85R28571 JXC-D
By: Creighton S.B. No. 2293
A BILL TO BE ENTITLED
AN ACT
relating to the creation of Montgomery County Improvement 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. Subtitle C, Title 4, Special District Local Laws
Code, is amended by adding Chapter 3955 to read as follows:
CHAPTER 3955. MONTGOMERY COUNTY IMPROVEMENT DISTRICT NO. 1
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 3955.001. DEFINITIONS. In this chapter:
(1) "Board" means the district's board of directors.
(2) "County" means Montgomery County.
(3) "Director" means a board member.
(4) "District" means the Montgomery County
Improvement District No. 1.
Sec. 3955.002. CREATION AND NATURE OF DISTRICT. The
district is a special district created under Section 59, Article
XVI, Texas Constitution.
Sec. 3955.003. PURPOSE; DECLARATION OF INTENT. (a) The
creation of the district is 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 creating the district and in authorizing 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 creation of the district is 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 creation of the district may not be
interpreted to relieve 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 county services provided in the
district.
Sec. 3955.004. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a)
The district is created 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 creation 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,
rail, 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. 3955.005. INITIAL DISTRICT TERRITORY. (a) The
district is initially composed of the territory described by
Section 2 of the Act enacting this chapter.
(b) The boundaries and field notes contained in Section 2 of
the Act enacting this chapter form a closure. A mistake in the
field notes or in copying the field notes in the legislative process
does not affect the district's:
(1) organization, existence, or validity;
(2) right to issue any type of bonds for the purposes
for which the district is created or to pay the principal of and
interest on the bonds;
(3) right to impose or collect an assessment or tax; or
(4) legality or operation.
Sec. 3955.006. APPLICABILITY OF MUNICIPAL MANAGEMENT
DISTRICTS LAW. Except as otherwise provided by this chapter,
Chapter 375, Local Government Code, applies to the district.
Sec. 3955.007. 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. 3955.051. 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
June 1 of each odd-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 15 directors.
(c) Section 49.052, Water Code, does not apply to the
directors.
Sec. 3955.052. APPOINTMENT OF VOTING DIRECTORS. The Texas
Commission on Environmental Quality shall appoint voting directors
from persons recommended by the board.
Sec. 3955.053. NONVOTING DIRECTORS. The board may appoint
nonvoting directors to serve at the pleasure of the voting
directors.
Sec. 3955.054. 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. 3955.055. 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. 3955.056. INITIAL VOTING DIRECTORS. (a) The initial
board consists of the following directors:
Pos. No. Name of Director Pos. No. Name of Director
Pos. No. Name of Director
1. Tony Comer 1. Tony Comer
1. Tony Comer
2. Nichole Comer 2. Nichole Comer
2. Nichole Comer
3. Vicky Cutroneo 3. Vicky Cutroneo
3. Vicky Cutroneo
4. Ryan Quigley 4. Ryan Quigley
4. Ryan Quigley
5. Jerry Hayley 5. Jerry Hayley
5. Jerry Hayley
(b) Of the initial directors, the terms of directors
appointed for positions one through three expire June 1, 2019, and
the terms of directors appointed for positions four and five expire
June 1, 2021.
(c) Section 3955.052 does not apply to this section.
(d) This section expires September 1, 2021.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 3955.101. GENERAL POWERS AND DUTIES. The district has
the powers and duties necessary to accomplish the purposes for
which the district is created.
Sec. 3955.102. 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. 3955.103. 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. 3955.104. 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. 3955.105. PUBLIC FACILITY CORPORATIONS. As provided
by Chapter 303, Local Government Code, the board by resolution may
authorize the creation of a public facility corporation in the
district to finance or to provide for the acquisition,
construction, rehabilitation, renovation, repair, equipping,
furnishing, or placement in service of public facilities in an
orderly, planned manner and at the lowest possible borrowing costs.
Sec. 3955.106. 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. 3955.107. LAW ENFORCEMENT SERVICES. To protect the
public interest, the district may contract with a qualified party,
including the county, to provide law enforcement services in the
district for a fee.
Sec. 3955.108. 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. 3955.109. 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. 3955.110. 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. 3955.111. ROAD UTILITY DISTRICT POWERS. The district
has the powers provided by the general laws relating to road utility
districts created under Section 52(b), Article III, Texas
Constitution and Chapter 441, Transportation Code.
Sec. 3955.112. STRATEGIC PARTNERSHIP AGREEMENT. The
district may negotiate and enter into a written strategic
partnership agreement under Section 43.0751, Local Government
Code, with a municipality in whose extraterritorial jurisdiction
the district is located.
Sec. 3955.113. ANNEXATION OR EXCLUSION OF LAND. (a) The
district may annex land as provided by Subchapter J, Chapter 49,
Water Code.
(b) The district may exclude land as provided by Subchapter
J, Chapter 49, Water Code. Section 375.044(b), Local Government
Code, does not apply to the district.
Sec. 3955.114. NO EMINENT DOMAIN POWER. The district may
not exercise the power of eminent domain.
SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS; ASSESSMENTS
Sec. 3955.151. 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. 3955.152. 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. 3955.153. 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. 3955.154. METHOD OF NOTICE FOR HEARING. The district
may mail the notice required by Section 375.115(c), Local
Government Code, by certified or first-class United States mail.
The board shall determine the method of notice.
Sec. 3955.155. 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. 3955.156. RESIDENTIAL PROPERTY NOT EXEMPT. Section
375.161, Local Government Code, does not apply to the district.
Sec. 3955.157. COMPETITIVE BIDDING. Subchapter I, Chapter
49, Water Code, applies to the district. Sections 375.221 and
375.223, Local Government Code, do not apply to the district.
Sec. 3955.158. TAX AND ASSESSMENT ABATEMENTS. 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. 3955.201. 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 3955.203.
(b) The district must hold an election in the manner
provided by Subchapter L, Chapter 375, Local Government Code, to
obtain voter approval before the district may impose an ad valorem
tax or issue bonds payable from ad valorem taxes.
(c) Section 375.243, Local Government Code, does not apply
to the district.
(d) 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. 3955.202. OPERATION AND MAINTENANCE TAX. (a) If
authorized by a majority of the district voters voting at an
election held in accordance with Section 3955.201, the district may
impose an operation and maintenance tax on taxable property in the
district in accordance with Section 49.107, Water Code, 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. 3955.203. 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. 3955.204. 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.
Sec. 3955.205. 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. 3955.206. BONDS FOR RECREATIONAL FACILITIES. 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.
SUBCHAPTER F. DEFINED AREAS
Sec. 3955.251. AUTHORITY TO ESTABLISH DEFINED AREAS OR
DESIGNATED PROPERTY. The district may define areas or designate
certain property of the district to pay for improvements,
facilities, or services that primarily benefit that area or
property and do not generally and directly benefit the district as a
whole.
Sec. 3955.252. PROCEDURE FOR ELECTION. (a) Before the
district may impose an ad valorem tax or issue bonds payable from ad
valorem taxes of the defined area or designated property, the board
shall hold an election in the defined area or in the designated
property only.
(b) The board may submit the issues to the voters on the same
ballot to be used in another election.
Sec. 3955.253. DECLARING RESULT AND ISSUING ORDER. (a) If
a majority of the voters voting at the election approve the
proposition or propositions, the board shall declare the results
and, by order, shall establish the defined area and describe it by
metes and bounds or designate the specific property.
(b) A court may not review the board's order except on the
ground of fraud, palpable error, or arbitrary and confiscatory
abuse of discretion.
Sec. 3955.254. TAXES FOR SERVICES, IMPROVEMENTS, AND
FACILITIES IN DEFINED AREAS OR DESIGNATED PROPERTY. On voter
approval and adoption of the order described by Section 3955.253,
the district may apply separately, differently, equitably, and
specifically its taxing power and lien authority to the defined
area or designated property to provide money to construct,
administer, maintain, and operate services, improvements, and
facilities that primarily benefit the defined area or designated
property.
Sec. 3955.255. ISSUANCE OF BONDS FOR DEFINED AREA OR
DESIGNATED PROPERTY. After the order under Section 3955.253 is
adopted, the district may issue bonds to provide for any land,
improvements, facilities, plants, equipment, and appliances for
the defined area or designated property.
SUBCHAPTER G. SALES AND USE TAX
Sec. 3955.301. MEANINGS OF WORDS AND PHRASES. A word or
phrase used in this subchapter that is defined by Chapters 151 and
321, Tax Code, has the meaning assigned by Chapters 151 and 321, Tax
Code.
Sec. 3955.302. APPLICABILITY OF CERTAIN TAX CODE
PROVISIONS. (a) Except as otherwise provided by this subchapter,
Subtitles A and B, Title 2, Tax Code, and Chapter 151, Tax Code,
apply to taxes imposed under this subchapter and to the
administration and enforcement of those taxes in the same manner
that those laws apply to state taxes.
(b) Chapter 321, Tax Code, relating to municipal sales and
use taxes, applies to the application, collection, change, and
administration of a sales and use tax imposed under this subchapter
to the extent consistent with this chapter, as if references in
Chapter 321, Tax Code, to a municipality referred to the district
and references to a governing body referred to the board.
(c) Sections 321.106, 321.401, 321.402, 321.403, 321.404,
321.406, 321.409, 321.506, 321.507, and 321.508, Tax Code, do not
apply to a tax imposed under this subchapter.
Sec. 3955.303. AUTHORIZATION; ELECTION. (a) The district
may adopt a sales and use tax to serve the purposes of the district
after an election in which a majority of the voters of the district
voting in the election authorize the adoption of the tax.
(b) The board by order may call an election to authorize a
sales and use tax. The election may be held with any other district
election.
(c) The district shall provide notice of the election and
shall hold the election in the manner prescribed by Section
3955.201.
(d) The ballots shall be printed to provide for voting for
or against the proposition: "Authorization of a sales and use tax
in the Montgomery County Improvement District No. 1 at a rate not to
exceed ___ percent."
Sec. 3955.304. ABOLISHING SALES AND USE TAX. (a) Except as
provided by Subsection (b), the board may abolish the sales and use
tax without an election.
(b) The board may not abolish the sales and use tax if the
district has outstanding debt secured by the tax.
Sec. 3955.305. SALES AND USE TAX RATE. (a) On adoption of
the tax authorized by this subchapter, a tax is imposed on the
receipts from the sale at retail of taxable items in the district
and an excise tax is imposed on the use, storage, or other
consumption in the district of taxable items purchased, leased, or
rented from a retailer during the period that the tax is in effect.
(b) The board shall determine the rate of the tax, which may
be in one-eighth of one percent increments not to exceed the maximum
rate authorized by the district voters at the election. The board
may lower the tax rate to the extent the rate does not impair any
outstanding debt or obligations payable from the tax.
(c) The rate of the excise tax is the same as the rate of the
sales tax portion of the tax and is applied to the sales price of the
taxable item.
SUBCHAPTER H. DISSOLUTION AND MUNICIPAL ANNEXATION
Sec. 3955.351. MUNICIPAL ANNEXATION; DISSOLUTION. (a) The
district is a "water or sewer district" under Section 43.071, Local
Government Code.
(b) Section 43.075, Local Government Code, applies to the
district.
(c) Section 375.264, Local Government Code, does not apply
to the dissolution of the district by a municipality.
SECTION 2. The Montgomery County Improvement District No. 1
initially includes all territory contained in the following area:
[[[Boundaries to be determined]]]
SECTION 3. (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 4. 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, 2017.
Pos. No. Name of Director
1. Tony Comer
2. Nichole Comer
3. Vicky Cutroneo
4. Ryan Quigley
5. Jerry Hayley