1-1 By: Gallegos, et al. S.B. No. 727 1-2 (In the Senate - Filed February 24, 1997; February 26, 1997, 1-3 read first time and referred to Committee on Intergovernmental 1-4 Relations; March 6, 1997, reported favorably by the following vote: 1-5 Yeas 9, Nays 2; March 6, 1997, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to contracts between municipal utility districts located 1-9 in extraterritorial areas and municipalities. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Subchapter C, Chapter 42, Local Government Code, 1-12 is amended by adding Section 42.0441 to read as follows: 1-13 Sec. 42.0441. JOINT AGREEMENTS BETWEEN MUNICIPAL UTILITY 1-14 DISTRICTS IN EXTRATERRITORIAL AREAS AND MUNICIPALITIES. (a) It is 1-15 the intent of the legislature to enable municipal utility districts 1-16 in extraterritorial areas and municipalities to negotiate mutually 1-17 agreeable alternatives to annexation. In furtherance of that goal, 1-18 this section authorizes municipal utility districts and 1-19 municipalities to execute mutually agreeable contracts providing 1-20 for the joint funding of services in lieu of annexation. 1-21 (b) For purposes of this section: 1-22 (1) "District" means a municipal utility district, 1-23 water control and improvement district, or other district created 1-24 under Section 59, Article XVI, Texas Constitution. 1-25 (2) "Municipality" means a municipality with a 1-26 population of more than 1.6 million. 1-27 (3) "Services" means services delivered within the 1-28 area of a district or services provided by a municipality for the 1-29 benefit of persons outside the municipality. 1-30 (c) The mayor of a municipality may enter into negotiations 1-31 with the board of directors of one or more districts located in the 1-32 municipality's extraterritorial jurisdiction. Notice of the 1-33 mayor's request to initiate negotiations shall be submitted to the 1-34 board of the district. A district may in its discretion agree to 1-35 enter into negotiations with the mayor. 1-36 (d) On electing to enter into negotiations with the mayor, 1-37 the board of directors shall appoint a designee from the board to 1-38 negotiate with the mayor. 1-39 (e) The mayor of a municipality shall enter into 1-40 negotiations with the board of a district located in the 1-41 municipality's extraterritorial jurisdiction on submission of a 1-42 petition approved by a majority of the members of the board. The 1-43 mayor shall enter into negotiations with the board not later than 1-44 30 days after a valid petition is filed with the mayor. 1-45 (f) On initiation of negotiations, the mayor and the board's 1-46 designee shall negotiate in good faith. The mayor and the board's 1-47 designee may, in their discretion, agree to a written contract that 1-48 includes one or more of the following options: 1-49 (1) a provision that guarantees the continuation of 1-50 the extraterritorial status of the defined area and its immunity 1-51 from annexation by the municipality for a period not to exceed 15 1-52 years; 1-53 (2) a provision for revenue sharing between the 1-54 municipality and the district that compensates for police 1-55 protection, fire protection, construction or maintenance of water 1-56 or wastewater facilities, construction or maintenance of roads or 1-57 streets, parks, playgrounds, or any other facility, building, or 1-58 service; 1-59 (3) a provision that imposes the municipality's sales 1-60 and excise tax within the boundaries of the district pursuant to 1-61 the provisions of Chapter 321, Tax Code; 1-62 (4) a provision that imposes a property assessment as 1-63 authorized under Chapter 372 for the purpose of achieving public 1-64 service and cost-sharing equity between the area within the 2-1 district and property located within the boundaries of the 2-2 municipality; if an assessment is imposed by mutual agreement, the 2-3 municipality is authorized to establish a local government 2-4 corporation within the district pursuant to Subchapter D, Chapter 2-5 431, Transportation Code, for the purpose of administrating the 2-6 assessment; 2-7 (5) a provision imposing a water and sewer surcharge; 2-8 or 2-9 (6) provisions that include other terms, conditions, 2-10 and considerations that the parties consider appropriate. 2-11 (g) The governing body of the municipality and the board of 2-12 a district may renew or extend a contract for successive periods 2-13 not to exceed 15 years each. 2-14 (h) A contract agreed to by the mayor of a municipality and 2-15 the board of a district shall be submitted to the governing body of 2-16 the municipality and the board of the district for final approval. 2-17 On approval by the governing body of the municipality and a 2-18 majority of members of the board of the district, the contract 2-19 shall be deemed finally approved and binding on both parties. 2-20 SECTION 2. Chapter 321.102, Tax Code, is amended by adding 2-21 Subsection (c-1) to read as follows: 2-22 (c-1) If the boundaries of a municipality in which the tax 2-23 imposed under this chapter are changed pursuant to Section 2-24 42.0441(f)(3), Local Government Code, the municipal secretary shall 2-25 send by United States registered or certified mail to the 2-26 comptroller a certified copy of the ordinance that changes the 2-27 municipality's boundaries and shows the effective date of the 2-28 boundary change. The ordinance must be accompanied by a map 2-29 clearly showing the added territory. The tax takes effect in the 2-30 added territory on the first day of the first calendar quarter 2-31 after the comptroller receives the ordinance and map. 2-32 SECTION 3. The importance of this legislation and the 2-33 crowded condition of the calendars in both houses create an 2-34 emergency and an imperative public necessity that the 2-35 constitutional rule requiring bills to be read on three several 2-36 days in each house be suspended, and this rule is hereby suspended. 2-37 * * * * *