By:  Madla, Lindsay                                     S.B. No. 89
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to municipal annexation; providing penalties.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Subchapter B, Chapter 42, Local Government Code,
 1-4     is amended by adding Section 42.0225 to read as follows:
 1-5           Sec. 42.0225.  EXTRATERRITORIAL JURISDICTION AROUND CERTAIN
 1-6     MUNICIPALLY OWNED PROPERTY.  (a)  This section applies only to an
 1-7     area owned by a municipality that is:
 1-8                 (1)  annexed by the municipality; and
 1-9                 (2)  not contiguous to other territory of the
1-10     municipality.
1-11           (b)  Notwithstanding Sections 42.021(2)-(5), the annexation
1-12     of the area expands the extraterritorial jurisdiction of the
1-13     municipality only to include the area located within one mile of
1-14     the boundaries of the annexed area.
1-15           (c)  The extraterritorial jurisdiction of the municipality
1-16     does not expand following the annexation of territory located only
1-17     in the municipality's extraterritorial jurisdiction that is created
1-18     under Subsection (b).
1-19           SECTION 2.  Subchapter A, Chapter 43, Local Government Code,
1-20     is amended by adding Section 43.002 to read as follows:
1-21           Sec. 43.002.  CONTINUATION OF LAND USE.  (a)  A municipality
1-22     may not, after annexing an area, prohibit a person from:
1-23                 (1)  continuing to use land in the area in the manner
1-24     in which the land was being used on the date the annexation
 2-1     proceedings were instituted if the land use was legal at that time;
 2-2     or
 2-3                 (2)  beginning to use land in the area in the manner
 2-4     that was planned for the land before the 90th day before the
 2-5     effective date of the annexation if:
 2-6                       (A)  one or more licenses, certificates, permits,
 2-7     approvals, or other forms of authorization by a governmental entity
 2-8     were required by law for the planned land use; and
 2-9                       (B)  a completed application for the initial
2-10     authorization was filed with the governmental entity before the
2-11     date the annexation proceedings were instituted.
2-12           (b)  For purposes of this section, a completed application is
2-13     filed if the application includes all documents and other
2-14     information designated as required by the governmental entity in a
2-15     written notice to the applicant.
2-16           (c)  This section does not prohibit a municipality from
2-17     imposing:
2-18                 (1)  a regulation relating to the location of sexually
2-19     oriented businesses as that term is defined by Section 243.002;
2-20                 (2)  a municipal ordinance, regulation, or other
2-21     requirement affecting colonias as that term is defined by Section
2-22     2306.581, Government Code;
2-23                 (3)  a regulation relating to preventing imminent
2-24     destruction of property or injury to persons;
2-25                 (4)  a regulation relating to public nuisances;
2-26                 (5)  a regulation relating to the storage and use of
 3-1     hazardous substances;
 3-2                 (6)  a regulation relating to the sale and use of
 3-3     fireworks; or
 3-4                 (7)  a regulation relating to the discharge of
 3-5     firearms.
 3-6           SECTION 3.  The heading to Subchapter C, Chapter 43, Local
 3-7     Government Code, is amended to read as follows:
 3-8            SUBCHAPTER C.  ANNEXATION PROCEDURE FOR AREAS ANNEXED
 3-9                       UNDER MUNICIPAL ANNEXATION PLAN
3-10           SECTION 4.  Sections 43.052 and 43.053, Local Government
3-11     Code, are amended to read as follows:
3-12           Sec. 43.052.  MUNICIPAL ANNEXATION PLAN REQUIRED.  (a)  A
3-13     municipality may annex an area identified in the annexation plan
3-14     only as provided by this section.
3-15           (b)  A municipality shall prepare an annexation plan that
3-16     specifically identifies annexations that may occur beginning on the
3-17     third anniversary of the date the annexation plan is adopted.  The
3-18     municipality may amend the plan to specifically identify
3-19     annexations that may occur beginning on the third anniversary of
3-20     the date the plan is amended.
3-21           (c)  At any time during which an area is included in a
3-22     municipality's annexation plan, another political subdivision,
3-23     including a municipal utility district or other special district
3-24     and excluding a county, independent school district, and emergency
3-25     services district, in which the area is located may not:
3-26                 (1)  reduce the tax rate applicable to the area;
 4-1                 (2)  voluntarily transfer an asset without
 4-2     consideration; or
 4-3                 (3)  enter into a contract for services that extends
 4-4     beyond the three-year annexation plan period.
 4-5           (d)  A municipality may amend its annexation plan at any time
 4-6     to remove an area proposed for annexation.  If, before the end of
 4-7     the 18th month after the month an area is included in the
 4-8     three-year annexation cycle, a municipality amends its annexation
 4-9     plan to remove the area, the municipality may not amend the plan to
4-10     again include the area in its annexation plan until the first
4-11     anniversary of the date the municipality amended the plan to remove
4-12     the area.  If, during or after the 18 months after the month an
4-13     area is included in the three-year annexation cycle, a municipality
4-14     amends its annexation plan to remove the area, the municipality may
4-15     not amend the plan to again include the area in its annexation plan
4-16     until the second anniversary of the date the municipality amended
4-17     the plan to remove the area.
4-18           (e)  Before the 90th day after the date a municipality adopts
4-19     or amends an annexation plan under this section, the municipality
4-20     shall give written notice to:
4-21                 (1)  each property owner in the affected area, as
4-22     indicated by the appraisal records furnished by the appraisal
4-23     district for each county in which the affected area is located,
4-24     that the area has been included in or removed from the
4-25     municipality's annexation plan;
4-26                 (2)  each public entity, as defined by Section 43.053,
 5-1     or private entity that provides services in the area proposed for
 5-2     annexation; and
 5-3                 (3)  [ANNEXATION HEARING REQUIREMENTS.  (a)  Before a
 5-4     municipality may institute annexation proceedings, the governing
 5-5     body of the municipality must conduct two public hearings at which
 5-6     persons interested in the annexation are given the opportunity to
 5-7     be heard.  The hearings must be conducted on or after the 40th day
 5-8     but before the 20th day before the date of the institution of the
 5-9     proceedings.]
5-10           [(b)  At least one of the hearings must be held in the area
5-11     proposed for annexation if more than 20 adult residents of the area
5-12     file a written protest of the annexation with the secretary of the
5-13     municipality within 10 days after the date of the publication of
5-14     the notice required by this section.  The protest must state the
5-15     name, address, and age of each protester who signs.]
5-16           [(c)  The municipality must publish notice of the hearings in
5-17     a newspaper of general circulation in the municipality and in the
5-18     area proposed for annexation.  The notice for each hearing must be
5-19     published at least once on or after the 20th day but before the
5-20     10th day before the date of the hearing.  The municipality must
5-21     give additional notice by certified mail to] each railroad company
5-22     that serves the municipality and is on the municipality's tax roll
5-23     if the company's right-of-way is in the area proposed for
5-24     annexation.
5-25           (f)  This section does not apply to an area proposed for
5-26     annexation if:
 6-1                 (1)  the area has fewer than 250 permanent residents;
 6-2                 (2)  the area will be annexed by vote or petition of
 6-3     the qualified voters or property owners as provided by Subchapter
 6-4     B;
 6-5                 (3)  the area is the subject of an industrial district
 6-6     contract under Section 42.044;
 6-7                 (4)  the area is located in a colonia, as that term is
 6-8     defined by Section 2306.581, Government Code;
 6-9                 (5)  the area is annexed under Section 43.026, 43.027,
6-10     43.029, or 43.031; or
6-11                 (6)  the municipality determines that the annexation of
6-12     the area is necessary to protect the public health or safety.
6-13           Sec. 43.053.  INVENTORY OF SERVICES AND FACILITIES REQUIRED.
6-14     (a)  In this section, "public entity" includes a municipality,
6-15     county, fire protection service provider, including a volunteer
6-16     fire department, emergency medical services provider, including a
6-17     volunteer emergency medical services provider, municipal utility
6-18     district, or water control and improvement district.
6-19           (b)  After adopting an annexation plan or amending an
6-20     annexation plan to include additional areas under Section 43.052, a
6-21     municipality shall compile a comprehensive inventory of services
6-22     and facilities provided by public and private entities, directly or
6-23     by contract, in each area proposed for annexation.  The inventory
6-24     of services and facilities must include all services and facilities
6-25     the municipality is required to provide or maintain following the
6-26     annexation.
 7-1           (c)  The municipality shall request, in the notice provided
 7-2     under Section 43.052(e), the information necessary to compile the
 7-3     inventory from each public or private entity that provides services
 7-4     or facilities in each area proposed for annexation.  The public or
 7-5     private entity shall provide to the municipality the information
 7-6     held by the entity that is necessary to compile the inventory not
 7-7     later than the 90th day after the date the municipality requests
 7-8     the information.  The information provided under this subsection
 7-9     must include the type of service provided, the method of service
7-10     delivery, and all information prescribed by Subsections (e) and
7-11     (f).  If a service provider fails to provide the information
7-12     required by this subsection within the 90-day period, the
7-13     municipality may impose an administrative penalty of $200 for each
7-14     day the service provider is in violation of this subsection.  The
7-15     municipality shall prescribe procedures to provide for due process
7-16     in the imposition of an administrative penalty under this
7-17     subsection.
7-18           (d)  The information required in the inventory shall be based
7-19     on the services and facilities provided during the year preceding
7-20     the date the municipality adopted the annexation plan or amended
7-21     the annexation plan to include additional areas.
7-22           (e)  For utility facilities, roads, drainage structures, and
7-23     other infrastructure provided or maintained by public or private
7-24     entities, the inventory must include:
7-25                 (1)  an engineer's report that describes the physical
7-26     condition of all infrastructure elements in the area; and
 8-1                 (2)  a summary of capital, operational, and maintenance
 8-2     expenditures for that infrastructure.
 8-3           (f)  For police, fire, and emergency medical services
 8-4     provided by public or private entities, the inventory must include
 8-5     for each service:
 8-6                 (1)  the average dispatch and delivery time;
 8-7                 (2)  a schedule of equipment, including vehicles;
 8-8                 (3)  a staffing schedule that discloses the
 8-9     certification and training levels of personnel; and
8-10                 (4)  a summary of operating and capital expenditures.
8-11           (g)  The municipality shall complete the inventory and make
8-12     the inventory available for public inspection on or before the 60th
8-13     day after the municipality receives the required information from
8-14     the service providers under Subsection (c).  [PERIOD FOR COMPLETION
8-15     OF ANNEXATION; EFFECTIVE DATE.  (a)  The annexation of an area must
8-16     be completed within 90 days after the date the governing body
8-17     institutes the annexation proceedings or those proceedings are
8-18     void.  Any period during which the municipality is restrained or
8-19     enjoined by a court of competent jurisdiction from annexing the
8-20     area is not included in computing the 90-day period.]
8-21           [(b)  Notwithstanding any provision of a municipal charter to
8-22     the contrary, the governing body of a municipality with a
8-23     population of 1.5 million or more may provide that an annexation
8-24     take effect on any date within 90 days after the date of the
8-25     adoption of the ordinance providing for the annexation.]
8-26           SECTION 5.  Subchapter C, Chapter 43, Local Government Code,
 9-1     is amended by adding Section 43.0545 to read as follows:
 9-2           Sec. 43.0545.  ANNEXATION OF CERTAIN ADJACENT AREAS.  (a)  A
 9-3     municipality may not annex an area that is located in the
 9-4     extraterritorial jurisdiction of the municipality only because the
 9-5     area is contiguous to municipal territory that is less than 1,000
 9-6     feet in width at its narrowest point.
 9-7           (b)  A municipality may not annex an area that is located in
 9-8     the extraterritorial jurisdiction of the municipality only because
 9-9     the area is contiguous to municipal territory that:
9-10                 (1)  was annexed before September 1, 1999; and
9-11                 (2)  was in the extraterritorial jurisdiction of the
9-12     municipality at the time of annexation only because the territory
9-13     was contiguous to municipal territory that was less than 1,000 feet
9-14     in width at its narrowest point.
9-15           (c)  Subsections (a) and (b) do not apply to an area:
9-16                 (1)  completely surrounded by incorporated territory of
9-17     one or more municipalities;
9-18                 (2)  for which the owners of the area have requested
9-19     annexation by the municipality;
9-20                 (3)  that is owned by the municipality; or
9-21                 (4)  that is the subject of an industrial district
9-22     contract under Section 42.044.
9-23           (d)  Subsection (b) does not apply if the minimum width of
9-24     the narrow territory described by Subsection (b)(2), following
9-25     subsequent annexation, is no longer less than 1,000 feet in width
9-26     at its narrowest point.
 10-1          (e)  For purposes of this section, roads, highways, rivers,
 10-2    lakes, or other bodies of water are not included in computing the
 10-3    1,000 foot distance unless the area annexed includes land in
 10-4    addition to a road, highway, river, lake, or other body of water.
 10-5          SECTION 6.  Section 43.056, Local Government Code, is amended
 10-6    to read as follows:
 10-7          Sec. 43.056.  PROVISION OF SERVICES TO ANNEXED AREA.
 10-8    (a)  Before the first day of the 10th month after the month in
 10-9    which the inventory is prepared as provided by Section 43.053
10-10    [publication of the notice of the first hearing required under
10-11    Section 43.052], the governing body of the municipality proposing
10-12    the annexation shall direct its planning department or other
10-13    appropriate municipal department to prepare a service plan that
10-14    provides for the extension of full municipal services to the area
10-15    to be annexed.  The municipality shall provide the services by any
10-16    of the methods by which it extends the services to any other area
10-17    of the municipality.
10-18          (b)  The service plan must include a program under which the
10-19    municipality will provide full municipal services in the annexed
10-20    area no later than 2-1/2 [4 1/2] years after the effective date of
10-21    the annexation, in accordance with Subsection (e), unless certain
10-22    services cannot reasonably be provided within that period and the
10-23    municipality proposes a schedule for providing those services
10-24    [(d)].  If the municipality proposes a schedule to extend the
10-25    period for providing certain services, the schedule must provide
10-26    for the provision of full municipal services no later than 4-1/2
 11-1    years after the effective date of the annexation.  However, under
 11-2    the program the municipality must provide the following services in
 11-3    the area on [within 60 days after] the effective date of the
 11-4    annexation of the area:
 11-5                (1)  police protection;
 11-6                (2)  fire protection;
 11-7                (3)  emergency medical services;
 11-8                (4)  solid waste collection;
 11-9                (5)  operation and [(4)]  maintenance of water and
11-10    wastewater facilities in the annexed area that are not within the
11-11    service area of another water or wastewater utility;
11-12                (6)  operation and [(5)]  maintenance of roads and
11-13    streets, including road and street lighting;
11-14                (7)  operation and [(6)]  maintenance of parks,
11-15    playgrounds, and swimming pools; and
11-16                (8)  operation and [(7)]  maintenance of any other
11-17    publicly owned facility, building, or service.
11-18          [(b-1)  The service plan of a municipality with a population
11-19    of 1.5 million or more must include a program under which the
11-20    municipality will provide full municipal services in the annexed
11-21    area no later than 4-1/2 years after the effective date of the
11-22    annexation, in accordance with Subsection (d).  However, under the
11-23    program the municipality must:]
11-24                [(1)  provide the following services in the area on and
11-25    after the effective date of the annexation of the area:]
11-26                      [(A)  police protection; and]
 12-1                      [(B)  solid waste collection;]
 12-2                [(2)  provide the following services in the area within
 12-3    30 days after the effective date of the annexation of the area, if
 12-4    the services are provided through a contract between the
 12-5    municipality and a service provider:]
 12-6                      [(A)  emergency medical service; and]
 12-7                      [(B)  fire protection; and]
 12-8                [(3)  provide the following services in the area within
 12-9    60 days after the effective date of the annexation of the area:]
12-10                      [(A)  maintenance of water and wastewater
12-11    facilities in the annexed area that are not within the service area
12-12    of another water or wastewater utility;]
12-13                      [(B)  maintenance of roads and streets, including
12-14    road and street lighting;]
12-15                      [(C)  maintenance of parks, playgrounds, and
12-16    swimming pools;]
12-17                      [(D)  maintenance of any other publicly owned
12-18    facility, building, or service; and]
12-19                      [(E)  emergency medical service and fire
12-20    protection, if the services are provided by municipal personnel and
12-21    equipment.]
12-22          (c)  For purposes of this section, "full municipal services"
12-23    means services funded in whole or in part by municipal taxation and
12-24    provided by the annexing municipality within its full-purpose
12-25    boundaries.
12-26          (d)  A municipality with a population of 1.5 million or more
 13-1    may provide all or part of the municipal services required under
 13-2    the service plan by contracting with service providers.  If the
 13-3    municipality owns a water and wastewater utility, the municipality
 13-4    shall, subject to this section, extend water and wastewater service
 13-5    to any annexed area not within the service area of another water or
 13-6    wastewater utility.  If the municipality annexes territory included
 13-7    within the boundaries of a municipal utility district or a water
 13-8    control and improvement district, the municipality shall comply
 13-9    with applicable state law relating to annexation of territory
13-10    within a municipal utility district or a water control and
13-11    improvement district.  The service plan shall summarize the service
13-12    extension policies of the municipal water and wastewater utility.
13-13          (e) [(d)]  The service plan must also include a program under
13-14    which the municipality will initiate after the effective date of
13-15    the annexation the acquisition or construction of capital
13-16    improvements necessary for providing municipal services adequate to
13-17    serve the area.  The construction shall [begin within two years
13-18    after the effective date of the annexation of the area and shall]
13-19    be substantially completed within the period provided in the
13-20    service plan.  The service plan may be amended to extend the period
13-21    for construction if the construction is proceeding with all
13-22    deliberate speed [4-1/2 years after that date].  The acquisition or
13-23    construction of the facilities shall be accomplished by purchase,
13-24    lease, or other contract or by the municipality succeeding to the
13-25    powers, duties, assets, and obligations of a conservation and
13-26    reclamation district as authorized or required by law.  The
 14-1    construction of the facilities shall be accomplished in a
 14-2    continuous process and shall be completed as soon as reasonably
 14-3    possible, consistent with generally accepted local engineering and
 14-4    architectural standards and practices.  However, the municipality
 14-5    does not violate this subsection if the construction process is
 14-6    interrupted for any reason by circumstances beyond the direct
 14-7    control of the municipality.  The requirement that construction of
 14-8    capital improvements must be substantially completed within the
 14-9    time period provided in the service plan [4-1/2 years] does not
14-10    apply to a development project or proposed development project
14-11    within an annexed area if the annexation of the area was initiated
14-12    by petition or request of the owners of land in the annexed area
14-13    and the municipality and the landowners have subsequently agreed in
14-14    writing that the development project within that area, because of
14-15    its size or projected manner of development by the developer, is
14-16    not reasonably expected to be completed within that period.
14-17          (f) [(e)]  A service plan may not:
14-18                (1)  require the creation of another political
14-19    subdivision;
14-20                (2)  require a landowner in the area to fund the
14-21    capital improvements necessary to provide municipal services in a
14-22    manner inconsistent with Chapter 395 unless otherwise agreed to by
14-23    the landowner; or
14-24                (3)  provide [fewer] services [or lower levels of
14-25    services] in the area in a manner that would have the effect of
14-26    reducing the level of fire and police protection and emergency
 15-1    medical services provided within the corporate boundaries of the
 15-2    municipality before annexation.
 15-3          (g)  If the annexed area had a lower level of services than
 15-4    the level of services provided within the corporate boundaries of
 15-5    the municipality before annexation, a service plan must provide the
 15-6    annexed area with a level of services that is comparable to the
 15-7    level of services available in other parts of the municipality with
 15-8    land uses and population densities similar to those reasonably
 15-9    contemplated or projected in the area.  If the annexed area had a
15-10    level of services equal to the level of services provided within
15-11    the corporate boundaries of the  municipality before annexation, a
15-12    service plan must maintain that same level of services.  Except as
15-13    provided by this subsection, if the annexed area had a level of
15-14    services superior to the level of services provided within the
15-15    corporate boundaries of the municipality before annexation, a
15-16    service plan must provide the annexed area with a level of services
15-17    that is comparable to the level of services available in other
15-18    parts of the municipality with land use and population densities
15-19    similar to those reasonably contemplated or projected in the area.
15-20    If the annexed area had a level of services for operating and
15-21    maintaining the infrastructure of the area, including the
15-22    facilities described by Subsections (b)(5)-(8), superior to the
15-23    level of services provided within the corporate boundaries of the
15-24    municipality before annexation, a service plan must provide for the
15-25    operation and maintenance of the infrastructure of the annexed area
15-26    at a level of services that is equal or superior to that level of
 16-1    services[:]
 16-2                      [(A)  than were in existence in the area
 16-3    immediately preceding the date of the annexation; or]
 16-4                      [(B)  than are otherwise available in other parts
 16-5    of the municipality with land uses and population densities similar
 16-6    to those reasonably contemplated or projected in the area].
 16-7          (h) [(f)]  If only a part of the area to be annexed is
 16-8    actually annexed, the governing body shall direct the department to
 16-9    prepare a revised service plan for that part.
16-10          (i) [(g)]  The proposed service plan must be made available
16-11    for public inspection and explained to the inhabitants of the area
16-12    at the public hearings held under Section 43.0561 [43.052].  The
16-13    plan may be amended through negotiation at the hearings, but the
16-14    provision of any service may not be deleted.  On completion of the
16-15    public hearings, the service plan shall be attached to the
16-16    ordinance annexing the area and approved as part of the ordinance.
16-17          (j) [(h)]  On approval by the governing body, the service
16-18    plan is a contractual obligation that is not subject to amendment
16-19    or repeal except that if the governing body determines at the
16-20    public hearings required by this subsection that changed conditions
16-21    or subsequent occurrences make the service plan unworkable or
16-22    obsolete, the governing body may amend the service plan to conform
16-23    to the changed conditions or subsequent occurrences.  An amended
16-24    service plan must provide for services that are comparable to or
16-25    better than those established in the service plan before amendment.
16-26    Before any amendment is adopted, the governing body must provide an
 17-1    opportunity for interested persons to be heard at public hearings
 17-2    called and held in the manner provided by Section 43.0561 [43.052].
 17-3          (k) [(i)]  A service plan is valid for 10 years.  Renewal of
 17-4    the service plan is at the discretion of the municipality.  A
 17-5    person residing or owning land in an annexed area may enforce a
 17-6    service plan by applying for a writ of mandamus not later than the
 17-7    second anniversary of the date the person knew or should have known
 17-8    that the municipality was not complying with the service plan.  If
 17-9    a writ of mandamus is applied for, the municipality has the burden
17-10    of proving that the services have been provided in accordance with
17-11    the service plan in question.
17-12          (l)  If a court issues a [the] writ under Subsection (k), the
17-13    court:
17-14                (1)  [municipality shall pay the person's costs and
17-15    reasonable attorney's fees in bringing the action.  A writ issued
17-16    under this subsection] must provide the municipality the option of
17-17    disannexing the area within a reasonable period specified by the
17-18    court;
17-19                (2)  may require the municipality to comply with the
17-20    service plan in question before a reasonable date specified by the
17-21    court if the municipality does not disannex the area within the
17-22    period prescribed by the court under Subdivision (1);
17-23                (3)  may require the municipality to refund to the
17-24    landowners of the annexed area money collected by the municipality
17-25    from those landowners for services to the area that were not
17-26    provided;
 18-1                (4)  may assess a civil penalty against the
 18-2    municipality, to be paid to the state in an amount as justice may
 18-3    require, for the period in which the municipality is not in
 18-4    compliance with the service plan;
 18-5                (5)  may require the parties to participate in
 18-6    mediation; and
 18-7                (6)  may require the municipality to pay the person's
 18-8    costs and reasonable attorney's fees in bringing the action for the
 18-9    writ [30 days].
18-10          (m) [(j)  A municipality that annexes an area shall provide
18-11    the area or cause the area to be provided with services in
18-12    accordance with the service plan for the area.]
18-13          [(k)]  This section does not require that a uniform level of
18-14    full municipal services be provided to each area of the
18-15    municipality if the governing body of the municipality determines
18-16    that different characteristics of topography, land use, and
18-17    population density are considered a sufficient basis for providing
18-18    different levels of service.  Nothing in this subsection modifies
18-19    the requirement under Subsection (g) for a service plan to provide
18-20    a level of services in an annexed area that is equal or superior to
18-21    the level of services provided within the corporate boundaries of
18-22    the municipality before annexation.  To the extent of any conflict
18-23    between this subsection and Subsection (g), Subsection (g)
18-24    prevails.
18-25          SECTION 7.  Subchapter C, Chapter 43, Local Government Code,
18-26    is amended by renumbering Section 43.0561 as Section 43.0566 and
 19-1    adding Sections 43.0561, 43.0562, 43.0563, and 43.0564 to read as
 19-2    follows:
 19-3          Sec. 43.0561.  ANNEXATION HEARING REQUIREMENTS.  (a)  Before
 19-4    a municipality may institute annexation proceedings, the governing
 19-5    body of the municipality must conduct two public hearings at which
 19-6    persons interested in the annexation are given the opportunity to
 19-7    be heard.  The hearings must be conducted not later than the 90th
 19-8    day after the date the inventory is available for inspection.
 19-9          (b)  At least one of the hearings must be held in the area
19-10    proposed for annexation if a suitable site is reasonably available
19-11    and more than 20 adults who are permanent residents of the area
19-12    file a written protest of the annexation with the secretary of the
19-13    municipality within 10 days after the date of the publication of
19-14    the notice required by this section.  The protest must state the
19-15    name, address, and age of each protester who signs.  If a suitable
19-16    site is not reasonably available in the area proposed for
19-17    annexation, the hearing may be held outside the area proposed for
19-18    annexation if the hearing is held in the nearest suitable public
19-19    facility.
19-20          (c)  The municipality must publish notice of the hearings in
19-21    a newspaper of general circulation in the municipality and in the
19-22    area proposed for annexation.  The notice for each hearing must be
19-23    published at least once on or after the 20th day but before the
19-24    10th day before the date of the hearing.  The municipality must
19-25    give additional notice by certified mail to each railroad company
19-26    that serves the municipality and is on the municipality's tax roll
 20-1    if the company's right-of-way is in the area proposed for
 20-2    annexation.
 20-3          Sec. 43.0562.  NEGOTIATIONS REQUIRED.  (a)  After holding the
 20-4    hearings as provided by Section 43.0561, the municipality and the
 20-5    property owners of the area proposed for annexation shall negotiate
 20-6    for the provision of services to the area after annexation or for
 20-7    the provision of services to the area in lieu of annexation under
 20-8    Section 43.0563.
 20-9          (b)  Except as provided by Subsection (c), the commissioners
20-10    court of the county in which the area proposed for annexation is
20-11    located shall select five representatives to negotiate with the
20-12    municipality for the provision of services to the area after
20-13    annexation.  If the area proposed for annexation is located in more
20-14    than one county, the commissioners court of the county in which the
20-15    greatest number of residents reside shall select three
20-16    representatives to negotiate with the municipality, and the
20-17    commissioners courts of the remaining counties jointly shall select
20-18    two representatives to negotiate with the municipality.
20-19          (c)  If a municipality proposes to annex a municipal utility
20-20    district, the governing body of the district shall negotiate with
20-21    the municipality for provision of services to the area after
20-22    annexation.  If more than one municipal utility district is located
20-23    in the area proposed for annexation, the governing boards of the
20-24    districts may jointly select five representatives to negotiate with
20-25    the municipality on behalf of all the affected districts.
20-26          Sec. 43.0563.  CONTRACTS FOR PROVISION OF SERVICES IN LIEU OF
 21-1    ANNEXATION.  (a)  The governing body of a municipality may
 21-2    negotiate and enter into a written agreement with representatives
 21-3    designated under Section 43.0562 for the provision of services and
 21-4    the funding of the services in the area.  The agreement may also
 21-5    include an agreement related to permissible land uses and
 21-6    compliance with municipal ordinances.
 21-7          (b)  An agreement under this section is in lieu of annexation
 21-8    by the municipality of the area.
 21-9          (c)  In negotiating an agreement under this section, the
21-10    parties may agree to:
21-11                (1)  any term allowed under Section 42.044 or 43.0751,
21-12    regardless of whether the municipality or the area proposed for
21-13    annexation would have been able to agree to the term under Section
21-14    42.044 or 43.0751; and
21-15                (2)  any other term to which both parties agree to
21-16    satisfactorily resolve any dispute between the parties, including
21-17    the creation of any type of special district otherwise allowed by
21-18    state law.
21-19          Sec. 43.0564.  ARBITRATION REQUIRED.  (a)  If the
21-20    municipality and the representatives of the area proposed for
21-21    annexation cannot reach an agreement for  the provision of services
21-22    under Section 43.0562, 43.0563, or 43.0751, either party by
21-23    majority decision of the party's representatives may request the
21-24    appointment of an arbitrator to resolve the service plan issues in
21-25    dispute.  The request must be made in writing to the other party
21-26    before the 60th day after the date the service plan is completed
 22-1    under Section 43.056.  The municipality may not annex the area
 22-2    under another section of this chapter during the pendency of the
 22-3    arbitration proceeding or an appeal from the arbitrator's decision.
 22-4          (b)  The parties to the dispute may agree on the appointment
 22-5    of an arbitrator.  If the parties cannot agree on the appointment
 22-6    of an arbitrator before the 31st day after the date arbitration is
 22-7    requested, the chief administrative district judge in a county with
 22-8    jurisdiction over either party shall appoint a qualified person who
 22-9    is not a resident or property owner of the municipality or the area
22-10    proposed for annexation to serve as arbitrator.
22-11          (c)  The arbitrator shall:
22-12                (1)  set a hearing to be held not later than the 10th
22-13    day after the date the arbitrator is appointed; and
22-14                (2)  notify the parties to the arbitration in writing
22-15    of the time and place of the hearing not later than the eighth day
22-16    before the date of the hearing.
22-17          (d)  The authority of the arbitrator is limited to issuing a
22-18    decision relating only to the service plan issues in dispute.
22-19          (e)  The arbitrator may:
22-20                (1)  receive in evidence any documentary evidence or
22-21    other information the arbitrator considers relevant;
22-22                (2)  administer oaths; and
22-23                (3)  issue subpoenas to require:
22-24                      (A)  the attendance and testimony of witnesses;
22-25    and
22-26                      (B)  the production of books, records, and other
 23-1    evidence relevant to an issue presented to the arbitrator for
 23-2    determination.
 23-3          (f)  The arbitrator shall complete the hearing within one
 23-4    day.  The arbitrator, for good cause shown, may schedule an
 23-5    additional hearing to be held not later than the seventh day after
 23-6    the date of the first hearing.  Unless otherwise agreed to by the
 23-7    parties, the arbitrator must issue a decision in writing and
 23-8    deliver a copy of the decision to the parties not later than the
 23-9    14th day after the date of the final hearing.
23-10          (g)  Either party may appeal any provision of an arbitrator's
23-11    decision that exceeds the authority granted under Subsection (d) to
23-12    a district court in a county in which the area proposed for
23-13    annexation is located.
23-14          (h)  If the municipality does not agree with the terms of the
23-15    arbitrator's decision, the municipality may not annex the area
23-16    proposed for annexation before the fifth anniversary of the date of
23-17    the arbitrator's decision.
23-18          (i)  The municipality shall pay the cost of arbitration.
23-19          Sec. 43.0566 [43.0561].  RELEASE OF EXTRATERRITORIAL
23-20    JURISDICTION BY GENERAL LAW MUNICIPALITY OVER CERTAIN TRACTS OF
23-21    LAND.  (a)  This section applies only to a tract of property that
23-22    is:
23-23                (1)  40 or more acres in size;
23-24                (2)  located entirely in a county with a population of
23-25    more than 260,000; and
23-26                (3)  located in the extraterritorial jurisdiction of a
 24-1    general law municipality with a population of more than 1,000 but
 24-2    less than 2,500 that provides water but not sewer services.
 24-3          (b)  The owner of a tract of land to which this section
 24-4    applies that is adjacent to the corporate limits of another
 24-5    municipality may petition the governing body of that other
 24-6    municipality for annexation.  On receipt of a petition, the
 24-7    municipality may annex the area if the municipality agrees to a
 24-8    service plan that provides both water and sewer services to the
 24-9    tract not later than 3 1/2 years after the date of the annexation.
24-10    On annexation, the area is released from the extraterritorial
24-11    jurisdiction of the municipality described by Subsection (a)(3) and
24-12    becomes a part of the municipality agreeing to provide water and
24-13    sewer services.
24-14          (c)  This section expires March 31, 1996, unless there is
24-15    litigation pending at that time involving the validity of the
24-16    annexation of a tract of land to which this section applies.  If
24-17    litigation is pending, this section remains in effect until a court
24-18    enters a final judgment in the case.
24-19          SECTION 8.  Chapter 43, Local Government Code, is amended by
24-20    adding Subchapter C-1 to read as follows:
24-21       SUBCHAPTER C-1.  ANNEXATION PROCEDURE FOR AREAS EXEMPTED FROM
24-22                         MUNICIPAL ANNEXATION PLAN
24-23          Sec. 43.061.  APPLICABILITY.  This subchapter applies to an
24-24    area proposed for annexation that is not required to be included in
24-25    a municipal annexation plan under Section 43.052.
24-26          Sec. 43.062.  PROCEDURES APPLICABLE.  Sections 43.051,
 25-1    43.054, 43.0545, 43.055, 43.0565, and 43.057 apply to the
 25-2    annexation of an area to which this subchapter applies.
 25-3          Sec. 43.063.  ANNEXATION HEARING REQUIREMENTS.  (a)  Before a
 25-4    municipality may institute annexation proceedings, the governing
 25-5    body of the municipality must conduct two public hearings at which
 25-6    persons interested in the annexation are given the opportunity to
 25-7    be heard.  The hearings must be conducted on or after the 40th day
 25-8    but before the 20th day before the date of the institution of the
 25-9    proceedings.
25-10          (b)  At least one of the hearings must be held in the area
25-11    proposed for annexation if a suitable site is reasonably available
25-12    and more than 10 percent of the adults who are permanent residents
25-13    of the area file a written protest of the annexation with the
25-14    secretary of the municipality within 10 days after the date of the
25-15    publication of the notice required by this section.  The protest
25-16    must state the name, address, and age of each protester who signs.
25-17          (c)  The municipality must publish notice of the hearings in
25-18    a newspaper of general circulation in the municipality and in the
25-19    area proposed for annexation.  The notice for each hearing must be
25-20    published at least once on or after the 20th day but before the
25-21    10th day before the date of the hearing.  The municipality must
25-22    give additional notice by certified mail to each railroad company
25-23    that serves the municipality and is on the municipality's tax roll
25-24    if the company's right-of-way is in the area proposed for
25-25    annexation.
25-26          Sec. 43.064.  PERIOD FOR COMPLETION OF ANNEXATION; EFFECTIVE
 26-1    DATE.  (a)  The annexation of an area must be completed within 90
 26-2    days after the date the governing body institutes the annexation
 26-3    proceedings or those proceedings are void.  Any period during which
 26-4    the municipality is restrained or enjoined by a court of competent
 26-5    jurisdiction from annexing the area is not included in computing
 26-6    the 90-day period.
 26-7          (b)  Notwithstanding any provision of a municipal charter to
 26-8    the contrary, the governing body of a municipality with a
 26-9    population of 1.5 million or more may provide that an annexation
26-10    take effect on any date within 90 days after the date of the
26-11    adoption of the ordinance providing for the annexation.
26-12          Sec. 43.065.  PROVISION OF SERVICES TO ANNEXED AREA.
26-13    (a)  Before the publication of the notice of the first hearing
26-14    required under Section 43.063, the governing body of the
26-15    municipality proposing the annexation shall direct its planning
26-16    department or other appropriate municipal department to prepare a
26-17    service plan that provides for the extension of full municipal
26-18    services to the area to be annexed.  The municipality shall provide
26-19    the services by any of the methods by which it extends the services
26-20    to any other area of the municipality.
26-21          (b)  Sections 43.056(b)-(m) apply to the annexation of an
26-22    area to which this subchapter applies.
26-23          SECTION 9.  Section 43.0751, Local Government Code, is
26-24    amended by amending Subsection (b) and adding Subsection (o) to
26-25    read as follows:
26-26          (b)  The governing bodies of a municipality and a district
 27-1    may [shall] negotiate and [may] enter into a written strategic
 27-2    partnership agreement for the district by mutual consent.  The
 27-3    governing body of a municipality, on written request from a
 27-4    district included in the municipality's annexation plan under
 27-5    Section 43.052, shall negotiate and enter into a written strategic
 27-6    partnership agreement with the district  [bodies of the
 27-7    municipality and the district shall evidence their intention to
 27-8    negotiate such an agreement by resolution, each of which
 27-9    resolutions shall specify an expiration date if the other governing
27-10    body fails to adopt a resolution under this section on or before
27-11    the specified date.  The governing body of a municipality that has
27-12    evidenced its intention by unexpired resolution to enter into
27-13    negotiations with a district for an agreement under this section
27-14    may not initiate proceedings to annex the district under any other
27-15    section of this code prior to the expiration of two years after the
27-16    adoption date of the resolution unless the municipality has
27-17    previously instituted annexation proceedings in granting consent to
27-18    the creation of the district prior to January 1, 1995].
27-19          (o)  If a municipality required to negotiate with a district
27-20    under this section and the requesting  district fail to agree on
27-21    the terms of a strategic partnership agreement, either party may
27-22    seek binding arbitration of the issues relating to the agreement in
27-23    dispute under Section 43.0564.
27-24          SECTION 10.  Subsection (a), Section 43.121, Local Government
27-25    Code, is amended to read as follows:
27-26          (a)  The governing body of a home-rule municipality with more
 28-1    than 225,000 inhabitants[, if authorized under its home-rule
 28-2    charter,] by ordinance may annex an area for the limited purposes
 28-3    of applying its planning, zoning, health, and safety ordinances in
 28-4    the area.
 28-5          SECTION 11.  Subsection (c), Section 43.141, Local Government
 28-6    Code, is amended to read as follows:
 28-7          (c)  If the area is disannexed under this section, it may not
 28-8    be annexed again within 10 [five] years after the date of the
 28-9    disannexation.  [If it is reannexed within seven years after the
28-10    date of the disannexation, a service plan for the area must be
28-11    implemented not later than one year after the date of the
28-12    reannexation.]
28-13          SECTION 12.  Subchapter G, Chapter 43, Local Government Code,
28-14    is amended by adding Section 43.148 to read as follows:
28-15          Sec. 43.148.  REFUND OF TAXES AND FEES.  (a) If an area is
28-16    disannexed, the municipality disannexing the area shall refund to
28-17    the landowners of the area the amount of money collected by the
28-18    municipality in property taxes and fees from those landowners
28-19    during the period that the area was a part of the municipality less
28-20    the amount of money that the municipality spent for the direct
28-21    benefit of the area during that period.
28-22          (b)  A municipality shall proportionately refund the amount
28-23    under Subsection (a) to the landowners according to a method to be
28-24    developed by the municipality that identifies each landowner's
28-25    approximate pro rata payment of the taxes and fees being refunded.
28-26          SECTION 13.  Subchapter Z, Chapter 43, Local Government Code,
 29-1    is amended by adding Section 43.905 to read as follows:
 29-2          Sec. 43.905.  EFFECT OF ANNEXATION ON OPERATION OF SCHOOL
 29-3    DISTRICT.  (a)  A municipality that proposes to annex an area shall
 29-4    provide written notice of the proposed annexation to each public
 29-5    school district located in the area proposed to be annexed within
 29-6    the time period prescribed for publishing the notice of the first
 29-7    hearing under Section 43.0561 or 43.063, as applicable.
 29-8          (b)  A notice to a public school district shall contain a
 29-9    description of:
29-10                (1)  the area within the district proposed to be
29-11    annexed;
29-12                (2)  any financial impact on the district resulting
29-13    from the annexation, including any changes in utility costs; and
29-14                (3)  any proposal the municipality has to abate,
29-15    reduce, or limit any financial impact on the district.
29-16          (c)  The municipality may not proceed with the annexation
29-17    unless the municipality provides the required notice.
29-18          (d)  A municipality that has annexed any portion of an area
29-19    after December 1, 1996, and before September 1, 1999, in which a
29-20    school district has a facility shall grant a variance from the
29-21    municipality's building code for that facility if the facility does
29-22    not comply with the code.  The municipality shall notify the
29-23    governing board of the school district in writing specifying the
29-24    building code variance granted by the municipality under this
29-25    subsection.  The governing board of the school district shall
29-26    notify the municipality in writing specifying the actions the
 30-1    governing board proposes to take regarding the variance granted.
 30-2          SECTION 14.  Subchapter A, Chapter 5, Property Code, is
 30-3    amended by adding Section 5.011 to read as follows:
 30-4          Sec. 5.011.  SELLER'S DISCLOSURE REGARDING POTENTIAL
 30-5    ANNEXATION.  (a)  A person who sells an interest in real property
 30-6    in this state shall give to the purchaser of the property a written
 30-7    notice that reads substantially similar to the following:
 30-8                   NOTICE REGARDING POSSIBLE ANNEXATION
 30-9                If the property that is the subject of this
30-10          contract is located outside the limits of a
30-11          municipality, the property may now or later be included
30-12          in the extraterritorial jurisdiction of a municipality
30-13          and may now or later be subject to annexation by the
30-14          municipality.  Each municipality maintains a map that
30-15          depicts its boundaries and extraterritorial
30-16          jurisdiction.  To determine if the property is located
30-17          within a municipality's extraterritorial jurisdiction
30-18          or is likely to be located within a municipality's
30-19          extraterritorial jurisdiction, contact all
30-20          municipalities located in the general proximity of the
30-21          property for further information.
30-22          (b)  The seller shall deliver the notice to the purchaser
30-23    before the date the executory contract binds the purchaser to
30-24    purchase the property.  The notice may be given separately, as part
30-25    of the contract during negotiations, or as part of any other notice
30-26    the seller delivers to the purchaser.
 31-1          (c)  This section does not apply to a transfer:
 31-2                (1)  under a court order or foreclosure sale;
 31-3                (2)  by a trustee in bankruptcy;
 31-4                (3)  to a mortgagee by a mortgagor or successor in
 31-5    interest or to a beneficiary of a deed of trust by a trustor or
 31-6    successor in interest;
 31-7                (4)  by a mortgagee or a beneficiary under a deed of
 31-8    trust who has acquired the land at a sale conducted under a power
 31-9    of sale under a deed of trust or a sale under a court-ordered
31-10    foreclosure or has acquired the land by a deed in lieu of
31-11    foreclosure;
31-12                (5)  by a fiduciary in the course of the administration
31-13    of a decedent's estate, guardianship, conservatorship, or trust;
31-14                (6)  from one co-owner to another co-owner of an
31-15    undivided interest in the real property;
31-16                (7)  to a spouse or a person in the lineal line of
31-17    consanguinity of the seller;
31-18                (8)  to or from a governmental entity;
31-19                (9)  of only a mineral interest, leasehold interest, or
31-20    security interest; or
31-21                (10)  of real property that is located wholly within a
31-22    municipality's corporate boundaries.
31-23          (d)  If the notice is delivered as provided by this section,
31-24    the seller has no duty to provide additional information regarding
31-25    the possible annexation of the property by a municipality.
31-26          (e)  If an executory contract is entered into without the
 32-1    seller providing the notice required by this section, the purchaser
 32-2    may terminate the contract for any reason within the earlier of:
 32-3                (1)  seven days after the date the purchaser receives
 32-4    the notice; or
 32-5                (2)  the date the transfer occurs.
 32-6          SECTION 15.  (a)  This Act takes effect September 1, 1999,
 32-7    except that Section 14 of this Act takes effect January 1, 2000.
 32-8          (b)  Each municipality shall adopt an annexation plan as
 32-9    required by Section 43.052, Local Government Code, as amended by
32-10    this Act, on or before December 31, 1999, that becomes effective
32-11    December 31, 1999.
32-12          (c)  Except as provided by Subsection (d) of this section,
32-13    the changes in law made by Sections 2 through 7 and 9 through 12 of
32-14    this Act apply only to an annexation included in a municipality's
32-15    annexation plan prepared under Section 43.052, Local Government
32-16    Code, as amended by this Act.  Except as provided by Subsection (d)
32-17    of this section, a municipality may continue to annex any area
32-18    during the period beginning December 31, 1999, and ending December
32-19    31, 2002, under Chapter 43, Local Government Code, as it existed
32-20    immediately before September 1, 1999, if the area is not included
32-21    in the annexation plan, and the former law is continued in effect
32-22    for that purpose.
32-23          (d)  The changes in law made by this Act in Sections 43.002,
32-24    43.0545, 43.056(b), (e), (f), (g), (k), (l), and (m), 43.121(a),
32-25    43.141(c), 43.148, and 43.905, Local Government Code, as added or
32-26    amended by this Act, apply to the annexation of an area that is not
 33-1    included in the municipality's annexation plan during the period
 33-2    beginning December 31, 1999, and ending December 31, 2002, if the
 33-3    first hearing notice required by Section 43.052, Local Government
 33-4    Code, as it existed immediately before September 1, 1999, is
 33-5    published on or after that date.
 33-6          (e)  The changes in law made by this Act in Sections 43.002,
 33-7    43.0545, 43.056(b), (e), (f), (g), (k), (l), and (m), 43.121(a),
 33-8    43.141(c), 43.148, and 43.905, Local Government Code, as added or
 33-9    amended by this Act, apply only to the annexation of an area that
33-10    is not required to be included in a municipal annexation plan under
33-11    Section 43.052, Local Government Code, as added by this Act, if the
33-12    first hearing notice required by Section 43.063, Local Government
33-13    Code, as added by this Act, is published on or after September 1,
33-14    1999.
33-15          (f)  The change in law made by Section 1 of this Act applies
33-16    only to:
33-17                (1)  an annexation included in a municipality's
33-18    annexation plan prepared under Section 43.052, Local Government
33-19    Code, as amended by this Act; and
33-20                (2)  an annexation of an area that is not included in
33-21    the municipality's annexation plan during the period beginning
33-22    December 31, 1999, and ending December 31, 2002, if the first
33-23    hearing notice required by Section 43.052, Local Government Code,
33-24    as it existed immediately before September 1, 1999, is published on
33-25    or after that date.
33-26          (g)  The change in law made by Section 14 of this Act applies
 34-1    only to a transfer of property that occurs on or after January 1,
 34-2    2000.  For purposes of this section, a transfer of property occurs
 34-3    before January 1, 2000, if the executory contract binding the
 34-4    purchaser to purchase the property is executed before that date.
 34-5    Property transferred before January 1, 2000, is covered by the law
 34-6    in effect when the property was transferred, and the former law is
 34-7    continued in effect for that purpose.
 34-8          SECTION 16.  The importance of this legislation and the
 34-9    crowded condition of the calendars in both houses create an
34-10    emergency and an imperative public necessity that the
34-11    constitutional rule requiring bills to be read on three several
34-12    days in each house be suspended, and this rule is hereby suspended.