By Swinford, et al. H.B. No. 1880 77R7327 BDH-D 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: 3-15 (1) conserve and develop the natural resources of this 3-16 state, including agricultural resources; 3-17 (2) conserve the soil for agricultural use; and 3-18 (3) reclaim or drain overflowed lands or provide 3-19 necessary irrigation for natural agricultural resources. 3-20 (b) A district created under this chapter exercises public 3-21 and essential governmental functions. 3-22 (c) Chapter 49, Water Code, does not apply to a district, 3-23 except as provided by Section 60.061. 3-24 (d) The creation of a district is essential to accomplish 3-25 the purposes of Section 52-a, Article III, Texas Constitution, and 3-26 other public purposes stated in this chapter. 3-27 (Sections 60.007-60.020 reserved for expansion 4-1 SUBCHAPTER B. CREATION OF DISTRICT 4-2 Sec. 60.021. PETITION TO ESTABLISH DISTRICT. (a) On 4-3 petition of at least 10 residents of a county included within a 4-4 proposed district, the commissioners court of a county in which an 4-5 agricultural facility of the proposed district is to be located may 4-6 commence the creation of a district. 4-7 (b) The creation of the district is subject to a 4-8 confirmation election held as provided by this subchapter. 4-9 (c) A district may consist of parcels of land that are: 4-10 (1) not contiguous; and 4-11 (2) located in one or more counties. 4-12 (d) Not later than the 10th day following the date of 4-13 receipt of a petition, the commissioners court shall provide notice 4-14 of the receipt of the petition and a copy of the petition to: 4-15 (1) the commissioners court of each other county 4-16 located in whole or in part in the proposed district; and 4-17 (2) the governing body of each municipality located in 4-18 whole or in part in the proposed district. 4-19 Sec. 60.022. CONTENTS OF PETITION. A petition filed under 4-20 Section 60.021 must: 4-21 (1) describe the boundaries of the proposed district 4-22 by metes and bounds or by lot and block number, if there is a 4-23 recorded map or plat and survey of the area; 4-24 (2) include a name for the proposed district, which 4-25 must include the term "Agricultural Development District"; 4-26 (3) be signed by the landowners of any land to be 4-27 included within the proposed district and provide an acknowledgment 5-1 that the landowners desire the land to be included in the district; 5-2 (4) include the names of at least five persons who are 5-3 willing and qualified to serve as temporary directors of the 5-4 district; 5-5 (5) name each county in which any agricultural 5-6 facilities to be owned by the district are to be located; 5-7 (6) state the general nature of the proposed 5-8 development and the cost of the development as then estimated by 5-9 the petitioners; 5-10 (7) state the necessity and feasibility of the 5-11 proposed district and whether the district will serve the public 5-12 purpose of furthering agricultural interests; 5-13 (8) include a pledge that the district will make 5-14 payments in lieu of taxes to any school district and county in 5-15 which any real property to be owned by the district is located, as 5-16 follows: 5-17 (A) annual payments to each entity equal to the 5-18 amount of taxes imposed on the real property by the entity in the 5-19 year of the district's creation; and 5-20 (B) a payment to each entity equal to the amount 5-21 that would be due under Section 23.55, Tax Code, on the district's 5-22 date of creation; and 5-23 (9) include a pledge that, if the district employs 5-24 more than 50 persons, the district will make payments in lieu of 5-25 taxes to any school district, in addition to those made under 5-26 Subdivision (8), in an amount negotiated between the district and 5-27 the school district. 6-1 Sec. 60.023. COMMISSIONERS COURT TO CALL PUBLIC HEARING. 6-2 Before the 30th day after the date a petition is received, the 6-3 commissioners court shall call a public hearing at which the 6-4 petition will be considered. The notice of the hearing must state 6-5 that any person may appear and present evidence or testify for or 6-6 against the creation of the district. 6-7 Sec. 60.024. ADDITIONAL NOTICE OF PUBLIC HEARING. In 6-8 addition to other notice required by law, before the 14th day 6-9 before the date of the public hearing, notice of the hearing shall 6-10 be mailed to the persons who signed the petition and be published 6-11 in a newspaper with general circulation in the county with the most 6-12 land within the proposed district. 6-13 Sec. 60.025. PUBLIC HEARING. (a) At the public hearing, the 6-14 commissioners court shall examine the petition to ascertain its 6-15 sufficiency. 6-16 (b) Any interested person may appear at the public hearing 6-17 to offer evidence or testimony on the sufficiency of the petition 6-18 and whether the district should be created. 6-19 Sec. 60.026. ACTION ON PETITION. (a) After the hearing, if 6-20 the commissioners court finds that the petition conforms to the 6-21 requirements of Section 60.022 and that the creation of the 6-22 district and the proposed development is feasible and necessary and 6-23 would serve the public purpose of economic development in the 6-24 counties to be included in the district, the commissioners court 6-25 shall make that finding and enter an order granting the petition 6-26 and creating the district. 6-27 (b) The order may specify the cost of publishing notice and 7-1 conducting hearings for the creation of the district together with 7-2 the cost of conducting the confirmation election. A county may 7-3 require the petitioners to pay the county the appropriate amounts 7-4 specified in the order creating the district at the time the order 7-5 becomes final. 7-6 (c) If the commissioners court finds that the petition does 7-7 not conform to the requirements of Section 60.022 or that the 7-8 creation of the district and the proposed project is not feasible 7-9 and necessary and would not serve the public purpose of economic 7-10 development in the counties to be included in the district, the 7-11 commissioners court shall make that finding in an order and deny 7-12 the petition. 7-13 Sec. 60.027. TEMPORARY DIRECTORS; VACANCY IN OFFICE. (a) 7-14 If the commissioners court grants the petition, it shall appoint as 7-15 temporary directors of the district five persons who are qualified 7-16 under this chapter to serve as directors. 7-17 (b) A vacancy in the office of temporary directors shall be 7-18 filled by appointment by the commissioners court. 7-19 Sec. 60.028. QUALIFICATION AND BOND OF TEMPORARY DIRECTORS. 7-20 Each temporary director shall execute a bond in accordance with 7-21 Section 60.087 and shall take the oath of office. 7-22 Sec. 60.029. ELECTION TO CONFIRM DISTRICT AND INITIAL 7-23 PERMANENT DIRECTORS. The temporary board of directors shall 7-24 conduct an election in the district to confirm the creation of the 7-25 district and to confirm the initial permanent directors. 7-26 Sec. 60.030. ELECTION ORDER. An order calling an election 7-27 under Section 60.029 must state: 8-1 (1) the nature of the election, the proposition to 8-2 appear on the ballot, and the names of at least five persons to 8-3 serve as the initial permanent members of the board of directors; 8-4 (2) the number and terms of directors on the board and 8-5 the manner of selection of board members; 8-6 (3) the date of the election; 8-7 (4) the hours during which the polls will be open; and 8-8 (5) the location of the polling places. 8-9 Sec. 60.031. NOTICE. In addition to other notice required 8-10 by law, the temporary directors shall give notice of the election 8-11 by publishing the substance of the election order in a newspaper 8-12 with general circulation in the county in which the most land 8-13 within the proposed district is located. The notice must be 8-14 published before the 14th day before the date set for the election. 8-15 Sec. 60.032. CONDUCT OF ELECTION. (a) The election shall be 8-16 held in accordance with the Election Code, to the extent not 8-17 inconsistent with this chapter. 8-18 (b) The ballot shall be printed to permit: 8-19 (1) voting for or against the proposition: "The 8-20 creation of __________ Agricultural Development District and 8-21 confirmation of the initial permanent directors of the district"; 8-22 and 8-23 (2) naming of the proposed initial permanent 8-24 directors. 8-25 Sec. 60.033. ELECTION RESULTS. (a) After the election, the 8-26 presiding judge shall make returns of the result to the temporary 8-27 board of directors. The temporary board of directors shall canvass 9-1 the returns and declare the results. 9-2 (b) If a majority of the votes cast in the election favor 9-3 the creation of the district, the temporary board shall order the 9-4 district to be created and the persons named on the ballot to serve 9-5 as the initial permanent directors and shall enter the order in its 9-6 minutes. If a majority of the votes cast in the election do not 9-7 favor the creation of the district, the temporary board shall 9-8 declare the proposition to create the district as defeated and 9-9 enter the result in its minutes. 9-10 (c) A certified copy of the temporary board's order creating 9-11 the district or of the declaration that the proposition to create 9-12 the district was defeated shall be sent to the commissioners court 9-13 of each county included in the district by certified or registered 9-14 mail. The board shall include with the order or declaration the 9-15 date of the election, the ballot proposition, and the number of 9-16 votes cast for or against the proposition. 9-17 (d) In the event 10 or fewer votes are cast in the election, 9-18 not later than the 90th day following the date of the order 9-19 canvassing the election, the temporary board shall submit the 9-20 proceedings of the election, including voter affidavits as to 9-21 residency and qualification to vote, to the attorney general. 9-22 (Sections 60.034-60.050 reserved for expansion 9-23 SUBCHAPTER C. DISTRICT POWERS AND DUTIES 9-24 Sec. 60.051. GENERAL POWERS AND DUTIES. (a) A district has 9-25 the powers and duties that are prescribed by this chapter and that 9-26 are necessary or desirable to carry out a power or duty expressly 9-27 or implicitly granted to the district under this chapter. 10-1 (b) A district may own or implement more than one project 10-2 under this chapter. 10-3 (c) A district may merge with another district or districts 10-4 provided that the board of each district agrees to the merger. 10-5 (d) A district may perform acts necessary to carry out the 10-6 purposes of this chapter. 10-7 (e) A district may not impose an ad valorem tax. 10-8 (f) A district may make payments in lieu of taxes to a 10-9 school district or county in the manner provided by Section 10-10 60.022(8). 10-11 (g) To the extent consistent with the purposes of this 10-12 chapter, a district may enter into an installment purchase contract 10-13 to acquire goods or services for the district. 10-14 Sec. 60.052. ECONOMIC DEVELOPMENT. A district may encourage 10-15 the economic development of the area in which the district is 10-16 located by: 10-17 (1) fostering the growth of agricultural enterprises; 10-18 (2) stimulating innovation in agricultural 10-19 enterprises; 10-20 (3) seeking to eliminate unemployment or 10-21 underemployment in the state; and 10-22 (4) developing or expanding transportation resources 10-23 for agricultural purposes. 10-24 Sec. 60.053. AGRICULTURAL DEVELOPMENT. (a) A district may: 10-25 (1) promote all agricultural enterprises, facilities, 10-26 and services of the district; 10-27 (2) encourage the maintenance and conservation of soil 11-1 and water in the district; 11-2 (3) acquire, design, construct, and operate an 11-3 agricultural enterprise; and 11-4 (4) expand, develop, and diversify production, 11-5 processing, marketing, and export of Texas agricultural products. 11-6 (b) A district may acquire property as necessary, including 11-7 vehicles, farm equipment, and other machinery and related 11-8 facilities for the harvesting, processing, storage, packaging, 11-9 distribution, and transportation of agricultural products or 11-10 by-products. 11-11 Sec. 60.054. AGRICULTURAL PROJECTS. (a) The district may 11-12 designate as an agricultural project a project that relates to the 11-13 development of agriculture in the district and surrounding areas 11-14 and the preservation and conservation of the soil and water in the 11-15 district for agricultural purposes. 11-16 (b) A project designated under Subsection (a) must be 11-17 approved by: 11-18 (1) the department; and 11-19 (2) the county commissioners court that issued the 11-20 district's creation order. 11-21 (c) The cost of a project, including interest during 11-22 construction and costs of issuance of bonds, may be paid from any 11-23 source, including proceeds of district bonds. 11-24 (d) The implementation of a project is a governmental 11-25 function or service for purposes of Chapter 791, Government Code. 11-26 Sec. 60.055. TRANSPORTATION DEVELOPMENT; NAVIGATION 11-27 DISTRICTS. (a) The district may encourage the transportation and 12-1 distribution of the district's agricultural products through the 12-2 development and operation of transportation structures necessary to 12-3 further the purposes of this chapter, including railroads, toll 12-4 roads, and private roads. 12-5 (b) The district may cooperate and contract with any 12-6 navigation district on any area of mutual interest. 12-7 Sec. 60.056. AGREEMENTS; DONATIONS. (a) The district may: 12-8 (1) make an agreement with any person for any district 12-9 purpose, including an agreement: 12-10 (A) to acquire, construct, operate, or maintain 12-11 an agricultural enterprise; 12-12 (B) with a municipality or county to provide law 12-13 enforcement services in the district on a fee basis; or 12-14 (C) under a qualified management contract for 12-15 the operation of an agricultural facility; and 12-16 (2) accept a donation, grant, or loan from any person. 12-17 (b) The district, a county, and any other political 12-18 subdivision may contract to implement a district project or assist 12-19 the district in providing a service authorized by this chapter. A 12-20 contract under this subsection may provide: 12-21 (1) for payment from a district assessment or other 12-22 revenue; or 12-23 (2) that an assessment or other revenue collected from 12-24 a district project, or from a person using or purchasing a 12-25 commodity or service from a district project, may be paid or 12-26 rebated to the district. 12-27 Sec. 60.057. PROPERTY. The district may acquire or dispose 13-1 of property in any manner, including by: 13-2 (1) conveyance; 13-3 (2) mortgage; or 13-4 (3) lease, as lessor or lessee. 13-5 Sec. 60.058. EMINENT DOMAIN. The district may exercise the 13-6 power of eminent domain for the purpose of acquiring an 13-7 agricultural facility in order to own, operate, or maintain its 13-8 functional capabilities or the land on which an agricultural 13-9 facility is to be built, if the land will be owned by the district. 13-10 The use of the land may be the subject of a lease agreement entered 13-11 into by the district. 13-12 Sec. 60.059. RESEARCH. The district may conduct or pay for 13-13 research for agricultural purposes. 13-14 Sec. 60.060. SUITS. (a) The district may sue and be sued. 13-15 (b) In a suit against the district, process may be served on 13-16 a director or registered agent. 13-17 (c) The district may not be required to give a bond on an 13-18 appeal or writ of error in a civil case that the district is 13-19 prosecuting or defending. 13-20 (d) The district may indemnify a director or district 13-21 employee or a former director or district employee for reasonable 13-22 expenses and costs, including attorney's fees, incurred by that 13-23 person in connection with a claim asserted against that person if: 13-24 (1) the claim relates to an act or omission of the 13-25 person when acting in the scope of the person's board membership or 13-26 district employment; and 13-27 (2) the person has not been found liable or guilty on 14-1 the claim. 14-2 Sec. 60.061. ANNEXATION; EXCLUDING TERRITORY. (a) The 14-3 district may annex land as provided by Section 49.301 or 49.302, 14-4 Water Code, except that the references in those sections related to 14-5 taxes do not apply. As provided by those sections, the district 14-6 may annex land that is not adjacent or contiguous to the district. 14-7 (b) The board on its own motion may call a hearing on the 14-8 question of the exclusion of land from the district in the manner 14-9 provided by Section 49.304 or 49.307, Water Code, if the proposed 14-10 exclusion is practicable, just, or desirable. 14-11 (c) The board shall call a hearing on the exclusion of land 14-12 or other property from the district in the manner provided by 14-13 Section 49.304 or 49.307, Water Code, if a property owner in the 14-14 district files with the board secretary a written petition 14-15 requesting the hearing before the district issues any bonds. 14-16 (d) The district may annex land only with the written 14-17 consent of the owner of the land to be annexed. The consent must 14-18 include a statement that the owner of the land to be annexed 14-19 understands that the land, once included in the district, will be 14-20 subject to assessments imposed by the district. 14-21 Sec. 60.062. POWERS BEYOND DISTRICT TERRITORY. The district 14-22 may exercise any of its powers outside the boundaries of the 14-23 district, except the power to impose assessments and the power of 14-24 eminent domain, if the board determines that there is a benefit to 14-25 the district in exercising that power. 14-26 Sec. 60.063. NOTICE TO PURCHASERS. (a) Any person who 14-27 proposes to sell or convey real property located in a district must 15-1 first give to the purchaser written notice that the property is 15-2 located in the district. The notice must be given to the 15-3 prospective purchaser prior to execution of a binding contract of 15-4 sale and purchase either separately or as an addendum or paragraph 15-5 of a purchase contract. The purchaser shall sign the notice as 15-6 evidence of receipt. 15-7 (b) At the closing of the purchase and sale, a separate copy 15-8 of the notice with current information about the district and its 15-9 right to impose assessments on land within its boundaries, which 15-10 conveys with the land, shall be executed by the seller and 15-11 purchaser and recorded in the deed records of the county in which 15-12 the property is located. 15-13 (c) If notice is given at closing, a purchaser or the 15-14 purchaser's heirs, successors, or assigns may not maintain any 15-15 action for damages or maintain any action against the seller, title 15-16 insurance company, real estate brokers, or lienholder, or any 15-17 agent, representative, or person acting in their behalf, by reason 15-18 of the imposition of fees or assessments by the district authorized 15-19 by this chapter. 15-20 Sec. 60.064. OFFICIAL SEAL. The district may adopt an 15-21 official seal for the district. 15-22 Sec. 60.065. LIMIT ON DISTRICT POWERS. The district may not 15-23 exercise a power unless it furthers the purposes of this chapter. 15-24 (Sections 60.066-60.080 reserved for expansion 15-25 SUBCHAPTER D. BOARD OF DIRECTORS 15-26 Sec. 60.081. BOARD OF DIRECTORS. (a) The district is 15-27 governed by a board of directors selected in the manner provided by 16-1 the order issued under Section 60.030. On approval of the county 16-2 commissioners court of each county in which the district is 16-3 located, the board may increase or decrease the number of directors 16-4 on the board by resolution if the board finds that to do so is in 16-5 the best interest of the district. 16-6 (b) The directors serve terms as provided by the order 16-7 issued under Section 60.030. 16-8 (c) To serve as a director, a person must be at least 18 16-9 years old and: 16-10 (1) reside in the district; or 16-11 (2) own real property in the district. 16-12 (d) The board shall elect from among its members a 16-13 president, vice president, and secretary. The board by rule may 16-14 provide for the election of other officers. 16-15 Sec. 60.082. VACANCIES. The remaining directors shall fill 16-16 by appointment for the unexpired term a vacancy in the office of 16-17 director. 16-18 Sec. 60.083. BOARD MEETINGS. The board shall meet at least 16-19 once every three months and at the call of the presiding officer or 16-20 a majority of the directors. 16-21 Sec. 60.084. MANAGEMENT OF DISTRICT. (a) The board has 16-22 control over and shall manage the affairs of the district and may 16-23 employ any person, firm, partnership, or corporation the board 16-24 considers necessary for conducting the affairs of the district, 16-25 including engineers, attorneys, financial advisors, a general 16-26 manager, operations personnel, auditors, and secretaries. 16-27 (b) The board may require an officer or employee to execute 17-1 a bond payable to the district and conditioned on the faithful 17-2 performance of the person's duties. 17-3 (c) The board may remove any district employee. 17-4 (d) The board may adopt rules necessary or convenient to 17-5 carry out district powers and duties to govern its affairs. 17-6 (e) The board may adopt rules to preserve the public health 17-7 and welfare concerning the agricultural products submitted to the 17-8 district for harvesting, processing, distributing, or transporting. 17-9 (f) The board may adopt rules on the priority of the use of 17-10 district property and services, including the payment of fees. 17-11 Sec. 60.085. HEARINGS. (a) The board may conduct hearings 17-12 and take evidence on any matter before the board. 17-13 (b) The board may appoint a hearings examiner to conduct a 17-14 hearing called by the board. The hearings examiner may be a 17-15 district employee or director. 17-16 Sec. 60.086. COMPENSATION AND EXPENSES. A director serves 17-17 without compensation but is entitled to be reimbursed by the 17-18 district for a reasonable and necessary expense incurred in 17-19 performing an official duty. 17-20 Sec. 60.087. DIRECTOR'S BOND. (a) As soon as practicable 17-21 after a director is appointed or elected, the director shall 17-22 execute a $10,000 bond payable to the district and conditioned on 17-23 the faithful performance of the director's duties. 17-24 (b) Each director's bond must be approved by the board. 17-25 (c) The bond shall be filed with and retained by the 17-26 district. 17-27 Sec. 60.088. CONFLICTS OF INTEREST; AFFIDAVIT OF INTEREST. 18-1 (a) Except as provided in this section: 18-2 (1) a director may participate in all board votes and 18-3 decisions; and 18-4 (2) Chapter 171, Local Government Code, governs 18-5 conflicts of interest for directors. 18-6 (b) Section 171.004, Local Government Code, does not apply 18-7 to the district. A director who has a substantial interest in a 18-8 business or charitable entity that will receive a pecuniary benefit 18-9 from a board action shall file a one-time affidavit declaring the 18-10 interest. An additional affidavit is not required if the 18-11 director's interest changes. After the affidavit is filed with the 18-12 board secretary, the director may participate in a discussion or 18-13 vote on that action if: 18-14 (1) a majority of the directors have similar interests 18-15 in the same entity; or 18-16 (2) all similar business or charitable entities in the 18-17 district will receive a similar pecuniary benefit. 18-18 (c) A director who is also an officer or employee of another 18-19 public entity may not participate in the discussion of or vote on a 18-20 matter regarding a contract with that other public entity. 18-21 (d) For purposes of this section, a director has a 18-22 substantial interest in a business or charitable entity in the same 18-23 manner that a person would have a substantial interest in a 18-24 business entity under Section 171.002, Local Government Code. 18-25 (Sections 60.089-60.100 reserved for expansion 18-26 SUBCHAPTER E. FINANCES; BONDS 18-27 Sec. 60.101. MISCELLANEOUS FINANCIAL POWERS AND DUTIES. (a) 19-1 The district may: 19-2 (1) impose a charge for using land, a facility, or a 19-3 service the district provides; 19-4 (2) issue bonds as provided by this subchapter; 19-5 (3) borrow money for any corporate purpose or 19-6 combination of purposes; 19-7 (4) loan money; 19-8 (5) invest money under its control in an investment 19-9 permitted by Chapter 2256, Government Code; 19-10 (6) select a depositor; 19-11 (7) establish a system of accounts for the district; 19-12 and 19-13 (8) set the fiscal year for the district. 19-14 (b) The board by rule shall establish the procedure and 19-15 number of directors' signatures required to disburse or transfer 19-16 district money. 19-17 Sec. 60.102. REPAYMENT OF ORGANIZATIONAL EXPENSES. The 19-18 directors may pay: 19-19 (1) all costs and expenses necessarily incurred in the 19-20 creation and organization of the district; 19-21 (2) the cost of investigation and making plans, 19-22 including the cost of feasibility analyses, engineering reports, 19-23 design fees, and other necessary costs; and 19-24 (3) legal fees. 19-25 Sec. 60.103. BONDS. (a) The district may issue any type of 19-26 bond, including an anticipation note or refunding bond, for any 19-27 district purpose. A bond may be issued under Chapter 1371, 20-1 Government Code. 20-2 (b) When authorizing the issuance of a bond, the district 20-3 may also authorize the later issuance of a parity or subordinate 20-4 lien bond. 20-5 (c) A district bond must: 20-6 (1) mature not later than 40 years after its date of 20-7 issuance; and 20-8 (2) state on its face that the bond is not an 20-9 obligation of the state. 20-10 (d) A district bond may be payable from or secured by: 20-11 (1) any source of money, including district revenue, 20-12 loans, or assessments; or 20-13 (2) a lien, pledge, mortgage, or other security 20-14 interest on district revenue or property. 20-15 (e) The district may use bond proceeds for any purpose, 20-16 including to pay: 20-17 (1) into a reserve fund for debt service; 20-18 (2) for the acquisition, design, construction, repair, 20-19 maintenance, or replacement of property, including buildings and 20-20 equipment; 20-21 (3) administrative and operating expenses; 20-22 (4) all expenses incurred or that will be incurred in 20-23 the issuance, sale, and delivery of the bonds; 20-24 (5) the principal of and interest on bonds; or 20-25 (6) for the operation of an agricultural enterprise. 20-26 (f) The district may contract with a bondholder to impose an 20-27 assessment to pay for the operation of an agricultural enterprise. 21-1 Sec. 60.104. APPROVAL OF ASSESSMENT BONDS. A bond secured by 21-2 an assessment may not be issued unless the district receives a 21-3 written petition signed by each owner of the property being 21-4 assessed requesting the assessment and the issuance of bonds. 21-5 Sec. 60.105. AGRICULTURAL FINANCE AUTHORITY BONDS. (a) A 21-6 district may apply for and receive financial assistance from the 21-7 Texas Agricultural Finance Authority. The assistance may be 21-8 funding derived from the proceeds of general obligation or revenue 21-9 bonds issued by the authority or may be loans, loan guaranties, 21-10 insurance, or any other benefit offered by the authority for the 21-11 purposes of expansion, development, and diversification of 21-12 production, processing, marketing, and export of Texas agricultural 21-13 products. 21-14 (b) A district's proposal under this section is subject to 21-15 Chapter 58. If a district project involves a value-added 21-16 agricultural operation, it shall receive preference as provided by 21-17 Section 58.0211(b). 21-18 Sec. 60.106. TAX INCREMENT FINANCING. (a) A district may 21-19 use tax increment financing under Chapter 311, Tax Code, in the 21-20 manner provided by that chapter for a municipality and as modified 21-21 by this section. 21-22 (b) A county commissioners court may establish a 21-23 reinvestment zone including property located in the district and 21-24 enter into a contract with the directors of the district on terms 21-25 mutually acceptable to the two entities to allow the district to 21-26 use tax increment financing as provided by Chapter 311, Tax Code. 21-27 (c) Property within the corporate limits of a municipality 22-1 is not eligible for tax increment financing under this section. 22-2 (d) Before using tax increment financing, a district must: 22-3 (1) obtain the approval of the county commissioners 22-4 court that issued the district's creation order; and 22-5 (2) comply with Section 311.003, Tax Code, as that 22-6 section applies to a municipality. 22-7 (e) For the purpose of tax increment financing under this 22-8 section, the district board of directors is the board of directors 22-9 of the reinvestment zone. Section 311.009, Tax Code, does not 22-10 apply to this chapter. 22-11 (Sections 60.107-60.120 reserved for expansion 22-12 SUBCHAPTER F. ASSESSMENTS 22-13 Sec. 60.121. GENERAL POWERS. (a) A district may impose an 22-14 assessment: 22-15 (1) for a district expense; 22-16 (2) to finance a project or district service; or 22-17 (3) for any other purpose authorized by this chapter. 22-18 (b) Money derived from an assessment for one purpose may not 22-19 be borrowed or otherwise used for a purpose other than the purpose 22-20 for which the assessment is imposed, except as provided by 22-21 Subsection (c). 22-22 (c) The board shall establish a procedure for the 22-23 distribution or use of money derived from an assessment that 22-24 exceeds the amount of money necessary to accomplish the purpose for 22-25 which the assessment was collected. 22-26 Sec. 60.122. LIMITS ON ASSESSMENTS. (a) A district may 22-27 impose an assessment only on real property or on an agricultural 23-1 product produced on real property included in a petition for 23-2 assessment. 23-3 (b) The owner of an improvement constructed in the district 23-4 may waive the right to notice and an assessment hearing and may 23-5 agree to the imposition of the assessment on the improvement or 23-6 land and payment of the assessment at an agreed rate. 23-7 (c) The district may not impose an assessment on property 23-8 owned by a utility. For purposes of this subsection, "utility" 23-9 means a person that provides to the public gas, electricity, 23-10 telephone, wastewater, or water service. 23-11 (d) A district assessment on real property runs with the 23-12 land and successor landowners are bound to pay district assessments 23-13 as they are imposed on the land within the district, providing that 23-14 notice to purchasers was provided to a successor landowner under 23-15 Section 60.063. 23-16 Sec. 60.123. HEARING AND PETITION REQUIRED. A district may 23-17 impose an assessment only if: 23-18 (1) a written petition has been filed with the board 23-19 that: 23-20 (A) requests the assessment; 23-21 (B) states the specific purpose of the 23-22 assessment; and 23-23 (C) is signed by each owner of the real property 23-24 to be assessed or, for an assessment on an agricultural product, by 23-25 each owner of real property on which the agricultural product 23-26 subject to the assessment may be produced; 23-27 (2) two-thirds of the members of the board vote to 24-1 impose the assessment; 24-2 (3) the board provides notice of a hearing on the 24-3 proposal under Section 60.129; and 24-4 (4) the board holds a hearing on the advisability of 24-5 the assessment under Section 60.130. 24-6 Sec. 60.124. APPORTIONMENT OF COST. The board shall 24-7 apportion the cost of an assessment according to the special 24-8 benefits accruing to the real property or product because of the 24-9 project or service to be financed by the assessment. The cost may 24-10 be assessed on real property or on an agricultural product produced 24-11 on real property, as appropriate: 24-12 (1) equally by front foot or by square foot of the 24-13 land area of the real property; 24-14 (2) equally by acreage of the real property; 24-15 (3) according to the value of the real property or 24-16 agricultural product as determined by the board, which may consider 24-17 the value of a structure or improvement on real property; 24-18 (4) based upon the productivity of land subject to the 24-19 assessment or on which the agricultural product subject to the 24-20 assessment is produced; 24-21 (5) in proportion to the value of the agricultural 24-22 product produced on the real property for the year preceding the 24-23 year of the assessment; or 24-24 (6) according to any other reasonable assessment plan 24-25 that imposes a fair share of the cost on property or agricultural 24-26 products similarly benefited. 24-27 Sec. 60.125. ASSESSMENT TO FINANCE A PROJECT OR SERVICE. If 25-1 the board determines the total cost of an assessment to finance a 25-2 project or service, the board shall impose the assessment against 25-3 each parcel of land or against the agricultural product against 25-4 which an assessment may be imposed in the district. The board may 25-5 impose an annual assessment for a service. The amount of an annual 25-6 assessment may vary from year to year, but may not exceed the 25-7 amount necessary to pay the costs and debts of a project to be 25-8 financed by the assessment. 25-9 Sec. 60.126. ASSESSMENT ROLL. (a) The board shall prepare 25-10 and maintain an assessment roll showing the assessment against each 25-11 parcel of real property and against all applicable agricultural 25-12 products and the board's basis for the assessment. 25-13 (b) The board shall allow the public to inspect the 25-14 assessment roll. 25-15 Sec. 60.127. INTEREST ON ASSESSMENTS; LIEN. (a) An 25-16 assessment, including an assessment resulting from an addition or 25-17 correction to the assessment roll, penalties and interest on an 25-18 assessment, assessment collection expenses, and reasonable 25-19 attorney's fees incurred by the district in collecting an 25-20 assessment are: 25-21 (1) a first and prior lien against the property or 25-22 agricultural product assessed; 25-23 (2) superior to any other lien or claim other than a 25-24 lien or claim for county, school district, or municipal ad valorem 25-25 taxes; and 25-26 (3) the personal liability of and charge against the 25-27 owners of the property or the agricultural product when the 26-1 assessment was made, even if the owners are not named in an 26-2 assessment proceeding. 26-3 (b) The lien is effective from the date of the order 26-4 imposing the assessment until the assessment and any related 26-5 penalties, interest, collection expenses, or attorney's fees are 26-6 paid. 26-7 Sec. 60.128. MISTAKES. After notice and hearing in the 26-8 manner required for an original assessment, the board may impose an 26-9 assessment to correct a mistake in the assessment: 26-10 (1) relating to the total cost of the assessment; or 26-11 (2) covering a delinquency or collection costs. 26-12 Sec. 60.129. NOTICE OF HEARING. (a) In addition to other 26-13 notice required by law, the board shall provide notice of an 26-14 assessment hearing in a newspaper with general circulation in the 26-15 district. The publication must be made not later than the 14th day 26-16 before the date of the hearing. 26-17 (b) The notice must include the: 26-18 (1) time and place of the hearing; 26-19 (2) purpose of the proposed assessment; 26-20 (3) estimated cost of the purpose for which the 26-21 assessment is proposed, including interest during construction and 26-22 associated financing costs; and 26-23 (4) proposed assessment method. 26-24 Sec. 60.130. CONDUCT OF HEARING. (a) A hearing on a 26-25 proposed assessment may be adjourned from time to time. 26-26 (b) If a hearings examiner conducts the hearing, the 26-27 examiner shall file with the board a report on the examiner's 27-1 findings under Subsection (d). 27-2 (c) The board or hearings examiner shall hear and rule on 27-3 all objections to a proposed assessment raised at the hearing by an 27-4 owner of real property that would be subject to the assessment or 27-5 on which agricultural products subject to the assessment are 27-6 produced. 27-7 (d) The board or hearings examiner shall make findings 27-8 relating to the: 27-9 (1) advisability of the assessment, including the 27-10 purpose of the assessment; 27-11 (2) estimated cost of the assessment; 27-12 (3) area benefited by the assessment; 27-13 (4) method of assessment; and 27-14 (5) method and time for payment of the assessment. 27-15 (e) After receiving or issuing the findings required by 27-16 Subsection (d), the board by order: 27-17 (1) shall: 27-18 (A) impose the assessment as a special 27-19 assessment on the property or on the agricultural products; and 27-20 (B) specify the method of payment on the 27-21 assessment; and 27-22 (2) may: 27-23 (A) amend a proposed assessment; 27-24 (B) require an assessment to be paid in periodic 27-25 installments, including interest; 27-26 (C) require an interest charge or penalty for a 27-27 failure to make timely payment; or 28-1 (D) charge an amount to cover a delinquency or 28-2 collection expense. 28-3 (f) If the board orders that an assessment may be paid in 28-4 periodic installments, the installments must: 28-5 (1) be in amounts sufficient to meet the annual costs 28-6 of the project or service for which the assessment is imposed; and 28-7 (2) continue for the number of years required to 28-8 retire the indebtedness or pay for the project or service for which 28-9 the assessment is imposed. 28-10 Sec. 60.131. REHEARING. On petition of a property owner 28-11 contesting an assessment of the owner's real property or 28-12 agricultural products received not later than the 30th day after 28-13 the date the assessment order is issued, the board may hold an 28-14 additional hearing to consider the assessment order. 28-15 Sec. 60.132. FILING OF NOTICE OF ASSESSMENT. Not later than 28-16 the 30th day after the date on which an assessment order is issued, 28-17 the district shall file a notice of the assessment in the deed 28-18 records of the county in which the real property to be assessed, or 28-19 on which the agricultural product to be assessed is produced, is 28-20 located. The notice must: 28-21 (1) provide a description of the real property or the 28-22 agricultural products that are subject to the assessment; 28-23 (2) state the name of the owner of the real property 28-24 or the agricultural products subject to the assessment; and 28-25 (3) describe how to contact the district for further 28-26 information about the assessment. 28-27 Sec. 60.133. APPEAL OF INDIVIDUAL ASSESSMENT. (a) A real 29-1 property owner or a person who owns an agricultural product against 29-2 which an assessment is imposed may appeal the assessment to a 29-3 district court in the county in which the real property assessed, 29-4 or on which the agricultural product is produced, is located. 29-5 (b) The owner must file the notice of appeal with the court 29-6 not later than the 30th day after the person receives a bill or 29-7 other notice of the assessment. 29-8 (c) The court shall review the appeal by trial de novo. 29-9 Sec. 60.134. ASSESSMENT AFTER APPEAL. If the court holds 29-10 that an assessment is invalid, the board may impose a new 29-11 assessment in accordance with this subchapter. 29-12 (Sections 60.135-60.150 reserved for expansion 29-13 SUBCHAPTER G. DISSOLUTION 29-14 Sec. 60.151. DISSOLUTION. The district dissolves if: 29-15 (1) a majority of the board votes for dissolution; and 29-16 (2) all district debts and obligations have been 29-17 discharged. 29-18 Sec. 60.152. DISPOSITION OF PROPERTY OF DISSOLVED DISTRICT. 29-19 Prior to dissolution, the board may sell its property. If the 29-20 purchaser of any district property is not a governmental entity, 29-21 purchase by the person renders the agricultural facility or other 29-22 property ineligible to issue tax-exempt securities, to impose 29-23 assessments, or to be eligible for tax-exempt status. 29-24 SECTION 2. This Act takes effect immediately if it receives 29-25 a vote of two-thirds of all the members elected to each house, as 29-26 provided by Section 39, Article III, Texas Constitution. If this 29-27 Act does not receive the vote necessary for immediate effect, this 30-1 Act takes effect September 1, 2001. 30-2 COMMITTEE AMENDMENT NO. 1 30-3 Amend H.B. 1880 as follows: 30-4 (1) On page 9, line 16 after the period add "A certified 30-5 copy of the order creating the district shall be filed in the real 30-6 property records in the county in which the district is located, 30-7 and shall include the legal description of the district." 30-8 (2) On Page 15, line 19 after the period add "Notice is not 30-9 required to be given pursuant to this paragraph unless a certified 30-10 copy of the order creating the district has been recorded in the 30-11 real property records in the county in which the land is located, 30-12 and such order contains the legal description of the district. A 30-13 purchaser, seller, lender, real estate broker, title insurance 30-14 company, and title insurance agent may conclusively rely on the 30-15 recorded certified copy of the order." 30-16 Hardcastle