2007S0454-1 02/21/07
  By: Williams S.B. No. 1012
relating to the establishment of regional participation agreements
between certain municipalities and special districts.
       SECTION 1.  Subchapter D, Chapter 43, Local Government Code,
is amended by adding Section 43.0754 to read as follows:
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
             (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
             (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
             (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;
             (12)  any other provision or term to which the parties
       (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
       (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
       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.