By: Barrientos S.B. No. 1396 A BILL TO BE ENTITLED AN ACT 1-1 relating to altering the annexation status of land in certain 1-2 municipal utility districts and authorizing the collection of 1-3 municipal sales taxes in the districts. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 43, Local Government Code, is amended by 1-6 adding Subchapter H to read as follows: 1-7 SUBCHAPTER H. ALTERATION OF ANNEXATION STATUS 1-8 Sec. 43.201. DEFINITIONS. In this subchapter: 1-9 (1) "Consent agreement" means an agreement between a 1-10 district and a municipality under Section 42.042. 1-11 (2) "Limited-purpose annexation" means annexation 1-12 authorized under Section 43.121. 1-13 Sec. 43.202. APPLICABILITY. This subchapter applies to: 1-14 (1) a municipal utility district operating under 1-15 Chapter 54, Water Code, that: 1-16 (A) was annexed for full purposes by a 1-17 municipality as a condition of the municipality granting consent to 1-18 the creation of the district; 1-19 (B) was annexed by the municipality on the same 1-20 date as at least five other districts; and 1-21 (C) has not had on the eighth anniversary of the 1-22 district's annexation by the municipality more than 10 percent of 1-23 the housing units or commercial square footage authorized in its 2-1 consent agreement constructed; and 2-2 (2) a municipality that has: 2-3 (A) annexed territory for limited purposes; 2-4 (B) disannexed territory that previously was 2-5 annexed for limited purposes; and 2-6 (C) previously disannexed territory in a 2-7 municipal utility district originally annexed for full purposes on 2-8 the same date as a district to which this section applies. 2-9 Sec. 43.203. ALTERATION OF ANNEXATION STATUS. (a) The 2-10 governing body of a district by resolution may petition a 2-11 municipality to alter the annexation status of land in the district 2-12 from full-purpose annexation to limited-purpose annexation. 2-13 (b) On receipt of the district's petition, the governing 2-14 body of the municipality shall enter into negotiations with the 2-15 district for an agreement to alter the status of annexation that 2-16 must: 2-17 (1) specify the period, which may not be less than 10 2-18 years beginning on January 1 of the year following the date of the 2-19 agreement, in which limited-purpose annexation is in effect; 2-20 (2) provide that, at the expiration of the period, the 2-21 district's annexation status will automatically revert to 2-22 full-purpose annexation without following procedures provided by 2-23 Sections 43.051 through 43.055 or any other procedural requirement 2-24 for annexation not in effect on January 1, 1995; and 2-25 (3) specify the financial obligations of the district 3-1 during and after the period of limited-purpose annexation for: 3-2 (A) facilities constructed by the municipality 3-3 that are in or that serve the district; 3-4 (B) debt incurred by the district for water and 3-5 sewer infrastructure that will be assumed by the municipality at 3-6 the end of the period of limited-purpose annexation; and 3-7 (C) use of the municipal sales taxes collected 3-8 by the municipality for facilities or services in the district. 3-9 (c) If an agreement is not reached within 90 days after the 3-10 date the municipality receives a petition submitted by a district: 3-11 (1) the district's status is automatically altered 3-12 from full-purpose annexation to limited-purpose annexation for a 3-13 period of not less than 10 years, beginning January 1 of the year 3-14 following the date of the submission of a petition; and 3-15 (2) on the expiration of the 10-year period of 3-16 Subdivision (1), notwithstanding any other provision of law, the 3-17 district may be restored to full-purpose annexation at the option 3-18 of the municipality, provided that the municipality assumes all 3-19 obligations otherwise assigned by law to a municipality that 3-20 annexes a district; and 3-21 (3) the municipality may collect a waste and 3-22 wastewater surcharge for customers in the district after 3-23 restoration of full-purpose annexation provided that: 3-24 (A) notice of such proposed surcharge is 3-25 provided to the board of a district six months prior to restoration 4-1 of full-purpose annexation; 4-2 (B) the surcharge does not exceed the cost of a 4-3 post-annexation surcharge to any other district annexed by the 4-4 municipality; and 4-5 (C) the surcharge is in effect only during the 4-6 period in which bonds issued by the district or refunded by the 4-7 municipality are not fully retired. 4-8 (d) The municipality shall have no responsibility to 4-9 reimburse the developer of the district or its successors for more 4-10 than $800,000 for engineering and construction costs to design and 4-11 build internal water treatment and distribution facilities, 4-12 wastewater treatment and collection facilities, or drainage 4-13 facilities, whether temporary or permanent, installed after 4-14 September 1, 1995. Any obligation to reimburse the developer may 4-15 be paid in installments over a three-year period. 4-16 (e) During the period of limited-purpose annexation: 4-17 (1) the district must comply with other items in its 4-18 consent agreement with the municipality; 4-19 (2) the municipality: 4-20 (A) must continue to provide wholesale water and 4-21 sewer service as provided by the consent agreement; and 4-22 (B) is relieved of service obligations in the 4-23 district that are not provided to other territory annexed for 4-24 limited purposes or required by the annexation alteration agreement 4-25 between the municipality and the district; and 5-1 (3) retail sales in the boundaries of the district 5-2 will be treated for municipal sales tax purposes as if the district 5-3 were annexed by the municipality for full purposes. 5-4 (f) This section does not apply to land or facilities in a 5-5 district to which the municipality granted a property tax abatement 5-6 before September 1, 1995. 5-7 SECTION 2. This Act takes effect September 1, 1995. 5-8 SECTION 3. The importance of this legislation and the 5-9 crowded condition of the calendars in both houses create an 5-10 emergency and an imperative public necessity that the 5-11 constitutional rule requiring bills to be read on three several 5-12 days in each house be suspended, and this rule is hereby suspended.