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The House Committee on Special Purpose Districts met on July 19 to discuss a new template for Municipal Utility District and Management District bills.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Statements

  • Chair Jim Murphy – We have two issues we want to address, we don’t plan on solving them today, but we do want to talk about them
  • Introduces Rep. Ben Leman (succeeded Leighton Schubert, HD 13) to the committee

 

Chair Jim Murphy

  • Introduces bill template for Municipal Utility Districts, we have crafted a version of the template for management districts
  • No one is precluded from doing anything different, but template bills have special conditions
  • Also speaks to standard language not necessarily part of the template, but can apply to things like hotel/motel tax
  • Have streamlined areas where things are explained in other bodies of law, incorporated through reference
  • We’re moving to a majority of land by value rather than majority by owners; since districts levy assessments & not taxes, thought it was important to go by value
  • Reflects what was heard in Houston where a group of small owners ran a district & a group of large owners felt disenfranchised
  • Maintaining election for ad valorem tax rate
  • Will need to continue working on language to differentiate bonds and lines of credit from each other
  • Maintained notion of consent of a municipality within an ETJ/city limit, important that governments coordinate with each other
  • Have lowered the threshold for dissolution from 3/4ths to 2/3rds, this lower threshold is also determined by value
  • Once we get this approved, would like to send it over to the Senate, hoping to have a universal template for session; would like committee members to sign off once borrowing language is resolved (e.g. bonds vs. lines of credit)
  • Cecil Bell – Obviously were going to look at the interim report for the final language on the template, are you saying that when that interim report is adopted this template will be inclusive of that report? So there is a little time to act
    • Absolutely, expected this in advance of this hearing, but not how it worked out; if we had another two weeks, we could act on this document today
    • Template is a good reflection of the outreach work, but not ready for approval yet
    • I don’t anticipate this being a long process, just a couple weeks at most
  • Scott Cosper – Related to section 207, I’m glad that this interim report is addressing how crucial it is that districts still receive crucial services (like water and wastewater); should be as transparent as possible & needs to be a clearer notice of dissolution, particularly in rural districts
  • Cosper – Lack of understanding and communication led to most of the issues in my district
    • Dissolution is largely a debt and asset issue currently, but also need to address service issues, will come up with some notice that addresses dissolution
    • When you form districts you give notice, so when we dissolve them we should also give notice, seems logical
  • Will fold interim report and template folded together in the very near future