H.B. No. 2077
AN ACT
relating to the creation of the City of Conroe Municipal Management
District No. 3; providing authority to issue bonds and impose
assessments, fees, and 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 3964 to read as follows:
CHAPTER 3964. CITY OF CONROE MUNICIPAL MANAGEMENT DISTRICT NO. 3
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 3964.0101. DEFINITIONS. In this chapter:
(1) "Board" means the district's board of directors.
(2) "City" means the City of Conroe, Texas.
(3) "Commission" means the Texas Commission on
Environmental Quality.
(4) "Director" means a board member.
(5) "District" means the City of Conroe Municipal
Management District No. 3.
Sec. 3964.0102. CREATION AND NATURE OF DISTRICT. The
district is a special district created under Sections 52 and 52-a,
Article III, and Section 59, Article XVI, Texas Constitution.
Sec. 3964.0103. PURPOSE; LEGISLATIVE FINDINGS. (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 city 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 city from providing the level of
services provided to the area in the district as of the effective
date of the Act enacting this chapter. The district is created to
supplement and not to supplant the city services provided in the
district.
Sec. 3964.0104. 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 district is created to accomplish the purposes of a
municipal management district as provided by general law and
Sections 52 and 52-a, Article III, and Section 59, Article XVI,
Texas Constitution.
(d) The creation of the district is in the public interest
and is essential to:
(1) further the public purposes of developing and
diversifying the economy of the state;
(2) eliminate unemployment and underemployment;
(3) develop or expand transportation and commerce; and
(4) provide quality residential housing.
(e) 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, and
recreational facilities for the district.
(f) 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.
(g) 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. 3964.0105. DISTRICT TERRITORY. (a) The district is
composed of the territory described by Section 2 of the Act enacting
this chapter, as that territory may have been modified under other
law.
(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 contract;
(3) authority to borrow money or issue bonds or other
obligations or to pay the principal and interest of the bonds or
other obligations;
(4) right to impose or collect an assessment, or
collect other revenue; or
(5) legality or operation.
Sec. 3964.0106. APPLICABILITY OF MUNICIPAL MANAGEMENT
DISTRICTS LAW. Except as otherwise provided by this chapter,
Chapter 375, Local Government Code, applies to the district.
Sec. 3964.0107. CONSTRUCTION OF CHAPTER. This chapter
shall be liberally construed in conformity with the findings and
purposes stated in this chapter.
Sec. 3964.0108. CONFLICTS OF LAW. This chapter prevails
over any provision of Chapter 375, Local Government Code, that is in
conflict or inconsistent with this chapter.
Sec. 3964.0109. CONSENT OF MUNICIPALITY REQUIRED. The
board may not hold an election to authorize the issuance of bonds
until the governing body of the city by ordinance or resolution
consents to the creation of the district and to the inclusion of
land in the district. The city's consent must be granted in the
manner provided by Section 54.016, Water Code, for including land
within the corporate limits or extraterritorial jurisdiction of a
city.
SUBCHAPTER B. BOARD OF DIRECTORS
Sec. 3964.0201. GOVERNING BODY; TERMS. The district is
governed by a board of five directors appointed by the commission
who serve staggered terms of four years, with two or three
directors' terms expiring June 1 of each even-numbered year.
Sec. 3964.0202. APPOINTMENT BY COMMISSION. (a) Before the
term of a director expires, the board shall recommend to the
commission a person to serve as a successor director. The
commission shall appoint as director the person recommended by the
board.
(b) A person recommended by the board under Subsection (a)
must be:
(1) at least 18 years of age;
(2) an owner of property in the district;
(3) an owner of stock, whether beneficial or
otherwise, of a corporate owner of property in the district;
(4) an owner of a beneficial interest in a trust that
owns property in the district; or
(5) an agent, employee, or tenant of a person
described by Subdivision (2), (3), or (4).
Sec. 3964.0203. VACANCY. If a vacancy occurs on the board,
the remaining directors shall appoint a director for the remainder
of the unexpired term.
Sec. 3964.0204. COMPENSATION; EXPENSES. (a) The district
may compensate each director in an amount not to exceed $150 for
each board meeting. The total amount of compensation a director may
receive each year may not exceed $7,200.
(b) A director is entitled to reimbursement for necessary
and reasonable expenses incurred in carrying out the duties and
responsibilities of the board.
Sec. 3964.0205. INITIAL DIRECTORS. (a) On or after the
effective date of the Act enacting this chapter, the owner or owners
of a majority of the assessed value of the real property in the
district according to the most recent certified tax appraisal rolls
for the county may submit a petition to the commission requesting
that the commission appoint as initial directors five persons named
in the petition. The commission shall appoint as initial directors
the persons named in the petition.
(b) The initial directors shall determine by lot which three
positions expire June 1, 2022, and which two positions expire June
1, 2020.
(c) This section expires September 1, 2023.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 3964.0301. GENERAL POWERS AND DUTIES. The district
has the powers and duties necessary to accomplish the purposes for
which the district is created.
Sec. 3964.0302. IMPROVEMENT PROJECTS AND SERVICES. The
district may provide, design, construct, acquire, improve,
relocate, operate, maintain, or finance an improvement project or
service using money available to the district for the purpose, 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. 3964.0303. LOCATION OF IMPROVEMENT PROJECT. A
district improvement project may be located inside or outside of
the district.
Sec. 3964.0304. NO EMINENT DOMAIN. The district may not
exercise the power of eminent domain.
SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS
Sec. 3964.0401. 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 the district's money.
Sec. 3964.0402. MONEY USED FOR IMPROVEMENTS OR SERVICES.
The district may acquire, construct, or finance an improvement
project or service authorized by this chapter or Chapter 375, Local
Government Code, using any money available to the district for that
purpose.
SUBCHAPTER E. TAXES AND BONDS
Sec. 3964.0501. OPERATION AND MAINTENANCE TAX. The
district may impose an operation and maintenance tax on taxable
property in the district for any district purpose in the manner
provided by Section 49.107, Water Code, if authorized by a majority
of the district voters voting at an election under that section,
including for:
(1) maintaining and operating the district;
(2) constructing or acquiring improvements; or
(3) providing a service.
Sec. 3964.0502. TAXES FOR BONDS AND OTHER OBLIGATIONS. At
the time bonds or other obligations payable wholly or partly from ad
valorem taxes are issued:
(1) the board shall impose a continuing direct annual
ad valorem tax for each year that all or part of the bonds are
outstanding; and
(2) the board annually shall impose an ad valorem tax
on all taxable property in the district in an amount sufficient to:
(A) pay the interest on the bonds or other
obligations as the interest becomes due; and
(B) create a sinking fund for the payment of the
principal of the bonds or other obligations when due or the
redemption price at any earlier required redemption date.
SUBCHAPTER F. SPECIAL BOND PROVISIONS
Sec. 3964.0601. APPLICABILITY. This subchapter applies
only to bonds payable wholly or partly from revenue derived from
assessments on real property in the district.
Sec. 3964.0602. CONFLICT OF LAWS. In the event of a
conflict between this subchapter and any other law, this subchapter
prevails.
Sec. 3964.0603. WRITTEN AGREEMENT REGARDING SPECIAL
APPRAISALS. Before the district may issue bonds, the district and
any person to whom the board intends that proceeds of the bonds be
distributed, including the developer, another owner of land in the
district, and any entity acting as a lender to the developer or
other landowner for the purpose of a project relating to the
district, must enter into a written agreement that:
(1) waives for the term of the agreement the right to a
special appraisal with respect to taxation by the district under
Subchapters B, C, D, E, F, and H, Chapter 23, Tax Code; and
(2) remains in effect for 30 years and is binding on
the parties, on entities related to or affiliated with the parties,
and on their successors and assignees.
Sec. 3964.0604. REQUIREMENTS FOR ADVERTISING BOND ISSUE.
The district may not advertise for an issuance of bonds until the
completion of at least 25 percent of the projected value of the
improvements, including houses and other buildings, that are liable
for district assessments and necessary to support the district
bonds.
Sec. 3964.0605. REQUIREMENTS FOR BOND ISSUE. The district
may not issue bonds until:
(1) the district submits to the commission:
(A) an engineer's report describing the project
for which the bonds will provide funding, including data, profiles,
maps, plans, and specifications related to the project; and
(B) a cash flow analysis to determine the
projected rate of assessment, which includes the following
assumptions:
(i) each ending balance for debt service in
the analysis is not less than 25 percent of the following year's
debt service requirement;
(ii) interest income is only shown on the
ending balance for debt service for the first two years; and
(iii) the projected rate of assessment is
level or decreasing for the life of the bonds issued by the
district;
(2) the completion of at least 75 percent of the
projected value of the improvements, including houses and other
buildings, that are liable for district assessments and necessary
to support the district bonds; and
(3) the district has obtained an independent market
study from a firm recognized in the area of real estate market
analysis supporting the development projects for the real property
that is liable for district assessments and necessary to support
the district bonds.
Sec. 3964.0606. REQUIREMENTS FOR COLLECTION OF REVENUE TO
PAY BONDS. The district may not collect an assessment to be used
for the payment of bonds until:
(1) the completion of at least 95 percent of the
underground water, wastewater, and drainage facilities financed
from bond proceeds that are necessary to serve the projected
build-out, as certified by the district's engineer;
(2) the district or other appropriate party has
secured the groundwater, surface water, and water discharge permits
that are necessary to secure capacity to support the projected
build-out;
(3) the completion of at least 95 percent of lift
station, water plant, and sewage treatment plant capacity
sufficient to serve the connections constructed in the project for
a period of not less than 18 months, as certified by the district's
engineer; and
(4) the completion of at least 95 percent of the
streets and roads that are necessary to provide access to the areas
served by utilities and financed by the proceeds of bonds issued by
the district, as certified by the district's engineer and
constructed in accordance with municipal or county standards.
SECTION 2. The City of Conroe Municipal Management District
No. 3 initially includes all the territory contained in the
following area:
A METES & BOUNDS description of a certain 191.97 acre
(8,362,413 square feet) tract of land situated in the Mary Corner
Survey, Abstract No. 9, James Smith Survey, Abstract No. 37, and
the James W. Singleton Survey, Abstract No. 496 in Montgomery
County, Texas, being all of a called 49.840 acre tract conveyed to
Muse 128, L.P. by General Warranty Deed recorded in Clerk's File
No. 2018026027, Montgomery County Official Public Records of Real
Property, being all of a called 14.6529 acre tract conveyed to Muse
128, L.P. by General Warranty Deed recorded in Clerk's File
No. 2018040787, Montgomery County Official Public Records of Real
Property, and being all of a called 127.440 acre tract conveyed to
Muse 128, L.P. by General Warranty Deed recorded in Clerk's File
No. 2018011371, Montgomery County Official Public Records of Real
Property; said 191.97 acre (8,362,413 square feet) tract of land
being more particularly described as follows with all bearings
being based on the Texas Coordinate System, Central Zone, NAD 83:
BEGINNING at a point being the northwest corner of a called
26.732 acre tract conveyed to McClanahan Storage 105, Inc. by
General Warranty Deed recorded in Clerk's File No. 2014050308,
Montgomery County Official Public Records of Real Property, being
the northeast corner of said called 127.440 acre tract, being in the
south right-of-way of State Highway 105 (width varies), and being
the most northerly northeast corner of the herein described tract,
from which a 5/8-inch iron rod found bears South 81°46'43" East,
3.05 feet;
THENCE, South 04°06'28" East, 2,445.72 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being the southwest corner of a
called 1.433 acre tract conveyed to McClanahan Development, LLC by
Warranty Deed recorded in Clerk's File No. 2017069964, Montgomery
County Official Public Records of Real Property, being in the east
line of said called 127.440 acre tract, and being an interior corner
of the herein described tract;
THENCE, North 86°29'21" East, 1,353.75 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being the southeast corner of a
called Unrestricted Reserve "H" of Poplar Business Park Section 1
recorded in Cabinet Z, Sheet 2679, Montgomery County Map Records,
being the northeast corner of said called 14.6529 acre tract, being
in the west right-of-way of Old Highway 105 (based on a width of 60
feet), and being the most easterly northeast corner of the herein
described tract;
THENCE, South 04°00'56" East, 388.46 feet to a 3/8-inch iron
rod found being in the east line of said called 14.6529 acre tract,
being in the west right-of-way of said Old Highway 105, and being
the most easterly corner of the herein described tract;
THENCE, North 79°51'51" West, 16.98 feet to a 1-inch iron pipe
found being in the east line of said called 14.6529 acre tract,
being in the west right-of-way of said Old Highway 105, and being an
interior angle point of the herein described tract;
THENCE, South 03°57'24" East, 88.24 feet to a 1-inch iron pipe
found being the northeast corner of a called 4.9474 acre tract
conveyed to Susan Rose Korthauer by Warranty Deed recorded in
Clerk's File No. 2008056538, Montgomery County Official Public
Records of Real Property, being the southeast corner of said called
14.6529 acre tract, being in the west right-of-way of Northshore
Drive (based on a width of 60 feet), and being the most northerly
southeast corner of the herein described tract;
THENCE, South 86°29'21" West, 1,336.43 feet to a 1-inch iron
pipe found being in the north line of a called 1.500 acre tract
conveyed to Brittany Lee Brandt by General Warranty Deed with
Vendor's Lien in Favor of Third Party recorded in Clerk's File
No. 2011024870, Montgomery County Official Public Records of Real
Property, being the southwest corner of said called 14.6529 acre
tract, being the southeast corner of said called 127.440 acre
tract, and being an angle point of the herein described tract;
THENCE, South 86°27'31" West, 381.94 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being the northwest corner of
said called 1.500 acre tract, being in the south line of said called
127.440 acre tract, being the northeast corner of said called
49.840 acre tract, and being an interior angle point of the herein
described tract;
THENCE, South 03°30'30" East, 1,667.47 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being the southeast corner of
said called 49.840 acre tract, being in the northwest right-of-way
of said Northshore Drive, and being the most southerly southeast
corner of the herein described tract;
THENCE, South 86°29'30" West, 1,301.26 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being in the north line of the
remainder of a called 47.596 acre tract conveyed to Jan Stuart
Oostermeyer and Dale Grove Oostermeyer by General Warranty Deed
with Vendor's Lien recorded in Volume 925, Page 587, Montgomery
County Deed Records, being the southwest corner of said called
49.840 acre tract, and being the most southerly southwest corner of
the herein described tract;
THENCE, North 03°41'39" West, 1,664.90 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being the northeast corner of a
called 4.97 acre tract conveyed to Mark Speight and Blanca Speight
by Warranty Deed with Vendor's Lien recorded in Clerk's File
No. 2015112241, Montgomery County Official Public Records of Real
Property, being the northwest corner of said called 49.840 acre
tract, being in the south line of said called 127.440 acre tract,
and being an interior angle point of the herein described tract;
THENCE, South 86°15'04" West, 1,095.59 feet to a 5/8-inch iron
rod (with cap) found being the northwest corner of a called 2.474
acre tract conveyed to Richard H. Hansen and Kristine M. Hansen by
Texas General Warranty Deed with Vendor's Lien recorded in Clerk's
File No. 2017046810, Montgomery County Official Public Records of
Real Property, being the southwest corner of said called 127.440
acre tract, being in the east right-of-way of McCaleb Road (width
varies), being the most northerly southwest corner of the herein
described tract, and being the beginning of a non-tangent curve to
the left;
THENCE, along said non-tangent curve to the left having a
radius of 4,431.68 feet, an arc length of 116.13 feet, and a long
chord bearing North 02°15'40" West, 116.13 feet to a 5/8-inch iron
rod (with cap) found being in the west line of said called 127.440
acre tract and being in the east right-of-way of said McCaleb Road;
THENCE, North 03°00'42" West, 1,081.87 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being in the south line of a
called 2.066 acre tract conveyed to Lake South Water Supply
Corporation by Warranty Deed recorded in Clerk's File
No. 2005-104064, Montgomery County Official Public Records of Real
Property, being the most westerly corner of said called 127.440
acre tract, being in the east right-of-way of said McCaleb Road, and
being the most westerly corner of the herein described tract;
THENCE, North 87°04'28" East, 1,599.20 feet to a 5/8-inch iron
rod found being the southeast corner of a called 60.63 acre tract
conveyed to GAM Enterprises, Inc. by Warranty Deed recorded in
Clerk's File No. 2011029722, Montgomery County Official Public
Records of Real Property, being an interior corner of said called
127.440 acre tract, and being an interior corner of the herein
described tract;
THENCE, North 02°58'33" West, 2,248.07 feet to a 5/8-inch iron
rod found being the northeast corner of a called Restricted Reserve
"A" of Lake Conroe Business Park Section 4 recorded in Cabinet M,
Sheet 163, Montgomery County Map Records, being the most northerly
corner of said 127.440 acre tract, being in the south right-of-way
of said State Highway 105, and being the most northerly corner of
the herein described tract;
THENCE, South 70°13'10" East, 493.12 feet to a Texas
Department of Transportation brass disk in concrete found being in
the north line of said 127.440 acre tract, being in the south
right-of-way of said State Highway 105, and being an angle point of
the herein described tract;
THENCE, South 55°13'24" East, 77.29 feet to a 5/8-inch iron
rod (with cap stamped "Manhard") set being in the north line of said
127.440 acre tract, being in the south right-of-way of said State
Highway 105, and being an angle point of the herein described tract;
THENCE South 70°16'14" East, 661.82 feet to the POINT OF
BEGINNING, CONTAINING 191.97 acres (8,362,413 square feet) of land
in Montgomery County, Texas filed in the office of Manhard
Consulting, Ltd. in The Woodlands, Texas.
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) 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, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2077 was passed by the House on May 7,
2019, by the following vote: Yeas 130, Nays 16, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2077 was passed by the Senate on May
22, 2019, by the following vote: Yeas 28, Nays 3.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor