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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. DEFINITIONS [DEFINITION]. In this |
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subchapter: |
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(1) "Costs" means costs and expenses paid or incurred |
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before, during, or after the establishment of a public improvement |
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district and in connection with or related to the undertaking and |
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funding of a public improvement project authorized under this |
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subchapter. |
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(2) "Extraterritorial[, "extraterritorial] |
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jurisdiction" means extraterritorial jurisdiction as determined |
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under Chapter 42. |
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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 is an area, the boundaries of which are |
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designated by the governing body of a municipality or county under |
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this subchapter, that may include two or more noncontiguous areas |
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separated by: |
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(1) a right-of-way or other land dedicated to or |
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owned, leased, or used by a political subdivision or other |
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governmental entity, tax-exempt entity, public or private utility, |
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or railroad; 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(b) and (c), Local Government |
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Code, are amended to read as follows: |
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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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(10) the establishment or improvement of parks and |
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recreation facilities; |
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(11) facilities or equipment for firefighters, |
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police, sheriffs, and emergency service providers; |
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(12) the right to receive or provide utility services; |
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(13) projects similar to those listed in Subdivisions |
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(1)-(12) [(1)-(10)]; |
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(14) [(12)] acquisition, by purchase or otherwise, of |
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real property in connection with an authorized improvement; |
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(15) [(13)] special supplemental services for |
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improvement and promotion of the district, including services |
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relating to: |
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(A) advertising; |
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(B) [,] promotion; |
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(C) [,] health and sanitation; |
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(D) [,] water and wastewater; |
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(E) firefighters, police, sheriffs, emergency |
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service providers, and other public safety and [,] security |
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personnel; |
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(F) [,] business recruitment; |
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(G) [,] development; |
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(H) [,] recreation;[,] and |
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(I) cultural enhancement; |
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(16) [(14)] payment of expenses incurred in the |
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establishment, administration, and operation of the district; and |
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(17) [(15)] the development, rehabilitation, or |
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expansion of affordable housing. |
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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)(15) |
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[(b)(13)]. |
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SECTION 4. Chapter 372, Local Government Code is amended to |
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add Sec. 372.031 as follows: |
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Sec. 372.031. FINDINGS PRIOR TO ISSUANCE OF CERTAIN BONDS |
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OR OBLIGATIONS. (a) Prior to the issuance under this chapter of |
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bonds or obligations wholly or partly payable from or secured by |
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assessments, the governing body of a municipality with a population |
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of 250,000 or less or the governing body of a county with a |
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population of 1 million or less issuing the bonds or obligations |
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must find and determine the following: |
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(1) construction of all underground water, |
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wastewater, and drainage facilities and roadways to serve the real |
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property liable for assessments necessary to support the payment of |
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the bonds or obligations is at least 95 percent complete; and |
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(2) construction of at least 25 percent of the houses |
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or other buildings on the real property liable for assessments and |
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necessary to support the bonds or obligations has been completed. |
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(b) Prior to the issuance under this chapter of bonds or |
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obligations wholly or partly payable from or secured by |
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assessments, a municipality with a population of more than 700,000 |
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or a county with a population of more than 1 million issuing the |
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bonds or obligations must obtain an independent market study from a |
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firm recognized in the area of real estate market analysis |
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supporting the development projects for the real property liable |
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for assessments and necessary to support the payment of the bonds or |
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obligations. |
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(c) Subsections (a) and (b) do not apply to general |
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obligation bonds or certificates of obligations. |
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(d) The Attorney General shall adopt rules to enforce this |
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section and to ensure the integrity and economic feasibility of |
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bonds or obligations issued under this chapter. |
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SECTION 5. Subchapter A, Chapter 372, Local Government |
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Code, is amended 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) A public improvement project under Section 372.003 may |
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include the acquisition, construction, maintenance, or improvement |
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of buildings and other facilities commonly used for: |
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(1) teaching, research, or the preservation of |
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knowledge by an institution of higher education; or |
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(2) an auxiliary purpose of an institution of higher |
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education, including the provision of administrative services, |
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student services, student housing, athletics, performing arts, and |
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alumni support. |
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(c) 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 Subsection (b) may enter into a |
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memorandum of understanding with an institution of higher education |
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that provides educational services in the municipality or county |
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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 6. Section 372.014, Local Government Code, is |
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amended by adding Subsection (c) to read as follows: |
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(c) The assessment plan is intended to be flexible to |
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provide for various 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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or |
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(2) assessments levied to pay the costs for all |
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improvements contemplated for all phases of development of the |
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property with different payment and collection dates for the |
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different phases determined by events established by the plan, |
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including events related to the future phased development of the |
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property. |
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SECTION 7. Section 372.015, Local Government Code, is |
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amended by adding 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 the 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 parcel was subdivided may be reallocated among |
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the subdivided parcels. |
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(g) If two or more parcels are consolidated, the assessments |
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against each parcel 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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an assessment is levied against a parcel: |
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(1) the change in use does not affect the validity of |
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the assessment against the parcel; and |
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(2) the aggregate amount of assessments levied against |
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multiple undeveloped parcels for which the proposed use has changed |
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may be reallocated among the undeveloped parcels. |
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SECTION 8. 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 9. Section 372.018, Local Government Code, is |
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amended by amending Subsections (a) and (f) and adding Subsection |
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(g) 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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installment sales contracts, reimbursement agreements, time |
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warrants, or temporary notes are issued or entered into to finance |
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or pay for the improvement for which the assessment is levied |
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[assessed], the interest rate for the [that] assessment may not |
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exceed a rate that is one-half of one percent higher than the actual |
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interest rate paid on the debt. [Interest on the assessment between
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the effective date of the ordinance or order levying the assessment
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and the date the first installment is payable shall be added to the
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first installment.] The interest on any delinquent installment |
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shall be added to each subsequent installment until all delinquent |
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installments are paid. The added interest may be used to pay costs, |
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including the payment or prepayment of the assessment, |
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administrative costs, costs of improvements, and costs of financing |
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such as reserves for debt service. |
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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. |
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(g) The owner of assessed property may pay at any time on any |
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parcel or lot all or 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 general obligation |
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bonds, revenue bonds, installment sales contract, reimbursement |
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agreement, temporary note, or time warrant issued or entered into |
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to finance or pay for the improvements [, on any lot or parcel]. |
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SECTION 10. 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 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. (a) |
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The governing body of a municipality or county may issue: |
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(1) general [General] obligation bonds [issued to pay
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costs under Section 372.023(d) must be issued] under [the
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provisions of] Subtitles A and C, Title 9, Government Code; |
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(2) certificates of obligation under Subchapter C, |
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Chapter 271; and |
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(3) revenue [. Revenue] bonds, issued [to pay costs
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under that subsection may be issued from time to time] in one or |
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more series [and are to be payable from and secured by liens on all
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or part of the revenue derived from improvements authorized under
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this subchapter, including revenue derived from installment
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payments of special assessments]. |
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(b) The bond or obligation may be: |
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(1) issued on the terms determined by the governing |
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body of the municipality or county; |
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(2) issued to pay costs; |
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(3) issued to refund any obligation entered into or |
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issued under this subchapter, including an installment sales |
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contract, reimbursement agreement, temporary note, and time |
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warrant; and |
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(4) payable from and secured by special assessments. |
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(c) If the bond or obligation is issued for the purpose |
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described by Subsection (b)(3) and is secured wholly or partly by a |
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special assessment, the lien created by the originally levied |
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special assessment continues uninterrupted for the term of the bond |
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or obligation to secure payment of the bond or obligation. |
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SECTION 12. Section 372.026, Local Government Code, is |
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amended by adding Subsection (g) to read as follows: |
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(g) If an assessment is collected and applied to pay an |
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amount due under an installment sales contract, reimbursement |
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agreement, temporary note, or time warrant, the governing body of a |
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municipality or county may pledge all or any part of the revenue |
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collected to pay general obligation bonds, certificates of |
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obligation, or revenue bonds issued to refund those obligations. |
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The pledge authorized by this subsection: |
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(1) does not affect the lien of that assessment; and |
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(2) is not a reassessment or a new assessment. |
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SECTION 13. Section 372.023(f), Local Government Code, is |
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repealed. |
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SECTION 14. 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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