80R8384 MXM-F

By: Elkins H.B. No. 3223

A BILL TO BE ENTITLED

AN ACT

relating to public improvement districts designated by a county or municipality.

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

SECTION 1. Subchapter A, Chapter 372, Local Government Code, is amended by adding Section 372.0035 to read as follows:

Sec. 372.0035. LIMIT ON ACCESS TO OR USE OF PROJECT. The governing body of a municipality or county that undertakes an improvement project under Section 372.003 may limit access to, or the use of, the project to that part of the municipality, county, or municipality's extraterritorial jurisdiction that benefits from the project.

SECTION 2. Section 372.007(a), Local Government Code, is amended to read as follows:

(a) Before holding the hearing required by Section 372.009, the governing body of the municipality may use the services of municipal employees, the governing body of the county may use the services of county employees, or the governing body of the municipality or county may employ consultants to prepare a report to determine whether an improvement or combination of improvements should be made as proposed by petition [or otherwise or whether the improvement should be made in combination with other improvements authorized under this subchapter]. The governing body may also require that a preliminary estimate of the cost of the improvement or combination of improvements be made.

SECTION 3. Sections 372.010(a) and (c), Local Government Code, are amended to read as follows:

(a) During the six-month period after the date of the final adjournment of the hearing under Section 372.009, the governing body of the municipality or county may authorize an improvement district if, by majority vote of all members of the governing body, the members adopt a resolution authorizing the district in accordance with its finding as to the advisability of any [the] improvement or combination of improvements.

(c) Actual construction of a new [an] improvement may not begin, or acquisition of an existing improvement may not occur, until after the 20th day after the date the authorization takes effect and may not begin or occur if during that 20-day period written protests signed by at least two-thirds of the owners of record of property within the improvement district or by the owners of record of property comprising at least two-thirds of the total area of the district are filed with the municipal or county secretary or other officer performing the duties of the municipal or county secretary. A person whose name appears on a protest may withdraw the name from the protest at any time before the governing body of the municipality or county convenes to determine the sufficiency of the protest.

SECTION 4. Section 372.012, Local Government Code, is amended to read as follows:

Sec. 372.012. AREA OF DISTRICT; ADDING OR EXCLUDING AREA. (a) The area of a public improvement district to be assessed according to the findings of the governing body of the municipality or county may be less than the area described in the proposed boundaries stated by the notice under Section 372.009. The area to be assessed may not include property not described by the notice as being within the proposed boundaries of the district unless a hearing is held to include the property and notice for the hearing is given in the same manner as notice under Section 372.009.

(b) Unless the public improvement district has issued general obligation or revenue bonds that are secured by assessments or an obligation exists in the district to pay in installments the cost of improvements, the owners of an area may file a petition to add or exclude an area. The petition must satisfy the requirements of Section 372.005. Before the area may be added or excluded, the governing body of the municipality or county must hold a hearing in the same manner as a hearing under Section 372.009. If the governing body finds that the addition or exclusion is advisable, the area is added or excluded.

SECTION 5. Section 372.013(b), Local Government Code, is amended to read as follows:

(b) The plan must cover a period of at least five years and must also define the annual indebtedness and the projected costs for the improvement or combination of improvements found advisable in a resolution authorizing the district under Section 372.006. The plan shall be reviewed and updated annually for the purpose of determining the annual budget for improvements.

SECTION 6. Section 372.016(a), Local Government Code, is amended to read as follows:

(a) After the total cost of an improvement or combination of improvements is determined, the governing body of the municipality or county shall prepare a proposed assessment roll. The roll must state the assessment against each parcel of land in the district, as determined by the method of assessment chosen by the municipality or county under this subchapter.

SECTION 7. Section 372.017(b), Local Government Code, is amended to read as follows:

(b) After all objections have been heard and the governing body has passed on the objections, the governing body by ordinance or order shall levy the assessment as a special assessment on the property. The governing body by ordinance or order shall specify the method of payment of the assessment. The governing body may provide that assessments be paid in periodic installments, at an interest rate and for a period approved by the governing body. The installments must be in amounts necessary to meet annual costs for improvements and must continue for:

(1) the [a] period necessary to retire the indebtedness on the improvements; or

(2) the period approved by the governing body for the payment of the installments.

SECTION 8. Section 372.018, Local Government Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) An assessment bears interest at the rate specified by the governing body of the municipality or county. If general obligation or revenue bonds are issued to finance the improvement for which the assessment is assessed, the interest rate for that assessment [, but] may not exceed a rate that is one-half of one percent higher than the actual interest rate paid on the [public] debt [used to finance the improvement]. If an assessment is for an improvement acquired under a contract that provides for the improvement to be purchased through installment payments, the governing body shall limit the interest rate for the assessment so that it does not exceed one-half of one percent of the highest average interest rate reported by a newspaper in a weekly bond index in the month before the date of the contract. The newspaper must specialize in bonds and be acceptable to the governing body as a reliable source for bond interest rates.

(a-1) Interest on the assessment between the effective date of the ordinance or order levying the assessment and the date the first installment is payable shall be added to the first installment. The interest on any delinquent installment shall be added to each subsequent installment until all delinquent installments are paid.

SECTION 9. Section 372.023, Local Government Code, is amended by amending Subsections (d), (e), and (f) and adding Subsection (d-1) to read as follows:

(d) A cost payable from a special assessment that is to be paid in installments and a cost payable by the municipality or county as a whole but not payable from available general funds or other available general improvement funds shall be paid:

(1) under an installment sale contract with the person who constructs the improvement for which the costs apply; or

(2) by the issuance and sale of revenue or general obligation bonds.

(d-1) The interest rate on the unpaid purchase price in an installment sale contract under Subsection (d) may not exceed one-half of one percent of the highest average interest rate reported by a newspaper in a weekly bond index in the month before the date of the contract. The newspaper must specialize in bonds and be acceptable as a reliable source for bond interest rates to the governing body of the municipality or county that enters into the contract.

(e) While an improvement is in progress, the governing body of the municipality or county, to pay the costs of the improvement, may issue temporary notes, [or] time warrants, general obligation bonds, or revenue bonds [to pay for the costs of the improvement and, on completion of the improvement, issue revenue or general obligation bonds].

(f) The cost of more than one improvement may be paid:

(1) from a single issue and sale of bonds without other consolidation proceedings before the bond issue; or

(2) under an agreement with a person who sells the improvement to the municipality.

SECTION 10. 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, 2007.