1-1 By: Van de Putte S.B. No. 1716
1-2 (In the Senate - Filed March 9, 2001; March 14, 2001, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 19, 2001, reported favorably, as amended, by the
1-5 following vote: Yeas 7, Nays 0; April 19, 2001, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Staples
1-7 Amend S.B. No. 1716 as follows:
1-8 (1) In SECTION 12 of the bill, amend Subsection (a), Section
1-9 372.014, Local Government Code, to read as follows:
1-10 (a) An [assessment plan must provide that at least 10
1-11 percent of the cost of an improvement be paid by special
1-12 assessments against property in the improvement district. The]
1-13 assessment plan must be included in the annual service plan.
1-14 (2) In SECTION 16 of the bill, insert the following sentence
1-15 just prior to the final sentence of SECTION 16 of the bill:
1-16 "Delinquent installments of the assessment shall incur interest,
1-17 penalties, and attorney's fees in the same manner as delinquent ad
1-18 valorem taxes."
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to the authority of a county to establish public
1-22 improvement districts.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. The heading to Chapter 372, Local Government
1-25 Code, is amended to read as follows:
1-26 CHAPTER 372. IMPROVEMENT DISTRICTS IN MUNICIPALITIES AND
1-27 COUNTIES
1-28 SECTION 2. Section 372.002, Local Government Code, is
1-29 amended to read as follows:
1-30 Sec. 372.002. EXERCISE OF POWERS. Powers granted under this
1-31 subchapter may be exercised by a municipality or county in which
1-32 the governing body of the municipality or county initiates or
1-33 receives a petition requesting the establishment of a public
1-34 improvement district. A petition must comply with the requirements
1-35 of Section 372.005.
1-36 SECTION 3. Subsection (a), Section 372.003, Local Government
1-37 Code, is amended to read as follows:
1-38 (a) If the governing body of a municipality or county finds
1-39 that it promotes the interests of the municipality or county, the
1-40 governing body may undertake an improvement project that confers a
1-41 special benefit on a definable part of the municipality or county
1-42 or the municipality's extraterritorial jurisdiction. A project may
1-43 be undertaken in the municipality or county or the municipality's
1-44 extraterritorial jurisdiction.
1-45 SECTION 4. Subsection (a), Section 372.005, Local Government
1-46 Code, is amended to read as follows:
1-47 (a) A petition for the establishment of a public improvement
1-48 district must state:
1-49 (1) the general nature of the proposed improvement;
1-50 (2) the estimated cost of the improvement;
1-51 (3) the boundaries of the proposed assessment
1-52 district;
1-53 (4) the proposed method of assessment, which may
1-54 specify included or excluded classes of assessable property;
1-55 (5) the proposed apportionment of cost between the
1-56 public improvement district and the municipality or county as a
1-57 whole;
1-58 (6) whether the management of the district is to be by
1-59 the municipality or county, the private sector, or a partnership
1-60 between the municipality or county and the private sector;
1-61 (7) that the persons signing the petition request or
1-62 concur with the establishment of the district; and
1-63 (8) that an advisory body may be established to
2-1 develop and recommend an improvement plan to the governing body of
2-2 the municipality or county.
2-3 SECTION 5. Section 372.006, Local Government Code, is
2-4 amended to read as follows:
2-5 Sec. 372.006. FINDINGS. If a petition that complies with
2-6 this subchapter is filed, the governing body of the municipality or
2-7 county may make findings by resolution as to the advisability of
2-8 the proposed improvement, its estimated cost, the method of
2-9 assessment, and the apportionment of cost between the proposed
2-10 improvement district and the municipality or county as a whole.
2-11 SECTION 6. Subsection (a), Section 372.007, Local Government
2-12 Code, is amended to read as follows:
2-13 (a) Before holding the hearing required by Section 372.009,
2-14 the governing body of the municipality may use the services of
2-15 municipal employees, the governing body of the county may use the
2-16 services of county employees, or the governing body of the
2-17 municipality or county may employ consultants to prepare a report
2-18 to determine whether an improvement should be made as proposed by
2-19 petition or otherwise or whether the improvement should be made in
2-20 combination with other improvements authorized under this
2-21 subchapter. The governing body may also require that a preliminary
2-22 estimate of the cost of the improvement or combination of
2-23 improvements be made.
2-24 SECTION 7. Subsection (a), Section 372.008, Local Government
2-25 Code, is amended to read as follows:
2-26 (a) After receiving a petition that complies with Section
2-27 372.005, the governing body of the municipality or county may
2-28 appoint an advisory body with the responsibility of developing and
2-29 recommending an improvement plan to the governing body.
2-30 SECTION 8. Subsections (a), (b), and (c), Section 372.009,
2-31 Local Government Code, are amended to read as follows:
2-32 (a) A public improvement district may be established and
2-33 improvements provided by the district may be financed under this
2-34 subchapter only after the governing body of the municipality or
2-35 county holds a public hearing on the advisability of the
2-36 improvement.
2-37 (b) The hearing may be adjourned from time to time until the
2-38 governing body makes findings by resolution as to:
2-39 (1) the advisability of the improvement;
2-40 (2) the nature of the improvement;
2-41 (3) the estimated cost of the improvement;
2-42 (4) the boundaries of the public improvement district;
2-43 (5) the method of assessment; and
2-44 (6) the apportionment of costs between the district
2-45 and the municipality or county as a whole.
2-46 (c) Notice of the hearing must be given in a newspaper of
2-47 general circulation in the municipality or county. If any part of
2-48 the improvement district is to be located in the municipality's
2-49 extraterritorial jurisdiction or if any part of the improvements is
2-50 to be undertaken in the municipality's extraterritorial
2-51 jurisdiction, the notice must also be given in a newspaper of
2-52 general circulation in the part of the extraterritorial
2-53 jurisdiction in which the district is to be located or in which the
2-54 improvements are to be undertaken. The final publication of notice
2-55 must be made before the 15th day before the date of the hearing.
2-56 The notice must state:
2-57 (1) the time and place of the hearing;
2-58 (2) the general nature of the proposed improvement;
2-59 (3) the estimated cost of the improvement;
2-60 (4) the boundaries of the proposed assessment
2-61 district;
2-62 (5) the proposed method of assessment; and
2-63 (6) the proposed apportionment of cost between the
2-64 improvement district and the municipality or county as a whole.
2-65 SECTION 9. Section 372.010, Local Government Code, is
2-66 amended to read as follows:
2-67 Sec. 372.010. IMPROVEMENT ORDER. (a) During the six-month
2-68 period after the date of the final adjournment of the hearing under
2-69 Section 372.009, the governing body of the municipality or county
3-1 may authorize an improvement district if, by majority vote of all
3-2 members of the governing body, the members adopt a resolution
3-3 authorizing the district in accordance with its finding as to the
3-4 advisability of the improvement.
3-5 (b) An authorization takes effect when it has been published
3-6 one time in a newspaper of general circulation in the municipality
3-7 or county. If any part of the improvement district is located in
3-8 the municipality's extraterritorial jurisdiction or if any part of
3-9 the improvements is to be undertaken in the municipality's
3-10 extraterritorial jurisdiction, the authorization does not take
3-11 effect until the notice is also given one time in a newspaper of
3-12 general circulation in the part of the extraterritorial
3-13 jurisdiction in which the district is located or in which the
3-14 improvements are to be undertaken.
3-15 (c) Actual construction of an improvement may not begin
3-16 until after the 20th day after the date the authorization takes
3-17 effect and may not begin if during that 20-day period written
3-18 protests signed by at least two-thirds of the owners of record of
3-19 property within the improvement district or by the owners of record
3-20 of property comprising at least two-thirds of the total area of the
3-21 district are filed with the municipal or county secretary or other
3-22 officer performing the duties of the municipal or county secretary.
3-23 A person whose name appears on a protest may withdraw the name from
3-24 the protest at any time before the governing body of the
3-25 municipality or county convenes to determine the sufficiency of the
3-26 protest.
3-27 SECTION 10. Section 372.012, Local Government Code, is
3-28 amended to read as follows:
3-29 Sec. 372.012. AREA OF DISTRICT. The area of a public
3-30 improvement district to be assessed according to the findings of
3-31 the governing body of the municipality or county may be less than
3-32 the area described in the proposed boundaries stated by the notice
3-33 under Section 372.009. The area to be assessed may not include
3-34 property not described by the notice as being within the proposed
3-35 boundaries of the district unless a hearing is held to include the
3-36 property and notice for the hearing is given in the same manner as
3-37 notice under Section 372.009.
3-38 SECTION 11. Subsection (a), Section 372.013, Local
3-39 Government Code, is amended to read as follows:
3-40 (a) The advisory body shall prepare an ongoing service plan
3-41 and present the plan to the governing body of the municipality or
3-42 county for review and approval. The governing body may assign
3-43 responsibility for the plan to another entity in the absence of an
3-44 advisory body.
3-45 SECTION 12. Subsection (b), Section 372.014, Local
3-46 Government Code, is amended to read as follows:
3-47 (b) The municipality or county is responsible for payment of
3-48 assessments against exempt municipal or county property in the
3-49 district. Payment of assessments by other exempt jurisdictions
3-50 must be established by contract. An assessment paid by the
3-51 municipality or county under this subsection is considered to have
3-52 been paid by special assessment for the purposes of Subsection (a).
3-53 SECTION 13. Subsections (a) and (c), Section 372.015, Local
3-54 Government Code, are amended to read as follows:
3-55 (a) The governing body of the municipality or county shall
3-56 apportion the cost of an improvement to be assessed against
3-57 property in an improvement district. The apportionment shall be
3-58 made on the basis of special benefits accruing to the property
3-59 because of the improvement.
3-60 (c) The governing body may establish by ordinance or order:
3-61 (1) reasonable classifications and formulas for the
3-62 apportionment of the cost between the municipality or county and
3-63 the area to be assessed; and
3-64 (2) the methods of assessing the special benefits for
3-65 various classes of improvements.
3-66 SECTION 14. Subsections (a) and (b), Section 372.016, Local
3-67 Government Code, are amended to read as follows:
3-68 (a) After the total cost of an improvement is determined,
3-69 the governing body of the municipality or county shall prepare a
4-1 proposed assessment roll. The roll must state the assessment
4-2 against each parcel of land in the district, as determined by the
4-3 method of assessment chosen by the municipality or county under
4-4 this subchapter.
4-5 (b) The governing body shall file the proposed assessment
4-6 roll with the municipal secretary or other officer performing the
4-7 functions of the municipal secretary or in a district formed by a
4-8 county, the county tax assessor-collector. The proposed assessment
4-9 roll is subject to public inspection. The governing body shall
4-10 require the municipal secretary or other officer or county tax
4-11 assessor-collector to publish notice of the governing body's
4-12 intention to consider the proposed assessments at a public hearing.
4-13 The notice must be published in a newspaper of general circulation
4-14 in the municipality or county before the 10th day before the date
4-15 of the hearing. If any part of the improvement district is located
4-16 in the municipality's extraterritorial jurisdiction or if any part
4-17 of the improvements is to be undertaken in the municipality's
4-18 extraterritorial jurisdiction, the notice must also be published,
4-19 before the 10th day before the date of the hearing, in a newspaper
4-20 of general circulation in the part of the extraterritorial
4-21 jurisdiction in which the district is located or in which the
4-22 improvements are to be undertaken. The notice must state:
4-23 (1) the date, time, and place of the hearing;
4-24 (2) the general nature of the improvement;
4-25 (3) the cost of the improvement;
4-26 (4) the boundaries of the assessment district; and
4-27 (5) that written or oral objections will be considered
4-28 at the hearing.
4-29 SECTION 15. Section 372.017, Local Government Code, is
4-30 amended to read as follows:
4-31 Sec. 372.017. LEVY OF ASSESSMENT. (a) At or on the
4-32 adjournment of the hearing referred to by Section 372.016 on
4-33 proposed assessments, the governing body of the municipality or
4-34 county must hear and pass on any objection to a proposed
4-35 assessment. The governing body may amend a proposed assessment on
4-36 any parcel.
4-37 (b) After all objections have been heard and the governing
4-38 body has passed on the objections, the governing body by ordinance
4-39 or order shall levy the assessment as a special assessment on the
4-40 property. The governing body by ordinance or order shall specify
4-41 the method of payment of the assessment. The governing body may
4-42 provide that assessments be paid in periodic installments. The
4-43 installments must be in amounts necessary to meet annual costs for
4-44 improvements and must continue for a period necessary to retire the
4-45 indebtedness on the improvements.
4-46 SECTION 16. Section 372.018, Local Government Code, is
4-47 amended to read as follows:
4-48 Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An
4-49 assessment bears interest at the rate specified by the governing
4-50 body of the municipality or county, but may not exceed a rate that
4-51 is one-half of one percent higher than the actual interest rate
4-52 paid on the public debt used to finance the improvement. Interest
4-53 on the assessment between the effective date of the ordinance or
4-54 order levying the assessment and the date the first installment is
4-55 payable shall be added to the first installment. The interest on
4-56 any delinquent installment shall be added to each subsequent
4-57 installment until all delinquent installments are paid.
4-58 (b) An assessment or reassessment, with interest, the
4-59 expense of collection, and reasonable attorney's fees, if incurred,
4-60 is a first and prior lien against the property assessed, superior
4-61 to all other liens and claims except liens or claims for state,
4-62 county, school district, or municipality ad valorem taxes, and is a
4-63 personal liability of and charge against the owners of the property
4-64 regardless of whether the owners are named. The lien is effective
4-65 from the date of the ordinance or order levying the assessment
4-66 until the assessment is paid and may be enforced by the governing
4-67 body in the same manner that an ad valorem tax lien against real
4-68 property may be enforced by the governing body. The owner of
4-69 assessed property may pay at any time the entire assessment, with
5-1 interest that has accrued on the assessment, on any lot or parcel.
5-2 SECTION 17. Section 372.019, Local Government Code, is
5-3 amended to read as follows:
5-4 Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. After notice and a
5-5 hearing, the governing body of the municipality or county may make
5-6 supplemental assessments to correct omissions or mistakes in the
5-7 assessment relating to the total cost of the improvement. Notice
5-8 must be given and the hearing held under this section in the same
5-9 manner as required by Sections 372.016 and 372.017.
5-10 SECTION 18. Section 372.020, Local Government Code, is
5-11 amended to read as follows:
5-12 Sec. 372.020. REASSESSMENT. The governing body of the
5-13 municipality or county may make a reassessment or new assessment of
5-14 a parcel of land if:
5-15 (1) a court of competent jurisdiction sets aside an
5-16 assessment against the parcel;
5-17 (2) the governing body determines that the original
5-18 assessment is excessive; or
5-19 (3) on the written advice of counsel, the governing
5-20 body determines that the original assessment is invalid.
5-21 SECTION 19. Section 372.021, Local Government Code, is
5-22 amended to read as follows:
5-23 Sec. 372.021. SPECIAL IMPROVEMENT DISTRICT FUND. (a) A
5-24 municipality or county that intends to create a public improvement
5-25 district may by ordinance or order establish a special improvement
5-26 district fund in the municipal or county treasury.
5-27 (b) The municipality or county annually may levy a tax to
5-28 support the fund.
5-29 (c) The fund may be used to:
5-30 (1) pay the costs of planning, administration, and an
5-31 improvement authorized by this subchapter;
5-32 (2) prepare preliminary plans, studies, and
5-33 engineering reports to determine the feasibility of an improvement;
5-34 and
5-35 (3) if ordered by the governing body of the
5-36 municipality or county, pay the initial cost of the improvement
5-37 until temporary notes, time warrants, or improvement bonds have
5-38 been issued and sold.
5-39 (d) The fund is not required to be budgeted for expenditure
5-40 during any year, but the amount of the fund must be stated in the
5-41 municipality's or county's annual budget. The amount of the fund
5-42 must be based on an annual service plan that describes the public
5-43 improvements for the fiscal year.
5-44 (e) A grant-in-aid or contribution made to the municipality
5-45 or county for the planning and preparation of plans for an
5-46 improvement authorized under this subchapter may be credited to the
5-47 special improvement district fund.
5-48 SECTION 20. Section 372.022, Local Government Code, is
5-49 amended to read as follows:
5-50 Sec. 372.022. SEPARATE FUNDS. A separate public improvement
5-51 district fund shall be created in the municipal or county treasury
5-52 for each district. Proceeds from the sale of bonds, temporary
5-53 notes, and time warrants, and other sums appropriated to the fund
5-54 by the governing body of the municipality or county shall be
5-55 credited to the fund. The fund may be used solely to pay costs
5-56 incurred in making an improvement. When an improvement is
5-57 completed, the balance of the part of the assessment that is for
5-58 improvements shall be transferred to the fund established for the
5-59 retirement of bonds.
5-60 SECTION 21. Subsections (b), (d), and (e), Section 372.023,
5-61 Local Government Code, are amended to read as follows:
5-62 (b) A cost payable by the municipality or county as a whole
5-63 may be paid from general funds available for the purpose or other
5-64 available general funds.
5-65 (d) A cost payable from a special assessment that is to be
5-66 paid in installments and a cost payable by the municipality or
5-67 county as a whole but not payable from available general funds or
5-68 other available general improvement funds shall be paid by the
5-69 issuance and sale of revenue or general obligation bonds.
6-1 (e) While an improvement is in progress, the governing body
6-2 of the municipality or county may issue temporary notes or time
6-3 warrants to pay for the costs of the improvement and, on completion
6-4 of the improvement, issue revenue or general obligation bonds.
6-5 SECTION 22. Section 372.025, Local Government Code, is
6-6 amended to read as follows:
6-7 Sec. 372.025. TERMS AND CONDITIONS OF BONDS. (a) Revenue
6-8 bonds may be issued to mature serially or in any other manner but
6-9 must mature not later than 40 years after their date. A provision
6-10 may be made for the subsequent issuance of additional parity bonds
6-11 or subordinate lien bonds under terms and conditions specified in
6-12 the ordinance or order authorizing the issuance of the bonds.
6-13 (b) The bonds shall be executed and the bonds and interest
6-14 coupons appertaining to them are negotiable instruments within the
6-15 meaning and for all purposes of the Uniform Commercial Code
6-16 (Section 1.101 et seq., Business & Commerce Code). The ordinance
6-17 or order authorizing the issuance of the bonds must specify:
6-18 (1) whether the bonds are issued registrable as to
6-19 principal alone or as to both principal and interest;
6-20 (2) whether the bonds are redeemable before maturity;
6-21 (3) the form, denomination, and manner of issuance;
6-22 (4) the terms, conditions, and other details applying
6-23 to the bonds including the price, terms, and interest rates on the
6-24 bonds; and
6-25 (5) the manner of sale of the bonds.
6-26 (c) The ordinance or order authorizing the issuance of the
6-27 bonds may specify that the proceeds from the sale of the bonds:
6-28 (1) be used to pay interest on the bonds during and
6-29 after the period of acquisition or construction of an improvement
6-30 financed through the sale of the bonds;
6-31 (2) be used for creating a reserve fund for payment of
6-32 the principal of and interest on the bonds and for creating other
6-33 funds; and
6-34 (3) may be placed in time deposit or invested, until
6-35 needed.
6-36 SECTION 23. Subsections (a), (b), and (c), Section 372.026,
6-37 Local Government Code, are amended to read as follows:
6-38 (a) For the payment of bonds issued under this subchapter
6-39 and the payment of principal, interest, and any other amounts
6-40 required or permitted in connection with the bonds, the governing
6-41 body of the municipality or county may pledge all or part of the
6-42 income from improvements financed under this subchapter, including
6-43 income received in installment payments under Section 372.023.
6-44 (b) Pledged income must be fixed and collected in amounts
6-45 sufficient, with other pledged resources, to pay principal,
6-46 interest, and other expenses related to the bonds, and to the
6-47 extent required by the ordinance or order authorizing the bonds, to
6-48 pay for the operation, maintenance, and other expenses related to
6-49 improvements authorized by this subchapter.
6-50 (c) The bonds may also be secured by mortgages or deeds of
6-51 trust on any real property related to the facilities authorized
6-52 under this subchapter that are owned or are to be acquired by the
6-53 municipality or county and by chattel mortgages, liens, or security
6-54 interests on any personal property appurtenant to that real
6-55 property. The governing body may authorize the execution of trust
6-56 indentures, mortgages, deeds of trust, or other forms of
6-57 encumbrances as evidence of the indebtedness.
6-58 SECTION 24. Subsections (a) and (b), Section 372.027, Local
6-59 Government Code, are amended to read as follows:
6-60 (a) Revenue bonds issued under this subchapter may be
6-61 refunded or refinanced by the issuance of refunding bonds, under
6-62 terms or conditions set forth in ordinances or orders of the
6-63 municipality or county issuing the bonds. The provisions of this
6-64 subchapter applying generally to revenue bonds, including
6-65 provisions related to the issuance of those bonds, apply to
6-66 refunding bonds authorized by this section. The refunding bonds
6-67 may be sold and delivered in amounts necessary for the principal,
6-68 interest, and any redemption premium of the bonds to be refunded,
6-69 on the date of the maturity of the bond or any redemption date of
7-1 the bond.
7-2 (b) Refunding bonds may be issued for exchange with the
7-3 bonds they are refunding. The comptroller of public accounts shall
7-4 register refunding bonds described by this subsection and deliver
7-5 the bonds to holders of bonds being refunded in accordance with the
7-6 ordinance or order authorizing the issuance of refunding bonds.
7-7 The exchange may be made in one delivery or several installment
7-8 deliveries.
7-9 SECTION 25. This Act takes effect immediately if it receives
7-10 a vote of two-thirds of all the members elected to each house, as
7-11 provided by Section 39, Article III, Texas Constitution. If this
7-12 Act does not receive the vote necessary for immediate effect, this
7-13 Act takes effect September 1, 2001.
7-14 * * * * *