By Swinford, et al. H.B. No. 1880 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, operation, and administration of 1-3 agricultural development districts and granting the power of 1-4 eminent domain and the authority to issue bonds. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 4, Agriculture Code, is amended by adding 1-7 Chapter 60 to read as follows: 1-8 CHAPTER 60. TEXAS AGRICULTURAL DEVELOPMENT DISTRICTS 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 60.001. SHORT TITLE. This chapter may be cited as the 1-11 Agricultural Development District Act. 1-12 Sec. 60.002. LEGISLATIVE INTENT. This chapter furthers the 1-13 public purpose of improving the economy of this state by providing 1-14 incentives for the development of agricultural operations and 1-15 facilities. 1-16 Sec. 60.003. FINDINGS. (a) Agriculture is a critical 1-17 element in Texas' economic, cultural, and historical development 1-18 but is under considerable pressure as a result of market 1-19 concentration, competitive forces, adverse weather conditions, 1-20 urbanization, and other factors. 1-21 (b) Agriculture is a vital component of a diversified state 1-22 economy, creates numerous economic opportunities, and serves to 1-23 renew the state's natural resources through the annual production 1-24 of crops and livestock and the use and reuse of agricultural 2-1 by-products. 2-2 (c) The state must increase economic opportunities, 2-3 including value-added operations, to keep more agriculture-based 2-4 activity in the state and ensure that agriculture remains a vital 2-5 force in the economy. In order to accomplish this goal, the state 2-6 must provide incentives to promote the development of agricultural 2-7 facilities. 2-8 (d) The means and measures authorized by this chapter are in 2-9 the public interest and serve a public purpose of this state in 2-10 promoting the development of agricultural facilities and operations 2-11 by providing incentives for the development of projects that result 2-12 in employment and economic activity. 2-13 (e) The creation of agricultural development districts is 2-14 essential to accomplish the purposes of Section 52-a, Article III, 2-15 Texas Constitution, and to accomplish the other public purposes 2-16 stated in this chapter and further serves the purposes of Section 2-17 59, Article XVI, and Section 52, Article III, Texas Constitution. 2-18 Sec. 60.004. DEFINITIONS. In this chapter: 2-19 (1) "Assessment" means a charge levied against real 2-20 property located within a district's boundaries or against an 2-21 agricultural product produced on real property in the district to 2-22 pay the costs associated with the district's purposes, including a 2-23 reassessment or supplemental assessment. 2-24 (2) "Board" means the board of directors of a 2-25 district. 2-26 (3) "Bond" means an obligation issued by a district 2-27 under this chapter, including a bond, certificate, note, or other 3-1 evidence of indebtedness. 3-2 (4) "Director" means a member of the board of 3-3 directors of a district. 3-4 (5) "District" means a Texas Agricultural Development 3-5 District established under this chapter. 3-6 (6) "Project" means an agricultural project designated 3-7 under Section 60.054. 3-8 Sec. 60.005. GOVERNMENTAL AGENCY; TORT CLAIMS. A district is 3-9 a governmental agency, a body politic and corporate, and a 3-10 political subdivision of this state. Section 375.004, Local 3-11 Government Code, applies to a district. 3-12 Sec. 60.006. PURPOSE AND NATURE OF DISTRICT. (a) A district 3-13 is created as a conservation and reclamation district under Section 3-14 59, Article XVI, Texas Constitution, to conserve and develop the 3-15 natural resources of this state, including agricultural resources. 3-16 (b) A district created under this chapter exercises public 3-17 and essential governmental functions. 3-18 (c) Chapter 49, Water Code, does not apply to a district, 3-19 except as provided by Section 60.061. 3-20 (d) The creation of a district is essential to accomplish 3-21 the purposes of Section 52-a, Article III, Texas Constitution, and 3-22 other public purposes stated in this chapter. 3-23 (Sections 60.007-60.020 reserved for expansion 3-24 SUBCHAPTER B. CREATION OF DISTRICT 3-25 Sec. 60.021. PETITION TO ESTABLISH DISTRICT. (a) On 3-26 petition of at least 10 residents of a proposed district, five of 3-27 whom must own real property in the proposed district, the 4-1 commissioners court of a county in which an agricultural facility 4-2 of the proposed district is to be located may commence the creation 4-3 of a district. 4-4 (b) The creation of the district is subject to a 4-5 confirmation election held as provided by this subchapter. 4-6 (c) A district may consist of parcels of land that are: 4-7 (1) not contiguous; and 4-8 (2) located in one or more counties. 4-9 (d) Not later than the 10th day following the date of 4-10 receipt of a petition, the commissioners court shall provide notice 4-11 of the receipt of the petition and a copy of the petition to: 4-12 (1) the commissioners court of each other county 4-13 located in whole or in part in the proposed district; and 4-14 (2) the governing body of each municipality located in 4-15 whole or in part in the proposed district. 4-16 (e) No part of a proposed district may be located within the 4-17 corporate boundaries of a municipality unless, prior to the 4-18 formation of the district, the governing body of the municipality 4-19 consents in writing to the formation of the district within the 4-20 municipality. 4-21 Sec. 60.022. CONTENTS OF PETITION. A petition filed under 4-22 Section 60.021 must: 4-23 (1) describe the boundaries of the proposed district 4-24 by metes and bounds or by lot and block number, if there is a 4-25 recorded map or plat and survey of the area; 4-26 (2) include a name for the proposed district, which 4-27 must include the term "Agricultural Development District"; 5-1 (3) be signed by the landowners of any land to be 5-2 included within the proposed district and provide an acknowledgment 5-3 consistent with Section 121.001, Civil Practice and Remedies Code, 5-4 that the landowners desire the land to be included in the district; 5-5 (4) include the names of at least five persons who are 5-6 willing and qualified to serve as temporary directors of the 5-7 district; 5-8 (5) name each county in which any agricultural 5-9 facilities to be owned by the district are to be located; 5-10 (6) name each municipality in which any part of the 5-11 district is to be located; 5-12 (7) state the general nature of the proposed 5-13 development and the cost of the development as then estimated by 5-14 the petitioners; 5-15 (8) state the necessity and feasibility of the 5-16 proposed district and whether the district will serve the public 5-17 purpose of furthering agricultural interests; 5-18 (9) include a pledge that the district will make 5-19 payments in lieu of taxes to any school district and county in 5-20 which any real property to be owned by the district is located, as 5-21 follows: 5-22 (A) annual payments to each entity equal to the 5-23 amount of taxes imposed on the real property by the entity in the 5-24 year of the district's creation; and 5-25 (B) a payment to each entity equal to the amount 5-26 that would be due under Section 23.55, Tax Code, on the district's 5-27 date of creation; and 6-1 (10) include a pledge that, if the district employs 6-2 more than 50 persons, the district will make payments in lieu of 6-3 taxes to any school district, in addition to those made under 6-4 Subdivision (9), in an amount negotiated between the district and 6-5 the school district. 6-6 Sec. 60.023. COMMISSIONERS COURT TO CALL PUBLIC HEARING. 6-7 Before the 30th day after the date a petition is received, the 6-8 commissioners court shall call a public hearing at which the 6-9 petition will be considered. The notice of the hearing must state 6-10 that any person may appear and present evidence or testify for or 6-11 against the creation of the district. 6-12 Sec. 60.024. ADDITIONAL NOTICE OF PUBLIC HEARING. In 6-13 addition to other notice required by law, before the 14th day 6-14 before the date of the public hearing, notice of the hearing shall 6-15 be mailed to the persons who signed the petition and be published 6-16 in a newspaper with general circulation in the county with the most 6-17 land within the proposed district. 6-18 Sec. 60.025. PUBLIC HEARING. (a) At the public hearing, the 6-19 commissioners court shall examine the petition to ascertain its 6-20 sufficiency. 6-21 (b) Any interested person may appear at the public hearing 6-22 to offer evidence or testimony on the sufficiency of the petition 6-23 and whether the district should be created. 6-24 Sec. 60.026. ACTION ON PETITION. (a) After the hearing, if 6-25 the commissioners court finds that the petition conforms to the 6-26 requirements of Section 60.022 and that the creation of the 6-27 district and the proposed development is feasible and necessary and 7-1 would serve the public purpose of economic development in the 7-2 counties to be included in the district, the commissioners court 7-3 shall make that finding and enter an order granting the petition 7-4 and creating the district. 7-5 (b) The order may specify the cost of publishing notice and 7-6 conducting hearings for the creation of the district together with 7-7 the cost of conducting the confirmation election. A county may 7-8 require the petitioners to pay the county the appropriate amounts 7-9 specified in the order creating the district at the time the order 7-10 becomes final. 7-11 (c) If the commissioners court finds that the petition does 7-12 not conform to the requirements of Section 60.022 or that the 7-13 creation of the district and the proposed project is not feasible 7-14 and necessary and would not serve the public purpose of economic 7-15 development in the counties to be included in the district, the 7-16 commissioners court shall make that finding in an order and deny 7-17 the petition. 7-18 Sec. 60.027. TEMPORARY DIRECTORS; VACANCY IN OFFICE. (a) 7-19 If the commissioners court grants the petition, it shall appoint as 7-20 temporary directors of the district five persons who are qualified 7-21 under this chapter to serve as directors. 7-22 (b) A vacancy in the office of temporary directors shall be 7-23 filled by appointment by the commissioners court. 7-24 Sec. 60.028. QUALIFICATION AND BOND OF TEMPORARY DIRECTORS. 7-25 Each temporary director shall execute a bond in accordance with 7-26 Section 60.087 and shall take the oath of office. 7-27 Sec. 60.029. ELECTION TO CONFIRM DISTRICT AND INITIAL 8-1 PERMANENT DIRECTORS. The temporary board of directors shall 8-2 conduct an election in the district to confirm the creation of the 8-3 district and to confirm the initial permanent directors. 8-4 Sec. 60.030. ELECTION ORDER. An order calling an election 8-5 under Section 60.029 must state: 8-6 (1) the nature of the election, the proposition to 8-7 appear on the ballot, and the names of at least five persons to 8-8 serve as the initial permanent members of the board of directors; 8-9 (2) the number and terms of directors on the board and 8-10 the manner of selection of board members; 8-11 (3) the date of the election; 8-12 (4) the hours during which the polls will be open; and 8-13 (5) the location of the polling places. 8-14 Sec. 60.031. NOTICE. In addition to other notice required 8-15 by law, the temporary directors shall give notice of the election 8-16 by publishing the substance of the election order in a newspaper 8-17 with general circulation in the county in which the most land 8-18 within the proposed district is located. The notice must be 8-19 published before the 14th day before the date set for the election. 8-20 Sec. 60.032. CONDUCT OF ELECTION. (a) The election shall be 8-21 held in accordance with the Election Code, to the extent not 8-22 inconsistent with this chapter. 8-23 (b) The ballot shall be printed to permit: 8-24 (1) voting for or against the proposition: "The 8-25 creation of __________ Agricultural Development District and 8-26 confirmation of the initial permanent directors of the district"; 8-27 and 9-1 (2) naming of the proposed initial permanent 9-2 directors. 9-3 Sec. 60.033. ELECTION RESULTS. (a) After the election, the 9-4 presiding judge shall make returns of the result to the temporary 9-5 board of directors. The temporary board of directors shall canvass 9-6 the returns and declare the results. 9-7 (b) If a majority of the votes cast in the election favor 9-8 the creation of the district, the temporary board shall order the 9-9 district to be created and the persons named on the ballot to serve 9-10 as the initial permanent directors and shall enter the order in its 9-11 minutes. If a majority of the votes cast in the election do not 9-12 favor the creation of the district, the temporary board shall 9-13 declare the proposition to create the district as defeated and 9-14 enter the result in its minutes. 9-15 (c) A certified copy of the temporary board's order creating 9-16 the district or of the declaration that the proposition to create 9-17 the district was defeated shall be sent to the commissioners court 9-18 of each county included in the district by certified or registered 9-19 mail. The board shall include with the order or declaration the 9-20 date of the election, the ballot proposition, and the number of 9-21 votes cast for or against the proposition. A certified copy of the 9-22 order creating the district shall be filed in the real property 9-23 records in the county in which the district is located and shall 9-24 include the legal description of the district. 9-25 (d) In the event 10 or fewer votes are cast in the election, 9-26 not later than the 90th day following the date of the order 9-27 canvassing the election, the temporary board shall submit the 10-1 proceedings of the election, including voter affidavits as to 10-2 residency and qualification to vote, to the attorney general. 10-3 (Sections 60.034-60.050 reserved for expansion 10-4 SUBCHAPTER C. DISTRICT POWERS AND DUTIES 10-5 Sec. 60.051. GENERAL POWERS AND DUTIES. (a) A district has 10-6 the powers and duties that are prescribed by this chapter and that 10-7 are necessary or desirable to carry out a power or duty expressly 10-8 or implicitly granted to the district under this chapter. 10-9 (b) A district may own or implement more than one project 10-10 under this chapter. 10-11 (c) A district may merge with another district or districts 10-12 provided that the board of each district agrees to the merger. 10-13 (d) A district may perform acts necessary to carry out the 10-14 purposes of this chapter. 10-15 (e) A district may not impose an ad valorem tax. 10-16 (f) A district may make payments in lieu of taxes to a 10-17 school district or county in the manner provided by Sections 10-18 60.022(9) and (10). 10-19 (g) To the extent consistent with the purposes of this 10-20 chapter, a district may enter into an installment purchase contract 10-21 to acquire goods or services for the district. 10-22 Sec. 60.052. ECONOMIC DEVELOPMENT. A district may encourage 10-23 the economic development of the area in which the district is 10-24 located by: 10-25 (1) fostering the growth of agricultural enterprises; 10-26 (2) stimulating innovation in agricultural 10-27 enterprises; 11-1 (3) seeking to eliminate unemployment or 11-2 underemployment in the state; and 11-3 (4) developing or expanding transportation resources 11-4 for agricultural purposes. 11-5 Sec. 60.053. AGRICULTURAL DEVELOPMENT. (a) A district may: 11-6 (1) promote all agricultural enterprises, facilities, 11-7 and services of the district; 11-8 (2) encourage the maintenance and conservation of soil 11-9 and water in the district; 11-10 (3) acquire, design, construct, and operate an 11-11 agricultural enterprise; and 11-12 (4) expand, develop, and diversify production, 11-13 processing, marketing, and export of Texas agricultural products. 11-14 (b) A district may acquire property as necessary, including 11-15 vehicles, farm equipment, and other machinery and related 11-16 facilities for the harvesting, processing, storage, packaging, 11-17 distribution, and transportation of agricultural products or 11-18 by-products. 11-19 Sec. 60.054. AGRICULTURAL PROJECTS; NOTICE. (a) The 11-20 district shall designate as an agricultural project a project that 11-21 relates to the development of agriculture in the district and 11-22 surrounding areas and the preservation and conservation of the soil 11-23 and water in the district for agricultural purposes. 11-24 (b) Each project designated under Subsection (a) must be 11-25 approved by: 11-26 (1) the department; and 11-27 (2) the county commissioners court of the county in 12-1 which the project is to be located. 12-2 (c) The cost of a project, including interest during 12-3 construction and costs of issuance of bonds, may be paid from any 12-4 source, including proceeds of district bonds. 12-5 (d) The implementation of a project is a governmental 12-6 function or service for purposes of Chapter 791, Government Code. 12-7 (e) Before the 14th day preceding the date the county 12-8 commissioners court considers approval of a project not included in 12-9 the district's creation order, the district shall notify by mail 12-10 each person who owns land that is immediately adjacent to the 12-11 proposed project. 12-12 Sec. 60.055. TRANSPORTATION DEVELOPMENT; NAVIGATION 12-13 DISTRICTS. (a) The district may encourage the transportation and 12-14 distribution of the district's agricultural products through the 12-15 development and operation of transportation structures necessary to 12-16 further the purposes of this chapter, including railroads, toll 12-17 roads, and private roads. 12-18 (b) The district may cooperate and contract with any 12-19 navigation district on any area of mutual interest. 12-20 Sec. 60.056. AGREEMENTS; DONATIONS. (a) The district may: 12-21 (1) make an agreement with any person for any district 12-22 purpose, including an agreement: 12-23 (A) to acquire, construct, operate, or maintain 12-24 an agricultural enterprise; 12-25 (B) with a municipality or county to provide law 12-26 enforcement services in the district on a fee basis; or 12-27 (C) under a qualified management contract for 13-1 the operation of an agricultural facility; and 13-2 (2) accept a donation, grant, or loan from any person. 13-3 (b) The district, a county, and any other political 13-4 subdivision may contract to implement a district project or assist 13-5 the district in providing a service authorized by this chapter. A 13-6 contract under this subsection may provide: 13-7 (1) for payment from a district assessment or other 13-8 revenue; or 13-9 (2) that an assessment or other revenue collected from 13-10 a district project, or from a person using or purchasing a 13-11 commodity or service from a district project, may be paid or 13-12 rebated to the district. 13-13 Sec. 60.057. PROPERTY. The district may acquire or dispose 13-14 of property in any manner, including by: 13-15 (1) conveyance; 13-16 (2) mortgage; or 13-17 (3) lease, as lessor or lessee. 13-18 Sec. 60.058. EMINENT DOMAIN. The district may exercise the 13-19 power of eminent domain for the purpose of acquiring an 13-20 agricultural facility in order to own, operate, or maintain its 13-21 functional capabilities or the land on which an agricultural 13-22 facility is to be built, if the land will be owned by the district. 13-23 The use of the land may be the subject of a lease agreement entered 13-24 into by the district. 13-25 Sec. 60.059. RESEARCH. The district may conduct or pay for 13-26 research for agricultural purposes. 13-27 Sec. 60.060. SUITS. (a) The district may sue and be sued. 14-1 (b) In a suit against the district, process may be served on 14-2 a director or registered agent. 14-3 (c) The district may not be required to give a bond on an 14-4 appeal or writ of error in a civil case that the district is 14-5 prosecuting or defending. 14-6 (d) The district may indemnify a director or district 14-7 employee or a former director or district employee for reasonable 14-8 expenses and costs, including attorney's fees, incurred by that 14-9 person in connection with a claim asserted against that person if: 14-10 (1) the claim relates to an act or omission of the 14-11 person when acting in the scope of the person's board membership or 14-12 district employment; and 14-13 (2) the person has not been found liable or guilty on 14-14 the claim. 14-15 Sec. 60.061. ANNEXATION; EXCLUDING TERRITORY. (a) The 14-16 district may annex land as provided by Section 49.301 or 49.302, 14-17 Water Code, except that the references in those sections related to 14-18 taxes do not apply. As provided by those sections, the district 14-19 may annex land that is not adjacent or contiguous to the district. 14-20 (b) A district may not annex territory within the corporate 14-21 limits of a municipality unless the governing body of the 14-22 municipality consents in writing to the annexation. 14-23 (c) The board on its own motion may call a hearing on the 14-24 question of the exclusion of land from the district in the manner 14-25 provided by Section 49.304 or 49.307, Water Code, if the proposed 14-26 exclusion is practicable, just, or desirable. 14-27 (d) The board shall call a hearing on the exclusion of land 15-1 or other property from the district in the manner provided by 15-2 Section 49.304 or 49.307, Water Code, if a property owner in the 15-3 district files with the board secretary a written petition 15-4 requesting the hearing before the district issues any bonds. 15-5 (e) The district may annex land only with the written 15-6 consent of the owner of the land to be annexed. The consent must 15-7 include a statement that the owner of the land to be annexed 15-8 understands that the land, once included in the district, will be 15-9 subject to assessments imposed by the district. 15-10 Sec. 60.062. POWERS BEYOND DISTRICT TERRITORY. The district 15-11 may exercise any of its powers outside the boundaries of the 15-12 district, except the power to impose assessments and the power of 15-13 eminent domain, if the board determines that there is a benefit to 15-14 the district in exercising that power. 15-15 Sec. 60.063. NOTICE TO PURCHASERS. (a) Any person who 15-16 proposes to sell or convey real property located in a district must 15-17 first give to the purchaser written notice that the property is 15-18 located in the district. The notice must be given to the 15-19 prospective purchaser prior to execution of a binding contract of 15-20 sale and purchase either separately or as an addendum or paragraph 15-21 of a purchase contract. The purchaser shall sign the notice as 15-22 evidence of receipt. 15-23 (b) At the closing of the purchase and sale, a separate copy 15-24 of the notice with current information about the district and its 15-25 right to impose assessments on land within its boundaries, which 15-26 conveys with the land, shall be executed by the seller and 15-27 purchaser and recorded in the deed records of the county in which 16-1 the property is located. 16-2 (c) If notice is given at closing, a purchaser or the 16-3 purchaser's heirs, successors, or assigns may not maintain any 16-4 action for damages or maintain any action against the seller, title 16-5 insurance company, real estate brokers, or lienholder, or any 16-6 agent, representative, or person acting in their behalf, by reason 16-7 of the imposition of fees or assessments by the district authorized 16-8 by this chapter. Notice is not required to be given pursuant to 16-9 this paragraph unless a certified copy of the order creating the 16-10 district has been recorded in the real property records in the 16-11 county in which the land is located and such order contains the 16-12 legal description of the district. A purchaser, seller, lender, 16-13 real estate broker, title insurance company, and title insurance 16-14 agent may conclusively rely on the recorded certified copy of the 16-15 order. 16-16 Sec. 60.064. OFFICIAL SEAL. The district may adopt an 16-17 official seal for the district. 16-18 Sec. 60.065. LIMIT ON DISTRICT POWERS. The district may not 16-19 exercise a power unless it furthers the purposes of this chapter. 16-20 (Sections 60.066-60.080 reserved for expansion 16-21 SUBCHAPTER D. BOARD OF DIRECTORS 16-22 Sec. 60.081. BOARD OF DIRECTORS. (a) The district is 16-23 governed by a board of directors selected in the manner provided by 16-24 the order issued under Section 60.030. On approval of the county 16-25 commissioners court of each county in which the district is 16-26 located, the board may increase or decrease the number of directors 16-27 on the board by resolution if the board finds that to do so is in 17-1 the best interest of the district. 17-2 (b) The directors serve terms as provided by the order 17-3 issued under Section 60.030. 17-4 (c) To serve as a director, a person must be at least 18 17-5 years old and: 17-6 (1) reside in the district; or 17-7 (2) own real property in the district. 17-8 (d) The board shall elect from among its members a 17-9 president, vice president, and secretary. The board by rule may 17-10 provide for the election of other officers. 17-11 Sec. 60.082. VACANCIES. The remaining directors shall fill 17-12 by appointment for the unexpired term a vacancy in the office of 17-13 director. 17-14 Sec. 60.083. BOARD MEETINGS. The board shall meet at least 17-15 once every three months and at the call of the presiding officer or 17-16 a majority of the directors. 17-17 Sec. 60.084. MANAGEMENT OF DISTRICT. (a) The board has 17-18 control over and shall manage the affairs of the district and may 17-19 employ any person, firm, partnership, or corporation the board 17-20 considers necessary for conducting the affairs of the district, 17-21 including engineers, attorneys, financial advisors, a general 17-22 manager, operations personnel, auditors, and secretaries. 17-23 (b) The board may require an officer or employee to execute 17-24 a bond payable to the district and conditioned on the faithful 17-25 performance of the person's duties. 17-26 (c) The board may remove any district employee. 17-27 (d) The board may adopt rules necessary or convenient to 18-1 carry out district powers and duties to govern its affairs. 18-2 (e) The board may adopt rules to preserve the public health 18-3 and welfare concerning the agricultural products submitted to the 18-4 district for harvesting, processing, distributing, or transporting. 18-5 (f) The board may adopt rules on the priority of the use of 18-6 district property and services, including the payment of fees. 18-7 Sec. 60.085. HEARINGS. (a) The board may conduct hearings 18-8 and take evidence on any matter before the board. 18-9 (b) The board may appoint a hearings examiner to conduct a 18-10 hearing called by the board. The hearings examiner may be a 18-11 district employee or director. 18-12 Sec. 60.086. COMPENSATION AND EXPENSES. A director serves 18-13 without compensation but is entitled to be reimbursed by the 18-14 district for a reasonable and necessary expense incurred in 18-15 performing an official duty. 18-16 Sec. 60.087. DIRECTOR'S BOND. (a) As soon as practicable 18-17 after a director is appointed or elected, the director shall 18-18 execute a $10,000 bond payable to the district and conditioned on 18-19 the faithful performance of the director's duties. 18-20 (b) Each director's bond must be approved by the board. 18-21 (c) The bond shall be filed with and retained by the 18-22 district. 18-23 Sec. 60.088. CONFLICTS OF INTEREST; AFFIDAVIT OF INTEREST. 18-24 (a) Except as provided in this section: 18-25 (1) a director may participate in all board votes and 18-26 decisions; and 18-27 (2) Chapter 171, Local Government Code, governs 19-1 conflicts of interest for directors. 19-2 (b) Section 171.004, Local Government Code, does not apply 19-3 to the district. A director who has a substantial interest in a 19-4 business or charitable entity that will receive a pecuniary benefit 19-5 from a board action shall file a one-time affidavit declaring the 19-6 interest. An additional affidavit is not required if the 19-7 director's interest changes. After the affidavit is filed with the 19-8 board secretary, the director may participate in a discussion or 19-9 vote on that action if: 19-10 (1) a majority of the directors have similar interests 19-11 in the same entity; or 19-12 (2) all similar business or charitable entities in the 19-13 district will receive a similar pecuniary benefit. 19-14 (c) A director who is also an officer or employee of another 19-15 public entity may not participate in the discussion of or vote on a 19-16 matter regarding a contract with that other public entity. 19-17 (d) For purposes of this section, a director has a 19-18 substantial interest in a business or charitable entity in the same 19-19 manner that a person would have a substantial interest in a 19-20 business entity under Section 171.002, Local Government Code. 19-21 (Sections 60.089-60.100 reserved for expansion 19-22 SUBCHAPTER E. FINANCES; BONDS 19-23 Sec. 60.101. MISCELLANEOUS FINANCIAL POWERS AND DUTIES. (a) 19-24 The district may: 19-25 (1) impose a charge for using land, a facility, or a 19-26 service the district provides; 19-27 (2) issue bonds as provided by this subchapter; 20-1 (3) borrow money for any corporate purpose or 20-2 combination of purposes; 20-3 (4) loan money; 20-4 (5) invest money under its control in an investment 20-5 permitted by Chapter 2256, Government Code; 20-6 (6) select a depositor; 20-7 (7) establish a system of accounts for the district; 20-8 and 20-9 (8) set the fiscal year for the district. 20-10 (b) The board by rule shall establish the procedure and 20-11 number of directors' signatures required to disburse or transfer 20-12 district money. 20-13 Sec. 60.102. REPAYMENT OF ORGANIZATIONAL EXPENSES. The 20-14 directors may pay: 20-15 (1) all costs and expenses necessarily incurred in the 20-16 creation and organization of the district; 20-17 (2) the cost of investigation and making plans, 20-18 including the cost of feasibility analyses, engineering reports, 20-19 design fees, and other necessary costs; and 20-20 (3) legal fees. 20-21 Sec. 60.103. BONDS. (a) The district may issue any type of 20-22 bond, including an anticipation note or refunding bond, for any 20-23 district purpose. A bond may be issued under Chapter 1371, 20-24 Government Code. 20-25 (b) When authorizing the issuance of a bond, the district 20-26 may also authorize the later issuance of a parity or subordinate 20-27 lien bond. 21-1 (c) A district bond must: 21-2 (1) mature not later than 40 years after its date of 21-3 issuance; and 21-4 (2) state on its face that the bond is not an 21-5 obligation of the state. 21-6 (d) A district bond may be payable from or secured by: 21-7 (1) any source of money, including district revenue, 21-8 loans, or assessments; or 21-9 (2) a lien, pledge, mortgage, or other security 21-10 interest on district revenue or property. 21-11 (e) The district may use bond proceeds for any purpose, 21-12 including to pay: 21-13 (1) into a reserve fund for debt service; 21-14 (2) for the acquisition, design, construction, repair, 21-15 maintenance, or replacement of property, including buildings and 21-16 equipment; 21-17 (3) administrative and operating expenses; 21-18 (4) all expenses incurred or that will be incurred in 21-19 the issuance, sale, and delivery of the bonds; 21-20 (5) the principal of and interest on bonds; or 21-21 (6) for the operation of an agricultural enterprise. 21-22 (f) The district may contract with a bondholder to impose an 21-23 assessment to pay for the operation of an agricultural enterprise. 21-24 Sec. 60.104. APPROVAL OF ASSESSMENT BONDS. A bond secured by 21-25 an assessment may not be issued unless the district receives a 21-26 written petition signed by each owner of the property being 21-27 assessed requesting the assessment and the issuance of bonds. 22-1 Sec. 60.105. AGRICULTURAL FINANCE AUTHORITY BONDS. (a) A 22-2 district may apply for and receive financial assistance from the 22-3 Texas Agricultural Finance Authority. The assistance may be 22-4 funding derived from the proceeds of general obligation or revenue 22-5 bonds issued by the authority or may be loans, loan guaranties, 22-6 insurance, or any other benefit offered by the authority for the 22-7 purposes of expansion, development, and diversification of 22-8 production, processing, marketing, and export of Texas agricultural 22-9 products. 22-10 (b) A district's proposal under this section is subject to 22-11 Chapter 58. If a district project involves a value-added 22-12 agricultural operation, it shall receive preference as provided by 22-13 Section 58.0211(b). 22-14 Sec. 60.106. TAX INCREMENT FINANCING. (a) A district may 22-15 use tax increment financing under Chapter 311, Tax Code, in the 22-16 manner provided by that chapter for a municipality and as modified 22-17 by this section. 22-18 (b) A county commissioners court may establish a 22-19 reinvestment zone including property located in the district and 22-20 enter into a contract with the directors of the district on terms 22-21 mutually acceptable to the two entities to allow the district to 22-22 use tax increment financing as provided by Chapter 311, Tax Code. 22-23 (c) Property within the corporate limits of a municipality 22-24 is not eligible for tax increment financing under this section. 22-25 (d) Before using tax increment financing, a district must: 22-26 (1) obtain the approval of the county commissioners 22-27 court that issued the district's creation order; and 23-1 (2) comply with Section 311.003, Tax Code, as that 23-2 section applies to a municipality. 23-3 (e) For the purpose of tax increment financing under this 23-4 section, the district board of directors is the board of directors 23-5 of the reinvestment zone. Section 311.009, Tax Code, does not 23-6 apply to this chapter. 23-7 (Sections 60.107-60.120 reserved for expansion 23-8 SUBCHAPTER F. ASSESSMENTS 23-9 Sec. 60.121. GENERAL POWERS. (a) A district may impose an 23-10 assessment: 23-11 (1) for a district expense; 23-12 (2) to finance a project or district service; or 23-13 (3) for any other purpose authorized by this chapter. 23-14 (b) Money derived from an assessment for one purpose may not 23-15 be borrowed or otherwise used for a purpose other than the purpose 23-16 for which the assessment is imposed, except as provided by 23-17 Subsection (c). 23-18 (c) The board shall establish a procedure for the 23-19 distribution or use of money derived from an assessment that 23-20 exceeds the amount of money necessary to accomplish the purpose for 23-21 which the assessment was collected. 23-22 Sec. 60.122. LIMITS ON ASSESSMENTS. (a) A district may 23-23 impose an assessment only on real property or on an agricultural 23-24 product produced on real property included in a petition for 23-25 assessment. 23-26 (b) The owner of an improvement constructed in the district 23-27 may waive the right to notice and an assessment hearing and may 24-1 agree to the imposition of the assessment on the improvement or 24-2 land and payment of the assessment at an agreed rate. 24-3 (c) The district may not impose an assessment on property 24-4 owned by a utility. For purposes of this subsection, "utility" 24-5 means a person that provides to the public gas, electricity, 24-6 telephone, wastewater, or water service. 24-7 (d) A district assessment on real property runs with the 24-8 land and successor landowners are bound to pay district assessments 24-9 as they are imposed on the land within the district, providing that 24-10 notice to purchasers was provided to a successor landowner under 24-11 Section 60.063. 24-12 Sec. 60.123. HEARING AND PETITION REQUIRED. A district may 24-13 impose an assessment only if: 24-14 (1) a written petition has been filed with the board 24-15 that: 24-16 (A) requests the assessment; 24-17 (B) states the specific purpose of the 24-18 assessment; and 24-19 (C) is signed by each owner of the real property 24-20 to be assessed or, for an assessment on an agricultural product, by 24-21 each owner of real property on which the agricultural product 24-22 subject to the assessment may be produced; 24-23 (2) two-thirds of the members of the board vote to 24-24 impose the assessment; 24-25 (3) the board provides notice of a hearing on the 24-26 proposal under Section 60.129; and 24-27 (4) the board holds a hearing on the advisability of 25-1 the assessment under Section 60.130. 25-2 Sec. 60.124. APPORTIONMENT OF COST. The board shall 25-3 apportion the cost of an assessment according to the special 25-4 benefits accruing to the real property or product because of the 25-5 project or service to be financed by the assessment. The cost may 25-6 be assessed on real property or on an agricultural product produced 25-7 on real property, as appropriate: 25-8 (1) equally by front foot or by square foot of the 25-9 land area of the real property; 25-10 (2) equally by acreage of the real property; 25-11 (3) according to the value of the real property or 25-12 agricultural product as determined by the board, which may consider 25-13 the value of a structure or improvement on real property; 25-14 (4) based upon the productivity of land subject to the 25-15 assessment or on which the agricultural product subject to the 25-16 assessment is produced; 25-17 (5) in proportion to the value of the agricultural 25-18 product produced on the real property for the year preceding the 25-19 year of the assessment; or 25-20 (6) according to any other reasonable assessment plan 25-21 that imposes a fair share of the cost on property or agricultural 25-22 products similarly benefited. 25-23 Sec. 60.125. ASSESSMENT TO FINANCE A PROJECT OR SERVICE. If 25-24 the board determines the total cost of an assessment to finance a 25-25 project or service, the board shall impose the assessment against 25-26 each parcel of land or against the agricultural product against 25-27 which an assessment may be imposed in the district. The board may 26-1 impose an annual assessment for a service. The amount of an annual 26-2 assessment may vary from year to year, but may not exceed the 26-3 amount necessary to pay the costs and debts of a project to be 26-4 financed by the assessment. 26-5 Sec. 60.126. ASSESSMENT ROLL. (a) The board shall prepare 26-6 and maintain an assessment roll showing the assessment against each 26-7 parcel of real property and against all applicable agricultural 26-8 products and the board's basis for the assessment. 26-9 (b) The board shall allow the public to inspect the 26-10 assessment roll. 26-11 Sec. 60.127. INTEREST ON ASSESSMENTS; LIEN. (a) An 26-12 assessment, including an assessment resulting from an addition or 26-13 correction to the assessment roll, penalties and interest on an 26-14 assessment, assessment collection expenses, and reasonable 26-15 attorney's fees incurred by the district in collecting an 26-16 assessment are: 26-17 (1) a first and prior lien against the property or 26-18 agricultural product assessed; 26-19 (2) superior to any other lien or claim other than a 26-20 lien or claim for county, school district, or municipal ad valorem 26-21 taxes; and 26-22 (3) the personal liability of and charge against the 26-23 owners of the property or the agricultural product when the 26-24 assessment was made, even if the owners are not named in an 26-25 assessment proceeding. 26-26 (b) The lien is effective from the date of the order 26-27 imposing the assessment until the assessment and any related 27-1 penalties, interest, collection expenses, or attorney's fees are 27-2 paid. 27-3 Sec. 60.128. MISTAKES. After notice and hearing in the 27-4 manner required for an original assessment, the board may impose an 27-5 assessment to correct a mistake in the assessment: 27-6 (1) relating to the total cost of the assessment; or 27-7 (2) covering a delinquency or collection costs. 27-8 Sec. 60.129. NOTICE OF HEARING. (a) In addition to other 27-9 notice required by law, the board shall provide notice of an 27-10 assessment hearing in a newspaper with general circulation in the 27-11 district. The publication must be made not later than the 14th day 27-12 before the date of the hearing. 27-13 (b) The notice must include the: 27-14 (1) time and place of the hearing; 27-15 (2) purpose of the proposed assessment; 27-16 (3) estimated cost of the purpose for which the 27-17 assessment is proposed, including interest during construction and 27-18 associated financing costs; and 27-19 (4) proposed assessment method. 27-20 Sec. 60.130. CONDUCT OF HEARING. (a) A hearing on a 27-21 proposed assessment may be adjourned from time to time. 27-22 (b) If a hearings examiner conducts the hearing, the 27-23 examiner shall file with the board a report on the examiner's 27-24 findings under Subsection (d). 27-25 (c) The board or hearings examiner shall hear and rule on 27-26 all objections to a proposed assessment raised at the hearing by an 27-27 owner of real property that would be subject to the assessment or 28-1 on which agricultural products subject to the assessment are 28-2 produced. 28-3 (d) The board or hearings examiner shall make findings 28-4 relating to the: 28-5 (1) advisability of the assessment, including the 28-6 purpose of the assessment; 28-7 (2) estimated cost of the assessment; 28-8 (3) area benefited by the assessment; 28-9 (4) method of assessment; and 28-10 (5) method and time for payment of the assessment. 28-11 (e) After receiving or issuing the findings required by 28-12 Subsection (d), the board by order: 28-13 (1) shall: 28-14 (A) impose the assessment as a special 28-15 assessment on the property or on the agricultural products; and 28-16 (B) specify the method of payment on the 28-17 assessment; and 28-18 (2) may: 28-19 (A) amend a proposed assessment; 28-20 (B) require an assessment to be paid in periodic 28-21 installments, including interest; 28-22 (C) require an interest charge or penalty for a 28-23 failure to make timely payment; or 28-24 (D) charge an amount to cover a delinquency or 28-25 collection expense. 28-26 (f) If the board orders that an assessment may be paid in 28-27 periodic installments, the installments must: 29-1 (1) be in amounts sufficient to meet the annual costs 29-2 of the project or service for which the assessment is imposed; and 29-3 (2) continue for the number of years required to 29-4 retire the indebtedness or pay for the project or service for which 29-5 the assessment is imposed. 29-6 Sec. 60.131. REHEARING. On petition of a property owner 29-7 contesting an assessment of the owner's real property or 29-8 agricultural products received not later than the 30th day after 29-9 the date the assessment order is issued, the board may hold an 29-10 additional hearing to consider the assessment order. 29-11 Sec. 60.132. FILING OF NOTICE OF ASSESSMENT. Not later than 29-12 the 30th day after the date on which an assessment order is issued, 29-13 the district shall file a notice of the assessment in the deed 29-14 records of the county in which the real property to be assessed, or 29-15 on which the agricultural product to be assessed is produced, is 29-16 located. The notice must: 29-17 (1) provide a description of the real property or the 29-18 agricultural products that are subject to the assessment; 29-19 (2) state the name of the owner of the real property 29-20 or the agricultural products subject to the assessment; and 29-21 (3) describe how to contact the district for further 29-22 information about the assessment. 29-23 Sec. 60.133. APPEAL OF INDIVIDUAL ASSESSMENT. (a) A real 29-24 property owner or a person who owns an agricultural product against 29-25 which an assessment is imposed may appeal the assessment to a 29-26 district court in the county in which the real property assessed, 29-27 or on which the agricultural product is produced, is located. 30-1 (b) The owner must file the notice of appeal with the court 30-2 not later than the 30th day after the person receives a bill or 30-3 other notice of the assessment. 30-4 (c) The court shall review the appeal by trial de novo. 30-5 Sec. 60.134. ASSESSMENT AFTER APPEAL. If the court holds 30-6 that an assessment is invalid, the board may impose a new 30-7 assessment in accordance with this subchapter. 30-8 (Sections 60.135-60.150 reserved for expansion 30-9 SUBCHAPTER G. DISSOLUTION 30-10 Sec. 60.151. DISSOLUTION. The district dissolves if: 30-11 (1) a majority of the board votes for dissolution; and 30-12 (2) all district debts and obligations have been 30-13 discharged. 30-14 Sec. 60.152. DISPOSITION OF PROPERTY OF DISSOLVED DISTRICT. 30-15 Prior to dissolution, the board may sell its property. If the 30-16 purchaser of any district property is not a governmental entity, 30-17 purchase by the person renders the agricultural facility or other 30-18 property ineligible to issue tax-exempt securities, to impose 30-19 assessments, or to be eligible for tax-exempt status. 30-20 SECTION 2. This Act takes effect immediately if it receives 30-21 a vote of two-thirds of all the members elected to each house, as 30-22 provided by Section 39, Article III, Texas Constitution. If this 30-23 Act does not receive the vote necessary for immediate effect, this 30-24 Act takes effect September 1, 2001.