SLC C.S.H.B. 2363 75(R)BILL ANALYSIS LAND & RESOURCE MANAGEMENT C.S.H.B. 2363 By: Hilbert 4-29-97 Committee Report (Substituted) BACKGROUND Currently, Texas law requires that municipalities provide necessary services to areas that are annexed by that municipality within a specified period of time. These services are required by law to be laid out in a Service Plan that is to be promulgated by the annexing municipality prior to annexation. Some argue certain cities have failed to adequately address the service needs of areas that they have annexed. PURPOSE CSHB 2363 would require annexing municipalities to promulgate service plans that meet specific criterion. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sec. 43.052, Local Gov. Code, by amending (a) and (b) and adding (d) as follows: (a) Requires that the hearings that are to be held prior to institution of annexation proceedings be held on three separate days and establishes the number of days apart the hearings must be from each other and from the date that annexation proceedings are initiated. This section also states that the hearings must be held between 7p.m. and 9p.m. (b) Requires that one hearing be held in the area to be annexed and at least one of the hearings be held at a site designated by the MUDs in the area to be annexed. (d) States that a hearing conducted under this section shall be conducted by a visiting state judge and a written record of the proceedings shall be maintained by the municipality during the period covered by the service plan. SECTION 2. Amends Sec. 43.056, Local Gov. Code, as follows: Sec. 43.056. PROVISION OF SERVICES TO ANNEXED AREA. (a) defines "full municipal services" for all municipalities; (b) strikes the language providing that a municipality direct its planing department to prepare a service plan; establishes that the service plan must include: (1) a map of the boundaries of the municipality and the area to be annexed; (2) a map that bears the approval of a licensed engineer indicating that the proposals contained in the service plan can be accommodated by the municipality's infrastructure; (3) general land use of the area; (4) description of the methods by which the municipality intends to pay for the extension of services; (5) statement indicating whether the area to be annexed meets the requirements of Sections 43.051, 43.054, and 43.055 (c) establishes that certain services must be provided within the time permitted by the subsequent subsections (d) and (e); requires that the service plan provide for the extension of full municipal services to the area within 2 years of the annexation; (d) establishes that a municipality must provide certain services within 60 days of annexation; (e) applies to municipalities with populations of 50,000 or more and requires that their service plans allow for the provision of certain services on the effective date of an annexation, certain other services within 30 days of annexation, and others within 60 days of annexation; (f) strikes the definition of "full municipal services" from the old Subsection (c) and establishes that municipalities with populations of 50,000 or more may provide the requisite services by contracting with providers; requires municipalities with populations of 50,000 or more that own water or wastewater utilities to provide for the extension of water and sewer lines into the annexed area if the area is not within the service area of another utility; residents of the annexed area must be able to secure services that are consistent with the municipality's policies for providing such services; requires a municipality to amend its service plan to provide for any construction necessary to extend water or sewer lines to any property within the annexed territory when the owners of such property have requested the extension; the extension must be complete within two years of annexation; establishes that the request from the property owners must: (1) be in writing as prescribed by the municipality and state that the extension will be in compliance with the municipality's policies; (2) be filed with the clerk or secretary of the municipality at least 30 days before the annexation ordinance is adopted; (g) If the municipality annexes areas in the territory within a MUD or a water control and improvement district the municipality shall comply with applicable state law relating to annexation of such territory. (h) Requires that the construction of capital improvements that must be addressed in the service plan and instituted upon completion of annexation proceedings the improvements must be substantially completed within two years of the annexation. (i) States that the service plan may not require the creation of another political subdivision, provide services in a manner inconsistent with chapter 395, or provide fewer services or lower levels of services in the area. (j) States that municipal service described in the plan for the area to be annexed be provided in a manner that ensures the services are equal to or better than the services provided to the area immediately before annexation. (k) States that the service plan shall allow a resident of the area proposed to be annexed to vote in any election. Sets forth exceptions to this subsection. (l) Allows for revisions to the service plan. (m) States that the service plan shall be made available for public inspection. Allows for amendment to the service plan. (n) States that the service plan is a contractual obligation. (o) States that a person residing in an annexed area may enforce a service plan by applying for a writ of mandamus. (p) States that the municipality shall provide the annexed area with services in accordance with the service plan for the area. SECTION 3. Amends Subchapter C, Chapter 43, Local Gov. Code, by adding Sec. 43.0562 as follows: Sec. 43.0562. ADDITIONAL SERVICE PLAN REQUIREMENTS: EMERGENCY MEDICAL AND FIRE PROTECTION SERVICES. (a) States that in addition to the requirements for a service plan under Sec. 43.056, a service plan under this chapter must also include: (1) a description of the emergency medical services to be provided to the annexed area. Sets forth certain aspects and details that must be described. (2) a description of the fire protection services to provided to the annexed area. Sets forth certain aspects and details that must be described. (b) States that voluntary providers of services are considered equal to a municipal service provider if the voluntary provider is trained or certified under state law and has complied with continuing education requirements. (c) Sets forth how service delivery or response times are to be evaluated. (d) Allows for continuation of existing fire or emergency service agreements. (e) States that the municipality shall provide compatible communication devices to parties that they enter into agreements with for service providing. (f) Allows for an independent third party review of the service plan to determine if it meets the requirements of this section. (g) Sets forth that a municipality shall pay for land, buildings, or equipment that it will use for providing services. Sets forth appraisal process. SECTION 4. Amends Subchapter C, Chapter 43, Local Gov. Code, by adding Sec. 43.0566 as follows: Sec. 43.0566. ENGINEER'S REPORT REGARDING SERVICE PLAN; PERFORMANCE BOND. (a) Sets forth that the service plan shall be reviewed by a licensed engineer. Sets forth that engineer's review shall include cost estimates for implementing the service plan. (b) Allows for the engineer to consult with other professionals. (c) States that within 30 days after the date an annexation ordinance is adopted the municipality shall post a performance bond to ensure the implementation of the plan. Sets forth certain aspects of the bond that must be included. SECTION 5. Amends Subchapter C, Chapter 43, Local Gov. Code, by adding Sec. 43.0567 as follows: Sec. 43.0567. VOTER CHALLENGE TO SERVICE PLAN BEFORE ANNEXATION. (a) provides that annexation proceedings will be interrupted if 10% of the registered voters in the area to be annexed sign a petition claiming that the service plan is deficient and the petition complies with Chapter 277 of the Election Code; (b) grants the municipality five days within which to determine the validity of the petition and establishes that failure to do so makes the petition valid on the sixth day; (c) establishes an arbitration process that the municipality may submit to if it contests the petition; the municipality must notify each petitioner by mail within ten days of the determination of the validity of the petition; the arbitration panel is to be appointed within thirty days of notification and is to consist of a member appointed by each of the following: (1) the municipality; (2) the petitioners; (3) the judge in the district court in the county in which most of the area to be annexed is located and who has the longest tenure; (d) states that the decision of the arbitration panel is binding on both parties; if it finds in favor of the petitioners, the municipality may not proceed with annexation until one year has passed and a new service plan has been developed; if the panel finds in favor of the municipality, it may proceed with the annexation; (e) applies Chapter 171, Civil Practice and Remedies Code, to the arbitration proceedings and states that any reference to court in that section refers to the court of the judge who appointed a member of the panel. SECTION 6. Amends Subchapter C, Chapter 43, Local Gov. Code, by adding Sec. 43.058 as follows: Sec. 43.058. EXPENDITURE OF TAX REVENUE IN ANNEXED AREA. (a) requires a municipality to establish, for each area that it annexes, separate accounts in which it is to deposit at least 50% of the property taxes collected from the area and any interest accrued; (b) prohibits the municipality from spending the money on anything other than: (1) construction or maintenance of capital improvements needed to provide services to the annexed area; (2) other improvements or programs that directly benefit the annexed area. SECTION 7. Amends Sec. 43.141, Local Gov. Code, as follows: (a) Changes the number of petitioners required before disannexation proceedings for failure to provide services may be instituted from a majority of qualified voters to 10% of registered voters; makes conforming changes. (b) changes the procedure which may be adopted by the petitioners in the event that a municipality refuses to disannex territory within sixty days of receipt of the petition for disannexation; establishes that the petitioners may submit to the same arbitration panel as in Section 43.0567(a); requires the petitioners, if they intend to submit to the arbitration panel, to file notice of their intent with the municipality within ten days of the expiration of the sixty days referred to above; establishes that the panel will be appointed within thirty days of the filing of notice and in the same manner as the arbitration panel for interruption of annexation procedures in Section 43.0567(c). (c) establishes that the decision of the arbitration panel is binding; if it finds for the municipality, the municipality may continue with its current plan; if the panel finds in favor of the petitioners, the panel will enter an order disannexing the territory and requiring the municipality to pay an administrative penalty to the landowners in the amount of $25,000 for every day that the municipality did not meet its service plan obligations. (d) applies Chapter 171, Civil Practice and Remedy Code, to the arbitration panel. (e) - (h) conforming changes. SECTION 8. Sets forth that changes made in this Act are applicable on or after September 1, 1997. SECTION 9. Effective date: September 1, 1997. SECTION 10. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE CSHB 2363 amends Sections 43.052, 43.056, 43.0562, 43.0566, 43.0567, 43.058, and 43.141 of the Local Government Code. The original legislation only amended Sec. 43.0562 of the Local Government Code. CSHB 2363 states that Sec. 43.056, Local Gov. Code, applies to municipalities with populations of 50,000 or more. The original legislation applied to municipalities with a population of 225,000 or more. CSHB 2363 sets forth that the annexing municipality must detail how it plans on paying for the provision of services to the newly annexed area. The original legislation did not contain this provision. CSHB 2362 also contains a provision that states that within 30 days after the date an annexation ordinance is adopted the municipality shall post a performance bond to ensure the implementation of the plan. The original legislation did not contain a similar provision. CSHB 2363 defines "full municipal services" for all municipalities. Additionally, the substitute requires that the service plan provide for the extension of full municipal services to the area within 2 years of the annexation. The original legislation did not contain these provisions. CSHB 2363 requires that the construction of capital improvements that must be addressed in the service plan and instituted upon completion of annexation proceedings and the improvements must be substantially completed within two years of the annexation. The original legislation contained no such provision. CSHB 2363 sets forth that the service plan is a contractual obligation for the municipality. The original legislation did not contain these provisions. CSHB 2363 sets forth that the service plan shall be reviewed by a licensed engineer. Sets forth that the engineer's review shall include cost estimates for implementing the service plan. The original legislation did not contain such provisions. CSHB 2363 provides that annexation proceedings will be interrupted if 10% of the registered voters in the area to be annexed sign a petition claiming that the service plan is deficient and the petition complies with Chapter 277 of the Election Code. CSHB 2363 also sets up an arbitration process that the municipality may submit to if it contests the petition to disrupt the annexation proceedings. The original legislation did not contain any similar provisions. CSHB 2363 requires a municipality to establish, for each area that it annexes, separate accounts in which it is to deposit at least 50% of the property taxes collected from the area and any interest accrued. Additionally, it set forth certain restrictions on how that money can be spent. The original legislation did not contain these provisions. CSHB 2363 sets forth that annexed areas can initiate disannexation proceedings if the municipality fails to provide the level of services detailed in the service plan. The original legislation did not contain this provision.