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A BILL TO BE ENTITLED
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AN ACT
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relating to public improvement districts designated by a |
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municipality or county. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 372.0015, Local Government Code, is |
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amended to read as follows: |
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Sec. 372.0015. DEFINITION. In this subchapter, |
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DEFINITIONS. In this subchapter: |
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(1) "costs" mean costs and expenses paid or incurred |
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before, during, or after a public improvement district is |
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established and in connection with or related to the undertaking |
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and funding of public improvement projects authorized by Section |
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372.003; and |
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(2) "extraterritorial jurisdiction" means |
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extraterritorial jurisdiction as determined under Chapter 42, |
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Local Government Code. |
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SECTION 2. Subchapter A, Chapter 372, Local Government |
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Code, is amended by adding Section 372.0025 to read as follows: |
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Sec. 372.0025 PUBLIC IMPROVEMENT DISTRICT. A public |
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improvement district may include two or more noncontiguous areas |
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separated by: |
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(1) right-of-way or other land dedicated to or owned, |
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leased, or used by a political subdivision or other governmental |
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entity, tax-exempt entity, public or private utility, or railroad; |
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or |
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(2) not more than 1,000 feet, as measured in a straight |
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line, between the nearest points on the property lines of the |
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closest situated noncontiguous areas. |
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SECTION 3. Sections 372.003(a), (b), and (c), Local |
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Government Code, are amended to read as follows: |
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Sec. 372.003. AUTHORIZED IMPROVEMENTS. (a) If the |
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governing body of a municipality or county finds that it promotes |
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the interests of the municipality or county, the governing body may |
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undertake an improvement project that confers a special benefit on |
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a definable part of the municipality or county or the |
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municipality's extraterritorial jurisdiction. A project may be |
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undertaken in the municipality or county or the municipality's |
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extraterritorial jurisdiction. |
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(b) A public improvement project may include: |
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(1) landscaping; |
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(2) erection of fountains, distinctive lighting, and |
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signs; |
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(3) acquiring, constructing, improving, widening, |
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narrowing, closing, or rerouting of sidewalks or of streets, any |
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other roadways, or their rights-of-way; |
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(4) construction or improvement of pedestrian malls; |
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(5) acquisition and installation of pieces of art; |
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(6) acquisition, construction, or improvement of |
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libraries; |
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(7) acquisition, construction, or improvement of |
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off-street parking facilities; |
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(8) acquisition, construction, improvement, or |
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rerouting of mass transportation facilities; |
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(9) acquisition, construction, or improvement of |
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water, wastewater, or drainage facilities or improvements, |
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including the right to receive or provide utility service; |
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(10) the establishment or improvement of parks and |
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recreation facilities; |
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(11) facilities and equipment for firefighters, |
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police, sheriffs, and emergency service providers; |
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(1112) projects similar to those listed in |
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Subdivisions (1)-(1011); |
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(1213) acquisition, by purchase or otherwise, of real |
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property in connection with an authorized improvement; |
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(1314) special supplemental services for improvement |
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and promotion of the district, including services relating to |
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advertising, promotion, health and sanitation, water and |
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wastewater, firefighters, police, sheriffs, emergency service |
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providers, and other public safety, and security personnel, |
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business recruitment, development, recreation, and cultural |
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enhancement; |
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(1415) payment of expenses incurred in the |
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establishment, administration, and operation of the district; |
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(1516) the development, rehabilitation, or expansion |
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of affordable housing; |
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(17) acquisition, construction, maintenance, or |
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improvement of buildings and other facilities commonly used for |
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teaching, research, or the preservation of knowledge by an |
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institution of higher education or for auxiliary purposes of the |
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institution, including administration, student services and |
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housing, athletics, performing arts, and alumni support; |
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(c) A public improvement project may be limited to the |
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provision of the services described by Subsection (b)(1314). |
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SECTION 3. Chapter 372, Local Government Code, is amended |
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by adding Section 372.0035 to read as follows: |
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Sec. 372.0035. AUTHORIZED HIGHER EDUCATION FACILITIES; |
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LEASE TO INSTITUTION OF HIGHER EDUCATION. (a) In this section, |
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"institution of higher education" has the meaning assigned by |
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Section 61.003, Education Code. |
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(b) The governing body of a municipality or county that |
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establishes a public improvement district to finance a public |
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improvement project described by Section 372.003(b)(17) may enter |
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into a memorandum of understanding with an institution of higher |
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education that provides educational services in the municipality or |
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county under which the municipality or county leases the public |
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improvement project to the institution, at a nominal rate, for use |
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by the institution in providing teaching, research, public service, |
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or auxiliary enterprise activities to students of the institution. |
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SECTION 5. Section 372.014, Local Government Code, is |
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amended to add subsection (c) to read as follows: |
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(c) The assessment plan is intended to be flexible to |
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accommodate a variety of development scenarios, including: |
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(1) assessments against all property to pay the costs |
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of improvements that benefit all the property and additional |
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assessments levied against portions of the property to pay the |
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costs of improvements that benefit those portions of the property; |
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and |
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(2) assessments to pay the costs for all improvements |
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contemplated for all phases of development of the property with |
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different payment and collection dates for the different phases |
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determined by events established by the plan, including events |
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related to the future phased development of the property. |
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SECTION 6. Section 372.015, Local Government Code, is |
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amended to add subsections (e), (f), (g), and (h) to read as |
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follows: |
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(e) The annual installment of an assessment payable in |
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installments may be increased or decreased by the governing body of |
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the municipality or county as reflected in the updated annual |
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service plan and corresponding updated assessment roll. |
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(f) If a parcel is subdivided, the assessment against the |
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parcel before the subdivision may be reallocated among the |
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subdivided parcels. |
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(g) If two or more parcels are consolidated, the assessments |
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may be reallocated to the consolidated parcel. |
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(h) If a proposed use of an undeveloped parcel changes after |
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the assessment is levied against the parcel, the change in use does |
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not affect the validity of the assessment, and the aggregate amount |
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of the assessments levied against the undeveloped parcels may be |
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reallocated among the undeveloped parcels. |
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SECTION 7. Subchapter A, Chapter 372, Local Government |
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Code, is amended by adding Section 372.0175 to read as follows: |
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Sec. 372.0175. CONTRACTS FOR COLLECTION OF ASSESSMENTS. |
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The governing body of a municipality or county may contract with the |
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governing body of another taxing unit, as defined by Section 1.04, |
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Tax Code, or the board of directors of an appraisal district to |
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perform the duties of the municipality or county relating to |
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collection of special assessments levied under this subchapter. |
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SECTION 8. Sections 372.018(a), (f), and (g), Local |
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Government Code, are amended to read as follows: |
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(a) An assessment bears interest at the rate specified by |
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the governing body of the municipality or county beginning at the |
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time or times or on the occurrence of one or more events specified |
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by the governing body. If general obligation bonds, revenue bonds, |
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reimbursement agreements, installment sales contracts, time |
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warrants, or temporary notes are issued to finance the improvement |
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for which the assessment is assessed levied, the interest rate for |
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that the assessment may not exceed a rate that is one-half of one |
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percent higher than the actual interest rate paid on the debt |
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Interest on the assessment between the effective date of the
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ordinance or order levying the assessment and the date the first
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installment is payable shall be added to the first installment. The |
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interest on any delinquent installment shall be added to each |
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subsequent installment until all delinquent installments are paid. |
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The added interest may be used to pay administrative costs, costs of |
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improvements, and costs of financing, including reserves for debt |
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service and prepayments of assessments. |
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(f) Delinquent installments of the assessment shall incur |
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interest, penalties, and attorney's fees in the same manner as |
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delinquent ad valorem taxes. The owner of assessed property may pay
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at any time all or any part of the assessment, with interest that
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has accrued on the assessment, on any lot or parcel. |
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(g) The owner of assessed property may pay at any time all or |
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any part of the assessment, with interest that: |
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(1) has accrued on the assessment; and |
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(2) will accrue on the assessment until the next |
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scheduled prepayment or redemption date on the bonds, installment |
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sales contracts, reimbursement agreements, temporary notes, or |
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time warrants issued or entered into to finance or pay for the |
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improvements. |
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SECTION 9. Section 372.023, Local Government Code, is |
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amended by amending Subsections (a), (d), (e), and (g) and adding |
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Subsections (a-1) and (d-1) to read as follows: |
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(a) Costs of improvements may be paid or reimbursed by any |
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combination of the methods described by this section if the |
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improvements are dedicated, conveyed, leased, or otherwise |
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provided to or for the benefit of: |
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(1) a municipality or county; |
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(2) a political subdivision or other entity exercising |
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the powers granted under this subchapter as authorized by other |
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law; or |
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(3) an entity that: |
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(A) is approved by the governing body of an |
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entity described by Subdivision (1) or (2); and |
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(B) is authorized by order, ordinance, |
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resolution, or other official action to act for an entity described |
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by Subdivision (1) or (2) [The cost of an improvement made under
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this subchapter must be paid in accordance with this section]. |
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(a-1) The payment or reimbursement may be provided before or |
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after a method of payment or reimbursement authorized by this |
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section is entered into or issued. |
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(d) Costs [A cost] payable from a special assessment that is |
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payable [to be paid] in installments may be paid by any combination |
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of the following methods [and a cost payable by the municipality or
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county as a whole but not payable from available general funds or
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other available general improvement funds shall be paid]: |
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(1) under an installment sales [sale] contract or a |
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reimbursement agreement between the municipality or county and |
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[with] the person who acquires, installs, or constructs the |
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improvements [contracts to install or construct the improvement for
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which the costs apply]; |
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(2) as provided by a temporary note or time warrant |
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issued by the municipality or county and payable to the [reimburse
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a] person who acquires, installs, or constructs the improvements |
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[for money advanced or work performed in connection with an
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improvement]; or |
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(3) by the issuance and sale of [revenue or general
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obligation] bonds under Section 372.024. |
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(d-1) An installment sales contract, reimbursement |
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agreement, temporary note, or time warrant described by Subsection |
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(d) may be assigned by the payee without the consent of the |
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municipality or county. |
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(e) The [net effective] interest rate[, as computed for a
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public security under Section 1204.005, Government Code,] on unpaid |
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amounts due under an installment sales contract, reimbursement |
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agreement, temporary note, or time warrant described by [money owed
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or paid under] Subsection (d): |
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(1) may not exceed, for a period of not more than five |
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years, as determined by the governing body of the municipality or |
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county, five [one half of one] percent above the highest average |
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index [interest] rate for tax-exempt bonds reported in a daily or |
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[by a newspaper in a] weekly bond index approved by the governing |
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body and reported in the month before the date the obligation was |
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incurred; and |
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(2) after the period described by Subdivision (1), may |
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not exceed two percent above the bond index rate described by |
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Subdivision (1) [of the contract or agreement or the issuance of the
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bond, temporary note, or time warrant.
The newspaper must
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specialize in bonds and be acceptable as a reliable source for bond
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interest rates to the governing body of the municipality or county
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that enters into the contract or agreement or that issues the bond,
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temporary note, or time warrant]. |
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(g) The cost of more than one improvement may be paid: |
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(1) from a single issue and sale of bonds without other |
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consolidation proceedings before the bond issue; or |
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(2) under a single installment sales contract, |
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reimbursement agreement, temporary note, or time warrant [an
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agreement with a person who contracts to install or construct the
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improvement and who sells the improvement to the municipality or
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county]. |
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SECTION 10. Section 372.023(f), Local Government Code, is |
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repealed |
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SECTION 11. Section 372.024, Local Government Code, is |
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amended to read as follows: |
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Sec. 372.024. GENERAL OBLIGATION AND REVENUE BONDS. |
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General(a) The governing body of a municipality or county may |
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issue: |
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(1) general obligation bonds issued to pay costs under
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Section 372.023(d) must be issued under the provisions of under |
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Subtitles A and C, Title 9, Government Code.
Revenue bonds issued
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to pay costs under that subsection may be issued from time to time
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in one or more series and are to be payable from and secured by liens
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on all or part of the revenue derived from improvements authorized
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under this subchapter,; |
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(2) certificates of obligation under Subchapter C, |
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Chapter 271; and |
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(3) revenue bonds issued in one or more series. |
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(b) The bonds or obligations authorized by Subsection (a): |
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(1) shall be issued upon such terms as the governing |
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body of the municipality or county shall determine; |
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(2) may be issued to pay costs; |
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(3) may be issued to refund any bonds or obligations |
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entered into or issued under this subchapter (including revenue
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derived from installment payments of special assessments., but not |
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limited to, installment sales contracts; reimbursement agreements, |
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temporary notes, and time warrants); and |
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(4) may be payable from and secured by special |
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assessments. |
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(c) If bonds or obligations are issued for the purposes |
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described in Subsection (b)(3) and are secured wholly or partly by |
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special assessments, the lien created by the originally levied |
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special assessments shall continue uninterrupted as security for |
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the bonds or obligations. |
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SECTION 12. Section 372.026, Local Government Code, is |
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amended to add Subsection (g) to read as follows: |
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(g) If assessment revenue is being collected to pay an |
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installment sales contract, reimbursement agreement, temporary |
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note, or time warrant, the governing body of a municipality or |
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county may pledge all or any part of the assessment revenue being |
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collected as security for and to pay general obligation bonds, |
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certificates of obligation, or revenue bonds issued to refund the |
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installment sales contract, reimbursement agreement, temporary |
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note, or time warrant. The pledge authorized by this subsection |
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shall not constitute a reassessment or new assessment and shall not |
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affect the original lien of the pledged assessment which shall |
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continue uninterrupted. |
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SECTION 13. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2011. |
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COMMITTEE AMENDMENT NO. |
1 |
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Amend H.B. 3246 (introduced version), after Section 12 of the |
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bill, by inserting the following new Section 13 and renumbering the |
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subsequent section accordingly: |
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SECTION 13. Chapter 372, Local Government Code is amended |
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to add Sec. 372.031 as follows: |
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Sec. 372.031. ECONOMIC FEASIBILITY OF BONDS PAYABLE FROM |
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ASSESSMENTS. (a) Prior to the issuance of bonds or obligations |
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payable wholly or partly from assessments, a municipality or county |
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issuing such bonds must find and determine the following: |
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(i) all underground water, wastewater, and drainage |
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facilities and all road and street construction to serve assessed |
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property necessary to support the bonds shall be 95% complete; and |
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(ii) at least 25% of the property assessed necessary |
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to support the bonds must be developed with completed houses, |
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buildings or other vertical improvements. |
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(b) This section does not apply to general obligation bonds |
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or certificates of obligations. |
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Callegari |