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A BILL TO BE ENTITLED
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AN ACT
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relating to consent of municipalities in the creation of municipal |
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utility districts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 54.016(a) and (f), Water Code, are |
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amended to read as follows: |
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(a) No land within the corporate limits of a city or within |
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the extraterritorial jurisdiction of a city, shall be included in a |
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district unless the city grants its written consent, by resolution |
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or ordinance, to the inclusion of the land within the district in |
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accordance with Section 42.042, Local Government Code, and this |
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section. The request to a city for its written consent to the |
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creation of a district, shall be signed by a majority in value of |
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the holders of title of the land within the proposed district as |
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indicated by the county tax rolls or, if there are more than 50 |
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persons holding title to the land in the proposed district as |
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indicated by the county tax rolls, the request to the city will be |
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sufficient if it is signed by 50 holders of title to the land in the |
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district. A petition for the written consent of a city to the |
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inclusion of land within a district shall describe the boundaries |
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of the land to be included in the district by metes and bounds or by |
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lot and block number, if there is a recorded map or plat and survey |
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of the area, and state the general nature of the work proposed to be |
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done, the necessity for the work, and the cost of the project as |
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then estimated by those filing the petition. If, at the time a |
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petition is filed with a city for creation of a district, the |
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district proposes to connect to a city's water or sewer system or |
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proposes to contract with a regional water and wastewater provider |
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which has been designated as such by the commission as of the date |
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such petition is filed, to which the city has made a capital |
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contribution for the water and wastewater facilities serving the |
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area, the proposed district shall be designated as a "city service |
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district." If such proposed district does not meet the criteria for |
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a city service district at the time the petition seeking creation is |
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filed, such district shall be designated as a "noncity service |
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district." The city's consent shall not place any restrictions or |
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conditions on the creation of a noncity service district as defined |
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by this chapter [Chapter 54 of the Texas Water Code] other than |
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those expressly provided in Subsection (e) of this section and |
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shall specifically not limit the amounts of the district's bonds. A |
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city may not require annexation as a consent to creation of any |
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district. A city shall not refuse to approve a district bond issue |
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for any reason except that the district is not in compliance with |
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valid consent requirements applicable to the district. If a city |
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grants its written consent without the concurrence of the applicant |
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to the creation of a noncity service district containing conditions |
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or restrictions that the petitioning land owner or owners |
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reasonably believe exceed the city's powers, such land owner or |
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owners may petition the commission to create the district and to |
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modify the conditions and restrictions of the city's consent. The |
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commission may declare any provision of the consent to be null and |
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void. The commission may approve the creation of a district that |
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includes any portion of the land covered by the city's consent to |
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creation of the district. The legislature may create and may |
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validate the creation of a district that includes any portion of the |
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land covered by the city's consent to the creation of the district. |
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(f) A city may provide in its written consent for the |
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inclusion of land in a district that is initially located wholly or |
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partly outside the corporate limits of the city that a contract |
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("allocation agreement") between the district and the city be |
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entered into prior to the first issue of bonds, notes, warrants, or |
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other obligations of the district. The allocation agreement shall |
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contain the following provisions: |
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(1) a method by which the district shall continue to |
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exist following the annexation of all territory within the district |
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by the city, if the district is [initially] located outside the |
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corporate limits of the city at the time the creation of the |
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district is approved by the district's voters; |
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(2) an allocation of the taxes or revenues of the |
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district or the city which will assure that, following the date of |
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the inclusion of all the district's territory within the corporate |
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limits of the city, the total annual ad valorem taxes collected by |
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the city and the district from taxable property within the district |
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does not exceed an amount greater than the city's ad valorem tax |
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upon such property; |
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(3) an allocation of governmental services to be |
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provided by the city or the district following the date of the |
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inclusion of all of the district's territory within the corporate |
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limits of the city; and |
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(4) such other terms and conditions as may be deemed |
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appropriate by the city. |
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SECTION 2. The change in law made to Section 54.016(f), |
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Water Code, as amended by this Act, applies only to an agreement |
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entered into on or after the effective date of this Act. An |
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agreement entered into before the effective date of this Act is |
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governed by the law in effect on the date the agreement was entered |
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into, and the former law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2017. |