1-1 By: Barrientos S.B. No. 1396
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 April 28, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; April 28, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1396 By: Barrientos
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to altering the annexation status of land in certain
1-11 municipal utility districts and authorizing the collection of
1-12 municipal sales taxes in the districts.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Chapter 43, Local Government Code, is amended by
1-15 adding Subchapter H to read as follows:
1-16 SUBCHAPTER H. ALTERATION OF ANNEXATION STATUS
1-17 Sec. 43.201. DEFINITIONS. In this subchapter:
1-18 (1) "Consent agreement" means an agreement between a
1-19 district and a municipality under Section 42.042.
1-20 (2) "Limited-purpose annexation" means annexation
1-21 authorized under Section 43.121.
1-22 Sec. 43.202. APPLICABILITY. This subchapter applies to:
1-23 (1) a municipal utility district operating under
1-24 Chapter 54, Water Code, that:
1-25 (A) was annexed for full purposes by a
1-26 municipality as a condition of the municipality granting consent to
1-27 the creation of the district;
1-28 (B) was annexed by the municipality on the same
1-29 date as at least five other districts; and
1-30 (C) has not had on the eighth anniversary of the
1-31 district's annexation by the municipality more than 10 percent of
1-32 the housing units or commercial square footage authorized in its
1-33 consent agreement constructed; and
1-34 (2) a municipality that has:
1-35 (A) annexed territory for limited purposes;
1-36 (B) disannexed territory that previously was
1-37 annexed for limited purposes; and
1-38 (C) previously disannexed territory in a
1-39 municipal utility district originally annexed for full purposes on
1-40 the same date as a district to which this section applies.
1-41 Sec. 43.203. ALTERATION OF ANNEXATION STATUS. (a) The
1-42 governing body of a district by resolution may petition a
1-43 municipality to alter the annexation status of land in the district
1-44 from full-purpose annexation to limited-purpose annexation.
1-45 (b) On receipt of the district's petition, the governing
1-46 body of the municipality shall enter into negotiations with the
1-47 district for an agreement to alter the status of annexation that
1-48 must:
1-49 (1) specify the period, which may not be less than 10
1-50 years beginning on January 1 of the year following the date of the
1-51 agreement, in which limited-purpose annexation is in effect;
1-52 (2) provide that, at the expiration of the period, the
1-53 district's annexation status will automatically revert to
1-54 full-purpose annexation without following procedures provided by
1-55 Sections 43.051 through 43.055 or any other procedural requirement
1-56 for annexation not in effect on January 1, 1995; and
1-57 (3) specify the financial obligations of the district
1-58 during and after the period of limited-purpose annexation for:
1-59 (A) facilities constructed by the municipality
1-60 that are in or that serve the district;
1-61 (B) debt incurred by the district for water and
1-62 sewer infrastructure that will be assumed by the municipality at
1-63 the end of the period of limited-purpose annexation; and
1-64 (C) use of the municipal sales taxes collected
1-65 by the municipality for facilities or services in the district.
1-66 (c) If an agreement is not reached within 90 days after the
1-67 date the municipality receives a petition submitted by a district:
1-68 (1) the district's status is automatically altered
2-1 from full-purpose annexation to limited-purpose annexation for a
2-2 period of not less than 10 years, beginning January 1 of the year
2-3 following the date of the submission of a petition; and
2-4 (2) on the expiration of the 10-year period of
2-5 Subdivision (1), notwithstanding any other provision of law, the
2-6 district may be restored to full-purpose annexation at the option
2-7 of the municipality, provided that the municipality assumes all
2-8 obligations otherwise assigned by law to a municipality that
2-9 annexes a district; and
2-10 (3) the municipality may collect a waste and
2-11 wastewater surcharge for customers in the district after
2-12 restoration of full-purpose annexation provided that:
2-13 (A) notice of such proposed surcharge is
2-14 provided to the board of a district six months prior to restoration
2-15 of full-purpose annexation;
2-16 (B) the surcharge does not exceed the cost of a
2-17 post-annexation surcharge to any other district annexed by the
2-18 municipality; and
2-19 (C) the surcharge is in effect only during the
2-20 period in which bonds issued by the district or refunded by the
2-21 municipality are not fully retired.
2-22 (d) The municipality shall have no responsibility to
2-23 reimburse the developer of the district or its successors for more
2-24 than $800,000 for engineering and construction costs to design and
2-25 build internal water treatment and distribution facilities,
2-26 wastewater treatment and collection facilities, or drainage
2-27 facilities, whether temporary or permanent, installed after
2-28 September 1, 1995. Any obligation to reimburse the developer may
2-29 be paid in installments over a three-year period.
2-30 (e) During the period of limited-purpose annexation:
2-31 (1) the district must comply with other items in its
2-32 consent agreement with the municipality;
2-33 (2) the municipality:
2-34 (A) must continue to provide wholesale water and
2-35 sewer service as provided by the consent agreement; and
2-36 (B) is relieved of service obligations in the
2-37 district that are not provided to other territory annexed for
2-38 limited purposes or required by the annexation alteration agreement
2-39 between the municipality and the district; and
2-40 (3) retail sales in the boundaries of the district
2-41 will be treated for municipal sales tax purposes as if the district
2-42 were annexed by the municipality for full purposes.
2-43 (f) This section does not apply to land or facilities in a
2-44 district to which the municipality granted a property tax abatement
2-45 before September 1, 1995.
2-46 SECTION 2. This Act takes effect September 1, 1995.
2-47 SECTION 3. The importance of this legislation and the
2-48 crowded condition of the calendars in both houses create an
2-49 emergency and an imperative public necessity that the
2-50 constitutional rule requiring bills to be read on three several
2-51 days in each house be suspended, and this rule is hereby suspended.
2-52 * * * * *