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.

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