1-1 By: Barrientos S.B. No. 1395
1-2 (In the Senate - Filed March 13, 1995; March 20, 1995, read
1-3 first time and referred to Committee on Natural Resources;
1-4 May 3, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; May 3, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1395 By: Barrientos
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to authorizing agreements affecting annexation between
1-11 certain political subdivisions of the state.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subchapter C, Chapter 42, Local Government Code,
1-14 is amended by adding Section 42.048 to read as follows:
1-15 Sec. 42.048. REGIONAL ECONOMIC DEVELOPMENT AGREEMENTS.
1-16 (a) The governing body of a municipality may transfer parts of its
1-17 extraterritorial jurisdiction to one or more specified
1-18 municipalities to facilitate extension of municipal services to the
1-19 area and the growth of the region's tax base. The limits set forth
1-20 in Section 42.021 do not apply to transfers of extraterritorial
1-21 jurisdiction under this section. A municipality may not transfer
1-22 territory in a district from the extraterritorial jurisdiction of
1-23 one municipality to another unless the transfer results in all
1-24 territory in a district being in the extraterritorial jurisdiction
1-25 of a single municipality.
1-26 (b) The governing bodies of neighboring municipalities and
1-27 districts as defined in Section 43.0751 may enter into a regional
1-28 economic development agreement for contiguous, unincorporated
1-29 territory that is partially within the extraterritorial
1-30 jurisdiction of each municipality that is a party to the agreement.
1-31 A regional economic development agreement may provide for the
1-32 following:
1-33 (1) the boundaries of the area covered by the
1-34 agreement;
1-35 (2) the duration of the agreement and means for
1-36 renewing or terminating the agreement;
1-37 (3) apportionment of the area covered by the agreement
1-38 into service areas assigned to participating municipalities;
1-39 (4) a regional economic development board composed of
1-40 representatives of parties to an agreement to provide planning for
1-41 service delivery to the territory covered by the agreement;
1-42 (5) revenue sharing among participating municipalities
1-43 in order to reduce destructive competition for commercial and
1-44 industrial tax base; and
1-45 (6) such other lawful terms as the parties consider
1-46 appropriate.
1-47 (c) A municipality may annex for limited purposes a service
1-48 area assigned to that municipality by a regional economic
1-49 development agreement adopted under this section in order to
1-50 provide planning and zoning in the service area, notwithstanding
1-51 the limitations imposed by Section 43.121(a).
1-52 (d) A municipality that has annexed an assigned service area
1-53 for limited purposes under this section may impose a retail sales
1-54 tax within the boundaries of the assigned service area. Sales tax
1-55 collected under this section shall be used to fund the activities
1-56 of the regional economic development board and construct facilities
1-57 necessary to extend municipal services to the area covered by the
1-58 regional economic development agreement.
1-59 SECTION 2. Subchapter D, Chapter 43, Local Government Code,
1-60 is amended by adding Section 43.0751 to read as follows:
1-61 Sec. 43.0751. STRATEGIC PARTNERSHIPS FOR CONTINUATION OF
1-62 CERTAIN DISTRICTS. (a) In this section:
1-63 (1) "District" means a water control and improvement
1-64 district or a municipal utility district created or operating under
1-65 Chapter 51 or 54, Water Code.
1-66 (2) "Limited district" means a district that, pursuant
1-67 to a strategic partnership agreement, continues to exist after
1-68 full-purpose annexation by a municipality in accordance with the
2-1 terms of a strategic partnership agreement.
2-2 (3) "Strategic partnership agreement" means a written
2-3 agreement between a municipality and a district that provides terms
2-4 and conditions under which services will be provided and funded by
2-5 the parties to the agreement and under which the district will
2-6 continue to exist for an extended period of time if the land within
2-7 the district is annexed for limited or full purposes by the
2-8 municipality.
2-9 (b) The governing bodies of a municipality and a district
2-10 shall negotiate and may enter into a written strategic partnership
2-11 agreement for the district. The governing bodies of the
2-12 municipality and the district shall evidence their intention to
2-13 negotiate such an agreement by resolution, each of which
2-14 resolutions shall specify an expiration date if the other governing
2-15 body fails to adopt a resolution under this section on or before
2-16 the specified date. The governing body of a municipality that has
2-17 evidenced its intention by unexpired resolution to enter into
2-18 negotiations with a district for an agreement under this section
2-19 may not initiate proceedings to annex the district under any other
2-20 section of this code prior to the expiration of two years after the
2-21 adoption date of the resolution unless the municipality has
2-22 previously instituted annexation proceedings in granting consent to
2-23 the creation of the district prior to January 1, 1995.
2-24 (c) A strategic partnership agreement shall not be effective
2-25 until adopted by the governing bodies of the municipality and the
2-26 district. The agreement shall be recorded in the deed records of
2-27 the county or counties in which the land included within the
2-28 district is located and shall bind each owner and each future owner
2-29 of land included within the district's boundaries on the date the
2-30 agreement becomes effective.
2-31 (d) Before the governing body of a municipality or a
2-32 district adopts a strategic partnership agreement, it shall conduct
2-33 two public hearings at which members of the public who wish to
2-34 present testimony or evidence regarding the proposed agreement
2-35 shall be given the opportunity to do so. Notice of public hearings
2-36 conducted by the governing body of a municipality under this
2-37 subsection shall be published in a newspaper of general circulation
2-38 in the municipality and in the district. The notice must be in the
2-39 format prescribed by Section 43.123(b) and must be published at
2-40 least once on or after the 20th day before each date. Notice of
2-41 public hearings conducted by the governing body of a district under
2-42 this subsection shall be given in accordance with the district's
2-43 notification procedures for other matters of public importance.
2-44 Any notice of a public hearing conducted under this subsection
2-45 shall contain a statement of the purpose of the hearing, the date,
2-46 time, and place of the hearing, and the location where copies of
2-47 the proposed agreement may be obtained prior to the hearing. The
2-48 governing bodies of a municipality and a district may conduct joint
2-49 public hearings under this subsection, provided that at least one
2-50 public hearing is conducted within the district. A municipality
2-51 may combine the public hearings and notices required by this
2-52 subsection with the public hearings and notices required by Section
2-53 43.124.
2-54 (e) The governing body of a municipality may not annex a
2-55 district for limited purposes under this section or under the
2-56 provisions of Subchapter F until it has adopted a strategic
2-57 partnership agreement with the district. The governing body of a
2-58 municipality may not adopt a strategic partnership agreement before
2-59 the agreement has been adopted by the governing body of the
2-60 affected district.
2-61 (f) A strategic partnership agreement may provide for the
2-62 following:
2-63 (1) limited-purpose annexation of the district under
2-64 the provisions of Subchapter F provided that the district shall
2-65 continue in existence during the period of limited-purpose
2-66 annexation;
2-67 (2) such amendments to the timing requirements of
2-68 Sections 43.123(d)(2) and 43.127(b) as may be necessary or
2-69 convenient to effectuate the purposes of the agreement;
2-70 (3) payments by the municipality to the district for
3-1 services provided by the district;
3-2 (4) a full-purpose annexation provision that specifies
3-3 one of the following:
3-4 (A) the date on which the land included within
3-5 the district's boundaries shall be converted from the
3-6 municipality's limited-purpose jurisdiction to its full-purpose
3-7 jurisdiction, provided that such date shall not be later than 10
3-8 years after the effective date of the strategic partnership
3-9 agreement; or
3-10 (B)(i) terms for payment of an annual fee to the
3-11 municipality by the district in lieu of full-purpose annexation,
3-12 the form in which each such payment must be tendered, a method of
3-13 calculating the fee, and the date by which each such payment must
3-14 be made; failure by a district to timely make an annual payment in
3-15 lieu of full-purpose annexation in the amount and form required by
3-16 a strategic partnership agreement shall be the only ground for
3-17 termination of the agreement with respect to annexation at the
3-18 option of the municipality;
3-19 (ii) to determine a reasonable fee to be
3-20 derived from residential property in a district, the municipality
3-21 or the district may request a cost-of-service study by an
3-22 independent third party agreeable to both parties if
3-23 cost-of-service data prepared by the municipality is not
3-24 acceptable. Both parties shall be equally responsible for the cost
3-25 of the study, which shall include an evaluation of the estimated
3-26 annual cost of providing municipal services to the residential
3-27 portion of the district over the next 10 years and the estimated
3-28 annual amount of ad valorem taxes from residential property the
3-29 city would receive on full-purpose annexation of the district over
3-30 the next 10 years. The fee shall not exceed the estimated annual
3-31 amount of residential ad valorem taxes that would be derived by
3-32 full-purpose annexation of the district, less the estimated annual
3-33 amount required to provide municipal services to the residential
3-34 property in the district if annexed for full purposes. A fee
3-35 determined through this methodology is subject to renegotiation
3-36 every 10 years at the request of either party to the agreement
3-37 following the same procedure used to set the fee in the original
3-38 agreement. This methodology does not apply to fees from commercial
3-39 property;
3-40 (5) conversion of the district to a limited district
3-41 including some or all of the land included within the boundaries of
3-42 the district, which conversion shall be effective on the
3-43 full-purpose annexation conversion date established under
3-44 Subdivision (4)(A);
3-45 (6) agreements existing between districts and
3-46 governmental bodies and private providers of municipal services in
3-47 existence on the date a municipality evidences its intention by
3-48 adopting a resolution to negotiate for a strategic partnership
3-49 agreement with the district shall be continued and provision made
3-50 for modifications to such existing agreements; and
3-51 (7) such other lawful terms that the parties consider
3-52 appropriate.
3-53 (g) A strategic partnership agreement that provides for the
3-54 creation of a limited district under Subsection (f)(5) shall
3-55 include provisions setting forth the following:
3-56 (1) the boundaries of the limited district;
3-57 (2) the functions of the limited district and the term
3-58 during which the limited district shall exist after full-purpose
3-59 annexation, which term may be renewed successively by the governing
3-60 body of the municipality, provided that no such original or renewed
3-61 term shall exceed 10 years;
3-62 (3) the name by which the limited district shall be
3-63 known; and
3-64 (4) the procedure by which the limited district may be
3-65 dissolved prior to the expiration of any term established under
3-66 Subdivision (2).
3-67 (h) On the full-purpose annexation conversion date set forth
3-68 in the strategic partnership agreement pursuant to Subsection
3-69 (f)(4)(A), the land included within the boundaries of the district
3-70 shall be deemed to be within the full-purpose boundary limits of
4-1 the municipality without the need for further action by the
4-2 governing body of the municipality. The full-purpose annexation
4-3 conversion date established by a strategic partnership agreement
4-4 may be altered only by mutual agreement of the district and the
4-5 municipality. However, nothing herein shall prevent the
4-6 municipality from terminating the agreement and instituting
4-7 proceedings to annex the district, on request by the governing body
4-8 of the district, on any date prior to the full-purpose annexation
4-9 conversion date established by the strategic partnership agreement.
4-10 Land annexed for limited or full purposes under this section shall
4-11 not be included in calculations prescribed by Section 43.055(a).
4-12 (i) A district that is negotiating for or that has adopted a
4-13 strategic partnership agreement shall not incur additional debt,
4-14 liabilities, or obligations, to construct additional utility
4-15 facilities, or sell or otherwise transfer property without prior
4-16 approval of the municipality, which approval shall not be
4-17 unreasonably withheld or delayed. An action taken in violation of
4-18 this subsection is void.
4-19 (j) Except as limited by this section or the terms of a
4-20 strategic partnership agreement, a district that has been annexed
4-21 for limited purposes by a municipality and a limited district shall
4-22 have and may exercise all functions, powers, and authority
4-23 otherwise vested in a district.
4-24 (k) A municipality that has annexed a district for limited
4-25 purposes under this section may impose a retail sales tax within
4-26 the boundaries of the district.
4-27 (l) An agreement or a decision made under this section and
4-28 an action taken under the agreement by the parties to the agreement
4-29 are not subject to approval or an appeal brought under the Water
4-30 Code unless it is an appeal of a utility rate charged by a
4-31 municipality to customers outside the corporate boundaries of the
4-32 municipality.
4-33 (m) A municipality that may annex a district for limited
4-34 purposes to implement a strategic partnership agreement under this
4-35 section shall not annex for full purposes any territory within a
4-36 district created pursuant to a consent agreement with that
4-37 municipality executed before August 27, 1979. The prohibition on
4-38 annexation established by this subsection shall expire on
4-39 September 1, 1997, or on the date on or before which the
4-40 municipality and the district may have separately agreed that
4-41 annexation would not take place.
4-42 SECTION 3. The importance of this legislation and the
4-43 crowded condition of the calendars in both houses create an
4-44 emergency and an imperative public necessity that the
4-45 constitutional rule requiring bills to be read on three several
4-46 days in each house be suspended, and this rule is hereby suspended.
4-47 * * * * *