H.B. No. 3374
AN ACT
relating to the powers and duties of the Cleveland Municipal
Utility District No. 1 of Montgomery County, Texas; providing
authority to issue bonds; providing authority to impose a tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 6, Special District Local Laws
Code, is amended by adding Chapter 8073 to read as follows:
CHAPTER 8073. CLEVELAND MUNICIPAL UTILITY DISTRICT NO. 1 OF
MONTGOMERY COUNTY, TEXAS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 8073.0101. DEFINITIONS. In this chapter:
(1) "Board" means the district's board of directors.
(2) "District" means the Cleveland Municipal Utility
District No. 1 of Montgomery County, Texas.
Sec. 8073.0102. NATURE AND PURPOSES OF DISTRICT. (a) The
district is a municipal utility district created under Section 59,
Article XVI, Texas Constitution.
(b) The district is created to accomplish the purposes of:
(1) a municipal utility district as provided by
general law and Section 59, Article XVI, Texas Constitution; and
(2) Section 52, Article III, Texas Constitution, that
relate to the construction, acquisition, improvement, operation,
or maintenance of macadamized, graveled, or paved roads, or
improvements, including storm drainage, in aid of those roads.
Sec. 8073.0103. ELIGIBILITY FOR INCLUSION IN TAX INCREMENT
REINVESTMENT ZONE. (a) All or part of the district is eligible to
be included in a tax increment reinvestment zone created under
Chapter 311, Tax Code.
(b) If the City of Cleveland has created or creates a tax
increment reinvestment zone described by Subsection (a) that
includes all or part of the territory of the district, the City of
Cleveland and the board of directors of the zone, by contract with
the district, may grant money to the district from the tax increment
fund to be used for a permissible purpose of the district, including
the right to pledge the money as security for a bond or other
obligation issued by the district.
SUBCHAPTER B. POWERS AND DUTIES
Sec. 8073.0201. GENERAL POWERS AND DUTIES. The district
has the powers and duties necessary to accomplish the purposes for
which the district is created.
Sec. 8073.0202. MUNICIPAL UTILITY DISTRICT POWERS AND
DUTIES. The district has the powers and duties provided by the
general law of this state, including Chapters 49 and 54, Water Code,
applicable to municipal utility districts created under Section 59,
Article XVI, Texas Constitution.
Sec. 8073.0203. AUTHORITY FOR ROAD PROJECTS. Under Section
52, Article III, Texas Constitution, the district may design,
acquire, construct, finance, issue bonds for, improve, operate,
maintain, and convey to this state, a county, or a municipality for
operation and maintenance macadamized, graveled, or paved roads, or
improvements, including storm drainage, in aid of those roads.
Sec. 8073.0204. ROAD STANDARDS AND REQUIREMENTS. (a) A
road project must meet all applicable construction standards,
zoning and subdivision requirements, and regulations of each
municipality in whose corporate limits or extraterritorial
jurisdiction the road project is located.
(b) If a road project is not located in the corporate limits
or extraterritorial jurisdiction of a municipality, the road
project must meet all applicable construction standards,
subdivision requirements, and regulations of each county in which
the road project is located.
(c) If the state will maintain and operate the road, the
Texas Transportation Commission must approve the plans and
specifications of the road project.
Sec. 8073.0205. DIVISION OF DISTRICT. (a) The district may
be divided into two or more new districts only if the district:
(1) has no outstanding bonded debt; and
(2) is not imposing ad valorem taxes.
(b) This chapter applies to any new district created by the
division of the district, and a new district has all the powers and
duties of the district.
(c) Any new district created by the division of the district
may, at the time the new district is created, contain only:
(1) land within the initial boundaries of the
district; or
(2) land adjacent to the initial boundaries of the
district if that adjacent land is:
(A) not within the extraterritorial jurisdiction
of a city; or
(B) within the extraterritorial jurisdiction of
a city and that adjacent land has been approved for inclusion in the
district under a consent ordinance or resolution adopted by the
city.
(d) The board, on its own motion or on receipt of a petition
signed by the owner or owners of a majority of the assessed value of
the real property in the district, may adopt an order dividing the
district.
(e) An order dividing the district must:
(1) name each new district;
(2) include the metes and bounds description of the
territory of each new district;
(3) appoint temporary directors for each new district;
and
(4) provide for the division of assets and liabilities
between or among the new districts.
(f) On or before the 30th day after the date of adoption of
an order dividing the district, the district shall file the order
with the Texas Commission on Environmental Quality and record the
order in the real property records of each county in which the
district is located.
(g) Any new district created by the division of the district
shall hold a confirmation and directors' election as required by
Section 49.102, Water Code.
(h) Except as provided by Subsection (c), municipal consent
by a city is not required for the creation of any new district
created under this section.
(i) Any new district created by the division of the district
must hold an election as required by this chapter to obtain voter
approval before the district may impose a maintenance tax or issue
bonds payable wholly or partly from ad valorem taxes.
(j) If the voters of a new district do not confirm the
creation of the new district, the assets, obligations, territory,
and governance of the new district revert to that of the original
district.
SUBCHAPTER C. BONDS AND OTHER OBLIGATIONS
Sec. 8073.0301. AUTHORITY TO ISSUE BONDS AND OTHER
OBLIGATIONS FOR ROAD PROJECTS. (a) The district may issue bonds or
other obligations payable wholly or partly from ad valorem taxes,
impact fees, revenue, contract payments, grants, revenue from a tax
increment reinvestment zone created under Chapter 311, Tax Code,
other district money, or any combination of those sources to pay for
a road project authorized by Section 8073.0203.
(b) The district may not issue bonds payable from ad valorem
taxes to finance a road project unless the issuance is approved by a
vote of a two-thirds majority of the district voters voting at an
election held for that purpose.
(c) At the time of issuance, the total principal amount of
bonds or other obligations issued or incurred to finance road
projects and payable from ad valorem taxes may not exceed
one-fourth of the assessed value of the real property in the
district.
Sec. 8073.0302. 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 ad valorem tax, without limit as to rate or amount, while all
or part of the bonds are outstanding as required and in the manner
provided by Sections 54.601 and 54.602, Water Code.
SECTION 2. The Cleveland Municipal Utility District No. 1
of Montgomery County, Texas, retains all the rights, powers,
privileges, authority, duties, and functions that it had before the
effective date of this Act.
SECTION 3. (a) The legislature validates and confirms all
governmental acts and proceedings of the Cleveland Municipal
Utility District No. 1 of Montgomery County, Texas, that were taken
before the effective date of this Act.
(b) This section does not apply to any matter that on the
effective date of this Act:
(1) is involved in litigation if the litigation
ultimately results in the matter being held invalid by a final court
judgment; or
(2) has been held invalid by a final court judgment.
SECTION 4. (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, the
lieutenant governor, and the 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 are fulfilled
and accomplished.
SECTION 5. 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. 3374 was passed by the House on April
26, 2019, by the following vote: Yeas 130, Nays 9, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3374 was passed by the Senate on May
22, 2019, by the following vote: Yeas 30, Nays 1.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor