84R18796 JXC-F
	By: Kolkhorst	S.B. No. 2035

	A BILL TO BE ENTITLED
	AN ACT
	relating to the conversion of the Harris-Fort Bend Counties
	Municipal Utility District No. 4 to the Katy Management District
	No. 1; providing authority to issue bonds; providing authority to
	impose assessments, fees, or taxes.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  The Harris-Fort Bend Counties Municipal Utility
	District No. 4 is converted to the Katy Management District No. 1
	and is governed by Chapter 3935, Special District Local Laws Code,
	as added by this Act.
	SECTION 2.  Subtitle C, Title 4, Special District Local Laws
	Code, is amended by adding Chapter 3935 to read as follows:
	CHAPTER 3935.  KATY MANAGEMENT DISTRICT NO. 1
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 3935.001.  DEFINITIONS. In this chapter:
	(1)  "Board" means the district's board of directors.
	(2)  "City" means the City of Katy.
	(3)  "County" means Harris County or Fort Bend County.
	(4)  "Director" means a board member.
	(5)  "District" means the Katy Management District No.
	1.
	Sec. 3935.002.  NATURE OF DISTRICT; CONVERSION. The Katy
	Management District No. 1 is a special district created under
	Section 59, Article XVI, Texas Constitution, as the Harris-Fort
	Bend Counties Municipal Utility District No. 4.  The district is
	converted to a municipal management district known as the Katy
	Management District No. 1 under the same constitutional authority.
	Sec. 3935.003.  PURPOSE; DECLARATION OF INTENT. (a) The
	conversion and operation of the district are 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 chapter. By converting the district to a
	municipal management district and in authorizing the city, the
	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.
	(b)  The conversion and operation of the district are
	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 district.
	(c)  This chapter and the conversion or operation of the
	district may not be interpreted to relieve the city or the county
	from providing the level of services provided as of the effective
	date of the Act enacting this chapter to the area in the district.
	The district is created to supplement and not to supplant city or
	county services provided in the district.
	Sec. 3935.004.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a)
	The district is converted to a municipal management district to
	serve a public use and benefit.
	(b)  All land and other property included in the district
	will benefit from the improvements and services to be provided by
	the district under powers conferred by Sections 52 and 52-a,
	Article III, and Section 59, Article XVI, Texas Constitution, and
	other powers granted under this chapter.
	(c)  The operation of the district is in the public interest
	and is essential to further the public purposes of:
	(1)  developing and diversifying the economy of the
	state;
	(2)  eliminating unemployment and underemployment; and
	(3)  developing or expanding transportation and
	commerce.
	(d)  The district will:
	(1)  promote the health, safety, and general welfare of
	residents, employers, potential employees, employees, visitors,
	and consumers in the district, and of the public;
	(2)  provide needed funding for the district to
	preserve, maintain, and enhance the economic health and vitality of
	the district territory as a community and business center;
	(3)  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 beauty;
	and
	(4)  provide for water, wastewater, drainage, road, and
	recreational facilities for the district.
	(e)  Pedestrian ways along or across a street, whether at
	grade or above or below the surface, and street lighting, street
	landscaping, parking, and street art objects are parts of and
	necessary components of a street and are considered to be a street
	or road improvement.
	(f)  The district will not act as the agent or
	instrumentality of any private interest even though the district
	will benefit many private interests as well as the public.
	Sec. 3935.005.  INITIAL DISTRICT TERRITORY. The district is
	initially composed of the territory of the former Harris-Fort Bend
	Counties Municipal Utility District No. 4 as that territory existed
	on March 1, 2015.
	Sec. 3935.006.  APPLICABILITY OF MUNICIPAL MANAGEMENT
	DISTRICTS LAW. Except as otherwise provided by this chapter,
	Chapter 375, Local Government Code, applies to the district.
	Sec. 3935.007.  CONSTRUCTION OF CHAPTER. This chapter shall
	be liberally construed in conformity with the findings and purposes
	stated in this chapter.
	SUBCHAPTER B. BOARD OF DIRECTORS
	Sec. 3935.051.  GOVERNING BODY; TERMS. (a) The district is
	governed by a board of five voting directors who serve staggered
	terms of four years, with two or three directors' terms expiring May
	1 of each even-numbered year.
	(b)  The board by resolution may change the number of voting
	directors on the board if the board determines that the change is in
	the best interest of the district. The board may not consist of
	fewer than 5 or more than 11 voting directors.
	Sec. 3935.052.  APPOINTMENT OF VOTING DIRECTORS. (a)  The
	mayor and members of the governing body of the city shall appoint
	voting directors from persons recommended by the board.  A person is
	appointed if a majority of the members of the governing body,
	including the mayor, vote to appoint that person.
	(b)  Section 375.063, Local Government Code, does not apply
	to the district.
	Sec. 3935.053.  NONVOTING DIRECTORS. The board may appoint
	nonvoting directors to serve at the pleasure of the voting
	directors.
	Sec. 3935.054.  QUORUM. For purposes of determining the
	requirements for a quorum of the board, the following are not
	counted:
	(1)  a board position vacant for any reason, including
	death, resignation, or disqualification;
	(2)  a director who is abstaining from participation in
	a vote because of a conflict of interest; or
	(3)  a nonvoting director.
	Sec. 3935.055.  COMPENSATION. A director is entitled to
	receive fees of office and reimbursement for actual expenses as
	provided by Section 49.060, Water Code. Sections 375.069 and
	375.070, Local Government Code, do not apply to the board.
	Sec. 3935.056.  INITIAL VOTING DIRECTORS ON CONVERSION TO
	MANAGEMENT DISTRICT.  (a)  On the conversion of the district to a
	management district, the initial board consists of the following
	directors:
	Pos. No. Name of Director
	1. Kenneth Berger
	2. Orville Wient
	3. Robert C. Hargarther
	4. Donald P. Cox
	5. Nick Alexander Jr.
	(b)  Of the initial directors, the terms of directors
	appointed for positions one through three expire May 14, 2016, and
	the terms of directors appointed for positions four and five expire
	May 12, 2018.
	(c)  Sections 3935.051 and 3935.052 do not apply to the
	appointment or terms of directors appointed under Subsection (a).
	A director appointed to succeed a director appointed under
	Subsection (a) serves until May 1 of the appropriate year.
	SUBCHAPTER C. POWERS AND DUTIES
	Sec. 3935.101.  GENERAL POWERS AND DUTIES. The district has
	the powers and duties necessary to accomplish the purposes
	described by this chapter.
	Sec. 3935.102.  IMPROVEMENT PROJECTS AND SERVICES. The
	district may provide, design, construct, acquire, improve,
	relocate, operate, maintain, or finance an improvement project or
	service using any money available to the district, or contract with
	a governmental or private entity to provide, design, construct,
	acquire, improve, relocate, operate, maintain, or finance an
	improvement project or service authorized under this chapter or
	Chapter 375, Local Government Code.
	Sec. 3935.103.  MUNICIPAL UTILITY DISTRICT POWERS AND
	DUTIES.  The district has the powers and duties provided by the
	general law of this state, including Chapters 49 and 54, Water Code,
	applicable to municipal utility districts created under Section 59,
	Article XVI, Texas Constitution.
	Sec. 3935.104.  DEVELOPMENT CORPORATION POWERS. The
	district, using money available to the district, may exercise the
	powers given to a development corporation under Chapter 505, Local
	Government Code, including the power to own, operate, acquire,
	construct, lease, improve, or maintain a project under that
	chapter.
	Sec. 3935.105.  NONPROFIT CORPORATION. (a) The board by
	resolution may authorize the creation of a nonprofit corporation to
	assist and act for the district in implementing a project or
	providing a service authorized by this chapter.
	(b)  The nonprofit corporation:
	(1)  has each power of and is considered to be a local
	government corporation created under Subchapter D, Chapter 431,
	Transportation Code; and
	(2)  may implement any project and provide any service
	authorized by this chapter.
	(c)  The board shall appoint the board of directors of the
	nonprofit corporation. The board of directors of the nonprofit
	corporation shall serve in the same manner as the board of directors
	of a local government corporation created under Subchapter D,
	Chapter 431, Transportation Code, except that a board member is not
	required to reside in the district.
	Sec. 3935.106.  AGREEMENTS; GRANTS. (a) As provided by
	Chapter 375, Local Government Code, the district may make an
	agreement with or accept a gift, grant, or loan from any person.
	(b)  The implementation of a project is a governmental
	function or service for the purposes of Chapter 791, Government
	Code.
	Sec. 3935.107.  LAW ENFORCEMENT SERVICES. To protect the
	public interest, the district may contract with a qualified party,
	including the county or the city, to provide law enforcement
	services in the district for a fee.
	Sec. 3935.108.  MEMBERSHIP IN CHARITABLE ORGANIZATIONS. The
	district may join and pay dues to a charitable or nonprofit
	organization that performs a service or provides an activity
	consistent with the furtherance of a district purpose.
	Sec. 3935.109.  ECONOMIC DEVELOPMENT. (a) The district may
	engage in activities that accomplish the economic development
	purposes of the district.
	(b)  The district may establish and provide for the
	administration of one or more programs to promote state or local
	economic development and to stimulate business and commercial
	activity in the district, including programs to:
	(1)  make loans and grants of public money; and
	(2)  provide district personnel and services.
	(c)  The district may create economic development programs
	and exercise the economic development powers provided to
	municipalities by:
	(1)  Chapter 380, Local Government Code; and
	(2)  Subchapter A, Chapter 1509, Government Code.
	Sec. 3935.110.  PARKING FACILITIES. (a) The district may
	acquire, lease as lessor or lessee, construct, develop, own,
	operate, and maintain parking facilities or a system of parking
	facilities, including lots, garages, parking terminals, or other
	structures or accommodations for parking motor vehicles off the
	streets and related appurtenances.
	(b)  The district's parking facilities serve the public
	purposes of the district and are owned, used, and held for a public
	purpose even if leased or operated by a private entity for a term of
	years.
	(c)  The district's parking facilities are parts of and
	necessary components of a street and are considered to be a street
	or road improvement.
	(d)  The development and operation of the district's parking
	facilities may be considered an economic development program.
	Sec. 3935.111.  ANNEXATION OF LAND. The district may annex
	land as provided by Subchapter J, Chapter 49, Water Code.
	Sec. 3935.112.  APPROVAL BY CITY.  (a)  Except as provided by
	Subsection (c), the district must obtain the approval of the city
	for:
	(1)  the issuance of bonds;
	(2)  the plans and specifications of an improvement
	project financed by bonds; and
	(3)  the plans and specifications of an improvement
	project related to the use of land owned by the city, an easement
	granted by the city, or a right-of-way of a street, road, or
	highway.
	(b)  The district may not issue bonds until the governing
	body of the city adopts a resolution or ordinance authorizing the
	issuance of the bonds.
	(c)  If the district obtains the approval of the city's
	governing body of a capital improvements budget for a period not to
	exceed 10 years, the district may finance the capital improvements
	and issue bonds specified in the budget without further approval
	from the city.
	(d)  The governing body of the city:
	(1)  is not required to adopt a resolution or ordinance
	to approve plans and specifications described by Subsection (a);
	and
	(2)  may establish an administrative process to approve
	plans and specifications described by Subsection (a) without the
	involvement of the governing body.
	SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS; ASSESSMENTS
	Sec. 3935.151.  DISBURSEMENTS AND TRANSFERS OF MONEY. The
	board by resolution shall establish the number of directors'
	signatures and the procedure required for a disbursement or
	transfer of district money.
	Sec. 3935.152.  MONEY USED FOR IMPROVEMENTS OR SERVICES.
	The district may acquire, construct, finance, operate, or maintain
	any improvement or service authorized under this chapter or Chapter
	375, Local Government Code, using any money available to the
	district.
	Sec. 3935.153.  PETITION REQUIRED FOR FINANCING SERVICES AND
	IMPROVEMENTS WITH ASSESSMENTS. (a) The board may not finance a
	service or improvement project with assessments under this chapter
	unless a written petition requesting that service or improvement
	has been filed with the board.
	(b)  A petition filed under Subsection (a) must be signed by
	the owners of a majority of the assessed value of real property in
	the district subject to assessment according to the most recent
	certified tax appraisal roll for the county.
	Sec. 3935.154.  ASSESSMENTS; LIENS FOR ASSESSMENTS. (a)
	The board by resolution may impose and collect an assessment for any
	purpose authorized by this chapter in all or any part of the
	district.
	(b)  An assessment, a reassessment, or an assessment
	resulting from an addition to or correction of the assessment roll
	by the district, penalties and interest on an assessment or
	reassessment, an expense 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 a 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 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.
	(d)  The board may make a correction to or deletion from the
	assessment roll that does not increase the amount of assessment of
	any parcel of land without providing notice and holding a hearing in
	the manner required for additional assessments.
	Sec. 3935.155.  TAX AND ASSESSMENT ABATEMENT.  The district
	may designate reinvestment zones and may grant abatements of
	district taxes or assessments on property in the zones.
	SUBCHAPTER E. TAXES AND BONDS
	Sec. 3935.201.  ELECTIONS REGARDING TAXES AND BONDS. (a)
	The district may issue, without an election, bonds, notes, and
	other obligations secured by:
	(1)  revenue other than ad valorem taxes; or
	(2)  contract payments described by Section 3935.203.
	(b)  The district must hold an election in the manner
	provided by Chapters 49 and 54, Water Code, to obtain voter approval
	before the district may impose an ad valorem tax or issue bonds
	payable from ad valorem taxes.
	(c)  All or any part of any facilities or improvements that
	may be acquired by a district by the issuance of its bonds may be
	submitted as a single proposition or as several propositions to be
	voted on at the election.
	Sec. 3935.202.  OPERATION AND MAINTENANCE TAX. (a) If
	authorized by a majority of the district voters voting at an
	election held in accordance with Section 49.107, Water Code, the
	district may impose an operation and maintenance tax on taxable
	property in the district in accordance with that section for any
	district purpose, including to:
	(1)  maintain and operate the district;
	(2)  construct or acquire improvements; or
	(3)  provide a service.
	(b)  The board shall determine the tax rate. The rate may not
	exceed the rate approved at the election.
	(c)  Section 49.107(h), Water Code, does not apply to the
	district.
	Sec. 3935.203.  CONTRACT TAXES. (a) In accordance with
	Section 49.108, Water Code, the district may impose a tax other than
	an operation and maintenance tax and use the revenue derived from
	the tax to make payments under a contract after the provisions of
	the contract have been approved by a majority of the district voters
	voting at an election held for that purpose.
	(b)  A contract approved by the district voters may contain a
	provision stating that the contract may be modified or amended by
	the board without further voter approval.
	Sec. 3935.204.  AUTHORITY TO BORROW MONEY AND TO ISSUE BONDS
	AND OTHER OBLIGATIONS. (a)  The district may borrow money on terms
	determined by the board. Section 375.205, Local Government Code,
	does not apply to a loan, line of credit, or other borrowing from a
	bank or financial institution secured by revenue other than ad
	valorem taxes.
	(b)  The district may issue bonds, notes, or other
	obligations payable wholly or partly from ad valorem taxes,
	assessments, impact fees, revenue, contract payments, grants, or
	other district money, or any combination of those sources of money,
	to pay for any authorized district purpose.
	(c)  The limitation on the outstanding principal amount of
	bonds, notes, and other obligations provided by Section 49.4645,
	Water Code, does not apply to the district.
	Sec. 3935.205.  TAXES FOR BONDS. At the time the district
	issues bonds payable wholly or partly from ad valorem taxes, the
	board shall provide for the annual imposition of a continuing
	direct annual ad valorem tax, without limit as to rate or amount,
	for each year that all or part of the bonds are outstanding as
	required and in the manner provided by Sections 54.601 and 54.602,
	Water Code.
	Sec. 3935.206.  CITY NOT REQUIRED TO PAY DISTRICT
	OBLIGATIONS. Except as provided by Section 375.263, Local
	Government Code, the city is not required to pay a bond, note, or
	other obligation of the district.
	SECTION 3.  The Katy Management District No. 1 retains all
	rights, powers, privileges, authority, duties, and functions that
	the Harris-Fort Bend Counties Municipal Utility District No. 4 had
	before the effective date of this Act, except as otherwise
	expressly provided by Chapter 3935, Special District Local Laws
	Code, as added by this Act.
	SECTION 4.  (a) The legislature validates and confirms all
	governmental acts and proceedings of the Harris-Fort Bend Counties
	Municipal Utility District No. 4 that were taken before the
	effective date of this Act.
	(b)  This section does not apply to any matter that on the
	effective date of this Act:
	(1)  is involved in litigation if the litigation
	ultimately results in the matter being held invalid by a final court
	judgment; or
	(2)  has been held invalid by a final court judgment.
	SECTION 5.  (a) The 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
	under Section 59, Article XVI, Texas Constitution, and Chapter 313,
	Government Code.
	(b)  The governor, one of the required recipients, has
	submitted the notice and Act to the Texas Commission on
	Environmental Quality.
	(c)  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.
	(d)  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.
	(e)  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 6.  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, 2015.