Bill not drafted by TLC or Senate E&E. Line and page numbers may not match official copy. By: Gallegos 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. 1-8 (a) It is the intent of the legislature to enable municipal 1-9 utility districts in extraterritorial areas and municipalities to 1-10 negotiate mutually-agreeable alternatives to annexation. In 1-11 furtherance of that goal, this section authorizes municipal utility 1-12 districts and municipalities to execute mutually-agreeable 1-13 contracts providing for the joint funding of services in lieu of 1-14 annexation. 1-15 (b) For purposes of this section: 1-16 (1) "District" means a municipal utility district, 1-17 water control and improvement district, or other district created 1-18 under Article XVI, Section 59 of the Texas Constitution. 1-19 (2) "Municipality" means a municipality over 1.6 1-20 million population. 1-21 (3) "Services" means services delivered within the 1-22 area of a district or services provided by a municipality for the 1-23 benefit of persons outside the municipality. 2-1 (c) The mayor of a municipality may enter into negotiations 2-2 with the board of directors of one or more districts located in the 2-3 municipality's extraterritorial jurisdiction. Notice of the 2-4 mayor's request to initiate negotiations shall be submitted to the 2-5 board of the district. A district may in its discretion agree to 2-6 enter into negotiations with the mayor. 2-7 (d) Upon electing to enter into negotiations with the mayor, 2-8 the board of directors shall appoint a designee from the board to 2-9 negotiate with the mayor. 2-10 (e) The mayor of a municipality shall enter into 2-11 negotiations with the board of a district located in the 2-12 municipality's extraterritorial jurisdiction upon submission of a 2-13 petition approved by a majority of the members of the board. The 2-14 mayor shall enter into negotiations with the board not later than 2-15 30 days after a valid petition is filed with the mayor. 2-16 (f) Upon initiation of negotiations, the mayor and the 2-17 board's designee shall negotiate in good faith. The mayor and the 2-18 board's designee may, in their discretion, agree to a written 2-19 contract that includes one or more of the following options: 2-20 (1) a provision that guarantees the continuation of 2-21 the extraterritorial status of the defined area and its immunity 2-22 from annexation by the municipality for a period not to exceed 15 2-23 years; 2-24 (2) a provision for revenue-sharing between the 2-25 municipality and the district that compensates for police 3-1 protection, fire protection, construction or maintenance of water 3-2 or wastewater facilities, construction or maintenance of roads or 3-3 streets, parks, playgrounds, or any other facility, building or 3-4 service; 3-5 (3) a provision that imposes the municipality's sales 3-6 and excise tax within the boundaries of the district, pursuant to 3-7 the provisions of Chapter 321 of the Tax Code; 3-8 (4) a provision that imposes a property assessment (as 3-9 authorized under Chapter 372, Local Government Code) for the 3-10 purpose of achieving public service and cost sharing equity between 3-11 the area within the district and property located within the 3-12 boundaries of the municipality. If such assessment is imposed by 3-13 mutual agreement, the municipality is authorized to establish a 3-14 local government corporation within the district pursuant to 3-15 Subchapter D, Chapter 431, Transportation Code, for the purpose of 3-16 administrating said assessment; 3-17 (5) a provision imposing a water and sewer surcharge; 3-18 or 3-19 (6) provisions that include other terms, conditions 3-20 and considerations that the parties consider appropriate. 3-21 (g) The governing body of the municipality and the board of 3-22 a district may renew or extend a contract for successive periods 3-23 not to exceed 15 years. 3-24 (h) A contract agreed to by the mayor of a municipality and 3-25 the board of a district shall be submitted to the governing body of 4-1 the municipality and the board of the district for final approval. 4-2 Upon approval by the governing body of the municipality and a 4-3 majority of members of the board of the district, the contract 4-4 shall be deemed finally approved and binding on both parties. 4-5 SECTION 2. Chapter 321.102, Tax Code, is amended by adding a 4-6 new subsection (c-1) to read as follows: 4-7 (c-1) If the boundaries of a municipality in which the tax 4-8 imposed under this chapter are changed pursuant to Subchapter (C), 4-9 Chapter 42, Sec. 42.0441(e)(2), Local Government Code, the 4-10 municipal secretary shall send by United States registered or 4-11 certified mail to the controller a certified copy of the ordinance 4-12 that changes the municipality's boundaries and shows the effective 4-13 date of the boundary change. The ordinance must be accompanied by 4-14 a map clearly showing the added territory. The tax takes effect in 4-15 the added territory on the first day of the first calendar quarter 4-16 after the comptroller receives the ordinance and map. 4-17 SECTION 3. The importance of this legislation and the 4-18 crowded condition of the calendars in both houses create an 4-19 emergency and an imperative public necessity that the 4-20 constitutional rule requiring bills to be read on three several 4-21 days in each house be suspended, and this rule is hereby suspended.