Suspending limitations on conference committee jurisdiction, S.B. 1396 By ____________________ H.R. No. ____ 74R14312 CAG-D R E S O L U T I O N 1-1 BE IT RESOLVED by the House of Representatives of the State 1-2 of Texas, 74th Legislature, Regular Session, 1995, That House Rule 1-3 13, Section 9(a), be suspended in part as provided by House Rule 1-4 13, Section 9(f), to enable the conference committee appointed to 1-5 resolve the differences on Senate Bill No. 1396 to consider and 1-6 take action on the following matters: 1-7 (1) House Rule 13, Section 9(a)(4), is suspended to permit 1-8 the committee to add text in the form of Section 43.0751, Local 1-9 Government Code, to read as follows: 1-10 SECTION 1. Subchapter D, Chapter 43, Local Government Code, 1-11 is amended by adding Section 43.0751 to read as follows: 1-12 Sec. 43.0751. STRATEGIC PARTNERSHIPS FOR CONTINUATION OF 1-13 CERTAIN DISTRICTS. (a) In this section: 1-14 (1) "District" means a water control and improvement 1-15 district or a municipal utility district created or operating under 1-16 Chapter 51 or 54, Water Code. 1-17 (2) "Limited district" means a district that, pursuant 1-18 to a strategic partnership agreement, continues to exist after 1-19 full-purpose annexation by a municipality in accordance with the 1-20 terms of a strategic partnership agreement. 1-21 (3) "Strategic partnership agreement" means a written 1-22 agreement between a municipality and a district that provides terms 1-23 and conditions under which services will be provided and funded by 1-24 the parties to the agreement and under which the district will 2-1 continue to exist for an extended period of time if the land within 2-2 the district is annexed for limited or full purposes by the 2-3 municipality. 2-4 (b) The governing bodies of a municipality and a district 2-5 shall negotiate and may enter into a written strategic partnership 2-6 agreement for the district. The governing bodies of the 2-7 municipality and the district shall evidence their intention to 2-8 negotiate such an agreement by resolution, each of which 2-9 resolutions shall specify an expiration date if the other governing 2-10 body fails to adopt a resolution under this section on or before 2-11 the specified date. The governing body of a municipality that has 2-12 evidenced its intention by unexpired resolution to enter into 2-13 negotiations with a district for an agreement under this section 2-14 may not initiate proceedings to annex the district under any other 2-15 section of this code prior to the expiration of two years after the 2-16 adoption date of the resolution unless the municipality has 2-17 previously instituted annexation proceedings in granting consent to 2-18 the creation of the district prior to January 1, 1995. 2-19 (c) A strategic partnership agreement shall not be effective 2-20 until adopted by the governing bodies of the municipality and the 2-21 district. The agreement shall be recorded in the deed records of 2-22 the county or counties in which the land included within the 2-23 district is located and shall bind each owner and each future owner 2-24 of land included within the district's boundaries on the date the 2-25 agreement becomes effective. 2-26 (d) Before the governing body of a municipality or a 2-27 district adopts a strategic partnership agreement, it shall conduct 3-1 two public hearings at which members of the public who wish to 3-2 present testimony or evidence regarding the proposed agreement 3-3 shall be given the opportunity to do so. Notice of public hearings 3-4 conducted by the governing body of a municipality under this 3-5 subsection shall be published in a newspaper of general circulation 3-6 in the municipality and in the district. The notice must be in the 3-7 format prescribed by Section 43.123(b) and must be published at 3-8 least once on or after the 20th day before each date. Notice of 3-9 public hearings conducted by the governing body of a district under 3-10 this subsection shall be given in accordance with the district's 3-11 notification procedures for other matters of public importance. 3-12 Any notice of a public hearing conducted under this subsection 3-13 shall contain a statement of the purpose of the hearing, the date, 3-14 time, and place of the hearing, and the location where copies of 3-15 the proposed agreement may be obtained prior to the hearing. The 3-16 governing bodies of a municipality and a district may conduct joint 3-17 public hearings under this subsection, provided that at least one 3-18 public hearing is conducted within the district. A municipality 3-19 may combine the public hearings and notices required by this 3-20 subsection with the public hearings and notices required by Section 3-21 43.124. 3-22 (e) The governing body of a municipality may not annex a 3-23 district for limited purposes under this section or under the 3-24 provisions of Subchapter F until it has adopted a strategic 3-25 partnership agreement with the district. The governing body of a 3-26 municipality may not adopt a strategic partnership agreement before 3-27 the agreement has been adopted by the governing body of the 4-1 affected district. 4-2 (f) A strategic partnership agreement may provide for the 4-3 following: 4-4 (1) limited-purpose annexation of the district under 4-5 the provisions of Subchapter F provided that the district shall 4-6 continue in existence during the period of limited-purpose 4-7 annexation; 4-8 (2) such amendments to the timing requirements of 4-9 Sections 43.123(d)(2) and 43.127(b) as may be necessary or 4-10 convenient to effectuate the purposes of the agreement; 4-11 (3) payments by the municipality to the district for 4-12 services provided by the district; 4-13 (4) annexation of any commercial property in a 4-14 district for full purposes by the municipality, notwithstanding any 4-15 other provision of this code or the Water Code, except for the 4-16 obligation of the municipality to provide, directly or through 4-17 agreement with other units of government, full provision of 4-18 municipal services to annexed territory, in lieu of any annexation 4-19 of residential property or payment of any fee on residential 4-20 property in lieu of annexation of residential property in the 4-21 district authorized by this subsection; 4-22 (5) a full-purpose annexation provision that specifies 4-23 one of the following: 4-24 (A) the date on which the land included within 4-25 the district's boundaries shall be converted from the 4-26 municipality's limited-purpose jurisdiction to its full-purpose 4-27 jurisdiction, provided that such date shall not be later than 10 5-1 years after the effective date of the strategic partnership 5-2 agreement; or 5-3 (B)(i) terms for payment of an annual fee to the 5-4 municipality by the district in lieu of full-purpose annexation, 5-5 the form in which each such payment must be tendered, a method of 5-6 calculating the fee, and the date by which each such payment must 5-7 be made; failure by a district to timely make an annual payment in 5-8 lieu of full-purpose annexation in the amount and form required by 5-9 a strategic partnership agreement shall be the only ground for 5-10 termination of the agreement with respect to annexation at the 5-11 option of the municipality; 5-12 (ii) to determine a reasonable fee to be 5-13 derived from residential property in a district, the municipality 5-14 or the district may request a cost-of-service study by an 5-15 independent third party agreeable to both parties if 5-16 cost-of-service data prepared by the municipality is not 5-17 acceptable. Both parties shall be equally responsible for the cost 5-18 of the study, which shall include an evaluation of the estimated 5-19 annual cost of providing municipal services to the residential 5-20 portion of the district over the next 10 years and the estimated 5-21 annual amount of ad valorem taxes from residential property the 5-22 city would receive on full-purpose annexation of the district over 5-23 the next 10 years. The fee shall not exceed the estimated annual 5-24 amount of residential ad valorem taxes that would be derived by 5-25 full-purpose annexation of the district, less the estimated annual 5-26 amount required to provide municipal services to the residential 5-27 property in the district if annexed for full purposes. A fee 6-1 determined through this methodology is subject to renegotiation 6-2 every 10 years at the request of either party to the agreement 6-3 following the same procedure used to set the fee in the original 6-4 agreement. This methodology does not apply to fees from commercial 6-5 property; 6-6 (6) conversion of the district to a limited district 6-7 including some or all of the land included within the boundaries of 6-8 the district, which conversion shall be effective on the 6-9 full-purpose annexation conversion date established under 6-10 Subdivision (5)(A); 6-11 (7) agreements existing between districts and 6-12 governmental bodies and private providers of municipal services in 6-13 existence on the date a municipality evidences its intention by 6-14 adopting a resolution to negotiate for a strategic partnership 6-15 agreement with the district shall be continued and provision made 6-16 for modifications to such existing agreements; and 6-17 (8) such other lawful terms that the parties consider 6-18 appropriate. 6-19 (g) A strategic partnership agreement that provides for the 6-20 creation of a limited district under Subsection (f)(6) shall 6-21 include provisions setting forth the following: 6-22 (1) the boundaries of the limited district; 6-23 (2) the functions of the limited district and the term 6-24 during which the limited district shall exist after full-purpose 6-25 annexation, which term may be renewed successively by the governing 6-26 body of the municipality, provided that no such original or renewed 6-27 term shall exceed 10 years; 7-1 (3) the name by which the limited district shall be 7-2 known; and 7-3 (4) the procedure by which the limited district may be 7-4 dissolved prior to the expiration of any term established under 7-5 Subdivision (2). 7-6 (h) On the full-purpose annexation conversion date set forth 7-7 in the strategic partnership agreement pursuant to Subsection 7-8 (f)(5)(A), the land included within the boundaries of the district 7-9 shall be deemed to be within the full-purpose boundary limits of 7-10 the municipality without the need for further action by the 7-11 governing body of the municipality. The full-purpose annexation 7-12 conversion date established by a strategic partnership agreement 7-13 may be altered only by mutual agreement of the district and the 7-14 municipality. However, nothing herein shall prevent the 7-15 municipality from terminating the agreement and instituting 7-16 proceedings to annex the district, on request by the governing body 7-17 of the district, on any date prior to the full-purpose annexation 7-18 conversion date established by the strategic partnership agreement. 7-19 Land annexed for limited or full purposes under this section shall 7-20 not be included in calculations prescribed by Section 43.055(a). 7-21 (i) A district that is negotiating for or that has adopted a 7-22 strategic partnership agreement shall not incur additional debt, 7-23 liabilities, or obligations, to construct additional utility 7-24 facilities, or sell or otherwise transfer property without prior 7-25 approval of the municipality, which approval shall not be 7-26 unreasonably withheld or delayed. An action taken in violation of 7-27 this subsection is void. 8-1 (j) Except as limited by this section or the terms of a 8-2 strategic partnership agreement, a district that has been annexed 8-3 for limited purposes by a municipality and a limited district shall 8-4 have and may exercise all functions, powers, and authority 8-5 otherwise vested in a district. 8-6 (k) A municipality that has annexed a district for limited 8-7 purposes under this section may impose a retail sales tax within 8-8 the boundaries of the district. 8-9 (l) An agreement or a decision made under this section and 8-10 an action taken under the agreement by the parties to the agreement 8-11 are not subject to approval or an appeal brought under the Water 8-12 Code unless it is an appeal of a utility rate charged by a 8-13 municipality to customers outside the corporate boundaries of the 8-14 municipality. 8-15 (m) A municipality that may annex a district for limited 8-16 purposes to implement a strategic partnership agreement under this 8-17 section shall not annex for full purposes any territory within a 8-18 district created pursuant to a consent agreement with that 8-19 municipality executed before August 27, 1979. The prohibition on 8-20 annexation established by this subsection shall expire on 8-21 September 1, 1997, or on the date on or before which the 8-22 municipality and any district may have separately agreed that 8-23 annexation would not take place whichever is later. 8-24 Explanation: This change is necessary to clarify the 8-25 authority of a municipality and certain municipal utility districts 8-26 or water control and improvement districts to enter into a 8-27 strategic partnership agreement. 9-1 (2) House Rule 13, Section 9(a)(4), is suspended to permit 9-2 the committee to add text in the form of Article 1010a, Revised 9-3 Statutes, to read as follows: 9-4 SECTION 2. Chapter 4, Title 28, Revised Statutes, is amended 9-5 by adding Article 1010a to read as follows: 9-6 Art. 1010a. DEVELOPMENT REGULATION 9-7 Sec. 1. This article applies only to a home-rule 9-8 municipality that: 9-9 (1) has a charter provision allowing for 9-10 limited-purpose annexation; and 9-11 (2) has annexed territory for a limited purpose. 9-12 Sec. 2. In this article: 9-13 (1) "Affected area" means an area that is: 9-14 (A) within a municipality or a municipality's 9-15 extraterritorial jurisdiction; 9-16 (B) within a county other than the county in 9-17 which a majority of the territory of the municipality is located; 9-18 (C) within the boundaries of one or more school 9-19 districts other than the school district in which a majority of the 9-20 territory of the municipality is located; and 9-21 (D) within the area of or within 1,500 feet of 9-22 the boundary of an assessment road district in which there are two 9-23 state highways. 9-24 (2) "Assessment road district" means a road district 9-25 that has issued refunding bonds and that has imposed assessments on 9-26 each parcel of land under Section 4.438A, County Road and Bridge 9-27 Act (Article 6702-1, Vernon's Texas Civil Statutes). 10-1 (3) "State highway" means a highway that is part of 10-2 the state highway system under Section 2, Chapter 186, General 10-3 Laws, Acts of the 39th Legislature, Regular Session, 1925 (Article 10-4 6674b, Vernon's Texas Civil Statutes). 10-5 Sec. 3. (a) A municipality may not deny, limit, delay, or 10-6 condition the use or development of land, any part of which is 10-7 within an affected area, because of: 10-8 (1) traffic or traffic operations that would result 10-9 from the proposed use or development of the land; or 10-10 (2) the effect that the proposed use or development of 10-11 the land would have on traffic or traffic operations. 10-12 (b) In this section, an action to deny, limit, delay, or 10-13 condition the use or development of land includes a decision or 10-14 action by the governing body of the municipality or a commission, 10-15 board, department, agency, office, or employee of the municipality 10-16 related to zoning, subdivision, site planning, the construction or 10-17 building permit process, or any other municipal process, approval, 10-18 or permit. 10-19 (c) This article does not prevent a municipality from 10-20 exercising its authority to require the dedication of right-of-way. 10-21 Sec. 4. (a) A provision in any covenant or agreement 10-22 relating to land in an affected area made before, on, or after the 10-23 effective date of this article that would have the effect of 10-24 denying, limiting, delaying, or conditioning the use or development 10-25 of the land because of its effect on traffic or traffic operations 10-26 may not be enforced by a municipality. 10-27 (b) This article controls over any other law relating to 11-1 municipal regulation of land use or development based on traffic. 11-2 Explanation: This change is necessary to clarify the 11-3 authority of certain municipalities to regulate the development or 11-4 use of land within certain affected areas. 11-5 (3) House Rule 13, Section 9(a)(1), is suspended to permit 11-6 the committee to change the text of Section 43.203(c)(1), Local 11-7 Government Code to read as follows: 11-8 (1) the district's status is automatically altered 11-9 from full-purpose annexation to limited-purpose annexation for a 11-10 period of not less than 10 years, beginning January 1 of the year 11-11 following the date of the submission of a petition, unless the 11-12 voters of the district have approved the dissolution of the 11-13 district through an election authorized by this section; and 11-14 Explanation: This change is necessary to clarify the 11-15 procedure for altering annexation status. 11-16 (4) House Rule 13, Section 9(a)(1), is suspended to permit 11-17 the committee to change the text of Section 43.203(g), Local 11-18 Government Code, to read as follows: 11-19 (g) This section does not allow a change in annexation 11-20 status for land or facilities in a district to which the 11-21 municipality granted a property tax abatement before September 1, 11-22 1995. 11-23 Explanation: This change is necessary to clarify the types 11-24 of land or facilities that may have a change in annexation status. 11-25 ¯BEGCAPTIONÆ 11-26 Suspending limitations on conference committee jurisdiction, S.B. 11-27 1396. 12-1 ¯ENDCAPTIONÆ