By: Barrientos S.B. No. 1395
A BILL TO BE ENTITLED
AN ACT
1-1 relating to authorizing agreements affecting annexation between
1-2 certain political subdivisions of the state.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter C, Chapter 42, Local Government Code,
1-5 is amended by adding Section 42.048 to read as follows:
1-6 Sec. 42.048. REGIONAL ECONOMIC DEVELOPMENT AGREEMENTS.
1-7 (a) The governing body of a municipality may transfer parts of its
1-8 extraterritorial jurisdiction to one or more specified
1-9 municipalities to facilitate extension of municipal services to the
1-10 area and the growth of the region's tax base. The distance limits
1-11 set forth in Section 42.021 do not apply to transfers of
1-12 extraterritorial jurisdiction under this section. A municipality
1-13 may not transfer territory in a utility district created under
1-14 Chapter 51 or 54, Water Code, unless the transfer results in the
1-15 district being entirely within the jurisdiction of the
1-16 extraterritorial jurisdiction of one municipality or the transfer
1-17 is authorized under Section 42.042 and involves a district in the
1-18 extraterritorial jurisdiction of more than two municipalities on
1-19 the effective date of this section.
1-20 (b) The governing bodies of neighboring municipalities and
1-21 districts as defined in Section 43.0751 may enter into a regional
1-22 economic development agreement for contiguous, unincorporated
1-23 territory that is partially within the extraterritorial
2-1 jurisdiction of each municipality that is a party to the agreement.
2-2 A regional economic development agreement may provide for the
2-3 following:
2-4 (1) the boundaries of the area covered by the
2-5 agreement;
2-6 (2) the duration of the agreement and means for
2-7 renewing or terminating the agreement;
2-8 (3) apportionment of the area covered by the agreement
2-9 into service areas assigned to participating municipalities;
2-10 (4) a regional economic development board composed of
2-11 representatives of parties to an agreement to provide planning for
2-12 service delivery to the territory covered by the agreement;
2-13 (5) revenue sharing among participating municipalities
2-14 in order to reduce destructive competition for commercial and
2-15 industrial tax base; and
2-16 (6) such other lawful terms as the parties consider
2-17 appropriate.
2-18 (c) A municipality may annex for limited purposes a service
2-19 area assigned to that municipality by a regional economic
2-20 development agreement adopted under this section in order to
2-21 provide planning and zoning in the service area, notwithstanding
2-22 the limitations imposed by Section 43.121(a).
2-23 (d) A municipality that has annexed an assigned service area
2-24 for limited purposes under this section may impose a retail sales
2-25 tax within the boundaries of the assigned service area. Sales tax
3-1 collected under this section shall be used to fund the activities
3-2 of the regional economic development board and construct facilities
3-3 necessary to extend municipal services to the area covered by the
3-4 regional economic development agreement.
3-5 SECTION 2. Subchapter D, Chapter 43, Local Government Code,
3-6 is amended by adding Section 43.0751 to read as follows:
3-7 Sec. 43.0751. STRATEGIC PARTNERSHIPS FOR CONTINUATION OF
3-8 CERTAIN DISTRICTS. (a) In this section:
3-9 (1) "District" means a water control and improvement
3-10 district or a municipal utility district created or operating under
3-11 Chapter 51 or 54, Water Code.
3-12 (2) "Limited district" means a district that, pursuant
3-13 to a strategic partnership agreement, continues to exist after
3-14 full-purpose annexation by a municipality in accordance with the
3-15 terms of a strategic partnership agreement.
3-16 (3) "Strategic partnership agreement" means a written
3-17 agreement between a municipality and a district that provides terms
3-18 and conditions under which services will be provided and funded by
3-19 the parties to the agreement and under which the district will
3-20 continue to exist for an extended period of time if the land within
3-21 the district is annexed for limited or full purposes by the
3-22 municipality.
3-23 (b) The governing bodies of a municipality and a district
3-24 shall negotiate and may enter into a written strategic partnership
3-25 agreement for the district. The governing bodies of the
4-1 municipality and the district shall evidence their intention to
4-2 negotiate such an agreement by resolution, each of which
4-3 resolutions shall specify an expiration date if the other governing
4-4 body fails to adopt a resolution under this section on or before
4-5 the specified date. The governing body of a municipality that has
4-6 evidenced its intention by unexpired resolution to enter into
4-7 negotiations with a district for an agreement under this section
4-8 may not initiate proceedings to annex the district under any other
4-9 section of this code prior to the expiration of two years after the
4-10 adoption date of the resolution unless the municipality has
4-11 previously instituted annexation proceedings in granting consent to
4-12 the creation of the district prior to January 1, 1995.
4-13 (c) A strategic partnership agreement shall not be effective
4-14 until adopted by the governing bodies of the municipality and the
4-15 district. The agreement shall be recorded in the deed records of
4-16 the county or counties in which the land included within the
4-17 district is located and shall bind each owner and each future owner
4-18 of land included within the district's boundaries on the date the
4-19 agreement becomes effective.
4-20 (d) Before the governing body of a municipality or a
4-21 district adopts a strategic partnership agreement, it shall conduct
4-22 two public hearings at which members of the public who wish to
4-23 present testimony or evidence regarding the proposed agreement
4-24 shall be given the opportunity to do so. Notice of public hearings
4-25 conducted by the governing body of a municipality under this
5-1 subsection shall be published in a newspaper of general circulation
5-2 in the municipality and in the district. The notice must be in the
5-3 format prescribed by Section 43.123(b) and must be published at
5-4 least once on or after the 20th day before each date. Notice of
5-5 public hearings conducted by the governing body of a district under
5-6 this subsection shall be given in accordance with the district's
5-7 notification procedures for other matters of public importance.
5-8 Any notice of a public hearing conducted under this subsection
5-9 shall contain a statement of the purpose of the hearing, the date,
5-10 time, and place of the hearing, and the location where copies of
5-11 the proposed agreement may be obtained prior to the hearing. The
5-12 governing bodies of a municipality and a district may conduct joint
5-13 public hearings under this subsection, provided that at least one
5-14 public hearing is conducted within the district. A municipality
5-15 may combine the public hearings and notices required by this
5-16 subsection with the public hearings and notices required by Section
5-17 43.124.
5-18 (e) The governing body of a municipality may not annex a
5-19 district for limited purposes under this section or under the
5-20 provisions of Subchapter F until it has adopted a strategic
5-21 partnership agreement with the district. The governing body of a
5-22 municipality may not adopt a strategic partnership agreement before
5-23 the agreement has been adopted by the governing body of the
5-24 affected district.
5-25 (f) A strategic partnership agreement may provide for the
6-1 following:
6-2 (1) limited-purpose annexation of the district under
6-3 the provisions of Subchapter F provided that the district shall
6-4 continue in existence during the period of limited-purpose
6-5 annexation;
6-6 (2) such amendments to the timing requirements of
6-7 Sections 43.123(d)(2) and 43.127(b) as may be necessary or
6-8 convenient to effectuate the purposes of the agreement;
6-9 (3) payments by the municipality to the district for
6-10 services provided by the district;
6-11 (4) annexation of any commercial property in a
6-12 district for full purposes by the municipality, notwithstanding any
6-13 other provision of this code or the Water Code, except for the
6-14 obligation of the municipality to provide, directly or through
6-15 agreement with other units of government, full provision of
6-16 municipal services to annexed territory, in lieu of any annexation
6-17 of residential property or payment of any fee on residential
6-18 property in lieu of annexation of residential property in the
6-19 district authorized by this subsection;
6-20 (5) a full-purpose annexation provision that specifies
6-21 one of the following:
6-22 (A) the date on which the land included within
6-23 the district's boundaries shall be converted from the
6-24 municipality's limited-purpose jurisdiction to its full-purpose
6-25 jurisdiction, provided that such date shall not be later than 10
7-1 years after the effective date of the strategic partnership
7-2 agreement; or
7-3 (B)(i) terms for payment of an annual fee to the
7-4 municipality by the district in lieu of full-purpose annexation,
7-5 the form in which each such payment must be tendered, a method of
7-6 calculating the fee, and the date by which each such payment must
7-7 be made; failure by a district to timely make an annual payment in
7-8 lieu of full-purpose annexation in the amount and form required by
7-9 a strategic partnership agreement shall be the only ground for
7-10 termination of the agreement with respect to annexation at the
7-11 option of the municipality;
7-12 (ii) to determine a reasonable fee to be
7-13 derived from residential property in a district, the municipality
7-14 or the district may request a cost-of-service study by an
7-15 independent third party agreeable to both parties if
7-16 cost-of-service data prepared by the municipality is not
7-17 acceptable. Both parties shall be equally responsible for the cost
7-18 of the study, which shall include an evaluation of the estimated
7-19 annual cost of providing municipal services to the residential
7-20 portion of the district over the next 10 years and the estimated
7-21 annual amount of ad valorem taxes from residential property the
7-22 city would receive on full-purpose annexation of the district over
7-23 the next 10 years. The fee shall not exceed the estimated annual
7-24 amount of residential ad valorem taxes that would be derived by
7-25 full-purpose annexation of the district, less the estimated annual
8-1 amount required to provide municipal services to the residential
8-2 property in the district if annexed for full purposes. A fee
8-3 determined through this methodology is subject to renegotiation
8-4 every 10 years at the request of either party to the agreement
8-5 following the same procedure used to set the fee in the original
8-6 agreement. This methodology does not apply to fees from commercial
8-7 property;
8-8 (6) conversion of the district to a limited district
8-9 including some or all of the land included within the boundaries of
8-10 the district, which conversion shall be effective on the
8-11 full-purpose annexation conversion date established under
8-12 Subdivision (5)(A);
8-13 (7) agreements existing between districts and
8-14 governmental bodies and private providers of municipal services in
8-15 existence on the date a municipality evidences its intention by
8-16 adopting a resolution to negotiate for a strategic partnership
8-17 agreement with the district shall be continued and provision made
8-18 for modifications to such existing agreements; and
8-19 (8) such other lawful terms that the parties consider
8-20 appropriate.
8-21 (g) A strategic partnership agreement that provides for the
8-22 creation of a limited district under Subsection (f)(6) shall
8-23 include provisions setting forth the following:
8-24 (1) the boundaries of the limited district;
8-25 (2) the functions of the limited district and the term
9-1 during which the limited district shall exist after full-purpose
9-2 annexation, which term may be renewed successively by the governing
9-3 body of the municipality, provided that no such original or renewed
9-4 term shall exceed 10 years;
9-5 (3) the name by which the limited district shall be
9-6 known; and
9-7 (4) the procedure by which the limited district may be
9-8 dissolved prior to the expiration of any term established under
9-9 Subdivision (2).
9-10 (h) On the full-purpose annexation conversion date set forth
9-11 in the strategic partnership agreement pursuant to Subsection
9-12 (f)(5)(A), the land included within the boundaries of the district
9-13 shall be deemed to be within the full-purpose boundary limits of
9-14 the municipality without the need for further action by the
9-15 governing body of the municipality. The full-purpose annexation
9-16 conversion date established by a strategic partnership agreement
9-17 may be altered only by mutual agreement of the district and the
9-18 municipality. However, nothing herein shall prevent the
9-19 municipality from terminating the agreement and instituting
9-20 proceedings to annex the district, on request by the governing body
9-21 of the district, on any date prior to the full-purpose annexation
9-22 conversion date established by the strategic partnership agreement.
9-23 Land annexed for limited or full purposes under this section shall
9-24 not be included in calculations prescribed by Section 43.055(a).
9-25 (i) A district that is negotiating for or that has adopted a
10-1 strategic partnership agreement shall not incur additional debt,
10-2 liabilities, or obligations, to construct additional utility
10-3 facilities, or sell or otherwise transfer property without prior
10-4 approval of the municipality, which approval shall not be
10-5 unreasonably withheld or delayed. An action taken in violation of
10-6 this subsection is void.
10-7 (j) Except as limited by this section or the terms of a
10-8 strategic partnership agreement, a district that has been annexed
10-9 for limited purposes by a municipality and a limited district shall
10-10 have and may exercise all functions, powers, and authority
10-11 otherwise vested in a district.
10-12 (k) A municipality that has annexed a district for limited
10-13 purposes under this section may impose a retail sales tax within
10-14 the boundaries of the district.
10-15 (l) An agreement or a decision made under this section and
10-16 an action taken under the agreement by the parties to the agreement
10-17 are not subject to approval or an appeal brought under the Water
10-18 Code unless it is an appeal of a utility rate charged by a
10-19 municipality to customers outside the corporate boundaries of the
10-20 municipality.
10-21 (m) A municipality that may annex a district for limited
10-22 purposes to implement a strategic partnership agreement under this
10-23 section shall not annex for full purposes any territory within a
10-24 district created pursuant to a consent agreement with that
10-25 municipality executed before August 27, 1979. The prohibition on
11-1 annexation established by this subsection shall expire on
11-2 September 1, 1997, or on the date on or before which the
11-3 municipality and any district may have separately agreed that
11-4 annexation would not take place whichever is later.
11-5 SECTION 3. The importance of this legislation and the
11-6 crowded condition of the calendars in both houses create an
11-7 emergency and an imperative public necessity that the
11-8 constitutional rule requiring bills to be read on three several
11-9 days in each house be suspended, and this rule is hereby suspended.