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.