By: Nichols, Williams S.B. No. 1913

(In the Senate - Filed April 25, 2013; April 25, 2013, read first time and referred to Committee on Intergovernmental Relations; May 2, 2013, reported favorably by the following vote: Yeas 4, Nays 0; May 2, 2013, sent to printer.)

A BILL TO BE ENTITLED

AN ACT

relating to authorizing certain special districts in Montgomery County to enter into strategic partnership agreements.

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

SECTION 1. Subchapter C, Chapter 8302, Special District Local Laws Code, is amended by adding Section 8302.102 to read as follows:

Sec. 8302.102. STRATEGIC PARTNERSHIP; CONTINUATION OF DISTRICT AFTER ANNEXATION BY MUNICIPALITY. (a) The district may continue to exist as a limited district after full-purpose annexation by a municipality if the district and the annexing municipality state the terms of the limited district's existence in a strategic partnership agreement.

(b) A strategic partnership agreement between the district and an annexing municipality may:

(1) authorize the conversion of the district to a limited district upon full-purpose annexation and may permit the limited district to continue to exist and provide services for a fixed term or an indefinite term, on conditions that are mutually agreeable to the district and the annexing municipality;

(2) contain a pledge of user fee revenues, tax proceeds from taxes levied within constitutional limits, miscellaneous revenues, and other funds under the control of a party, to cover that party's pecuniary obligations under the agreement;

(3) continue in effect for a fixed term or an indefinite term, as may be agreed upon by the district and the annexing municipality; and

(4) contain other provisions relating to annexation or services, including enforcement provisions, as may be agreed upon by the district and the annexing municipality.

(c) An agreement described in this section shall be valid, binding, and enforceable in accordance with its terms. To achieve this purpose:

(1) this section controls over any other laws, rules, regulations, charter provisions, or ordinances, including any contrary provision of Section 43.0751, Local Government Code; and

(2) if the district and an annexing municipality enter into such an agreement, sovereign immunity is waived for each party for the purpose of adjudicating claims based on the agreement, including claims for money damages, declaratory judgment, and other remedies, subject to the terms and conditions of this section.

(d) The total amount of money awarded in an adjudication described by Subsection (c)(2) is limited to direct damages, excluding consequential damages, exemplary damages, or damages for unabsorbed office overhead, plus reasonable and necessary attorney's fees that are equitable and just, plus interest as allowed by law, including interest as calculated under Chapter 2251, Government Code. This section does not waive a defense or a limitation on damages available to a party to such an agreement other than a bar against suit based on sovereign immunity.

(e) An agreement described in this section is not a joint enterprise for liability purposes. This section does not waive sovereign immunity to suit for a cause of action for a negligent or intentional tort or for a cause of action brought by any person or entity that is not a party to an agreement described in this section.

(f) In this section:

(1) "Sovereign immunity" includes immunities commonly referred to as "sovereign immunity" or "governmental immunity" and encompasses both immunity from suit and immunity from liability.

(2) "Adjudicating" or "adjudication" means the bringing of a civil suit and prosecution to final judgment in a county or state court and includes the bringing of an authorized arbitration proceeding and prosecution to final resolution in accordance with any mandatory procedures established in an agreement described in this section.

(g) This section provides authority for the district and an annexing municipality to enter into a strategic partnership agreement, and such authority is in addition to, and separate from, any authority provided by Section 43.0751, Local Government Code, and any other laws, rules, regulations, charter provisions, and ordinances.

SECTION 2. Subchapter C, Chapter 8303, Special District Local Laws Code, is amended by adding Section 8303.102 to read as follows:

Sec. 8303.102. STRATEGIC PARTNERSHIP; CONTINUATION OF DISTRICT AFTER ANNEXATION BY MUNICIPALITY. (a) The district may continue to exist as a limited district after full-purpose annexation by a municipality if the district and the annexing municipality state the terms of the limited district's existence in a strategic partnership agreement.

(b) A strategic partnership agreement between the district and an annexing municipality may:

(1) authorize the conversion of the district to a limited district upon full-purpose annexation and may permit the limited district to continue to exist and provide services for a fixed term or an indefinite term, on conditions that are mutually agreeable to the district and the annexing municipality;

(2) contain a pledge of user fee revenues, tax proceeds from taxes levied within constitutional limits, miscellaneous revenues, and other funds under the control of a party, to cover that party's pecuniary obligations under the agreement;

(3) continue in effect for a fixed term or an indefinite term, as may be agreed upon by the district and the annexing municipality; and

(4) contain other provisions relating to annexation or services, including enforcement provisions, as may be agreed upon by the district and the annexing municipality.

(c) An agreement described in this section shall be valid, binding, and enforceable in accordance with its terms. To achieve this purpose:

(1) this section controls over any other laws, rules, regulations, charter provisions, or ordinances, including any contrary provision of Section 43.0751, Local Government Code; and

(2) if the district and an annexing municipality enter into such an agreement, sovereign immunity is waived for each party for the purpose of adjudicating claims based on the agreement, including claims for money damages, declaratory judgment, and other remedies, subject to the terms and conditions of this section.

(d) The total amount of money awarded in an adjudication described by Subsection (c)(2) is limited to direct damages, excluding consequential damages, exemplary damages, or damages for unabsorbed office overhead, plus reasonable and necessary attorney's fees that are equitable and just, plus interest as allowed by law, including interest as calculated under Chapter 2251, Government Code. This section does not waive a defense or a limitation on damages available to a party to such an agreement other than a bar against suit based on sovereign immunity.

(e) An agreement described in this section is not a joint enterprise for liability purposes. This section does not waive sovereign immunity to suit for a cause of action for a negligent or intentional tort or for a cause of action brought by any person or entity that is not a party to an agreement described in this section.

(f) In this section:

(1) "Sovereign immunity" includes immunities commonly referred to as "sovereign immunity" or "governmental immunity" and encompasses both immunity from suit and immunity from liability.

(2) "Adjudicating" or "adjudication" means the bringing of a civil suit and prosecution to final judgment in a county or state court and includes the bringing of an authorized arbitration proceeding and prosecution to final resolution in accordance with any mandatory procedures established in an agreement described in this section.

(g) This section provides authority for the district and an annexing municipality to enter into a strategic partnership agreement, and such authority is in addition to, and separate from, any authority provided by Section 43.0751, Local Government Code, and any other laws, rules, regulations, charter provisions, and ordinances.

SECTION 3. The change in law made by this Act applies to a strategic partnership agreement entered into before, on, or after the effective date of this Act.

SECTION 4. A strategic partnership agreement entered into by the Montgomery County Utility District No. 3 or the Montgomery County Utility District No. 4 before the effective date of this Act is validated in all respects as if the agreement were entered into as authorized by law.

SECTION 5. Section 4 of this Act does not apply to any matter that on the effective date of this Act:

(1) is involved in litigation if the litigation ultimately results in the matter being held invalid by a final judgment of a court of competent jurisdiction; or

(2) has been held invalid by a final judgment of a court of competent jurisdiction.

SECTION 6. This Act takes effect September 1, 2013.

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