80R19066 T

By: Watson S.B. No. 1688

Substitute the following for S.B. No. 1688:

By: Krusee C.S.S.B. No. 1688

A BILL TO BE ENTITLED

AN ACT

relating to the creation, powers, and duties of a transportation infrastructure services district created by a municipality; imposing taxes and authorizing bonds.

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

SECTION 1. Subtitle I, Title 6, Transportation Code, is amended by adding Chapter 432 to read as follows:

CHAPTER 432. TRANSPORTATION INFRASTRUCTURE SERVICES DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 432.001. DEFINITIONS. In this chapter:

(1) "Board" means a district's board of directors.

(2) "Bond" has the meaning assigned to "public security" by Section 1201.002(2), Government Code.

(3) "Bond petitioner" means a person or entity that does not reside or maintain a principal office in a district but that owns real property in a district as determined from the most recent certified county property tax rolls.

(4) "Corporate limits" means the boundaries of areas included within the principal municipality for full purposes.

(5) "District" means a transportation infrastructure services district.

(6) "District voters" means qualified voters residing in a district.

(7) "Principal municipality" means the most populous municipality in a county.

(8) "Retail public utility" has the meaning assigned by Section 13.002, Water Code.

Sec. 432.002. NATURE OF DISTRICT. A district is a special district and a political subdivision of this state created under Section 59, Article XVI, Texas Constitution.

Sec. 432.003. PURPOSE; DECLARATION OF INTENT. (a) The creation of a district is essential to accomplish the purposes of Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other public purposes stated in this chapter. In enacting this chapter, the legislature is creating a program under Section 52-a, Article III, Texas Constitution.

(b) The creation of a district is necessary to ensure that necessary infrastructure services, including road facilities and water, wastewater, and drainage infrastructure, are provided to areas abutting toll projects to promote, develop, encourage, and maintain employment, commerce, economic development, and the public welfare in the district territory.

Sec. 432.004. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) A district is created to serve a public use and benefit.

(b) All land and other property included in a district will benefit from the improvements and services to be provided by a district under powers conferred by Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other powers granted under this chapter.

(c) The creation of a district is in the public interest and is essential to:

(1) further the public purposes of:

(A) developing and diversifying the economy of the state; and

(B) providing a safe, reliable, and adequate transportation system;

(C) controlling, storing, preserving, and distributing storm water and floodwater, the water of rivers and streams for irrigation, power, and all other useful purposes;

(D) providing municipal collection and wastewater treatment; and

(2) develop or expand transportation and commerce by providing the necessary infrastructure, including road facilities and water, wastewater, and drainage infrastructure, to ensure the highest and best use of territory in a district that supports efficient transportation systems and robust commercial and residential activity.

(d) The present and prospective traffic congestion in areas abutting a toll project, the need to plan for, manage, and control traffic and provide for the safety of pedestrians in those areas, and the limited availability of money require the promotion and development of transportation and related infrastructure by new and alternative means. A district will serve the public purpose of securing adequate infrastructure that is safe and will benefit not only the land and other property in a district but also the employees, employers, and consumers of a district and the public.

(e) A district will not act as the agent or instrumentality of any private interest even though a district will benefit many private interests as well as the public.

Sec. 432.005. LIBERAL CONSTRUCTION OF CHAPTER. This chapter shall be liberally construed in conformity with the findings and purposes stated in this chapter.

Sec. 432.006. APPLICATION OF OTHER LAW. Except as expressly provided by this chapter, Chapter 49, Water Code, does not apply to a district created under this chapter.

[Sections 432.007-432.050 reserved for expansion]

SUBCHAPTER B. CREATION OF DISTRICT

Sec. 432.051. AREAS ELIGIBLE FOR CREATION OF DISTRICT. (a) A district may be created only in an area located:

(1) entirely in a county with a population of less than 1.3 million in which the principal municipality has a population of 600,000 or more;

(2) within an area that is a corridor that is bounded on:

(A) the east by a line that is two miles to the east of the center line of a toll project that passes through the extraterritorial jurisdiction or corporate limits of the principal municipality; and

(B) the west by:

(i) a line that is five miles to the west of the center line; or

(ii) the principal municipality's eastern full-purpose boundary, whichever is less; and

(3) except as provided by Subsection (c)(2), inside the extraterritorial jurisdiction of the principal municipality.

(b) A district is not required to be immediately adjacent to a toll project.

(c) A district may include:

(1) homestead territory not excluded under Section 432.056.

(2) territory not excluded under Section 432.057.

(3) territory that has been annexed by the principal municipality for limited purposes if the owner of the territory requests in writing the inclusion of the territory in a district.

Sec. 432.052. HEARINGS. (a) Not earlier than the 60th day or later than the 30th day before the date the governing body of the principal municipality creates a district under Section 432.053, the governing body must hold two hearings to consider the creation of the proposed district.

(b) Not later than the seventh day before the date of each hearing, the principal municipality must publish notice of the hearing in a newspaper of general circulation in the area of the proposed district.

(c) The notice must state:

(1) the date, time, and place for the hearing;

(2) the boundaries of the proposed district, including a map of the proposed district;

(3) the powers of the proposed district, including the power to impose assessments and ad valorem taxes; and

(4) the fact that a sales and use tax will be imposed.

Sec. 432.053. CREATION BY ORDINANCE. (a) The governing body of the principal municipality by ordinance may create a district.

(b) The ordinance must:

(1) describe the district's boundaries; and

(2) name the district the "(insert name) Transportation Infrastructure Services District."

Sec. 432.054. MISTAKE IN BOUNDARY DESCRIPTION. A mistake in the field notes in the municipal ordinance creating a district or in copying the field notes of district boundaries does not in any way affect a district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for a purpose for which the district is created or to pay the principal of and interest on the bond;

(3) right to impose or collect a tax; or

(4) legality or operation.

Sec. 432.055. VOTING RIGHTS AND ELIGIBILITY FOR OFFICE OF DISTRICT RESIDENTS. The qualified voters of a district are entitled to vote in the elections of the principal municipality except bond elections for bonds issued by the principal municipality under other law. A district resident is not eligible to be a candidate for or to be elected to a municipal office.

Sec. 432.056. EXCLUSION OF HOMESTEAD TERRITORY. (a) The district may not include any homestead territory unless the owner of the territory requests in writing that the territory be included in a district. The written notice must contain a sufficient description of the property to enable identification of the territory to be included.

(b) Upon receipt of a written request described by Subsection (a), the board may accept or reject the request. The board shall provide notice of its action to the requestor and to the principal municipality's governing body.

(c) If the board accepts the request, the board must notify the principal municipality's governing body of the facts of the request and the board's acceptance.

(d) Not later than the 14th day after the date the governing body receives the notice from the board, the governing body shall enter an order in its minutes that the homestead territory is included in a district created by the governing body's ordinance by operation of law. A copy of the order shall be filed with the county clerk of the county in which a district is located.

Sec. 432.057. EXCLUSION OF CERTAIN PLATTED TERRITORY. Without the written consent of the owner in writing, the district may not include any territory that is described on a plat that was approved by the appropriate governmental entity on or before April 1, 2007.

Sec. 432.058. MULTIPLE DISTRICTS. (a) The principal municipality may create one or more districts under this chapter.

(b) A district may not include territory that is already included within the boundaries of a district created under this chapter.

[Sections 432.058-432.100 reserved for expansion]

SUBCHAPTER C. ANNEXATION AND RELATED ISSUES

Sec. 432.101. ANNEXATION OF DISTRICT TERRITORY BY PRINCIPAL MUNICIPALITY. (a) The principal municipality may annex all or part of the territory located in the district for full purposes under Chapter 43, Local Government Code.

(b) Except as provided by Sections 432.253(d) and 432.352, full-purpose annexation of an area in the district does not affect the operation of the district in the area that is not annexed.

(c) The law governing pre-existing land uses in territory annexed by a municipality, including Section 43.002, Local Government Code, apply to the territory annexed under this section by the principal municipality.

(d) If the principal municipality annexes part of the territory in a district, the principal municipality, at its option, shall:

(1) assume a pro rata share of the property, assets, debts, liabilities, and obligations of the district attributable to the annexed territory; or

(2) pay the district an annual payment equal to the debt service costs of the district attributable to the annexed territory.

(e) For purposes of determining assumption or payment under Subsection (d), any valuation agreed to by the principal municipality's governing body and the board that reasonably reflects the value of the property, assets, debts, liabilities, and obligations of the district may be used. The valuation agreement must be approved by a two-thirds vote of the board.

Sec. 432.102. PLANNING AND ZONING BY PRINCIPAL MUNICIPALITY. (a) The principal municipality may exercise planning and zoning authority under Subtitle A, Title 7, Local Government Code, in the transportation infrastructure impact zone, including the imposition of its planning and zoning ordinances in the zone.

(b) As soon as practicable after the effective date of this chapter, the principal municipality's governing body shall establish appropriate initial zoning classifications for territory in the zone.

(c) The principal municipality may exercise planning and zoning authority under Subtitle A, Title 7, Local Government Code, in a district if the district voters approve the question at the election held under Section 432.260(e).

(d) If the principal municipality is authorized to impose its planning and zoning ordinances in a district, the land development code of the principal municipality is the land development code of that district.

(e) A board shall publish a land use plan for territory in a district not later than the second anniversary of the date the district is created.

(f) The land use plan must be based on a proposal submitted to the board by the land use advisory committee.

(g) As used in this section, "transportation infrastructure impact zone" means the area bounded by and included within the area located within 1,250 feet on each side of the center line of the toll project as it passes through the principal municipality's extraterritorial jurisdiction, excluding any right-of-way.

Sec. 432.103. LAND USE ADVISORY COMMITTEE. (a) The principal municipality may not impose a change in its planning or zoning ordinances that applies to a district unless the governing body of the principal municipality appoints a land use advisory committee composed of the public directors and other persons who are representatives of a broad cross-section of the commercial and homebuilding interests and residents of the district as determined by the governing body. At least 75 percent of the persons on the advisory committee must be owners of property in the district.

(b) The advisory committee shall:

(1) recommend an initial land use plan to the board; and

(2) review all proposed changes by the principal municipality to its planning and zoning ordinances that would apply to the area in a district.

(c) If the advisory committee does not recommend that the principal municipality adopt the proposed changes, the principal municipality must hold a hearing for which notice is given and that is conducted in the manner provided by Section 432.052 before it may impose the changes.

Sec. 432.104. NO EXTENSION OF EXTRATERRITORIAL JURISDICTION. A district's territory does not extend the extraterritorial jurisdiction of the principal municipality.

Sec. 432.105. CONTINUATION OF LAND USE IN A DISTRICT. (a) The principal municipality may not, in exercising planning and zoning authority in a district, prohibit a person in a district from:

(1) continuing to use land in the area in the manner in which the land was being used on the date the principal municipality is granted planning and zoning authority in a district if the land use was legal at that time; or

(2) beginning to use land in the area in the manner that was planned for the land before the 90th day before the effective date of the grant of planning and zoning authority if:

(A) one or more licenses, certificates, permits, approvals, or other forms of authorization by a government entity were required by law for the planned land use; and

(B) a completed application for the initial authorization was filed with governmental entity before the date of the granting of the planning and zoning authority.

(b) For purposes of this section, a completed application is filed if the application includes all documents and other information designated as required by a governmental entity in a written notice to the applicant.

(c) This section does not prohibit the principal municipality from imposing:

(1) a regulation relating to the location of sexually oriented businesses, as that term is defined by Section 243.002, Local Government Code;

(2) a municipal ordinance, regulation, or other requirement affecting colonias, as that term is defined by Section 2306.581, Government Code; and

(5) a regulation relating to flood control.

(d) Notwithstanding any other provision of law to the contrary, the principal municipality may not impose a requirement in a zone or a district that prohibits a person in a zone or district from

(1) continuing to use land for sand, gravel, or aggregate mining operations and related packaging activities if:

(A) the person was using the land for that purpose on September 1, 2007; and

(B) the use is permitted by this state and the person has obtained the necessary permits for operations and related activities; or

(2) beginning to use land for sand, gravel or aggregate mining operations and related packaging activities if:

(A) the person had an option to own or lease the land for those purposes on September 1, 2007;

(B) the option has not expired; and

(C) the use is permitted by this state and the person has obtained the necessary permits for operations and related activities.

Sec. 432.107. NO DOUBLE TAXATION. (a) It is the intent of the legislature that upon partial or full annexation of territory in a district for full purposes by the principal municipality that a district's sales tax imposed by this chapter and a district's ad valorem tax authorized by this chapter shall be discontinued as provided by this chapter and that residents of a district who become residents of the principal municipality are not subject to double taxation.

(b) Notwithstanding any other provision of law, in the first tax year after a partial or full annexation, the principal municipality may make any adjustment to its ad valorem tax rate that the governing body of the principal municipality determines is necessary in order for bonds issued under this chapter to be treated as credit worthy by any municipal bond rating organization that has issued a rating on the bonds.

[Sections 432.108-432.150 reserved for expansion]

SUBCHAPTER D. BOARD OF DIRECTORS

Sec. 432.151. GOVERNING BODY. (a) A district is governed by a board of directors.

(b) A district's board is responsible for the management, operation, and control of the district, including district property.

(c) A district's board consists of the presiding officer, municipal directors, and public directors.

(d) The presiding officer of the board is the presiding officer of the principal municipality's governing body. The presiding officer is entitled to discuss any matter before the board but is not entitled to vote unless the presiding officer's vote is necessary to break a tie vote.

(e) The municipal directors consist of six members of the principal municipality's governing body other than the presiding officer of the governing body chosen by the governing body.

(f) The public directors consist of the following persons:

(1) two persons appointed by the principal municipality's governing body from a list of at least six names submitted by a nonprofit organization that promotes economic development and real estate related issues in the county in which the district is located;

(2) two persons appointed by the principal municipality's governing body from a list of at least six names submitted by a nonprofit organization that represents home builders; and

(3) two persons who are either residents of or property owners of property in the district appointed by the principal municipality's governing body after reviewing letters of interest submitted by district residents and property owners.

Sec. 432.152. TERMS. (a) A public director serves for a term of two years.

(b) The initial public directors are divided into two groups. A director in the first group serves a one-year term. A director in the second group serves a two-year term. The two directors appointed under Section 432.151(f)(3) must be placed in different groups. The grouping of initial directors and terms for the directors in each group are determined by the board.

(c) A person may be appointed to successive terms as a director.

(d) The presiding officer and a municipal director on a district board serve for the term to which the person was elected to the governing body.

Sec. 432.153. QUALIFICATIONS. To be qualified as a director, a person must be at least 18 years old.

Sec. 432.154. FILING OF CONSTITUTIONAL OATH OF OFFICE. The constitutional oath of office for a public director must be in writing and be filed with the district and retained in its records.

Sec. 432.155. REMOVAL. (a) The principal municipality's governing body after notice and hearing may remove a public director for misconduct or failure to carry out the director's duties on petition by a majority of the remaining directors.

(b) The presiding officer or a member of the principal municipality's governing body is removed and replaced as presiding officer or as a municipal director only if the person ceases to be a member of the governing body or the member's office is vacant as provided by other law.

Sec. 432.156. VACANCY. A vacancy in the office of a public director shall be filled for the remainder of the unexpired term in the manner provided for the original appointment.

Sec. 432.157. ADDITIONAL OFFICERS. (a) The assistant presiding officer of the governing body of the principal municipality presides in the absence of the presiding officer or when there is a vacancy in that office. When presiding, the assistant presiding officer retains that person's voting rights as a municipal director.

(b) The board may elect any other officers the board considers appropriate.

Sec. 432.158. CONFLICT OF INTEREST. (a) A municipal director is not prohibited from voting or deciding any matter before the board that involves the principal municipality.

(b) A public director who will receive a pecuniary benefit from an action of the board or who has a beneficial interest in a business entity that will receive a pecuniary benefit from an action of the board may participate in discussion and vote on that action if other similar business entities in the district will receive a similar pecuniary benefit.

Sec. 432.159. COMPENSATION; EXPENSES. (a) The presiding officer and municipal directors serve without compensation or reimbursement for expenses.

(b) A public director is entitled to:

(1) compensation determined by the board; and

(2) be reimbursed for necessary and reasonable expenses incurred in carrying out the duties and responsibilities of a director.

(c) The total compensation paid to a public director under Subsection (b)(1) may not exceed $7,200 in a calendar year.

Sec. 432.160. OTHER PUBLIC ENTITIES; EXPENSES. An employee of another public entity may serve as a district officer if the person does not receive additional compensation. The person may be reimbursed for reasonable and necessary expenses incurred in the performance of district duties.

Sec. 432.161. DOCTRINE OF INCOMPATIBILITY INAPPLICABLE; SERVICE IN ANOTHER PUBLIC OFFICE. (a) The common law doctrine of incompatibility does not apply to a director.

(b) A person serving as a director may serve in another public office.

[Sections 432.162-432.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES

Sec. 432.201. GENERAL POWERS AND DUTIES. (a) A district has the powers and duties that permit it to accomplish any district purpose or any other purpose authorized for the district by the constitution, this code, or any other law.

(b) A district may do anything necessary, convenient, or desirable to carry out the powers expressly granted or implied by this chapter.

Sec. 432.202. ROAD FACILITIES. (a) If there is a benefit to the district, a district may:

(1) acquire a road facility, acquire property for a road facility, and construct or improve a road facility, inside or outside the district, as necessary to ensure an adequate transportation infrastructure; and

(2) provide financing for a road facility or for the construction, acquisition, or improvement of a road facility from money available to the district under this chapter.

(b) A district may only exercise the authority granted by this section for a project outside the district if the acquisition, construction, improvement, or financing is necessary to connect the district's road facilities with the transportation network outside the district.

Sec. 432.203. REIMBURSEMENT OF PRIVATE ENTITIES FOR ROADS OR IMPROVEMENTS; ACQUISITION BY DISTRICT. (a) A district may reimburse a private entity for money spent to construct a road or any other improvement the district may make under this chapter that has been or will be dedicated or otherwise transferred to public use, or purchase a road or any other improvement the district may make under this chapter that will be constructed by a private entity after the date of the creation of the district.

(b) The principal municipality may not impose a requirement for participation in its utility service extension program in a district that exceeds the program requirements for similarly-situated property that apply outside a district.

Sec. 432.204. WATER SUPPLY. A district may supply water for municipal uses, domestic uses, power, and commercial purposes and all other beneficial uses or controls.

Sec. 432.205. STORM DRAINAGE. A district may gather, conduct, divert, and control local storm water or other local harmful excesses of water in a district.

Sec. 432.206. IRRIGATION. A district may irrigate the land in a district.

Sec. 432.207. WASTE MANAGEMENT. A district may collect, transport, process, dispose of, and control all domestic, industrial, or communal wastes, excluding municipal solid waste or industrial solid waste, whether in fluid, solid, or composite state. As used in this section, "municipal solid waste" and industrial solid waste" have the meanings assigned by Section 361.003, Health and Safety Code.

Sec. 432.208. ALTERATION OF LAND ELEVATION. A district may alter land elevation in a district where it is needed.

Sec. 432.209. OTHER DRAINAGE AND FLOOD CONTROL POWERS. (a) A district may adopt:

(1) a master drainage plan, including rules relating to the plan and design criteria for drainage channels, facilities, and flood control improvements;

(2) rules for construction activity to be conducted in the district that:

(A) reasonably relate to providing adequate drainage or flood control; and

(B) use generally accepted engineering criteria; and

(3) reasonable procedures to enforce rules adopted by the district under this subsection.

(b) If a district adopts a master drainage plan, the district may:

(1) adopt rules relating to review and approval of proposed drainage plans submitted by property developers; and

(2) by rule, require that a property developer who proposes to subdivide land located in the district, and who is otherwise required to obtain approval of the plat of the proposed subdivision from a municipality or county, submit for district approval a drainage report for the subdivision.

(c) The drainage report must include a map containing a description of the land to be subdivided. The map must show an accurate representation of:

(1) any existing drainage features, including drainage channels, streams, flood control improvements, and other facilities;

(2) any additional drainage facilities or connections to existing drainage facilities proposed by the property developer's plan for the subdivision; and

(3) any other parts of the property developer's plan for the subdivision that may affect drainage.

(d) The district shall review each drainage report submitted to the district under this section and shall approve a report if it shows compliance with:

(1) this section;

(2) the district's master drainage plan adopted under this section; and

(3) the rules adopted by the district under this section.

(e) On or before the 30th day after the date a drainage report is received, the district shall send notice of the district's approval or disapproval of the drainage report to:

(1) the property developer; and

(2) each municipal or county authority with responsibility for approving the plat of the proposed subdivision.

(f) If the district disapproves a drainage report, the district shall include in the notice of disapproval a written statement:

(1) explaining the reasons for the rejection; and

(2) recommending changes, if possible, that would make a revised version of the drainage report acceptable for approval.

Sec. 432.210. SUITS. A district may sue and be sued in all courts, may institute and prosecute suits without giving security for costs, and may appeal from a judgment without giving a supersedeas or cost bond.

Sec. 432.211. DISTRICT PROPERTY; IMPROVEMENTS. (a) A district may acquire by grant, purchase, gift, devise, lease, or otherwise and may hold, use, sell, lease, or dispose of real and personal property, licenses, patents, rights, and interests necessary, convenient, or useful for the full exercise of its powers.

(b) A district may purchase, construct, acquire, own, operate, maintain, repair, improve, or extend inside its boundaries any and all works, improvements, facilities, plants, equipment, and appliances necessary to accomplish any district purpose authorized by the constitution, this code, or other law, including all works, improvements, facilities, plants, equipment, and appliances incident, helpful, or necessary to accomplish the purposes of this chapter.

(c) A district may acquire property under a conditional sale contract, lease, equipment trust certificate, or any other form of contract or trust agreement.

(d) A district may sell, lease, convey, or otherwise dispose of any of its rights, interests, or property that are not needed for or, in the case of leases, that are not consistent with, the efficient operation and maintenance of the district's improvements.

Sec. 432.212. SURPLUS PROPERTY. A district may sell, lease, or otherwise dispose of any surplus property not needed for its requirements or for the purpose of carrying out its powers under this chapter.

Sec. 432.213. SERVICES. A district may provide services:

(1) inside its boundaries; and

(2) outside its boundaries if the district receives payment for the services that fully covers the costs of providing the services.

Sec. 432.214. JOINT AGREEMENTS. (a) A district may enter into an agreement with any person, public or private, for the joint use of a facility, installation, or other property.

(b) A district may act jointly with any other person, public or private, whether within this state or the United States, to perform any power or duty under this chapter.

Sec. 432.215. OTHER CONTRACTS; GRANTS. A district may enter a contract, lease, or other agreement with and accept a grant or loan from the United States, this state, a county, a municipality, or any other political subdivision, a public or private corporation, or any other person and may perform all acts necessary for the full exercise of the powers vested in it on any terms the board determines advisable.

Sec. 432.216. INSURANCE PREMIUMS. A district may procure and pay premiums to insurers for insurance of any type in amounts considered necessary or advisable by the board.

Sec. 432.217. SERVICE TO AREAS OUTSIDE THE DISTRICT; DUPLICATION; WATER POWERS. (a) If there is a net benefit to the district, the district may purchase, construct, acquire, own, operate, repair, improve, or extend any work, improvement, facility, plant, equipment, or appliance necessary to provide any service or facility authorized to be provided by the district to an area contiguous to or in the vicinity of the district if:

(1) the district does not duplicate a service or facility of another public entity;

(2) the facility is necessary to connect a district's infrastructure to the infrastructure of:

(A) the principal municipality; or

(B) another district created under this chapter; and

(3) the district complies with the provisions of Section 432.218.

(b) A district providing potable water and sewer utility services to household users may not provide a service or facility to serve an area outside the district that is also in the corporate limits of a municipality unless the municipality consents by resolution or ordinance for the district to serve the area in the municipality.

Sec. 432.218. CERTIFICATE OF CONVENIENCE FOR WATER OR SEWER SERVICES NOT REQUIRED. (a) A district is not required to hold a certificate of convenience and necessity as a precondition to provide retail water or sewer service to any customer or service area. This section applies whether the customer or service area is located inside or outside the district, or has previously received water or sewer service from an entity required by law to hold a certificate of convenience and necessity as a precondition for the service.

(b) This section does not authorize a district to provide a service, either wholesale, retail, or whether the customer or service area is located inside or outside the district:

(1) in an area for which a retail public utility holds a certificate of convenience and necessity, unless:

(A) the Texas Commission on Environmental Quality has:

(i) authorized the district to provide the service or facility; or

(ii) revoked the certificate of convenience and necessity of a retail public utility because the utility never provided, is no longer providing, or has failed to provide continuous and adequate service; or

(B) the retail public utility and the district agree; or

(2) in another district without that district's consent, unless the transportation infrastructure services district has a certificate of convenience and necessity to provide services to that area.

(c) This section does not void certificates of convenience and necessity granted under other law or impair the rights of a person holding a certificate of convenience and necessity as provided by other law.

Sec. 432.219. CONTRACT FOR OR LEASE OF PROJECT. A district may contract, including by a lease, for the use or operation of a project or part of a project.

Sec. 432.220. ECONOMIC DEVELOPMENT POWERS. (a) A district may exercise the powers of a municipality with a population of 100,000 or more under Chapter 380, Local Government Code.

(b) The principal municipality may exercise its powers under Chapter 380, Local Government Code, in a district.

Sec. 432.221. CONVEYANCES. (a) A district may convey a district facility, including a road, to a governmental entity if the board determines the conveyance is necessary to further the purposes of the district.

(b) A conveyance of a district facility to a governmental entity:

(1) is ordered by the board;

(2) is made free and clear of district indebtedness; and

(3) does not affect the district's responsibility to:

(A) pay in full the principal of and interest and any premium on any outstanding district bonds or other indebtedness; or

(B) perform any obligation provided by orders or resolutions authorizing the bonds or other indebtedness.

(c) After conveyance, the governmental entity to which the district facility is conveyed:

(1) is the owner of the facility;

(2) has jurisdiction and sole control over the facility;

(3) is responsible for all maintenance of the facility; and

(4) may alter, relocate, close, or discontinue maintenance of the facility as provided by law, including a municipal charter.

Sec. 432.222. HEARINGS. The district may conduct hearings and take testimony and proof, under oath or affirmation, at hearings, on any matter necessary to implement a district purpose.

Sec. 432.223. EMPLOYEES. (a) A district may employ and compensate persons for district purposes.

(b) An employee of another public entity may serve as a district employee if the employee does not receive any additional compensation for service as a district employee. The employee may be reimbursed for any reasonable or necessary expense incurred in the performance of a district duty.

Sec. 432.224. NO EMINENT DOMAIN POWER. A district may not exercise the power of eminent domain.

[Sections 432.224-432.250 reserved for expansion]

SUBCHAPTER F. GENERAL FINANCIAL PROVISIONS

Sec. 432.251. GENERAL FINANCIAL POWERS. A district may incur liabilities, borrow money on terms the board determines, or issue bonds.

Sec. 432.252. USE OF DISTRICT REVENUE; PRINCIPAL MUNICIPALITY. District revenue is separate from the principal municipality's revenue. A district may use revenue only for the benefit of the district as provided by this chapter.

Sec. 432.253. SALES AND USE TAX. (a) On creation of a district, there is imposed in the district a sales and use tax.

(b) The tax is imposed on the receipts from the sale at retail of taxable items in the district at the rate equal to the sales and use tax imposed by the principal municipality. Except as provided by Subsection (d), the tax rate changes to remain equal to the principal municipality's rate.

(c) Except as provided by this section, Chapter 321, Tax Code, governs the imposition, computation, administration, governance, and abolition of a tax imposed under this section.

(d) If any territory in the district is annexed by the principal municipality, both the municipality's and the district's sales and use tax applies in the annexed area; provided, however, that if the district's sales and use tax rate combined with any other sales and use tax applicable in the annexed area exceeds two percent, the district's sales and use tax is abolished.

Sec. 432.254. AUTHORITY TO IMPOSE AD VALOREM TAX; RATE. (a) A district may impose an ad valorem tax at a rate not to exceed the adopted ad valorem tax imposed by the principal municipality.

(b) Before setting or changing a tax rate, the district shall publish notice and hold a hearing on the tax rate in the same manner as provided by Section 432.052.

(c) After setting the initial tax rate, a district is governed by Section 49.107(g), Water Code, and the Tax Code in the same manner as a home-rule municipality that imposes an ad valorem tax. In the event of a conflict between the provisions of the Water Code and the Tax Code, the Water Code prevails.

(d) The initial tax rate does not take effect until the tax year beginning on a date after the approval of either a bond program or a capital improvement program at an election held under Section 432.260(e).

(e) An ad valorem tax imposed under this chapter is subject to any existing exemption claimed by a property owner under law, including Section 1-d or 1-d-1, Article VIII, Texas Constitution.

Sec. 432.255. GENERAL OBLIGATION AND REVENUE BONDS. (a) For the payment of all or part of the costs of an improvement project or service, the board may issue bonds payable from and secured by ad valorem taxes, sales and use taxes, revenue, grants, gifts, contracts, leases, or any combination of those sources.

(b) Bonds may be secured by liens on all or part of the revenue from improvements authorized under this chapter, including installment payments from any source pledged to their payment.

Sec. 432.256. BOND MATURITY. Bonds may mature not more than 40 years from their date of issue. Provision may be made for the subsequent issuance of additional parity bonds or subordinate lien bonds under terms that may be stated in the order or resolution authorizing the issuance of the bonds.

Sec. 432.257. BOND PROCEEDS. (a) In addition to the purposes authorized under Section 432.255, if provided by the bond order or resolution, the proceeds from the sale of bonds may be used:

(1) to pay:

(A) interest on the bonds during and after the acquisition or construction of any improvement project to be provided through the issuance of the bonds; and

(B) administrative and operation expenses to create a reserve fund for the payment of the principal of and interest on the bonds; and

(2) to create any other funds.

(b) The bond proceeds may be placed on time deposit or invested, until needed, in securities in the manner provided by the bond order or resolution.

Sec. 432.258. PLEDGES; REFUNDING BONDS; APPROVAL BY ATTORNEY GENERAL; REGISTRATION. (a) The board may pledge all or part of the income from improvement projects financed under this chapter or from any other source to the payment of the bonds, including the payment of principal, interest, and any other amounts required or permitted in connection with the bonds.

(b) The pledged income must be set and collected in amounts that will be at least sufficient, with any other pledged resources:

(1) to provide for all payments of principal, interest, and any other amounts required in connection with the bonds;

(2) to the extent required by the order or resolution authorizing the issuance of the bonds, to provide for the payment of expenses in connection with the bonds; and

(3) to pay operation, maintenance, and other expenses in connection with the improvement projects authorized under this chapter.

(c) Bonds may be additionally secured by a mortgage or deed of trust on real property relating to the facilities authorized under this chapter owned or to be acquired by the district and by chattel mortgages, liens, or security interests on personal property appurtenant to that real property. The board may authorize the execution of trust indentures, mortgages, deeds of trust, or other forms of encumbrance to evidence the indebtedness.

(d) The board may pledge to the payment of the bonds all or any part of any grant, donation, revenue, or income received or to be received from the United States or any other public or private source.

(e) Bonds issued under this chapter may be refunded or otherwise refinanced by the issuance of refunding bonds under terms or conditions determined by order or resolution of the board. Refunding bonds may be issued in amounts necessary to pay the principal of, and interest and redemption premium, if any, on, bonds to be refunded, at a maturity or on an redemption date, and to provide for the payment of costs incurred in connection with the refunding.

(f) The refunding bonds shall be issued in the manner provided by this chapter for other bonds.

(g) The district shall submit bonds and the appropriate proceedings authorizing their issuance to the attorney general for examination.

(h) If the bonds recite that they are secured by a pledge of fees, revenues, or rentals from a contract or lease, the district also shall submit to the attorney general a copy of the fee procedures, contract, or lease and the proceedings relating to it.

(j) If the attorney general finds that the bonds have been authorized and any contract, or lease has been made in accordance with law, the attorney general shall approve the bonds and the fee, contract, or lease, and the bonds shall be registered by the comptroller.

(k) After approval and registration, the bonds and any fee, contract, or lease relating to them are incontestable in any court or other forum for any reason and are valid and binding obligations for all purposes in accordance with their terms.

Sec. 432.259. APPLICATION OF WATER DISTRICT LAW TO DISTRICT BONDS. (a) Chapter 49, Water Code, applies to district bonds, except for sections relating to:

(1) oversight, review, or approval, by the Texas Commission on Environmental Quality or the commission's executive director, of a district's creation, operation, or dissolution; or

(2) any similar action by the commission or the commission's executive director.

(b) In case of a conflict between this chapter and Chapter 49, Water Code, this chapter controls.

Sec. 432.260. BOND AND CAPITAL IMPROVEMENT PROGRAMS. (a) Not later than the third anniversary of the creation date of a district, the board shall approve a bond program or a capital improvement program.

(b) Revenue from a bond program or capital improvement program under this section may be used for any district purpose.

(c) The board shall appoint a bond committee to consider and propose a bond program. The bond committee is composed of persons appointed by the board and the public directors. At least three-fourths of the committee members other than the public directors must be owners of real property in the district.

(d) The bond program or capital improvement program must be based on a proposal submitted to the board by the bond committee.

(e) Not later than one year after the adoption by the board of the bond or capital improvement program, the board shall hold an election in the district on a single question consisting of two separate propositions on:

(1) the implementation of the bond or capital improvement program; and

(2) the application of the principal municipality's planning and zoning ordinances under Section 432.102(c).

(f) The question under Subsection (e) is approved only if a majority of the district voters voting at the election approve each proposition.

(g) If the question under Subsection (e) is approved by a majority of the district voters voting at the election:

(1) the board shall begin to implement the bond or capital improvement program not later than the first anniversary of the election date at which the program was approved; and

(2) the principal municipality may apply its planning and zoning ordinances in the district under Section 432.102(c).

(h) Except as provided by Section 432.354, the failure of a proposition at an election under this section does not affect the district's operation or powers and does not act as a dissolution of the district. The board may call subsequent elections under this section to approve a question, including the question under Subsection (e).

(i) A district's authorization to issue bonds resulting from an election held under this section, or any other law that allows for district voters to authorize the issuance of bonds by a district, remains in effect after the election unless the district is dissolved as provided by this chapter.

(j) Before a district may call an election on the question under Subsection (e), the district must receive a petition requesting the election signed by bond petitioners holding at least 50 percent of the assessed value of the property held by bond petitioners in a district.

(k) Before a district may call an election under Subsection (e), the principal municipality shall indicate to what extent, if any, it will provide financial assistance to the district, whether through construction of facilities, grant of funds or a guarantee of revenues to secure the district's bonds. If the principal municipality is making a financial commitment, it shall enter into an interlocal agreement with the district specifying such commitment. The interlocal agreement must be approved by a two-thirds vote of the board.

(l) Not earlier than the 60th day or later than the 30th day before the date an election is held under this section, the district shall mail to each district voter a notice of election. The notice must state the date of the election, the times that the polling places for the election are open, and the location of those polling places. Failure of a person entitled to notice under this subsection to receive the notice does not invalidate an election.

(m) After the voters approve the question submitted under Subsection (e), a board may approve a subsequent bond program or capital improvement program based on the recommendations of the bond committee and submit that program to the district voters. At an election held under this subsection, the district is not required to resubmit the proposition under Subsection (e)(2). A program submitted to the district voters under this subsection is approved by a majority of the district voters voting at the election.

Sec. 432.261. CREDIT AGREEMENTS. A district may enter into a credit agreement under Chapter 1371, Government Code.

Sec. 432.262. RATES AND FEES. (a) Except as provided by Subsection (b), a district may establish and maintain reasonable and nondiscriminatory rates, fares, charges, rents, or other fees or compensation for the use of the improvements constructed, operated, or maintained by the district.

(b) A district may not impose a toll on a road constructed wholly or partly with district money.

(c) The principal municipality's water and wastewater charges for classes of customers in a district must be identical to the charges for the same classes of customers.

Sec. 432.263. NO MUNICIPAL OBLIGATION. Except as provided by Section 432.353, the principal municipality is not obligated to pay any district bonds.

Sec. 432.264. BONDS EXEMPT FROM TAXATION. Bonds issued under this chapter, the transfer of the bonds, and income from the bonds, including profits made on the sale of the bonds, are exempt from taxation in this state.

Sec. 432.265. APPLICATION OF OTHER LAW ON PRIVATE PROPERTY RIGHTS. In addition to other exemptions available to a district under Chapter 2007, Government Code, that chapter does not apply to a tax imposed by a district.

[Sections 432.266-432.300 reserved for expansion]

SUBCHAPTER G. ASSESSMENTS

Sec. 432.301. GENERAL POWERS RELATING TO ASSESSMENTS. A district may undertake improvement projects and services that confer a special benefit on all or a definable part of the district. The district may impose assessments on property in that area, based on the benefit conferred by the improvement project or service, to pay all or part of the cost of the project or service. If the board determines that there is a net benefit to the district, the district may provide an improvement or service to an area outside the district.

Sec. 432.302. SPECIFIC POWERS RELATING TO ASSESSMENTS. (a) An improvement project or service provided by a district may include the construction, acquisition, improvement, relocation, operation, maintenance, or provision of:

(1) lighting and signs; streets and sidewalks; pedestrian skywalks, crosswalks, and tunnels; drainage and navigation improvements; pedestrian malls; solid waste, water, sewer, and power facilities, including electrical, gas, steam, cogeneration, and chilled water facilities; parks, plazas, and the cost of any demolition in connection with providing any of the improvement projects;

(2) other improvements similar to those described in Subdivision (1);

(3) the acquisition of real property or any interest in real property in connection with an improvement project or service authorized by this chapter;

(4) special supplemental services for health and sanitation, public safety, maintenance, security, and elimination or relief of traffic congestion; and

(5) expenses incurred in the establishment, administration, maintenance, and operation of the district or any of its improvements, projects, or services.

(b) An improvement project on two or more streets or two or more types of improvements may be included in one proceeding and financed as one improvement project.

Sec. 432.303. PROPOSED ASSESSMENTS. A service or improvement project may be financed under this chapter after a petition and hearing notice given as required by this subchapter and a public hearing by the board on the advisability of the improvement or service and the proposed assessments.

Sec. 432.304. PETITION REQUIRED. A district may not finance a service or improvement project under this chapter unless a written petition has been filed with the board requesting the improvement or service signed by the owners of 100 percent of the assessed value of the property to be assessed as determined from the most recent certified county property tax rolls.

Sec. 432.305. NOTICE OF HEARING. (a) A district shall provide notice of a hearing in a newspaper with general circulation in the county in which the district is located. The final publication must be made not later than the 30th day before the date of the hearing.

(b) The notice must include:

(1) the time and place of the hearing;

(2) the general nature of the proposed improvement project or service;

(3) the estimated cost of the improvement, including interest during construction and associated financing costs; and

(4) the proposed method of assessment.

(c) The district shall mail written notice containing the information required by Subsection (b) by certified mail, return receipt requested, not later than the 30th day before the date of the hearing. The notice must be mailed to each property owner in the district who will be subject to assessment at the current address of the property to be assessed as reflected on the tax rolls.

Sec. 432.306. CONCLUSION OF HEARING; FINDINGS. (a) A hearing on the service or improvement project, whether conducted by the board or a hearings examiner, may be adjourned from time to time.

(b) At the conclusion of the hearing, the board shall make findings by resolution or order relating to the advisability of the improvement project or service, the nature of the improvement project or service, the estimated cost, the area benefited, the method of assessment, and the method and time for payment of the assessment.

(c) If a hearings examiner is appointed to conduct the hearing, after conclusion of the hearing, the hearings examiner shall file with the board a report stating the examiner's findings and conclusions.

Sec. 432.307. AREA TO BE ASSESSED. (a) The area of a district to be assessed according to the board's findings may be the entire district or any part of the district and may be less than the area proposed in the notice of the hearing.

(b) Except as provided by Subsection (c), the area to be assessed may not include property that is not in the district at the time of the hearing unless there is an additional hearing, preceded by the required notice.

(c) The owner of an improvement constructed after the district has imposed assessments may waive the right to notice and an assessment hearing and may agree to the imposition and payment of assessments at an agreed rate for improvements constructed in a the district.

Sec. 432.308. OBJECTIONS; IMPOSITION OF ASSESSMENT. (a) At a hearing on proposed assessments, at any adjournment of the hearing, or after consideration of the hearings examiner's report, the board shall hear and rule on all objections to each proposed assessment.

(b) The board may amend proposed assessments for any parcel.

(c) After all objections have been heard and action has been taken with regard to those objections, the board, by order or resolution, shall impose the assessments on the property and shall specify the method of payment of the assessments and may provide that those assessments be paid in periodic installments, including interest.

(d) Periodic installments must be in amounts sufficient to meet annual costs for services and improvements as provided by Section 432.309 and continue for the number of years required to retire indebtedness or pay for the services to be rendered. The board may provide interest charges or penalties for failure to make timely payment and also may impose an amount to cover delinquencies and expenses of collection.

(e) The board shall establish a procedure for the distribution or use of any assessments in excess of those necessary to finance the service or improvement project for which those assessments were collected.

Sec. 432.309. APPORTIONMENT OF COST. The board shall apportion the cost of an improvement project or service to be assessed against the property in the district based on the special benefits accruing to the property because of the improvement project or service. The cost may be assessed:

(1) equally by front foot or by square foot of land area against all property in the district;

(2) against property according to the value of the property as determined by the board, with or without regard to structures or other improvements on the property; or

(3) on any other reasonable assessment plan that results in imposing fair and equitable shares of the cost on property similarly benefited.

Sec. 432.310. ASSESSMENT ROLL. If the total cost of an improvement project or service is determined, the board shall impose the assessments against each parcel of land against which an assessment may be imposed in the district. With regard to an assessment for a service, the board may impose an annual assessment that is lower but not higher than the initial assessment. The board shall have an assessment roll prepared showing the assessments against each property and the board's basis for the assessment. The assessment roll shall be filed with the board secretary or other officer who performs the function of secretary and be open for public inspection.

Sec. 432.311. INTEREST ON ASSESSMENTS; LIEN. (a) Assessments bear interest at a rate specified by the board. The interest rate may not exceed the rate permitted by Chapter 1204, Government Code.

(b) Interest on an assessment between the effective date of the order or resolution imposing the assessment and the date the first installment and any related penalty is payable is added to the first installment. The interest or penalties on all unpaid installments are added to each subsequent installment until paid.

(c) An assessment or any reassessment and any interest and penalties on that assessment or reassessment is a lien against the property until it is paid.

(d) The owner of any property assessed may pay at any time the entire assessment against any lot or parcel with accrued interest to the date of the payment.

Sec. 432.312. SUPPLEMENTAL ASSESSMENTS. After notice and hearing in the manner required for an original assessment, the board may make supplemental assessments to correct omissions or mistakes in the assessment:

(1) relating to the total cost of the improvement project or service; or

(2) covering delinquencies or costs of collection.

Sec. 432.313. APPEAL. (a) After determination of an assessment, a property owner may appeal the assessment to the board. The property owner must file a notice of appeal with the board not later than the 30th day after the date the assessment is adopted. The board shall set a date to hear the appeal.

(b) The property owner may appeal the board's decision on the assessment to a court. The property owner must file notice of the appeal with the court not later than the 30th day after the date of the board's final decision with respect to the assessment.

(c) Failure to file either of the notices in the time required by this section results in a loss of the right to appeal the assessment.

(d) If an assessment against a parcel of land is set aside by a court, found excessive by the board, or determined to be invalid by the board, the board may make a reassessment or new assessment of the parcel.

Sec. 432.314. APPEAL OF ORDER. A person against whom an assessment is made by board order may appeal the assessment to a district court in the county in which the district is located in the manner provided for the appeal of a contested case under Chapter 2001, Government Code. Review by the district court is by trial de novo.

Sec. 432.315. GOVERNMENTAL ENTITIES; ASSESSMENTS. Payment of assessments by municipalities, counties, other political subdivisions, and organizations exempt from federal income tax under Section 501(c)(3), Internal Revenue Code of 1986, is established by contract. Municipalities, counties, and other political subdivisions may contract with the district under terms those entities consider advisable to provide for the payment of assessments.

Sec. 432.316. UTILITIES; ASSESSMENTS. Payment of assessments shall be established by contract on the property, including the equipment, rights-of-way, facilities, or improvements, of:

(1) an electric utility or a power generation company, as those terms are defined under Section 31.002, Utilities Code;

(2) a gas utility, as that term is defined under Sections 101.003 and 121.001, Utilities Code;

(3) a telecommunications provider, as that term is defined by Section 51.002, Utilities Code; and

(4) a person who provides to the public advanced telecommunication services.

[Sections 432.317-432.350 reserved for expansion]

SUBCHAPTER H. DISSOLUTION

Sec. 432.351. DISSOLUTION BY PRINCIPAL MUNICIPALITY. (a) After a hearing, the governing body of the principal municipality may by ordinance dissolve the district.

(b) Before dissolution under this section, the principal municipality shall publish notice and hold a hearing on the proposed dissolution in the manner provided by Section 432.052.

Sec. 432.352. DISSOLUTION BY ANNEXATION. On the effective date of any full-purpose annexation proceeding by the principal municipality that results in all territory in the district being annexed for full purposes, the district is automatically dissolved without further action by the principal municipality's governing body.

Sec. 432.353. ASSUMPTION OF ASSETS, DEBTS. (a) On dissolution, the principal municipality assumes the assets, debts, and other obligations of the district.

(b) On dissolution, the principal municipality may use any source of revenue available to the district under Section 432.255 to pay any district debt or obligation assumed by the principal municipality.

(c) Upon dissolution of the district by the principal municipality under this section, the application of the principal municipality's planning and zoning ordinances, as authorized by an election under Section 432.260(e), is repealed, and the application of the principal municipality's planning and zoning ordinances is governed by other law.

Sec. 432.354. OTHER METHOD OF DISSOLUTION. If the question submitted under Section 432.260(e) is not approved at an initial or subsequent election held by the sixth anniversary of the date of a district's creation, that district is automatically dissolved without further action by the principal municipality's governing body.

[Sections 432.354-432.400 reserved for expansion]

SUBCHAPTER I. NOTICES

Sec. 432.401. NOTICE TO PURCHASERS. (a)(1) Any person who proposes to sell or convey real property located in a district created under this chapter that is providing or proposing to provide, as the district's principal function, road, water, sanitary sewer, drainage, and flood control or protection facilities or services, or any of these facilities or services that have been financed or are proposed to be financed with bonds of the district payable in whole or part from taxes of the district to household or commercial users, other than agricultural, irrigation, or industrial users, must first give to the purchaser the written notice provided in this section.

(2) This section does not apply to:

(A) transfers of title under any type of lien foreclosure;

(B) transfers of title by deed in cancellation of indebtedness secured by a lien upon the property conveyed;

(C) transfers of title by reason of a will or probate proceedings; or

(D) transfers of title to a governmental entity.

(b) The notice required under Subsection (a) shall be substantially in the following form:

"The real property, described below, that you are about to purchase is located in the [Name] Transportation Infrastructure Services District. The district has taxing authority separate from any other taxing authority and may, subject to voter approval, issue bonds and levy a tax rate in payment of those bonds. The tax rate levied by the district may not exceed the ad valorem (property tax) rate levied by the City of [Name of principal municipality]. As of January 1, [year], the district's tax rate on real property in the district is $ [amount] on each $100 of assessed valuation. If the district has not yet levied taxes, the most recent projected rate of tax, as of this date, is $[amount] on each $100 of assessed valuation. The total amount of bonds, excluding refunding bonds and any bonds or any portion of bonds issued that are payable solely from revenues received or expected to be received under a contract with a governmental entity, approved by the voters and which have been or may, at this date, be issued is $[amount], and the aggregate initial principal amounts of all bonds issued for one or more of the specified facilities of the district and payable in whole or in part from property taxes is $[amount].

"The district is located in whole or in part in the extraterritorial jurisdiction of the City of [name of principal municipality]. By law, a district located in the extraterritorial jurisdiction of a municipality may be annexed without the consent of the district or the voters of the district. When all territory in a district is fully annexed by the municipality, the district is dissolved. "The purpose of this district is to provide road, water, sewer, drainage, or flood control facilities and services within the district through the issuance of bonds payable in whole or in part from property taxes. The cost of these utility facilities is not included in the purchase price of your property, and these utility facilities are owned or to be owned by the district. The legal description of the property you are acquiring is as follows: [legal description of property being acquired] ________________________________ _____________________________ Signature of Seller Date

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 purchaser acknowledges receipt of the foregoing notice at or prior to execution of a binding contract for the purchase of the real property described in such notice or at closing of purchase of the real property. ________________________________ _____________________________ Signature of Purchaser Date

(c) If the law relating to annexation or district dissolution is amended and causes inaccuracies in the content of the notices prescribed by this section, a district shall revise the content of the notices to accurately reflect current law.

(d) The notice required by this section shall be given to the prospective purchaser prior to execution of a binding contract of sale and purchase either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller providing the notice required by this subsection, the purchaser shall be entitled to terminate the contract. If, however, the seller furnishes the required notice at or prior to closing the purchase and sale contract and the purchaser elects to close even though such notice was not timely furnished prior to execution of the contract, it shall be conclusively presumed that the purchaser has waived all rights to terminate the contract and recover damages or other remedies or rights under the provisions of this section. Notwithstanding any provision of this subchapter to the contrary, all sellers, title companies, real estate brokers, and examining attorneys, and any agent, representative, or person acting on their behalf, shall not be liable for damages under the provisions of either Subsection (m) or (n) or liable for any other damages to any person for:

(1) failing to provide the notice required by this section to a purchaser prior to execution of a binding contract of a purchase and sale or at or prior to the closing of the purchase and sale contract when the district has not filed the information form and map or plat as required under this subchapter; or

(2) unintentionally providing a notice prescribed by this section that is not the correct notice under the circumstances prior to execution of a binding contract of purchase and sale or at or prior to the closing of the purchase and sale contract.

(e) The purchaser shall sign the notice or purchase contract including such notice to evidence the receipt of notice.

(f) At the closing of purchase and sale, a separate copy of such notice with current information shall be executed by the seller and purchaser, acknowledged, and thereafter recorded in the deed records of the county in which the property is located. For the purposes of this section, all sellers, title companies, real estate brokers, and examining attorneys, and any agent, representative, or person acting on their behalf, shall be entitled to rely on the accuracy of the information form and map or plat as last filed by each district under this subchapter or the information contained in or shown on the notice form issued by the district under this subchapter in completing the notice form to be executed by the seller and purchaser at the closing of purchase and sale. Any information taken from the information form or map or plat as last filed by each district and the information contained in or shown on the notice form issued by the district under this subchapter shall be, for purposes of this section, conclusively presumed as a matter of law to be correct. All subsequent sellers, purchasers, title insurance companies, real estate brokers, examining attorneys, and lienholders shall be entitled to rely upon the information form and map or plat filed by the district or the notice form issued by the district under this subchapter.

(g) For the purposes of this section, an executory contract of purchase and sale having a performance period of more than six months shall be considered a sale.

(h) All sellers, and all persons completing the prescribed notice in the sellers' behalf, shall be entitled to rely on the information contained in or shown on the information form and map or plat filed of record by the district under this subchapter in completing the prescribed form to be given to the prospective purchaser prior to execution of a binding contract of sale and purchase. Except as otherwise provided in Subsection (f), any information taken from the information form or map or plat filed of record by the district in effect as of January 1 of each year shall be, for purposes of the notice to be given to the prospective purchaser prior to execution of a binding contract of sale and purchase, conclusively presumed as a matter of law to be correct for the period January 1 through December 31 of such calendar year. A seller and any persons completing the prescribed notice in the seller's behalf may provide more recent information, if available, than the information contained in or shown on the information form and map or plat filed of record by the district under this subchapter in effect as of January 1 of each year in completing the prescribed form to be given to the purchaser prior to execution of a binding contract of sale and purchase. Nothing contained in the preceding sentence shall be construed to create an affirmative duty on the part of a seller or any persons completing the prescribed notice in the seller's behalf to provide more recent information than the information taken from the information form and map or plat filed of record by the district as of January 1 of each year in completing the prescribed notice to be given to the purchaser prior to execution of a binding contract of sale and purchase. All subsequent sellers, purchasers, title insurance companies, real estate brokers, examining attorneys, and lienholders shall be entitled to rely upon the information form and map or plat filed by the district.

(i) If such notice is given at closing as provided in Subsection (f), a purchaser, or the purchaser's heirs, successors, or assigns, shall not be entitled to maintain any action for damages or maintain any action against a seller, title insurance company, real estate brokers, or lienholder, or any agent, representative, or person acting in their behalf, by reason of use by the seller of the information filed for record by the district or reliance by the seller on the filed plat and filed legal description of the district in determining whether the property to be sold and purchased is within the district. No action may be maintained against any title company for failure to disclose the inclusion of the described real property within a district when the district has not filed for record the information form, map, or plat with the clerk of the county or counties in which the district is located.

(j) Any purchaser who purchases any real property in a district and who thereafter sells or conveys the same shall on closing of such subsequent sale be conclusively considered as having waived any prior right to damages under this section.

(k) It is the express intent of this section that all sellers, title insurance companies, examining attorneys, vendors of property and tax information, real estate brokers, and lienholders, and any agent, representative, or person acting on their behalf, shall be entitled to rely on the accuracy of the information form and map or plat as last filed by each district or the information contained in or shown on the notice form issued by the district under this subchapter, or for the purposes of the notice to be given the purchaser prior to execution of a binding contract of sale and purchase the information contained in or shown on the information form and map or plat filed of record by the district in effect as of January 1 of each year for the period January 1 through December 31 of such calendar year.

(l) Except as otherwise provided in Subsection (f), if any sale or conveyance of real property within a district is not made in compliance with the provisions of this section, the purchaser may institute a suit for damages under the provisions of either Subsection (m) or (n).

(m) A purchaser of real property covered by the provisions of this section, if the sale or conveyance of the property is not made in compliance with this section, may institute a suit for damages in the amount of all costs relative to the purchase of the property plus interest and reasonable attorney's fees. The suit for damages may be instituted jointly or severally against the person, firm, corporation, partnership, organization, business trust, estate, trust, association, or other legal entity that sold or conveyed the property to the purchaser. Following the recovery of damages under this subsection, the amount of the damages shall first be paid to satisfy all unpaid obligations on each outstanding lien or liens on the property and the remainder of the damage amount shall be paid to the purchaser. On payment of all damages respectively to the lienholders and purchaser, the purchaser shall reconvey the property to the seller.

(n) A purchaser of real property covered by the provisions of this section, if the sale or conveyance of the property is not made in compliance with this section, may institute a suit for damages in an amount not to exceed $5,000, plus reasonable attorney's fees.

(o) A purchaser is not entitled to recover damages under both Subsections (m) and (n), and entry of a final decision awarding damages to the purchaser under either Subsection (m) or (n) shall preclude the purchaser from recovering damages under the other subsection. Notwithstanding any part or provision of the general or special laws or the common law of the state to the contrary, the relief provided under Subsections (m) and (n) shall be the exclusive remedies for a purchaser aggrieved by the seller's failure to comply with the provisions of this section. Any action for damages shall not, however, apply to, affect, alter, or impair the validity of any existing vendor's lien, mechanic's lien, or deed of trust lien on the property.

(r) A suit for damages under the provisions of this section must be brought within 90 days after the purchaser receives the first district tax notice or within four years after the property is sold or conveyed to the purchaser, whichever time occurs first, or the purchaser loses the right to seek damages under this section.

(s) Notwithstanding any provisions of this subchapter to the contrary, a purchaser may not recover damages of any kind under this section if that person:

(1) purchases an equity in real property and in conjunction with the purchase assumes any liens, whether purchase money or otherwise; and

(2) does not require proof of title by abstract, title policy, or any other proof of title.

Sec. 432.402. NOTICE FORM FROM DISTRICT. (a) A district shall maintain in the district's office the statutory form of Notice to Purchasers required by this section for that district.

(b) Upon written request of any person, a district shall issue the notice form completed by a district with all information required to be furnished by the district. A notice form issued by a district under the provisions of this section shall include a written statement that the notice form is being issued by the district, the date of its issuance, and the district's telephone number. A district is not be required to orally provide the information.

(c) A district may charge a reasonable fee as determined by the district not to exceed $10 for the issuance of a notice form under this section. The notice form shall be delivered by regular mail or made available at the district's office. If a district is requested to deliver the notice form to a person by an alternative method, the district may impose a charge not to exceed the actual cost of such delivery.

(d) A district may delegate the responsibility for issuance of the particular form of Notice to Purchasers to an employee or agent of the district. The board by resolution shall designate the district employee or agent responsible for issuing the notice forms.

(e) Any notice issued by the district shall contain the information effective as of the date of its issuance.

Sec. 432.403. MAP OF DISTRICT BOUNDARIES. The principal municipality shall include on its map prepared under Section 41.001, Local Government Code, the boundaries of each district created under this chapter by the principal municipality. A copy of the map showing a district's boundaries shall be kept in the district's office and shall be used to prepare the notices required under this subchapter.

Sec. 432.404. FILING INFORMATION. (a) A district board shall file with the county clerk in the county in which the district is located a duly affirmed and acknowledged information statement that includes the information required in Subsection (b), and a complete and accurate map or plat showing the boundaries of the district prepared under Section 432.403.

(b) The information statement filed by a district under this section include:

(1) the name of the district;

(2) the complete and accurate legal description of the boundaries of the district;

(3) the most recent rate of district taxes on property located in the district;

(4) the total amount of bonds that have been approved by the voters and which 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 pursuant to a contract with a governmental entity);

(5) the aggregate initial principal amount of all bonds of the district payable in whole or part from taxes (excluding refunding bonds and any bonds or portion of bonds payable solely from revenues received or expected to be received pursuant to a contract with a governmental entity) that have been previously issued;

(7) the date of the district's creation;

(8) a statement of the functions performed or to be performed by the district; and

(9) the particular form of Notice to Purchasers required by Section 423.401 to be furnished by a seller to a purchaser of real property in that district completed by the district with all information required to be furnished by the district.

If a district has not yet levied taxes, a statement to such effect together with the district's most recent projected rate of debt service tax shall be substituted for Subdivisions (3) and (4).

(c) The information statement and map or plat required by this section shall be signed by the presiding officer of the board and affirmed and acknowledged before it is filed with the county clerk, and each amendment made to an information form or map shall also be signed by the presiding officer and affirmed and acknowledged before it is filed with the county clerk.

(d) The information statement required by this section shall be filed with the county clerk by the second day after the date the district is created.

(e) Within seven days after 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.

(f) Any person who knowingly affirms the corrections and accuracy of and acknowledges an information form, map, or plat, or any amendment to an information form, map, or plat that includes information that is inaccurate or incorrect shall be guilty of a misdemeanor and shall be fined not less than $100 nor more than $1,000 for each violation.

(g) If a district fails to file the information required by this section in the time required, a district resident may request the attorney general or the district or county attorney of the county in which the district is located to seek a writ of mandamus to compel the preparation and filing of the information.

(i) If a district covered by this section is dissolved, annexed to another local government, or consolidated with another district, the presiding officer of the board shall file a statement of this fact together with the effective date of the dissolution, annexation, or consolidation with the information form. After a district is dissolved and the statement is filed under this subsection, a person who sells or conveys property within the dissolved district is no longer required to give notice under Section 432.401.

SECTION 2. The heading to Subtitle I, Title 6, Transportation Code, is amended to read as follows:

SUBTITLE I. TRANSPORTATION CORPORATIONS AND TRANSPORTATION

INFRASTRUCTURE SERVICES DISTRICTS

SECTION 3. Subsection (h), Section 43.052, Local Government Code, is amended to read as follows:

(h) This section does not apply to an area proposed for annexation if:

(1) the area contains fewer than 100 separate tracts of land on which one or more residential dwellings are located on each tract;

(2) the area will be annexed by petition of more than 50 percent of the real property owners in the area proposed for annexation or by vote or petition of the qualified voters or real property owners as provided by Subchapter B;

(3) the area is or was the subject of:

(A) an industrial district contract under Section 42.044; or

(B) a strategic partnership agreement under Section 43.0751;

(4) the area is located in a colonia, as that term is defined by Section 2306.581, Government Code;

(5) the area is annexed under:

(A) Section 43.026, 43.027, 43.029, or 43.031; or

(B) Chapter 432, Transportation Code;

(6) the area is located completely within the boundaries of a closed military installation; or

(7) the municipality determines that the annexation of the area is necessary to protect the area proposed for annexation or the municipality from:

(A) imminent destruction of property or injury to persons; or

(B) a condition or use that constitutes a public or private nuisance as defined by background principles of nuisance and property law of this state.

SECTION 4. 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.