By: Anchia H.B. No. 3452

A BILL TO BE ENTITLED

AN ACT

relating to improvement districts in municipalities and counties.

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

SECTION 1. Chapter 372.003(a), Local Government Code, is 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 properties that have a common land use or other common characteristic or 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;

(10) the establishment or improvement of parks;

(11) projects similar to those listed in Subdivisions (1)-(10);

(12) acquisition, by purchase or otherwise, of real property in connection with an authorized improvement;

(13) special supplemental services for improvement and promotion of the district, including services relating to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment, development, recreation, and cultural enhancement;

(14) payment of expenses incurred in the establishment, administration, and operation of the district including the costs of operating and maintaining mass transportation facilities financed with public improvement district assessments; and

(15) the development, rehabilitation, or expansion of affordable housing.

(c) A public improvement project may be limited to the provision of the services described by Subsection (b(13).

SECTION 2. Section 372, Local Government Code, is amended by adding a new Subsection 372.0031 to read as follows:

Sec. 372.0031 VALUE CAPTURE AND COST. If the public improvement project is to be financed through a deferred payment, the governing body shall prepare an estimate of the appraised value of the properties in the District and the cost of the improvement before the improvement is constructed and before the hearing provided by Section 372.009 is held.

SECTION 3. Sec. 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:

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

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

(9) the estimated property value appreciation and the proposed schedule for collecting the assessment, if a deferred payment and collection method is to be used to finance the improvements.

SECTION 4. Sec. 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:

(5) the method of assessment; and

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

(7) the estimated property value appreciation and the proposed schedule for collecting the assessment, if a deferred payment and collection method is to be used to finance the improvements.

(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:

(5) the proposed method of assessment; and

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

(7) the estimated property value appreciation and the proposed schedule for collecting the assessment, if a deferred payment and collection method is to be used to finance the improvements.

SECTION 5. Sec. 372.013, Local Government Code, is amended 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 public improvement project is to be financed through a deferred payment and collection method, the plan shall describe the total projected costs, the total indebtedness of the improvement project, the estimated property value appreciation attributable to improvements in the district and an estimated collection schedule for the deferred assessments.

SECTION 6. Sec. 372.017 and 372.018, Local Government Code, are amended to read as follows:

Sec. 372.017. LEVY OF ASSESSMENT. (a) At or on the adjournment of the hearing referred to by Section 372.016 on proposed assessments, the governing body of the municipality or county must hear and pass on any objection to a proposed assessment. The governing body may amend a proposed assessment on any parcel.

(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 provide that the payment of assessments be deferred to a specific date or event in the future, or that payment be made 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.

Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An assessment bears interest Interest shall accrue on the assessment or any deferred assessment 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, deferred assessment, or 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 or deferred assessment until the assessment is paid.

(d) The lien runs with the land and that portion of an assessment payment that has not yet come due is not eliminated by foreclosure of an ad valorem tax lien.

(e) The assessment lien may be enforced by the governing body in the same manner that an ad valorem tax lien against real property may be enforced by the governing body. Foreclosure of accrued installments does not eliminate the outstanding principal balance of the assessment. Any purchaser of the property in foreclosure takes the property subject to the assessment lien and any associated obligations.

(f) Delinquent installments of the assessment or 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.

(g) The assessment lien may be enforced by sale of the property in the manner provided by law for the collection of ad valorem taxes by the municipality.

SECTION 7. SUBCHAPTER B. IMPROVEMENT DISTRICTS IN HOME-RULE MUNICIPALITIES, Sec. 372.041(a), Local Government Code, is amended by adding a new subsection (4) to read as follows:

Sec. 372.041. AUTHORITY OF HOME-RULE MUNICIPALITY. (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 any public improvement project authorized by this chapter.

SECTION 8. 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.