By: Eissler H.B. No. 2197

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of regional participation agreements between certain municipalities and special districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 43, Local Government Code, is amended by adding Section 43.0754 to read as follows:

Sec. 43.0754. REGIONAL PARTICIPATION AGREEMENTS. (a) In this section:

(1) "District" means a political subdivision created by general or special law that has the powers of a municipal management district under Chapter 375 and a conservation and reclamation district under Chapters 49 and 54, Water Code, all or substantially all of the territory of which is located within the boundaries of a planned community and within the extraterritorial jurisdiction of one or more municipalities.

(2) "Municipality" means a municipality:

(A) that has a population of 1.5 million or more and that includes in its extraterritorial jurisdiction all or substantially all of the territory of a district; or

(B) that includes in its extraterritorial jurisdiction not more than 10 percent of the territory of the district.

(3) "Party" means a district, municipality, or other person that is a party to a regional participation agreement approved and entered into under this section.

(4) "Planned community" means a planned community of 20 square miles or more with a population of 50,000 or more that is subject in whole or in part to a restrictive covenant that contains an ad valorem-based assessment on real property used or to be used, in any part, to fund governmental or quasi-governmental services and facilities within and for the planned community.

(5) "Regional participation agreement" means a contract or agreement entered into under this section or in anticipation of the enactment of this section and any amendment, modification, supplement, addition, renewal, or extension to or of the contract or agreement or any proceeding relating to the contract or agreement.

(b) Notwithstanding any contrary law or municipal charter provision, the governing body or bodies of one or more municipalities and the governing body or bodies of one or more districts and other benefited persons may approve and authorize execution and performance of a regional participation agreement to further regional participation in the funding of eligible programs or projects between the municipality or municipalities and the district or districts and other benefited persons.

(c) A regional participation agreement may provide or allow for:

(1) the establishment, administration, use, investment, and application of a regional participation fund, which shall be a special fund or escrow account to be used solely for funding the costs and expenses of eligible programs or projects;

(2) payments to be made by a district, a municipality, or other persons into the regional participation fund for application currently or in the future toward eligible programs or projects;

(3) the methods and procedures by which eligible programs or projects are prioritized, identified, and selected for implementation and are planned, designed, bid, constructed, administered, inspected, and completed;

(4) the methods and procedures for accounting for amounts on deposit in, or to the credit of, or expended from the regional participation fund, as well as any related investment income or amounts due and owing to or from any party to such fund;

(5) credits against payments otherwise due by any party under the agreement resulting from taxes, charges, fees, assessments, tolls, or other payments in support of or related to the usage or costs of eligible programs or projects that are levied or imposed upon, assessed against, or made applicable to a party or its citizens, ratepayers, taxpayers, or constituents after the effective date of the agreement;

(6) any type of annexation of any part of the territory of a district to be deferred by a municipality for a mutually agreeable period;

(7) the release of all or part of the territory of a district from the extraterritorial jurisdiction of a municipality at a specified time or upon the occurrence of specified events;

(8) remedies for breach of the agreement;

(9) the modification, amendment, renewal, extension, or termination of the agreement;

(10) another district, municipality, or other benefited person to join the agreement as a party at any time;

(11) third-party beneficiaries to be specifically designated and conferred rights or remedies under the agreement; and

(12) any other provision or term to which the parties agree.

(d) A regional participation agreement may provide for the funding of any program or project, whether individual, intermittent, or continuing and whether located or conducted within or outside the boundaries of a party, for the planning, design, construction, acquisition, lease, rental, installment purchase, improvement, provision of furnishings or equipment, rehabilitation, repair, reconstruction, relocation, preservation, beautification, use, execution, administration, management, operation, or maintenance of any works, improvements, or facilities, or any functions or services, whether provided to, for, by, or on behalf of a party, that provide a material benefit to each party in the accomplishment of the public purposes of each party, related to:

(1) mobility or transportation, including mass transportation, traffic circulation, or ground, air, rail, water, or other means of transportation or movement of people, freight, goods or materials;

(2) health care treatment, research, teaching, or education facilities or infrastructure;

(3) parks or recreation, open space, and scenic, wildlife, wetlands, or wilderness areas;

(4) public assembly or shelter, including halls, arenas, stadiums or similar facilities for sporting events, exhibitions, conventions, or other mass assembly purposes;

(5) environmental preservation or enhancement, including air or water quality protection, improvement, preservation, or enhancement, and noise abatement;

(6) the supply, conservation, transportation, treatment, disposal, or reuse of water or wastewater;

(7) drainage, stormwater management or detention, and flood control or prevention; or

(8) public safety and security, including law enforcement, firefighting and fire prevention, emergency services and facilities, and homeland security.

(e) A regional participation agreement must be:

(1) in writing;

(2) approved by the governing body of each municipality or district that is or that becomes a party to the agreement; and

(3) must be recorded in the deed records of any county in which any territory of a district is located.

(f) Another district, municipality, or benefited person may join or become a party to a regional participation agreement in the manner authorized in the agreement.

(g) A regional participation agreement need not describe the land contained within the boundaries of a district that is a party to the agreement.

(h) A regional participation agreement binds each party to the agreement and each owner and future owner of land that is subject to the agreement. If a party or land or a landowner is excluded or removed from an agreement, the removal or exclusion is effective on the recordation of the amendment, supplement, modification, or restatement of the agreement implementing such removal or exclusion.

(i) A regional participation agreement may not require a district to make payments from any funds that are restricted, encumbered, or pledged for the payment of contractual obligations or indebtedness of a district. Otherwise, any party may commit or pledge any available source of funds, including unencumbered sales and use taxes, to make payments due or to become due under the agreement.

(j) A regional participation agreement and any action taken under the agreement are not subject to any method of approval or appeal under the Water Code.

(k) Notwithstanding any defect, ambiguity, discrepancy, invalidity, or unenforceability of a regional participation agreement that has been voluntarily entered into and fully executed by the parties thereto, or any contrary law, common law doctrine, or municipal charter provision, and for the duration of any annexation deferral period established in the agreement during which a district continues to perform its obligations under the agreement:

(1) Section 42.023 and any other law or municipal charter provision relating to the reduction of the extraterritorial jurisdiction of a municipality that is a party to the agreement shall not apply, and Sections 42.041(b)-(e) do not apply to any land or owner of land within a district that is a party to the agreement;

(2) the governing body of a municipality may not include the area covered by the agreement in a municipal annexation plan and may not initiate or continue an annexation proceeding relating to that area; and

(3) any area of a district to be released from the extraterritorial jurisdiction of a municipality pursuant to the agreement shall, by operation of law, and without further action by a party or its governing body, be released at the time or upon the occurrence of the events specified in the agreement.

(l) This section shall be liberally construed so as to give effect to its legislative purposes and to sustain the validity of a regional participation agreement if the agreement was entered into under or in anticipation of enactment of this section.

SECTION 2. The legislature finds and determines that the financial burdens of implementing essential regional public improvement projects, including projects located outside of municipal boundaries, or that are of substantial benefit to areas within and adjacent to a municipality, or to the state as a whole, often are borne by large municipalities in the state; that there exists insufficient legislative authority to promote and facilitate regional participation in the funding and implementation of such projects; that annexation of adjacent areas by large municipalities in many instances does not provide a satisfactory means of apportioning such financial burdens and may create or exacerbate public service delivery and financial burdens of municipalities; that financial participation in such projects by populous, defined communities in close proximity to large municipalities by mutual agreement provides an equitable, material, and effective alternative means of addressing such circumstances without resort to municipal annexation; that to prevent the fragmentation of, or non-uniform allocation of costs to, participating defined communities, provision should also be made for similar agreements with other municipalities with jurisdiction over insubstantial portions of such defined communities; and that implementation of the provisions of this Act will be of substantial benefit to participating communities and municipalities, to the regions of the state that include such participants, and to the state as a whole by promoting and facilitating regional governmental cooperation and the funding of essential public improvement projects, thereby accomplishing the public purposes of conserving and preserving the natural resources of the state, promoting and advancing employment and economic diversification and development and stimulating business within the state, permitting the improvement of traffic circulation, the movement of people, freight, goods, and materials, mass transportation, and health care facilities and infrastructure within the state, promoting the enhancement and improvement of air and water quality and noise abatement measures within the state, promoting the development of parks, recreational facilities, and public assembly facilities within the state, and encouraging the preservation and protection of scenic, wildlife, wetlands, and wilderness areas in the state, and other purposes beneficial to the state.

SECTION 3. The provisions of this Act are severable. If any word, phrase, clause, sentence, section, provision, or part of this Act is held invalid or unconstitutional, it shall not affect the validity of the remaining portions, and it is declared to be the legislative intent that this Act would have been passed as to the remaining portions regardless of the invalidity of any part.

SECTION 4. A regional participation agreement entered into in anticipation of this Act is not invalid because of the agreement's authorization, execution, or delivery before the effective date of this Act.

SECTION 5. 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 receives the vote necessary for immediate effect, this Act takes effect September 1, 2007.