76R12180 PAM-D                          
         By Madla, et al.                                        S.B. No. 89
         Substitute the following for S.B. No. 89:
         By Bosse                                            C.S.S.B. No. 89
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to municipal annexation; providing penalties.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subchapter B, Chapter 42, Local Government Code,
 1-5     is amended by adding Section 42.0225 to read as follows:
 1-6           Sec. 42.0225.  EXTRATERRITORIAL JURISDICTION AROUND CERTAIN
 1-7     MUNICIPALLY OWNED PROPERTY.  (a)  This section applies only to an
 1-8     area owned by a municipality that is:
 1-9                 (1)  annexed by the municipality; and
1-10                 (2)  not contiguous to other territory of the
1-11     municipality.
1-12           (b)  Notwithstanding Sections 42.021(2)-(5), the annexation
1-13     of the area expands the extraterritorial jurisdiction of the
1-14     municipality only to include the area located within one mile of
1-15     the boundaries of the annexed area.
1-16           (c)  The extraterritorial jurisdiction of the municipality
1-17     does not expand following the annexation of territory located only
1-18     in the municipality's extraterritorial jurisdiction that is created
1-19     under Subsection (b).
1-20           SECTION 2.  Subchapter A, Chapter 43, Local Government Code,
1-21     is amended by adding Section 43.002 to read as follows:
1-22           Sec. 43.002.  CONTINUATION OF LAND USE.  (a)  A municipality
1-23     may not, after annexing an area, prohibit a person from:
1-24                 (1)  continuing to use land in the area in the manner
 2-1     in which the land was being used on the date the annexation
 2-2     proceedings were instituted if the land use was legal at that time;
 2-3     or
 2-4                 (2)  beginning to use land in the area in the manner
 2-5     that was planned for the land before the 90th day before the
 2-6     effective date of the annexation if:
 2-7                       (A)  one or more licenses, certificates, permits,
 2-8     approvals, or other forms of authorization by a governmental entity
 2-9     were required by law for the planned land use; and
2-10                       (B)  a completed application for the initial
2-11     authorization was filed with the governmental entity before the
2-12     date the annexation proceedings were instituted.
2-13           (b)  For purposes of this section, a completed application is
2-14     filed if the application includes all documents and other
2-15     information designated as required by the governmental entity in a
2-16     written notice to the applicant.
2-17           (c)  This section does not prohibit a municipality from
2-18     imposing:
2-19                 (1)  a regulation relating to the location of sexually
2-20     oriented businesses as that term is defined by Section 243.002;
2-21                 (2)  a municipal ordinance, regulation, or other
2-22     requirement affecting colonias as that term is defined by Section
2-23     2306.581, Government Code;
2-24                 (3)  a regulation relating to preventing imminent
2-25     destruction of property or injury to persons;
2-26                 (4)  a regulation relating to public nuisances;
2-27                 (5)  a regulation relating to flood control;
 3-1                 (6)  a regulation relating to the storage and use of
 3-2     hazardous substances;
 3-3                 (7)  a regulation relating to the sale and use of
 3-4     fireworks; or
 3-5                 (8)  a regulation relating to the discharge of
 3-6     firearms.
 3-7           SECTION 3.  The heading to Subchapter C, Chapter 43, Local
 3-8     Government Code, is amended to read as follows:
 3-9            SUBCHAPTER C.  ANNEXATION PROCEDURE FOR AREAS ANNEXED
3-10                       UNDER MUNICIPAL ANNEXATION PLAN
3-11           SECTION 4.  Sections 43.052 and 43.053, Local Government
3-12     Code, are amended to read as follows:
3-13           Sec. 43.052.  MUNICIPAL ANNEXATION PLAN REQUIRED.  (a)  In
3-14     this section, "special district" means a municipal utility
3-15     district, water control and improvement district, or other district
3-16     created under Section 52, Article III, or Section 59, Article XVI,
3-17     of the Texas Constitution.
3-18           (b)  A municipality may annex an area identified in the
3-19     annexation plan only as provided by this section.
3-20           (c)  A municipality shall prepare an annexation plan that
3-21     specifically identifies annexations that may occur beginning on the
3-22     third anniversary of the date the annexation plan is adopted.  The
3-23     municipality may amend the plan to specifically identify
3-24     annexations that may occur beginning on the third anniversary of
3-25     the date the plan is amended.
3-26           (d)  At any time during which an area is included in a
3-27     municipality's annexation plan, a municipal utility district or
 4-1     other special district that will be abolished as a result of the
 4-2     annexation, excluding an emergency services district, in which the
 4-3     area is located may not without consent of the municipality:
 4-4                 (1)  reduce the tax rate applicable to the area below
 4-5     the effective tax rate or the rollback tax rate calculated under
 4-6     Chapter 26, Tax Code;
 4-7                 (2)  voluntarily transfer an asset without
 4-8     consideration; or
 4-9                 (3)  enter into a contract for services that extends
4-10     beyond the three-year annexation plan period other than a contract
4-11     with another political subdivision for the operation of water,
4-12     wastewater, and drainage facilities.
4-13           (e)  A municipality may amend its annexation plan at any time
4-14     to remove an area proposed for annexation.  If, before the end of
4-15     the 18th month after the month an area is included in the
4-16     three-year annexation cycle, a municipality amends its annexation
4-17     plan to remove the area, the municipality may not amend the plan to
4-18     again include the area in its annexation plan until the first
4-19     anniversary of the date the municipality amended the plan to remove
4-20     the area.  If, during or after the 18 months after the month an
4-21     area is included in the three-year annexation cycle, a municipality
4-22     amends its annexation plan to remove the area, the municipality may
4-23     not amend the plan to again include the area in its annexation plan
4-24     until the second anniversary of the date the municipality amended
4-25     the plan to remove the area.
4-26           (f)  Before the 90th day after the date a municipality adopts
4-27     or amends an annexation plan under this section, the municipality
 5-1     shall give written notice to:
 5-2                 (1)  each property owner in the affected area, as
 5-3     indicated by the appraisal records furnished by the appraisal
 5-4     district for each county in which the affected area is located,
 5-5     that the area has been included in or removed from the
 5-6     municipality's annexation plan;
 5-7                 (2)  each public entity, as defined by Section 43.053,
 5-8     or private entity that provides services in the area proposed for
 5-9     annexation; and
5-10                 (3)  [ANNEXATION HEARING REQUIREMENTS.  (a)  Before a
5-11     municipality may institute annexation proceedings, the governing
5-12     body of the municipality must conduct two public hearings at which
5-13     persons interested in the annexation are given the opportunity to
5-14     be heard.  The hearings must be conducted on or after the 40th day
5-15     but before the 20th day before the date of the institution of the
5-16     proceedings.]
5-17           [(b)  At least one of the hearings must be held in the area
5-18     proposed for annexation if more than 20 adult residents of the area
5-19     file a written protest of the annexation with the secretary of the
5-20     municipality within 10 days after the date of the publication of
5-21     the notice required by this section.  The protest must state the
5-22     name, address, and age of each protester who signs.]
5-23           [(c)  The municipality must publish notice of the hearings in
5-24     a newspaper of general circulation in the municipality and in the
5-25     area proposed for annexation.  The notice for each hearing must be
5-26     published at least once on or after the 20th day but before the
5-27     10th day before the date of the hearing.  The municipality must
 6-1     give additional notice by certified mail to] each railroad company
 6-2     that serves the municipality and is on the municipality's tax roll
 6-3     if the company's right-of-way is in the area proposed for
 6-4     annexation.
 6-5           (g)  If an area is not removed from the municipality's
 6-6     annexation plan, the annexation of the area under the plan must be
 6-7     completed before the 31st day after the third anniversary of the
 6-8     date the area was included in the annexation plan.  If the
 6-9     annexation is not completed within the period prescribed by this
6-10     subsection, the municipality may not annex the area proposed for
6-11     annexation before the fifth anniversary of the last day for
6-12     completing an annexation under this subsection.
6-13           (h)  This section does not apply to an area proposed for
6-14     annexation if:
6-15                 (1)  the area contains fewer than 100 separate tracts
6-16     of land on which one or more residential dwellings are located;
6-17                 (2)  the area will be annexed by vote or petition of
6-18     the qualified voters or property owners as provided by Subchapter
6-19     B;
6-20                 (3)  the area is included within the boundaries of a
6-21     special district and the area is annexed at the request of the
6-22     district;
6-23                 (4)  the area is the subject of an industrial district
6-24     contract under Section 42.044;
6-25                 (5)  the area is located in a colonia, as that term is
6-26     defined by Section 2306.581, Government Code;
6-27                 (6)  the area is annexed under Section 43.026, 43.027,
 7-1     43.029, or 43.031; or
 7-2                 (7)  the municipality determines that the annexation of
 7-3     the area is necessary to protect the area proposed for annexation
 7-4     or the municipality from:
 7-5                       (A)  imminent destruction of property or injury
 7-6     to persons; or
 7-7                       (B)  a condition or use that constitutes a public
 7-8     or private nuisance as defined by background principles of nuisance
 7-9     and property law of this state.
7-10           Sec. 43.053.  INVENTORY OF SERVICES AND FACILITIES REQUIRED.
7-11     (a)  In this section, "public entity" includes a municipality,
7-12     county, fire protection service provider, including a volunteer
7-13     fire department, emergency medical services provider, including a
7-14     volunteer emergency medical services provider, or a special
7-15     district as that term is defined by Section 43.052.
7-16           (b)  After adopting an annexation plan or amending an
7-17     annexation plan to include additional areas under Section 43.052, a
7-18     municipality shall compile a comprehensive inventory of services
7-19     and facilities provided by public and private entities, directly or
7-20     by contract, in each area proposed for annexation.  The inventory
7-21     of services and facilities must include all services and facilities
7-22     the municipality is required to provide or maintain following the
7-23     annexation.
7-24           (c)  The municipality shall request, in the notice provided
7-25     under Section 43.052(f), the information necessary to compile the
7-26     inventory from each public or private entity that provides services
7-27     or facilities in each area proposed for annexation.  The public or
 8-1     private entity shall provide to the municipality the information
 8-2     held by the entity that is necessary to compile the inventory not
 8-3     later than the 90th day after the date the municipality requests
 8-4     the information unless the entity and the municipality agree to
 8-5     extend the period for providing the information.  The information
 8-6     provided under this subsection must include the type of service
 8-7     provided, the method of service delivery, and all information
 8-8     prescribed by Subsections (e) and (f).  If a service provider fails
 8-9     to provide the required information within the 90-day period, the
8-10     municipality is not required to include the information in an
8-11     inventory prepared under this section.
8-12           (d)  The information required in the inventory shall be based
8-13     on the services and facilities provided during the year preceding
8-14     the date the municipality adopted the annexation plan or amended
8-15     the annexation plan to include additional areas.
8-16           (e)  For utility facilities, roads, drainage structures, and
8-17     other infrastructure provided or maintained by public or private
8-18     entities, the inventory must include:
8-19                 (1)  an engineer's report that describes the physical
8-20     condition of all infrastructure elements in the area; and
8-21                 (2)  a summary of capital, operational, and maintenance
8-22     expenditures for that infrastructure.
8-23           (f)  For police, fire, and emergency medical services
8-24     provided by public or private entities, the inventory must include
8-25     for each service:
8-26                 (1)  the average dispatch and delivery time;
8-27                 (2)  a schedule of equipment, including vehicles;
 9-1                 (3)  a staffing schedule that discloses the
 9-2     certification and training levels of personnel; and
 9-3                 (4)  a summary of operating and capital expenditures.
 9-4           (g)  The municipality shall complete the inventory and make
 9-5     the inventory available for public inspection on or before the 60th
 9-6     day after the municipality receives the required information from
 9-7     the service providers under Subsection (c).
 9-8           (h)  The municipality may monitor the services provided in an
 9-9     area proposed for annexation and verify the inventory information
9-10     provided by the service provider.  [PERIOD FOR COMPLETION OF
9-11     ANNEXATION; EFFECTIVE DATE.  (a)  The annexation of an area must be
9-12     completed within 90 days after the date the governing body
9-13     institutes the annexation proceedings or those proceedings are
9-14     void.  Any period during which the municipality is restrained or
9-15     enjoined by a court of competent jurisdiction from annexing the
9-16     area is not included in computing the 90-day period.]
9-17           [(b)  Notwithstanding any provision of a municipal charter to
9-18     the contrary, the governing body of a municipality with a
9-19     population of 1.5 million or more may provide that an annexation
9-20     take effect on any date within 90 days after the date of the
9-21     adoption of the ordinance providing for the annexation.]
9-22           SECTION 5.  Subchapter C, Chapter 43, Local Government Code,
9-23     is amended by adding Section 43.0545 to read as follows:
9-24           Sec. 43.0545.  ANNEXATION OF CERTAIN ADJACENT AREAS.  (a)  A
9-25     municipality may not annex an area that is located in the
9-26     extraterritorial jurisdiction of the municipality only because the
9-27     area is contiguous to municipal territory that is less than 1,000
 10-1    feet in width at its narrowest point.
 10-2          (b)  A municipality may not annex an area that is located in
 10-3    the extraterritorial jurisdiction of the municipality only because
 10-4    the area is contiguous to municipal territory that:
 10-5                (1)  was annexed before September 1, 1999; and
 10-6                (2)  was in the extraterritorial jurisdiction of the
 10-7    municipality at the time of annexation only because the territory
 10-8    was contiguous to municipal territory that was less than 1,000 feet
 10-9    in width at its narrowest point.
10-10          (c)  Subsections (a) and (b) do not apply to an area:
10-11                (1)  completely surrounded by incorporated territory of
10-12    one or more municipalities;
10-13                (2)  for which the owners of the area have requested
10-14    annexation by the municipality;
10-15                (3)  that is owned by the municipality; or
10-16                (4)  that is the subject of an industrial district
10-17    contract under Section 42.044.
10-18          (d)  Subsection (b) does not apply if the minimum width of
10-19    the narrow territory described by Subsection (b)(2), following
10-20    subsequent annexation, is no longer less than 1,000 feet in width
10-21    at its narrowest point.
10-22          (e)  For purposes of this section, roads, highways, rivers,
10-23    lakes, or other bodies of water are not included in computing the
10-24    1,000 foot distance.
10-25          SECTION 6.  Section 43.056, Local Government Code, is amended
10-26    to read as follows:
10-27          Sec. 43.056.  PROVISION OF SERVICES TO ANNEXED AREA.
 11-1    (a)  Before the first day of the 10th month after the month in
 11-2    which the inventory is prepared as provided by Section 43.053
 11-3    [publication of the notice of the first hearing required under
 11-4    Section 43.052], [the governing body of] the municipality proposing
 11-5    the annexation shall complete [direct its planning department or
 11-6    other appropriate municipal department to prepare] a service plan
 11-7    that provides for the extension of full municipal services to the
 11-8    area to be annexed.  The municipality shall provide the services by
 11-9    any of the methods by which it extends the services to any other
11-10    area of the municipality.
11-11          (b)  The service plan must include a program under which the
11-12    municipality will provide full municipal services in the annexed
11-13    area no later than 2-1/2 [4 1/2] years after the effective date of
11-14    the annexation, in accordance with Subsection (e), unless that
11-15    period is extended by an arbitration decision issued under this
11-16    chapter or by agreement between the municipality and the party with
11-17    which the municipality is required to negotiate for services under
11-18    this subchapter [(d)].  However, under the program the municipality
11-19    must provide the following services in the area on [within 60 days
11-20    after] the effective date of the annexation of the area:
11-21                (1)  police protection;
11-22                (2)  fire protection;
11-23                (3)  emergency medical services;
11-24                (4)  solid waste collection;
11-25                (5)  operation and [(4)]  maintenance of water and
11-26    wastewater facilities in the annexed area that are not within the
11-27    service area of another water or wastewater utility;
 12-1                (6)  operation and [(5)]  maintenance of roads and
 12-2    streets, including road and street lighting;
 12-3                (7)  operation and [(6)]  maintenance of parks,
 12-4    playgrounds, and swimming pools; and
 12-5                (8)  operation and [(7)]  maintenance of any other
 12-6    publicly owned facility, building, or service.
 12-7          [(b-1)  The service plan of a municipality with a population
 12-8    of 1.5 million or more must include a program under which the
 12-9    municipality will provide full municipal services in the annexed
12-10    area no later than 4-1/2 years after the effective date of the
12-11    annexation, in accordance with Subsection (d).  However, under the
12-12    program the municipality must:]
12-13                [(1)  provide the following services in the area on and
12-14    after the effective date of the annexation of the area:]
12-15                      [(A)  police protection; and]
12-16                      [(B)  solid waste collection;]
12-17                [(2)  provide the following services in the area within
12-18    30 days after the effective date of the annexation of the area, if
12-19    the services are provided through a contract between the
12-20    municipality and a service provider:]
12-21                      [(A)  emergency medical service; and]
12-22                      [(B)  fire protection; and]
12-23                [(3)  provide the following services in the area within
12-24    60 days after the effective date of the annexation of the area:]
12-25                      [(A)  maintenance of water and wastewater
12-26    facilities in the annexed area that are not within the service area
12-27    of another water or wastewater utility;]
 13-1                      [(B)  maintenance of roads and streets, including
 13-2    road and street lighting;]
 13-3                      [(C)  maintenance of parks, playgrounds, and
 13-4    swimming pools;]
 13-5                      [(D)  maintenance of any other publicly owned
 13-6    facility, building, or service; and]
 13-7                      [(E)  emergency medical service and fire
 13-8    protection, if the services are provided by municipal personnel and
 13-9    equipment.]
13-10          (c)  For purposes of this section, "full municipal services"
13-11    means services [funded in whole or in part by municipal taxation
13-12    and] provided by the annexing municipality within its full-purpose
13-13    boundaries, including water and central wastewater services and
13-14    excluding gas or electrical service.
13-15          (d)  A municipality with a population of 1.5 million or more
13-16    may provide all or part of the municipal services required under
13-17    the service plan by contracting with service providers.  If the
13-18    municipality owns a water and wastewater utility, the municipality
13-19    shall, subject to this section, extend water and wastewater service
13-20    to any annexed area not within the service area of another water or
13-21    wastewater utility.  If the municipality annexes territory included
13-22    within the boundaries of a municipal utility district or a water
13-23    control and improvement district, the municipality shall comply
13-24    with applicable state law relating to annexation of territory
13-25    within a municipal utility district or a water control and
13-26    improvement district.  The service plan shall summarize the service
13-27    extension policies of the municipal water and wastewater utility.
 14-1          (e) [(d)]  The service plan must also include a program under
 14-2    which the municipality will initiate after the effective date of
 14-3    the annexation the acquisition or construction of capital
 14-4    improvements necessary for providing municipal services adequate to
 14-5    serve the area.  The construction shall [begin within two years
 14-6    after the effective date of the annexation of the area and shall]
 14-7    be substantially completed within 2-1/2 [4-1/2] years after the
 14-8    effective [that] date of annexation unless that period is extended
 14-9    as provided by Subsection (b).  The acquisition or construction of
14-10    the facilities shall be accomplished by purchase, lease, or other
14-11    contract or by the municipality succeeding to the powers, duties,
14-12    assets, and obligations of a conservation and reclamation district
14-13    as authorized or required by law.  The construction of the
14-14    facilities shall be accomplished in a continuous process and shall
14-15    be completed as soon as reasonably possible, consistent with
14-16    generally accepted local engineering and architectural standards
14-17    and practices.  However, the municipality does not violate this
14-18    subsection if the construction process is interrupted for any
14-19    reason by circumstances beyond the direct control of the
14-20    municipality.  The requirement that construction of capital
14-21    improvements must be substantially completed within 2-1/2 [4-1/2]
14-22    years does not apply to a development project or proposed
14-23    development project within an annexed area if the annexation of the
14-24    area was initiated by petition or request of the owners of land in
14-25    the annexed area and the municipality and the landowners have
14-26    subsequently agreed in writing that the development project within
14-27    that area, because of its size or projected manner of development
 15-1    by the developer, is not reasonably expected to be completed within
 15-2    that period.
 15-3          (f) [(e)]  A service plan may not:
 15-4                (1)  require the creation of another political
 15-5    subdivision;
 15-6                (2)  require a landowner in the area to fund the
 15-7    capital improvements necessary to provide municipal services in a
 15-8    manner inconsistent with Chapter 395 unless otherwise agreed to by
 15-9    the landowner; or
15-10                (3)  provide [fewer] services [or lower levels of
15-11    services] in the area in a manner that would have the effect of
15-12    reducing by more than a negligible amount the level of fire and
15-13    police protection and emergency medical services provided within
15-14    the corporate boundaries of the municipality before annexation.
15-15          (g)  If the annexed area had a lower level of services,
15-16    infrastructure, and infrastructure maintenance than the level of
15-17    services, infrastructure, and infrastructure maintenance provided
15-18    within the corporate  boundaries of the  municipality before
15-19    annexation, a service plan must provide the annexed area with a
15-20    level of services, infrastructure, and infrastructure maintenance
15-21    that is comparable to the level of services, infrastructure, and
15-22    infrastructure maintenance available in other parts of the
15-23    municipality with topography, land use, and population density
15-24    similar to those reasonably contemplated or projected in the area.
15-25    If the annexed area had a level of services, infrastructure, and
15-26    infrastructure maintenance equal to the level of services,
15-27    infrastructure, and infrastructure maintenance provided within the
 16-1    corporate boundaries of the  municipality before annexation, a
 16-2    service plan must maintain that same level of services,
 16-3    infrastructure, and infrastructure maintenance.  Except as provided
 16-4    by this subsection, if the annexed area had a level of services
 16-5    superior to the level of services provided within the corporate
 16-6    boundaries of the municipality before annexation, a service plan
 16-7    must provide the annexed area with a level of services that is
 16-8    comparable to the level of services available in other parts of the
 16-9    municipality with topography, land use, and population density
16-10    similar to those reasonably contemplated or projected in the area.
16-11    If the annexed area had a level of services for operating and
16-12    maintaining the infrastructure of the area, including the
16-13    facilities described by Subsections (b)(5)-(8), superior to the
16-14    level of services provided within the corporate boundaries of the
16-15    municipality before annexation, a service plan must provide for the
16-16    operation and maintenance of the infrastructure of the annexed area
16-17    at a level of services that is equal or superior to that level of
16-18    services.  In a municipality with a population of 1.6 million or
16-19    more, if the annexed area had a level of services, infrastructure,
16-20    and infrastructure maintenance superior to the level of services,
16-21    infrastructure, and infrastructure maintenance provided within the
16-22    corporate boundaries of the municipality before annexation, a
16-23    service plan must provide the annexed area with a level of
16-24    services, infrastructure, and infrastructure maintenance that is
16-25    comparable to the level of services, infrastructure, and
16-26    infrastructure maintenance that existed in the annexed area before
16-27    annexation.
 17-1          (h)  A municipality with a population of 1.6 million or more
 17-2    may not impose a fee in the annexed area, over and above ad valorem
 17-3    taxes and fees imposed within the corporate boundaries of the
 17-4    municipality before annexation, to maintain the level of services
 17-5    that existed in the area before annexation.  This subsection does
 17-6    not prohibit the municipality from imposing a fee for a service in
 17-7    the area annexed if the same fee is imposed within the corporate
 17-8    boundaries of the municipality before annexation.
 17-9          (i) [(f)]  If only a part of the area to be annexed is
17-10    actually annexed, the governing body shall direct the department to
17-11    prepare a revised service plan for that part.
17-12          (j) [(g)]  The proposed service plan must be made available
17-13    for public inspection and explained to the inhabitants of the area
17-14    at the public hearings held under Section 43.0561 [43.052].  The
17-15    plan may be amended through negotiation at the hearings, but the
17-16    provision of any service may not be deleted.  On completion of the
17-17    public hearings, the service plan shall be attached to the
17-18    ordinance annexing the area and approved as part of the ordinance.
17-19          (k) [(h)]  On approval by the governing body, the service
17-20    plan is a contractual obligation that is not subject to amendment
17-21    or repeal except that if the governing body determines at the
17-22    public hearings required by this subsection that changed conditions
17-23    or subsequent occurrences make the service plan unworkable or
17-24    obsolete, the governing body may amend the service plan to conform
17-25    to the changed conditions or subsequent occurrences.  An amended
17-26    service plan must provide for services that are comparable to or
17-27    better than those established in the service plan before amendment.
 18-1    Before any amendment is adopted, the governing body must provide an
 18-2    opportunity for interested persons to be heard at public hearings
 18-3    called and held in the manner provided by Section 43.0561 [43.052].
 18-4          (l) [(i)]  A service plan is valid for 10 years.  Renewal of
 18-5    the service plan is at the discretion of the municipality.  A
 18-6    person residing or owning land in an annexed area may enforce a
 18-7    service plan by petitioning the municipality for a change in policy
 18-8    or procedures to ensure compliance with the service plan.  If the
 18-9    municipality fails to take action with regard to the petition, the
18-10    petitioner may request arbitration of the dispute under Section
18-11    43.0565.  [applying for a writ of mandamus.  If a court issues the
18-12    writ, the municipality shall pay the person's costs and reasonable
18-13    attorney's fees in bringing the action.  A writ issued under this
18-14    subsection must provide the municipality the option of disannexing
18-15    the area within 30 days.]
18-16          (m) [(j)  A municipality that annexes an area shall provide
18-17    the area or cause the area to be provided with services in
18-18    accordance with the service plan for the area.]
18-19          [(k)]  This section does not require that a uniform level of
18-20    full municipal services be provided to each area of the
18-21    municipality if the governing body of the municipality determines
18-22    that different characteristics of topography, land use, and
18-23    population density are considered a sufficient basis for providing
18-24    different levels of service.  A person aggrieved by a determination
18-25    made by a municipality under this subsection may request
18-26    arbitration of the dispute under Section 43.0565.  Nothing in this
18-27    subsection modifies the requirement under Subsection (g) for a
 19-1    service plan to provide a level of services in an annexed area that
 19-2    is equal or superior to the level of services provided within the
 19-3    corporate boundaries of the municipality before annexation.  To the
 19-4    extent of any conflict between this subsection and Subsection (g),
 19-5    Subsection (g) prevails.
 19-6          SECTION 7.  Subchapter C, Chapter 43, Local Government Code,
 19-7    is amended by renumbering Section 43.0561 as Section 43.0566 and
 19-8    Section 43.0565 as Section 43.0567 and adding Sections 43.0561,
 19-9    43.0562, 43.0563,  43.0564, and 43.0565 to read as follows:
19-10          Sec. 43.0561.  ANNEXATION HEARING REQUIREMENTS.  (a)  Before
19-11    a municipality may institute annexation proceedings, the governing
19-12    body of the municipality must conduct two public hearings at which
19-13    persons interested in the annexation are given the opportunity to
19-14    be heard.  The hearings must be conducted not later than the 90th
19-15    day after the date the inventory is available for inspection.
19-16          (b)  At least one of the hearings must be held in the area
19-17    proposed for annexation if a suitable site is reasonably available
19-18    and more than 20 adults who are permanent residents of the area
19-19    file a written protest of the annexation with the secretary of the
19-20    municipality within 10 days after the date of the publication of
19-21    the notice required by this section.  The protest must state the
19-22    name, address, and age of each protester who signs.  If a suitable
19-23    site is not reasonably available in the area proposed for
19-24    annexation, the hearing may be held outside the area proposed for
19-25    annexation if the hearing is held in the nearest suitable public
19-26    facility.
19-27          (c)  The municipality must publish notice of the hearings in
 20-1    a newspaper of general circulation in the municipality and in the
 20-2    area proposed for annexation.  The notice for each hearing must be
 20-3    published at least once on or after the 20th day but before the
 20-4    10th day before the date of the hearing.  The municipality must
 20-5    give additional notice by certified mail to:
 20-6                (1)  each public entity, as defined by Section 43.053,
 20-7    and utility service provider that provides services in the area
 20-8    proposed for annexation; and
 20-9                (2)  each railroad company that serves the municipality
20-10    and is on the municipality's tax roll if the company's right-of-way
20-11    is in the area proposed for annexation.
20-12          Sec. 43.0562.  NEGOTIATIONS REQUIRED.  (a)  After holding the
20-13    hearings as provided by Section 43.0561:
20-14                (1)  if a municipality has a population of less than
20-15    1.6 million, the municipality and the property owners of the area
20-16    proposed for annexation shall negotiate for the provision of
20-17    services to the area after annexation or for the provision of
20-18    services to the area in lieu of annexation under Section 43.0563;
20-19    or
20-20                (2)  if a municipality proposes to annex a special
20-21    district as that term is defined by Section 43.052, the
20-22    municipality and the governing body of the district shall negotiate
20-23    for the provision of services to the area after annexation or for
20-24    the provision of services to the area in lieu of annexation under
20-25    Section 43.0751.
20-26          (b)  For purposes of negotiations under Subsection (a)(1),
20-27    the commissioners court of the county in which the area proposed
 21-1    for annexation is located shall select five representatives to
 21-2    negotiate with the municipality for the provision of services to
 21-3    the area after annexation.  If the area proposed for annexation is
 21-4    located in more than one county, the commissioners court of the
 21-5    county in which the greatest number of residents reside shall
 21-6    select three representatives to negotiate with the municipality,
 21-7    and the commissioners courts of the remaining counties jointly
 21-8    shall select two representatives to negotiate with the
 21-9    municipality.
21-10          (c)  For purposes of negotiations under Subsection (a)(2), if
21-11    more than one special district is located in the area proposed for
21-12    annexation, the governing boards of the districts may jointly
21-13    select five representatives to negotiate with the municipality on
21-14    behalf of all the affected districts.
21-15          Sec. 43.0563.  CONTRACTS FOR PROVISION OF SERVICES IN LIEU OF
21-16    ANNEXATION.  (a)  The governing body of a municipality with a
21-17    population of less than 1.6 million may negotiate and enter into a
21-18    written agreement with representatives designated under Section
21-19    43.0562(a)(1) for the provision of services and the funding of the
21-20    services in the area.  The agreement may also include an agreement
21-21    related to permissible land uses and compliance with municipal
21-22    ordinances.
21-23          (b)  An agreement under this section is in lieu of annexation
21-24    by the municipality of the area.
21-25          (c)  In negotiating an agreement under this section, the
21-26    parties may agree to:
21-27                (1)  any term allowed under Section 42.044 or 43.0751,
 22-1    regardless of whether the municipality or the area proposed for
 22-2    annexation would have been able to agree to the term under Section
 22-3    42.044 or 43.0751; and
 22-4                (2)  any other term to which both parties agree to
 22-5    satisfactorily resolve any dispute between the parties, including
 22-6    the creation of any type of special district otherwise allowed by
 22-7    state law.
 22-8          Sec. 43.0564.  ARBITRATION REGARDING NEGOTIATIONS FOR
 22-9    SERVICES.  (a)  If the municipality and the representatives of the
22-10    area proposed for annexation cannot reach an agreement for  the
22-11    provision of services under Section 43.0562 or if the municipality
22-12    and the property owner representatives cannot reach an agreement
22-13    for the provision of services in lieu of annexation under Section
22-14    43.0563, either party by majority decision of the party's
22-15    representatives may request the appointment of an arbitrator to
22-16    resolve the service plan issues in dispute.  The request must be
22-17    made in writing to the other party before the 60th day after the
22-18    date the service plan is completed under Section 43.056.  The
22-19    municipality may not annex the area under another section of this
22-20    chapter during the pendency of the arbitration proceeding or an
22-21    appeal from the arbitrator's decision.
22-22          (b)  The parties to the dispute may agree on the appointment
22-23    of an arbitrator.  If the parties cannot agree on the appointment
22-24    of an arbitrator before the 11th business day after the date
22-25    arbitration is requested, the mayor of the municipality shall
22-26    immediately request a list of seven neutral arbitrators from the
22-27    American Arbitration Association or the Federal Mediation and
 23-1    Conciliation Service or their successors in function.  An
 23-2    arbitrator included in the list must be a resident of this state
 23-3    and may not be a resident of a county in which any part of the
 23-4    municipality or any part of the district proposed for annexation is
 23-5    located.  The parties to the dispute may agree on the appointment
 23-6    of an arbitrator included in the list.  If the parties cannot agree
 23-7    on the appointment of an arbitrator before the 11th business day
 23-8    after the date the list is provided to the parties, each party or
 23-9    the party's designee may alternately strike a name from the list.
23-10    The remaining person on the list shall be appointed as the
23-11    arbitrator.  In this subsection, "business day" means a day other
23-12    than a Saturday, Sunday, or state or national holiday.
23-13          (c)  The arbitrator shall:
23-14                (1)  set a hearing to be held not later than the 10th
23-15    day after the date the arbitrator is appointed; and
23-16                (2)  notify the parties to the arbitration in writing
23-17    of the time and place of the hearing not later than the eighth day
23-18    before the date of the hearing.
23-19          (d)  The authority of the arbitrator is limited to issuing a
23-20    decision relating only to the service plan issues in dispute.
23-21          (e)  The arbitrator may:
23-22                (1)  receive in evidence any documentary evidence or
23-23    other information the arbitrator considers relevant;
23-24                (2)  administer oaths; and
23-25                (3)  issue subpoenas to require:
23-26                      (A)  the attendance and testimony of witnesses;
23-27    and
 24-1                      (B)  the production of books, records, and other
 24-2    evidence relevant to an issue presented to the arbitrator for
 24-3    determination.
 24-4          (f)  Unless the parties to the dispute agree otherwise the
 24-5    arbitrator shall complete the hearing within two consecutive days.
 24-6    The arbitrator shall permit each party one day to present evidence
 24-7    and other information.  The arbitrator, for good cause shown, may
 24-8    schedule an additional hearing to be held not later than the
 24-9    seventh day after the date of the first hearing.  Unless otherwise
24-10    agreed to by the parties, the arbitrator must issue a decision in
24-11    writing and deliver a copy of the decision to the parties not later
24-12    than the 14th day after the date of the final hearing.
24-13          (g)  Either party may appeal any provision of an arbitrator's
24-14    decision that exceeds the authority granted under Subsection (d) to
24-15    a district court in a county in which the area proposed for
24-16    annexation is located.
24-17          (h)  If the municipality does not agree with the terms of the
24-18    arbitrator's decision, the municipality may not annex the area
24-19    proposed for annexation before the fifth anniversary of the date of
24-20    the arbitrator's decision.
24-21          (i)  Except as provided by this subsection, the municipality
24-22    shall pay the cost of arbitration.   If the arbitrator finds that
24-23    the request for arbitration submitted by the representatives of the
24-24    area proposed for annexation was groundless or requested in bad
24-25    faith or for the purposes of harassment, the arbitrator may require
24-26    the area proposed for annexation to pay all or part of the cost of
24-27    arbitration.
 25-1          Sec. 43.0565.  ARBITRATION REGARDING ENFORCEMENT OF SERVICE
 25-2    PLAN.  (a)  A person who requests arbitration as provided by
 25-3    Section 43.056(l) must request the appointment of an arbitrator in
 25-4    writing to the municipality.
 25-5          (b)  Sections 43.0564(b), (c), and (e) apply to appointment
 25-6    of an arbitrator and the conduct of an arbitration proceeding under
 25-7    this section.
 25-8          (c)  In an arbitration proceeding under this section, the
 25-9    municipality has the burden of proving that the municipality is in
25-10    compliance with the service plan requirements.
25-11          (d)  If the arbitrator finds that the municipality has not
25-12    complied with the service plan requirements:
25-13                (1)  the municipality may disannex the area before the
25-14    31st day after the date the municipality receives a copy of the
25-15    arbitrator's decision; and
25-16                (2)  the arbitrator may:
25-17                      (A)  require the municipality to comply with the
25-18    service plan in question before a reasonable date specified by the
25-19    arbitrator if the municipality does not disannex the area;
25-20                      (B)  require the municipality to refund to the
25-21    landowners of the annexed area money collected by the municipality
25-22    from those landowners for services to the area that were not
25-23    provided; and
25-24                      (C)  require the municipality to pay the costs of
25-25    arbitration, including the reasonable attorney's fees and
25-26    arbitration costs of the person requesting arbitration.
25-27          (e)  If the arbitrator finds that the municipality has
 26-1    complied with the service plan requirements, the arbitrator may
 26-2    require the person requesting arbitration to pay all or part of the
 26-3    cost of arbitration, including the reasonable attorney's fees of
 26-4    the municipality.
 26-5          Sec. 43.0566 [43.0561].  RELEASE OF EXTRATERRITORIAL
 26-6    JURISDICTION BY GENERAL LAW MUNICIPALITY OVER CERTAIN TRACTS OF
 26-7    LAND.  (a)  This section applies only to a tract of property that
 26-8    is:
 26-9                (1)  40 or more acres in size;
26-10                (2)  located entirely in a county with a population of
26-11    more than 260,000; and
26-12                (3)  located in the extraterritorial jurisdiction of a
26-13    general law municipality with a population of more than 1,000 but
26-14    less than 2,500 that provides water but not sewer services.
26-15          (b)  The owner of a tract of land to which this section
26-16    applies that is adjacent to the corporate limits of another
26-17    municipality may petition the governing body of that other
26-18    municipality for annexation.  On receipt of a petition, the
26-19    municipality may annex the area if the municipality agrees to a
26-20    service plan that provides both water and sewer services to the
26-21    tract not later than 3 1/2 years after the date of the annexation.
26-22    On annexation, the area is released from the extraterritorial
26-23    jurisdiction of the municipality described by Subsection (a)(3) and
26-24    becomes a part of the municipality agreeing to provide water and
26-25    sewer services.
26-26          (c)  This section expires March 31, 1996, unless there is
26-27    litigation pending at that time involving the validity of the
 27-1    annexation of a tract of land to which this section applies.  If
 27-2    litigation is pending, this section remains in effect until a court
 27-3    enters a final judgment in the case.
 27-4          Sec. 43.0567 [43.0565].  PROVISION OF WATER OR SEWER SERVICE
 27-5    IN POPULOUS MUNICIPALITY.  (a)  The requirements of this section
 27-6    are in addition to those prescribed by Section 43.056.
 27-7          (b)  A municipality with a population of more than 1.6 [1.5]
 27-8    million that includes within its boundaries annexed areas without
 27-9    water service, sewer service, or both:
27-10                (1)  shall develop a service plan that:
27-11                      (A)  must identify developed tracts in annexed
27-12    areas of the municipality that do not have water service, sewer
27-13    service, or both and must provide a procedure for providing water
27-14    service, sewer service, or both to those developed tracts;
27-15                      (B)  must establish a timetable for providing
27-16    service based on a priority system that considers potential health
27-17    hazards, population density, the number of existing buildings, the
27-18    reasonable cost of providing service, and the desires of the
27-19    residents;
27-20                      (C)  must include a capital improvements plan
27-21    committing the necessary financing;
27-22                      (D)  may relieve the municipality from an
27-23    obligation to provide water service, sewer service, or both in an
27-24    area described in the service plan if a majority of the households
27-25    in the area sign a petition stating they do not want to receive the
27-26    services;  and
27-27                      (E)  may require property owners to connect to
 28-1    service lines constructed to serve their area;
 28-2                (2)  shall provide water service, sewer service, or
 28-3    both to at least 75 percent of the residential buildings in annexed
 28-4    areas of the municipality that did not have water service, sewer
 28-5    service, or both on September 1, 1991;
 28-6                (3)  shall provide water service to each area annexed
 28-7    before January 1, 1993, if the area or subdivision as described in
 28-8    the service plan contains at least 25 residences without water
 28-9    service, unless a majority of the households in the area state in a
28-10    petition that they do not want municipal water service;  and
28-11                (4)  is subject to the penalty prescribed by Section
28-12    5.235(n)(6), Water Code, for the failure to provide services.
28-13          SECTION 8.  Chapter 43, Local Government Code, is amended by
28-14    adding Subchapter C-1 to read as follows:
28-15       SUBCHAPTER C-1.  ANNEXATION PROCEDURE FOR AREAS EXEMPTED FROM
28-16                         MUNICIPAL ANNEXATION PLAN
28-17          Sec. 43.061.  APPLICABILITY.  This subchapter applies to an
28-18    area proposed for annexation that is not required to be included in
28-19    a municipal annexation plan under Section 43.052.
28-20          Sec. 43.062.  PROCEDURES APPLICABLE.  Sections 43.051,
28-21    43.054, 43.0545, 43.055, 43.0567, and 43.057 apply to the
28-22    annexation of an area to which this subchapter applies.
28-23          Sec. 43.063.  ANNEXATION HEARING REQUIREMENTS.  (a)  Before a
28-24    municipality may institute annexation proceedings, the governing
28-25    body of the municipality must conduct two public hearings at which
28-26    persons interested in the annexation are given the opportunity to
28-27    be heard.  The hearings must be conducted on or after the 40th day
 29-1    but before the 20th day before the date of the institution of the
 29-2    proceedings.
 29-3          (b)  At least one of the hearings must be held in the area
 29-4    proposed for annexation if a suitable site is reasonably available
 29-5    and more than 10 percent of the adults who are permanent residents
 29-6    of the area file a written protest of the annexation with the
 29-7    secretary of the municipality within 10 days after the date of the
 29-8    publication of the notice required by this section.  The protest
 29-9    must state the name, address, and age of each protester who signs.
29-10          (c)  The municipality must publish notice of the hearings in
29-11    a newspaper of general circulation in the municipality and in the
29-12    area proposed for annexation.  The notice for each hearing must be
29-13    published at least once on or after the 20th day but before the
29-14    10th day before the date of the hearing.  The municipality must
29-15    give additional notice by certified mail to each railroad company
29-16    that serves the municipality and is on the municipality's tax roll
29-17    if the company's right-of-way is in the area proposed for
29-18    annexation.
29-19          Sec. 43.064.  PERIOD FOR COMPLETION OF ANNEXATION; EFFECTIVE
29-20    DATE.  (a)  The annexation of an area must be completed within 90
29-21    days after the date the governing body institutes the annexation
29-22    proceedings or those proceedings are void.  Any period during which
29-23    the municipality is restrained or enjoined by a court from annexing
29-24    the area is not included in computing the 90-day period.
29-25          (b)  Notwithstanding any provision of a municipal charter to
29-26    the contrary, the governing body of a municipality with a
29-27    population of 1.6 million or more may provide that an annexation
 30-1    take effect on any date within 90 days after the date of the
 30-2    adoption of the ordinance providing for the annexation.
 30-3          Sec. 43.065.  PROVISION OF SERVICES TO ANNEXED AREA.
 30-4    (a)  Before the publication of the notice of the first hearing
 30-5    required under Section 43.063, the governing body of the
 30-6    municipality proposing the annexation shall direct its planning
 30-7    department or other appropriate municipal department to prepare a
 30-8    service plan that provides for the extension of full municipal
 30-9    services to the area to be annexed.  The municipality shall provide
30-10    the services by any of the methods by which it extends the services
30-11    to any other area of the municipality.
30-12          (b)  Sections 43.056(b)-(m) apply to the annexation of an
30-13    area to which this subchapter applies.
30-14          SECTION 9.  Section 43.0751, Local Government Code, is
30-15    amended by amending Subsections (b) and (k) and adding Subsections
30-16    (o) and (p) to read as follows:
30-17          (b)  The governing bodies of a municipality and a district
30-18    may [shall] negotiate and [may] enter into a written strategic
30-19    partnership agreement for the district by mutual consent.  The
30-20    governing body of a municipality, on written request from a
30-21    district included in the municipality's annexation plan under
30-22    Section 43.052, shall negotiate and enter into a written strategic
30-23    partnership agreement with the district  [bodies of the
30-24    municipality and the district shall evidence their intention to
30-25    negotiate such an agreement by resolution, each of which
30-26    resolutions shall specify an expiration date if the other governing
30-27    body fails to adopt a resolution under this section on or before
 31-1    the specified date.  The governing body of a municipality that has
 31-2    evidenced its intention by unexpired resolution to enter into
 31-3    negotiations with a district for an agreement under this section
 31-4    may not initiate proceedings to annex the district under any other
 31-5    section of this code prior to the expiration of two years after the
 31-6    adoption date of the resolution unless the municipality has
 31-7    previously instituted annexation proceedings in granting consent to
 31-8    the creation of the district prior to January 1, 1995].
 31-9          (k)  A municipality that has annexed all or part of a
31-10    district for limited purposes under this section may impose a
31-11    retail sales tax within the boundaries of the part of the district
31-12    that is annexed for limited purposes.
31-13          (o)  If a municipality required to negotiate with a district
31-14    under this section and the requesting  district fail to agree on
31-15    the terms of a strategic partnership agreement, either party may
31-16    seek binding arbitration of the issues relating to the agreement in
31-17    dispute under Section 43.0752.
31-18          (p)  An agreement under this section:
31-19                (1)  may not require the district to provide revenue to
31-20    the municipality solely for the purpose of obtaining an agreement
31-21    with the municipality to forgo annexation of the district; and
31-22                (2)  must provide benefits to each party, including
31-23    revenue, services, and regulatory benefits, that must be reasonable
31-24    and equitable with regard to the benefits provided by the other
31-25    party.
31-26          SECTION 10.  Subchapter D, Chapter 43, Local Government Code,
31-27    is amended by adding Section 43.0752 to read as follows:
 32-1          Sec. 43.0752.  ARBITRATION OF STRATEGIC PARTNERSHIP
 32-2    AGREEMENT.  (a)  If the municipality and the district cannot reach
 32-3    an agreement on the terms of a strategic partnership agreement
 32-4    under Section 43.0751, either party may request the appointment of
 32-5    an arbitrator to resolve the issues in dispute.  The request must
 32-6    be made in writing to the other party before the 60th day after the
 32-7    date the district submits its written request for negotiations
 32-8    under Section 43.0751(b).  The municipality may not annex the
 32-9    district under another section of this chapter during the pendency
32-10    of the arbitration proceeding or an appeal from the arbitrator's
32-11    decision.
32-12          (b)  Sections 43.0564(b), (c), (e), (f), (g), and (h) apply
32-13    to appointment of an arbitrator and the conduct of an arbitration
32-14    proceeding under this section.
32-15          (c)  The authority of the arbitrator is limited to
32-16    determining whether the offer of a party complies with Section
32-17    43.0751(p).
32-18          (d)  If the arbitrator finds that an offer complies with
32-19    Section 43.0751(p), the arbitrator may issue a decision that
32-20    incorporates the offer as part of the strategic partnership
32-21    agreement.
32-22          (e)  The municipality and the district shall equally pay the
32-23    costs of arbitration.
32-24          SECTION 11.  Section 43.121(a), Local Government Code, is
32-25    amended to read as follows:
32-26          (a)  The governing body of a home-rule municipality with more
32-27    than 225,000 inhabitants[, if authorized under its home-rule
 33-1    charter,] by ordinance may annex an area for the limited purposes
 33-2    of applying its planning, zoning, health, and safety ordinances in
 33-3    the area.
 33-4          SECTION 12.  Section 43.141(c), Local Government Code, is
 33-5    amended to read as follows:
 33-6          (c)  If the area is disannexed under this section, it may not
 33-7    be annexed again within 10 [five] years after the date of the
 33-8    disannexation.  [If it is reannexed within seven years after the
 33-9    date of the disannexation, a service plan for the area must be
33-10    implemented not later than one year after the date of the
33-11    reannexation.]
33-12          SECTION 13.  Subchapter G, Chapter 43, Local Government Code,
33-13    is amended by adding Section 43.148 to read as follows:
33-14          Sec. 43.148.  REFUND OF TAXES AND FEES.  (a) If an area is
33-15    disannexed, the municipality disannexing the area shall refund to
33-16    the landowners of the area the amount of money collected by the
33-17    municipality in property taxes and fees from those landowners
33-18    during the period that the area was a part of the municipality less
33-19    the amount of money that the municipality spent for the direct
33-20    benefit of the area during that period.
33-21          (b)  A municipality shall proportionately refund the amount
33-22    under Subsection (a) to the landowners according to a method to be
33-23    developed by the municipality that identifies each landowner's
33-24    approximate pro rata payment of the taxes and fees being refunded.
33-25          (c)  A municipality required to refund money under this
33-26    section shall refund the money to current landowners in the area
33-27    not later than the 180th day after the date the area is disannexed.
 34-1    Money that is not refunded within the period prescribed by this
 34-2    subsection accrues interest at the rate of:
 34-3                (1)  six percent each year after the 180th day and
 34-4    until the 210th day after the date the area is disannexed; and
 34-5                (2)  one percent each month after the 210th day after
 34-6    the date the area is disannexed.
 34-7          SECTION 14.  Subchapter Z, Chapter 43, Local Government Code,
 34-8    is amended by adding Section 43.905 to read as follows:
 34-9          Sec. 43.905.  EFFECT OF ANNEXATION ON OPERATION OF SCHOOL
34-10    DISTRICT.  (a)  A municipality that proposes to annex an area shall
34-11    provide written notice of the proposed annexation to each public
34-12    school district located in the area proposed for annexation within
34-13    the time period prescribed for publishing the notice of the first
34-14    hearing under Section 43.0561 or 43.063, as applicable.
34-15          (b)  A notice to a public school district shall contain a
34-16    description of:
34-17                (1)  the area within the district proposed for
34-18    annexation;
34-19                (2)  any financial impact on the district resulting
34-20    from the annexation, including any changes in utility costs; and
34-21                (3)  any proposal the municipality has to abate,
34-22    reduce, or limit any financial impact on the district.
34-23          (c)  The municipality may not proceed with the annexation
34-24    unless the municipality provides the required notice.
34-25          (d)  A municipality that has annexed any portion of an area
34-26    after December 1, 1996, and before September 1, 1999, in which a
34-27    school district has a facility shall grant a variance from the
 35-1    municipality's building code for that facility if the facility does
 35-2    not comply with the code.
 35-3          (e)  A municipality that, as a result of the annexation,
 35-4    provides utility services to a school district facility may charge
 35-5    the district for utility services at:
 35-6                (1)  the same rate that the district was paying before
 35-7    the annexation; or
 35-8                (2)  a lower municipal rate.
 35-9          (f)  A rate set under Subsection (e) is effective until the
35-10    first day of the school district's fiscal year that begins after
35-11    the 90th day after the effective date of the annexation.
35-12          SECTION 15.  Subchapter A, Chapter 5, Property Code, is
35-13    amended by adding Section 5.012 to read as follows:
35-14          Sec. 5.012.  SELLER'S DISCLOSURE REGARDING POTENTIAL
35-15    ANNEXATION.  (a)  A person who sells an interest in real property
35-16    in this state shall give to the purchaser of the property a written
35-17    notice that reads substantially similar to the following:
35-18                   NOTICE REGARDING POSSIBLE ANNEXATION
35-19                If the property that is the subject of this
35-20          contract is located outside the limits of a
35-21          municipality, the property may now or later be included
35-22          in the extraterritorial jurisdiction of a municipality
35-23          and may now or later be subject to annexation by the
35-24          municipality.  Each municipality maintains a map that
35-25          depicts its boundaries and extraterritorial
35-26          jurisdiction.  To determine if the property is located
35-27          within a municipality's extraterritorial jurisdiction
 36-1          or is likely to be located within a municipality's
 36-2          extraterritorial jurisdiction, contact all
 36-3          municipalities located in the general proximity of the
 36-4          property for further information.
 36-5          (b)  The seller shall deliver the notice to the purchaser
 36-6    before the date the executory contract binds the purchaser to
 36-7    purchase the property.  The notice may be given separately, as part
 36-8    of the contract during negotiations, or as part of any other notice
 36-9    the seller delivers to the purchaser.
36-10          (c)  This section does not apply to a transfer:
36-11                (1)  under a court order or foreclosure sale;
36-12                (2)  by a trustee in bankruptcy;
36-13                (3)  to a mortgagee by a mortgagor or successor in
36-14    interest or to a beneficiary of a deed of trust by a trustor or
36-15    successor in interest;
36-16                (4)  by a mortgagee or a beneficiary under a deed of
36-17    trust who has acquired the land at a sale conducted under a power
36-18    of sale under a deed of trust or a sale under a court-ordered
36-19    foreclosure or has acquired the land by a deed in lieu of
36-20    foreclosure;
36-21                (5)  by a fiduciary in the course of the administration
36-22    of a decedent's estate, guardianship, conservatorship, or trust;
36-23                (6)  from one co-owner to another co-owner of an
36-24    undivided interest in the real property;
36-25                (7)  to a spouse or a person in the lineal line of
36-26    consanguinity of the seller;
36-27                (8)  to or from a governmental entity;
 37-1                (9)  of only a mineral interest, leasehold interest, or
 37-2    security interest; or
 37-3                (10)  of real property that is located wholly within a
 37-4    municipality's corporate boundaries.
 37-5          (d)  If the notice is delivered as provided by this section,
 37-6    the seller has no duty to provide additional information regarding
 37-7    the possible annexation of the property by a municipality.
 37-8          (e)  If an executory contract is entered into without the
 37-9    seller providing the notice required by this section, the purchaser
37-10    may terminate the contract for any reason within the earlier of:
37-11                (1)  seven days after the date the purchaser receives
37-12    the notice; or
37-13                (2)  the date the transfer occurs.
37-14          SECTION 16.  (a)  This Act takes effect September 1, 1999,
37-15    except that Section 15 of this Act takes effect January 1, 2000.
37-16          (b)  Each municipality shall adopt an annexation plan as
37-17    required by Section 43.052, Local Government Code, as amended by
37-18    this Act, on or before December 31, 1999, that becomes effective
37-19    December 31, 1999.
37-20          (c)  Except as provided by Subsection (d) of this section,
37-21    the changes in law made by Sections 2 through 7 and 9 through 13 of
37-22    this Act apply only to an annexation included in a municipality's
37-23    annexation plan prepared under Section 43.052, Local Government
37-24    Code, as amended by this Act.  Except as provided by Subsection (d)
37-25    of this section, a municipality may continue to annex any area
37-26    during the period beginning December 31, 1999, and ending December
37-27    31, 2002, under Chapter 43, Local Government Code, as it existed
 38-1    immediately before September 1, 1999, if the area is not included
 38-2    in the annexation plan, and the former law is continued in effect
 38-3    for that purpose.
 38-4          (d)  The changes in law made by this Act in Sections 43.002,
 38-5    43.0545, 43.056(b), (c), (e), (f), (g), (l), and (m), 43.121(a),
 38-6    43.141(c), 43.148, and 43.905, Local Government Code, as added or
 38-7    amended by this Act, apply to the annexation of an area that is not
 38-8    included in the municipality's annexation plan during the period
 38-9    beginning December 31, 1999, and ending December 31, 2002, if the
38-10    first hearing notice required by Section 43.052, Local Government
38-11    Code, as it existed immediately before September 1, 1999, is
38-12    published on or after that date.
38-13          (e)  The changes in law made by this Act in Sections 43.002,
38-14    43.0545, 43.056(b), (c), (e), (f), (g), (l), and (m), 43.121(a),
38-15    43.141(c), 43.148, and 43.905, Local Government Code, as added or
38-16    amended by this Act, apply only to the annexation of an area that
38-17    is not required to be included in a municipal annexation plan under
38-18    Section 43.052, Local Government Code, as amended by this Act, if
38-19    the first hearing notice required by Section 43.063, Local
38-20    Government Code, as added by this Act, is published on or after
38-21    September 1, 1999.
38-22          (f)  The change in law made by Section 1 of this Act applies
38-23    only to:
38-24                (1)  an annexation included in a municipality's
38-25    annexation plan prepared under Section 43.052, Local Government
38-26    Code, as amended by this Act; and
38-27                (2)  an annexation of an area that is not included in
 39-1    the municipality's annexation plan during the period beginning
 39-2    December 31, 1999, and ending December 31, 2002, if the first
 39-3    hearing notice required by Section 43.052, Local Government Code,
 39-4    as it existed immediately before September 1, 1999, is published on
 39-5    or after that date.
 39-6          (g)  The change in law made by Section 15 of this Act applies
 39-7    only to a transfer of property that occurs on or after January 1,
 39-8    2000.  For purposes of this section, a transfer of property occurs
 39-9    before January 1, 2000, if the executory contract binding the
39-10    purchaser to purchase the property is executed before that date.
39-11    Property transferred before January 1, 2000, is covered by the law
39-12    in effect when the property was transferred, and the former law is
39-13    continued in effect for that purpose.
39-14          SECTION 17.  The importance of this legislation and the
39-15    crowded condition of the calendars in both houses create an
39-16    emergency and an imperative public necessity that the
39-17    constitutional rule requiring bills to be read on three several
39-18    days in each house be suspended, and this rule is hereby suspended.