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A BILL TO BE ENTITLED
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AN ACT
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relating to the breach of development agreement contracts governing |
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land in the extraterritorial jurisdiction of certain |
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municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 212.172, Local Government Code, is |
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amended by amending Subsections (a), (c), (e), (f), (g), and (h) and |
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adding Subsections (i), (j), and (k) to read as follows: |
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(a) In this subchapter: |
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(1) "Adjudication" of a claim means the bringing of a |
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civil suit and prosecution to final judgment in county or state |
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court and includes the bringing of an authorized arbitration |
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proceeding and prosecution to final resolution in accordance with |
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any mandatory procedures established in the contract agreement for |
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the arbitration proceedings. |
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(2) "Contract" means a contract for a development |
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agreement authorized by this subchapter. |
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(3) "Extraterritorial [, "extraterritorial] |
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jurisdiction" means a municipality's extraterritorial jurisdiction |
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as determined under Chapter 42. |
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(c) A contract [An agreement under this subchapter] must: |
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(1) be in writing; |
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(2) contain an adequate legal description of the land; |
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(3) be approved by the governing body of the |
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municipality and the landowner; and |
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(4) be recorded in the real property records of each |
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county in which any part of the land that is subject to the contract |
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[agreement] is located. |
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(e) A municipality in an affected county, as defined by |
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Section 16.341, Water Code, may not enter into a contract [an |
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agreement under this subchapter] that is inconsistent with the |
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model rules adopted under Section 16.343, Water Code. |
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(f) The contract [agreement] between the governing body of |
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the municipality and the landowner is binding on the municipality |
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and the landowner and on their respective successors and assigns |
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for the term of the contract [agreement]. The contract [agreement] |
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is not binding on, and does not create any encumbrance to title as |
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to, any end-buyer of a fully developed and improved lot within the |
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development, except for land use and development regulations that |
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may apply to a specific lot. Annexation by a municipality of land |
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subject to a contract does not invalidate the enforceability of the |
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contract or infringe on the rights of a party to adjudicate a claim |
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arising under the contract. |
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(g) A contract: |
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(1) [An agreement under this subchapter] constitutes a |
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permit under Chapter 245; and |
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(2) is a program authorized by the legislature under |
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Section 52-a, Article III, Texas Constitution. |
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(h) A contract [An agreement] between a municipality and a |
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landowner entered into prior to the effective date of this section, |
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or any amendment to this section, and that complies with this |
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section is validated, enforceable, and may be adjudicated subject |
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to the terms and conditions of this subchapter, as amended. |
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(i) A municipality that enters into a contract waives |
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immunity from suit for the purpose of adjudicating a claim for |
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breach of the contract. |
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(j) Except as provided by Subsection (k), actual damages, |
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specific performance, or injunctive relief may be granted in an |
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adjudication brought against a municipality for breach of a |
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contract. The total amount of money awarded in an adjudication |
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brought against a municipality for breach of a contract is limited |
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to the following: |
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(1) the balance due and owed by the municipality under |
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the contract as it may have been amended; |
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(2) any amount owed by the landowner as a result of the |
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municipality's failure to perform under the contract, including |
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compensation for the increased cost of infrastructure as a result |
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of delays or accelerations caused by the municipality; |
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(3) reasonable attorney's fees; and |
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(4) interest as allowed by law, including interest as |
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calculated under Chapter 2251, Government Code. |
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(k) Damages awarded in an adjudication brought against a |
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municipality for breach of a contract may not include: |
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(1) consequential damages, except as expressly |
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allowed under Subsection (j)(2); or |
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(2) exemplary damages. |
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SECTION 2. Section 212.174, Local Government Code, is |
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amended to read as follows: |
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Sec. 212.174. MUNICIPAL UTILITIES. A municipality may not |
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require a contract [an agreement under this subchapter] as a |
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condition for providing water, sewer, electricity, gas, or other |
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utility service from a municipally owned or municipally operated |
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utility that provides any of those services. |
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SECTION 3. This Act takes effect September 1, 2021. |