By: Elkins H.B. No. 3246
 
 
 
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 372.0015, Local Government Code, is
  amended to read as follows:
               Sec. 372.0015.  DEFINITION.  In this subchapter,
  DEFINITIONS. In this subchapter:
               (1)  "costs" mean costs and expenses paid or incurred
  before, during, or after a public improvement district is
  established and in connection with or related to the undertaking
  and funding of public improvement projects authorized by Section
  372.003; and
               (2)  "extraterritorial jurisdiction" means
  extraterritorial jurisdiction as determined under Chapter 42,
  Local Government Code.
         SECTION 2.  Subchapter A, Chapter 372, Local Government
  Code, is amended by adding Section 372.0025 to read as follows:
               Sec. 372.0025  PUBLIC IMPROVEMENT DISTRICT. A public
  improvement district may include two or more noncontiguous areas
  separated by:
               (1)  right-of-way or other land dedicated to or owned,
  leased, or used by a political subdivision or other governmental
  entity, tax-exempt entity, public or private utility, or railroad;
  or
               (2)  not more than 1,000 feet, as measured in a straight
  line, between the nearest points on the property lines of the
  closest situated noncontiguous areas.
         SECTION 3.  Sections 372.003(a), (b), and (c), Local
  Government Code, are amended to read as follows:
               Sec. 372.003.  AUTHORIZED IMPROVEMENTS.  (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
  a definable part of the municipality or county or the
  municipality's extraterritorial jurisdiction.  A project may be
  undertaken in the municipality or county or the municipality's
  extraterritorial jurisdiction.
         (b)  A public improvement project may include:
               (1)  landscaping;
               (2)  erection of fountains, distinctive lighting, and
  signs;
               (3)  acquiring, constructing, improving, widening,
  narrowing, closing, or rerouting of sidewalks or of streets, any
  other roadways, or their rights-of-way;
               (4)  construction or improvement of pedestrian malls;
               (5)  acquisition and installation of pieces of art;
               (6)  acquisition, construction, or improvement of
  libraries;
               (7)  acquisition, construction, or improvement of
  off-street parking facilities;
               (8)  acquisition, construction, improvement, or
  rerouting of mass transportation facilities;
               (9)  acquisition, construction, or improvement of
  water, wastewater, or drainage facilities or improvements,
  including the right to receive or provide utility service;
               (10)  the establishment or improvement of parks and
  recreation facilities;
               (11)  facilities and equipment for firefighters,
  police, sheriffs, and emergency service providers;
               (1112)  projects similar to those listed in
  Subdivisions (1)-(1011);
               (1213)  acquisition, by purchase or otherwise, of real
  property in connection with an authorized improvement;
               (1314)  special supplemental services for improvement
  and promotion of the district, including services relating to
  advertising, promotion, health and sanitation, water and
  wastewater, firefighters, police, sheriffs, emergency service
  providers, and other public safety, and security personnel,
  business recruitment, development, recreation, and cultural
  enhancement;
               (1415)  payment of expenses incurred in the
  establishment, administration, and operation of the district;
               (15l6)  the development, rehabilitation, or expansion
  of affordable housing;
               (17)  acquisition, construction, maintenance, or
  improvement of buildings and other facilities commonly used for
  teaching, research, or the preservation of knowledge by an
  institution of higher education or for auxiliary purposes of the
  institution, including administration, student services and
  housing, athletics, performing arts, and alumni support;
         (c)  A public improvement project may be limited to the
  provision of the services described by Subsection (b)(1314).
         SECTION 3.  Chapter 372, Local Government Code, is amended
  by adding Section 372.0035 to read as follows:
         Sec. 372.0035.  AUTHORIZED HIGHER EDUCATION FACILITIES;
  LEASE TO INSTITUTION OF HIGHER EDUCATION.  (a)  In this section,
  "institution of higher education" has the meaning assigned by
  Section 61.003, Education Code.
         (b)  The governing body of a municipality or county that
  establishes a public improvement district to finance a public
  improvement project described by Section 372.003(b)(17) may enter
  into a memorandum of understanding with an institution of higher
  education that provides educational services in the municipality or
  county under which the municipality or county leases the public
  improvement project to the institution, at a nominal rate, for use
  by the institution in providing teaching, research, public service,
  or auxiliary enterprise activities to students of the institution.
         SECTION 5.  Section 372.014, Local Government Code, is
  amended to add subsection (c) to read as follows:
         (c)  The assessment plan is intended to be flexible to
  accommodate a variety of development scenarios, including:
               (1)  assessments against all property to pay the costs
  of improvements that benefit all the property and additional
  assessments levied against portions of the property to pay the
  costs of improvements that benefit those portions of the property;
  and
               (2)  assessments to pay the costs for all improvements
  contemplated for all phases of development of the property with
  different payment and collection dates for the different phases
  determined by events established by the plan, including events
  related to the future phased development of the property.
         SECTION 6.  Section 372.015, Local Government Code, is
  amended to add subsections (e), (f), (g), and (h) to read as
  follows:
         (e)  The annual installment of an assessment payable in
  installments may be increased or decreased by the governing body of
  the municipality or county as reflected in the updated annual
  service plan and corresponding updated assessment roll.
         (f)  If a parcel is subdivided, the assessment against the
  parcel before the subdivision may be reallocated among the
  subdivided parcels.
         (g)  If two or more parcels are consolidated, the assessments
  may be reallocated to the consolidated parcel.
         (h)  If a proposed use of an undeveloped parcel changes after
  the assessment is levied against the parcel, the change in use does
  not affect the validity of the assessment, and the aggregate amount
  of the assessments levied against the undeveloped parcels may be
  reallocated among the undeveloped parcels.
         SECTION 7.  Subchapter A, Chapter 372, Local Government
  Code, is amended by adding Section 372.0175 to read as follows:
         Sec. 372.0175.  CONTRACTS FOR COLLECTION OF ASSESSMENTS.
  The governing body of a municipality or county may contract with the
  governing body of another taxing unit, as defined by Section 1.04,
  Tax Code, or the board of directors of an appraisal district to
  perform the duties of the municipality or county relating to
  collection of special assessments levied under this subchapter.
         SECTION 8.  Sections 372.018(a), (f), and (g), Local
  Government Code, are amended to read as follows:
         (a)  An 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,
  reimbursement agreements, installment sales contracts, time
  warrants, or temporary notes are issued to finance the improvement
  for which the assessment is assessed levied, the interest rate for
  that the 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.
  The added interest may be used to pay administrative costs, costs of
  improvements, and costs of financing, including reserves for debt
  service and prepayments of assessments.
         (f)  Delinquent installments of the 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.
         (g)  The owner of assessed property may pay at any time all or
  any part of the assessment, with interest that:
               (1)  has accrued on the assessment; and
               (2)  will accrue on the assessment until the next
  scheduled prepayment or redemption date on the bonds, installment
  sales contracts, reimbursement agreements, temporary notes, or
  time warrants issued or entered into to finance or pay for the
  improvements.
         SECTION 9.  Section 372.023, Local Government Code, is
  amended by amending Subsections (a), (d), (e), and (g) and adding
  Subsections (a-1) and (d-1) to read as follows:
         (a)  Costs of improvements may be paid or reimbursed by any
  combination of the methods described by this section if the
  improvements are dedicated, conveyed, leased, or otherwise
  provided to or for the benefit of:
               (1)  a municipality or county;
               (2)  a political subdivision or other entity exercising
  the powers granted under this subchapter as authorized by other
  law; or
               (3)  an entity that:
                     (A)  is approved by the governing body of an
  entity described by Subdivision (1) or (2); and
                     (B)  is authorized by order, ordinance,
  resolution, or other official action to act for an entity described
  by Subdivision (1) or (2) [The cost of an improvement made under
  this subchapter must be paid in accordance with this section].
         (a-1)  The payment or reimbursement may be provided before or
  after a method of payment or reimbursement authorized by this
  section is entered into or issued.
         (d)  Costs [A cost] payable from a special assessment that is
  payable [to be paid] in installments may be paid by any combination
  of the following methods [and a cost payable by the municipality or
  county as a whole but not payable from available general funds or
  other available general improvement funds shall be paid]:
               (1)  under an installment sales [sale] contract or a
  reimbursement agreement between the municipality or county and
  [with] the person who acquires, installs, or constructs the
  improvements [contracts to install or construct the improvement for
  which the costs apply];
               (2)  as provided by a temporary note or time warrant
  issued by the municipality or county and payable to the [reimburse
  a] person who acquires, installs, or constructs the improvements
  [for money advanced or work performed in connection with an
  improvement]; or
               (3)  by the issuance and sale of [revenue or general
  obligation] bonds under Section 372.024.
         (d-1)  An installment sales contract, reimbursement
  agreement, temporary note, or time warrant described by Subsection
  (d) may be assigned by the payee without the consent of the
  municipality or county.
         (e)  The [net effective] interest rate[, as computed for a
  public security under Section 1204.005, Government Code,] on unpaid
  amounts due under an installment sales contract, reimbursement
  agreement, temporary note, or time warrant described by [money owed
  or paid under] Subsection (d):
               (1)  may not exceed, for a period of not more than five
  years, as determined by the governing body of the municipality or
  county, five [one half of one] percent above the highest average
  index [interest] rate for tax-exempt bonds reported in a daily or
  [by a newspaper in a] weekly bond index approved by the governing
  body and reported in the month before the date the obligation was
  incurred; and
               (2)  after the period described by Subdivision (1), may
  not exceed two percent above the bond index rate described by
  Subdivision (1) [of the contract or agreement or the issuance of the
  bond, temporary note, or time warrant.   The newspaper must
  specialize in bonds and be acceptable as a reliable source for bond
  interest rates to the governing body of the municipality or county
  that enters into the contract or agreement or that issues the bond,
  temporary note, or time warrant].
         (g)  The cost of more than one improvement may be paid:
               (1)  from a single issue and sale of bonds without other
  consolidation proceedings before the bond issue; or
               (2)  under a single installment sales contract,
  reimbursement agreement, temporary note, or time warrant [an
  agreement with a person who contracts to install or construct the
  improvement and who sells the improvement to the municipality or
  county].
         SECTION 10.  Section 372.023(f), Local Government Code, is
  repealed
         SECTION 11.  Section 372.024, Local Government Code, is
  amended to read as follows:
         Sec. 372.024.  GENERAL OBLIGATION AND REVENUE BONDS.  
  General(a) The governing body of a municipality or county may
  issue:
               (1)  general obligation bonds issued to pay costs under
  Section 372.023(d) must be issued under the provisions of under
  Subtitles A and C, Title 9, Government Code.   Revenue bonds issued
  to pay costs under that subsection may be issued from time to time
  in one or more series and are to be payable from and secured by liens
  on all or part of the revenue derived from improvements authorized
  under this subchapter,;
               (2)  certificates of obligation under Subchapter C,
  Chapter 271; and
               (3)  revenue bonds issued in one or more series.
         (b)  The bonds or obligations authorized by Subsection (a):
               (1)  shall be issued upon such terms as the governing
  body of the municipality or county shall determine;
               (2)  may be issued to pay costs;
               (3)  may be issued to refund any bonds or obligations
  entered into or issued under this subchapter (including revenue
  derived from installment payments of special assessments., but not
  limited to, installment sales contracts; reimbursement agreements,
  temporary notes, and time warrants); and
               (4)  may be payable from and secured by special
  assessments.
         (c)  If bonds or obligations are issued for the purposes
  described in Subsection (b)(3) and are secured wholly or partly by
  special assessments, the lien created by the originally levied
  special assessments shall continue uninterrupted as security for
  the bonds or obligations.
         SECTION 12.  Section 372.026, Local Government Code, is
  amended to add Subsection (g) to read as follows:
         (g)  If assessment revenue is being collected to pay an
  installment sales contract, reimbursement agreement, temporary
  note, or time warrant, the governing body of a municipality or
  county may pledge all or any part of the assessment revenue being
  collected as security for and to pay general obligation bonds,
  certificates of obligation, or revenue bonds issued to refund the
  installment sales contract, reimbursement agreement, temporary
  note, or time warrant.  The pledge authorized by this subsection
  shall not constitute a reassessment or new assessment and shall not
  affect the original lien of the pledged assessment which shall
  continue uninterrupted.
         SECTION 13.  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.