75R12686 PAM-D                           

         By Hilbert                                            H.B. No. 2363

         Substitute the following for H.B. No. 2363:

         By Turner of Coleman                              C.S.H.B. No. 2363

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the provision of services in certain annexed areas.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 43.052, Local Government Code, is amended

 1-5     by amending Subsections (a) and (b) and adding Subsection (d) to

 1-6     read as follows:

 1-7           (a)  Before a municipality may institute annexation

 1-8     proceedings, the governing body of the municipality must conduct at

 1-9     least three [two] public hearings on separate days at which persons

1-10     interested in the annexation are given the  opportunity to be

1-11     heard.  The first hearing [hearings] must be conducted on or after

1-12     the 75th [40th] day [but before the 20th day] before the date of

1-13     the institution of the proceedings.  Each hearing must be separated

1-14     by 30 or more days from the date of a previous hearing.  The

1-15     hearings must be held between 7 p.m. and 9 p.m.

1-16           (b)  The municipality shall hold:

1-17                 (1)  at [At] least one of the hearings [must be held]

1-18     in the area proposed for annexation; and

1-19                 (2)  at least one of the hearings at a site designated

1-20     by the municipal utility districts in the area proposed for

1-21     annexation  [if more than 20 adult residents of the area file a

1-22     written protest of the annexation with the secretary of the

1-23     municipality within 10 days after the date of the publication of

1-24     the notice required by this section.  The protest must state the

 2-1     name, address, and age of each protester who signs].

 2-2           (d)  A hearing conducted under this section shall be

 2-3     conducted by a visiting state judge and a written record of the

 2-4     proceedings shall be maintained by the municipality during the

 2-5     period covered by the service plan.

 2-6           SECTION 2.  Section 43.056, Local Government Code, is amended

 2-7     to read as follows:

 2-8           Sec. 43.056.  PROVISION OF SERVICES TO ANNEXED AREA.  (a)  In

 2-9     this section, "full municipal services" means services funded in

2-10     whole or in part by municipal taxation and provided by the annexing

2-11     municipality within its full-purpose boundaries.

2-12           (b)  Before the publication of the notice of the first

2-13     hearing required under Section 43.052, the governing body of the

2-14     municipality proposing the annexation shall [direct its planning

2-15     department or other appropriate municipal department to] prepare a

2-16     service plan that provides for the extension of full municipal

2-17     services to the area to be annexed.  The municipality shall provide

2-18     the services by any of the methods by which it extends the services

2-19     to any other area of the municipality.  The service plan must

2-20     include:

2-21                 (1)  one or more maps that show the boundaries of the

2-22     municipality at the time the plan is prepared and the boundaries of

2-23     the area to be annexed in relation to the municipal boundaries;

2-24                 (2)  one or more maps that bear the seal of an engineer

2-25     licensed by this state and that show the major trunk water mains

2-26     and sewer interceptors and outfalls of the municipality at the time

2-27     the plan is prepared and the proposed extensions of the water mains

 3-1     and sewer interceptors and outfalls to serve the area to be

 3-2     annexed;

 3-3                 (3)  the general land use patterns in the area to be

 3-4     annexed;

 3-5                 (4)  a description of the methods by which the

 3-6     municipality  will finance the extension of services to the area to

 3-7     be annexed; and

 3-8                 (5)  a statement indicating whether the area to be

 3-9     annexed meets the requirements of Sections 43.051, 43.054, and

3-10     43.055.

3-11           (c) [(b)]  The service plan must include a program under

3-12     which the municipality will provide:

3-13                 (1)  certain services in the annexed area in accordance

3-14     with Subsection (d) or (e); and

3-15                 (2)  full municipal services in the annexed area not

3-16     [no] later than the second anniversary of [4 1/2 years after] the

3-17     effective date of the annexation, in accordance with Subsection (h)

3-18     [(d)].

3-19           (d)  Under the service plan, [However, under the program] the

3-20     municipality must provide the following services in the area within

3-21     60 days after the effective date of the annexation of the area:

3-22                 (1)  police protection;

3-23                 (2)  fire protection;

3-24                 (3)  emergency medical service;

3-25                 (4) [(3)]  solid waste collection;

3-26                 (5) [(4)]  maintenance of water and wastewater

3-27     facilities in the annexed area that are not within the service area

 4-1     of another water or wastewater utility;

 4-2                 (6) [(5)]  maintenance of roads and streets, including

 4-3     road and street lighting;

 4-4                 (7) [(6)]  maintenance of parks, playgrounds, and

 4-5     swimming pools; and

 4-6                 (8) [(7)]  maintenance of any other publicly owned

 4-7     facility, building, or service.

 4-8           (e)  This subsection, instead of Subsection (d), applies to

 4-9     [(b-1)  The service plan of] a municipality with a population of

4-10     50,000 [1.5 million] or more. Under the service plan, [must include

4-11     a program under which the municipality will provide full municipal

4-12     services in the annexed area no later than 4 1/2 years after the

4-13     effective date of the annexation, in accordance with Subsection

4-14     (d).  However, under the program] the municipality must:

4-15                 (1)  provide the following services in the area on and

4-16     after the effective date of the annexation of the area:

4-17                       (A)  police protection; and

4-18                       (B)  solid waste collection;

4-19                 (2)  provide the following services in the area within

4-20     30 days after the effective date of the annexation of the area, if

4-21     the services are provided through a contract between the

4-22     municipality and a service provider:

4-23                       (A)  emergency medical service;  and

4-24                       (B)  fire protection;  and

4-25                 (3)  provide the following services in the area within

4-26     60 days after the effective date of the annexation of the area:

4-27                       (A)  maintenance of water and wastewater

 5-1     facilities in the annexed area that are not within the service area

 5-2     of another water or wastewater utility;

 5-3                       (B)  maintenance of roads and streets, including

 5-4     road and street lighting;

 5-5                       (C)  maintenance of parks, playgrounds, and

 5-6     swimming pools;

 5-7                       (D)  maintenance of any other publicly owned

 5-8     facility, building, or service;  and

 5-9                       (E)  emergency medical service and fire

5-10     protection, if the services are provided by municipal personnel and

5-11     equipment.

5-12           (f) [(c)  For purposes of this section, "full municipal

5-13     services" means services funded in whole or in part by municipal

5-14     taxation and provided by the annexing municipality within its

5-15     full-purpose boundaries.]  A municipality with a population of

5-16     50,000 [1.5 million] or more may provide all or part of the

5-17     municipal services required under the service plan by contracting

5-18     with service providers.  If the municipality owns a water and

5-19     wastewater utility, the municipality shall, subject to this

5-20     section, provide for the extension of major trunk water mains and

5-21     sewer lines into the [extend water and  wastewater service to any]

5-22     annexed area not within the service area of another water or

5-23     wastewater utility so that, after construction of the lines, the

5-24     property owners in the annexed area will be able to secure public

5-25     water and sewer service according to the municipal policies for

5-26     extending water and sewer lines to individual lots or subdivisions.

5-27     If the owner of an occupied dwelling unit or an operating

 6-1     commercial or industrial property in the area to be annexed

 6-2     requests the municipality to extend water and sewer lines to the

 6-3     property or to a point on a public street or road right-of-way

 6-4     adjacent to the property, the municipality shall, at the time of

 6-5     the adoption of the annexation ordinance, amend the service plan to

 6-6     reflect and accommodate those extensions and to establish a

 6-7     schedule for constructing any necessary trunk water mains, sewer

 6-8     outfall lines, sewer lines, and water lines as soon as possible,

 6-9     but not later than the second anniversary of the effective date of

6-10     the annexation.  The request from the property owner must:

6-11                 (1)  be in writing on a form that is prescribed by the

6-12     municipality and state that the extension will be made according to

6-13     the municipal policies for extending water and sewer lines to

6-14     individual lots or subdivisions; and

6-15                 (2)  be filed with the municipal secretary or clerk

6-16     before the 30th day before the date the annexation ordinance is

6-17     adopted.

6-18           (g)  If the municipality annexes territory included within

6-19     the boundaries of a municipal utility district or a water control

6-20     and improvement district, the municipality shall comply with

6-21     applicable state law relating to annexation of territory within a

6-22     municipal utility district or a water control and improvement

6-23     district.  The service plan shall summarize the service extension

6-24     policies of the municipal water and wastewater utility.

6-25           (h) [(d)]  The service plan must also include a program under

6-26     which the municipality will initiate the acquisition or

6-27     construction of capital improvements necessary for providing

 7-1     municipal services adequate to serve the area.  The construction

 7-2     shall begin [within two years] after the effective date of the

 7-3     annexation of the area and shall be substantially completed on or

 7-4     before the second anniversary of [within 4 1/2 years after] that

 7-5     date.  The acquisition or construction of the  facilities shall be

 7-6     accomplished by purchase, lease, or other contract or by the

 7-7     municipality succeeding to the powers, duties, assets, and

 7-8     obligations of a conservation and reclamation district as

 7-9     authorized or required by law.  The construction of the facilities

7-10     shall be accomplished in a continuous process and shall be

7-11     completed as soon as reasonably possible, consistent with generally

7-12     accepted local engineering and architectural standards and

7-13     practices.  However, the municipality does not violate this

7-14     subsection if the construction process is interrupted for any

7-15     reason by circumstances beyond the direct control of the

7-16     municipality.  The requirement that construction of capital

7-17     improvements must be substantially completed on or before the

7-18     second anniversary of the effective date of the annexation [within

7-19     4 1/2 years] does not apply to a development project or proposed

7-20     development project within an annexed area if the annexation of the

7-21     area was initiated by petition or request of the owners of land in

7-22     the annexed area and the municipality and the landowners have

7-23     agreed in writing that the development project within that area,

7-24     because of its size or projected manner of development by the

7-25     developer, is not reasonably expected to be completed within that

7-26     period.

7-27           (i) [(e)]  A service plan may not:

 8-1                 (1)  require the creation of another political

 8-2     subdivision;

 8-3                 (2)  require a landowner in the area to fund the

 8-4     capital improvements necessary to provide municipal services in a

 8-5     manner inconsistent with Chapter 395 unless otherwise agreed to by

 8-6     the landowner; [or]

 8-7                 (3)  provide fewer services or lower levels of services

 8-8     in the area[:]

 8-9                       [(A)]  than were in existence in the area

8-10     immediately preceding the  date of the annexation, regardless of

8-11     whether those services were provided before annexation by

8-12     governmental entities, volunteers, property owners' associations,

8-13     or other nongovernmental providers; or

8-14                 (4)  provide fewer services or lower levels of services

8-15     in the area [(B)]  than are [otherwise] available in other parts of

8-16     the municipality [with land uses and population densities similar

8-17     to those reasonably contemplated or projected in the area].

8-18           (j)  The service plan must provide that every  municipal

8-19     service described in the plan for the area to be annexed be

8-20     provided in a manner that ensures the services are equal to or

8-21     better than the services provided to the area immediately before

8-22     annexation.  An annexation may not occur if any service proposed in

8-23     the plan is less than the service provided immediately before the

8-24     annexation.  The service must also be provided to each portion of

8-25     the area to be annexed in the exact way that the service is

8-26     provided to any other portion of the area to be annexed.

8-27           (k)  The service plan shall allow a resident of the area

 9-1     proposed to be annexed to vote in any election.  If a municipality

 9-2     holds an election and the residents of an annexed area are not

 9-3     allowed to vote in the election, the results of the election are

 9-4     void.  This subsection does not apply to:

 9-5                 (1)  an election on the question of the creation of a

 9-6     municipal special district or authority in which no part of the

 9-7     area annexed is part of the proposed special district or authority

 9-8     and the creation of which would not create any liability for which

 9-9     a resident of the annexed area would be requested to pay in any

9-10     way, including through the payment of any municipal tax;

9-11                 (2)  a local option election conducted under Chapter

9-12     251, Alcoholic Beverage Code, in which no part of the area annexed

9-13     is part of the area affected by the election; or

9-14                 (3)  an election for a single-member district of the

9-15     municipality, in which no part of the area annexed is part of the

9-16     area within the district.

9-17           (l) [(f)]  If only a part of the area to be annexed is

9-18     actually annexed, the governing body shall direct the department to

9-19     prepare a revised service plan for that part.

9-20           (m) [(g)]  The proposed service plan must be made available

9-21     for public inspection and explained to the inhabitants of the area

9-22     at the public hearings held under Section 43.052.  The plan may be

9-23     amended through negotiation at the hearings, but the provision of

9-24     any service may not be deleted.  On completion of the public

9-25     hearings, the service plan shall be attached to the ordinance

9-26     annexing the area and approved as part of the ordinance.

9-27           (n) [(h)]  On approval by the governing body, the service

 10-1    plan is a contractual obligation that is not subject to amendment

 10-2    or repeal except that if the governing body determines at the

 10-3    public hearings required by this subsection that changed conditions

 10-4    or subsequent occurrences make the service plan unworkable or

 10-5    obsolete, the governing body may amend the service plan to conform

 10-6    to the changed conditions or subsequent occurrences.  An amended

 10-7    service plan must provide for services that are comparable to or

 10-8    better than those established in the service plan before amendment.

 10-9    Before any amendment is adopted, the governing body must provide an

10-10    opportunity for interested persons to be heard at public hearings

10-11    called and held in the manner provided by Section 43.052.

10-12          (o) [(i)  A service plan is valid for 10 years.  Renewal of

10-13    the service plan is at the discretion of the municipality.]  A

10-14    person residing in an annexed area may enforce a service plan by

10-15    applying for a writ of mandamus.  If a court issues the writ, the

10-16    municipality shall pay the person's costs and reasonable attorney's

10-17    fees in bringing the action.  A writ issued under this subsection

10-18    must provide the municipality the option of disannexing the area

10-19    within 30 days.

10-20          (p) [(j)]  A municipality that annexes an area shall provide

10-21    the area or cause the area to be provided with services in

10-22    accordance with the service plan for the area.

10-23          [(k)  This section does not require that a uniform level of

10-24    full municipal services be provided to each area of the

10-25    municipality if different characteristics of topography, land use,

10-26    and population density are considered a sufficient basis for

10-27    providing different levels of service.]

 11-1          SECTION 3.  Subchapter C, Chapter 43, Local Government Code,

 11-2    is amended by adding Section 43.0562 to read as follows:

 11-3          Sec. 43.0562.  ADDITIONAL SERVICE PLAN REQUIREMENTS:

 11-4    EMERGENCY MEDICAL AND FIRE PROTECTION SERVICES.  (a)  In addition

 11-5    to the requirements for a service plan under Section 43.056, a

 11-6    service plan under this chapter must include:

 11-7                (1)  a description of the emergency medical services to

 11-8    be provided to the annexed area that includes a description of:

 11-9                      (A)  service delivery times, including dispatch

11-10    and response times;

11-11                      (B)  equipment and supplies, including types of

11-12    ambulance units, types of medical equipment with which units are

11-13    equipped, and the ability of emergency services providers to use

11-14    the equipment and supplies;

11-15                      (C)  staffing and qualifications of emergency

11-16    medical service workers;

11-17                      (D)  communications provided to units in the

11-18    area, including the use of 9-1-1 systems or other emergency

11-19    communication systems;

11-20                      (E)  any mutual aid agreements the municipality

11-21    has made or will make;

11-22                      (F)  any special apparatus or services, including

11-23    emergency education training;

11-24                      (G)  the cost of providing emergency medical

11-25    services; and

11-26                      (H)  other detailed direct comparisons between

11-27    any aspect of emergency medical services and the services proposed

 12-1    to be provided by the municipality; and

 12-2                (2)  a description of the fire protection services to

 12-3    be provided to the area that includes a description of:

 12-4                      (A)  service delivery times, including average

 12-5    dispatch and average response times;

 12-6                      (B)  the types of fire protection equipment and

 12-7    capabilities, including whether the equipment meets industry

 12-8    standards at the time of the annexation, is capable of comparable

 12-9    or multiple functions, and is capable of stand-alone operations and

12-10    whether any reserve equipment is in fact operational;

12-11                      (C)  the organization and staffing of fire

12-12    protection units in the area, including whether the organization is

12-13    capable of addressing the immediate needs of the area, whether

12-14    sufficient well-trained personnel exist, and the certification and

12-15    training levels of the personnel;

12-16                      (D)  the cost of providing the fire protection

12-17    services;

12-18                      (E)  any mutual aid agreements the municipality

12-19    has made or will make;

12-20                      (F)  any special apparatus or services, including

12-21    hazardous materials units or vehicles, water, technical, or

12-22    vehicular rescue units or training, and emergency education

12-23    training; and

12-24                      (G)  other detailed direct comparisons between

12-25    any aspect of fire protection services in the area immediately

12-26    before annexation and the services proposed to be provided by the

12-27    municipality.

 13-1          (b)  In determining whether municipal service providers

 13-2    provide service equal to or better than that provided by a

 13-3    voluntary provider, a voluntary provider is considered equal to a

 13-4    municipal service provider if the voluntary provider is trained or

 13-5    certified under state law and has complied with any continuing

 13-6    education requirements.

 13-7          (c)  In determining whether service delivery or response

 13-8    times are equal to or better than services immediately before

 13-9    annexation, the service plan shall use the service delivery or

13-10    response times of the emergency medical or fire protection

13-11    organization operating in the area.

13-12          (d)  A fire protection or emergency service mutual aid

13-13    agreement that existed before the date of the service plan shall be

13-14    continued under the service plan for a period of not less than 10

13-15    years.

13-16          (e)  If a municipality enters into an agreement with any

13-17    party to provide services under the plan required by this section,

13-18    the municipality shall provide the party with compatible

13-19    communication equipment that allows the party to communicate, in

13-20    any manner the party determines is necessary, directly with the

13-21    municipality's service provider.

13-22          (f)  Not later than the 30th day after the date of the last

13-23    hearing under Section 43.052, the municipality and the municipal

13-24    utility districts in the area proposed to be annexed shall agree on

13-25    an independent third party to review the service plan to determine

13-26    if the plan meets the requirements of this section. If the third

13-27    party determines that the service plan does not meet the

 14-1    requirements, the service plan is void and the municipality shall

 14-2    develop a new service plan that meets the requirements of this

 14-3    section.

 14-4          (g)  If the municipality, in annexing an area, either renders

 14-5    useless for its primary function an emergency service provider's or

 14-6    fire protection provider's land, buildings, or equipment in the

 14-7    area to be annexed or in an adjacent area, or, using eminent domain

 14-8    powers, condemns a provider's land or buildings, the municipality

 14-9    shall pay to the provider, not later than the 30th day before the

14-10    date of the annexation, the value of the land, building, or

14-11    equipment that is determined by the average of three independent

14-12    appraisals.  The municipality shall pay the cost of the appraisals.

14-13    A service plan adopted under this section shall list any land,

14-14    buildings, or equipment affected and shall allow providers to add

14-15    additional affected property to the list.

14-16          SECTION 4.  Subchapter C, Chapter 43, Local Government Code,

14-17    is amended by adding Section 43.0566 to read as follows:

14-18          Sec. 43.0566.  ENGINEER'S REPORT REGARDING SERVICE PLAN;

14-19    PERFORMANCE BOND.  (a)  Before a service plan is finally prepared

14-20    under this subchapter, a municipality shall submit the plan for

14-21    review to an engineer who is licensed by this state and who is not

14-22    an employee of the municipality.  The engineer shall estimate the

14-23    costs of implementing the service plan.  The estimate must:

14-24                (1)  itemize the costs and include a total of those

14-25    costs;

14-26                (2)  cover the term of the service plan; and

14-27                (3)  describe optional methods of implementing parts of

 15-1    the plan if more than one method is reasonably possible.

 15-2          (b)  The engineer may consult other professionals as

 15-3    necessary to comply with the duties imposed by this section and the

 15-4    municipality shall pay the cost of those consultations.

 15-5          (c)  Within 30 days after the date an annexation ordinance is

 15-6    adopted for an area to which the service plan applies, the

 15-7    municipality shall post a performance bond to ensure the

 15-8    implementation of the plan.  The bond must:

 15-9                (1)  be issued by a surety company authorized to do

15-10    business in this state;

15-11                (2)  be conditioned on the faithful performance of the

15-12    municipality's duties under the service plan;

15-13                (3)  be in the amount estimated by the engineer to be

15-14    the total cost of implementing the service plan; and

15-15                (4)  be payable to the owners of land in the area who

15-16    are  entitled to services under the service plan.

15-17          SECTION 5.  Subchapter C, Chapter 43, Local Government Code,

15-18    is amended by adding Section 43.0567 to read as follows:

15-19          Sec. 43.0567.  VOTER CHALLENGE TO SERVICE PLAN BEFORE

15-20    ANNEXATION.  (a)  After a municipality prepares a service plan for

15-21    an area that the municipality proposes to annex and before the

15-22    annexation takes effect, the municipality may not proceed with the

15-23    annexation if the municipality receives a petition that:

15-24                (1)  claims the service plan is deficient by not

15-25    complying with the provisions of this subchapter regarding service

15-26    plans and explains in detail the ways in which the service plan is

15-27    deficient;

 16-1                (2)  is signed by a number of registered voters of the

 16-2    area to be annexed equal to at least 10 percent of the number of

 16-3    registered  voters in the area; and

 16-4                (3)  complies with Chapter 277, Election Code, as if

 16-5    the petition were a petition for an election.

 16-6          (b)  The municipality shall determine whether the petition is

 16-7    valid within five days after the date the petition is filed with

 16-8    the municipality. If the municipality fails to make the

 16-9    determination within the permitted period, the petition is

16-10    considered valid on the sixth day after the date it is filed with

16-11    the municipality.

16-12          (c)  If the municipality disagrees with the claim made by the

16-13    petition that the service plan is deficient, the municipality may

16-14    submit to an arbitration panel the question of whether the service

16-15    plan is deficient as described by the petition.  To begin the

16-16    arbitration process, the municipality shall mail to each signer of

16-17    the petition, at the signer's address contained on the petition, a

16-18    notice stating the municipality's intent to begin arbitration.  The

16-19    notice must be  mailed by depositing it in the United States mail

16-20    within 10 days after the date the petition is determined to be

16-21    valid under Subsection (b). Within 30 days after the date the

16-22    notice is mailed, an arbitration panel shall be appointed as

16-23    follows:

16-24                (1)  the municipality shall appoint one member of the

16-25    panel;

16-26                (2)  the signers, by joint action representing a

16-27    majority of the signers, shall appoint one member of the panel; and

 17-1                (3)  the district judge who serves in the county in

 17-2    which a majority of the area to be annexed is located and who has

 17-3    the longest tenure as a district judge in that county shall appoint

 17-4    one member of the panel.

 17-5          (d)  The decision of the arbitration panel is binding on the

 17-6    municipality and the signers of the petition.  If the arbitration

 17-7    panel decides in favor of the signers, the municipality may not

 17-8    proceed with the annexation.  The municipality may not initiate new

 17-9    annexation proceedings in connection with the area until after the

17-10    first anniversary of the date of the arbitration panel's decision,

17-11    and if the municipality initiates annexation proceedings after that

17-12    date, it must prepare a new service plan for the area.  If the

17-13    arbitration panel decides in favor of the municipality, the

17-14    municipality may proceed with the annexation.

17-15          (e)  The arbitration panel is governed by Chapter 171, Civil

17-16    Practice and Remedies Code, as if this section were a written

17-17    contract requiring arbitration between the municipality and the

17-18    signers of the petition.  A reference in that chapter to a court

17-19    means the court of the district judge who appoints a member of the

17-20    arbitration panel under Subsection (c).

17-21          SECTION 6.  Subchapter C, Chapter 43, Local Government Code,

17-22    is amended by adding Section 43.058 to read as follows:

17-23          Sec. 43.058.  EXPENDITURE OF TAX REVENUE IN ANNEXED AREA.

17-24    (a)  A municipality shall create a separate account in the

17-25    municipal treasury for each area the municipality annexes.  The

17-26    municipality shall deposit to the credit of the account at least 50

17-27    percent of the property tax revenue the municipality collects each

 18-1    year from the annexed area.  The municipality also shall deposit to

 18-2    the credit of the account any interest earned on the money in the

 18-3    account.

 18-4          (b)  The money in the account may be used only to finance:

 18-5                (1)  the construction or maintenance of capital

 18-6    improvements in the area that are necessary for the municipality to

 18-7    provide services to the area; and

 18-8                (2)  other improvements in, or programs provided to,

 18-9    the area that directly benefit the area.

18-10          SECTION 7.  Section 43.141, Local Government Code, is amended

18-11    to read as follows:

18-12          Sec. 43.141.  DISANNEXATION FOR FAILURE TO PROVIDE SERVICES.

18-13    (a)  Ten percent [A majority] of the registered [qualified] voters

18-14    of an annexed area may petition the governing body of the

18-15    municipality to disannex the area if the municipality fails or

18-16    refuses to provide services or to cause services to be provided to

18-17    the area within the period specified by Section 43.056 and, if

18-18    applicable, Section 43.0565 or by the service plan prepared for the

18-19    area under  those sections [that section].

18-20          (b)  If the governing body fails or refuses to disannex the

18-21    area within 60 days after the date of the receipt of the petition,

18-22    any one or more of the signers of the petition may  submit to an

18-23    arbitration panel the question of whether the municipality failed

18-24    or refused to act as described by Subsection (a).  To begin the

18-25    arbitration process, the signers of the petition  who intend to  be

18-26    parties to the arbitration shall file with the municipality a

18-27    notice stating the intent of those signers to begin arbitration.

 19-1    The notice must be filed within 10 days after the expiration of the

 19-2    60-day period described by this subsection.  Within 30 days after

 19-3    the date the notice is filed, an arbitration panel shall be

 19-4    appointed as follows:

 19-5                (1)  the municipality shall appoint one member of the

 19-6    panel;

 19-7                (2)  the signers who filed the notice, by joint action

 19-8    representing a majority of those signers, shall appoint one member

 19-9    of the panel; and

19-10                (3)  the district judge who serves in the county in

19-11    which a majority of the annexed area is located and who has the

19-12    longest tenure as a district judge in that county shall appoint one

19-13    member of the panel.

19-14          (c)  The decision of the arbitration panel is binding on the

19-15    municipality and the signers of the petition.  If the arbitration

19-16    panel decides in favor of the municipality, the municipality may

19-17    continue to act in accordance with the service plan as it

19-18    previously existed.  If the arbitration panel decides [bring a

19-19    cause of action in a district court of the county in which the area

19-20    is principally located to request that the area be disannexed.  On

19-21    the filing of an answer by the governing body, and on application

19-22    of either party, the case shall be advanced and heard without

19-23    further delay in accordance with the Texas Rules of Civil

19-24    Procedure.  The district court shall enter an order disannexing the

19-25    area if the court finds] that a valid petition was filed with the

19-26    municipality and that the municipality failed to perform its

19-27    obligations in accordance with the service plan or failed to

 20-1    perform in good faith, the arbitration panel shall enter an order:

 20-2                (1)  disannexing the area; and

 20-3                (2)  requiring the municipality to pay to the

 20-4    landowners of the area an administrative penalty, to be allocated

 20-5    among the landowners  in a manner the panel determines is just, in

 20-6    the amount of $25,000 for each day the municipality is found to

 20-7    have failed to perform its obligations in accordance with the

 20-8    service plan or failed to perform in good faith.

 20-9          (d)  The arbitration panel is governed by Chapter 171, Civil

20-10    Practice and Remedies Code, as if this section were a written

20-11    contract requiring arbitration between the municipality and the

20-12    signers of the petition.  A reference in that chapter to a court

20-13    means the court of the district judge who appoints a member of the

20-14    arbitration panel under Subsection (b).

20-15          (e) [(c)]  If the area is disannexed under this section, it

20-16    may not be annexed again within five years after the date of the

20-17    disannexation.  If it is reannexed within seven years after the

20-18    date of the disannexation, a service plan for the area must be

20-19    implemented not later than one year after the date of the

20-20    reannexation.

20-21          (f) [(d)]  The petition for disannexation must:

20-22                (1)  be written;

20-23                (2)  request the disannexation;

20-24                (3)  be signed in ink or indelible pencil by the

20-25    appropriate voters;

20-26                (4)  be signed by each voter as that person's name

20-27    appears on the most recent official list of registered voters;

 21-1                (5)  contain a note made by each voter stating the

 21-2    person's residence address and the precinct number and voter

 21-3    registration number that appear on the person's voter registration

 21-4    certificate;

 21-5                (6)  describe the area to be disannexed and have a plat

 21-6    or other likeness of the area attached; and

 21-7                (7)  be presented to the secretary of the municipality.

 21-8          (g) [(e)]  The signatures to the petition need not be

 21-9    appended to one paper.

21-10          (h) [(f)]  Before the petition is circulated among the

21-11    voters, notice of the petition must be given by posting a copy of

21-12    the petition for 10 days in three public places in the annexed area

21-13    and by publishing a copy of the petition once in a newspaper of

21-14    general circulation serving the area before the 15th day before the

21-15    date the petition is first circulated.  Proof of the posting and

21-16    publication must be made by attaching to the petition presented to

21-17    the secretary:

21-18                (1)  the sworn affidavit of any voter who signed the

21-19    petition, stating the places and dates of the posting; and

21-20                (2)  the sworn affidavit of the publisher of the

21-21    newspaper in which the notice was published, stating the name of

21-22    the newspaper and the issue and date of publication.

21-23          SECTION 8.  (a)  The change in law made by this Act to

21-24    Section 43.052, Local Government Code, applies only to an

21-25    annexation for which the first hearing notice required by that

21-26    section is published on or after September 1, 1997.  An annexation

21-27    for which the first hearing notice is published before that date is

 22-1    governed by the law in effect at the time the notice is published,

 22-2    and the former law is continued in effect for that purpose.

 22-3          (b)  The changes in law made by this Act to Section 43.056,

 22-4    Local Government Code, apply only to an annexation for which the

 22-5    annexation ordinance is adopted on or after September 1, 1997.

 22-6          (c)  Sections 43.0566, 43.0567, and 43.058, Local Government

 22-7    Code, as added by this Act, apply only to an annexation for which

 22-8    the annexation ordinance is adopted on or after September 1, 1997.

 22-9          (d)  The changes in law made by this Act to Section 43.141,

22-10    Local Government Code, apply only to an annexed area for which the

22-11    annexation ordinance is adopted on or after September 1, 1997.  An

22-12    annexed area for which the annexation ordinance is adopted before

22-13    that date is governed by the law in effect at the time the

22-14    ordinance is adopted, and the former law is continued in effect for

22-15    that purpose.

22-16          SECTION 9.  This Act takes effect September 1, 1997.

22-17          SECTION 10.  The importance of this legislation and the

22-18    crowded condition of the calendars in both houses create an

22-19    emergency and an imperative public necessity that the

22-20    constitutional rule requiring bills to be read on three several

22-21    days in each house be suspended, and this rule is hereby suspended.