H.B. 3592 78(R)    BILL ANALYSIS


H.B. 3592
By: West, George "Buddy"
Urban Affairs
Committee Report (Unamended)

BACKGROUND AND PURPOSE 

Currently several conditions exist in downtown Midland that suppress
property values and financially impede new development and investment.
House Bill 3592 is relating to the creation of the Downtown Midland
Management District; providing authority to impose taxes and issues bonds.
This bill will give the needed  initiative to improve economic stability
and encourage revitalization and reinvestment in downtown Midland.   

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)  The Downtown Midland Management
District is 
a special district created under Section 59, Article XVI, Texas
Constitution. 
 (b)  The board by resolution may change the name of the district.

SECTION 2.  DEFINITIONS.  Defines the terms "Board" and "District."

SECTION 3.  DECLARATION OF INTENT.  (a)  The creation of the district is
essential to accomplish the purposes of Sections 52 and 52-a, Article III,
and Section 59, Article XVI, Texas Constitution, and other public purposes
stated in this Act. 
(b)  The creation of the district is necessary to promote, develop,
encourage, and maintain employment, commerce, transportation, housing,
tourism, recreation, the arts, entertainment, economic development,
safety, and the public welfare in the area of the district. 
(c)  The creation of the district and this legislation may not be
interpreted to relieve Midland County or the City of Midland from
providing the level of services provided, as of the effective date of this
Act, to the area in the district. The district is created to supplement
and not to supplant the county or city services provided in the area in
the district. 
(d)  By creating the district and in authorizing the City of Midland,
Midland County, and other political subdivisions to contract with the
district, the legislature has established a program to accomplish the
public purposes set out in Section 52-a, Article III, Texas Constitution. 

SECTION 4.  BOUNDARIES.  This section sets forth the metes and bounds of
the Downtown Midland Management District.  

SECTION 5.  FINDINGS RELATING TO BOUNDARIES.  The boundaries and field
notes of the district form a closure; if a mistake is made, the mistake
does not in any way affect the district's organization, existence, or
validity; right to issue any type of bond for a purpose for which the
district is created or to pay the principal of and interest on a bond;
right to impose or collect an assessment or tax; legality; or operation.  

SECTION 6.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.  This section sets
forth legislative findings of benefit and public purpose of the Downtown
Midland Management  District. 

SECTION 7.  APPLICATION OF OTHER LAW.  Except as otherwise provided,
Chapter 375, Local Government Code, and Chapter 311, Government Code (Code
Construction Act) apply. 

 SECTION 8.  CONSTRUCTION OF ACT.  This Act shall be liberally construed
in conformity with the findings and purposes stated. 

SECTION 9.  BOARD OF DIRECTORS IN GENERAL.  This section provides that the
Downtown Midland Management District is governed by a board of nine voting
directors and nonvoting directors as provided by SECTION 11, below, and
sets terms of the directors.  This section also provides that the board
may increase or decrease the number of directors on the board by
resolution; however the board may not consist of fewer than seven or more
than 13 directors.  

SECTION 10.  APPOINTMENT OF DIRECTORS.  This section sets forth provisions
regarding the appointment of directors. 

SECTION 11.  NONVOTING DIRECTORS.  This section sets forth the
composition, qualification, and appointment of nonvoting directors.  This
section also provides that nonvoting directors are not counted for the
purposes of establishing a quorum of the board. 
 
SECTION 12.  CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT.  Sets forth
Chapter 171, Local Government Code, as governing conflicts of interest for
directors.  Provides that Section 171.004, Local Government Code, does not
apply to the district.  A director who has a substantial interest in a
business or charitable entity that will receive a pecuniary benefit from a
board action shall file a one-time affidavit declaring the interest. An
additional affidavit is not required if the director's interest changes.
After the affidavit is filed with the board secretary, the director may
participate in a discussion or vote on that action if a majority of the
directors have a similar interest in the same entity; or all other similar
business or charitable entities in the district will receive a similar
pecuniary benefit.  A director who is also an officer or employee of a
public entity may not participate in the discussion of or vote on a matter
regarding a contract with that same public entity. 
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, Local
Government Code. 
 
SECTION 13.  ADDITIONAL POWERS OF DISTRICT.  The district may exercise the
powers given to a Section 4B corporation, including the power to own,
operate, acquire, construct, lease, improve, and maintain projects, and  a
housing finance corporation created under Chapter 394, Local Government
Code, to provide housing or residential development projects in the
district. 

SECTION 14.  AGREEMENTS; GRANTS.  Provides that the district may make an
agreement with or accept a gift, grant, or loan from any person.  In
addition, the section provides that the implementation of a district
project is a governmental function or service for the purposes of Chapter
791, Government Code. 

SECTION 15.  LAW ENFORCEMENT SERVICES.  To protect the public interest,
the district may contract with Midland County or the City of Midland to
provide law enforcement services in the district for a fee. 

SECTION 16.  NONPROFIT CORPORATION.  This section provides that the board
may authorize the creation of a nonprofit corporation, to be considered a
local government corporation created under Chapter 431, Transportation
Code, by resolution to assist and act on behalf of the district in
implementing a project or providing a service authorized by this Act. The
board shall appoint the board of directors of a nonprofit corporation, who
shall serve in the same manner as the board of directors of a local
government corporation created under Chapter 431, Transportation Code. 

SECTION 17.  REQUIREMENTS FOR FINANCING SERVICES AND IMPROVEMENTS.  This
section provides that the board may not finance a service or improvement
project with assessments unless a written petition requesting that
improvement or service has been filed with the board, signed by the owners
of a majority of the assessed value of real property in the district
subject to assessment as determined by the most recent certified tax
appraisal roll for Midland County; or at least 25 persons who own real
property in the district, if more than 25 persons own real property in the
district as determined by the most recent certified tax appraisal roll for
Midland County. 
 
 SECTION 18.  ELECTIONS.  Provides that the district must hold an election
in accordance with Subchapter L, Chapter 375, Local Government Code, to
obtain voter approval before the district imposes a maintenance tax or
issues a bond payable from ad valorem taxes.The board may include more
than one purpose in a single proposition at an election; provides that
Section 375.243, Local Government Code, does not apply to the district. 

SECTION 19.  MAINTENANCE TAX.  Provides that the district, if approved in
an election under SECTION 18, above,  may impose 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; the board will determine the tax rate. 

SECTION 20.  ASSESSMENTS.  Provides that the board, by resolution, may
impose and collect an assessment for any purpose authorized by this Act.
However, board may not impose an assessment on a parcel of real property
that at the time of the assessment is appraised at less than $200,000,
according to the most recent certified tax appraisal roll for Midland
County, without the written consent of the owner.  Provides that
assessments and associated costs are a first and prior lien against the
property assessed; are superior to any other lien or claim other than a
lien or claim for county, school district, or municipal ad valorem taxes;
and are the personal liability of and charge against the owners of the
property even if the owners are not named in the assessment proceedings. 
Such a lien is effective from the date of the resolution which imposed the
assessment until the date the assessment is paid; empowers the board to
enforce the lien in the same manner as an ad valorem tax lien against real
property.  Allows the board to make corrections to or deletions from the
assessment roll without notice and hearing if the corrections or deletions
do not increase the amount of assessment of any parcel of land. 
 
SECTION 21.  UTILITIES.  Prohibits the district from imposing an impact
fee or assessment upon electric utilities, power generation companies, gas
utilities, or a person that provides to the public cable television or
advanced telecommunications services. 

SECTION 22.  BONDS.  This section provides for the issuance of bonds or
other obligations payable wholly or partially  from ad valorem taxes,
assessments, impact fees, revenue, grants, or other money of the district,
or any combination; these can take the form of a bond, note, certificate
of participation or other instrument evidencing a proportionate interest
in payments to be made by the district, or any other type of obligation. 
 
SECTION 23.  MUNICIPALITY NOT REQUIRED TO PAY DISTRICT OBLIGATIONS.
Except as provided by Section 375.263, Local Government Code, the City of
Midland is not required to pay a bond, note, or other obligation of the
district. 
 
SECTION 24.  DISBURSEMENTS OR TRANSFERS OF MONEY.  The board, by
resolution, must establish the number of directors' signatures and the
procedure required for a disbursement or transfer of the district's money. 
 
SECTION 25.  COMPETITIVE BIDDING LIMIT.  Provides that Section 375.221,
Local Government Code, applies to the district only for a contract that
has a value greater than $50,000. 
 
SECTION 26.  EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING DEBT.
Provides that the board may vote to dissolve the district even if it has
outstanding debts, in which case the district shall remain in existence
solely for the limited purpose of discharging its debts. Once such debts
are discharged, the dissolution will be effective.  Provides that Section
375.264, Local Government Code, does not apply to the district. 
 
SECTION 27.  ANNEXATION.  Provides that the district may annex territory
as provided by Subchapter C, Chapter 375, Local Government Code; including
territory located inside the boundaries of a reinvestment zone created by
the City of Midland, if the governing body of the city consents to the
annexation. 

SECTION 28.  TAX AND ASSESSMENT ABATEMENTS.  This section empowers the
district to grant tax and assessment abatements . 
 
SECTION 29.  MEMBERSHIP IN CHARITABLE ORGANIZATIONS.  This section
authorizes the district to join and pay dues to tax-exempt organization
that performs services or provides activities consistent with the
furtherance of the purposes of the district. 

SECTION 30.  ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.  Provides that
all or any part of the area of the district is eligible to be included in
a tax increment or tax abatement reinvestment zone, or an enterprise zone. 
 
SECTION 31.  ECONOMIC DEVELOPMENT PROGRAMS.  This section provides that
the district may establish and administer state or local economic
development programs with all of the powers and authority of a
municipality under Chapter 380, Local Government Code. 

SECTION 32.  INITIAL DIRECTORS.  This section names initial directors of
the district, and provides for their terms of office; supercedes SECTION
10 for the purposes of this section; sunsets this section on September 1,
2007.  
 
SECTION 33.  LEGISLATIVE FINDINGS.  This section sets forth specific
legislative findings. 

SECTION 34.  EFFECTIVE DATE.  Effective date.

EFFECTIVE DATE

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