76(R) HB 2894 House committee report

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


Office of House Bill AnalysisC.S.H.B. 2894
By: Coleman
County Affairs
4/13/1999
Committee Report (Substituted)



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. C.S.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. Amends Chapter 376, Local Government Code, by adding Subchapter
H, as follows: 

SUBCHAPTER H.  MIDTOWN MANAGEMENT DISTRICT

Sec. 376.301. CREATION OF DISTRICT. Creates the Midtown Management District
(district) as a special district under Section 59, Article XVI, Texas
Constitution.  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. 

Sec. 376.302.  DECLARATION OF INTENT.  Sets forth the intent relating to
the creation of the district. 

Sec. 376.303.  DEFINITIONS.  Defines "board," "district," "municipality,"
"county," and "utility" for the purposes of this Act.  
  
Sec. 376.304.  BOUNDARIES.  Specifies the territory contained in the
district.  
 . 
Sec. 376.305.  FINDINGS RELATING TO BOUNDARIES.  Sets forth the findings
relating to the boundaries. 
  
Sec. 376.306.  FINDINGS OF BENEFIT AND PUBLIC PURPOSE.  Sets forth the
findings 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.  

Sec. 376.307.   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, .  

Sec. 376.308.  LIBERAL CONSTRUCTION OF SUBCHAPTER.  Requires this
subchapter to be liberally construed in conformity with the legislative
findings and purposes stated in this subchapter.  

Sec. 376.309.  BOARD OF DIRECTORS IN GENERAL.  (a) Provides that the
district is governed by a board of 17 directors who shall serve staggered
four-year terms, with eight directors' terms expiring June 1 of an
odd-numbered year and nine directors' terms expiring June 1 of the
following odd-numbered year. Requires a director to receive compensation in
accordance with Section 49.060 (Fees of Office; Reimbursement), Water Code.

Sec. 376.310.  APPOINTMENT OF DIRECTORS.  Requires the mayor and the
members of the governing body of the municipality to appoint directors from
persons recommended by the board.  Provides that a person is appointed if a
majority of the members and the mayor vote to appoint that person.
Prohibits a person from being appointed to the board if the appointment of
that person would result in less than two-thirds of the directors residing
in the municipality. 

Sec. 376.311.  EX OFFICIO BOARD MEMBERS.  Requires the director of certain
departments described in this section to serve as a nonvoting ex officio
director.  Authorizes the board to appoint a director of the consolidated,
renamed, or changed department, if a department described in this section
is consolidated, renamed, or changed, as a nonvoting ex officio board
member.  Authorizes the board to appoint a representative of another
department of the municipality that performs duties comparable to those
performed by the abolished department.  Authorizes the board to appoint the
presiding officer of a nonprofit corporation that is actively involved in
activities in the municipality's midtown area to serve as a nonvoting ex
officio director. 

Sec. 376.312.  CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT. (a) Authorizes a
director to participate in all board votes and decisions, and provides that
Chapter 171 governs conflict of interests for board members. 

(b)  Provides that Section 171.004 does not apply to the district.
Requires a director who has substantial interest in  a business or
charitable entity that will receive a pecuniary benefit from a board action
to file a one-time affidavit declaring the interest.  Authorizes the
director to participate in a discussion or vote on that action under
specified conditions.  

(c)  Prohibits a director who is also an officer or employee of a public
entity from participating in the discussion of or vote on a matter
regarding a contract with that same public entity. 

(d)  Provides that for the purposes of this section, a director has a
substantial interest in a charitable entity in the same manner that a
person would have a substantial interest in a business entity under Section
171.002. 

Sec. 376.313. ADDITIONAL POWERS OF DISTRICT.  Authorizes the district to
exercise the powers given to a corporation created 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 powers given to 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. 

Sec. 376.314. AGREEMENTS: GENERAL; DONANTIONS, INTERLOCAL AGREEMENTS, AND
LAW ENFORCEMENT SERVICES.  Authorizes the district to make an agreement
with or  accept a donation, grant, or loan from any person.  Provides that
the implementation of a project is a governmental function or service for
the purposes of Chapter 791, Government Code.  Authorizes the district to
contract with the municipality or  the county for the municipality or
county to provide law enforcement services in the district for a fee. 

Sec.376.315.  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.  

Sec. 376.316. 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.  

Sec. 376.317. PETITION REQUIRED 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. 

Sec. 376.318.  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. 

Sec. 376.319.  MAINTENANCE TAX.   Authorizes the district, if authorized at
an election held in accordance with Section 376.318, to impose 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. Requires the
board to determine the tax rate.   

Sec. 376.320.  CERTAIN RESIDENTIAL PROPERTY IS NOT EXEMPT.  Prohibits
certain properties described by the section from being  exempt from the
imposition of a tax, an impact fee, or an assessment under this subchapter. 

Sec. 376.321.  UTILITIES.  Prohibits the district from imposing an
assessment or impact fee on a utility's property.  

Sec. 376.322.  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.  

Sec. 376.323.  COMPETITIVE BIDDING.  Authorizes the district to enter a
contract for more than $25,000 for  certain services, improvements, or
purchases. 

Sec. 376.324. EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING
DEBTS.  Authorizes the board to vote to dissolve a district that has debt.
Requires the district to remain in existence solely for the limited purpose
of discharging its debts, if the vote is in favor of dissolution. 

SECTION 2. 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 3. Provides that, notwithstanding Section 376.310, Local Government
Code, as added by this Act, the initial board consists of certain persons
named section.  Provides that of the initial directors, the directors
appointed for positions 1 through 9 serve until June 1, 2003, and the
directors appointed for positions 10 through 17 serve until June 1, 2001. 

SECTION 4.  Emergency clause.
                       Effective date: upon passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE


The substitute modifies the original in the caption by deleting text
regarding the administration, powers, and duties of the Midtown Municipal
Management District. 

C.S.H.B. 2894 modifies the original by conforming to legislative council
format. 

C.S.H.B. 2894 modifies the original in SECTION 1 by amending Chapter 376,
Local Government Code, to include a new Subchapter H (Midtown Management
District), Chapter 376, Local Government Code.  The substitutes
redesignates  and clarifies proposed text in certain SECTIONS of the
original as new sections in Subchapter H, as follows: 

_Section 376.301 (Creation of the District), Local Government Code,
redesignated from proposed SECTION 1. 

_Section 376.302 (Declaration of Intent), Local Government Code,
redesignated from proposed SECTION 2. 

_Section 376.303 (Definitions), Local Government Code, redesignated from
proposed SECTION 3. 

_Section 376.304 (Boundaries), Local Government Code, redesignated from
proposed SECTION 4. 

_Section 376.305 (Findings Relating to Boundaries), Local Government Code,
redesignated from proposed SECTION 5. 

_Section 376.306 (Findings of Benefit and Public Purpose), Local Government
Code, redesignated from proposed SECTION 6. 

_Section 376.307 (Application of Other Law), Local Government Code,
redesignated from proposed SECTION 7. 

_Section 376.308 (Liberal Construction of Subchapter), Local Government
Code, redesignated from proposed SECTION 8. 

_Section 376.309 (Board of Directors in General), Local Government Code,
redesignated from proposed SECTION 9 (Subsections (a)-(c).)  Provides that
the district is governed by a board of 17, rather than 11, directors, and
establishes June 1 as the expiration date of a directors term in a given
year. 

_Section 376.310 (Appointment of Directors), Local Government Code,
redesignated from  proposed SECTION 11. 

_Section 376.311 (Ex Officio Board Members), Local Government Code,
redesignated from proposed SECTION 12 (b). 

_Section 376.312 (Conflicts of Interest; One-Time Affidavit), Local
Government Code, redesignated from proposed SECTION 9 (Subsection (d).) The
substitute includes new subsections, as follows: 

(b)  Provides that Section 171.004 does not apply to the district.
Requires a director who has substantial interest in  a business or
charitable entity that will receive a pecuniary benefit from a board action
to file a one-time affidavit declaring the interest.  Authorizes the
director to participate in a discussion or vote on that action under
specified conditions.  

(c)  Prohibits a director who is also an officer or employee of a public
entity from participating in the discussion of or vote on a matter
regarding a contract with that same public entity. 

(d)  Provides that for the purposes of this section, a director has a
substantial interest in a charitable entity in the same manner that a
person would have a substantial interest in a business entity under Section
171.002. 

_Section 376.313 (Additional Powers of the District), Local Government
Code, redesignated from proposed SECTION 13 (Subsections (c) and (d).) 

_Section 376.314 (Agreements: General; Donations, Interlocal Agreements,
and Law Enforcement Service), Local Government Code, redesignated from
proposed SECTION 26 (Subsection (c)). 

_Section 376.315 (Nonprofit Corporation), Local Government Code,
redesignated from proposed SECTION 17. 

_Section 376.316 (Annexation), Local Government Code, redesignated from
proposed SECTION 28. 

_Section 376.317 (Petition Required For Financing Services and
Improvements), Local Government Code, redesignated from proposed SECTION
15. 

_Section 376.318 (Elections), Local Government Code, redesignated from
proposed SECTION 22. 

_Section 376.319 (Maintenance Tax), Local Government Code, redesignated
from proposed SECTION 24. 

_Section 376.320 (Certain Residential Property is not Exempt), Local
Government Code, redesignated from proposed SECTION 16. 

_Section 376.321 (Utilities), Local Government Code, redesignated from
proposed SECTION 20 (Subsection (d).)  The substitute clarifies the
proposed text by prohibiting the district from imposing an assessment or
impact fee on a utility's property.  

_Section 376.322 (Disbursements or Transfers of Funds), Local Government
Code, redesignated from proposed SECTION 18. 

_Section 376.323 (Competitive Bidding Limit), Local Government Code,
redesignated from proposed SECTION 27. 

_New Section 376.324 (Exception for Dissolution of District with
Outstanding Debts), Local Government Code, redesignated from proposed
SECTION 25. 
 
_SECTION 2 redesignated from proposed SECTION 29.

_SECTION 3 redesignated from proposed SECTION 10. Includes names of certain
persons serving as the intial board of directors. 

_SECTION 4 redesignated from proposed SECTION 31.

The substitute deletes the proposed SECTION 30  which provided an effective
date of September 1, 1999. 

The substitute deletes the proposed SECTION 14 relating to conflicts or
inconsistencies with other laws. 

The substitute deletes the proposed SECTION 19 relating to the issuance of
bonds by the district. 

The substitute deletes the proposed SECTION 20 (Subsections (a)-(c)),
relating to the authority of the board to levy and collect an assessment,
and relating to the effective date of a lien. 

The substitute deletes the proposed SECTION 21 relating to the city's
approval of certain improvement projects. 

The substitute deletes the proposed SECTION 23 relating to the district's
authority to impose  impact fees.  

The substitute deletes the proposed SECTION 26 (Subsection (a) and (b))
relating to the protection of the public's interest and the authority of
the district to contract with certain entities.