C.S.S.B. 420 78 ) BILL ANALYSIS
C.S.S.B. 420
By: Nelson
County Affairs
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Currently, a county development district can be created without municipal
consent, upon petition of all landowners in the proposed district to
commissioners court, a public hearing, and a successful confirmation
election. C.S.S.B. 420 requires a proposed county development district to
track the authorization processes used for the creation of municipal
utility districts to ensure appropriate involvement of the impacted
municipality in the creation of the county development district.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution.
SECTION BY SECTION ANALYSIS
SECTION 1.
(a) Amends Section 383.022, Local Government Code, to require the petition
of landowners requesting creation of a county development district to be
accompanied by proof of written notice to a municipality of the district's
proposed creation and boundaries, if the proposed district contains land
in the extraterritorial jurisdiction of that municipality. Makes
non-substantive changes.
(b) Makes application of the changes made to Section 383.022, Local
Government Code,
by this Act prospective.
SECTION 2.
(a) Amends Chapter 383B, Local Government Code, by adding Section
383.0235, as follows:
Sec. 383.0235. CONSENT OF MUNICIPALITY.
(a) Authorizes land in the corporate limits of a municipality to be
included in a district only if the municipality, by resolution or
ordinance, grants its written consent to the inclusion of the land in the
district.
(b) Authorizes a municipality to consent in writing to the inclusion in
the district
of land in the corporate limits of a municipality only if the
municipality receives a
petition requesting the municipality's consent to the inclusion of land
signed by
certain landowners who meet specific criteria.
) Requires the petition to describe the boundaries of the land to be
included in the district by metes and bounds or lot and block number, if
there is a recorded map or plat and survey of the area, and to state the
general nature of the work proposed to be done by the district, the
necessity for the work, and the cost of the project as then estimated by
those filing the petition.
(d) Provides that the municipality may not condition its consent on a
limitation of
the amounts of the districts's bonds or require annexation as a
condition to its
consent.
(e) Authorizes a municipality, in its written consent to the inclusion
of land in a
district, to perform certain tasks.
(f) Provides that in addition to rights and remedies provided by other
law, the
municipality is entitled to injunctive relief or a writ of mandamus
requiring the
district and its officials to observe and comply with the terms
prescribed in the
municipality's written consent if a district violates the terms of a
municipality's
written consent.
(b) Makes application of Section 383.0235, Local Government Code, as added
by this Act, prospective.
SECTION 3.
(a) Amends Section 383.034, Local Government Code, by adding Subsection
(e), to
require the temporary board of directors to file an order canvassing the
results of an election with
the district records and the county clerk. Requires the order to describe
the district's boundaries.
Requires the county clerk to record the order.
(b) Makes application of the changes made to Section 383.034, Local
Government Code, by this Act prospective.
SECTION 4.
(a) Amends Section 383.043, Local Government Code, to provide that Section
49.052, rather than 50.026, Water Code, applies to a director of a
district.
(b) Makes application of the changes made to Section 383.043, Local
Government Code,
by this Act prospective.
SECTION 5. Amends Section 383.053, Local Government Code, by amending
Subsection (a) and adding Subsections (d) and (e), as follows:
(a) Authorizes the board of directors of the district (board) to designate
one or more places inside or outside the district for conducting regular
or special meetings.
(d) Authorizes the board, on written request of at least 25 qualified
voters who reside in the district, to meet only in the district for the
year after the date on which the board received the request.
(e) Requires the board to give notice of any meeting place outside the
district by
filing a resolution establishing the location of the meeting place with
the
commissioners court and by publishing notice of the location in a
newspaper of
general circulation in the district. Requires the board, if the location
of the meeting changes, to give notice in the same manner.
SECTION 6. Amends Chapter 383D, Local Government Code, by adding Sections
383.067 and
383.068, as follows:
Sec. 383.067. INFRASTRUCTURE FOR RESIDENTIAL SUBDIVISIONS; TOURISM.
Authorizes the district to construct, finance, or otherwise provide
infrastructure for a
residential subdivision only if the infrastructure serves the purpose of
attracting visitors and tourists to the county.
Sec. 383.068. AD VALOREM TAXES PROHIBITED. Provides that the district may
not
impose an ad valorem tax.
SECTION 7.
(a) Amends Chapter 383D, Local Government Code, by adding Section 383.069,
as follows:
Sec. 383.069 POSTING SIGNS IN THE DISTRICT.
(a) Requires the district, not later than the 30th day after the date the
district is created, to post signs indicating the district's existence at
two principal entrances to the district.
(b) Requires the board to determine the information on and the size and
exact
location of the signs.
(b) Provides that Section 383.069, Local Government Code, as added by this
section, takes effect September 1, 2003.
) Requires a county development district created under Chapter 383, Local
government Code, before the effective date of this section, to comply with
Section 383.069, Local Government Code, as added by this section, not
later than January 1, 2004.
SECTION 8.
(a) Amends Section 383.084, Local Government Code, by amending Subsection
(a) and adding Subsections ) and (d), as follows:
(a) Deletes existing language in text related to the issuance of bonds.
) Requires the commissioners court to file the order adding or excluding
land with the county clerk. Requires the county clerk to record the order.
(d) Provides that the commissioners court may not add or exclude land
under this
section unless certain criteria are met.
(b) Makes application of Section 383.084, Local Government Code, as
amended by this Act, prospective.
SECTION 9.
(a) Amends Chapter 383, Local Government Code, by adding Subchapter I, as
follows:
SUBCHAPTER I. AUDIT OF DISTRICT ACCOUNTS AND RECORDS
Sec. 383.141. DUTY TO AUDIT.
(a) Requires the board to have the district's fiscal accounts and records
audited annually at the expense of the district.
(b) Requires the audit to be performed by a certified public accountant
or public
accountant certified or licensed under Chapter 901, Occupations Code
(Accountants).
) Requires the audit to be completed not later than the 120th day after
the last day of the district's fiscal year.
Sec. 383.142. FORM OF AUDIT. Requires the district audit to be performed
according to
the generally accepted auditing standards adopted by the American
Institute of Certified
Public Accountants as of January 1, 2003, or later standards adopted by
the board under this section. Requires financial statements to be prepared
in accordance with the generally
accepted accounting principles adopted by the American Institute of
Certified Public
Accountants as of January 1, 2003, or later principles adopted by the
board under this
section. Requires the board to consider later changes to the standards or
principles adopted by the institute and authorizes the board to adopt a
standard or principle if the board considers it reasonable.
Sec. 383.143. FINANCIAL REPORTS.
(a) Requires any depository, treasurer, or bookkeeper who receives or has
control over any district money to keep a full and itemized account of
that money.
(b) Requires the depository, treasurer, and bookkeeper to make the
itemized
accounts available for audit.
Sec. 383.144. FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL REPORTS.
(a) Requires the board, after the board approves the audit and not later
than the 135th day after the last day of the districts's fiscal year, to
file a copy of the audit report to the commissioners court and the
comptroller.
(b) Requires the board, if the board refuses to approve the audit report,
to file a copy of the of the report to the commissioners court and the
comptroller not later than the 135th day after the last day of the
district's fiscal year. Requires the report to be accompanied by a
statement from the board explaining the reasons for its failure to approve
the report.
) Requires a district to file a copy of each audit in the district
office.
(d) Requires the board, when the audit report is filed with the
comptroller under
Subsection (a), to file with the comptroller an annual filing affidavit
in a format
prescribed by the comptroller. Requires the affidavit to be executed by an
authorized representative of the board and to state that all copies of the
audit report have been filed as required by this section.
Sec. 383.145. NONCOMPLIANCE; DUTY OF COMPTROLLER. Requires the comptroller
to file with the attorney general the names of any districts that do not
comply with this subchapter.
(b) Requires a county development district to have an annual audit
performed as required by Chapter 383I, Local Government Code, as added by
this section, only for the fiscal year that begins on or after the
effective date of this section.
SECTION 10.
(a) Amends Chapter 383, Local Government Code, by adding Subchapter J, as
follows:
SUBCHAPTER J. NOTICE OF DISTRICT TO PURCHASERS OF REAL PROPERTY;
FILING OF INFORMATION
Sec. 383.161. NOTICE TO PURCHASERS.
(a) Requires a person, if a person proposes to sell real property located
in a district that is acquiring or planning to acquire a project that has
been financed or is proposed to be financed with district bonds payable
wholly or partly from district taxes, to give to the purchaser written
notice as prescribed by this section. Provides that an executory contract
that has a performance period of more than six months is considered a sale
of real property under this section.
(b) Provides that this section does not apply to a transfer of title
under certain
conditions.
) Requires the notice to be executed by the seller and read with certain
applicable language.
Sec. 383.162. TIMING OF NOTICE.
(a) Requires the notice required by Section 383.161 to be given to the
prospective purchaser before the execution of the contract. Authorizes the
notice to be given separately or as an addendum or paragraph to the
contract.
(b) Authorizes the purchaser, if the seller fails to provide the notice
required by
Section 383.161 (Notice To Purchasers), to terminate the contract.
Sec. 383.163. SIGNATURE OF PURCHASER. Requires the purchaser to sign the
notice
required by Section 383.161 (Notice To Purchasers) or the contract that
includes the notice to evidence the purchaser's receipt of the notice.
Sec. 383.164. RECORDING OF NOTICE.
(a) Requires the seller and purchaser, at the closing of the contract, to
execute and acknowledge a separate copy of the notice required by Section
383.161 containing information that is accurate at the time of the closing
and to record the copy of the notice in the county deed records.
(b) Authorizes a seller, title company, real estate broker, or examining
attorney, and any agent, representative, or person acting on behalf of the
seller, company, broker, or attorney, in completing the notice to be
executed by the seller and purchaser at the closing of the contract, to
rely on the accuracy of the information form and map or plat that is last
filed by the district under Section 383.170 (Filing Information;
Penalties).
) Provides that any information taken from the information form and map
or plat
maintained by the district under Section 383.170 is conclusively presumed
to be correct as a matter of law for purposes of this section.
Sec. 383.165. RELIANCE ON INFORMATION FORM AND MAP OR PLAT FILED BY
DISTRICT.
(a) Authorizes a seller, title insurance company, examining attorney,
vendor of property and tax information, real estate broker, or lienholder,
and any agent, representative, or person acting on behalf of the seller,
company, attorney, vendor, broker, or lienholder, in completing the notice
required to be given to a prospective purchaser before the execution of
the contract, to rely on the information contained in the information form
and map or plat filed of record by the district in effect as of January 1
of each year. Authorizes any seller, purchaser, title insurance company,
real estate broker, examining attorney, or lienholder to rely on the
information form and map or plat filed by the district.
(b) Prohibits a purchaser, or the purchaser's heirs, successors, assigns,
if the notice is not given at closing as provided by this subchapter, from
maintaining an action, including an action for damages, against a seller,
title insurance company, real estate broker, or lienholder, or any agent,
representative, or person acting on behalf of the seller, company, broker,
or lienholder, because of the seller's use of the information filed of
record by the district or the seller's reliance on the filed plat and
filed legal description of the district to determine whether the property
to be purchased is in the district.
) Provides that an action may not be maintained against a title company
for the
failure to disclose that the described real property is included in a
district if the
district did not file for record the information form and map or plat with
the county clerk.
Sec. 383.166. WAIVER OF DAMAGES. Provides that a purchaser who purchases
real
property in a district and who later sells the property is conclusively
considered on the
closing of the sale to have waived any prior right to damages under this
subchapter.
Sec. 383.167. EXEMPTION FROM DAMAGES. Provides that a seller, title
company, real estate broker, or examining attorney, and an agent,
representative, or person acting on behalf of the seller, company, broker,
or attorney, is not liable for damages under Section 383.166 or liable for
any other damages to any person for not complying with certain factors.
Sec. 383.168. FILING INFORMATION; PENALTIES
(a) Requires the board to file with the county clerk an affirmed and
acknowledged information form that includes the information required in
Subsection (b) and a complete map or plat that describes the district
boundaries.
(b) Requires the information form filed by a district under this section
to include
certain information.
) Requires the district, if a district has not imposed taxes when the
district files the information form under this section, to substitute for
Subsections (b)(3) and (b)(5) a statement that the district has not
imposed taxes at the time of filing that includes the district's most
recent projected rate of debt service tax.
(d) Requires the information form and map or plat required by this section
to be
signed by a majority of the directors and affirmed and acknowledged by
each director who signed the form and map or plat before it is filed with
the county clerk. Requires each amendment made to an information form,
map, or plat to be signed by the directors and affirmed and acknowledged
by each director who signed the form and map or plat before it is filed
with the county clerk.
(e) Requires the information form required by this section to be filed
with the county clerk not later than the second day after the date on
which the results of the
conformation election are declared.
(f) Requires the district, if there is a change in any of the information
contained in
the district information form, map, or plat to file an amendment to the
information
form, map, or plat setting forth the changes made not later than the
seventh day after the change in information.
(g) Provides that a person commits an offense if the person affirm the
accuracy of
and acknowledges an information form, map, or plat or any amendment to an
information form, map, or plat that includes inaccurate information.
Provides that
an offense under this subsection is a Class C misdemeanor.
(h) Authorizes the attorney general or the district or county attorney, if
a district fails to timely file the information required by this section,
to seek a writ of mandamus to require the board to prepare and file the
necessary information.
(I) Provides that a director commits an offense if the director wilfully
fails to join in filing an information form, map, or plat or an amendment
to an information form, map, or plat under this section. Provides that an
offense under this subsection is a Class C misdemeanor. Provides that a
director is presumed to have wilfully failed to join in the filing of an
information form, map, or plat or an
amendment to an information form, map, or plat if that director was
present at the meeting at which the information included in the
information form, map, or plat or an amendment to an information form,
map, or plat or amendment to the information form, map, or plat was
adopted and the director did not sign the information map, or plat or an
amendment to an information form, map, or plat.
Sec. 383.169. ADDITIONAL FILING ON DISSOLUTION.
(a) Requires the board, if a district is dissolved, annexed to another
local government, or consolidated with another district, to file with the
information form a statement that the district is being dissolved,
annexed, or consolidated that includes the effective date of the
dissolution, annexation, or consolidation.
(b) Provides that after a district is dissolved and the statement is fled
under this
section, a person who sells property in the dissolved district is not
required to give
notice under this subchapter.
Sec. 383.170. FILING INFORMATION ON INTERNET.
(a) The district will maintain information on the Internet at a domain
name.
(b) Information from Sec. 383.168 shall be maintained on the Internet.
) The attorney general may seek a writ of mandamus to compel to the
district to comply with this section.
(d) This section does not apply to a dissolved district.
SECTION 11. Amends Chapter 383A, Local Government Code, by adding Section
383.006, as
follows:
Sec. 383.006. EXEMPTION FOR HAYS COUNTY DEVELOPMENT DISTRICT NO.
1. Provides that the changes in law made by Senate Bill No. 420, Acts of
the 78th
Legislature, Regular Session, 2003, do not apply to the Hays County
Development District No. 1 and the law as it existed immediately before
the effective date of that Act is continued in effect for purposes related
to that district.
SECTION 12. Effective date: upon passage or September 1, 2003.
COMPARISON OF ORIGINAL TO SUBSTITUTE
CSSB 420 adds that after the receipt of the minute order under Subsection
), the taxing entity is required to instruct the tax collector to
disclose on tax statements the district that the property is located in a
district. The tax collector is also required to include the disclosure on
all real property tax statements for property located in the district
issued after the tax collector receives the instruction. CSSB 420 requires
the District to maintain information on the Internet and stipulates the
information that must be included in the information. It provides that
the purchaser has seven days to terminate the contract if the seller fails
to provide notice required by Section 383.161. Other nonsubstantive or
conforming changes are made.