By Hilbert                                            H.B. No. 1464
         76R5804 CAG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to strategic partnership agreements between certain
 1-3     municipalities.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Sections 43.0751(b), (d), (e), and (f), Local
 1-6     Government Code, are amended to read as follows:
 1-7           (b)  The governing bodies of a municipality with a population
 1-8     of 225,000 or more and a district shall negotiate and shall [may]
 1-9     enter into a written strategic partnership agreement for the
1-10     district having a term of five or more years.  The governing body
1-11     of a municipality  must make a written determination of the need
1-12     for full purpose annexation and must have entered into a strategic
1-13     partnership agreement with a district for 10 or more years before
1-14     the date the municipality annexes any portion of the district for
1-15     full purposes.  The governing bodies of the municipality and the
1-16     district shall evidence their intention to negotiate such an
1-17     agreement by resolution, each of which resolutions shall specify an
1-18     expiration date if the other governing body fails to adopt a
1-19     resolution under this section on or before the specified date.  The
1-20     governing body of a municipality that has evidenced its intention
1-21     by unexpired resolution to enter into negotiations with a district
1-22     for an agreement under this section may not initiate proceedings to
1-23     annex the district under any other section of this code prior to
1-24     the expiration of five [two] years after the adoption date of the
 2-1     resolution unless the municipality has previously instituted
 2-2     annexation proceedings in granting consent to the creation of the
 2-3     district prior to January 1, 1995.
 2-4           (d)  Before the governing body of a municipality or a
 2-5     district adopts a strategic partnership agreement, it shall conduct
 2-6     three [two] public hearings at which members of the public who wish
 2-7     to present testimony or evidence regarding the proposed agreement
 2-8     shall be given the opportunity to do so.  The hearings shall be
 2-9     conducted by a visiting state judge jointly selected by the
2-10     municipality and the district.  Notice of public hearings conducted
2-11     by the governing body of a municipality under this subsection shall
2-12     be published in a newspaper of general circulation in the
2-13     municipality and in the district.  The notice must be in the format
2-14     prescribed by Section 43.123(b) and must be published at least once
2-15     on or after the 20th day before each date.  Notice of public
2-16     hearings conducted by the governing body of a district under this
2-17     subsection shall be given in accordance with the district's
2-18     notification procedures for other matters of public importance.
2-19     Any notice of a public hearing conducted under this subsection
2-20     shall contain a statement of the purpose of the hearing, the date,
2-21     time, and place of the hearing, and the location where copies of
2-22     the proposed agreement may be obtained prior to the hearing.  The
2-23     governing bodies of a municipality and a district may conduct joint
2-24     public hearings under this subsection, provided that at least one
2-25     public hearing is conducted within the district.  A municipality
2-26     may combine the public hearings and notices required by this
2-27     subsection with the public hearings and notices required by Section
 3-1     43.124.
 3-2           (e)  The governing body of a municipality may not annex a
 3-3     district for full or limited purposes under this chapter [section
 3-4     or under the provisions of Subchapter F] until it has adopted a
 3-5     strategic partnership agreement with the district.  The governing
 3-6     body of a municipality may not adopt a strategic partnership
 3-7     agreement before the agreement has been adopted by the governing
 3-8     body of the affected district.
 3-9           (f)  A strategic partnership agreement may provide for the
3-10     following:
3-11                 (1)  limited-purpose annexation of the district under
3-12     the provisions of Subchapter F  provided that the district shall
3-13     continue in existence during the period of limited-purpose
3-14     annexation;
3-15                 (2)  such amendments to the timing requirements of
3-16     Sections 43.123(d)(2) and 43.127(b) as may be necessary or
3-17     convenient to effectuate the purposes of the agreement;
3-18                 (3)  payments by the municipality to the district for
3-19     services provided by the district;
3-20                 (4)  annexation of any commercial property in a
3-21     district for full purposes by the municipality, notwithstanding any
3-22     other provision of this code or the Water Code, except for the
3-23     obligation of the municipality to provide, directly or through
3-24     agreement with other units of government, full provision of
3-25     municipal services to annexed territory, in lieu of any annexation
3-26     of residential property or payment of any fee on residential
3-27     property in lieu of annexation of residential property in the
 4-1     district authorized by this subsection;
 4-2                 (5)  a full-purpose annexation provision that specifies
 4-3     one of the following:
 4-4                       (A)  the date on which the land included within
 4-5     the district's boundaries shall be converted from the
 4-6     municipality's limited-purpose jurisdiction to its full-purpose
 4-7     jurisdiction, provided that such date shall not be later than 10
 4-8     years after the effective date of the strategic partnership
 4-9     agreement;  or
4-10                       (B)(i)  terms for payment of an annual fee to the
4-11     municipality by the district in lieu of full-purpose annexation,
4-12     the form in which each such payment must be tendered, a method of
4-13     calculating the fee, and the date by which each such payment must
4-14     be made;  failure by a district to timely make an annual payment in
4-15     lieu of full-purpose annexation in the amount and form required by
4-16     a strategic partnership agreement shall be the only ground for
4-17     termination of the agreement with respect to annexation at the
4-18     option of the municipality;
4-19                             (ii)  to determine a reasonable fee to be
4-20     derived from residential property in a district, the municipality
4-21     or the district may request a cost-of-service study by an
4-22     independent third party agreeable to both parties if
4-23     cost-of-service data prepared by the municipality is not
4-24     acceptable.  The municipality is [Both parties shall be equally]
4-25     responsible for the cost of the study, which shall include an
4-26     evaluation of the estimated annual cost of providing municipal
4-27     services to the residential portion of the district over the next
 5-1     10 years and the estimated annual amount of ad valorem taxes from
 5-2     residential property the city would receive on full-purpose
 5-3     annexation of the district over the next 10 years.  The governing
 5-4     board of a district may contribute to the cost of any study.  The
 5-5     fee shall not exceed the  estimated annual amount of residential ad
 5-6     valorem taxes that would be derived by full-purpose annexation of
 5-7     the district, less the estimated annual amount required to provide
 5-8     municipal services to the residential property in the district if
 5-9     annexed for full purposes.  A fee determined through this
5-10     methodology is subject to renegotiation every 10 years at the
5-11     request of either party to the agreement, or every five years if
5-12     agreed to by all parties to the agreement, following the same
5-13     procedure used to set the fee in the original agreement.  This
5-14     methodology does not apply to fees from commercial property;
5-15                 (6)  conversion of the district to a limited district
5-16     including some or all of the land included within the boundaries of
5-17     the district, which conversion shall be effective on the
5-18     full-purpose annexation conversion date established under
5-19     Subdivision (5)(A);
5-20                 (7)  agreements existing between districts and
5-21     governmental bodies and private providers of municipal services in
5-22     existence on the date a municipality evidences its intention by
5-23     adopting a resolution to negotiate for a strategic partnership
5-24     agreement with the district shall be continued and provision made
5-25     for modifications to such existing agreements; [and]
5-26                 (8)  such other lawful terms that the parties consider
5-27     appropriate; and
 6-1                 (9)  the addition of other political subdivisions to
 6-2     the agreement to allow the provision of the  highest quality of
 6-3     services at the lowest fee to residents of the district.
 6-4           SECTION 2.  The importance of this legislation and the
 6-5     crowded condition of the calendars in both houses create an
 6-6     emergency and an imperative public necessity that the
 6-7     constitutional rule requiring bills to be read on three several
 6-8     days in each house be suspended, and this rule is hereby suspended,
 6-9     and that this Act take effect and be in force from and after its
6-10     passage, and it is so enacted.