that are payable from ad valorem taxes. 
(b)  Allows the board to include more than one purpose in a single
proposition at an election. 
 SECTION 19.  MAINTENANCE TAX.  (a) Authorizes the district, if approved
at an election held in accordance with Section 10, to impose and collect
an annual ad valorem tax on taxable property in the district for any
district purpose, including to maintain and operate the district,
including improvements constructed or acquired by the district, or to
provide a service. 
(b) Provides that the board shall determine the tax rate.
SECTION 20.  ASSESSMENTS; PETITION REQUIRED FOR FINANCING SERVICES AND
IMPROVEMENTS. (a) Authorizes the board to impose and collect an assessment
for any purpose authorized by this Act. 
(b) Provides that the board may not finance a service or improvement
project through an assessment unless a written petition requesting that
service or improvement has been filed with the board.  The petition must
be signed by: (1) the owners of a majority of the assessed value of real
property in the district that will be subject to the assessment according
to the most recent certified tax appraisal roll or (2) at least 25 owners
of land in the district that will be subject to the assessment, if more
than 25 persons own land in the district that will be subject to the
assessment according to the most recent certified tax appraisal roll for
the county in which the property is located. 
(c) Provides the priority of liens for the district.
(d) Provides that the lien is effective from the date of the board's
resolution imposing the assessment until the date the assessment is paid;
the board may enforce the lien in the same manner that the board may
enforce an ad valorem tax lien against real property. 
SECTION 21.  UTILITIES. Provides that the district may not impose an
impact fee or assessment on electric utilities or power generation
companies, gas utilities, telecommunication providers, or a person who
provides to the public cable television or advanced telecommunications
services. 
SECTION 22.  USE AND ALTERATION OF PUBLIC WAYS.  Provides that Section
375.093(c), Local Government Code, applies to the district. 
SECTION 23.  TAX INCREMENT FINANCING POWERS.  (a) Provides that the
district is a tax increment reinvestment zone authorized by Chapter 311,
Tax Code, without further authorization or procedural requirement and
notwithstanding other statutory criteria. 
(b) Confers all the powers under Chapter 311, Tax Code, to the district.
(c) Provides that the district may enter into interlocal agreements with
any overlapping taxing entity for the payment of all or a portion of the
tax increment of the entity to the district and the overlapping taxing
entities are authorized to enter into such agreements. 
(d) Provides that the base year value of the district is the value as of
January 1, 2003, of all taxable real property in the district as shown on
the tax rolls of the appraisal district. 
SECTION 24. OBLIGATIONS.  (a) Authorizes the district to issue bonds or
other obligations payable in whole or part from ad valorem taxes,
assessments, impact fees, revenue, grants, other money sources of the
district or any combination of sources to pay for any authorized purpose
of the district. 
(b) Authorizes the district to issue bonds or other obligations of the
district 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 may 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. 
SECTION 25.  INITIAL DIRECTORS.  Provides the names and terms of the
initial board of directors for the district. 
 SECTION 26.  LEGISLATIVE FINDINGS.  Sets forth legislative findings
regarding the fulfillment of procedural requirements with respect to the
notice, introduction, and passage. 
SECTION 27.  EFFECTIVE DATE.

EFFECTIVE DATE

Upon passage, or, if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3575 makes non-substantive drafting changes to the original;
findings of benefit and public purpose are modified, and findings relating
to redevelopment and reinvestment zones are separated out into separate
sections; adds new section providing for application of Chapter 311,
Government Code (Code Construction Act); separates out into separate
section language providing for liberal construction and supremacy over
general law; separates section regarding board of directors into separate
sections; separates authority to impose ad valorem taxes into a separate
section; separates provisions for law enforcement services into a separate
section; adds a new section providing that the district may not impose an
impact fee or assessment on electric utilities or power generation
companies, gas utilities, telecommunication providers, or a person who
provides to the public cable television or advanced telecommunications
services; adds a new section regarding use and alteration of public ways;
names initial directors;