HBA-NLM H.B. 2894 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2894
By: Coleman
County Affairs
4/3/1999
Introduced



BACKGROUND AND PURPOSE 

Midtown Houston is currently being revitalized by the Midtown Redevelopment
Authority, in conjunction with a tax increment reinvestment zone
established by the city.  The purpose of this bill is to create a public
improvement district to expand revitalization efforts in the area. H.B.
2894 creates the Midtown Municipal Management District to assess the needs
of commercial property owners in the area to finance improvements and
services, in accordance with Chapter 375 (Municipal Management Districts in
General), Local Government Code. In addition, this bill sets forth the
intent and findings of the legislature relating to the public benefit and
purpose of the creation of the district. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  CREATION OF DISTRICT.  Establishes a special district to be
known as the "Midtown Municipal Management District."  Authorizes the name
of the district to be changed by resolution of the board of directors of
the district (board).  Specifies that the creation of the district is
essential to accomplish the purposes of Section 52 (Counties, Cities or
Other Political Corporations or Subdivisions; Lending Credit; Grants;
Bonds) and 52-a (Loan or Grant of Public Money for Economical Development),
Article III,  and Section 59 (Conservation and Development of Natural
Resources; Conservation and Reclamation Districts), Article XVI, Texas
Constitution. 


SECTION 2.  LEGISLATIVE DECLARATION.  Set forth the declaration of the
legislature relating to the creation of the district. 

SECTION 3.  DEFINITIONS.  Defines "board," "district," "city," and
"county," for the purposes of this Act.  
  
SECTION 4.  BOUNDARIES.  Specifies the territory contained in the district. 
 . 
SECTION 5.  FINDINGS RELATING TO BOUNDARIES.  Sets forth the findings of
the legislature relating to the boundaries. 
  
SECTION 6.  FINDING OF BENEFIT AND PUBLIC PURPOSE.  Sets forth the findings
of the legislature relating to public benefit and purpose.  Provides that
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.  Applies Chapter 375 (Municipal
Management Districts in General), Local Government Code, to the district
and its governing body and employees, except as otherwise provided by this
Act, .  

SECTION 8.  CONSTRUCTION OF ACT.  Requires this Act to be liberally
construed in conformity with the legislative findings and purposes stated
in this Act.  
 
SECTION 9.  BOARD OF DIRECTORS IN GENERAL.  (a) Provides that the district
is governed by a board of 11 directors who shall serve staggered four-year
terms.  

(b) Applies  Subchapter D (Administrative Provisions; Board of Directors),
Chapter 375, Local Government Code, to the board to the extent that
subchapter does not conflict with this Act.  

(c)  Requires the directors to be entitled to receive compensation in
accordance with Section 49.060 (Fees of Office; Reimbursement), Water Code.

(d)  Provides that a person who qualifies to serve on the board is
qualified to serve as a director and participate in all votes and decisions
pertaining to the business of the district regardless of any other
statutory provision to the contrary.  Requires a director who has a
beneficial interest in a business entity that will receive a pecuniary
benefit from or has a substantial interest in an action of the board  to
file a one-time affidavit to that effect, and additional affidavits
regarding such beneficial interest shall not be required.  Authorizes the
director to participate in discussion and vote on that action if a majority
of the board has a similar interest in the same action or if all other
similar business entities in the district will receive a similar pecuniary
benefit, after such affidavit is filed. Authorizes an employee of a public
entity to serve on the board of directors of the district, but prohibits
the public employee from participating in the discussion of or voting on
any matter regarding contracts with the public entity of which the director
is an employee.  

(e)  Requires the directors of the district to be public officials and to
be entitled to governmental immunity for their actions in their capacity as
directors and officers of the district.  

SECTION 10.  INITIAL DIRECTORS.  Provides that the initial board consists
of certain persons to be named in this subsection.  Provides that of the
initial directors, the directors appointed for positions 1 through 6 serve
until June 1, 2003, and the directors appointed for positions 7 through 11
serve until June 1, 2001.  

SECTION 11.    SUBSEQUENT DIRECTORS. Requires the mayor and city council of
the city to appoint subsequent directors from persons recommended by the
board. Prohibits a  person from being appointed to the board if the
appointment of that person would result in less than two-thirds of the
board members being residents of the city.  

SECTION 12.  EX OFFICIO MEMBERS OF BOARD OF DIRECTORS.  Requires the
directors of certain entities described by this section to serve as
non-voting ex officio members of the board.  
Authorizes the board to appoint the directors of the consolidated, renamed
or changed departments as non-voting ex officio members of the board or the
board may appoint a representative of another department of the city that
performs duties comparable to those performed by the abolished department,
if any of the entities described by this section  are consolidated,
renamed, changed, or abolished.  Authorizes the board to appoint the
chairpersons of other non-profit corporations actively involved in Midtown
activities in the city to serve as non-voting ex officio members of the
board.  

SECTION 13.  POWERS OF DISTRICT.  Establishes that the district has all
powers necessary or required to accomplish the purposes for which the
district was created. Specifies that the district has the rights, powers,
privileges, authorities, and functions of a district created under Chapter
375, Local Government Code. Specifies that the district has the powers
conferred on a corporation under Section 4B, Article 5190.6, V.T.C.S.
(Development Corporation Act of 1979).  Authorizes the district to own,
operate, acquire, construct, lease, improve, and maintain projects
described by that section. Authorizes the district to exercise the power of
a housing finance corporation created under Chapter 394 (Housing Financing
Corporations in Municipalities and Counties), Local Government Code, to
provide housing or residential development projects within the district.
Authorizes the district to levy certain taxes and  correct, add to, or
delete assessments from its assessment rolls after notice and hearing as
provided by Subchapter F (Assessments), Chapter 375, Local Government Code.
Authorizes the district to acquire property through eminent domain.
Requires the district to bear damages that are suffered by owners of
property or facilities if the district, in exercising a power  conferred by
this Act, requires a relocation, adjustment, raising, lowering, rerouting,
or changing the grade of or altering the construction of certain roadways
or utility structures. 

SECTION 14.  CONFLICTS WITH OTHER LAW.  Provides that this Act prevails if
any provision of a law referenced in Section 13 of this Act is in conflict
with or is inconsistent with this Act. Specifies that any law referenced in
this Act that is not in conflict or inconsistent with this Act is adopted
and incorporated by reference.  

SECTION 15.  REQUIREMENTS FOR FINANCING SERVICES AND IMPROVEMENTS.
Prohibits the board from financing services and improvement projects under
this Act unless a written petition requesting those improvements or
services has been filed with the board.  Provides that the petition must be
signed by certain persons described by this section. 

SECTION 16.  EXEMPTIONS.  Prohibits certain properties described by the
section from being exempt from the imposition of a tax, an impact fee, or
an assessment if the tax, impact fee, or assessment is imposed in
accordance with this Act.  

SECTION 17.  NONPROFIT CORPORATION.  (a)  Authorizes the board by
resolution to authorize the creation of a nonprofit corporation to aid,
assist, and act on behalf of the district in implementing a project or
providing a service authorized by this Act.  

(b)  Requires the board to appoint the board of directors of a nonprofit
corporation created under this section.  Requires the board of directors of
the nonprofit corporation to serve in the same manner as, for the same term
as, and on the conditions of the board of directors of a local government
corporation created under Subchapter D (Local Government Corporations),
Chapter 431, Transportation Code.  

(c)  Provides that 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 Subchapter D, Chapter 431,
Transportation Code.  

(d)  Authorizes a nonprofit corporation created under this section to
implement any project and provide any services authorized by this Act.  

SECTION 18.  DISBURSEMENTS OR TRANSFERS OF FUNDS.  Requires the board by
resolution to establish the number of directors' signatures and the
procedure required for a disbursement or transfer of the district's money.  

SECTION 19.  BONDS.  (a) Authorizes the district to issue bonds or other
obligations payable in whole or in part from ad valorem taxes, assessments,
impact fees, revenues, grants, or other funds of the district, or any
combination of those funds, to pay for any authorized purpose of the
district.  

(b)  Authorizes bonds or other obligations of the district to be issued in
the form of bonds, notes, certificates of participation, including other
instruments evidencing a proportionate interest in payments to be made by
the district, or other obligations that are issued in the exercise of the
district's borrowing power and to be issued in bearer or registered form or
not represented by an instrument but the transfer of which is registered on
books maintained by or on behalf of the district.  

(c) Provides that the district must obtain the city's approval of the
issuance of bonds for an improvement project, and the plans and
specifications of the improvement project to be financed by the bonds,
except as provided by Subsection (d) of this section.  

(d)   Authorizes the district to finance the capital improvements and issue
bonds specified in the budget without further city approval, if the
district obtains the city's approval of a capital improvements budget for a
specified period not to exceed five years.  

(e)  Requires the district to submit the bonds and the record of
proceedings of the district relating to authorization of the bonds to the
attorney general before the district issues bonds  for approval. 

SECTION 20.  ASSESSMENTS.  (a)  Authorizes the board to levy and collect an
assessment for any purpose authorized by this Act.  

(b)  Provides that 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)  Establishes that the lien is effective from the date of the resolution
of the board levying the assessment until the assessment is paid.
Authorizes the board to enforce the lien in the same manner that the board
may enforce an ad valorem tax lien against real property.  

(d)  Prohibits the district from imposing an assessment on the property,
equipment, or facilities of a public utility, as defined by the Public
Utility Regulatory Act of 1995.  

SECTION 21.  APPROVAL OF CERTAIN IMPROVEMENT PROJECTS. Provides that the
district must obtain the city's approval of the plans and specifications of
any district 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.  

SECTION 22.  ELECTIONS.   Requires the district to hold an election in the
manner provided by Subchapter L (Elections), Chapter 375, Government Code,
to obtain voter approval before the district imposes a maintenance tax or
issues bonds payable from ad valorem taxes or assessments in addition to
other necessary elections.  Authorizes the board to submit multiple
purposes in a single proposition at an election 

SECTION 23.  IMPACT FEES.  (a) Authorizes the district to impose an impact
fee for an authorized purpose as provided by Subchapter G (Impact Fees),
Chapter 375, Local Government Code. Prohibits the district from imposing an
impact fee on the property, equipment, or facilities of a public utility. 

SECTION 24.  MAINTENANCE TAX.   Authorizes the district, to levy and
collect an annual ad valorem tax on taxable property in the district for
the maintenance and operation of the district and the improvements
constructed or acquired by the district or for the provision of services to
industrial and commercial businesses, residents, or property owners, if
authorized at an election held in accordance with Section 22 of this Act.
Requires the board to determine the tax rate.   

SECTION 25.  DISSOLUTION OF DISTRICT.   Authorizes the district to be
dissolved as provided in Subchapter M (Dissolution), Chapter 375, Local
Government Code.  Authorizes a district that has debt to be dissolved as
provided by Subchapter M, Chapter 375, Local Government Code,
notwithstanding other provisions of that code.  Requires the district to
remain in existence solely for the limited purpose of discharging its bonds
or other obligations according to their terms,  if the district has debt
and is dissolved.  

SECTION 26.  CONTRACTS.    Authorizes the district to contract with the
city or county for the provision of law enforcement services by the county
or city in the district on a fee basis to protect the public interest.
Authorizes the city, county, or any other political subdivision of the
state, without further authorization, to contract with the district to
implement a project of the district or aid and assist the district in
providing the services authorized under this Act.  Authorizes a contract
under this subsection to: 

 _be for a period on which the parties agree;
_include terms on which the parties agree;
_be payable from taxes or any other sources of revenue that may be
available for such purpose; or 
_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.  

Authorizes the district to enter into a contract, lease, or agreement with
or make or accept grants and loans to or from certain entities and persons.
Authorizes the district to perform all acts necessary for the full exercise
of the powers vested in the district on terms and conditions and for the
term the board may determine to be advisable.  

SECTION 27.  COMPETITIVE BIDDING.  Authorizes the district to enter a
contract for more than $25,000 for  certain services, improvements, or
purchases. 

SECTION 28.  ANNEXATION.  Authorizes the district, without further
authorization, to annex land located within the boundaries of a
reinvestment zone created by the city under Chapter 311 (Tax Increment
Financing Act), Tax Code, with the consent of the city council of the city,
in addition to annexing land in accordance with Subchapter C (Boundaries),
Chapter 375, Local Government Code.  

SECTION 29.  NOTICE AND CONSENT.  Sets forth the findings of the
legislature relating to the proper and legal notice of the intention to
introduce this Act, recommendations filed by the Texas Natural Resource
Conservation Commission, and compliance with the constitution and other
state laws. 
 
SECTION 30.  Effective date: September 1, 1999.

SECTION 31.  Emergency clause.