Legislative Battles

HB 1219: Dissolution of Management Districts

The City of Houston stood in opposition to House Bill 1219, as the legislation sought to make it easier for property owners to dissolve Municipal Management Districts (MMD).

The bill would lower the threshold for dissolution of a district from a petition signed by the owners of 66% of the real property value in the district to 55% for any district created prior to 2017, and keeping 66% for any district created after 2017.

A Municipal Management District (MMD) is a political subdivision of the state created to promote, develop, encourage, and maintain employment, commerce, transportation, housing tourism, recreation, arts, entertainment, economic development, safety, and the public welfare within a defined area. Further, an MMD is an economic development tool that allows property owners to enhance a defined area.

MMDs are created by an act of the Texas Legislature and derive their rights and powers through enabling legislation.

There are 67 Municipal Management Districts in Houston and the surrounding area and are increasingly used across the state.

MMDs don’t replace municipal services, but they do supplement those services by providing services that benefit property included in its boundaries.

Management districts in Houston provide for the construction or maintenance of landscaping, lighting, signs, streets, walkways, drainage, solid waste, water, sewer, power facilities, parks, historic areas, works of art, parking facilities, transit systems, and other similar improvements. In addition, the districts may facilitate the financing of infrastructure, construction and reconstruction.

As such, dissolving an MMD would have a negative fiscal impact on the City and jeopardize the existence of several MMDs. Further, this legislation specifically targets MMDs in the Houston area, as a large number of Houston area MMDs were created prior to the 2017 threshold in the bill.

The City of Houston recognizes that providing for a mechanism to dissolve a management district is necessary, however, arbitrarily targeting Houston area MMDs, whose success are the model of the growing statewide trend, is ill conceived and opens the process up for abuse by bad actors.

Due to the advocacy efforts of several business and community groups, the Legislature agreed, and HB 1219 failed to pass during the 87th Legislative session.