82R7136 JXC-F

By: Davis of Dallas H.B. No. 2860

A BILL TO BE ENTITLED

AN ACT

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

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

SECTION 1. Section 372.003, Local Government Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) If the governing body of a municipality or county finds that it promotes the interests of the municipality or county, the governing body may undertake an improvement project that confers a special benefit on one or more [a] definable areas [part] of the municipality, the [or] county, or the municipality's extraterritorial jurisdiction. If the areas are noncontiguous, the areas must share a common characteristic or use.

(a-1) A project may be undertaken in the municipality, the [or] county, or the municipality's extraterritorial jurisdiction.

SECTION 2. Section 372.005(a), Local Government Code, is amended to read as follows:

(a) A petition for the establishment of a public improvement district must state:

(1) the general nature of the proposed improvement;

(2) the estimated cost of the improvement;

(3) the boundaries of the proposed assessment district;

(4) a description of territory to be included in the proposed assessment district that is noncontiguous with other territory in the district, including a description of the common characteristic or use of the noncontiguous territory to be included;

(5) the proposed method of assessment, which may specify included or excluded classes of assessable property;

(6) the proposed assessment schedule;

(7) if the proposed assessment schedule includes a deferred assessment, the appraised value of taxable real property liable for assessment in the district, and an estimate of property value appreciation for real property in the district for the period after the district is created and before the deferred assessment will be assessed;

(8) [(5)] the proposed apportionment of cost between the public improvement district and the municipality or county as a whole;

(9) [(6)] whether the management of the district is to be by the municipality or county, the private sector, or a partnership between the municipality or county and the private sector;

(10) [(7)] that the persons signing the petition request or concur with the establishment of the district; and

(11) [(8)] that an advisory body may be established to develop and recommend an improvement plan to the governing body of the municipality or county.

SECTION 3. Section 372.007, Local Government Code, is amended by adding Subsection (c) to read as follows:

(c) If the proposed assessment schedule in a petition filed under Section 372.005 includes a deferred assessment, before holding the hearing required by Section 372.009, the governing body of the municipality shall use the services of municipal employees, the governing body of the county shall use the services of county employees, or the governing body of the municipality or county shall employ consultants to estimate:

(1) the appraised value of taxable real property liable for assessment in the district; and

(2) the cost of the improvement.

SECTION 4. Sections 372.009(b) and (c), Local Government Code, are amended to read as follows:

(b) The hearing may be adjourned from time to time until the governing body makes findings by resolution as to:

(1) the advisability of the improvement;

(2) the nature of the improvement;

(3) the estimated cost of the improvement;

(4) the boundaries of the public improvement district, including the common characteristic or use of noncontiguous areas in the district;

(5) the method of assessment; [and]

(6) the proposed assessment schedule;

(7) if the proposed assessment schedule includes a deferred assessment, the appraised value of taxable real property liable for assessment in the district, and an estimate of property value appreciation for real property in the district for the period after the district is created and before the deferred assessment will be assessed; and

(8) the apportionment of costs between the district and the municipality or county as a whole.

(c) Notice of the hearing must be given in a newspaper of general circulation in the municipality or county. If any part of the improvement district is to be located in the municipality's extraterritorial jurisdiction or if any part of the improvements is to be undertaken in the municipality's extraterritorial jurisdiction, the notice must also be given in a newspaper of general circulation in the part of the extraterritorial jurisdiction in which the district is to be located or in which the improvements are to be undertaken. The final publication of notice must be made before the 15th day before the date of the hearing. The notice must state:

(1) the time and place of the hearing;

(2) the general nature of the proposed improvement;

(3) the estimated cost of the improvement;

(4) the boundaries of the proposed assessment district;

(5) the boundaries of the public improvement district, including the common characteristic or use of noncontiguous areas in the district;

(6) the proposed method of assessment; [and]

(7) the proposed assessment schedule;

(8) if the proposed assessment schedule includes a deferred assessment, the appraised value of taxable real property liable for assessment in the district, and an estimate of property value appreciation for real property in the district for the period after the district is created and before the deferred assessment will be assessed; and

(9) [(6)] the proposed apportionment of cost between the improvement district and the municipality or county as a whole.

SECTION 5. Section 372.013, Local Government Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b) Except as provided by Subsection (c), the [The] plan must cover a period of at least five years and must also define the annual indebtedness and the projected costs for improvements. The plan shall be reviewed and updated annually for the purpose of determining the annual budget for improvements.

(c) If the governing body plans to defer an assessment, the plan must include:

(1) estimates of:

(A) the cost of the improvement and any associated debt; and

(B) property value appreciation that will result from the improvement; and

(2) an estimated assessment collection schedule.

SECTION 6. Section 372.014(a), Local Government Code, is amended to read as follows:

(a) An assessment plan must be included in the [annual] service plan.

SECTION 7. Sections 372.015(a), (b), and (c), Local Government Code, are amended to read as follows:

(a) The governing body of the municipality or county shall apportion the cost of an improvement to be assessed against property in an improvement district. The apportionment shall be made on the basis of increased value of, and special benefits accruing to, the property because of the improvement.

(b) Cost of an improvement may be assessed:

(1) equally per front foot or square foot;

(2) according to the value of the property as determined by the governing body, with or without regard to improvements on the property; [or]

(3) as a percentage of sales or receipts;

(4) as a percentage of increased property value attributable to the improvement; or

(5) in any other manner that results in imposing equal shares of the cost on property similarly benefitted.

(c) The governing body may establish by ordinance or order:

(1) reasonable classifications and formulas for the apportionment of the cost between the municipality or county and the area to be assessed; and

(2) the methods of and schedule for assessing the special benefits for various classes of improvements.

SECTION 8. Section 372.016(b), Local Government Code, is amended to read as follows:

(b) The governing body shall file the proposed assessment roll with the municipal secretary or other officer performing the functions of the municipal secretary or in a district formed by a county, the county tax assessor-collector. The proposed assessment roll is subject to public inspection. The governing body shall require the municipal secretary or other officer or county tax assessor-collector to publish notice of the governing body's intention to consider the proposed assessments at a public hearing. The notice must be published in a newspaper of general circulation in the municipality or county before the 10th day before the date of the hearing. If any part of the improvement district is located in the municipality's extraterritorial jurisdiction or if any part of the improvements is to be undertaken in the municipality's extraterritorial jurisdiction, the notice must also be published, before the 10th day before the date of the hearing, in a newspaper of general circulation in the part of the extraterritorial jurisdiction in which the district is located or in which the improvements are to be undertaken. The notice must state:

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

(2) the general nature of the improvement;

(3) the cost of the improvement;

(4) the boundaries of the assessment district, including the common characteristic or use of noncontiguous areas in the district; [and]

(5) the method of assessment;

(6) the proposed assessment schedule;

(7) if the proposed assessment schedule includes a deferred assessment, the appraised value of taxable real property liable for assessment in the district, and an estimate of property value appreciation for real property in the district for the period after the district is created and before the deferred assessment will be assessed; and

(8) that written or oral objections will be considered at the hearing.

SECTION 9. Section 372.017(b), Local Government Code, is amended to read as follows:

(b) After all objections have been heard and the governing body has passed on the objections, the governing body by ordinance or order shall levy the assessment as a special assessment on the property. The governing body by ordinance or order shall specify the method of payment of the assessment. The governing body may defer an assessment until a date the governing body specifies in the ordinance or order. The governing body may provide that assessments be paid in periodic installments, at an interest rate and for a period approved by the governing body. The provision that assessments be paid in periodic installments may, but is not required to, result in level annual installment payments. The installments must be in amounts necessary to meet annual costs for improvements and must continue for:

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

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

SECTION 10. Sections 372.018(a), (b), (c), and (f), Local Government Code, are amended to read as follows:

(a) An assessment, including a deferred assessment, bears interest at the rate specified by the governing body of the municipality or county beginning at the time or times or on the occurrence of one or more events specified by the governing body. If general obligation bonds, revenue bonds, time warrants, or temporary notes are issued to finance the improvement for which the assessment is assessed, the interest rate for that assessment may not exceed a rate that is one-half of one percent higher than the actual interest rate paid on the debt. Interest on the assessment between the effective date of the ordinance or order levying the assessment and the date the first installment is payable shall be added to the first installment. The interest on any delinquent installment shall be added to each subsequent installment until all delinquent installments are paid.

(b) An assessment, including a deferred assessment or a reassessment, with interest, the expense of collection, and reasonable attorney's fees, if incurred, is:

(1) a first and prior lien against the property assessed;

(2) superior to all other liens and claims except liens or claims for state, county, school district, or municipality ad valorem taxes; and

(3) a personal liability of and charge against the owners of the property regardless of whether the owners are named.

(c) The lien is effective from the date of the ordinance or order levying the assessment, including a deferred assessment, until the assessment is paid.

(f) Delinquent installments of the assessment, including a deferred assessment, shall incur interest, penalties, and attorney's fees in the same manner as delinquent ad valorem taxes. The owner of assessed property may pay at any time all or any part of the assessment, with interest that has accrued on the assessment, on any lot or parcel.

SECTION 11. Section 372.041(a), Local Government Code, is amended to read as follows:

(a) A home-rule municipality may create improvement districts for the purposes of:

(1) levying, straightening, widening, enclosing, or otherwise improving a river, creek, bayou, stream, other body of water, street, or alley;

(2) draining, grading, filling, and otherwise protecting and improving the territory within the municipality's limits; [and]

(3) issuing bonds to finance improvements listed in this subsection; and

(4) financing an improvement described in Subchapter A.

SECTION 12. This Act takes effect September 1, 2011.