By: Gallegos, et al. S.B. No. 727
A BILL TO BE ENTITLED
AN ACT
1-1 relating to contracts between municipal utility districts located
1-2 in extraterritorial areas and municipalities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter C, Chapter 42, Local Government Code,
1-5 is amended by adding Section 42.0441 to read as follows:
1-6 Sec. 42.0441. JOINT AGREEMENTS BETWEEN MUNICIPAL UTILITY
1-7 DISTRICTS IN EXTRATERRITORIAL AREAS AND MUNICIPALITIES. (a) It is
1-8 the intent of the legislature to enable municipal utility districts
1-9 in extraterritorial areas and municipalities to negotiate mutually
1-10 agreeable alternatives to annexation. In furtherance of that goal,
1-11 this section authorizes municipal utility districts and
1-12 municipalities to execute mutually agreeable contracts providing
1-13 for the joint funding of services in lieu of annexation.
1-14 (b) For purposes of this section:
1-15 (1) "District" means a municipal utility district,
1-16 water control and improvement district, or other district created
1-17 under Section 59, Article XVI, Texas Constitution.
1-18 (2) "Municipality" means a municipality with a
1-19 population of more than 1.6 million.
1-20 (3) "Services" means services delivered within the
1-21 area of a district or services provided by a municipality for the
1-22 benefit of persons outside the municipality.
1-23 (c) Before a municipality initiates annexation proceedings
2-1 to annex area in a district located in the municipality's
2-2 extraterritorial jurisdiction, the mayor of the municipality shall
2-3 submit a request to the board of directors of the district to
2-4 initiate negotiations under this section. A district may in its
2-5 discretion agree to enter into negotiations with the mayor.
2-6 (d) On electing to enter into negotiations with the mayor,
2-7 the board of directors shall appoint a designee from the board to
2-8 negotiate with the mayor.
2-9 (e) The mayor of a municipality shall enter into
2-10 negotiations with the board of a district located in the
2-11 municipality's extraterritorial jurisdiction on submission of a
2-12 petition approved by a majority of the members of the board. The
2-13 mayor shall enter into negotiations with the board not later than
2-14 30 days after a valid petition is filed with the mayor.
2-15 (f) On initiation of negotiations, the mayor and the board's
2-16 designee shall negotiate in good faith. The mayor and the board's
2-17 designee may, in their discretion, agree to a written contract that
2-18 includes one or more of the following options:
2-19 (1) a provision that guarantees the continuation of
2-20 the extraterritorial status of the defined area and its immunity
2-21 from annexation by the municipality for a period not to exceed 15
2-22 years;
2-23 (2) a provision for revenue sharing between the
2-24 municipality and the district that compensates for police
2-25 protection, fire protection, construction or maintenance of water
3-1 or wastewater facilities, construction or maintenance of roads or
3-2 streets, parks, playgrounds, or any other facility, building, or
3-3 service;
3-4 (3) a provision that imposes the municipality's sales
3-5 and excise tax within the boundaries of the district pursuant to
3-6 the provisions of Chapter 321, Tax Code;
3-7 (4) a provision that imposes a property assessment as
3-8 authorized under Chapter 372 for the purpose of achieving public
3-9 service and cost-sharing equity between the area within the
3-10 district and property located within the boundaries of the
3-11 municipality; if an assessment is imposed by mutual agreement, the
3-12 municipality is authorized to establish a local government
3-13 corporation within the district pursuant to Subchapter D, Chapter
3-14 431, Transportation Code, for the purpose of administrating the
3-15 assessment;
3-16 (5) a provision imposing a water and sewer surcharge;
3-17 or
3-18 (6) provisions that include other terms, conditions,
3-19 and considerations that the parties consider appropriate.
3-20 (g) The governing body of the municipality and the board of
3-21 a district may renew or extend a contract for successive periods
3-22 not to exceed 15 years each.
3-23 (h) A contract agreed to by the mayor of a municipality and
3-24 the board of a district shall be submitted to:
3-25 (1) the governing body of the municipality and the
4-1 board of the district; and
4-2 (2) the qualified voters of the district in an
4-3 election held for the purpose of approving the contract.
4-4 (i) At least 50 percent of the qualified voters of the
4-5 district must participate in the election under Subsection (h)(2)
4-6 for the election to be valid.
4-7 (j) The contract is binding on the municipality and the
4-8 district if:
4-9 (1) the governing body of the municipality and a
4-10 majority of the members of the board of the district approve the
4-11 contract; and
4-12 (2) a majority of the qualified voters voting in an
4-13 election required by this section approve the contract.
4-14 (k) If a majority of the qualified voters voting in an
4-15 election required by this section do not approve the contract, the
4-16 result of the election may not be interpreted as consent to
4-17 annexation by the municipality.
4-18 (l) If a municipality and a district enter into negotiations
4-19 under this section, the governing body of the municipality may not
4-20 initiate proceedings to annex the district under any other section
4-21 of this code before September 1 of the second year after:
4-22 (1) the year the notice of the mayor's request to
4-23 initiate negotiations is submitted to the board of the district as
4-24 provided by Subsection (c); or
4-25 (2) the year the mayor entered negotiations with the
5-1 district after the district submitted a petition as provided by
5-2 Subsection (e).
5-3 SECTION 2. Chapter 321.102, Tax Code, is amended by adding
5-4 Subsection (c-1) to read as follows:
5-5 (c-1) If the boundaries of a municipality in which the tax
5-6 imposed under this chapter are changed pursuant to Section
5-7 42.0441(f)(3), Local Government Code, the municipal secretary shall
5-8 send by United States registered or certified mail to the
5-9 comptroller a certified copy of the ordinance that changes the
5-10 municipality's boundaries and shows the effective date of the
5-11 boundary change. The ordinance must be accompanied by a map
5-12 clearly showing the added territory. The tax takes effect in the
5-13 added territory on the first day of the first calendar quarter
5-14 after the comptroller receives the ordinance and map.
5-15 SECTION 3. The importance of this legislation and the
5-16 crowded condition of the calendars in both houses create an
5-17 emergency and an imperative public necessity that the
5-18 constitutional rule requiring bills to be read on three several
5-19 days in each house be suspended, and this rule is hereby suspended.