CHAPTER 3886. PROSPER MANAGEMENT DISTRICT NO. 1
SPECIAL DISTRICT LOCAL LAWS CODE
TITLE 4. DEVELOPMENT AND IMPROVEMENT
SUBTITLE C. DEVELOPMENT, IMPROVEMENT, AND MANAGEMENT
CHAPTER 3886. PROSPER MANAGEMENT DISTRICT NO. 1
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 3886.001. DEFINITIONS. In this chapter:
(1) "Board" means the district's board of directors.
(2) "Director" means a board member.
(3) "District" means the Prosper Management District No. 1.
(4) "Improvement project" means any program or project
authorized by Section 3886.103, inside or outside the district.
(5) "Town" means the Town of Prosper, Texas.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.002. 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.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.003. FINDINGS OF PUBLIC PURPOSE AND BENEFIT. (a) The
district is created to serve a public purpose 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; and
(3) develop or expand transportation and commerce.
(e) The district will:
(1) promote the health, safety, and general welfare of
residents, employers, employees, potential 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.
(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.
(h) This chapter and the creation of the district may not be
interpreted to relieve the town, Collin County, or Denton County
from providing the level of services provided as of the effective
date of the Act creating this chapter to the area in the
district. The district is created to supplement and not to
supplant the town and county services provided in the district.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.004. INITIAL DISTRICT TERRITORY. (a) The district is
initially composed of the territory described by Section 2 of the
Act creating this chapter.
(b) The boundaries and field notes contained in Section 2 of the
Act creating this chapter form a closure. A mistake made 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 issue any type of bond for the purposes for which
the district is created or to pay the principal of and interest
on a bond;
(3) right to impose a tax; or
(4) legality or operation.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.005. ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES. (a)
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 town under
Chapter 311, Tax Code;
(2) a tax abatement reinvestment zone created by the town under
Chapter 312, Tax Code; or
(3) an enterprise zone created by the town under Chapter 2303,
Government Code.
(b) If the town creates a tax increment reinvestment zone, tax
abatement reinvestment zone, or enterprise zone under Subsection
(a), the town and the board of directors of the zone, by contract
with the district, may grant money deposited in the tax increment
fund to the district to be used by the district for the purposes
described by Section 380.002(b), Local Government Code, for money
granted to a corporation under that section, including the right
to pledge the money as security for any bonds issued by the
district for an improvement project.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
SUBCHAPTER B. BOARD OF DIRECTORS
Sec. 3886.051. GOVERNING BODY; TERMS. (a) The district is
governed by a board of five directors.
(b) Directors serve staggered four-year terms, with the terms of
two or three directors expiring on June 1 of each odd-numbered
year.
(c) The governing body of the town, by a majority vote, shall
appoint one member of the board.
(d) The board shall recommend to the governing body of the town
persons to serve in the other four positions. The board shall
recommend to the governing body of the town the appropriate
number of successor directors before the terms of directors
appointed under this subsection expire. After reviewing the
recommendations, the governing body shall approve or disapprove
the directors recommended by the board. If the governing body is
not satisfied with the recommendations submitted by the board,
the board, on the request of the governing body, shall submit
additional recommendations.
(e) Board members may serve successive terms.
(f) If any provision of Subsection (c), (d), or (e) is found to
be invalid, the Texas Commission on Environmental Quality shall
appoint the board from recommendations submitted by the preceding
board.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.052. ELIGIBILITY. Except for a director appointed as
provided by Section 3886.051(c) or 3886.056(a), to be eligible to
serve as a director a person must own land in the district.
Section 49.052, Water Code, applies to the district.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.053. VACANCY. (a) The remaining directors shall fill
a vacancy on the board by appointing a person who is eligible
under Section 3886.052.
(b) If there are fewer than three directors, the governing body
of the town shall appoint the necessary number of directors to
fill all board vacancies.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.054. DIRECTOR'S OATH AND AFFIRMATION. A director's
oath and affirmation of office shall be filed with the district,
and the district shall retain the oath and affirmation in the
district records.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.055. OFFICERS. The board shall elect from among the
directors a chair, a vice chair, and a secretary.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
For expiration of this section, see Subsection (e).
Sec. 3886.056. INITIAL DIRECTORS. (a) The governing body of
the town shall appoint one initial director not later than the
90th day after the effective date of the Act creating the
district.
(b) On or after the effective date of the Act creating the
district, the owner or owners of a majority of the assessed value
of the real property in the district may submit a petition to the
governing body of the town requesting that the governing body
appoint as additional initial directors the four persons named in
the petition.
(c) If a petition described by Subsection (b) is not submitted
to the governing body of the town not later than the 30th day
after the effective date of the Act creating the district, the
governing body shall appoint as initial directors four additional
persons eligible under Section 3886.052.
(d) The four initial directors named in the petition described
by Subsection (b) or appointed under Subsection (c) shall draw
lots to determine which two directors shall serve two-year terms
and which two directors shall serve four-year terms. The
director appointed by the town under Subsection (a) shall serve a
four-year term.
(e) This section expires September 1, 2013.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 3886.101. GENERAL POWERS AND DUTIES. The district has the
powers and duties necessary to accomplish the purposes for which
the district is created.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.102. MUNICIPAL MANAGEMENT DISTRICT POWERS AND DUTIES.
(a) The district has the powers and duties provided by the
general laws of this state, including Chapter 375, Local
Government Code, as applicable to municipal management districts
created under Sections 52 and 52-a, Article III, and Section 59,
Article XVI, Texas Constitution.
(b) The district shall make available a district water or
wastewater facility to each person who holds a certificate of
convenience and necessity under Chapter 13, Water Code, for land
in the district.
(c) The district may not provide retail water or wastewater
services.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.103. IMPROVEMENT PROJECTS. (a) Subject to Sections
3886.102(b) and (c), the district may provide, or it may enter
into contracts with a governmental or private entity to provide,
the following types of improvement projects located in the
district or activities in support of or incidental to those
projects:
(1) a supply and distribution facility or system to provide
potable and town-approved nonpotable water to the residents and
businesses of the district, including a wastewater collection
facility;
(2) a paved road, street, or turnpike, inside and outside the
district, to the extent authorized by Section 52, Article III,
Texas Constitution;
(3) the planning, design, construction, improvement, and
maintenance of:
(A) landscaping;
(B) highway right-of-way or transit corridor beautification and
improvement;
(C) lighting, banners, and signs;
(D) a street or sidewalk;
(E) a hiking and cycling path or trail;
(F) a pedestrian walkway, skywalk, crosswalk, or tunnel;
(G) a park, lake, garden, recreational facility, sports
facility, open space, scenic area, or related exhibit or
preserve;
(H) a fountain, plaza, or pedestrian mall; or
(I) a drainage or storm-water detention improvement;
(4) protection and improvement of the quality of storm water
that flows through the district;
(5) the planning, design, construction, improvement,
maintenance, and operation of:
(A) a water or sewer facility; or
(B) an off-street parking facility or heliport;
(6) the planning and acquisition of:
(A) public art and sculpture and related exhibits and
facilities; or
(B) an educational and cultural exhibit or facility;
(7) the planning, design, construction, acquisition, lease,
rental, improvement, maintenance, installation, and management of
and provision of furnishings for a facility for:
(A) a conference, convention, or exhibition;
(B) a manufacturer, consumer, or trade show;
(C) a civic, community, or institutional event; or
(D) an exhibit, display, attraction, special event, or seasonal
or cultural celebration or holiday;
(8) the removal, razing, demolition, or clearing of land or
improvements in connection with improvement projects;
(9) the acquisition and improvement of land or other property
for the mitigation of the environmental effects of an improvement
project;
(10) the acquisition of property or an interest in property in
connection with an authorized improvement project;
(11) a special or supplemental service for the improvement and
promotion of the district or an area adjacent to the district or
for the protection of public health and safety in or adjacent to
the district, including:
(A) advertising;
(B) promotion;
(C) tourism;
(D) health and sanitation;
(E) public safety;
(F) security;
(G) fire protection or emergency medical services;
(H) business recruitment;
(I) development;
(J) elimination of traffic congestion; and
(K) recreational, educational, or cultural improvements,
enhancements, and services; or
(12) any similar public improvement, facility, or service.
(b) Subject to Section 3886.104, the district may not undertake
an improvement project under this section unless the board
determines the project to be necessary to accomplish a public
purpose of the district.
(c) An improvement project must comply with any applicable town
requirements, including codes and ordinances and any planned
development ordinance applicable to land in the district.
(d) The district may not provide, conduct, or authorize an
improvement project on the town streets, highways, rights-of-way,
or easements without the consent of the governing body of the
town.
(e) Subject to an agreement between the district and the town,
the town may:
(1) by ordinance, order, or resolution require that title to all
or any portion of an improvement project vest in the town; or
(2) by ordinance, order, resolution, or other directive,
authorize the district to own, encumber, maintain, and operate an
improvement project, subject to the right of the town to order a
conveyance of the improvement project to the town on a date
determined by the town, provided, however, that if an improvement
project is conveyed to the town, the improvement project will
continue to be used to serve land in the district.
(f) The district shall immediately comply with any town
ordinance, order, or resolution adopted under Subsection (e).
(g) For the purposes of this section, planning, design,
construction, improvement, and maintenance of a lake includes
work done for drainage, reclamation, or recreation.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.104. PROJECT DEVELOPMENT AGREEMENT REQUIRED. Before
the district may issue bonds, impose taxes, or borrow money, the
district and the town must negotiate and execute a mutually
approved and accepted interlocal project development agreement
regarding the district's development plans and rules for:
(1) the development and operation of the district; and
(2) the financing of improvement projects.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.105. GENERAL POWERS REGARDING CONTRACTS. (a) The
district may:
(1) contract with any person to accomplish any district purpose,
including a contract for:
(A) the payment, repayment, or reimbursement of costs incurred
by that person on behalf of the district, including all or part
of the costs of any improvement project and interest on the
reimbursed cost; or
(B) the use, occupancy, lease, rental, operation, maintenance,
or management of all or part of a proposed or existing
improvement project; and
(2) apply for and contract with any person to receive,
administer, and perform a duty or obligation of the district
under a federal, state, local, or private gift, grant, loan,
conveyance, transfer, bequest, or other financial assistance
arrangement relating to the investigation, planning, analysis,
study, design, acquisition, construction, improvement,
completion, implementation, or operation by the district or
others of a proposed or existing improvement project.
(b) A contract the district enters into to carry out a purpose
of this chapter may be on any terms and for any period the board
determines, including a negotiable or nonnegotiable note or
warrant payable to the town, Collin County, Denton County, or any
other person.
(c) Any person may contract with the district to carry out the
purposes of this chapter without further statutory or other
authorization.
(d) The governing body of the town must approve a contract
payable from ad valorem taxes for a period longer than one year.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.106. RULES; ENFORCEMENT. (a) The district may adopt
rules:
(1) to administer or operate the district;
(2) for the use, enjoyment, availability, protection, security,
and maintenance of the district's property and facilities; or
(3) to provide for public safety and security in the district.
(b) The district may enforce its rules by injunctive relief.
(c) To the extent a district rule conflicts with a town rule,
order, or regulation, the town rule, order, or regulation
controls.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.107. NAME CHANGE. The board by resolution may change
the district's name. The board shall give written notice of the
change to the town.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.108. ADDING OR REMOVING TERRITORY. The board may add
or remove territory under Subchapter J, Chapter 49, Water Code,
and Section 54.016, Water Code, except that:
(1) the addition or removal of the territory must be approved
by:
(A) the governing body of the town; and
(B) the owners of the territory being added or removed;
(2) a reference to a tax in Subchapter J, Chapter 49, Water
Code, or Section 54.016, Water Code, means an ad valorem tax; and
(3) territory may not be removed from the district if bonds or
other obligations of the district payable wholly or partly from
ad valorem taxes on the territory are outstanding.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.109. ECONOMIC DEVELOPMENT. The district may create
economic development programs and exercise the economic
development powers that Chapter 1509, Government Code, provides
for a municipality.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.110. NO EMINENT DOMAIN POWER. The district may not
exercise the power of eminent domain.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.111. TERMS OF EMPLOYMENT; COMPENSATION. The board may
employ and establish the terms of employment and compensation of
an executive director or general manager and any other district
employees the board considers necessary.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS
Sec. 3886.151. ELECTIONS REGARDING TAXES OR BONDS. (a) The
district may issue, without an election, bonds and other
obligations secured by revenue or contract payments from any
source other than ad valorem taxes.
(b) The district must hold an election in the manner provided by
Chapters 49 and 54, Water Code, to obtain voter approval before
the district may impose an ad valorem tax or issue bonds payable
from ad valorem taxes.
(c) 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.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.152. BORROWING MONEY. The district may borrow money
for a district purpose by issuing or executing bonds, notes,
credit agreements, or other obligations of any kind found by the
board to be necessary or appropriate for a district purpose. A
note, bond, credit agreement, or other obligation must be secured
by and payable from ad valorem taxes, assessments, or any other
district revenue.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.153. OPERATION AND MAINTENANCE TAX. (a) If
authorized at an election held under Section 3886.151, the
district may impose an operation and maintenance tax on taxable
property in the district in accordance with Section 49.107, Water
Code.
(b) Except as provided by Subsection (c), the district may
impose the tax for operation and maintenance purposes, including
for:
(1) planning, constructing, acquiring, maintaining, repairing,
and operating all improvement projects, including land, plants,
works, facilities, improvements, appliances, and equipment of the
district; and
(2) paying costs of services, engineering and legal fees, and
organization and administrative expenses.
(c) The district may not impose an operation and maintenance tax
unless the maximum rate of the tax is approved by the governing
body of the town and a majority of the voters of the district
voting at an election held for that purpose. If the maximum tax
rate is approved, the board may impose the tax at any rate that
does not exceed the approved rate.
(d) An operation and maintenance tax election may be held at the
same time and in conjunction with any other district election.
The election may be called by a separate election order or as
part of any other election order.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.154. CONTRACT TAXES. (a) In accordance with Section
49.108, Water Code, the district may make payments under a
contract from taxes other than operation and maintenance taxes
after the provisions of the contract have been approved by a
majority of the district voters voting at an election held for
that purpose.
(b) A contract approved by the district voters may contain a
provision stating that the contract may be modified or amended by
the board without further voter approval.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS
Sec. 3886.201. AUTHORITY TO ISSUE BONDS AND OTHER OBLIGATIONS.
The district may issue bonds or other obligations payable wholly
or partly from ad valorem taxes, impact fees, revenue, contract
payments, grants, sales and use taxes, revenue from a zone
created under Chapter 311 or 312, Tax Code, or Chapter 2303,
Government Code, other district money, or any combination of
those sources, to pay for any authorized district purpose.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.202. TAXES FOR BONDS. (a) At the time the district
issues bonds payable wholly or partly from ad valorem taxes, the
board shall provide for the annual imposition of an ad valorem
tax, without limit as to rate or amount, as required by Section
54.601, Water Code.
(b) The board shall annually impose the tax while all or part of
the bonds are outstanding. Sections 54.601 and 54.602, Water
Code, govern the amount and rate of the tax.
(c) The district annually shall impose the tax on all taxable
property in the district in an amount sufficient to:
(1) pay the interest on the bonds or other obligations as the
interest becomes due;
(2) 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
(3) pay the expenses of imposing the tax.
(d) The district may not issue bonds or other obligations that
are secured by and payable from ad valorem taxes unless the bonds
and the imposition of taxes are approved by:
(1) a majority of the district voters voting at an election for
that purpose; and
(2) the governing body of the town.
(e) The district shall hold an election required by this section
in the manner provided by Chapter 54, Water Code.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.203. BOND ISSUANCE PLAN REQUIRED BEFORE ISSUING BONDS.
The district may not issue bonds until the governing body of the
town approves a bond issuance plan authorizing and prescribing
the limitations on the issuance of the bonds.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.204. BOND MATURITY. Bonds must mature not more than
40 years from their date of issuance.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.205. BONDS FOR ROAD PROJECTS. At the time of
issuance, the total principal amount of bonds or other
obligations issued or incurred to finance road projects may not
exceed one-fourth of the assessed value of the real property in
the district.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
SUBCHAPTER F. DISSOLUTION
Sec. 3886.251. DISSOLUTION BY TOWN ORDINANCE. (a) The town by
ordinance may dissolve the district.
(b) The town may not dissolve the district until the district's
outstanding indebtedness or contractual obligations that are
payable from ad valorem taxes have been repaid or discharged.
(c) The town may not dissolve the district until the agreement
under Section 3886.104 has been executed and the district's
performance under the agreement has been fulfilled, including any
right or obligation the district has to reimburse a developer or
owner for the costs of improvement projects.
(d) The town may not dissolve the district before December 31,
2016.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.252. COLLECTION OF ASSESSMENTS AND OTHER REVENUE. (a)
If the dissolved district has bonds or other obligations
outstanding secured by and payable from assessments or other
revenue, other than ad valorem taxes, the town shall succeed to
the rights and obligations of the district regarding enforcement
and collection of the assessments or other revenue.
(b) The town shall have and exercise all district powers to
enforce and collect the assessments or other revenue to pay:
(1) the bonds or other obligations when due and payable
according to their terms; or
(2) special revenue or assessment bonds or other obligations
issued by the town to refund the outstanding bonds or
obligations.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.
Sec. 3886.253. ASSUMPTION OF ASSETS AND LIABILITIES. (a) After
the town dissolves the district, the town assumes the obligations
of the district, including any bonds or other indebtedness
payable from assessments or other district revenue.
(b) If the town dissolves the district, the board shall transfer
ownership of all district property to the town.
Added by Acts 2009, 81st Leg., R.S., Ch.
1077, Sec. 1, eff. September 1, 2009.