By Thompson, Menendez H.B. No. 3172
77R8221 ATP-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of a county to establish public
1-3 improvement districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The heading to Chapter 372, Local Government Code,
1-6 is amended to read as follows:
1-7 CHAPTER 372. IMPROVEMENT DISTRICTS IN MUNICIPALITIES AND
1-8 COUNTIES
1-9 SECTION 2. Section 372.002, Local Government Code, is amended
1-10 to read as follows:
1-11 Sec. 372.002. EXERCISE OF POWERS. Powers granted under this
1-12 subchapter may be exercised by a municipality or county in which
1-13 the governing body of the municipality or county initiates or
1-14 receives a petition requesting the establishment of a public
1-15 improvement district. A petition must comply with the requirements
1-16 of Section 372.005.
1-17 SECTION 3. Section 372.003(a), Local Government Code, is
1-18 amended to read as follows:
1-19 (a) If the governing body of a municipality or county finds
1-20 that it promotes the interests of the municipality or county, the
1-21 governing body may undertake an improvement project that confers a
1-22 special benefit on a definable part of the municipality or county
1-23 or the municipality's extraterritorial jurisdiction. A project may
1-24 be undertaken in the municipality or county or the municipality's
2-1 extraterritorial jurisdiction.
2-2 SECTION 4. Section 372.005(a), Local Government Code, is
2-3 amended to read as follows:
2-4 (a) A petition for the establishment of a public improvement
2-5 district must state:
2-6 (1) the general nature of the proposed improvement;
2-7 (2) the estimated cost of the improvement;
2-8 (3) the boundaries of the proposed assessment
2-9 district;
2-10 (4) the proposed method of assessment, which may
2-11 specify included or excluded classes of assessable property;
2-12 (5) the proposed apportionment of cost between the
2-13 public improvement district and the municipality or county as a
2-14 whole;
2-15 (6) whether the management of the district is to be by
2-16 the municipality or county, the private sector, or a partnership
2-17 between the municipality or county and the private sector;
2-18 (7) that the persons signing the petition request or
2-19 concur with the establishment of the district; and
2-20 (8) that an advisory body may be established to
2-21 develop and recommend an improvement plan to the governing body of
2-22 the municipality or county.
2-23 SECTION 5. Section 372.006, Local Government Code, is amended
2-24 to read as follows:
2-25 Sec. 372.006. FINDINGS. If a petition that complies with
2-26 this subchapter is filed, the governing body of the municipality or
2-27 county may make findings by resolution as to the advisability of
3-1 the proposed improvement, its estimated cost, the method of
3-2 assessment, and the apportionment of cost between the proposed
3-3 improvement district and the municipality or county as a whole.
3-4 SECTION 6. Section 372.007(a), Local Government Code, is
3-5 amended to read as follows:
3-6 (a) Before holding the hearing required by Section 372.009,
3-7 the governing body of the municipality may use the services of
3-8 municipal employees, the governing body of the county may use the
3-9 services of county employees, or the governing body of the
3-10 municipality or county may employ consultants to prepare a report
3-11 to determine whether an improvement should be made as proposed by
3-12 petition or otherwise or whether the improvement should be made in
3-13 combination with other improvements authorized under this
3-14 subchapter. The governing body may also require that a preliminary
3-15 estimate of the cost of the improvement or combination of
3-16 improvements be made.
3-17 SECTION 7. Section 372.008(a), Local Government Code, is
3-18 amended to read as follows:
3-19 (a) After receiving a petition that complies with Section
3-20 372.005, the governing body of the municipality or county may
3-21 appoint an advisory body with the responsibility of developing and
3-22 recommending an improvement plan to the governing body.
3-23 SECTION 8. Sections 372.009(a)-(c), Local Government Code,
3-24 are amended to read as follows:
3-25 (a) A public improvement district may be established and
3-26 improvements provided by the district may be financed under this
3-27 subchapter only after the governing body of the municipality or
4-1 county holds a public hearing on the advisability of the
4-2 improvement.
4-3 (b) The hearing may be adjourned from time to time until the
4-4 governing body makes findings by resolution as to:
4-5 (1) the advisability of the improvement;
4-6 (2) the nature of the improvement;
4-7 (3) the estimated cost of the improvement;
4-8 (4) the boundaries of the public improvement district;
4-9 (5) the method of assessment; and
4-10 (6) the apportionment of costs between the district
4-11 and the municipality or county as a whole.
4-12 (c) Notice of the hearing must be given in a newspaper of
4-13 general circulation in the municipality or county. If any part of
4-14 the improvement district is to be located in the municipality's
4-15 extraterritorial jurisdiction or if any part of the improvements is
4-16 to be undertaken in the municipality's extraterritorial
4-17 jurisdiction, the notice must also be given in a newspaper of
4-18 general circulation in the part of the extraterritorial
4-19 jurisdiction in which the district is to be located or in which the
4-20 improvements are to be undertaken. The final publication of notice
4-21 must be made before the 15th day before the date of the hearing.
4-22 The notice must state:
4-23 (1) the time and place of the hearing;
4-24 (2) the general nature of the proposed improvement;
4-25 (3) the estimated cost of the improvement;
4-26 (4) the boundaries of the proposed assessment
4-27 district;
5-1 (5) the proposed method of assessment; and
5-2 (6) the proposed apportionment of cost between the
5-3 improvement district and the municipality or county as a whole.
5-4 SECTION 9. Section 372.010, Local Government Code, is amended
5-5 to read as follows:
5-6 Sec. 372.010. IMPROVEMENT ORDER. (a) During the six-month
5-7 period after the date of the final adjournment of the hearing under
5-8 Section 372.009, the governing body of the municipality or county
5-9 may authorize an improvement district if, by majority vote of all
5-10 members of the governing body, the members adopt a resolution
5-11 authorizing the district in accordance with its finding as to the
5-12 advisability of the improvement.
5-13 (b) An authorization takes effect when it has been published
5-14 one time in a newspaper of general circulation in the municipality
5-15 or county. If any part of the improvement district is located in
5-16 the municipality's extraterritorial jurisdiction or if any part of
5-17 the improvements is to be undertaken in the municipality's
5-18 extraterritorial jurisdiction, the authorization does not take
5-19 effect until the notice is also given one time in a newspaper of
5-20 general circulation in the part of the extraterritorial
5-21 jurisdiction in which the district is located or in which the
5-22 improvements are to be undertaken.
5-23 (c) Actual construction of an improvement may not begin
5-24 until after the 20th day after the date the authorization takes
5-25 effect and may not begin if during that 20-day period written
5-26 protests signed by at least two-thirds of the owners of record of
5-27 property within the improvement district or by the owners of record
6-1 of property comprising at least two-thirds of the total area of the
6-2 district are filed with the municipal or county secretary or other
6-3 officer performing the duties of the municipal or county secretary.
6-4 A person whose name appears on a protest may withdraw the name from
6-5 the protest at any time before the governing body of the
6-6 municipality or county convenes to determine the sufficiency of the
6-7 protest.
6-8 SECTION 10. Section 372.012, Local Government Code, is
6-9 amended to read as follows:
6-10 Sec. 372.012. AREA OF DISTRICT. The area of a public
6-11 improvement district to be assessed according to the findings of
6-12 the governing body of the municipality or county may be less than
6-13 the area described in the proposed boundaries stated by the notice
6-14 under Section 372.009. The area to be assessed may not include
6-15 property not described by the notice as being within the proposed
6-16 boundaries of the district unless a hearing is held to include the
6-17 property and notice for the hearing is given in the same manner as
6-18 notice under Section 372.009.
6-19 SECTION 11. Section 372.013(a), Local Government Code, is
6-20 amended to read as follows:
6-21 (a) The advisory body shall prepare an ongoing service plan
6-22 and present the plan to the governing body of the municipality or
6-23 county for review and approval. The governing body may assign
6-24 responsibility for the plan to another entity in the absence of an
6-25 advisory body.
6-26 SECTION 12. Section 372.014(b), Local Government Code, is
6-27 amended to read as follows:
7-1 (b) The municipality or county is responsible for payment of
7-2 assessments against exempt municipal or county property in the
7-3 district. Payment of assessments by other exempt jurisdictions
7-4 must be established by contract. An assessment paid by the
7-5 municipality or county under this subsection is considered to have
7-6 been paid by special assessment for the purposes of Subsection (a).
7-7 SECTION 13. Sections 372.015(a) and (c), Local Government
7-8 Code, are amended to read as follows:
7-9 (a) The governing body of the municipality or county shall
7-10 apportion the cost of an improvement to be assessed against
7-11 property in an improvement district. The apportionment shall be
7-12 made on the basis of special benefits accruing to the property
7-13 because of the improvement.
7-14 (c) The governing body may establish by ordinance or order:
7-15 (1) reasonable classifications and formulas for the
7-16 apportionment of the cost between the municipality or county and
7-17 the area to be assessed; and
7-18 (2) the methods of assessing the special benefits for
7-19 various classes of improvements.
7-20 SECTION 14. Sections 372.016(a) and (b), Local Government
7-21 Code, are amended to read as follows:
7-22 (a) After the total cost of an improvement is determined,
7-23 the governing body of the municipality or county shall prepare a
7-24 proposed assessment roll. The roll must state the assessment
7-25 against each parcel of land in the district, as determined by the
7-26 method of assessment chosen by the municipality or county under
7-27 this subchapter.
8-1 (b) The governing body shall file the proposed assessment
8-2 roll with the municipal secretary or other officer performing the
8-3 functions of the municipal secretary or in a district formed by a
8-4 county, the county tax assessor-collector. The proposed assessment
8-5 roll is subject to public inspection. The governing body shall
8-6 require the municipal secretary or other officer or county tax
8-7 assessor-collector to publish notice of the governing body's
8-8 intention to consider the proposed assessments at a public hearing.
8-9 The notice must be published in a newspaper of general circulation
8-10 in the municipality or county before the 10th day before the date
8-11 of the hearing. If any part of the improvement district is located
8-12 in the municipality's extraterritorial jurisdiction or if any part
8-13 of the improvements is to be undertaken in the municipality's
8-14 extraterritorial jurisdiction, the notice must also be published,
8-15 before the 10th day before the date of the hearing, in a newspaper
8-16 of general circulation in the part of the extraterritorial
8-17 jurisdiction in which the district is located or in which the
8-18 improvements are to be undertaken. The notice must state:
8-19 (1) the date, time, and place of the hearing;
8-20 (2) the general nature of the improvement;
8-21 (3) the cost of the improvement;
8-22 (4) the boundaries of the assessment district; and
8-23 (5) that written or oral objections will be considered
8-24 at the hearing.
8-25 SECTION 15. Section 372.017, Local Government Code, is
8-26 amended to read as follows:
8-27 Sec. 372.017. LEVY OF ASSESSMENT. (a) At or on the
9-1 adjournment of the hearing referred to by Section 372.016 on
9-2 proposed assessments, the governing body of the municipality or
9-3 county must hear and pass on any objection to a proposed
9-4 assessment. The governing body may amend a proposed assessment on
9-5 any parcel.
9-6 (b) After all objections have been heard and the governing
9-7 body has passed on the objections, the governing body by ordinance
9-8 or order shall levy the assessment as a special assessment on the
9-9 property. The governing body by ordinance or order shall specify
9-10 the method of payment of the assessment. The governing body may
9-11 provide that assessments be paid in periodic installments. The
9-12 installments must be in amounts necessary to meet annual costs for
9-13 improvements and must continue for a period necessary to retire the
9-14 indebtedness on the improvements.
9-15 SECTION 16. Section 372.018, Local Government Code, is
9-16 amended to read as follows:
9-17 Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An
9-18 assessment bears interest at the rate specified by the governing
9-19 body of the municipality or county, but may not exceed a rate that
9-20 is one-half of one percent higher than the actual interest rate
9-21 paid on the public debt used to finance the improvement. Interest
9-22 on the assessment between the effective date of the ordinance or
9-23 order levying the assessment and the date the first installment is
9-24 payable shall be added to the first installment. The interest on
9-25 any delinquent installment shall be added to each subsequent
9-26 installment until all delinquent installments are paid.
9-27 (b) An assessment or reassessment, with interest, the
10-1 expense of collection, and reasonable attorney's fees, if incurred,
10-2 is a first and prior lien against the property assessed, superior
10-3 to all other liens and claims except liens or claims for state,
10-4 county, school district, or municipality ad valorem taxes, and is a
10-5 personal liability of and charge against the owners of the property
10-6 regardless of whether the owners are named. The lien is effective
10-7 from the date of the ordinance or order levying the assessment
10-8 until the assessment is paid and may be enforced by the governing
10-9 body in the same manner that an ad valorem tax lien against real
10-10 property may be enforced by the governing body. The owner of
10-11 assessed property may pay at any time the entire assessment, with
10-12 interest that has accrued on the assessment, on any lot or parcel.
10-13 SECTION 17. Section 372.019, Local Government Code, is
10-14 amended to read as follows:
10-15 Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. After notice and a
10-16 hearing, the governing body of the municipality or county may make
10-17 supplemental assessments to correct omissions or mistakes in the
10-18 assessment relating to the total cost of the improvement. Notice
10-19 must be given and the hearing held under this section in the same
10-20 manner as required by Sections 372.016 and 372.017.
10-21 SECTION 18. Section 372.020, Local Government Code, is
10-22 amended to read as follows:
10-23 Sec. 372.020. REASSESSMENT. The governing body of the
10-24 municipality or county may make a reassessment or new assessment of
10-25 a parcel of land if:
10-26 (1) a court of competent jurisdiction sets aside an
10-27 assessment against the parcel;
11-1 (2) the governing body determines that the original
11-2 assessment is excessive; or
11-3 (3) on the written advice of counsel, the governing
11-4 body determines that the original assessment is invalid.
11-5 SECTION 19. Section 372.021, Local Government Code, is
11-6 amended to read as follows:
11-7 Sec. 372.021. SPECIAL IMPROVEMENT DISTRICT FUND. (a) A
11-8 municipality or county that intends to create a public improvement
11-9 district may by ordinance or order establish a special improvement
11-10 district fund in the municipal or county treasury.
11-11 (b) The municipality or county annually may levy a tax to
11-12 support the fund.
11-13 (c) The fund may be used to:
11-14 (1) pay the costs of planning, administration, and an
11-15 improvement authorized by this subchapter;
11-16 (2) prepare preliminary plans, studies, and
11-17 engineering reports to determine the feasibility of an improvement;
11-18 and
11-19 (3) if ordered by the governing body of the
11-20 municipality or county, pay the initial cost of the improvement
11-21 until temporary notes, time warrants, or improvement bonds have
11-22 been issued and sold.
11-23 (d) The fund is not required to be budgeted for expenditure
11-24 during any year, but the amount of the fund must be stated in the
11-25 municipality's or county's annual budget. The amount of the fund
11-26 must be based on an annual service plan that describes the public
11-27 improvements for the fiscal year.
12-1 (e) A grant-in-aid or contribution made to the municipality
12-2 or county for the planning and preparation of plans for an
12-3 improvement authorized under this subchapter may be credited to the
12-4 special improvement district fund.
12-5 SECTION 20. Section 372.022, Local Government Code, is
12-6 amended to read as follows:
12-7 Sec. 372.022. SEPARATE FUNDS. A separate public improvement
12-8 district fund shall be created in the municipal or county treasury
12-9 for each district. Proceeds from the sale of bonds, temporary
12-10 notes, and time warrants, and other sums appropriated to the fund
12-11 by the governing body of the municipality or county shall be
12-12 credited to the fund. The fund may be used solely to pay costs
12-13 incurred in making an improvement. When an improvement is
12-14 completed, the balance of the part of the assessment that is for
12-15 improvements shall be transferred to the fund established for the
12-16 retirement of bonds.
12-17 SECTION 21. Sections 372.023(b), (d), and (e), Local
12-18 Government Code, are amended to read as follows:
12-19 (b) A cost payable by the municipality or county as a whole
12-20 may be paid from general funds available for the purpose or other
12-21 available general funds.
12-22 (d) A cost payable from a special assessment that is to be
12-23 paid in installments and a cost payable by the municipality or
12-24 county as a whole but not payable from available general funds or
12-25 other available general improvement funds shall be paid by the
12-26 issuance and sale of revenue or general obligation bonds.
12-27 (e) While an improvement is in progress, the governing body
13-1 of the municipality or county may issue temporary notes or time
13-2 warrants to pay for the costs of the improvement and, on completion
13-3 of the improvement, issue revenue or general obligation bonds.
13-4 SECTION 22. Section 372.025, Local Government Code, is
13-5 amended to read as follows:
13-6 Sec. 372.025. TERMS AND CONDITIONS OF BONDS. (a) Revenue
13-7 bonds may be issued to mature serially or in any other manner but
13-8 must mature not later than 40 years after their date. A provision
13-9 may be made for the subsequent issuance of additional parity bonds
13-10 or subordinate lien bonds under terms and conditions specified in
13-11 the ordinance or order authorizing the issuance of the bonds.
13-12 (b) The bonds shall be executed and the bonds and interest
13-13 coupons appertaining to them are negotiable instruments within the
13-14 meaning and for all purposes of the Uniform Commercial Code
13-15 (Section 1.101 et seq., Business & Commerce Code). The ordinance
13-16 or order authorizing the issuance of the bonds must specify:
13-17 (1) whether the bonds are issued registrable as to
13-18 principal alone or as to both principal and interest;
13-19 (2) whether the bonds are redeemable before maturity;
13-20 (3) the form, denomination, and manner of issuance;
13-21 (4) the terms, conditions, and other details applying
13-22 to the bonds including the price, terms, and interest rates on the
13-23 bonds; and
13-24 (5) the manner of sale of the bonds.
13-25 (c) The ordinance or order authorizing the issuance of the
13-26 bonds may specify that the proceeds from the sale of the bonds:
13-27 (1) be used to pay interest on the bonds during and
14-1 after the period of acquisition or construction of an improvement
14-2 financed through the sale of the bonds;
14-3 (2) be used for creating a reserve fund for payment of
14-4 the principal of and interest on the bonds and for creating other
14-5 funds; and
14-6 (3) may be placed in time deposit or invested, until
14-7 needed.
14-8 SECTION 23. Sections 372.026(a), (b), and (c), Local
14-9 Government Code, are amended to read as follows:
14-10 (a) For the payment of bonds issued under this subchapter
14-11 and the payment of principal, interest, and any other amounts
14-12 required or permitted in connection with the bonds, the governing
14-13 body of the municipality or county may pledge all or part of the
14-14 income from improvements financed under this subchapter, including
14-15 income received in installment payments under Section 372.023.
14-16 (b) Pledged income must be fixed and collected in amounts
14-17 sufficient, with other pledged resources, to pay principal,
14-18 interest, and other expenses related to the bonds, and to the
14-19 extent required by the ordinance or order authorizing the bonds, to
14-20 pay for the operation, maintenance, and other expenses related to
14-21 improvements authorized by this subchapter.
14-22 (c) The bonds may also be secured by mortgages or deeds of
14-23 trust on any real property related to the facilities authorized
14-24 under this subchapter that are owned or are to be acquired by the
14-25 municipality or county and by chattel mortgages, liens, or security
14-26 interests on any personal property appurtenant to that real
14-27 property. The governing body may authorize the execution of trust
15-1 indentures, mortgages, deeds of trust, or other forms of
15-2 encumbrances as evidence of the indebtedness.
15-3 SECTION 24. Sections 372.027(a) and (b), Local Government
15-4 Code, are amended to read as follows:
15-5 (a) Revenue bonds issued under this subchapter may be
15-6 refunded or refinanced by the issuance of refunding bonds, under
15-7 terms or conditions set forth in ordinances or orders of the
15-8 municipality or county issuing the bonds. The provisions of this
15-9 subchapter applying generally to revenue bonds, including
15-10 provisions related to the issuance of those bonds, apply to
15-11 refunding bonds authorized by this section. The refunding bonds
15-12 may be sold and delivered in amounts necessary for the principal,
15-13 interest, and any redemption premium of the bonds to be refunded,
15-14 on the date of the maturity of the bond or any redemption date of
15-15 the bond.
15-16 (b) Refunding bonds may be issued for exchange with the
15-17 bonds they are refunding. The comptroller of public accounts shall
15-18 register refunding bonds described by this subsection and deliver
15-19 the bonds to holders of bonds being refunded in accordance with the
15-20 ordinance or order authorizing the issuance of refunding bonds. The
15-21 exchange may be made in one delivery or several installment
15-22 deliveries.
15-23 SECTION 25. This Act takes effect immediately if it receives
15-24 a vote of two-thirds of all the members elected to each house, as
15-25 provided by Section 39, Article III, Texas Constitution. If this
15-26 Act does not receive the vote necessary for immediate effect, this
15-27 Act takes effect September 1, 2001.