C.S.S.B. 1912 78(R)    BILL ANALYSIS


C.S.S.B. 1912
By: Jackson
Urban Affairs
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

C.S.S.B. 1912 creates the Harborside Management District in Galveston
County as a political 
subdivision of Texas to administer and provide funding for community
improvement projects 
and services in certain commercial areas of Harborside.

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 Harborside Management
District (the "district") as a special district under Section 59, Article
XVI, Texas Constitution. 
(b)  Authorizes the Board of Directors of the district (the "board") by
resolution to change the name of the district. 

SECTION 2.  DEFINITIONS.  Defines "board and "district."

SECTION 3.  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. 
(c) Provides that the creation of the district may not be interpreted to
relieve Galveston County or the City of Galveston from providing the level
of services currently provided. 
(d) Provides that the creation of the district by the legislature is the
establishment of a program to accomplish the public purposes set out in
Section 52-a, Article III, Texas Constitution.   
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.  APPLICATION OF OTHER LAW.  Provides that except as otherwise
provided by the Act, Chapter 375, Local Government Code, applies to the
district.  This section also provides that Chapter 311, Government Code
(Code Construction Act) applies to the Act. 

SECTION 8.  CONSTRUCTION OF ACT.  Provides for liberal construction of the
Act. 

SECTION 9.  BOARD OF DIRECTORS IN GENERAL.  Sets forth number and terms of
directors, and provides the board may, within limits, increase or decrease
the number of directors. 

SECTION 10.  APPOINTMENT OF DIRECTORS.  Provides for directors'
appointment. 

SECTION 11.  NONVOTING DIRECTORS.  Designates certain persons as nonvoting
directors, provides for the appointment of nonvoting directors in the case
of a change in the agencies, departments, or divisions described in the
section.  Provides that nonvoting directors are not counted for the
purposes fo establishing quorum. 

SECTION 12.  CONFLICTS OF INTEREST; ONE-TIME AFFADAVIT.  Authorizes a
director to participate in board votes and decisions, and provides that
Chapter 171, Local Government Code, governs board members' conflicts of
interest.  Limits the application of Section 171.004, Government Code, to
exclude the district.  Requires a director with a conflict of interest to
file a one-time affidavit declaring the interest.  Authorizes the director
to participate in certain actions, subsequent to filing the affidavit,
under certain conditions. Prohibits a director who is also a public entity
officer or employee from taking part in a matter regarding a contract with
that public entity.  Sets forth a description of a director's substantial
interest regarding a charitable entity. 

SECTION 13.  ADDITIONAL POWERS OF DISTRICT.  Authorizes the district to
exercise the powers given to a corporation created under Section 4B,
Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil
Statutes), 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.  (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 15.  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 16.  NONPROFIT CORPORATION. Authorizes the board to authorize the
creation of a nonprofit corporation, with the powers and responsibilities
of a local government corporation created under Chapter 431,
Transportation Code, to implement a project, with or on behalf of the
district. Requires the board to appoint the board of directors of a
nonprofit corporation.  Sets forth terms and powers of a board of
directors of a nonprofit corporation under this section. 

SECTION 17.  REQUIREMENTS FOR FINANCING SERVICES AND IMPROVEMENTS. States
that the board may not finance a service or improvement project under this
Act unless a written petition requesting that improvement or service has
been filed with the board.  The petition must be signed by the owners of a
majority of the assessed value of real property in the district that will
be subject to the assessment as determined by the most recent certified
tax appraisal roll for Galveston County.   

SECTION 18.  ELECTIONS.  (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)  Prohibits the district from including 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 18, 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. Authorizes the board to impose and collect an
assessment for any purpose authorized by this Act.  Sets forth provisions
for assessments resulting from additions or corrections to the assessment
roll made by the district.  Provides for the priority of assessments and
associated costs.  Sets forth the term of effectiveness for the lien.
Authorizes the board to enforce the lien in the same  manner as 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.  BONDS. Allows the district to issue bonds or other
obligations payable in whole or in part from assessments, impact fees,
revenue, grants, or other money of the district, or any combination of
those sources of money, to pay for any authorized purpose of the district.
In exercising the district's borrowing power, the district may issue a
bond or other obligation in 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 other type of obligation. 

SECTION 23.  MUNICIPALITY NOT REQUIRED TO PAY DISTRICT OBLIGATIONS.
Provides that except as provided by Section 375.263, Local Government
Code, a municipality is not required to pay a bond, note, or other
obligation of the district. 

SECTION 24.  DISBURSEMENTS OR TRANSFERS OF MONEY. Requires the board to
establish procedures for the number of directors' signatures and the
procedure required for the disbursement or transfer of district money. 

SECTION 25.  COMPETITIVE BIDDING LIMIT.  Provides that Section 375.221,
Local Government Code, does not apply to the district, unless the contract
is for an amount exceeding $15,000. 

SECTION 26. EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING DEBTS.
Authorizes the board to dissolve a district that has debt.  Sets forth
procedures for the dissolution of a district.  Provides that Section
375.264, Local Government Code, does not apply to the district. 

SECTION 27.  INITIAL DIRECTORS.  Sets forth the initial district board of
directors, and sets forth their staggered terms. 

SECTION 28.  TAX AND ASSESSMENT ABATEMENTS.  Provides that without further
authorization or other procedural requirement , the district may grant an
abatement for a tax or other assessment owed to the district. 

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 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 sound growth; 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 of obsolete platting, deterioration of
structures or site improvements, or other factors, substantially impairs
or arrests sound growth. 

SECTION 30.  ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES. Provides that all
or any part of the district is eligible to be included in a tax
incremental reinvestment zone created by the City of Galveston under
Chapter 311, Tax Code, a tax abatement reinvestment zone created by the
City under Chapter 312, Tax Code, or an enterprise zone created by the
City under Chapter 2303, Government Code, regardless of other statutory
criteria. 

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.  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

The substitute modifies the original in the following ways:  eliminates
the restriction on the governing body of the City of Galveston to only
appoint directors from a list provided by the district's board; deletes
the provision allowing for assessments to be authorized by a petition of
only 25 property owners; prohibits the district's board from including
more than one purpose in a proposition at election; and lowers the
competitive bidding limit to $15,000 from the original's $25,000.