By: Keffer H.B. No. 3187

A BILL TO BE ENTITLED

AN ACT

relating to assessments for water and energy improvements in municipalities and counties; changing a fee.

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

SECTION 1. Section 399.003, Local Government Code, is amended to read as follows:

Sec. 399.003. EXERCISE OF POWERS. (a) In addition to the authority provided by Chapter 376 for municipalities, the governing body of a local government that establishes a program in accordance with the requirements provided by Section 399.008 may exercise powers granted under this chapter.

(b) The establishment of a program under this chapter by a local government is a governmental function for all purposes.

SECTION 2. Sections 399.006(b) and (c), Local Government Code, are amended to read as follows:

(b) An authorized representative [official] of the local government that establishes a program may enter into a written contract with a record owner of real property in a region designated under this chapter to impose an assessment to repay the owner's financing of a qualified project on the owner's property. The financing to be repaid through assessments may be provided by a third party or, if authorized by the program, by the local government.

(c) If the program provides for third-party financing, the authorized representative [official] of the local government that enters into a written contract with a property owner under Subsection (b) must also enter into a written contract with the party that provides financing for a qualified project under the program to service the debt through assessments.

SECTION 3. Section 399.007(a), Local Government Code, is amended to read as follows:

(a) The governing body of a local government may determine that it is convenient and advantageous to designate an area of the local government as a region within which the authorized representative of the local government [officials] and record owners of real property may enter into written contracts to impose assessments to repay the financing by owners of qualified projects on the owners' property and, if authorized by the local government program, finance the qualified project.

SECTION 4. Sections 399.008(a) and (e), Local Government Code, are amended to read as follows:

(a) To establish a program under this chapter, the governing body of a local government must take the following actions in the following order:

(1) adopt a resolution of intent that includes:

(A) a finding that, if appropriate, financing qualified projects through contractual assessments is a valid public purpose;

(B) a statement that the local government intends to make contractual assessments to repay financing for qualified projects available to property owners;

(C) a description of the types of qualified projects that may be subject to contractual assessments;

(D) a description of the boundaries of the region;

(E) a description of any proposed arrangements for third-party financing to be available or any local government financing to be provided for qualified projects;

(F) a description of local government debt servicing procedures if third-party financing will be provided and assessments will be collected to service a third-party debt;

(G) a reference to the report on the proposed program prepared as provided by Section 399.009 and a statement identifying the location where the report is available for public inspection;

(H) a statement of the time and place for a public hearing on the proposed program; and

(I) a statement identifying the appropriate representative of the local government [official and the appropriate assessor-collector] for purposes of consulting regarding collecting the proposed contractual assessments [with property taxes] imposed on the assessed property;

(2) hold a public hearing at which the public may comment on the proposed program, including the report required by Section 399.009; and

(3) adopt a resolution establishing the program and the terms of the program, including:

(A) each item included in the report under Section 399.009; and

(B) a description of each aspect of the program that may be amended only after another public hearing is held.

(e) A local government may impose fees to offset the costs of administering a program. The fees authorized by this subsection may be assessed as:

(1) a program application fee paid by the property owner requesting to participate in the program expressed as a set amount, a percentage of the amount of the assessment, or in any other manner;

(2) a component of the interest rate on the assessment in the written contract between the local government and the property owner; or

(3) a combination of Subdivisions (1) and (2).

SECTION 5. Sections 399.009(a) and (c), Local Government Code, are amended to read as follows:

(a) The report for a proposed program required by Section 399.008 must include:

(1) a map showing the boundaries of the proposed region;

(2) a form contract between the local government and the property owner specifying the terms of:

(A) assessment under the program; and

(B) financing provided by [a third party or] the local government, if applicable [as appropriate];

(3) if the proposed program provides for third-party financing, a form contract between the local government and the third party regarding the servicing of the debt through assessments;

(4) a description of types of qualified projects that may be subject to contractual assessments;

(5) a statement identifying a local government representative [official] authorized to enter into written contracts on behalf of the local government;

(6) a plan for ensuring sufficient capital for third-party financing and, if appropriate, raising capital for local government financing for qualified projects;

(7) if bonds will be issued to provide capital to finance qualified projects as part of the program as provided by Section 399.016:

(A) a maximum aggregate annual dollar amount for financing through contractual assessments to be provided by the local government under the program;

(B) a method for ranking requests from property owners for financing through contractual assessments in priority order if requests appear likely to exceed the authorization amount; and

(C) a method for determining:

(i) the interest rate and period during which contracting owners would pay an assessment; and

(ii) the maximum amount of an assessment;

(8) a method for ensuring that the period of the contractual assessment does not exceed the useful life of the qualified project that is the basis for the assessment;

(9) a description of the application process and eligibility requirements for financing qualified projects to be repaid through contractual assessments under the program;

(10) a method as prescribed by Subsection (b) for ensuring that property owners requesting to participate in the program demonstrate the financial ability to fulfill financial obligations to be repaid through contractual assessments;

(11) a statement explaining the manner in which property will be assessed and assessments will be collected;

(12) a statement explaining the lender notice requirement provided by Section 399.010;

(13) a statement explaining the review requirement provided by Section 399.011;

(14) a description of marketing and participant education services to be provided for the program;

(15) a description of quality assurance and antifraud measures to be instituted for the program; and

(16) the procedures for collecting the proposed contractual assessments.

(c) The local government shall make the report available for public inspection:

(1) on the local government's Internet website; and

(2) at the office of the representative [official] designated to enter into written contracts on behalf of the local government under the program.

SECTION 6. 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, 2015.