SRC-PNG S.B. 262 76(R)BILL ANALYSIS Senate Research CenterS.B. 262 By: Brown Natural Resources 6/23/1999 Enrolled DIGEST Under current law, when a municipality with a population of less than 1.5 million annexes a water district, including a municipal utility district (MUD), the municipality must pay any amounts owed to developers who paid for installing water and wastewater systems in the district. Upon annexation, the city becomes the owner of the utility system; therefore, the city must make reimbursement payments to developers "simultaneously" with the annexation. This bill requires the annexing municipality to pay utility reimbursements to developers "prior to" the annexation of a district. In addition, the bill provides for the imposition of penalties and interest on reimbursement payments that are delinquent on the effective date of the bill. PURPOSE As enrolled, S.B. 262 reimburses landowners or developers prior to annexation of a water-related special district. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 43.0715, Local Government Code, to define "delinquent sum." Requires certain municipalities to pay certain costs and expenses incurred by the landowner or developer in cash prior to the effective date of the annexation, rather than simultaneously with the annexation. Sets forth the conditions under which a payment will be considered timely for an annexation that is subject to preclearance. Requires the municipality to proceed to initiate and complete a report for each developer in the format approved by the Texas Natural Resource Conservation Commission (TNRCC) at a certain time. Requires the municipality to obtain from the district the estimated costs of each project previously undertaken by a developer which are eligible for reimbursement in the event the municipality is unable to complete the report prior to the effective date of the annexation as a result of the developer's failure to provide information to the municipality which cannot be obtained from other sources. Requires the amount of such costs, as estimated by the district, to be escrowed by the municipality for the benefit of the persons entitled to receive payment in an insured interest-bearing account with a financial institution authorized to do business in the state. Requires all interest accrued on the escrowed funds to be paid to the developer whether or not the annexation is valid. Authorizes the annexation to become effective upon placement of the funds in the escrow account. Requires no penalties or interest to accrue during the pendancy of the escrow under certain conditions. Authorizes either the municipality or developer to require disputes regarding the amount owed under this section to be subject to nonbinding arbitration, upon written notice to the other party. Establishes that a delinquent payment by the municipality incurs a certain penalty. Provides a higher penalty for a delinquent payment after a certain date. Provides that for annexation occurring prior to the effective date of the changes in law made by this Act in amending Subsection (b), a delinquent sum begins incurring a penalty on a certain date. Provides that for an annexation occurring after the effective date of this Act, a delinquent sum begins incurring a penalty on a certain date. SECTION 2. Provides that the changes in law made by this Act apply to any sum that is delinquent on the effective date of this Act. SECTION 3. Emergency clause. Effective date: upon passage.