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79R6204 MSE-F
By: Wong H.B. No. 3494
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Montrose Community Improvement
District; providing authority to levy an assessment, impose a tax,
and issue bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. MONTROSE COMMUNITY IMPROVEMENT DISTRICT.
Subtitle C, Title 4, Special District Local Laws Code, is amended by
adding Chapter 3842 to read as follows:
CHAPTER 3842. MONTROSE COMMUNITY IMPROVEMENT DISTRICT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 3842.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of the
district.
(2) "District" means the Montrose Community
Improvement District.
Sec. 3842.002. MONTROSE COMMUNITY IMPROVEMENT DISTRICT.
The Montrose Community Improvement District is a special district
created under Section 59, Article XVI, Texas Constitution.
Sec. 3842.003. 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 City of
Houston, Harris 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 Harris County or the City of Houston 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 the county or
city services provided in the area in the district.
Sec. 3842.004. 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:
(1) further the public purposes of developing and
diversifying the economy of the state;
(2) eliminate unemployment and underemployment; and
(3) develop or expand transportation and commerce.
(d) The district will:
(1) promote the health, safety, and general welfare of
residents, employers, 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; and
(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.
(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. 3842.005. 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:
(1) Subchapter J, Chapter 49, Water Code; or
(2) other law.
(b) The boundaries and field notes of the district 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 in any way affect the district's:
(1) organization, existence, or validity;
(2) right to issue any type of bond for a purpose for
which the district is created or to pay the principal of and
interest on the bond;
(3) right to impose or collect an assessment or tax; or
(4) legality or operation.
Sec. 3842.006. ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.
All or any part of the area of the district is eligible to be
included in:
(1) a tax increment reinvestment zone created by the
City of Houston under Chapter 311, Tax Code;
(2) a tax abatement reinvestment zone created by the
City of Houston under Chapter 312, Tax Code; or
(3) an enterprise zone created by the City of Houston
under Chapter 2303, Government Code.
Sec. 3842.007. APPLICABILITY OF MUNICIPAL MANAGEMENT
DISTRICTS LAW. Except as otherwise provided by this chapter,
Chapter 375, Local Government Code, applies to the district.
Sec. 3842.008. LIBERAL CONSTRUCTION OF CHAPTER. This
chapter shall be liberally construed in conformity with the
findings and purposes stated in this chapter.
[Sections 3842.009-3842.050 reserved for expansion]
SUBCHAPTER B. BOARD OF DIRECTORS
Sec. 3842.051. BOARD OF DIRECTORS; TERMS. (a) The district
is governed by a board of 11 voting directors who serve staggered
terms of four years, with five or six 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, but only if the board determines that the
change is in the best interest of the district. The board may not
consist of fewer than five or more than 15 voting directors.
Sec. 3842.052. APPOINTMENT OF DIRECTORS. The mayor and
members of the governing body of the City of Houston shall appoint
directors from persons recommended by the board. A person is
appointed if a majority of the members of the governing body,
including the mayor, vote to appoint that person.
Sec. 3842.053. NONVOTING DIRECTORS. (a) The following
persons serve as nonvoting directors:
(1) the directors of the following departments of the
City of Houston or a person designated by that director:
(A) parks and recreation;
(B) planning and development;
(C) public works; and
(D) civic center; and
(2) the City of Houston's chief of police.
(b) If a department described by Subsection (a) is
consolidated, renamed, or changed, the board may appoint a director
of the consolidated, renamed, or changed department as a nonvoting
director. If a department described by Subsection (a) is
abolished, the board may appoint a representative of another
department that performs duties comparable to those performed by
the abolished department.
Sec. 3842.054. QUORUM. For purposes of determining whether
a quorum of the board is present, the following are not counted:
(1) a vacant board position;
(2) a director who is abstaining from participation in
a vote because of a conflict of interest; or
(3) a nonvoting director.
Sec. 3842.055. CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT.
(a) Except as provided by this section:
(1) a director may participate in all board votes and
decisions; and
(2) Chapter 171, Local Government Code, governs
conflicts of interest for directors.
(b) Section 171.004, Local Government Code, does not apply
to the district. A director who has a substantial interest in a
business or charitable entity that will receive a pecuniary benefit
from a board action shall file a one-time affidavit declaring the
interest. An additional affidavit is not required if the
director's interest changes. After the affidavit is filed with the
board secretary, the director may participate in a discussion or
vote on that action if:
(1) a majority of the directors have a similar
interest in the same entity; or
(2) all other similar business or charitable entities
in the district will receive a similar pecuniary benefit.
(c) A director who is also an officer or employee of a public
entity may not participate in the discussion of or vote on a matter
regarding a contract with that public entity.
(d) For purposes of this section, a director has a
substantial interest in a charitable entity in the same manner that
a person would have a substantial interest in a business entity
under Section 171.002, Local Government Code.
Sec. 3842.056. INITIAL VOTING DIRECTORS. (a) The initial
board consists of the following voting directors: Pos. No. Name of Director
1 John C. Rose
2 Laura Mullen
3 Brett Littell
4 George Barnstone
5 Byron Rusk
6 Steven Biegal
7 Mike Mark
8 Alan Ueckert
9 John Hansen
10 Claude Wynn
11 Kathy Griffin
(b) Of the initial directors, the terms of directors
appointed for positions 1 through 6 expire June 1, 2007, and the
terms of directors appointed for positions 7 through 11 expire June
1, 2009.
(c) Section 3842.052 does not apply to this section.
(d) This section expires September 1, 2009.
[Sections 3842.057-3842.100 reserved for expansion]
SUBCHAPTER C. POWERS AND DUTIES
Sec. 3842.101. ADDITIONAL POWERS OF DISTRICT. The district
may exercise the powers given to a corporation under Section 4B,
Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
Civil Statutes), including the power to own, operate, acquire,
construct, lease, improve, or maintain a project described by that
section.
Sec. 3842.102. 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 for purposes of
this chapter to be a local government corporation created under
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 Chapter 431,
Transportation Code, except that a board member is not required to
reside in the district.
Sec. 3842.103. AGREEMENTS; GRANTS. (a) 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. 3842.104. AUTHORITY TO CONTRACT FOR LAW ENFORCEMENT.
To protect the public interest, the district may contract with a
qualified provider, including Harris County or the City of Houston,
to provide law enforcement services in the district for a fee.
Sec. 3842.105. APPROVAL BY CITY OF HOUSTON. (a) Except as
provided by Subsection (b), the district must obtain the approval
of the City of Houston's governing body for:
(1) the issuance of a bond for each improvement
project;
(2) the plans and specifications of the improvement
project financed by the bond; and
(3) the plans and specifications of any district
improvement project related to the use of land owned by the City of
Houston, an easement granted by the City of Houston, or a
right-of-way of a street, road, or highway.
(b) The approval obtained for the issuance of bonds under
Subsection (a) must be a resolution by the City of Houston. The
approval obtained for plans and specifications must be a permit
issued by the City of Houston.
(c) If the district obtains the approval of the City of
Houston's governing body of a capital improvements budget for a
period not to exceed five years, the district may finance the
capital improvements and issue bonds specified in the budget
without further approval from the City of Houston.
Sec. 3842.106. MEMBERSHIP IN CHARITABLE ORGANIZATIONS. The
district may join and pay dues to an organization that:
(1) enjoys tax-exempt status under Section 501(c)(3),
(4), or (6), Internal Revenue Code of 1986; and
(2) performs a service or provides an activity
consistent with the furtherance of a district purpose.
Sec. 3842.107. ECONOMIC DEVELOPMENT PROGRAMS. (a) 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.
(b) For purposes of this section, the district has all of
the powers of a municipality under Chapter 380, Local Government
Code.
Sec. 3842.108. NO EMINENT DOMAIN. The district may not
exercise the power of eminent domain.
[Sections 3842.109–3842.150 reserved for expansion]
SUBCHAPTER D. FINANCIAL PROVISIONS
Sec. 3842.151. 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 the district's money.
Sec. 3842.152. 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. 3842.153. 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:
(1) 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 Harris County; or
(2) at least 50 persons who own real property in the
district, if more than 50 persons own real property in the district
as determined by the most recent certified tax appraisal roll for
Harris County.
Sec. 3842.154. METHOD OF NOTICE FOR HEARING. The district
may mail the notice required by Section 375.115(c), Local
Government Code, by certified United States mail or an equivalent
service that can provide a record of mailing or other delivery.
Sec. 3842.155. ASSESSMENTS; LIENS FOR ASSESSMENTS. (a)
The board by resolution may impose and collect an assessment for any
purpose authorized by this chapter.
(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. 3842.156. AD VALOREM TAX. (a) If authorized at an
election held in accordance with Section 3842.160, the district may
impose an annual ad valorem tax on taxable property in the district
for any district purpose, including to:
(1) finance the district;
(2) maintain and operate the district;
(3) construct or acquire improvements; or
(4) provide a service.
(b) The board shall determine the tax rate.
Sec. 3842.157. UTILITY PROPERTY EXEMPT FROM IMPACT FEES AND
ASSESSMENTS. The district may not impose an impact fee or
assessment on the property, including the equipment,
rights-of-way, facilities, or improvements, of:
(1) an electric utility or a power generation company
as defined by Section 31.002, Utilities Code;
(2) a gas utility as defined by Section 101.003 or
121.001, Utilities Code;
(3) a telecommunications provider as defined by
Section 51.002, Utilities Code; or
(4) a person who provides to the public cable
television or advanced telecommunications services.
Sec. 3842.158. BONDS AND OTHER OBLIGATIONS. (a) The
district may issue bonds or other obligations payable wholly or
partly from taxes, assessments, impact fees, revenue, grants, or
other money of the district, or any combination of those sources of
money, to pay for any authorized purpose of the district.
(b) The district may issue a bond or other obligation in the
form of a bond, note, certificate of participation or other
instrument evidencing a proportionate interest in payments to be
made by the district, or other type of obligation.
Sec. 3842.159. 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, without limit as to rate or amount, for each year
that all or part of the bonds are outstanding; and
(2) the district annually shall impose the continuing
direct 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;
(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; and
(C) pay the expenses of imposing the taxes.
Sec. 3842.160. TAX AND BOND ELECTIONS. (a) The district
shall hold an election in the manner provided by Subchapter L,
Chapter 375, Local Government Code, to obtain voter approval before
the district imposes an ad valorem tax or issues bonds payable from
ad valorem taxes.
(b) The board may include more than one purpose in a single
proposition at an election.
(c) Section 375.243, Local Government Code, does not apply
to the district.
Sec. 3842.161. CITIES NOT REQUIRED TO PAY DISTRICT
OBLIGATIONS. Except as provided by Section 375.263, Local
Government Code, the City of Houston is not required to pay a bond,
note, or other obligation of the district.
Sec. 3842.162. COMPETITIVE BIDDING. Section 375.221, Local
Government Code, applies to the district only for a contract that
has a value greater than $25,000.
Sec. 3842.163. TAX AND ASSESSMENT ABATEMENTS. The district
may grant in the manner authorized by Chapter 312, Tax Code, an
abatement for a tax or assessment owed to the district.
[Sections 3842.164-3842.200 reserved for expansion]
SUBCHAPTER E. DISSOLUTION
Sec. 3842.201. DISSOLUTION OF DISTRICT WITH OUTSTANDING
DEBT. (a) The board may dissolve the district regardless of
whether the district has debt. Section 375.264, Local Government
Code, does not apply to the district.
(b) If the district has debt when it is dissolved, the
district shall remain in existence solely for the purpose of
discharging its debts. The dissolution is effective when all debts
have been discharged.
SECTION 2. BOUNDARIES. As of the effective date of this
Act, the Montrose Community Improvement District includes all
territory contained in the following described area in Harris
County, Texas:
Commencing, at the intersection of the center point of the right of
way of Shepherd Street and the center point of the right of way of
West Dallas Street, proceeding East along the center line of the
right of way of West Dallas Street to the intersection of the center
line of the right of way of West Dallas Street and the center line of
Montrose Boulevard;
Thence, South along the center line of Montrose Boulevard to the
center line of the right of way of US Highway 59;
Thence, East along the center line of the right of way of US Highway
59 to the center line of the right of way of Main Street;
Thence, Southwest along the center line of the right of way of Main
Street to the center line of the right of way of Bissonnet Street;
Thence, West along the center line of the right of way of Bissonnet
Street to the center line of the right of way of Graustark Street;
Thence, North along the center line of the right of way of
Graustark Street to the center line of the right of way of US
Highway 59;
Thence, West along the center line of the right of way of US Highway
59 to the center line of the right of way of South Shepard Street;
Thence, North along the center line of the right of way of South
Shepard to the POINT OF BEGINNING.
SAVE AND EXCEPT, any property contained within the boundaries of
the Midtown Management District, the Greater Southeast Management
District, or any other existing municipal management district.
SECTION 3. LEGISLATIVE FINDINGS. The legislature finds
that:
(1) proper and 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 by
the constitution and laws of this state, including the governor,
who has submitted the notice and Act to the Texas Commission on
Environmental Quality;
(2) 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;
(3) 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; and
(4) 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. DATE OF PETITION. A petition filed under Section
3842.153, Special District Local Laws Code, as added by this Act,
may be dated before the effective date of this Act.
SECTION 5. EFFECTIVE DATE. 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, 2005.