82R3306 PAM-D

By: Villarreal H.B. No. 659

A BILL TO BE ENTITLED

AN ACT

relating to voluntary assessment of property owners by a municipality to finance water or energy efficiency improvements.

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

SECTION 1. Chapter 376, Local Government Code, is amended by adding Section 376.0001 to read as follows:

Sec. 376.0001. FINDINGS. The legislature finds that the contractual assessment of property to finance water or energy efficiency public improvements or the installation of distributed generation renewable energy sources or water or energy efficiency improvements described by this chapter as authorized by this chapter serves the public purposes of economic development and water and energy conservation.

SECTION 2. Section 376.001, Local Government Code, is amended to read as follows:

Sec. 376.001. AUTHORIZED FINANCING. An assessment under this chapter may finance:

(1) water or energy efficiency public improvements to developed lots for which the costs and time delays of creating an entity under law to assess the lot would be prohibitively large relative to the cost of the water or energy efficiency public improvement to be financed; and

(2) the installation of distributed generation renewable energy sources or water or energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property.

SECTION 3. Sections 376.004(a) and (b), Local Government Code, are amended to read as follows:

(a) The governing body of a municipality may determine that it is convenient and advantageous to designate an area of the municipality within which authorized municipal officials and property owners may enter into contracts to assess properties for water or energy efficiency public improvements described by Section 376.001(1) and make financing arrangements under this chapter.

(b) The governing body of a municipality may determine that it is convenient, advantageous, and in the public interest to designate an area of the municipality within which authorized municipal officials and property owners may enter into contracts to assess properties to finance the installation of distributed generation renewable energy sources or water or energy efficiency improvements that are permanently fixed to real property.

SECTION 4. Sections 376.005(b), (c), and (d), Local Government Code, are amended to read as follows:

(b) The resolution of intention must:

(1) include a statement that the municipality proposes to make contractual assessment financing available to property owners;

(2) identify the types of water or energy efficiency public improvements, distributed generation renewable energy resources, or water or energy efficiency improvements that may be financed;

(3) describe the boundaries of the area in which contracts for assessments may be entered into;

(4) thoroughly describe the proposed arrangements for financing the program; and

(5) state the time and place for a public hearing and that interested persons may object to or inquire about the proposed program at the hearing.

(c) If contractual assessments are to be used to finance the installation of distributed generation renewable energy sources or water or energy efficiency improvements that are permanently fixed to real property, the resolution of intention must state that it is in the public interest to do so.

(d) The resolution shall direct an appropriate municipal official to:

(1) prepare a report under Section 376.006; and

(2) consult with the appropriate assessor and collector as provided by Section 376.009 [appraisal district or districts] regarding collecting the proposed contractual assessments with property taxes imposed on the assessed property.

SECTION 5. Sections 376.006 and 376.007, Local Government Code, are amended to read as follows:

Sec. 376.006. REPORT REGARDING ASSESSMENT. An appropriate municipal official designated in the resolution shall prepare a report containing:

(1) a map showing the boundaries of the area within which contractual assessments are proposed to be offered;

(2) a draft contract specifying the terms that would be agreed to by the municipality and a property owner within the contractual assessment area;

(3) a statement of municipal policies concerning contractual assessments including:

(A) identification of types of water or energy efficiency public improvements, distributed generation renewable energy sources, or water or energy efficiency improvements that may be financed through the use of contractual assessments;

(B) identification of a municipal official authorized to enter into contractual assessments on behalf of the municipality;

(C) a maximum aggregate dollar amount of contractual assessments;

(D) a method for ranking requests from property owners for financing through contractual assessments in priority order if requests appear likely to exceed the authorization amount; and

(E) a method for ensuring that property owners requesting financing demonstrate the financial ability to fulfill financial obligations under the contractual assessments;

(4) a plan for raising a capital amount required to pay for work performed in accordance with contractual assessments that:

(A) may include:

(i) amounts to be advanced by the municipality through funds available to it from any source; and

(ii) the sale of bonds or other financing;

(B) shall include a statement of or method for determining the interest rate and period during which contracting property owners would pay any assessment; and

(C) shall provide for:

(i) any reserve fund or funds; and

(ii) the apportionment of all or any portion of the costs incidental to financing, administration, and collection of the contractual assessment program among the consenting property owners and the municipality; and

(5) the results of the consultations with the appropriate assessor and collector as provided by Section 376.009 regarding collecting [appraisal districts concerning incorporating] the proposed contractual assessments with [into the assessments of] property taxes imposed on the assessed property.

Sec. 376.007. DIRECT PURCHASE BY OWNER. On the written consent of an authorized municipal official, the proposed arrangements for financing the program pertaining to the installation of distributed generation renewable energy sources or water or energy efficiency improvements that are permanently fixed to real property may authorize the property owner to:

(1) purchase directly the related equipment and materials for the installation of the distributed generation renewable energy sources or water or energy efficiency improvements; and

(2) contract directly for the installation of the distributed generation renewable energy sources or water or energy efficiency improvements.

SECTION 6. Chapter 376, Local Government Code, is amended by adding Section 376.0071 to read as follows:

Sec. 376.0071. RECORDING OF NOTICE OF CONTRACTUAL ASSESSMENT REQUIRED. (a) A municipality that authorizes financing through contractual assessments under this chapter shall file written notice of each contractual assessment in the real property records of the county in which the property is located.

(b) The written notice must be in recordable form and must contain:

(1) the amount of the assessment;

(2) the legal description of the property;

(3) the name of each property owner; and

(4) a reference to the statutory assessment lien provided under this chapter.

SECTION 7. Section 376.008, Local Government Code, is amended to read as follows:

Sec. 376.008. LIEN. (a) A contractual [An] assessment [imposed] under this chapter and any interest or penalties on the assessment:

(1) is [constitutes] a first and prior lien against the lot on which the assessment is imposed until the assessment, interest, or penalty is paid; and

(2) has the same priority as a lien for municipal property taxes.

(b) The lien runs with the land, and that portion of an assessment under the assessment contract that has not yet come due is not eliminated by foreclosure of a property tax lien.

(c) To the extent practicable, the assessment lien may be enforced by the municipality in the same manner that a property tax lien against real property may be enforced by the municipality.

(d) Delinquent installments of the assessment shall incur interest and penalties in the same manner as delinquent property taxes.

(e) A municipality may recover costs and expenses, including attorney's fees, in a suit to collect a delinquent installment of an assessment in the same manner as in a suit to collect a delinquent property tax.

SECTION 8. Chapter 376, Local Government Code, is amended by adding Section 376.009 to read as follows:

Sec. 376.009. COLLECTION OF ASSESSMENTS. (a) If the municipality authorizing financing through contractual assessments under this chapter imposes property taxes, the assessor and collector for the municipality shall collect the assessments under this chapter. If the property on which an assessment is imposed is subject to property taxation, the assessor and collector shall include the assessment in the tax bill prepared and mailed as provided by Section 31.01, Tax Code. The tax bill must separately state the amount of an assessment imposed under this chapter.

(b) If the municipality does not impose property taxes, the municipality may collect the assessments under this chapter or may contract with a third party, including the county assessor-collector, to collect the assessments. The county assessor-collector has the authority to collect assessments under this chapter as provided by this subsection.

(c) If the municipality collects its own property taxes and the governing body of the municipality authorizes split payment of taxes under Section 31.03, Tax Code, the assessor and collector for the municipality shall consider an assessment imposed under this chapter and included in the tax bill a municipal tax in applying each payment for a person who makes split payments.

(d) An assessor and collector that accepts a partial payment on a tax bill that includes more than one taxing unit and includes an assessment under this chapter shall consider the assessment a municipal tax in allocating partial payments among taxing units as provided by Section 31.07, Tax Code. An assessor and collector that accepts a partial payment on a tax bill that includes only a municipal tax and an assessment under this chapter shall allocate the partial payment in proportion to the amount of the municipal taxes and the assessment included in the bill.

SECTION 9. 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, 2011.