78R4935 SMJ-F

By:  Stick                                                        H.B. No. 1680



A BILL TO BE ENTITLED

AN ACT

relating to the ad valorem tax rate imposed by municipalities on 
property in certain municipal utility districts and to 
disannexation following a failure to set that rate.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter G, Chapter 54, Water Code, is amended 
by adding Section 54.605 to read as follows:
	Sec. 54.605.  TAX RATE IN CERTAIN DISTRICTS; DISANNEXATION 
FOR FAILURE TO SET PROPER RATE.  (a)  This section applies only to:
		(1)  a district that:                                                  
			(A)  is contained wholly within the boundaries of 
a municipality; and
			(B)  contains property subject to ad valorem taxes 
assessed by the district and by the municipality; and
		(2)  a municipality that has not assumed the bonded 
indebtedness of a district described by Subdivision (1).
	(b)  A municipality shall assess the municipality's ad 
valorem tax on property located in a district at a rate that 
provides that the combined rate of ad valorem taxes imposed by both 
the district and the municipality on property located in the 
district is not greater than the rate imposed by the municipality on 
property located outside the district.
	(c)  If a municipality imposes a tax rate that does not meet 
the requirements of Subsection (b), a majority of the registered 
voters in the district may petition the governing body of the 
municipality to disannex all the area contained within the 
boundaries of the district in the same manner and under the same 
conditions provided by Section 43.141, Local Government Code, for 
disannexation following a municipality's failure to provide 
services.
	SECTION 2.  This Act takes effect January 1, 2004, and 
applies only to ad valorem taxes imposed for a tax year beginning on 
or after that date.  An ad valorem tax imposed for a tax year 
beginning before the effective date of this Act is governed by the 
law in effect when the tax was imposed, and that law is continued in 
effect for that purpose.