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A BILL TO BE ENTITLED
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AN ACT
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relating to public improvement projects financed by or through |
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assessments levied on property by municipalities and counties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 262, Local Government |
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Code, is amended by adding Section 262.0242 to read as follows: |
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Sec. 262.0242. MANDATORY EXEMPTIONS: PUBLIC IMPROVEMENTS |
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PARTIALLY FUNDED BY SPECIAL ASSESSMENTS. The competitive bidding |
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and competitive proposal procedures prescribed by this subchapter |
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do not apply to contracts relating to a public improvement, |
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including paving, drainage, or street widening, and matters related |
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to the public improvement if at least one-third of the cost of the |
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public improvement is to be paid by or through special assessments |
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levied on property that will benefit from the improvement. |
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SECTION 2. Sections 372.003(b), (b-1), and (c), Local |
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Government 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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recreational facilities; |
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(11) acquisition, construction, or improvement of a |
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facility related to a water feature, including a recreational |
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lagoon or artificial body of water used for: |
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(A) aesthetic purposes; or |
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(B) swimming, boating, or other aquatic |
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recreational sports or activities; |
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(12) projects similar to those listed in Subdivisions |
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(1)-(11) [(1)-(10)]; |
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(13) [(12)] acquisition, by purchase or otherwise, of |
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real property, including a right-of-way, in connection with an |
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authorized improvement; |
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(14) [(13)] special supplemental services for |
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improvement and promotion of the district, including services |
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relating to advertising, promotion, health and sanitation, water |
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and wastewater, public safety, security, business recruitment, |
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development, recreation, and cultural enhancement; |
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(15) [(14)] payment of expenses incurred in the |
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establishment, administration, and operation of the district; and |
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(16) [(15)] the development, rehabilitation, or |
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expansion of affordable housing. |
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(b-1) Payment of expenses under Subsection (b)(15) |
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[(b)(14)] may also include expenses related to the operation and |
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maintenance of a public improvement project [mass transportation
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facilities]. |
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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)(14) |
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[(b)(13)]. |
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SECTION 3. Section 372.0035(a), Local Government Code, is |
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amended to read as follows: |
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(a) This section applies only to: |
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(1) a municipality that: |
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(A) has a population of more than 650,000 and |
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less than two million; [or] |
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(B) has a population of more than 325,000 and |
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less than 625,000; or |
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(C) has a population of at least 190,000 and no |
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part of which is located in a county with a population of at least |
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150,000; and |
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(2) a public improvement district established under |
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this subchapter and solely composed of territory in which the only |
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businesses are: |
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(A) hotels with 100 or more rooms ordinarily used |
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for sleeping, if the district is established by a municipality |
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described by Subdivision (1)(A); [or] |
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(B) hotels with 75 or more rooms ordinarily used |
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for sleeping, if the district is established by a municipality |
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described by Subdivision (1)(B); or |
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(C) hotels with 10 or more rooms ordinarily used |
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for sleeping, if the district is established by a municipality |
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described by Subdivision (1)(C). |
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SECTION 4. Section 372.010(c), Local Government Code, is |
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amended to read as follows: |
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(c) Actual construction of an improvement other than an |
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improvement financed under Section 372.152 may not begin until |
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after the 20th day after the date the authorization takes effect and |
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may not begin if during that 20-day period written protests signed |
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by at least two-thirds of the owners of record of property within |
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the improvement district or by the owners of record of property |
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comprising at least two-thirds of the total area of the district are |
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filed with the municipal or county secretary or other officer |
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performing the duties of the municipal or county secretary. A |
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person whose name appears on a protest may withdraw the name from |
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the protest at any time before the governing body of the |
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municipality or county convenes to determine the sufficiency of the |
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protest. |
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SECTION 5. Sections 372.012, 372.019, and 372.020, Local |
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Government Code, are amended to read as follows: |
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Sec. 372.012. AREA OF DISTRICT; INCREASE OF AREA. (a) The |
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area of a public improvement district to be assessed according to |
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the findings of the governing body of the municipality or county may |
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be less than the area described in the proposed boundaries stated by |
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the notice under Section 372.009. The area to be assessed may not |
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include property not described by the notice as being within the |
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proposed boundaries of the district unless a hearing is held to |
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include the property and notice for the hearing is given in the same |
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manner as notice under Section 372.009. |
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(b) The governing body of the municipality or county may |
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call and hold a public hearing in the same manner as a hearing under |
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Section 372.009 for the purpose of increasing the area of a public |
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improvement district if a petition requesting the increase is filed |
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by the owners of property to be added to the district in the manner |
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provided by Section 372.005, considering only the area to be added |
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for the purposes of Sections 372.005(b) and (b-1). After the |
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hearing, the governing body may by ordinance or order increase the |
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area of the district in accordance with the increase proposed in the |
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hearing. |
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(c) If the governing body of the municipality or county |
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increases the area of a public improvement district under |
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Subsection (b) and the governing body has levied an assessment on |
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property in the district before the increase, the governing body |
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may: |
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(1) make a supplemental assessment under Section |
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372.019; or |
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(2) reapportion the existing assessment in a manner |
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consistent with Section 372.015 after notice is given and a hearing |
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is held in the same manner as required by Sections 372.016 and |
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372.017. |
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Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. (a) After notice |
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and a hearing in accordance with Subsection (b), the governing body |
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of the municipality or county may make supplemental assessments to: |
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(1) correct omissions or mistakes in the assessment |
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relating to the total cost of the improvement; or |
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(2) levy an assessment on property added to the public |
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improvement district under Section 372.012. |
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(b) Notice must be given and the hearing held under this |
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section in the same manner as required by Sections 372.016 and |
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372.017. |
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Sec. 372.020. REASSESSMENT. The governing body of the |
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municipality or county may make a reassessment or new assessment of |
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a parcel of land if: |
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(1) a court of competent jurisdiction sets aside an |
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assessment against the parcel; |
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(2) the governing body determines that the original |
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assessment is excessive; [or] |
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(3) on the written advice of counsel, the governing |
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body determines that the original assessment is invalid; or |
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(4) the governing body increases the area of the |
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public improvement district under Section 372.012. |
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SECTION 6. Section 372.021(c), Local Government Code, is |
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amended to read as follows: |
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(c) The fund may be used to: |
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(1) pay the costs of planning, administration, and an |
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improvement authorized by this subchapter; |
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(2) prepare preliminary plans, studies, and |
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engineering reports to determine the feasibility of an improvement; |
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and |
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(3) if ordered by the governing body of the |
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municipality or county, pay the initial cost of the improvement |
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until temporary notes, time warrants, or general obligation bonds |
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or revenue [improvement] bonds have been issued and sold. |
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SECTION 7. Section 372.022, Local Government Code, is |
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amended to read as follows: |
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Sec. 372.022. SEPARATE FUNDS. If bonds are issued under |
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this chapter, a separate public improvement district fund shall be |
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created in the municipal or county treasury for each |
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district. Proceeds from the sale of bonds, temporary notes, and |
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time warrants, and other sums appropriated to the fund by the |
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governing body of the municipality or county shall be credited to |
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the fund. The fund may be used solely to pay costs incurred in |
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making an improvement. When an improvement is completed, the |
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balance of the part of the assessment that is for the improvement |
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[improvements] shall be transferred to the fund established for the |
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retirement of bonds. |
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SECTION 8. Sections 372.023(a) and (e), Local Government |
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Code, are amended 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) this state, a political subdivision of this state, |
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or other entity exercising the powers granted under this subchapter |
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as authorized by other law; [or] |
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(3) an entity created or operating under Section |
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52(b)(1) or (2), Article III, or Section 59, Article XVI, Texas |
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Constitution; |
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(4) a district created and operating under Chapter 65, |
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Water Code; |
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(5) an entity otherwise authorized under the laws of |
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this state to own the improvements, operate the improvements, and, |
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as applicable, provide services using the improvements; or |
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(6) 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), (3), (4), or (5); 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), (3), (4), or (5). |
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(e) The interest rate on unpaid amounts due under an |
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installment sales contract, reimbursement agreement, temporary |
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note, or time warrant described by Subsection (d): |
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(1) may not exceed, for a period of not more than seven |
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[five] years, as determined by the governing body of the |
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municipality or county, five percent above the highest average |
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index rate for tax-exempt revenue bonds reported in a daily or |
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weekly bond index approved by the governing body and reported in the |
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month before the date the obligation was 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). |
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SECTION 9. Section 372.026, Local Government Code, is |
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amended by amending Subsections (a), (b), and (f) and adding |
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Subsection (g) to read as follows: |
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(a) In this section, "obligation" means bonds, temporary |
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notes, time warrants, or an obligation under: |
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(1) an installment sale contract or reimbursement |
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agreement; or |
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(2) an agreement entered into under Subsection (f). |
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(b) For the payment of obligations issued or agreed to under |
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this subchapter and the payment of principal, interest, and any |
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other amounts required or permitted in connection with the |
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obligations, the governing body of the municipality or county may |
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pledge: |
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(1) all or part of the income from improvements |
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financed under this subchapter, including income received in |
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installment payments under Section 372.023; or |
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(2) for a municipality, tax increment revenue |
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generated from ad valorem and sales taxes imposed in a reinvestment |
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zone: |
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(A) designated by the municipality under Chapter |
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311, Tax Code; and |
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(B) located wholly or partly within the |
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boundaries of the public improvement district. |
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(f) The governing body may enter into an agreement with an |
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entity described by Subsection (g) [a corporation created by the
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municipality or county under the Texas Constitution or other law] |
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that provides for payment of amounts pledged under this section to |
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the entity [corporation] to secure indebtedness issued by the |
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entity [corporation] to finance an improvement project, including |
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indebtedness to pay capitalized interest and a reserve fund |
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permitted by this subchapter for revenue or general obligation |
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bonds issued under this subchapter and indebtedness issued to pay |
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the entity's [corporation's] costs of issuance. In addition, the |
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agreement may [provide that]: |
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(1) for an agreement with a corporation, provide that |
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the corporation is responsible for managing the district; or |
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(2) designate the entity that will hold title to the |
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[one or more] improvements under the agreement, which may include |
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an entity described by Section 372.023(a) [will be held by the
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corporation]. |
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(g) The governing body of the municipality or county may |
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enter into an agreement described by Subsection (f) only with: |
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(1) a corporation created by a municipality or county |
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under the Texas Constitution or other law; |
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(2) a corporation created under Subchapter D, Chapter |
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431, Transportation Code; or |
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(3) a political subdivision, instrumentality, or |
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entity created and authorized to issue bonds secured by pledged |
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revenue from a municipality or county. |
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SECTION 10. Section 372.027(a), Local Government Code, is |
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amended to read as follows: |
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(a) Revenue bonds issued under this subchapter may be |
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refunded or refinanced by the issuance of refunding bonds, under |
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terms or conditions set forth in ordinances, [or] orders, or |
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resolutions of the municipality, [or] county, or other entity |
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issuing the bonds. The provisions of this subchapter applying |
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generally to revenue bonds, including provisions related to the |
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issuance of those bonds, apply to refunding bonds authorized by |
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this section. The refunding bonds may be sold and delivered in |
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amounts necessary for the principal, interest, and any redemption |
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premium of the bonds to be refunded, on the date of the maturity of |
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the bond or any redemption date of the bond. Refunding bonds may be |
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issued in a principal amount in excess of the bonds to be refunded. |
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SECTION 11. Section 372.152(a), Local Government Code, is |
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amended to read as follows: |
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(a) General [The governing body of a municipality or county
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may issue and sell general] obligation bonds or revenue bonds to |
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reimburse a developer for the cost of a public improvement may be |
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issued and sold in accordance with this chapter if: |
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(1) the public improvement is located in a public |
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improvement district created on or after January 1, 2005; |
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(2) the public improvement is [has been] dedicated to |
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and accepted by the municipality, [or] county, or entity designated |
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to receive the improvement under Section 372.023(a); and |
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(3) before the public improvement was dedicated to and |
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accepted by the municipality or county, the governing body of the |
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municipality or county entered into an agreement with the developer |
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to pay for the public improvement. |
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SECTION 12. Section 5.014(a), Property Code, is amended to |
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read as follows: |
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(a) A seller of residential real property that is located in |
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a public improvement district established under Subchapter A, |
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Chapter 372, Local Government Code, or Chapter 382, Local |
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Government Code, and that consists of not more than one dwelling |
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unit located in this state shall give to the purchaser of the |
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property a written notice that reads substantially similar to the |
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following: |
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NOTICE OF OBLIGATION TO PAY PUBLIC IMPROVEMENT DISTRICT ASSESSMENT |
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TO (municipality or county levying assessment) CONCERNING THE |
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PROPERTY AT (street address) |
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As a purchaser of this parcel of real property you are |
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obligated to pay an assessment to ([a] municipality or county |
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levying assessment) for an improvement project undertaken by a |
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public improvement district under Subchapter A, Chapter 372, Local |
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Government Code, or Chapter 382, Local Government Code. [The
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assessment may be due annually or in periodic installments.] More |
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information concerning the amount of the assessment and the due |
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dates of that assessment may be obtained from ([the] municipality |
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or county levying [the] assessment). |
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The total unpaid principal amount of the assessment levied |
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against this parcel is (dollar amount) which may be paid in one lump |
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sum or in annual installments over (number of years). If paid in |
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annual installments, the unpaid principal amount of the assessment |
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bears interest at (percentage) and includes additional charges in |
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connection with administrative expenses associated with the public |
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improvement district. The amount of the assessment is subject to |
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change, but the principal amount of the assessment may not be |
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increased without a public hearing. |
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YOUR FAILURE TO PAY THE ASSESSMENTS COULD RESULT IN A LIEN ON |
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AND THE FORECLOSURE OF YOUR PROPERTY. [The amount of the
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assessments is subject to change.
Your failure to pay the
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assessments could result in a lien on and the foreclosure of your
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property.] |
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Date: __________________ ________________________________ |
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Signature of Purchaser |
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SECTION 13. 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, 2017. |