SRC-JXG S.B. 1069 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1069
76R7082 CAG-DBy: Fraser
Intergovernmental Relations
4/29/1999
As Filed


DIGEST 

Currently, a portion of the Sherwood Shores subdivision is part of the City
of Granite Shoals, and the remaining portion is an unincorporated area of
Burnet County. In 1973, the Burnet County District Court declared the
Sherwood Shores property owners' maintenance fees to be trust funds, and
the City of Granite Shoals was appointed the trustee of these funds. The
City of Granite Shoals collects the maintenance funds directly and uses the
funds to maintain parks, recreational areas, and streets in the
subdivision, as a trustee. The maintenance fees are often not remitted by
the property owners' because the maintenance fees are not ad valorem taxes.
S.B. 1069 would provide a voluntary mechanism for the residents of the
unincorporated portion of the subdivision to be annexed by the City of
Granite Shoals, and would provide that the City of Granite Shoals city
council do away with the trust fund.  

PURPOSE

As proposed, S.B. 1069 provides a voluntary mechanism for the residents of
the unincorporated portion of the subdivision to be annexed by the City of
Granite Shoals, and provides that the city council of the City of Granite
Shoals do away with the trust fund. 

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 Chapter 43C, Local Government Code, by adding Section
43.058, as follows: 

Sec. 43.058. ANNEXATION OF CERTAIN AREAS COVERED BY TRUST AGREEMENT. (a)
Provides that this section applies only to a municipality that has been
named, by a court order or otherwise, as the trustee of funds for the
benefit of any residents of the municipality and also for the benefit of
persons who reside outside the boundaries of the municipality.  

(b) Requires the municipality to adopt an ordinance or resolution
authorizing the dissolution of the trust in accordance with this section,
and annex all of the area outside the boundaries of the municipality that
contains any person who benefits from the trust.  

(c) Provides that the limitations in this chapter on the area eligible for
annexation by a municipality do not apply to an annexation conducted under
this section. Requires an annexation under this section to be conducted in
the same manner as a voluntary annexation under Section 43.024 and is
subject to the annexation procedures of this chapter. 

(d) Requires any election required by Section 43.024 to be conducted on the
first uniform election day occurring on or after the 45th day following the
date of the adoption of the municipal ordinance or resolution under
Subsection (b)(1). 
 
(e) Provides that the trust is dissolved, on the date the annexation
becomes final. Provides that the trust's assets and any rights, including
rights to pursue outstanding claims, are transferred to the municipality by
operation of law. 
 
(f) Authorizes the governing body of the municipality to increase the
municipality's ad valorem property tax rate to a level so that the amount
of money collected under the increased portion of the tax rate will equal
any trust fund income lost as a result of the dissolution of the trust
under this section, following the annexation of the area under this
section. Provides that the amount of money lost as a result of the
dissolution of the trust is equal to the amount of money that would have
been generated from the collection of all income from the area covered by
the trust fund, if all  trust income had been timely paid and collected,
for the purposes of calculating the increase in the tax rate. 
 
(g) Provides that the increase in the municipality's tax rate under
Subsection (f) to offset the lost trust income is subject to a tax rollback
election. 

(h) Provides that an annexation conducted under this section is final and
is not subject to judicial review, except for compliance with any
procedural matters. 

SECTION 2. Emergency clause.
           Effective date: upon passage.