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  S.B. No. 1234
 
 
 
 
AN ACT
  relating to municipal management districts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subdivisions (3) and (4), Section 375.003, Local
  Government Code, are amended to read as follows:
               (3)  "Commission" means the Texas Commission on
  Environmental Quality [Natural Resource Conservation Commission].
               (4)  "Disadvantaged business" means:
                     (A)  a corporation formed for the purpose of
  making a profit and at least 51 percent of all classes of the shares
  of stock or other equitable securities of which are owned by one or
  more persons who are socially disadvantaged because of their
  identification as members of certain groups that have suffered the
  effects of discriminatory practices or similar insidious
  circumstances over which they have no control, including black
  Americans, Hispanic Americans, women, Asian Pacific Americans, and
  American Indians;
                     (B)  a sole proprietorship formed for the purpose
  of making a profit that is owned, operated, and controlled
  exclusively by one or more persons described by Paragraph (A);
                     (C)  a partnership that is formed for the purpose
  of making a profit, in which 51 percent of the assets and interest
  in the partnership is owned by one or more persons described by
  Paragraph (A), and in which minority or women partners have a
  proportionate interest in the control, operation, and management of
  the partnership affairs;
                     (D)  a joint venture between minority and women's
  group members formed for the purpose of making a profit and the
  minority participation in which is based on the sharing of real
  economic interest, including equally proportionate control over
  management, interest in capital, and interest earnings, other than
  a joint venture in which majority group members own or control debt
  securities, leasehold interest, management contracts, or other
  interests; [or]
                     (E)  a supplier contract between persons
  described in Paragraph (A) and a prime contractor in which the
  disadvantaged business is directly involved for the manufacture or
  distribution of the supplies or materials or otherwise for
  warehousing and shipping the supplies; or
                     (F)  a person certified as a disadvantaged
  business by:
                           (i)  this state;
                           (ii)  a political subdivision of this state;
  or
                           (iii)  a regional planning commission,
  council of governments, or similar regional planning agency created
  under Chapter 391.
         SECTION 2.  Subsection (c), Section 375.022, Local
  Government Code, is amended to read as follows:
         (c)  The petition must:
               (1)  describe the boundaries of the proposed district:
                     (A)  by metes and bounds;
                     (B)  by verifiable landmarks, including a road,
  creek, or railroad line; or
                     (C) [,]  if there is a recorded map or plat and
  survey of the area, by lot and block number;
               (2)  state the specific purposes for which the district
  will be created;
               (3)  state the general nature of the work, projects, or
  services proposed to be provided, the necessity for those services,
  and the costs as estimated by the persons filing the petition;
               (4)  include a name of the district, which must be
  generally descriptive of the location of the district, followed by
  "Management District" or "Improvement District";
               (5)  include a proposed list of initial directors that
  includes the directors' experience and initial term of service; and
               (6)  include a resolution of the governing body of the
  municipality in support of the creation of the district.
         SECTION 3.  Section 375.043, Local Government Code, is
  amended to read as follows:
         Sec. 375.043.  ANNEXATION. A district may annex land as
  provided by Section 49.301 and Chapter 54, Water Code, subject to
  the approval of the governing body of the municipality.
         SECTION 4.  Subsection (b), Section 375.044, Local
  Government Code, is amended to read as follows:
         (b)  The board shall call a hearing on the exclusion of land
  or other property from the district if a signed petition evidencing
  the consent of the owners of a majority of the acreage in the
  district, according to the most recent certified tax roll of the
  county, is filed [landowner or property owner in the district
  files] with the secretary of the board [a written petition]
  requesting the hearing before the issuance of bonds.
         SECTION 5.  Section 375.061, Local Government Code, is
  amended to read as follows:
         Sec. 375.061.  NUMBER OF DIRECTORS; TERMS. A district is
  governed by a board of at least five [nine] but not more than 30
  directors who serve staggered four-year terms.
         SECTION 6.  Section 375.071, Local Government Code, is
  amended to read as follows:
         Sec. 375.071.  QUORUM. One-half of the serving directors
  constitutes a quorum, and a concurrence of a majority of a quorum of
  directors is required for any official action of the district. The
  written consent of at least two-thirds of the directors is required
  to authorize the levy of assessments, the levy of taxes, the
  imposition of impact fees, or the issuance of bonds.
         SECTION 7.  Section 375.091, Local Government Code, is
  amended to read as follows:
         Sec. 375.091.  GENERAL POWERS OF DISTRICT. [(a)] A district
  has the rights, powers, privileges, authority, and functions
  conferred by the general law of this state applicable to
  conservation and reclamation districts created under Article XVI,
  Section 59, of the Texas Constitution, including those conferred by
  Chapter 54, Water Code.
         [(b)     The district may contract and manage its affairs and
  funds for any corporate purpose in accordance with Chapter 54,
  Water Code.
         [(c)     The district has all the rights, powers, privileges,
  authority, and functions of road districts and road utility
  districts created pursuant to Article III, Section 52, of the Texas
  Constitution, including the power to levy ad valorem taxes for the
  construction, maintenance, and operation of macadamized, graveled,
  or paved roads and turnpikes, or in aid thereof. This power
  includes the power to levy ad valorem taxes to provide for mass
  transit systems in the manner and subject to the limitations
  provided in Article III, Section 52, and Article III, Section
  52(a), of the Texas Constitution.
         [(d)     A district has those powers conferred by Chapters 365
  and 441, Transportation Code, and the additional rights,
  privileges, authority, and functions contained in those chapters.]
         SECTION 8.  Subchapter E, Chapter 375, Local Government
  Code, is amended by adding Sections 375.0921 and 375.0922 to read as
  follows:
         Sec. 375.0921.  AUTHORITY FOR ROAD PROJECTS. (a)  Under
  Section 52, Article III, Texas Constitution, a 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.
         (b)  The district may impose ad valorem taxes to provide for
  mass transit systems in the manner and subject to the limitations
  provided by Section 52, Article III, and Section 52-a, Article III,
  Texas Constitution.
         Sec. 375.0922.  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.
         SECTION 9.  Subsection (a), Section 375.097, Local
  Government Code, is amended to read as follows:
         (a)  The board may appoint a hearings examiner to conduct any
  hearing called by the board, including a hearing required by
  Chapter 395. The hearings examiner may be an employee or contractor
  of the district, or a member of the district's board.
         SECTION 10.  Subchapter E, Chapter 375, Local Government
  Code, is amended by adding Section 375.098 to read as follows:
         Sec. 375.098.  DISTRICT ACT OR PROCEEDING PRESUMED VALID.
  (a)  A governmental act or proceeding of a district is conclusively
  presumed, as of the date it occurred, valid and to have occurred in
  accordance with all applicable statutes and rules if:
               (1)  the third anniversary of the effective date of the
  act or proceeding has expired; and
               (2)  a lawsuit to annul or invalidate the act or
  proceeding has not been filed on or before that third anniversary.
         (b)  This section does not apply to:
               (1)  an act or proceeding that was void at the time it
  occurred;
               (2)  an act or proceeding that, under a statute of this
  state or the United States, was a misdemeanor or felony at the time
  the act or proceeding occurred;
               (3)  a rule that, at the time it was passed, was
  preempted by a statute of this state or the United States, including
  Section 1.06 or 109.57, Alcoholic Beverage Code; or
               (4)  a matter that on the effective date of this
  section:
                     (A)  is involved in litigation if the litigation
  ultimately results in the matter being held invalid by a final
  judgment of a court; or
                     (B)  has been held invalid by a final judgment of a
  court.
         SECTION 11.  Subsection (a), Section 375.112, Local
  Government Code, is amended to read as follows:
         (a)  An improvement project or services provided by the
  district may include the construction, acquisition, improvement,
  relocation, operation, maintenance, or provision of:
               (1)  landscaping; lighting, banners, and signs;
  streets and sidewalks; pedestrian skywalks, crosswalks, and
  tunnels; seawalls; marinas; drainage and navigation improvements;
  pedestrian malls; solid waste, water, sewer, and power facilities,
  including electrical, gas, steam, cogeneration, and chilled water
  facilities; parks, plazas, lakes, rivers, bayous, ponds, and
  recreation and scenic areas; historic areas; fountains; works of
  art; off-street parking facilities, bus terminals, heliports, and
  mass transit systems; theatres, studios, exhibition halls,
  production facilities and ancillary facilities in support of the
  foregoing; and the cost of any demolition in connection with
  providing any of the improvement projects;
               (2)  other improvements similar to those described in
  Subdivision (1);
               (3)  the acquisition of real property or any interest
  in real property in connection with an improvement, project, or
  services authorized by this chapter, Chapter 54, Water Code, or
  Chapter 365 or 441, Transportation Code;
               (4)  special supplemental services for advertising,
  economic development, promoting the area in the district, health
  and sanitation, public safety, maintenance, security, business
  recruitment, development, elimination or relief of traffic
  congestion, recreation, and cultural enhancement; and
               (5)  expenses incurred in the establishment,
  administration, maintenance, and operation of the district or any
  of its improvements, projects, or services.
         SECTION 12.  Section 375.114, Local Government Code, is
  amended to read as follows:
         Sec. 375.114.  PETITION REQUIRED. The board may not finance
  services and improvement projects under this chapter unless a
  written petition has been filed with the board requesting those
  improvements or services signed by:
               (1)  the owners of 50 percent or more of the assessed
  value of the property in the district subject to assessment,
  according to [as determined from] the most recent certified county
  property tax rolls; or
               (2)  the owners of 50 percent or more of the surface
  area of the district, excluding roads, streets, highways, and
  utility rights-of-way, other public areas, and any other property
  exempt from assessment under Section 375.162 or 375.163, according
  to [as determined from] the most recent certified county property
  tax rolls.
         SECTION 13.  Subsection (e), Section 375.202, Local
  Government Code, is amended to read as follows:
         (e)  If provided by the bond order or resolution, the
  proceeds from the sale of bonds may be used to pay interest on the
  bonds during and after the period of the acquisition or
  construction of any improvement project to be provided through the
  issuance of the bonds, to pay administrative and operation expenses
  to create a reserve fund for the payment of the principal of and
  interest on the bonds, to pay costs associated with the issuance of
  the bonds, and to create any other funds. The proceeds of the bonds
  may be placed on time deposit or invested, until needed, in
  securities in the manner provided by the bond order or resolution.
         SECTION 14.  Subsection (a), Section 375.205, Local
  Government Code, is amended to read as follows:
         (a)  The district shall submit bonds and the appropriate
  proceedings authorizing their issuance to the attorney general for
  examination.  This subsection applies only to bonds that are public
  securities, as that term is defined by Section 1202.001, Government
  Code.
         SECTION 15.  Subchapter J, Chapter 375, Local Government
  Code, is amended by adding Section 375.209 to read as follows:
         Sec. 375.209.  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,
  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 16.  Section 375.221, Local Government Code, is
  amended to read as follows:
         Sec. 375.221.  APPLICABILITY OF WATER DISTRICTS LAW TO 
  COMPETITIVE BIDDING ON CERTAIN [PUBLIC WORKS] CONTRACTS.  (a)  
  Except as provided by Subsection (b) of this section, Subchapter I,
  Chapter 49, Water Code, applies to a district contract for
  construction work, equipment, materials, or machinery.
         (b)  [A contract, other than a contract for services, for
  more than $50,000 for the construction of improvements or the
  purchase of material, machinery, equipment, supplies, and other
  property, except real property, may be entered into only after
  competitive bids.   Notice of the contract for the purpose of
  soliciting bids shall be published once a week for two consecutive
  weeks in a newspaper with general circulation in the area in which
  the district is located.   The first publication of notice must be
  not later than the 14th day before the date set for receiving bids.]  
  The board may adopt rules governing receipt of bids and the award of
  the contract and providing for the waiver of the competitive bid
  requirement if:
               (1)  there is an emergency;
               (2)  the needed materials are available from only one
  source;
               (3)  in a procurement requiring design by the supplier
  competitive bidding would not be appropriate and competitive
  negotiation, with proposals solicited from an adequate number of
  qualified sources, would permit reasonable competition consistent
  with the nature and requirements of the procurement; or
               (4)  after solicitation, it is ascertained that there
  will be only one bidder.
         [(b)     If a proposed contract for works, plant improvements,
  facilities other than land, or the purchase of equipment,
  appliances, materials, or supplies is for an estimated amount of
  more than $50,000 or for a duration of more than two years,
  competitive sealed proposals shall be asked from at least three
  persons.]
         SECTION 17.  Subsection (a), Section 375.263, Local
  Government Code, is amended to read as follows:
         (a)  The [Except as limited by Section 375.264, the]
  governing body of a municipality in which a district is wholly
  located, by a vote of not less than two-thirds of its membership,
  may adopt an ordinance dissolving the district.
         SECTION 18.  Section 375.264, Local Government Code, is
  amended to read as follows:
         Sec. 375.264.  LIMITATION ON DISSOLUTION BY BOARD. A
  district may not be dissolved by its board [or by a municipality] if
  the district has any outstanding bonded indebtedness until that
  bonded indebtedness has been repaid or defeased in accordance with
  the order or resolution authorizing the issuance of the bonds.
         SECTION 19.  Subchapter N, Chapter 375, Local Government
  Code, is amended by adding Section 375.282 to read as follows:
         Sec. 375.282.  STRATEGIC PARTNERSHIP AGREEMENT. A district
  with territory in the extraterritorial jurisdiction of a
  municipality may negotiate and enter into a written strategic
  partnership with the municipality under Section 43.0751.
         SECTION 20.  Sections 375.021 and 375.027 and Subsection
  (f), Section 375.064, Local Government Code, are repealed.
         SECTION 21.  The change in law made by this Act to Section
  375.221, Local Government Code, applies only to a contract awarded
  on or after January 1, 2012.  A contract awarded before January 1,
  2012, is governed by the law in effect on the date the contract was
  awarded, and that law is continued in effect for that purpose.
         SECTION 22.  This Act takes effect September 1, 2011.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1234 passed the Senate on
  May 5, 2011, by the following vote: Yeas 31, Nays 0; and that the
  Senate concurred in House amendment on May 27, 2011, by the
  following vote: Yeas 30, Nays 1.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1234 passed the House, with
  amendment, on May 23, 2011, by the following vote: Yeas 142,
  Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor