By: Campbell, et al. S.B. No. 1639

A BILL TO BE ENTITLED

AN ACT

relating to the procedures for municipal annexations.

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

SECTION 1. Subchapter A, Chapter 43, Local Government Code, is amended by adding Section 43.003 to read as follows:

Sec. 43.003. LIMITED PURPOSE ANNEXATION GENERALLY PROHIBITED; EXCEPTION. (a) Except as provided by Section 43.0751, beginning September 1, 2015, a municipality may not annex an area for the limited purposes of applying its planning, zoning, health, and safety ordinances in the area.

(b) This section supersedes any municipal charter provision that conflicts with this section.

SECTION 2. Section 43.051, Local Government Code, is transferred to Subchapter B, Chapter 43, Local Government Code, redesignated as Section 43.0211, Local Government Code, and amended to read as follows:

Sec. 43.0211 [43.051]. AUTHORITY TO ANNEX LIMITED TO EXTRATERRITORIAL JURISDICTION. A municipality may annex area only in the municipality's [its] extraterritorial jurisdiction unless the municipality owns the area.

SECTION 3. Subchapter B, Chapter 43, Local Government Code, is amended by adding Section 43.0212 to read as follows:

Sec. 43.0212. AUTHORITY OF MUNICIPALITY TO ANNEX AREA ON REQUEST OF OWNERS. (a) A municipality may annex an area if each owner of land in the area requests the annexation.

(b) If a municipality elects to annex an area under this section, the governing body of the municipality must first negotiate and enter into a written agreement for the provision of services in the area with the owners of land in the area. The municipality is not required to provide a service that is not included in the agreement.

(c) Before a municipality may annex an area under this section, the governing body of the municipality must conduct at least two public hearings. The hearings must be conducted not less than 10 business days apart. During the first public hearing, the governing body must provide persons interested in the annexation the opportunity to be heard. During the final public hearing, the governing body may adopt an ordinance annexing the area.

SECTION 4. The heading to Subchapter C, Chapter 43, Local Government Code, is amended to read as follows:

SUBCHAPTER C. ANNEXATION OF AREAS WITH A POPULATION OF LESS THAN

200 [PROCEDURE FOR AREAS ANNEXED UNDER MUNICIPAL ANNEXATION PLAN]

SECTION 5. Subchapter C, Chapter 43, Local Government Code, is amended by adding Sections 43.0511 through 43.0517 to read as follows:

Sec. 43.0511. AUTHORITY TO ANNEX. A municipality may annex an area with a population of less than 200 only if the municipality obtains consent to annex the area through a petition signed by:

(1) more than 50 percent of the registered voters of the area; and

(2) if the registered voters of the area do not own more than 50 percent of the land in the area, more than 50 percent of the owners of land in the area.

Sec. 43.0512. RESOLUTION. The governing body of the municipality that proposes to annex an area under this subchapter must adopt a resolution that includes:

(1) a statement of the municipality's intent to annex the area;

(2) a detailed description and map of the area to be annexed; and

(3) a description of the services to be provided by the municipality in the area after the annexation, including, as applicable:

(A) police protection;

(B) fire protection;

(C) emergency medical services;

(D) solid waste collection;

(E) operation and maintenance of water and wastewater facilities in the annexed area;

(F) operation and maintenance of roads and streets, including road and street lighting;

(G) operation and maintenance of parks, playgrounds, and swimming pools; and

(H) operation and maintenance of any other publicly owned facility, building, or service.

Sec. 43.0513. NOTICE OF PROPOSED ANNEXATION. Not later than the seventh day after the date the governing body of the municipality adopts the resolution under Section 43.0512, the municipality must mail to each resident in the area notification of the proposed annexation that includes:

(1) notice of the public hearing required by Section 43.0514;

(2) an explanation of the 60-day petition period described by Section 43.0515; and

(3) a description of services to be provided by the municipality in the area after the annexation.

Sec. 43.0514. INITIAL PUBLIC HEARING. The governing body of a municipality must conduct at least one public hearing not earlier than the 21st day and not later than the 30th day after the date the governing body adopts the resolution under Section 43.0512.

Sec. 43.0515. PETITION. (a) The petition required by Section 43.0511 may be signed only by a registered voter of the area or an owner of land in the area. The petition must provide for the person signing to state whether the person is signing as a registered voter of the area, as an owner of land in the area, or as both.

(b) The municipality may collect signatures on the petition only during the period beginning on the 31st day after the date the governing body of the municipality adopts the resolution under Section 43.0512 and ending on the 90th day after the date the resolution is adopted.

(c) The petition must clearly state that a person signing the petition is consenting to the proposed annexation.

(d) The petition must include a map of and describe the area proposed to be annexed.

(e) The municipality must collect petition signatures in person, except that the municipality may provide for an owner of land in the area that is not a resident of the area to sign the petition electronically.

(f) Chapter 277, Election Code, applies to a petition under this section.

Sec. 43.0516. RESULTS OF PETITION. (a) When the petition period prescribed by Section 43.0515 ends, the petition shall be verified by the municipal secretary or other person responsible for verifying signatures. The municipality must notify the residents of the area proposed to be annexed of the results of the petition.

(b) If the municipality does not obtain the number of signatures on the petition required to annex the area, the municipality may not annex the area and may not adopt another resolution under Section 43.0512 to annex the same area until the first anniversary of the date the petition period ended.

(c) If the municipality obtains the number of signatures on the petition required to annex the area, the municipality may annex the area after:

(1) providing notice under Subsection (a);

(2) holding a public hearing at which members of the public are given an opportunity to be heard; and

(3) holding a final hearing not earlier than the 10th day after the date of the public hearing under Subdivision (2) at which the ordinance annexing the area may be adopted.

Sec. 43.0517. VOTER APPROVAL BY MUNICIPAL RESIDENTS ON PETITION. Notwithstanding Section 43.0516, a municipality may not annex an area under this subchapter without approval of a majority of the voters voting at an election called and held for that purpose if a petition protesting the annexation is signed by a number of registered voters of the municipality equal to at least 50 percent of the number of voters who voted in the most recent municipal election and is received by the secretary of the municipality before the date the petition period prescribed by Section 43.0515 ends.

SECTION 6. The heading to Subchapter C-1, Chapter 43, Local Government Code, is amended to read as follows:

SUBCHAPTER C-1. ANNEXATION OF AREAS WITH A POPULATION OF AT LEAST

200 [PROCEDURE FOR AREAS EXEMPTED FROM MUNICIPAL ANNEXATION PLAN]

SECTION 7. Subchapter C-1, Chapter 43, Local Government Code, is amended by adding Sections 43.0611 through 43.0618 to read as follows:

Sec. 43.0611. AUTHORITY TO ANNEX. A municipality may annex an area with a population of 200 or more only if the following conditions are met, as applicable:

(1) the municipality holds an election in the area proposed to be annexed at which the qualified voters of the area may vote on the question of the annexation, and a majority of the votes received at the election approve the annexation; and

(2) if the registered voters of the area do not own more than 50 percent of the land in the area, the municipality obtains consent to annex the area through a petition signed by more than 50 percent of the owners of land in the area.

Sec. 43.0612. RESOLUTION. The governing body of the municipality that proposes to annex an area under this subchapter must adopt a resolution that includes:

(1) a statement of the municipality's intent to annex the area;

(2) a detailed description and map of the area to be annexed; and

(3) a description of the services to be provided by the municipality in the area after the annexation, including, as applicable:

(A) police protection;

(B) fire protection;

(C) emergency medical services;

(D) solid waste collection;

(E) operation and maintenance of water and wastewater facilities in the annexed area;

(F) operation and maintenance of roads and streets, including road and street lighting;

(G) operation and maintenance of parks, playgrounds, and swimming pools; and

(H) operation and maintenance of any other publicly owned facility, building, or service.

Sec. 43.0613. NOTICE OF PROPOSED ANNEXATION. Not later than the seventh day after the date the governing body of the municipality adopts the resolution under Section 43.0612, the municipality must mail to each property owner in the area notification of the proposed annexation that includes:

(1) notice of the public hearing required by Section 43.0614;

(2) notice that an election on the question of annexing the area will be held; and

(3) a description of services to be provided by the municipality in the area after the annexation.

Sec. 43.0614. PUBLIC HEARINGS. (a) The governing body of a municipality must conduct at least one public hearing not earlier than the 21st day and not later than the 30th day after the date the governing body adopts the resolution under Section 43.0612.

(b) The governing body must conduct an additional public hearing not earlier than the 31st day and not later than the 90th day after the date the governing body adopts a resolution under Section 43.0612.

Sec. 43.0615. PROPERTY OWNER CONSENT REQUIRED FOR CERTAIN AREAS. (a) If the registered voters in the area to be annexed do not own more than 50 percent of the land in the area, the municipality must obtain consent to the annexation through a petition signed by more than 50 percent of the owners of land in the area in addition to the election required by this subchapter.

(b) The municipality must obtain the consent required by this section through the petition process prescribed by Section 43.0515, and the petition must be verified in the manner provided by Section 43.0516(a).

Sec. 43.0616. ELECTION. (a) A municipality shall order an election on the question of annexing an area to be held on the first uniform election date that falls on or after:

(1) the 90th day after the date the governing body of the municipality adopts the resolution under Section 43.0612; or

(2) if the consent of the owners of land in the area is required under Section 43.0615, the 78th day after the date the petition period to obtain that consent ends.

(b) An election under this section shall be held in the same manner as general elections of the municipality. The municipality shall pay for the costs of holding the election.

(c) A municipality that holds an election under this section may not hold another election on the question of annexation before the corresponding uniform election date of the following year.

Sec. 43.0617. RESULTS OF ELECTION AND PETITION. (a) Following an election held under this subchapter, the municipality must notify the residents of the area proposed to be annexed of the results of the election and, if applicable, of the petition required by Section 43.0615.

(b) If at the election held under this subchapter a majority of qualified voters do not approve the proposed annexation, or if the municipality is required to petition owners of land in the area under Section 43.0615 and does not obtain the required number of signatures, the municipality may not annex the area and may not adopt another resolution under Section 43.0612 to annex the same area until the first anniversary of the date of the adoption of the resolution.

(c) If at the election held under this subchapter a majority of qualified voters approve the proposed annexation, and if the municipality, as applicable, obtains the required number of petition signatures under Section 43.0615, the municipality may annex the area after:

(1) providing notice under Subsection (a);

(2) holding a public hearing at which members of the public are given an opportunity to be heard; and

(3) holding a final hearing not earlier than the 10th day after the date of the public hearing under Subdivision (2) at which the ordinance annexing the area may be adopted.

Sec. 43.0618. VOTER APPROVAL BY MUNICIPAL RESIDENTS ON PETITION. Notwithstanding Section 43.0617, a municipality may not annex an area under this subchapter without approval of a majority of the voters voting at an election called and held for that purpose if a petition protesting the annexation is signed by a number of registered voters of the municipality equal to at least 50 percent of the number of voters who voted in the most recent municipal election and is received by the secretary of the municipality before the date the election required by this subchapter is held.

SECTION 8. Section 43.071(e), Local Government Code, is amended to read as follows:

(e) Subsections (b) and (c) [(b)-(d)] do not apply to the annexation of:

(1) an area within a water or sewer district if:

(A) the governing body of the district consents to the annexation;

(B) the owners in fee simple of the area to be annexed consent to the annexation; and

(C) the annexed area does not exceed 525 feet in width at its widest point;

(2) a water or sewer district that has a noncontiguous part that is not within the extraterritorial jurisdiction of the municipality; or

(3) a part of a special utility district created or operating under Chapter 65, Water Code.

SECTION 9. Section 43.0715(c), Local Government Code, is amended to read as follows:

(c) At the time notice of the municipality's intent to annex the land within the district is first published [in accordance with Section 43.052], the municipality shall proceed to initiate and complete a report for each developer conducted in accordance with the format approved by the Texas [Natural Resource Conservation] Commission on Environmental Quality for audits. In the event the municipality is unable to complete the report prior to the effective date of the annexation as a result of the developer's failure to provide information to the municipality which cannot be obtained from other sources, the municipality shall obtain from the district the estimated costs of each project previously undertaken by a developer which are eligible for reimbursement. The amount of such costs, as estimated by the district, shall be escrowed by the municipality for the benefit of the persons entitled to receive payment in an insured interest-bearing account with a financial institution authorized to do business in the state. To compensate the developer for the municipality's use of the infrastructure facilities pending the determination of the reimbursement amount or federal preclearance, all interest accrued on the escrowed funds shall be paid to the developer whether or not the annexation is valid. Upon placement of the funds in the escrow account, the annexation may become effective. In the event a municipality timely escrows all estimated reimbursable amounts as required by this subsection and all such amounts, determined to be owed, including interest, are subsequently disbursed to the developer within five days of final determination in immediately available funds as required by this section, no penalties or interest shall accrue during the pendency of the escrow. Either the municipality or developer may, by written notice to the other party, require disputes regarding the amount owed under this section to be subject to nonbinding arbitration in accordance with the rules of the American Arbitration Association.

SECTION 10. Section 43.072(d), Local Government Code, is amended to read as follows:

(d) Annexation of area under this section is exempt from the provisions of this chapter that prohibit:

(1) a municipality from annexing area outside its extraterritorial jurisdiction; or

(2) [annexation of area narrower than the minimum width prescribed by Section 43.054; or

[(3)] reduction of the extraterritorial jurisdiction of a municipality without the written consent of the municipality's governing body.

SECTION 11. Sections 43.0751(b), (d), and (h), Local Government Code, are amended to read as follows:

(b) The governing bodies of a municipality and a district may negotiate and enter into a written strategic partnership agreement for the district by mutual consent. The governing body of a municipality, on written request from a district located in the municipality's extraterritorial jurisdiction [included in the municipality's annexation plan under Section 43.052], may [shall] negotiate and enter into a written strategic partnership agreement with the district. [A district included in a municipality's annexation plan under Section 43.052:

[(1) may not submit its written request before the date of the second hearing required under Section 43.0561; and

[(2) must submit its written request before the 61st day after the date of the second hearing required under Section 43.0561.]

(d) Before the governing body of a municipality or a district adopts a strategic partnership agreement, it shall conduct two public hearings at which members of the public who wish to present testimony or evidence regarding the proposed agreement shall be given the opportunity to do so. Notice of public hearings conducted by the governing body of a municipality under this subsection shall be published in a newspaper of general circulation in the municipality and in the district[. The notice must be in the format prescribed by Section 43.123(b)] and must be published at least once on or after the 20th day before the [each] date of each hearing. The notice may not be smaller than one-quarter page of a standard-size or tabloid-size newspaper, and the headline on the notice must be in 18-point or larger type. Notice of public hearings conducted by the governing body of a district under this subsection shall be given in accordance with the district's notification procedures for other matters of public importance. Any notice of a public hearing conducted under this subsection shall contain a statement of the purpose of the hearing, the date, time, and place of the hearing, and the location where copies of the proposed agreement may be obtained prior to the hearing. The governing bodies of a municipality and a district may conduct joint public hearings under this subsection, provided that at least one public hearing is conducted within the district.

(h) On the full-purpose annexation conversion date set forth in the strategic partnership agreement pursuant to Subsection (f)(5) [(f)(5)(A)], the land included within the boundaries of the district shall be deemed to be within the full-purpose boundary limits of the municipality without the need for further action by the governing body of the municipality. The full-purpose annexation conversion date established by a strategic partnership agreement may be altered only by mutual agreement of the district and the municipality. However, nothing herein shall prevent the municipality from terminating the agreement and instituting proceedings to annex the district, on request by the governing body of the district, on any date prior to the full-purpose annexation conversion date established by the strategic partnership agreement. [Land annexed for limited or full purposes under this section shall not be included in calculations prescribed by Section 43.055(a).]

SECTION 12. Section 43.07515(a), Local Government Code, is amended to read as follows:

(a) A municipality may not regulate under Section 43.0751 [or 43.0752] the sale, use, storage, or transportation of fireworks outside of the municipality's boundaries.

SECTION 13. Section 43.102(d), Local Government Code, is amended to read as follows:

(d) The municipality may annex the area even if the area is outside the municipality's extraterritorial jurisdiction or[,] is in another municipality's extraterritorial jurisdiction[, or is narrower than the minimum width prescribed by Section 43.054. Section 43.055, which relates to the amount of area a municipality may annex in a calendar year, does not apply to the annexation].

SECTION 14. Section 43.1025(c), Local Government Code, is amended to read as follows:

(c) Annexation of the [The] area described by Subsection (b) [may be annexed without the consent of the owners or residents of the area, but the annexation] may not occur unless each municipality in whose extraterritorial jurisdiction the area may be located:

(1) consents to the annexation; and

(2) reduces its extraterritorial jurisdiction over the area as provided by Section 42.023.

SECTION 15. Subchapter F, Chapter 43, Local Government Code, is amended by adding Section 43.1211 to read as follows:

Sec. 43.1211. APPLICABILITY. This subchapter applies to an area that was annexed for a limited purpose as authorized before September 1, 2015.

SECTION 16. Section 43.127(a), Local Government Code, is amended to read as follows:

(a) On [Except as provided by Section 43.123(e), on] or before the date prescribed by the regulatory plan prepared for the limited purpose area [under Section 43.123(d)(2)], the municipality must annex the area for full purposes. [This requirement may be waived and the date for full-purpose annexation postponed by written agreement between the municipality and a majority of the affected landowners. A written agreement to waive the municipality's obligation to annex the area for full purposes binds all future owners of land annexed for limited purposes pursuant to that waiver.]

SECTION 17. Sections 43.141(a) and (b), Local Government Code, are amended to read as follows:

(a) A majority of the qualified voters of an annexed area may petition the governing body of the municipality to disannex the area if the municipality fails or refuses to provide services or to cause services to be provided to the area [within the period specified by Section 43.056 or by the service plan prepared for the area under that section].

(b) If the governing body fails or refuses to disannex the area within 60 days after the date of the receipt of the petition, any one or more of the signers of the petition may bring a cause of action in a district court of the county in which the area is principally located to request that the area be disannexed. On the filing of an answer by the governing body, and on application of either party, the case shall be advanced and heard without further delay in accordance with the Texas Rules of Civil Procedure. The district court shall enter an order disannexing the area if the court finds that a valid petition was filed with the municipality and that the municipality failed to perform [its obligations in accordance with the service plan or failed to perform] in good faith.

SECTION 18. Section 43.201(2), Local Government Code, is amended to read as follows:

(2) "Limited-purpose annexation" means annexation authorized under former Section 43.121, as that section existed on January 1, 2015.

SECTION 19. Section 43.203(a), Local Government Code, is amended to read as follows:

(a) This section applies only to the [The] governing body of a district that by resolution petitioned [may petition] a municipality to alter the annexation status of land in the district from full-purpose annexation to limited-purpose annexation and before September 1, 2015:

(1) entered into an agreement to alter the status of annexation as provided by this section; or

(2) had its status automatically altered by operation of Subsection (c).

SECTION 20. Section 43.905(a), Local Government Code, is amended to read as follows:

(a) A municipality that proposes to annex an area shall provide written notice of the proposed annexation to each public school district located in the area proposed for annexation within the period prescribed for publishing the notice of the first hearing under Section 43.0212, 43.0514, [43.0561] or 43.0614 [43.063], as applicable.

SECTION 21. Section 775.0754(d), Health and Safety Code, is amended to read as follows:

(d) A municipality that enters into an agreement under this section is not required to provide emergency services in that annexed territory. To the extent of a conflict between this subsection and [Section 43.056, Local Government Code, or] any other law, this subsection controls.

SECTION 22. (a) Sections 42.0411, 43.021, 43.022, 43.023, 43.024, 43.025, 43.030, 43.032, 43.033, 43.034, 43.035(c), 43.036, 43.052, 43.053, 43.054, 43.0545, 43.0546, 43.055, 43.056, 43.0561, 43.0562, 43.0563, 43.0564, 43.0565, 43.0567, 43.057, 43.061, 43.062, 43.063, 43.064, 43.065, 43.071(d), (f), and (g), 43.072(c), (e), (g), (h), (i), (j), (k), (l), and (m), 43.0751(o), 43.0752, 43.101(c) and (d), 43.102(c), 43.1025(e) and (g), 43.103, 43.105, 43.121, 43.122, 43.123, 43.124, 43.125, 43.126, 43.129, 43.131, 43.132, and 43.147, Local Government Code, are repealed.

(b) Subchapter Y, Chapter 43, Local Government Code, is repealed.

(c) Sections 8374.252(a), 8375.252(a), 8376.252(a), 8377.252(a), 8378.252(a), 8382.252(a), 8383.252(a), 8384.252(a), 8385.252(a), and 8477.302(a), Special District Local Laws Code, are repealed.

SECTION 23. The changes in law made by this Act do not apply to an annexation for which the first hearing notice required by former Section 43.0561 or 43.063, Local Government Code, as applicable, was published before the effective date of this Act. An annexation described by this section is governed by the law in effect at the time the notice was published, and the former law is continued in effect for that purpose.

SECTION 24. This Act takes effect September 1, 2015.