HBA-ALS C.S.H.B. 641 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 641 By: Howard Business and Industry 4/16/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, there is no requirement to notify a prospective purchaser of residential property that the property may be subject to future annexation because it is located within a city's extraterritorial jurisdiction. C.S.H.B. 641 requires a municipal utility district to disclose to the purchaser of residential real property that the district is located in the extraterritorial jurisdiction of a municipality and for that reason the district may be annexed by the municipality, or that the district is located within the corporate boundaries of a municipality, and prescribes the statutory language that is required to be used for such notice. 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 Section 49.452, Water Code, as follows: Section 49.452. NOTICE TO PURCHASERS. (a) Provides that the provisions of this section do not apply to transfers of title to a governmental entity. (b) Requires the prescribed notice for districts located in the extraterritorial jurisdiction of one or more home-rule municipalities and not within the corporate boundaries of the municipality, rather than all districts, to be executed by the seller. Deletes the words "debt service" from the description of the most recent projected rate of tax which is required to appear in the prescribed notice required to be executed by a seller of real property. Adds the phrase "excluding refunding bonds and any bonds or any portion of bonds issued that are payable solely from revenues received or expected to be received under a contract with a governmental entity from the total amount of bonds" to the notification of the total amount of the bonds that is required to appear in the prescribed notice required to be executed by a seller of real property. Adds language requiring a municipal utility district to disclose to the purchaser of residential real property whether the property is located in a municipality's extraterritorial jurisdiction and detailing the results of annexation by the municipality. Makes conforming and nonsubstantive changes. (c) Sets forth the prescribed notice required to be executed by the seller of real property for districts located in whole or in part within the corporate boundaries of a municipality. (d) Sets forth the prescribed notice required to be executed by the seller of real property for districts that are not located in whole or in part within the corporate boundaries of a municipality or the extraterritorial jurisdictions of one or more home-rule cities. (e) Requires the district, if the law relating to annexation or district dissolution is amended and causes inaccuracies in the content of the prescribed notices under this section, to revise the content of the notices to accurately reflect current law. (f) Provides that real estate brokers, in addition to sellers, title companies, and examining attorneys, and any person acting on those persons' behalf are not liable for damages to a person for: (1) failing to provide required notice to a purchaser at or prior to the closing of the purchase and sale contract, or (2) unintentionally providing an incorrect notice prior to the execution of a contract of purchase and sale or at or prior to the closing of the contract. Redesignated from existing Subsection (c). Makes conforming and nonsubstantive changes. (g)-(s) Redesignated from existing Subsections (d)-(p), respectively, and makes conforming changes. SECTION 2. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in SECTION 1 (Section 49.452, Water Code) to amend Subsection (a)(1) by adding Paragraph (D) to provide that the provisions of this section do not apply to transfers of title to a governmental entity. The substitute modifies the original in SECTION 1 (Section 49.452(b), Water Code) to amend the prescribed statutory disclosure notice requirement of a seller of real property in a district located in the extraterritorial jurisdiction of one or more home-rule municipalities and not within the corporate boundaries of the municipality, rather than merely for property located in all districts. The substitute adds new bonds language to exclude from the total amount of bonds refunding bonds and any bonds or any portion of bonds issued that are payable solely from revenues received or expected to be received under a contract with a governmental entity. The substitute deletes language in the original which required a notice to disclose whether the district is located within the corporate boundaries or extraterritorial jurisdiction of a municipality. Makes nonsubstantive changes. The substitute modifies the original in SECTION 1 (Section 49.452(c), Water Code) by adding Subsection (c) to set forth the statutory notice requirement of a seller of real property for districts located in whole or in part within the corporate boundaries of a municipality. The substitute modifies the original in SECTION 1 (Section 49.452, Water Code) by adding Subsection (d) to set forth the prescribed notice required to be executed by the seller of real propery for districts that are not located in whole or in part within the corporate boundaries of a municipality or the extraterritorial jurisdictions of one or more home-rule cities. The substitute modifies the original in SECTION 1 (Section 49.452, Water Code) by adding Subsection (e) to require a district to revise the content of prescribed notices to accurately reflect amendments to current law that result in inaccuracies in the content of the prescribed notices under this section. The substitute modifies the original in SECTION 1 (Section 49.452, Water Code) to redesignate existing Subsection (c) to Subsection (f). Provides that real estate brokers, in addition to sellers, title companies, and examining attorneys, and any person acting on those persons' behalf, are not liable for damages for failing to provide notice to a purchaser at or prior to the closing of the purchase and sales contract or for unintentionally providing an incorrect notice prior to the execution of a contract of purchase and sale or at or prior to the closing of the contract. Redesignates existing Subsections (d)-(p) to Subsections (g)-(s). Makes conforming and nonsubstantive changes.