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Senate Bill 1535 |
Senate Author: Fraser |
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Effective: 6-15-07 |
House Sponsor: Hilderbran |
General-law Water Code provisions for municipal utility districts (MUDs) allow a MUD that is composed of at least 1,500 acres to define an area within the MUD and to issue bonds for the benefit of that defined area, payable from ad valorem taxes limited to that defined area. Senate Bill 1535 adds a Local Government Code chapter, applicable to a municipality that abolishes such a MUD. It provides that if the abolished MUD's bonds for a defined area have been approved but some or all of the bonds were not issued, sold, and delivered before the abolition, the governing body of the municipality may issue and sell municipal bonds for the original purposes for which they were approved, in an amount up to the unissued amount. The bonds must be secured by a tax on the property in the defined area of the former MUD. Alternatively, the governing body of the municipality may establish a public improvement district for the purpose of issuing and selling bonds for the original purpose, up to the unissued amount. A municipality may pursue either alternative, but not both. The new law prevails over a conflicting municipal charter, and prevails over any other conflicting law including the Public Improvement District Assessment Act.