By: Barrientos S.B. No. 1395
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the phased annexation of a municipal utility district
1-2 by a municipality and the continuation of the district as a limited
1-3 district to perform certain functions after annexation by a
1-4 municipality.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter D, Chapter 43, Local Government Code,
1-7 is amended by adding Section 43.0751 to read as follows:
1-8 Sec. 43.0751. PHASED ANNEXATION AND CONTINUATION OF CERTAIN
1-9 DISTRICTS.
1-10 (a) In this section:
1-11 (1) "District" means a municipal utility district
1-12 operating under Chapter 54, Water Code.
1-13 (2) "Limited District" means a district that, pursuant
1-14 to a phased annexation and continuation agreement, continues to
1-15 exist after full purpose annexation by a municipality in accordance
1-16 with the terms of a phased annexation and continuation agreement.
1-17 (3) "Phased annexation and continuation agreement"
1-18 means a written agreement between a municipality and district that
1-19 provides terms and conditions under which the district will
1-20 continue to exist for an extended period of time after the land
1-21 within the district is annexed for limited or full purposes by the
1-22 municipality.
1-23 (b) The governing bodies of a municipality and a district
2-1 may enter into a written phased annexation and continuation
2-2 agreement for the district. The governing bodies of the
2-3 municipality and the district shall evidence their intention to
2-4 negotiate such an agreement by resolution, each of which
2-5 resolutions shall specify an expiration date if the other governing
2-6 body fails to adopt a resolution under this section on or before
2-7 the specified date. The governing body of a municipality that has
2-8 evidenced its intention by unexpired resolution to enter into
2-9 negotiations with a district for an agreement under this section
2-10 may not initiate proceedings to annex the district under any other
2-11 section of this code prior to the expiration of 180 days after the
2-12 adoption date of the resolution.
2-13 (c) A phased annexation and continuation agreement shall not
2-14 be effective until adopted by the governing bodies of the
2-15 municipality and the district. The agreement shall be recorded in
2-16 the deed records of the county or counties in which the land
2-17 included within the district is located and shall bind each owner,
2-18 and each future owner, of land included within the district's
2-19 boundaries on the date the agreement becomes effective.
2-20 (d) Before the governing body of a municipality or a
2-21 district adopts a phased annexation and continuation agreement, it
2-22 shall conduct two public hearing at which members of the public who
2-23 wish to present testimony or evidence regarding the proposed
2-24 agreement shall be given the opportunity to do so. Notice of
2-25 public hearings conducted by the governing body of a municipality
3-1 under this subsection shall be published in a newspaper of general
3-2 circulation in the municipality and in the district. The notice
3-3 must be in the format prescribed by section 43.123(b) of this code,
3-4 and must be published at least once on or after the 20th day before
3-5 each hearing date. Notice of public hearings conducted by the
3-6 governing body of a district under this subsection shall be given
3-7 in accordance with the district's notification procedures for other
3-8 matter of public importance. Any notice of a public hearing
3-9 conducted under this subsection shall contain a statement of the
3-10 purpose of the hearing, the date, time and place of the hearing,
3-11 and the location where copies of the proposed agreement may be
3-12 obtained prior to the hearing. The governing bodies of a
3-13 municipality and a district may conduct joint public hearings under
3-14 this subsection, provided that at least one public hearing is
3-15 conducted at a location within the district. A municipality may
3-16 combine the public hearings and notices required by this subsection
3-17 with the public hearings and notices required by section 43.124 of
3-18 this code.
3-19 (e) The governing body of a municipality may not annex a
3-20 district for limited purposes under this section until it has
3-21 adopted a phased annexation and continuation agreement with the
3-22 district. The governing body of a municipality may not adopt a
3-23 phased annexation and continuation agreement before the agreement
3-24 has been adopted by the governing body of the affected district.
3-25 (f) A phased annexation and continuation agreement may
4-1 provide for the following:
4-2 (1) limited purpose annexation of the district under
4-3 the provisions of Subchapter F, Chapter 43 of the Local Government
4-4 Code, provided that the district shall continue in existence during
4-5 the period of limited purpose annexation;
4-6 (2) such amendments to the timing requirements of
4-7 sections 43.123(d)(2) and 43.127(b) of this code as may be
4-8 necessary or convenient to effectuate the purposes of the
4-9 agreement;
4-10 (3) the date on which the land included within the
4-11 district's boundaries shall be converted from the municipality's
4-12 limited purpose jurisdiction to its full purpose jurisdiction,
4-13 provided that such date shall not be later than ten (10) years
4-14 after the effective date of the phased annexation and continuation
4-15 agreement;
4-16 (4) conversion of the district to a limited district
4-17 including some or all of the land included within the boundaries of
4-18 the district, which limited district shall be created on the full
4-19 purpose annexation conversion date; and
4-20 (5) such other lawful terms as the parties consider
4-21 appropriate.
4-22 (g) A phased annexation and continuation agreement that
4-23 provides for the creation of a limited district under (f)(4) shall
4-24 include provisions setting forth the following:
4-25 (1) the boundaries of the limited district;
5-1 (2) the functions of the limited district and the term
5-2 during which the limited district shall exist, which term may be
5-3 renewed by the governing body of the municipality, provided that no
5-4 such original or renewed term shall exceed ten (10) years;
5-5 (3) the name by which the limited district shall be
5-6 known; and
5-7 (4) the procedure by which the limited district may be
5-8 dissolved prior to the expiration of any term established under
5-9 (g)(2).
5-10 (h) On the full purpose annexation conversion date set forth
5-11 in the phased annexation and continuation agreement pursuant to
5-12 (f)(3) of this section, the land included within the boundaries of
5-13 the district shall be deemed to be within the full purpose boundary
5-14 limits of the municipality without the need for further action by
5-15 the governing body of the municipality. The full purpose
5-16 annexation conversion date established by a phased annexation and
5-17 continuation agreement may not be altered by action of either the
5-18 district or the municipality, except that nothing herein shall
5-19 prevent the municipality from terminating the agreement and
5-20 instituting proceedings to annex the district, upon request by the
5-21 governing body of the district, on any date prior to the full
5-22 purpose annexation conversion date established by the phased
5-23 annexation and continuation agreement. Land annexed for limited or
5-24 full purposes under this section shall not be included in
5-25 calculations prescribed by section 43.055(a) of this code.
6-1 (i) A district that is negotiating for or that has adopted a
6-2 phased annexation and continuation agreement shall not incur
6-3 additional debt, liabilities or obligations, construct additional
6-4 facilities, sell or otherwise transfer property or other asset,
6-5 change service levels, or otherwise alter its position without
6-6 prior approval of the municipality. An action in violation of this
6-7 subsection is void.
6-8 (j) Except as limited by this section or the terms of a
6-9 phased annexation and continuation agreement, a district that has
6-10 been annexed for limited purposes by a municipality and a limited
6-11 district shall have and may exercise all functions, powers and
6-12 authority otherwise vested in a district.
6-13 (k) A municipality that has annexed a district for limited
6-14 purposes under this section may impose retail sales tax within the
6-15 boundaries of the district.
6-16 (l) An agreement or a decision made under this section and
6-17 an action taken under the agreement by the parties to the agreement
6-18 are not subject to an approval or an appeal brought under the Water
6-19 Code.
6-20 SECTION 2. The importance of this legislation and the
6-21 crowded condition of the calendars in both houses create an
6-22 emergency and an imperative public necessity that the
6-23 constitutional rule requiring bills to be read on three several
6-24 days in each house be suspended, and this rule is hereby suspended.