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.