HBA-DMD H.B. 3453 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3453 By: Williams County Affairs 4/12/1999 Introduced BACKGROUND AND PURPOSE The Town Center Improvement District (district) is a special improvement district having the powers of a municipal management district under Chapter 375 (Municipal Management Districts in General), Local Government Code, together with certain specific powers and authority, to encourage and promote economic development and business activity within and adjacent to the Town Center area of The Woodlands, in Montgomery County, Texas. H.B. 3453 modifies and adds to the specific powers and duties of the board of directors of the district (board). This bill increases the size of the board from eight to eleven directors of the board (director). This bill also modifies the qualifications and composition of the directors. This bill also authorizes the board to create an economic development zone. It authorizes the districts to enter into and carry out interlocal agreements for accomplishing improvement projects or providing certain facilities or services. 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 Section 7, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, as follows: Sec. 7. ADDITIONAL SPECIFIC POWERS AND DUTIES. Modifies the authorized duties of the board of directors of the Town Center Improvement District (board), in addition to the general powers set forth in Section 6 of this Act, subject to the provisions and limitations set forth here. Among the powers and duties, the Town Center Improvement District (district) is authorized to contract for off-duty peace officers to provide additional public safety and security services for certain events. Authorizes the district to exercise the economic development powers and authority conferred by Chapter 380 (Miscellaneous Provisions Relating to Municipal Planning and Development), Local Government Code, and Article 835s (Acquisition of Land and Facilities for Lease to Public or Private Entities), V.T.C.S., upon a municipality having a population of more than 100,000. Authorizes the board, subject to certain orders, rules, or regulations, to regulate the private use of public roadways, open spaces, parks, sidewalks, and similar public areas by performing certain procedures. Authorizes the board to employ and fix the terms of employment of a president, vicepresident, executive director, general manager, and any other operating officers the board judges necessary. SECTION 2. Amends Subsections (a), (b), (c), (d), (e), and (g), Section 8, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, as follows: (a) Provides that the district is governed by a board of eleven, rather than eight, directors of the board (director) who are required serve for staggered terms of four years. (b) Modifies the qualifications for a director. (c) Replaces the initial board with a new board who are required to serve as provided in this Act and to be composed of five elected directors and six appointed directors. Modifies the composition of the directors. Deletes the requirement of the directors, if one or more of the initial directors listed in this subsection fails to qualify for office within 90 days after the effective date of this Act, to appoint qualified persons to fill the vacancies for the unexpired terms. (d) Requires directors to serve until their successors have been elected or appointed and have qualified. (e) Requires a vacancy in the office of director to be filled by appointment of a qualified individual by a majority vote on the remaining directors, except that if the number of directors for any reason is less than six, rather than five, on petition of a resident of or owner of real property in the district, the commission is required to appoint the required number of qualified individuals to fill the vacancies. (g) Requires the directors, after having been appointed or elected and having qualified by executing a bond and taking the proper oath, to organize or reorganize by electing a chairman, a vice-chairman, rather than a president and vice-president, a secretary, and any other officers of the board as in the judgment of the board are necessary. SECTION 3. Amends Subsections (e) and (i), Section 11, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, as follows: (e) Provides that a tax imposed under this Act or the repeal or reduction of a tax under this Act takes effect on the first day of the calendar quarter, rather than October 1 after the expiration of the first complete calendar quarter, occurring after the date on which the comptroller receives the notice required by Subsection (b), Section 323.405 (Official Results of Election), Tax Code, or Subsection (i) of this section. (i) Deletes the requirement of the board, within 10 days after the annexation of all or part of the territory of the district by a municipality requiring a reduction of the district's sales and use tax, as provided in Subsection (h) of this section, to send to the comptroller by United States certified or registered mail certified copies of all resolutions or orders, rather than resolutions, orders or ordinances, pertaining to such events. SECTION 4. Amends Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, by adding Section 11C, as follows: Sec. 11C. ECONOMIC DEVELOPMENT ZONES. (a) Defines "economic development zone," "governing body," "initial development," and "substantial redevelopment." (b) Authorizes the board, on its own motion, or upon receipt of a petition signed by the owners of all real property within a defined area of the district, to by resolution create, designate, describe, assign a name to and appoint the governing body for an economic development zone within the district to promote initial development or substantial redevelopment of the area, if the board finds that the creation of a zone will further certain public purposes. (c) Provides that before designating an economic development zone, the board must prepare a preliminary financing plan for such zone. Specifies the provisions included in the plan. (d) Requires the board, before designating an economic development zone on its own motion or, if ad valorem taxes are to be used, in whole or in part, in payment of improvement project costs within the economic development zone to be designated in response to a landowner petition, to call and conduct a public hearing in the same general procedural manner as provided by Section 311.003 (Procedure for Creating Reinvestment Zone), Tax Code, for reinvestment zones designated by a municipality. (e) Prohibits an economic development zone from being created if more than 10 percent of the property in the proposed zone, excluding property that is publicly owned, is used or planned for use for residential purposes. Provides that property is used for residential purposes if it is occupied by a house having fewer than five living units. (f) Specifies the provisions for a resolution designating an area as an economic development zone. (g) Requires members of the governing body to be appointed for a term of two years, except for the initial members of the governing body, some of whose terms may be limited to one year in order to achieve staggered terms of office. Requires any vacancy on the governing body of the zone to be filled by appointment for the unexpired term by the district. (h) Provides that a member of a governing body must be a member of the board or must be at least 18 years of age, a citizen of the state, and a person described in Subsection 2(b) of this Act. Provides that each member must qualify for office by subscribing to the constitutional oath of office for public officers and furnishing a fidelity bond issued by a responsible surety in the amount of $10,000 in favor of the zone to secure faithful performance of the member's duties. (i) Requires the governing body of the zone, following appointment and qualification, to meet and organize by electing a president, a vice president, a secretary/treasurer and such other officers as the governing body of the zone may deem appropriate. (j) Authorizes the boundaries of an economic development zone to be reduced or enlarged in the same general manner as provided herein for creation of a zone. (k) Requires a zone created by the district under this section to constitute a body politic and corporate and a political subdivision of the state, separate and apart from the district. Requires the district and the zone to have the same power and authority to carry out this section as are conferred upon a municipality with respect to a reinvestment zone under Section 311.008 (Powers of Municipality), Tax Code. Authorizes the board, in addition to the powers herein granted to the governing body, to by order delegate, subject in whole or in part to final approval by the board of the district, any powers and duties relating to the financing and implementation of the project plan for the zone, including, without limitation, certain powers and authority. (l) Authorizes the board and the governing body each to enter into such agreements as may be considered necessary or convenient to implement a project plan and economic development zone financing plan and achieve their purposes. Authorizes an agreement to provide for the regulation or restriction of the use of land by imposing conditions, restrictions, or covenants that run with the land. Authorizes an agreement to dedicate revenue from the tax increment fund to pay project costs and to provide that a restriction adopted by the governing body continues in effect after the termination of the zone. Authorizes the district and the zone to enter into agreements whereby the district will provide administration, management, investment, accounting, and other services for the zone in consideration for the benefits to inure to the district through implementation of the project plan for the zone. (m) Requires the governing body, subject to approval by resolution of the board, to prepare and adopt, and authorizes the governing body thereafter to amend, a project plan and an economic development zone financing plan for the zone containing generally the information and estimates described in Section 311.011 (Project and Financing Plans), Tax Code, with respect to reinvestment zones, together with an estimate of total and incremental sales and use taxes to be derived from the zone. Provides that if a plan amendment reduces or increases the geographic area of the zone, increases the amount of bonded indebtedness to be incurred, creates or changes a tax increment to be contributed by a taxing unit, or increases the total estimated project costs, such amendment is authorized to be adopted only after a public hearing meeting the procedural requirements of this section has been held. (n) Requires the provisions of Sections 311.012 (Determination of Amount of Tax Increment) and 311.013 (Collection and Deposit of Tax Increments), Tax Code, relative to a city or municipality, or its governing body, to apply to the zone and the governing body of the zone if the financing plan adopted by the governing body of the zone uses ad valorem taxes, in whole or in part, for payment of project costs. (o) Authorizes the district, if approved at an election by a majority of the qualified voters voting in such election, to adopt or repeal for the use and benefit of one or more economic development zones previously or thereafter created by the district, an incremental sales and use tax of not more than one percent. Authorizes an election for the purpose of permitting voting for or against the adoption or repeal of the maximum rate of incremental sales and use tax specified by the board in the election proposition to be called and held by the board in general conformity with the procedural requirements of Section 11 of this Act for adoption of the limited sales and use tax therein authorized. Authorizes the governing body, after adoption at an election, and if and to the extent authorized by delegation by the district to a zone, to levy, assess, and collect all or any portion of such incremental sales and use tax, in increments of no less than one-eighth percent, within and for the benefit of the zone, by order of the governing body, and such incremental sales and use tax is required to be in addition to the limited sales and use tax authorized and levied, assessed, and collected by the district within and for the entire district under Section 11 of this Act. Requires such incremental sales and use tax to become effective on the first day of the calendar quarter following written notice to the comptroller of the imposition of same and to be paid into the tax increment fund for such zone. (p) Specifies the exceptions to the requirement that Sections 311.002 (Definitions), 311.014 (Tax Increment Fund), 311.015 (Tax Increment Bonds and Notes), 311.016 (Annual Report), and 311.017 (Termination of Reinvestment Zone), Tax Code, apply to the district. SECTION 5. Amends Section 12A, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, as follows: Sec. 12A. BONDS. (a) Makes nonsubstantive changes. (b) Makes no change. (c) Deletes repayments the district receives from a municipality because of a required reduction of the district's sales and use tax from the board's authorization to be secured and made payable, wholly or partly, by a pledge of any part of the net proceeds the district receives. SECTION 6. Amends Section 13, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997, to authorize the district and a municipality situated in whole or in part within the boundaries or impact area of the district to enter into and carry out interlocal agreements, with such terms and conditions as the parties may deem advisable, for the accomplishment of improvement projects or the provision of facilities, services, or equipment by the district within or for the benefit of the municipality, and notwithstanding any provision of law to the contrary, payment for such improvement projects, facilities, services, or equipment may be made or pledged by the municipality to the district out of any funds collected by the municipality pursuant to Chapter 351 (Municipal Hotel Occupancy Taxes), Tax Code, or any other lawfully available funds. SECTION 7. REPEAL. Repealer: Section 8(d), Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997. Section 8(d), relates to the terms of the initial directors. Repealer: Section 11(h), Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 255, Acts of the 75th Texas Legislature, Regular Session, 1997. Section 11(h), relates to the reduction of sales and use tax imposed by the district, in the event that all or part of the district is annexed. SECTION 8. TERMS OF OFFICE. Requires the additional directors authorized by this Act to be appointed and qualified as soon as practicable after the effective date of this Act. Requires one of the additional directors to serve for a term ending on the first Saturday in May, 2000, and the remaining two additional directors are required to serve for a term ending on the first Saturday in May, 2002, as determined by the board by lot or by mutual agreement. Requires nothing in this Act to be deemed or construed to affect the terms of office of the existing directors. SECTION 9. Sets forth legislative findings. SECTION 10. Provides that the provisions of this Act are severable. Prohibits any word, phrase, clause, sentence, section, provision, or part of this Act held invalid or unconstitutional, from affecting the validity of the remaining portions, and it is declared to be the legislative intent that this Act would have been passed as to the remaining portions regardless of the invalidity of any part. SECTION 11.Emergency clause. Effective date: upon passage.