HBA-MPA H.B. 7 76(R) BILL ANALYSIS
Office of House Bill AnalysisH.B. 7
By: Bosse
Land & Resource Management
3/2/1999
Introduced
BACKGROUND AND PURPOSE
The unilateral power of home rule cities to annex dates back to 1912 when
Texas voters approved a constitutional amendment granting home rule cities
the ability to do anything that was not prohibited by law (Article 11,
Section 5). Since annexation was not prohibited, cities were able to
attach adjacent territory without the consent of area residents. This
authority was limited by the Texas Municipal Annexation Act signed into law
in 1963, which granted every city in the state an area of extraterritorial
jurisdiction (ETJ) within which the city had exclusive right to annex and
within which no other city may incorporate. Since the passage of the
Municipal Annexation Act, there have been numerous amendments and several
unsuccessful attempts to end or severely limit the unilateral right of
annexation that most municipalities have under the Act. The ability of
cities to unilaterally annex within their ETJ by municipal ordinance,
however, has remained intact.
During the 75th Legislative Session, the House Committee on Land and
Resource Management reviewed more than 70 bills directed at changing
current statutes regarding municipal annexation. These bills included
measures to increase the unannexed area's negotiating leverage with the
municipality, give citizens of areas proposed for annexation the ability to
veto annexation, redefine boundaries and powers within the ETJ, change the
time within which a municipality must provide services to an annexed area
and the level of services to be provided, and to disannex one or more
areas. Also many home buyers do not realize the extent to which they are
subject to annexation.
H.B. 7 seeks to address the wide range of issues surrounding annexation,
balancing the interests of landowners and residents within a city's ETJ and
the needs of cities to manage growth in unincorporated areas within the
ETJ. The Act attempts to accomplish this balancing of interests by
including provisions related to the creation of three year annexation plans
by municipalities, the level of services to be provided in annexed areas,
alternatives to annexation, arbitration procedures and disannexation.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter B, Chapter 42, Local Government Code, by
adding Section 42.0225, as follows:
Sec. 42.0225. EXTRATERRITORIAL JURISDICTION AND CERTAIN MUNICIPALLY OWNED
PROPERTY. Provides that, for an area owned by a municipality that is not
contiguous to other territory of the municipality, not located in the
extraterritorial jurisdiction (ETJ) of the municipality, and is annexed by
the municipality, the ETJ of the municipality is expanded to include only
the area located within one mile of the boundaries of the annexed area,
notwithstanding the limits on ETJ enumerated in Section 42.021(2)-(5),
Local Government Code (Extent of Extraterritorial Jurisdiction). Provides
that a municipality's ETJ is not expanded if the area annexed under this
section lies within the municipality's existing ETJ.
SECTION 2. Amends Subchapter A, Chapter 43, Local Government Code, by
adding Section 43.002, as follows:
Sec. 43.002. CONTINUATION OF LAND USE. Prohibits a municipality, after
annexing an area, from prohibiting a person from continuing a legal land
use in effect on the date annexation proceedings were instituted; or
beginning a land use for which one or more licenses, certificates, permits,
approvals, or other forms of authorization were required, and for which a
completed application for initial authorization, which includes all
documents and information required, was filed with the government entity
90 days before the date annexation was effective.
SECTION 3. Amends Sections 43.052 and 43.053, Local Government Code, as
follows:
Sec. 43.052. MUNICIPAL ANNEXATION PLAN REQUIRED. (a) Authorizes a
municipality to annex an area identified in the annexation plan only as
provided in this section.
(b) Requires a municipality to prepare a plan that specifically identifies
annexation that may occur beginning on the third anniversary of the plan's
adoption. Authorizes the municipality to amend the plan to specifically
identify areas that may be annexed beginning on the third anniversary of
the amendment.
(c) Prohibits another political subdivision, other than a county, in which
an area included in an annexation plan is located, during the period that
the plan is in effect, from reducing the tax rate applicable to the area,
voluntarily transferring an asset without consideration, or entering into a
contract extending beyond the three-year annexation plan period, or
incurring debt for which payment would extend beyond the three-year
annexation plan period.
(d) Authorizes a municipality to amend its annexation plan at any time to
remove an area proposed for annexation. Prohibits a municipality, if it
has amended its annexation plan to remove an area from the plan within the
first year after the plan is adopted, from including the area in its
annexation plan until the first anniversary of the date of the amendment.
Prohibits a municipality, if it has amended its annexation plan to remove
an area from the plan within the second year after the plan is adopted,
from including the area in its annexation plan until the second anniversary
of the date of the amendment. Prohibits a municipality, if it has amended
its annexation plan to remove an area from the plan within the third year
after the plan is adopted, from including the area in its annexation plan
until the fifth anniversary of the date of the amendment.
(e) Requires the municipality to give written notice to each property owner
in the affected area before the 31st day after an annexation plan is
adopted or amended to include or remove the area from the plan.
(f) Provides that this section does not apply to a municipality that
annexes an area based on petition and election of area voters, the request
of area voters, an area it owns, a navigable stream, by petition of
landowners, an unoccupied area on petition of a school board, by a
described municipality of a small surrounded municipality, by changing
municipal boundaries by agreement, or an area in which a farm-to-market
road is proposed (Sections 43.023 - 43.32).
Deletes existing Section 43.052. ANNEXATION HEARING REQUIREMENTS. Deletes
existing text as follows: deletes provision that the governing body of a
municipality must conduct two public hearings conducted after the 40th day
but before the 20th days before it may institute annexation; deletes
provision that, if 20 adult residents file a protest, the municipality must
hold at least one of the public hearings in the area; deletes provision
that the municipality must publish notice of the hearings in a general
circulation newspaper in the municipality and the area to be annexed
between the 20th and the 10th day before the hearing, and provide written
notice to each railroad in the proposed annexation area.
Sec. 43.053. INVENTORY OF SERVICES AND FACILITIES REQUIRED. (a) Defines
"public entity" in this section to include a municipality, municipal
utility district, water district, volunteer fire department, and volunteer
emergency medical services provider.
(b) Requires a municipality, after adopting an annexation plan or amending
it to include additional areas, to compile a comprehensive inventory of
services and facilities provided by public or private entities, directly or
by contract, in each area proposed for annexation.
(c) Requires each public or private entity that provides services or
facilities in each area proposed for annexation to provide all information
necessary to compile the inventory to the municipality proposing
annexation.
(d) Requires that the information required in the inventory be based on
services and facilities provided in the year prior to the adoption of the
annexation plan or its amendment to include additional areas.
(e) Provides that the inventory for utilities, roads, drainage, structures,
and other infrastructure provided by public or private entities, must
include an engineer's report describing the condition of all infrastructure
elements, and a summary of expenditures on that infrastructure.
(f) Provides that for police, fire, and emergency medical services, the
inventory must include for each service the average dispatch and delivery
time, a schedule of equipment, including vehicles, a staffing schedule that
discloses the certification and training levels of personnel, and a summary
of operating and capital expenditures.
(g) Requires the municipality to complete the inventory and make it
available for public inspection before the 18th month before the month in
which the effective date of the annexation occurs.
Deletes existing Section 43.053. PERIOD FOR COMPLETION OF ANNEXATION;
EFFECTIVE DATE. Deletes existing text as follows: deletes provision that
annexation must be completed within 90 days after the governing body
institutes annexation proceedings, excluding any period during which a
court enjoins or restrains the municipality, or the annexation proceedings
are void; deletes provision that the governing body of a municipality with
a population over 1.5 million may make the annexation effective within 90
days after the date of the adoption of the ordinance providing for
annexation.
SECTION 4. Amends Subchapter C, Chapter 43, Local Government Code, by
adding Section 43.0545, as follows:
Sec. 43.0545. ANNEXATION OF CERTAIN ADJACENT AREAS. (a) Prohibits a
municipality from annexing an area within its ETJ only because it is
contiguous to municipal territory that is less than 1,000 feet wide at its
narrowest point.
(b) Prohibits a municipality from annexing an area in its ETJ only because
the area is contiguous to municipal territory annexed before September 1,
1999, which was in the ETJ at the time of annexation only because it was
contiguous to municipal territory that was less than 1,000 feet in width at
its narrowest point.
(c) Provides that Subsection (a) and (b) do not apply to an area completely
surrounded by incorporated territory of the municipality, where the owners
of the area have requested annexation, or that is owned by the
municipality.
(d) Provides that an area, which is in a municipality's ETJ only because it
is contiguous to municipal territory annexed only because it was contiguous
to municipal territory less than 1,000 feet in width at its narrowest
point, may be annexed, if the area which was less than 1,000 feet in width
at its narrowest point at the time of the previous annexation is more than
1,000 feet in width at its narrowest point as a result of the previous
annexation.
(e) Provides that for purposes of this section, roads, highways, rivers,
lakes, or other bodies of water are not included in computing the 1,000
foot distance.
SECTION 5. Amends Section 43.056, Local Government Code, as follows:
Sec. 43.056. PROVISION OF SERVICES TO ANNEXED AREA. (a) Makes conforming
changes.
(b) Provides that a municipality's service plan must include a program to
provide full municipal services in annexed areas no later than two and
one-half years after the effective date of annexation, rather than four and
one-half years. Adds emergency medical services to a list of services
which must be provided on, rather than within 60 days after, the effective
date of annexation. Redesignates existing Subdivisions (3)-(7) to (4)-(8),
respectively.
Deletes Subsection (b-1) which provides that a municipality with a
population over 1.5 million must provide: full municipal services within
four and one-half years after the effective date of annexation; police
protection and solid waste collection on and after the effective date of
the annexation; emergency medical service and fire protection within 30
days if contracted; within 60 days, maintenance of water and wastewater
facilities not within the service area of another water or wastewater
utility; roads and streets, including road and street lighting; parks,
playgrounds, and swimming pools; and any other publicly owned facility,
building or service, and if service is provided by municipal personnel and
equipment, emergency medical service and fire protection.
(c) Makes no change.
(d) Created from existing text.
(e) Requires that construction to implement the program of acquisition or
construction of capital improvement as part of the service plan be
substantially completed within two and one-half years after the effective
date of the annexation, rather than beginning within two years of the
effective date and being substantially completed four and one-half years
after that. Redesignated from existing Subsection (d). Makes conforming
change.
(f) Makes nonsubstantive changes. Redesignated from existing Subsection (e).
(g) Provides that: if the annexed area had a lower level of services than
those within the corporate boundaries of the municipality before
annexation, a service plan must provide a level of service comparable to
other areas of the municipality similar in land use and population to what
is reasonably projected for the annexed area. If the service level is
equal it must be maintained. If the level of service in the annexed area
is superior to the service level within the municipality, the service plan
must provide a service level comparable to other areas of the municipality
with land use and population density similar to those reasonably
contemplated or projected for the annexed area. If the annexed area had a
higher level of service for maintaining the infrastructure in the area than
in the municipality, the service plan must maintain infrastructure at an
equal or higher level of service in that area.
(h)-(j) Redesignated from existing Subsections (f)-(h). Makes conforming
changes.
(k) Provides that, if a person residing in an annexed area applies for a
writ of mandamus to enforce the service plan, the municipality has the
burden of proving that services have been provided in accordance with the
service plan. Writ of mandamus is defined as, " . . . a writ which issues
from a court of superior jurisdiction and is directed to a private or
municipal corporation . . . directing the restoration of the complainant to
rights or privileges of which the person has been illegally deprived"(
Black's Law Dictionary, Fifth Edition, p. 961).
(l) Establishes that a court, if it issues a writ under Subsection (k),
must provide the municipality with the option of disannexing the area
within 30 days, and may require the municipality to comply with the service
plan before a certain date; require the municipality to refund to the
landowners money collected for services that were not provided; assess a
civil penalty against the municipality, paid to the state, in an amount as
justice may require, for the period in which the municipality is not in
compliance with the service plan; and require the municipality to pay the
person's expenses and reasonable legal fees in bringing the action. Makes
conforming and nonsubstantive changes.
(m) Redesignated from existing Subsection (j).
(n) Provides that the governing body of the municipality makes the
determination that different characteristics of topography, land use, and
population density are sufficient basis for providing different levels of
service. Authorizes a person aggrieved by such a determination to submit
the determination for mutually agreeable arbitration or request review of
the decision by a district court in any county in which the annexed area is
located. Redesignated from existing Subsection (k).
SECTION 6. Amends Subchapter C, Chapter 43, Local Government Code, by
renumbering Section 43.0561 as Section 43.0564 and by adding Sections
43.0561, 43.0562, and 43.0563, as follows:
Sec. 43.0561. ANNEXATION HEARING REQUIREMENTS. (a) Provides that, before
annexation proceedings may be instituted, the governing body of a
municipality must conduct two public hearings at which persons with an
interest in the annexation are given an opportunity to be heard. Provides
that the hearing must be held not later than 60 days after the service plan
is completed.
(b) Provides that, if 20 adult residents file a written protest with the
secretary of the municipality within 10 days after the date of the
publication of the notice, containing the name, address, and age of each
signatory, the municipality must hold at least one of the public hearings
in the area to be annexed.
(c) Provides that the municipality must publish notice of the hearings in a
general circulation newspaper in the municipality and the area to be
annexed between the 20th and the 10th day before the hearing. Provides
that written notice must also be provided to each railroad company serving
the municipality and paying taxes in the municipality and with right-of way
in the proposed annexation area.
Sec. 43.0562. NEGOTIATIONS REQUIRED. (a) Provides that this section
applies only to the annexation of an area that has 250 or more inhabitants.
(b) Requires a municipality, after holding the required public hearings, to
negotiate with the property owners in the area proposed for annexation for
provision of services to the area after annexation.
(c) Requires property owners in the area proposed for annexation to select,
by majority vote, no more than five representatives to negotiate with the
municipality for provision of services to the area after annexation.
(d) Requires that, if the municipality proposes to annex a municipal
utility district (MUD), the governing body of the district act to represent
the property owners in negotiations with the municipality.
Sec. 43.0563. ARBITRATION REQUIRED. (a) Authorizes either the
municipality and the governing body of the MUD or the property owners'
representatives, if they cannot reach agreement through negotiation, to
request the appointment of an arbitrator to resolve the dispute. Provides
that the request must be made in writing before the 91st day after the last
public hearing on annexation.
(b) Authorizes the parties to the dispute to agree on the appointment of
the arbitrator. Requires the chief administrative district judge with
jurisdiction over either party, if the parties cannot agree on the
appointment of an arbitrator before the 31st day after the date arbitration
is requested, to select by random drawing a state visiting judge who is not
a resident or property owner of either the municipality or the area
proposed for annexation. Requires the visiting judge, before the 61st day
after arbitration is requested, to appoint a qualified person who is not a
resident or property owner of either the municipality or the area proposed
for annexation to serve as arbitrator.
(c) Limits the arbitrator to making decisions regarding the proposed
service plan's compliance with Section 43.056 (Provision of Services to
Annexed Area).
(d) Provides that the arbitrator must enter a decision regarding the
dispute, which is binding, before the 121st day after the date of the first
arbitration hearing.
(e) Requires the municipality to pay the cost of arbitration.
Sec. 43.0564. Created from existing Section 43.0561.
SECTION 7. Amends Section 43.0751, Local Government Code, by amending
Subsection (b) and adding Subsection (o), as follows:
(b) Authorizes, rather than requires, a municipality and a water control
and improvement district or MUD to negotiate and enter into a written
strategic partnership for the district by mutual consent. Requires the
governing body of a municipality, on written request from a district
included in the municipality's annexation plan, to negotiate into a written
strategic partnership agreement with the district. Deletes existing
language describing the process by which such a strategic partnership is to
be formed, and stipulating that annexation may not be initiated unless an
agreement is reached.
(o) Authorizes either party, if the municipality and the requesting
district fail to agree on the terms of the strategic partnership agreement,
to seek binding arbitration on the issues related to the agreement in
dispute not later than 90 days after the district's written request.
Prohibits the governing body from annexing the district under another
section of this code during negotiation, arbitration, or appeal.
SECTION 8. Amends Subchapter D, Chapter 43, Local Government Code, by
adding Sections 43.0752 and 43.0753, as follows:
Sec. 43.0752. CONTRACTS WITH CERTAIN AFFECTED AREAS IN LIEU OF ANNEXATION.
(a) Defines "community association."
(b) Requires the governing body of a municipality, on written request from
a community association comprised of a geographic area included in the
municipality's annexation plan, to negotiate and enter into a written
agreement with the association for the provision and funding of services in
the association's area, which may also include an agreement related to
permissible land use and compliance with municipal ordinances. Provides
that such an agreement is in lieu of annexation of the area by the
municipality.
(c) Requires that, if more than one community association requests a
written agreement, the municipality negotiate an agreement with each.
(d) Prohibits a municipality, if the municipality proposed to annex a
distinct geographic area and is not required to negotiate an agreement
applicable to the area, from annexing the distinct geographic area unless
it identifies the specific area to be annexed and notifies each person who
lives in the area or owns property there, before the 31st day after the
date the municipality adopts or amends its annexation plan to include the
area. Provides that this notice is in addition to any other notice
required by this chapter.
(e) Provides that a community association must make a written request
under Subsection (b) before the second anniversary of the date the
municipality adopts or amends its annexation plan to include the area.
(f) Authorizes the parties to an agreement made under this section to agree
to any term allowed under Sections 42.044 (Creation of Industrial Districts
in ETJ) or 43.0751 (Strategic Partnerships for Continuation of Certain
Districts), and to any term to which both parties agree in order to
satisfactorily resolve the dispute between them, including creation of any
special district allowed by state law.
(g) Authorizes either party, if the municipality and the community
association fail to agree on the terms of a written agreement, to seek
binding arbitration not later than 90 days after the district's request.
(h) Prohibits the governing body of the municipality from annexing the
geographic area containing the community association while negotiation of
an agreement under this section, the arbitration proceeding, or any appeal
from the arbitration award is pending.
Sec. 43.0753. ARBITRATION OF CERTAIN DISPUTES. (a) Defines "area proposed
for annexation."
(b) Provides that this section applies to arbitration of disputes arising
under the provisions of Section 43.0751 (Strategic Partnership for
Continuation of Certain Districts), and Section 43.0752 (Contracts with
Certain Affected Areas in Lieu of Annexation).
(c) Requires all parties to meet and select, before the 31st day after the
receipt of the notice that a party is seeking arbitration, a three member
arbitration panel consisting of one member selected by the governing body
of the municipality proposing annexation, one member selected by the
district or community association, and one neutral member selected by the
two other members.
(d) Requires the chief administrative district judge with jurisdiction over
either party, if the other two members do not select the neutral member
before the 31st day after arbitration is requested, to select by random
drawing a visiting judge, and requires the visiting judge to select within
11 days, a qualified person who is not a resident of the county in which a
party to the arbitration is located, as an arbitrator.
(e) Provides that arbitration under this section must conclude within120
days after the appointment of the last arbitrator.
(f) Authorizes the arbitration tribunal to fashion any remedy or apply any
term allowed under Sections 43.0751 or 43.0752, which cannot exceed 15
years. Provides that the remedy may allow for renewal.
(g) Requires the arbitration tribunal to issue a decision and an award,
describing any proposed remedy or other term within 11 days after the last
arbitration proceeding. Provides that if the award is accepted by all
parties, all the terms of the arbitration award are binding on all parties,
(h) Prohibits the municipality from annexing the area before the fifth
anniversary of the date of the arbitration tribunal's decision if the
municipality does not agree with the terms of the arbitration award.
SECTION 9. Amends Section 43.121(a), Local Government Code, to delete
reference to authorization by the home-rule charter of a municipality's
ability to annex by ordinance an area for limited purposes.
SECTION 10. Amends Section 43.141(c), Local Government Code, to prohibit a
municipality from annexing an area for ten years, rather than five years,
after the area has been disannexed. Makes conforming change.
SECTION 11. Amends Subchapter G, Local Government Code, by adding Section
43.148, as follows:
Sec. 43.148. REFUND OF TAXES AND FEES. Requires a municipality that
disannexes an area to refund to the landowners of the area the amount of
money collected in property taxes and fees during the period the area was
part of the municipality less what the municipality spent for the direct
benefit of the area during that period. Requires the municipality to
proportionately refund the amount to the landowners by a method to be
developed by the municipality, that identifies each landowner's pro rata
payment of taxes and fees being refunded.
SECTION 12. Amends Subchapter A, Chapter 5, Property Code, by adding
Section 5.0081, as follows:
Sec. 5.0081. SELLER'S DISCLOSURE REGARDING POTENTIAL ANNEXATION. (a)
Requires the seller of residential real property that includes not more
than one dwelling unit to provide to the purchaser of the property written
notice that details the inclusion of the property in a municipality's
annexation plan.
(b) Provides a model of recommended language for such a notice, and
requires the notice to be executed.
(c) Exempts from this section transfers to a mortgagee or beneficiary of a
trust deed by a mortgagor or trustor or successor in interest; from one
co-owner to another; to a spouse or a person related by consanguity;
between spouses resulting from decrees of dissolution of marriage or legal
separation or from incidental property settlement agreements; or to a
government entity.
(d) Requires the seller to deliver the notice to the purchaser on or before
the effective date of an executory contract binding the purchaser.
Authorizes the purchaser to terminate the executory contract for any reason
within seven days after the date the notice is received, if the seller
fails provide the notice before the contract is entered.
SECTION 13. (a) Effective date: September 1, 1999, except that Section 12
takes effect February 1, 2000.
(b) Requires each municipality to adopt an annexation plan on or before
December 31, 1999, to be effective on that date.
(c) Provides that, except as provided in Subsection (d), the changes in law
made by Sections 2-11 of this Act apply only to an annexation included in a
municipality's annexation plan; and authorizes a municipality to continue
an annexation between December 31, 1999, and December 31, 2002, under the
law in effect immediately before September 1, 1999, if the area is not
included in the annexation plan.
(d) Provides that changes in law made by this Act in certain enumerated
sections and subsections apply to annexations made under the provisions of
Subsection (c) if the first notice of public hearing is published on or
after September 1, 1999.
(e) Provides that the changes in law made by Section 1 of this Act apply
only to an annexation included in a municipality's annexation plan and to
an annexation not included in the annexation plan but made under the
provisions of Subsection (c) if the first notice of public hearing is
published on or after September 1, 1999.
(f) Makes application of Section 12 of this Act prospective.
SECTION 14. Emergency clause.