By: Lindsay S.B. No. 1726
(In the Senate - Filed March 14, 2003; March 20, 2003, read
first time and referred to Committee on Intergovernmental
Relations; April 3, 2003, reported favorably by the following
vote: Yeas 5, Nays 0; April 3, 2003, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Cy-Fair Community Improvement
District; providing authority to impose a tax and issue bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. CREATION OF DISTRICT. (a) A special district
to be known as the "Cy-Fair Community Improvement District" is a
governmental agency and a political subdivision of the state.
(b) The name of the district may be changed by resolution of
the board.
(c) The creation of the district is essential to accomplish
the purposes of Section 52, Article III; Section 59, Article XVI;
and Section 52-a, Article III, Texas Constitution, and other public
purposes stated in this Act.
SECTION 2. DECLARATION OF INTENT. (a) 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 Cy-Fair community of Harris County.
(b) The creation of the district and this legislation are
not to be interpreted to relieve the county from providing the level
of services, as of the effective date of this Act, to the area in the
district or to release the county from the obligations the county
has to provide services to that area. The district is created to
supplement and not supplant the county services provided in the
area in the district.
(c) By creating the district and in authorizing the
municipality, 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 3. DEFINITIONS. In this Act:
(1) "Board" means the board of directors of the
district.
(2) "County" means Harris County, Texas.
(3) "District" means the Cy-Fair Community
Improvement District.
(4) "Municipality" means the City of Houston, Texas,
or the City of Jersey Village, Texas.
SECTION 4. BOUNDARIES. The district includes all the
territory contained in the following described area:
All land included within the boundaries of Cypress Fairbanks
Independent School District; SAVE AND EXCEPT any land within the
boundaries of either of the municipalities as of the effective date
of this Act; and further SAVE AND EXCEPT any land currently within a
municipality and all tracts or parcels of land, rights-of-way,
facilities, and improvements owned by a public utility as defined
by Section 11.004, Utilities Code.
SECTION 5. FINDINGS RELATING TO BOUNDARIES. The boundaries
and field notes of the district form a closure. 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:
(1) organization, existence, and validity of the
district;
(2) right of the district to issue any type of bonds or
refunding bonds for the purposes for which the district is created
or to pay the principal of and interest on the bonds;
(3) right of the district to impose and collect
assessments or taxes; or
(4) legality or operation of the district or its
governing body.
SECTION 6. FINDINGS OF BENEFIT AND PUBLIC PURPOSE.
(a) All the land and other property included in the district will
be benefited by the improvements and services to be provided by the
district under powers conferred by Section 52, Article III; Section
59, Article XVI; and Section 52-a, Article III, Texas Constitution,
and other powers granted under this Act, and the district is created
to serve a public use and benefit.
(b) The creation of the district is in the public interest
and is essential to:
(1) further the public purposes of the development and
diversification of the economy of the state; and
(2) eliminate unemployment and underemployment and
develop or expand transportation and commerce.
(c) The district will:
(1) promote the health, safety, and general welfare of
residents, employers, employees, visitors, consumers in the
district, and the general public;
(2) provide needed money for the Cy-Fair community to
preserve, maintain, and enhance the economic health and vitality of
the district as a community and business center; and
(3) further promote the health, safety, welfare, and
enjoyment of the public by providing pedestrian ways and by
landscaping and developing certain areas in the district, which are
necessary for the restoration, preservation, and enhancement of
scenic and aesthetic beauty.
(d) 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 parts of and necessary
components of a street and are considered to be a street or road
improvement.
(e) The district will not act as the agent or
instrumentality of any private interest even though many private
interests will be benefited by the district, as will the general
public.
SECTION 7. APPLICATION OF OTHER LAW. (a) Except as
otherwise provided by this Act, Chapter 375, Local Government Code,
applies to the district and its governing body and employees.
(b) Chapter 311, Government Code, applies to this Act.
SECTION 8. CONSTRUCTION OF ACT. This Act shall be liberally
construed in conformity with the findings and purposes stated in
this Act.
SECTION 9. BOARD OF DIRECTORS. (a) The district is
governed by a board of 11 directors who serve staggered terms of
four years, with six members' terms expiring May 1 of an
odd-numbered year and five members' terms expiring May 1 of the
following odd-numbered year. The board may increase or decrease
the number of directors on the board by resolution, provided that it
is in the best interest of the district to do so and that the board
consists of not fewer than nine and not more than 30 directors. A
decrease in the number of directors of the board does not affect the
term of a member on the board serving at the time of the decrease.
(b) The imposition of a tax, assessment, or impact fee
requires a vote of a majority of the directors serving.
SECTION 10. APPOINTMENT OF DIRECTORS; VACANCY. The county
judge and members of the governing body of the county shall appoint
directors from persons recommended by the board who meet the
qualifications of Subchapter D, Chapter 375, Local Government Code.
A vacancy in the office of director because of the death,
resignation, or removal of a director shall be filled by the
remaining members of the board by appointing a qualified person for
the unexpired term.
SECTION 11. POWERS OF DISTRICT. The district has:
(1) all powers necessary or required to accomplish the
purposes for which the district was created;
(2) the rights, powers, privileges, authority, and
functions of a district created under Chapter 375, Local Government
Code;
(3) the powers given to a corporation under Section
4B, Development Corporation Act of 1979 (Article 5190.6, Vernon's
Texas Civil Statutes), including the power to own, operate,
acquire, construct, lease, improve, and maintain projects as
provided by that Act;
(4) the power to impose ad valorem taxes, assessments,
or impact fees in accordance with Chapter 375, Local Government
Code, to provide improvements and services for a project or
activity the district is authorized to acquire, construct, improve,
or provide under this Act;
(5) the power to correct, add to, or delete
assessments from its assessment rolls; provided, however, that any
additional or increased assessment may occur only following notice
and hearing as required in Subchapter F, Chapter 375, Local
Government Code; and
(6) the power to impose a limited sales and use tax and
apply the proceeds from the tax to provide improvements and
services for a project or activity the district may acquire,
construct, improve, or provide under this Act.
SECTION 12. EMINENT DOMAIN. The district may not exercise
the power of eminent domain.
SECTION 13. RELATION TO OTHER LAW. If any provision of
general law, including a law referenced in this Act, is in conflict
with or is inconsistent with this Act, this Act prevails. Any law
referenced in this Act that is not in conflict or inconsistent with
this Act is adopted and incorporated by reference.
SECTION 14. REQUIREMENTS FOR FINANCING SERVICES AND
IMPROVEMENTS. The district may not finance services and
improvement projects using special assessments unless a written
petition requesting those improvements or services 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 subject to the assessment in the district as
determined by the most recent certified county tax appraisal roll;
or
(2) at least 50 persons who own real property that is
subject to the assessment in the district, if there are more than 50
persons who own real property subject to the assessment in the
district as determined by the most recent certified county tax
appraisal roll.
SECTION 15. NONPROFIT CORPORATION. (a) The board by
resolution may authorize 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 Act.
(b) The board shall appoint the board of directors of a
nonprofit corporation created under this section. The board of
directors of the nonprofit corporation shall serve in the same
manner as, for the same term as, and on the same conditions as the
board of directors of a local government corporation created under
Chapter 431, Transportation Code.
(c) A nonprofit corporation created under this section has
the powers of and is considered for purposes of this Act to be a
local government corporation created under Chapter 431,
Transportation Code.
(d) A nonprofit corporation created under this section may
implement any project and provide any services authorized by this
Act.
SECTION 16. DISBURSEMENTS OR TRANSFERS OF MONEY. The board
by resolution shall establish the number of directors' signatures
and the procedure required for a disbursement or transfer of the
district's money.
SECTION 17. SALES AND USE TAX; EXCISE TAX. (a) For
purposes of this section:
(1) "Taxable items" includes all items subject to any
sales and use tax that could be imposed by the county if the county
has imposed a sales and use tax.
(2) "Use" with respect to a taxable service, means the
derivation in the district of a direct or indirect benefit from the
service.
(b) The district may impose a sales and use tax for the
benefit of the district if authorized by a majority of the qualified
voters of the district voting at an election called for that
purpose.
(c) If the district adopts a sales and use tax:
(1) a tax is imposed on the receipts from the sale at
retail of taxable items in the district; and
(2) an excise tax is imposed on the use, storage, or
other consumption in the district of taxable items purchased or
rented from a retailer during the period that the tax is effective
in the district.
(d) The rate of the excise tax is the same as the rate of the
sales tax portion of the tax applied to the sales price of the
taxable items and is included in the sales tax.
SECTION 18. SALES AND USE TAX ELECTION PROCEDURES.
(a) The board by order may call an election to adopt, change the
rate of, or abolish a sales and use tax. The election may be held at
the same time and in conjunction with a confirmation or directors
election.
(b) The election must be held on the next uniform election
date that falls on or after the 45th day after the date the order
calling the election is adopted.
(c) Notice of the election shall be given and the election
shall be held and conducted in the manner prescribed for bond
elections under Subchapter D, Chapter 49, Water Code.
(d) In an election to adopt the tax, the ballot shall be
prepared to permit voting for or against the proposition: "The
adoption of a local sales and use tax in the Cy-Fair Community
Improvement District at the rate of (proposed tax rate)."
(e) In an election to change the rate of the tax, the ballot
shall be prepared to permit voting for or against the proposition:
"The (increase or decrease, as applicable) in the rate of the local
sales and use tax imposed in the Cy-Fair Community Improvement
District from (tax rate on election date) percent to (proposed tax
rate) percent."
(f) In an election to abolish the tax, the ballot shall be
prepared to permit voting for or against the proposition: "The
abolition of the local sales and use tax in the Cy-Fair Community
Improvement District."
SECTION 19. IMPOSITION, COMPUTATION, ADMINISTRATION, AND
GOVERNANCE OF SALES AND USE TAX. (a) Chapter 323, Tax Code, to the
extent not inconsistent with this Act, governs the imposition,
application, collection, and administration of a sales and use tax
under this Act, except that Sections 323.401-323.406 and 323.505,
Tax Code, do not apply. Subtitles A and B, Title 2, Tax Code, and
Chapter 151, Tax Code, govern the administration and enforcement of
the taxes under this Act.
(b) The provisions of Sections 323.101(d) and (e), Tax Code,
apply to a sales and use tax authorized by this Act.
(c) Chapter 323, Tax Code, does not apply to the use and
allocation of revenues under this Act.
(d) In applying Chapter 323, Tax Code, the district's name
shall be substituted for references in that chapter to "the county"
and the board is substituted for references in that chapter to
"commissioners court."
(e) The adoption of a tax rate or change in the tax rate
takes effect after the expiration of the first complete calendar
quarter occurring after the date on which the comptroller of public
accounts receives a notice of the results of the election.
(f) The district may impose the sales and use tax under this
Act in increments of one-eighth of one percent, with a minimum tax
of one-half percent and a maximum tax of one percent.
(g) The board by order may abolish the local sales and use
tax without an election.
SECTION 20. USE OF SALES AND USE TAX. Revenue from a sales
and use tax imposed under this Act may be used only for the purposes
for which the district was created.
SECTION 21. SUBMISSION OF ANNEXATION INFORMATION. Not
later than the 10th day after the date on which the district annexes
or excludes territory, the board shall send to the comptroller of
public accounts a certified copy of any resolution, order, or
ordinance relating to the annexation or exclusion.
SECTION 22. BONDS. (a) The district may issue bonds or
other obligations secured by or payable in whole or in part from ad
valorem taxes, assessments, impact fees, sales and use taxes,
revenues, grants, or other money of the district, or any
combination of those sources of money, to pay for any authorized
purpose of the district.
(b) 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.
(c) Except as provided by Subsection (d) of this section,
the district must obtain the approval of the applicable
municipality prior to the issuance of bonds for an improvement
within the applicable municipality's extraterritorial
jurisdiction.
(d) If the district obtains the applicable municipality's
approval of a capital improvements budget, the district may finance
the capital improvements and issue bonds specified in the budget
without further municipal approval.
SECTION 23. ASSESSMENTS. (a) The board may impose and
collect an assessment for any purpose authorized by this Act.
(b) Assessments, reassessments, or assessments resulting
from an addition to or correction of the assessment roll by the
district, penalties and interest on an assessment or reassessment,
expenses of collection, and reasonable attorney's fees incurred by
the district:
(1) are a first and prior lien against the property
assessed;
(2) are superior to any other lien or claim other than
a lien or claim for county, school district, or municipal ad valorem
taxes; and
(3) are the personal liability of and charge against
the owners of the property even if the owners are not named in the
assessment proceedings.
(c) The lien is effective from the date of the resolution of
the board imposing the assessment until the date the assessment is
paid. The board may enforce the lien in the same manner, including
penalties and interest, that the board may enforce an ad valorem tax
lien against real property.
SECTION 24. PROPERTY EXEMPTED FROM TAX, FEE, OR ASSESSMENT.
(a) The district may not impose a tax, impact fee, or assessment on
a residential property, multi-unit residential property, or
condominium.
(b) The district may not impose an impact fee or assessment
on the property, equipment, or facilities of a public utility as
defined by Section 11.004, Utilities Code.
SECTION 25. ELECTIONS. (a) In addition to the elections
the district must hold under Subchapter L, Chapter 375, Local
Government Code, the district shall 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.
(b) The board may submit multiple purposes in a single
proposition at an election.
SECTION 26. MAINTENANCE TAX. (a) If authorized at an
election held in accordance with Section 25 of this Act, the
district may impose and collect an annual ad valorem tax on taxable
property in the district for the maintenance and operation of the
district, for the construction and acquisition of improvements, or
for the provision of services.
(b) The board shall determine the tax rate.
SECTION 27. ANNEXATION OF CERTAIN TERRITORY BY GOVERNING
BODY OF MUNICIPALITY. (a) The governing body of a municipality
that annexes for any purpose all or part of the territory of the
district may adopt an ordinance excluding that territory from the
district.
(b) On adoption of an ordinance under Subsection (a) of this
section, the district shall continue to levy and collect taxes and
assessments each year on the excluded territory at the same rate or
amount levied on territory in the district to meet its debt service
obligations with respect to the excluded territory's pro rata share
of the indebtedness of the district at the time the territory was
excluded. The taxes and assessments collected under this
subsection shall be applied exclusively to the payment of the
excluded territory's pro rata share of the indebtedness; provided,
however, that the district's sales taxes shall no longer be levied
within the excluded territory if the municipality undertakes in
writing to remit to the district monthly the excluded territory's
pro rata share of the indebtedness of the district to which sales
taxes of the district are pledged at the time the territory was
excluded, so long as such payment is timely made.
SECTION 28. LAW ENFORCEMENT. To protect the public
interest, the district may contract with the municipality or the
county for the provision of law enforcement services in the
district for a fee.
SECTION 29. CONTRACTS. (a) The municipality, the county,
or another political subdivision of the state, without further
authorization, may contract with the district to implement a
project of the district or assist the district in providing the
services authorized under this Act. A contract under this
subsection may:
(1) be for a period on which the parties agree;
(2) include terms on which the parties agree;
(3) be payable from taxes or any other sources of
revenue that may be available for that purpose; or
(4) provide that taxes or other revenue collected at a
district project or from a person using or purchasing a commodity or
service at a district project may be paid or rebated to the district
under the terms of the contract.
(b) The district may enter into a contract, lease, or other
agreement with or make or accept grants and loans to or from:
(1) the United States;
(2) the state or a state agency;
(3) a county, a municipality, or another political
subdivision of the state;
(4) a public or private corporation, including a
nonprofit corporation created by the board under this Act; or
(5) any other person.
SECTION 30. GENERAL AUTHORITY. The district may perform
all acts necessary for the full exercise of the powers vested in the
district on terms and for the period the board determines
advisable.
SECTION 31. INITIAL DIRECTORS. (a) The initial board
consists of the following persons:
Pos. No. Name of Director
1 Mike Bubela
2 Lynda F. Burke
3 Jimmy Martin
4 Alan Quintaro
5 Terry E. Payne
6 Rick Berry
7 Fred F. Caldwell
8 Carl Linseisen
9 Wayne C. Meyer
10 Gail Schubot
11 Diane K. Troyer
(b) Of the initial directors, the terms of directors
appointed for positions 1 through 5 expire on May 1, 2005, and the
terms of directors appointed for positions 6 through 11 expire on
May 1, 2007.
(c) This section expires May 2, 2007.
SECTION 32. The legislature finds that:
(1) proper and legal notice of the intention to
introduce this Act, setting forth the general substance of this
Act, has been published as provided by law, and the notice and a
copy of this Act have been furnished to all persons, agencies,
officials, or entities to which they are required to be furnished by
the constitution and laws of this state, including the governor,
who has submitted the notice and Act to the Texas Commission on
Environmental Quality;
(2) the Texas Commission on Environmental Quality has
filed its recommendations relating to this Act with the governor,
lieutenant governor, and speaker of the house of representatives
within the required time;
(3) the general law relating to consent by political
subdivisions to the creation of districts with conservation,
reclamation, and road powers and the inclusion of land in those
districts has been complied with; and
(4) all requirements of the constitution and laws of
this state and the rules and procedures of the legislature with
respect to the notice, introduction, and passage of this Act have
been fulfilled and accomplished.
SECTION 33. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2003.
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