78R16375 MXM-D
By: Nelson, et al. S.B. No. 420
Substitute the following for S.B. No. 420:
By: Lewis C.S.S.B. No. 420
A BILL TO BE ENTITLED
AN ACT
relating to county development districts; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) Section 383.022, Local Government Code, is
amended to read as follows:
Sec. 383.022. PETITION OF LANDOWNERS. (a) To create a
district, a petition requesting creation must be filed with the
commissioners court of the county in which all of the land in the
proposed district is located.
(b) The petition must be accompanied by:
(1) a sworn statement indicating consent to creation
signed by the holders of fee simple title of all of the land in the
proposed district; and
(2) 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.
(b) The changes made to Section 383.022, Local Government
Code, by this section apply only to a county development district
created on or after the effective date of this section. A district
that is created before the effective date of this section is
governed by the law applicable to the district immediately before
the effective date of this section, and that law is continued in
effect for that purpose.
SECTION 2. (a) Subchapter B, Chapter 383, Local Government
Code, is amended by adding Section 383.0235 to read as follows:
Sec. 383.0235. CONSENT OF MUNICIPALITY. (a) Land in the
corporate limits of a municipality may 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) A municipality may 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:
(1) the owners of the majority of the assessed value of
real property in the proposed boundaries in the district according
to the most recent certified county tax appraisal roll; or
(2) at least 50 landowners in the proposed boundaries
of the district, if more than 50 persons own land in the proposed
boundaries according to the most recent certified county tax
appraisal roll.
(c) The petition must:
(1) describe the boundaries of the land to be included
in the district by:
(A) metes and bounds; or
(B) lot and block number, if there is a recorded
map or plat and survey of the area; and
(2) 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) The municipality may not:
(1) condition its consent on a limitation of the
amounts of the district's bonds; or
(2) require annexation as a condition to its consent.
(e) In its written consent to the inclusion of land in a
district, a municipality may:
(1) require the district to construct all facilities
to serve the land in accordance with plans and specifications that
the municipality has approved;
(2) provide that the municipality has the right to
inspect all facilities being constructed by the district;
(3) restrict the terms of the district's bonds and
notes issued to provide service to the land in the municipality's
corporate limits and restrict the conditions on the sale of the
district's bonds and notes if the restrictions do not generally
render the district's bonds and notes unmarketable; or
(4) require the district to enter into an allocation
agreement with the municipality before the first issue of bonds,
notes, warrants, or other obligations of the district, that
provides:
(A) a method by which the district continues to
exist following the annexation of all of the territory in the
district by the municipality, if the district is initially located
outside the corporate limits of the municipality;
(B) an allocation of governmental services to be
provided by the municipality or the district following the date of
the inclusion of all of the district's territory in the
municipality's corporate boundaries; and
(C) any other term considered appropriate by the
municipality's governing body.
(f) 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) Section 383.0235, Local Government Code, as added by
this section, applies only to land added to a county development
district on or after the effective date of this section. Land added
to a district before the effective date of this section is governed
by the law applicable to the district immediately before the
effective date of this section, and that law is continued in effect
for that purpose.
SECTION 3. (a) Section 383.034, Local Government Code, is
amended by adding Subsections (e) and (f) to read as follows:
(e) The temporary board of directors shall file an order
canvassing the results of an election with the district records and
the county clerk. The order must describe the district's
boundaries. The county clerk shall record the order.
(f) After receipt of the minute order under Subsection (c),
the taxing entity shall instruct the tax collector for that entity
to disclose on the tax statement for each property located in the
district that the property is located in the district. The tax
collector shall include the disclosure on each real property tax
statement that is issued after the tax collector receives the
instruction.
(b) The changes made to Section 383.034, Local Government
Code, by this section apply only to an election that occurs on or
after the effective date of this section. An election that occurs
before the effective date of this section is governed by the law
applicable to the election immediately before the effective date of
this section, and that law is continued in effect for that purpose.
SECTION 4. (a) Section 383.043, Local Government Code, is
amended to read as follows:
Sec. 383.043. PERSONS DISQUALIFIED TO SERVE. Section
49.052 [50.026], Water Code, applies to a director of a district.
(b) The changes made to Section 383.043, Local Government
Code, by this section apply only to a director of a county
development district appointed or elected on or after the effective
date of this section. A director appointed or elected before the
effective date of this section is governed by the law applicable to
the director immediately before the effective date of this section,
and that law is continued in effect for that purpose.
SECTION 5. Section 383.053, Local Government Code, is
amended by amending Subsection (a) and adding Subsections (d) and
(e) to read as follows:
(a) The board may establish regular meetings to conduct
district business and may hold special meetings at other times as
the business of the district requires. The board may designate one
or more places inside or outside the district for conducting the
meetings.
(d) On written request of at least 25 qualified voters who
reside in the district, the board may meet only in the district for
the year after the date on which the board received the request.
(e) The board shall 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. If the location of a meeting place outside the district
changes, the board shall give notice in the same manner.
SECTION 6. Subchapter D, Chapter 383, Local Government
Code, is amended by adding Sections 383.067 and 383.068 to read as
follows:
Sec. 383.067. INFRASTRUCTURE FOR RESIDENTIAL SUBDIVISIONS;
TOURISM. The district may 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. The district
may not impose an ad valorem tax.
SECTION 7. (a) Subchapter D, Chapter 383, Local Government
Code, is amended by adding Section 383.069 to read as follows:
Sec. 383.069. POSTING SIGNS IN DISTRICT. (a) Not later
than the 30th day after the date the district is created, the
district shall post signs indicating the district's existence at
two principal entrances to the district.
(b) The board shall determine the information on and the
size and exact location of the signs.
(b) Section 383.069, Local Government Code, as added by this
section, takes effect September 1, 2003.
(c) A county development district created under Chapter
383, Local Government Code, before the effective date of this
section, shall comply with Section 383.069, Local Government Code,
as added by this section, not later than January 1, 2004.
SECTION 8. (a) Section 383.084, Local Government Code, is
amended by amending Subsection (a) and adding Subsections (c) and
(d) to read as follows:
(a) Before the board issues bonds, the board, [on its own
motion or] on request of a landowner in the district, may petition
the commissioners court for the addition of land to or exclusion of
land from the district.
(c) The commissioners court shall file the order adding or
excluding land with the county clerk. The county clerk shall record
the order.
(d) The commissioners court may not add or exclude land
under this section unless:
(1) each person who owns land that is to be added or
excluded consents to the addition or exclusion; and
(2) each municipality has been notified of the
proposed addition or exclusion of land, if land in the
extraterritorial jurisdiction of that municipality is to be added
or excluded.
(b) Section 383.084, Local Government Code, as amended by
this section, applies only to land added to or excluded from a
county development district on or after the effective date of this
section. Land added to or excluded from a district before the
effective date of this section is governed by the law applicable to
the district immediately before the effective date of this section,
and that law is continued in effect for that purpose.
SECTION 9. (a) Chapter 383, Local Government Code, is
amended by adding Subchapter I to read as follows:
SUBCHAPTER I. AUDIT OF DISTRICT ACCOUNTS AND RECORDS
Sec. 383.141. DUTY TO AUDIT. (a) The board shall have the
district's fiscal accounts and records audited annually at the
expense of the district.
(b) The audit must be performed by a certified public
accountant or public accountant certified or licensed under Chapter
901, Occupations Code.
(c) The audit must be completed not later than the 120th day
after the last day of the district's fiscal year.
Sec. 383.142. FORM OF AUDIT. The district audit shall 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. Financial statements shall 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.
The board shall consider later changes to the standards or
principles adopted by the institute and may adopt a standard or
principle if the board considers it reasonable.
Sec. 383.143. FINANCIAL REPORTS. (a) Any depository,
treasurer, or bookkeeper who receives or has control over any
district money shall keep a full and itemized account of that
money.
(b) The depository, treasurer, and bookkeeper shall make
the itemized accounts available for audit.
Sec. 383.144. FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
REPORTS. (a) After the board approves the audit and not later than
the 135th day after the last day of the district's fiscal year, the
board shall file a copy of the audit report to the commissioners
court and the comptroller.
(b) If the board refuses to approve the audit report, the
board shall file a copy 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. The report must be accompanied by a
statement from the board explaining the reasons for its failure to
approve the report.
(c) A district shall file a copy of each audit in the
district office.
(d) When the audit report is filed with the comptroller
under Subsection (a), the board shall file with the comptroller an
annual filing affidavit in a format prescribed by the comptroller.
The affidavit must be executed by an authorized representative of
the board and must state that all copies of the audit report have
been filed as required by this section.
Sec. 383.145. NONCOMPLIANCE; DUTY OF COMPTROLLER. The
comptroller shall file with the attorney general the names of any
districts that do not comply with this subchapter.
(b) A county development district shall have an annual audit
performed as required by Subchapter I, Chapter 383, Local
Government Code, as added by this section, only for each fiscal year
that begins on or after the effective date of this section.
SECTION 10. (a) Chapter 383, Local Government Code, is
amended by adding Subchapter J to read as follows:
SUBCHAPTER J. NOTICE OF DISTRICT TO PURCHASERS OF REAL PROPERTY;
FILING OF INFORMATION
Sec. 383.161. NOTICE TO PURCHASERS. (a) 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 and for which the last tax statement for
the property includes a disclosure that the property is located in a
district, the person must give to the purchaser written notice as
prescribed by this section. An executory contract that has a
performance period of more than six months is considered a sale of
real property under this section.
(b) This section does not apply to a transfer of title:
(1) under any type of lien foreclosure;
(2) by deed in cancellation of indebtedness secured by
a lien on the property conveyed;
(3) by reason of a will or probate proceedings; or
(4) to a governmental entity.
(c) The notice must be executed by the seller and read:
"The real property, described below, that you are about to
purchase is located in the ______ County Development District.
(The tax statement will disclose if the property is located in a
district.) The district has taxing authority separate from any
other taxing authority and may, subject to voter approval, issue an
unlimited amount of bonds and impose a sales and use tax in payment
of those bonds.
"The purpose of this district is to provide incentives for
the location and development of projects to attract visitors and
tourists to the county through the issuance of bonds payable wholly
or partly from sales and use taxes. The cost of the facilities
built or maintained for this purpose is not included in the purchase
price of the property you are purchasing, and these facilities are
owned or to be owned by the district.
"The district is required to maintain information on the
Internet at a domain name that is substantially similar to the name
of the district or on the Internet as part of the county's website.
The information includes information about the tax rate, projected
tax rate, bond debt, amount of approved bonds, and other
information about the district.
_______________(date)
________________________________________Signature of Seller
"PURCHASER IS ADVISED THAT THE INFORMATION SHOWN ON THIS FORM
IS SUBJECT TO CHANGE BY THE DISTRICT AT ANY TIME. THE DISTRICT
ROUTINELY ESTABLISHES TAX RATES DURING THE MONTHS OF SEPTEMBER
THROUGH DECEMBER OF EACH YEAR, EFFECTIVE FOR THE YEAR IN WHICH THE
TAX RATES ARE APPROVED BY THE DISTRICT. PURCHASER IS ADVISED TO
CONTACT THE DISTRICT TO DETERMINE THE STATUS OF ANY CURRENT OR
PROPOSED CHANGES TO THE INFORMATION SHOWN ON THIS FORM.
"The undersigned purchaser acknowledges receipt of this
notice at or before the execution of a contract for the purchase of
the real property described in the notice or at closing of purchase
of the real property.
_______________(date)
____________________________________Signature of Purchaser"
Sec. 383.162. TIMING OF NOTICE. (a) The notice required
by Section 383.161 must be given to the prospective purchaser
before the execution of the contract. The notice may be given
separately or as an addendum or paragraph to the contract.
(b) If the seller fails to provide the notice required by
Section 383.161, the purchaser may terminate the contract not later
than the seventh day after the date of closing of the contract.
Sec. 383.163. SIGNATURE OF PURCHASER. The purchaser shall
sign the notice required by Section 383.161 or the contract that
includes the notice to evidence the purchaser's receipt of the
notice.
Sec. 383.164. RECORDING OF NOTICE. (a) At the closing of
the contract, the seller and purchaser shall 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 shall record the copy of the notice in the county deed
records.
(b) In completing the notice to be executed by the seller
and purchaser at the closing of the contract, 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, may rely on the accuracy of the information
form and map or plat that is last filed by the district under
Section 383.168 or maintained by the district under Section
383.170.
(c) Any information taken from the information form and map
or plat filed by the district under Section 383.168 or 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) In completing the notice required to be
given to a prospective purchaser before the execution of the
contract, 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, may 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 or maintained by the district
under Section 383.170. Any seller, purchaser, title insurance
company, real estate broker, examining attorney, or lienholder may
rely on the information form and map or plat filed by the district
or maintained by the district under Section 383.170.
(b) If the notice is given at closing as provided by this
subchapter, a purchaser, or the purchaser's heirs, successors, or
assigns, may not maintain 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 maintained by the district under Section 383.170,
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.
(c) 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. 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. 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 to any person for:
(1) failing to provide the notice required by Section
383.161 to a purchaser before the execution of the contract, or at
or before the closing of the contract, if the district did not file
the information form and map or plat as required under Section
383.168 or maintain the information required under Section 383.170;
or
(2) unintentionally providing a notice required by
Section 383.161 that is incorrect under the circumstances before
the execution of the contract or at or before the closing of the
contract.
Sec. 383.168. FILING INFORMATION; PENALTIES. (a) The
board shall 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) The information form filed by a district under this
section shall include:
(1) the district name;
(2) the complete legal description of the district
boundaries;
(3) the most recent rate of sales and use taxes imposed
by the district;
(4) the total amount of bonds that have been approved
by the voters and that may be issued by the district, excluding
refunding bonds and any bonds or portion of bonds payable solely
from revenues received or expected to be received under a contract
with a governmental entity;
(5) the aggregate initial principal amount of all
bonds of the district payable wholly or partly from taxes,
excluding refunding bonds and any bonds or portion of bonds payable
solely from revenues received or expected to be received under a
contract with a governmental entity, that have been previously
issued;
(6) the date on which the election to confirm the
creation of the district was held;
(7) a statement of the functions performed or to be
performed by the district; and
(8) the notice to purchasers form required by Section
383.161 to be furnished by a seller to a purchaser of real property
in the district, completed by the district with all the information
required to be furnished by the district.
(c) If a district has not imposed taxes when the district
files the information form under this section, the district shall
substitute for Subsections (b)(3) and (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) The information form and map or plat required by this
section must 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. Each amendment made
to an information form, map, or plat must 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) The information form required by this section must be
filed with the county clerk not later than the second day after the
date on which the results of the confirmation election are
declared.
(f) If there is a change in any of the information contained
in the district information form, map, or plat, the district shall
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) A person commits an offense if the person affirms 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. An offense under this subsection is a
Class C misdemeanor.
(h) If a district fails to timely file the information
required by this section, the attorney general or the district or
county attorney may seek a writ of mandamus to require the board to
prepare and file the necessary information.
(i) 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.
An offense under this subsection is a Class C misdemeanor. 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 amendment to the information form, map, or plat was
adopted and the director did not sign the information form, map, or
plat or amendment to the information form, map, or plat.
Sec. 383.169. ADDITIONAL FILING ON DISSOLUTION. (a) If a
district is dissolved, annexed to another local government, or
consolidated with another district, the board shall 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) After a district is dissolved and the statement is filed
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 shall maintain information on the Internet at a domain
name that is substantially similar to the name of the district or on
the Internet as part of the county's website.
(b) The district shall maintain on the Internet site the
most current information described by Section 383.168 in a format
that is readily accessible to the public without charge. The
district or the county may not charge the public to access the site.
(c) The attorney general, an interested person, the
district attorney, or the county attorney may seek a writ of
mandamus to compel the district to comply with this section.
(d) This section does not apply to a dissolved district.
(b) The changes in law made by Sections 383.161-383.165,
Local Government Code, as added by this section, apply only to a
transfer of property that occurs on or after January 1, 2004. For
purposes of this subsection, a transfer of property occurs before
January 1, 2004, if the contract of purchase and sale binding the
purchaser to purchase the property was executed before that date.
Property transferred before January 1, 2004, is covered by the law
in effect when the property was transferred, and the former law is
continued in effect for that purpose.
(c) A county development district created before the
effective date of this section shall file an information form as
required by Section 383.168, Local Government Code, as added by
this section, not later than September 3, 2003.
SECTION 11. Subchapter A, Chapter 383, Local Government
Code, is amended by adding Section 383.006 to read as follows:
Sec. 383.006. EXEMPTION FOR HAYS COUNTY DEVELOPMENT
DISTRICT NO. 1. 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. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2003.