HBA-MPA C.S.S.B. 1866 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1866 By: Lindsay County Affairs 5/13/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, there is no Harris County Municipal Management District No. 1 (district). C.S.S.B. 1866 creates the district, sets forth district responsibilities and powers, and provides the authority to impose taxes and issue bonds. 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. HARRIS COUNTY MUNICIPAL MANAGEMENT DISTRICT NO. 1 Sec. 376.301. CREATION OF DISTRICT. Creates the Harris County Municipal Management District No. 1 (district) as a special district under the Texas Constitution. Authorizes the board of directors of a district to change the district's name. Establishes the necessity of the district's existence. Sec. 376.302. DECLARATION OF INTENT. Sets forth the necessity of the district for the area within the district. Provides that the creation of the district and this legislation are not to be interpreted to relieve other authorities from providing services because the creation of the district supplements, rather than supplants the district's existing services. Provides that the legislature has established a program to accomplish the public purposes set out in Section 52-a (Assistance to Encourage State Economic Development), Article III, Texas Constitution. Sec. 376.303. DEFINITIONS. Defines "board," "county," "district," "municipality," and "utility." Sec. 376.304. BOUNDARIES. Sets forth the legal description of the district's territory. Sec. 376.305. FINDINGS RELATING TO BOUNDARIES. Provides that the boundaries and field notes of the district form a closure. Sets forth issues which are unaffected by mistakes made in the assessment of boundaries. Sec. 376.306. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. Provides that all land and property included in the district will benefit from improvements and services, and the district is created to serve a public use. Sets forth issues which are dependent upon the creation of the district. Sets forth the district's responsibilities. Sets forth a description of street or road improvement. Prohibits the district from acting as the agent or instrumentality of any private interest. Sec. 376.307. APPLICATION OF OTHER LAW. Expands the application of Chapter 375 (Municipal Management Districts in General) to include the district. Sec. 376.308. LIBERAL CONSTRUCTION OF SUBCHAPTER. Requires this subchapter to be liberally construed in conformity with findings and purposes in this subchapter. Sec. 376.309. BOARD OF DIRECTORS IN GENERAL. Provides that 11 board directors serve staggered terms of four years, to govern the district. Requires a director to receive compensation as provided by Section 49.060 (Fees of Office; Reimbursement), Water Code. Sec. 376.310. APPOINTMENT OF DIRECTORS. Requires the mayor and members of the municipality's governing body to appoint directors from persons recommended by the board of directors of the district. Provides that a person is appointed upon majority vote by the members and the mayor. Prohibits a person from being appointed to the board if such action would result in less than two-thirds of the directors residing in the municipality. Sec. 376.311. EX OFFICIO BOARD MEMBERS. Sets forth individuals required to serve as nonvoting ex officio directors. Authorizes the board to appoint a certain director as a nonvoting ex officio board member, if certain circumstances including changes and abolishment, exist for a department of a municipality. Authorizes the board to appoint the presiding officer of a nonprofit corporation to serve as a nonvoting ex officio director. Sec. 376.312. CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT. (a) Authorizes a director to participate in board votes and decisions, and provides that Chapter 171 (Regulation of Conflicts of Interest of Officers of Municipalities, Counties, and Certain Other Local Governments), Local Government Code, governs board members' conflicts of interest. (b) Limits the application of Section 171.004 (Affidavit and Abstention from Voting Required), Local Government Code, to exclude the district. Requires a director with a conflict of interest to file a one-time affidavit declaring the interest. Authorizes the director to participate in certain actions, subsequent to filing the affidavit, under certain conditions. (c) Prohibits a director who is also a public entity officer or employee from taking part in a matter regarding a contract with that public entity. (d) Sets forth a description of a director's substantial interest regarding a charitable entity. Sec. 376.313. ADDITIONAL POWERS OF DISTRICT. Authorizes the district to exercise the statutory powers given to the following entities: corporations, housing finance corporations, and eligible political subdivisions. Authorizes the district to exercise its powers outside district boundaries. Sec. 376.314. AGREEMENTS: GENERAL; DONATIONS, 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 implementation of a project is a governmental function for the purposes of Chapter 791 (Interlocal Cooperation Contracts), Government Code. Authorizes the district to contract for law enforcement services, for a fee. Sec. 376.315. NONPROFIT CORPORATION. Authorizes the board to authorize the creation of a nonprofit corporation to implement a project, with or on behalf of the district. Requires the board to appoint the board of directors of a nonprofit corporation. Requires that the board of directors be appointed and serve under terms and conditions of a local government corporation created under Chapter 431 (Texas Transportation Corporation Act), Transportation Code. Sets forth terms and powers of a nonprofit corporation under this section. Sec. 376.316. ANNEXATION. Authorizes the district to annex certain territories. Sec. 376.317. ASSESSMENTS. Authorizes the board to impose and collect an assessment for any purpose authorized by this subchapter, and requires a two-thirds board member vote in favor of the imposition. Sets forth provisions for assessments resulting from additions or corrections to the assessment roll made by the district. Provides that certain assesments are superior to any other lien or claim, other than for county, school district, or municipal ad valorem taxes. Sets forth the term of effectiveness for the lien. Authorizes the board to enforce the lien in a certain manner. Sec. 376.318. PETITION REQUIRED FOR FINANCING SERVICES AND IMPROVEMENTS. Prohibits the board from financing certain projects prior to filing a written petition requesting the improvement or service. Sets forth requirements for the petition. Sec. 376.319. ELECTIONS. Requires the district to obtain voter approval, through an election, prior to imposing a maintenance tax or issuing bonds payable from ad valorem taxes or assessments. Authorizes the board to include multiple purposes in a single proposition. Sec. 376.320. MAINTENANCE TAX. Sets forth authorization for the district to impose and collect an annual ad valorem tax on taxable property, only if approved by a two-thirds vote of board members, and the tax is authorized by an election held in accordance with Section 376.319. Requires the board to determine the tax rate. Sec. 376.321. UTILITIES. Prohibits the district from imposing an assessment or impact fee on a utility's property. Sec. 376.322. MUNICIPAL APPROVAL. (a) Provides that the district must obtain approval from the municipality's governing body (body), except as provided by Subsection (b), of the issuance of bonds for an improvement project, and the plans and specifications of such a project. (b) Authorizes the district to finance the capital improvements and issue bonds without further approval from the municipality, if the district obtains approval from the body of a capital improvement budget for a period not to exceed five years. (c) Provides that the district must obtain approval from the body of the plans and specifications of any district improvement project related to specified municipal property. (d) Provides that a municipality is not obligated to pay any bonds, notes, or other obligations of the district, except as provided by Section 375.263 (Dissolution by Municipal Ordinance). Sec. 376.323. DISBURSEMENTS OR TRANSFERS OF FUNDS. Requires the board to establish procedures for directors' signatures and disbursement or transfer of district money. Sec. 376.324. COMPETITIVE BIDDING LIMIT. Provides that Section 375.221 (Competitive Bidding on Certain Public Works Contracts) does not apply to the district, unless the contract is for an amount exceeding $25,000. Sec. 376.325. EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING DEBTS. Authorizes the board to dissolve a district that has debt. Sets forth procedures for the dissolution of a district. Provides that Section 375.264 (Limitation) does not apply to the district. SECTION 2. Provides that the legislature finds that proper and legal notice regarding this Act has been given, the Texas Natural Resource Conservation Commission has filed its recommendations, certain laws have been complied with, and all requirements have been fulfilled and accomplished. SECTION 3. Sets forth the initial district board of directors, and sets forth their staggered terms. SECTION 4.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 1866 differs from the original bill in SECTION 1, as follows: The substitute changes the metes and bounds description of the district (proposed Section 376.304, Local Government Code), from the way it appears in the original bill. The substitute, in proposed Section 376.317(b)(2), specifies that certain district claims are superior to any other liens and claims, except for liens or claims for county, school district, or municipal ad valorem taxes, rather than liens or claims levied by a county, municipality, school district, or other political subdivision. The substitute removes proposed Section 376.321 of the original bill, which prohibited the exemption of single-family residential property from certain fees, and provided that Sections 375.161 and 375.164 do not apply to the district. Redesignates proposed Section 376.322 (Utilities) to Section 376.321. The substitute adds a new Section 376.322, as follows: Sec. 376.322. MUNICIPAL APPROVAL. (a) Provides that the district must obtain approval from the municipality's governing body (body), except as provided by Subsection (b), of the issuance of bonds for an improvement project, and the plans and specifications of such a project. (b) Authorizes the district to finance the capital improvements and issue bonds without further approval from the municipality, if the district obtains approval from the body of a capital improvement budget for a period not to exceed five years. (c) Provides that the district must obtain approval from the body of the plans and specifications of any district improvement project related to specified municipal property. (d) Provides that a municipality is not obligated to pay any bonds, notes, or other obligations of the district, except as provided by Section 375.263 (Dissolution by Municipal Ordinance).