BILL ANALYSIS

H.B. 3819

By: Crownover

Urban Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

H.B. 3819 creates the Valencia Municipal Management District No. 1 that includes approximately 448 acres within the Town of Little Elm, Denton County, Texas. The governing body of the town supports the creation of the district. The purpose of the district is to provide improvement projects and services that confer a special benefit on property in the district and to pay for such projects and services by levying special assessments on the benefited property.

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.

ANALYSIS

H.B. 3819 amends the Special District Local Laws Code to create the Valencia Municipal Management District No. 1, establish the nature and purpose of the district, make findings of benefit and public purpose, and provide for the description of the territory and for certain mistakes in the description. The bill makes all or part of the district eligible for inclusion in a tax increment reinvestment zone, a tax abatement reinvestment zone, an enterprise zone, or an industrial district. The bill provides for the liberal construction of the bill.  The bill makes provisions for the event that a town creates a tax increment reinvestment zone.

H.B. 3819 provides for the district's governance by a board of three directors composed of one appointed director, the town manager, and the finance director of the town.  The bill sets out the manner of appointment, length of terms, and qualifications for an appointed director. The bill includes provisions relating to vacancies, a director's oath or affirmation, officers, compensation of directors, reimbursement of expenses, and liability insurance coverage. The bill adds a temporary provision, set to expire September 1, 2014, to set forth the initial directors and to provide for their terms.

H.B. 3819 grants the district the powers and duties of a conservation and reclamation district,  road district, road utility district, public improvement district, municipal management district, and Type B development corporation. The bill authorizes the district to contract with a governmental or private entity, on terms determined by the board, to carry out an authorized power or duty or to accomplish a purpose for which the district is created.    The bill authorizes the board by resolution to authorize the creation of a nonprofit corporation to assist and act for the district in implementing a project or providing a service.   The bill authorizes the district to make an agreement with or accept a gift, grant, or loan from any person.  The bill authorizes the district to join and pay dues to a charitable or nonprofit organization to further a district purpose.  The bill authorizes the district to engage in activities that accomplish the economic development purposes of the district, create economic development programs, provide economic development grants, and exercise the economic development powers that state law governing obligations for other municipal purposes grants to municipalities.

H.B. 3819 authorizes the district's board of directors to add or remove territory in the district if the action is approved by the governing body of the Town of Little Elm and by the owners of the property being added or removed.  The bill prohibits territory from being removed from the district if bonds or other obligations of the district payable wholly or partly from assessments levied or assessed on the territory are outstanding.  The bill prohibits the district from exercising the power of eminent domain, imposing a property tax, or constructing, acquiring, maintaining, or operating a toll road.  The bill authorizes the district to provide, or enter into a contract with a governmental or private entity to provide, certain types of improvement projects and related activities and establishes conditions and restrictions on such district undertakings.

H.B. 3819 authorizes the district to borrow money for a district purpose by issuing bonds, notes, time warrants, or other obligations, or by entering into a contract payable wholly or partly from an assessment, contract payment, grant, revenue from a zone created under the Tax Increment Financing Act or Property Redevelopment and Tax Abatement Act, other district revenue, or a combination of these sources.  The bill requires the Town of Little Elm, before the district borrows money or issues bonds, to provide written notice to the district that no party to the development agreement, as defined in the bill's provisions, is in default as of the date the district is authorized to borrow the money or issue the bonds.  The bill authorizes the district to impose an assessment on property in the district to pay for an obligation and provides that a district obligation is not subject to the jurisdiction or supervision of the Texas Commission on Environmental Quality.  The bill sets forth provisions relating to disbursements and transfers of the district's money.  The bill makes the exemption from an impact fee, tax, or assessment for certain residential property under the municipal management district law inapplicable to the district.

H.B. 3819 provides for the dissolution of the district and the disposition of the district's assets and liabilities on dissolution.  The bill describes the territory that composes the district and defines "board," "county," "development agreement," "director," "district," and "town."

EFFECTIVE DATE

September 1, 2011.