Bill Text: TX HB1324 | 2013-2014 | 83rd Legislature | Enrolled


Bill Title: Relating to exclusion of land from certain water districts that fail to provide service to the land; clarifying and limiting the authority of those districts with outstanding bonds payable from ad valorem taxes to impose taxes on excluded land; providing for a financial review.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB1324 Detail]

Download: Texas-2013-HB1324-Enrolled.html
 
 
  H.B. No. 1324
 
 
 
 
AN ACT
  relating to exclusion of land from certain water districts that
  fail to provide service to the land; clarifying and limiting the
  authority of those districts with outstanding bonds payable from ad
  valorem taxes to impose taxes on excluded land; providing for a
  financial review.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 49.3076, Water Code, is amended by
  amending Subsections (a), (b), (c), (d), and (f) and adding
  Subsections (c-1) and (g-1) to read as follows:
         (a)  The board of a district that has a total area of more
  than 10,000 [5,000] acres shall call a hearing on the exclusion of
  land from the district on or before the 60th day after receiving a
  written petition filed with the secretary of the board by one or
  more owners of [a landowner whose] land more than half the acreage
  of which has been for more than 20 years included in and taxable by
  the district [for more than 28 years] if any bonds issued by the
  district payable in whole or in part from taxes of the district are
  outstanding and the petition:
               (1)  is [includes a] signed by [petition evidencing the
  consent of] the owners of a majority of the acreage proposed to be
  excluded, as reflected by the most recent certified tax roll of the
  district;
               (2)  includes a claim that the district does [has] not
  provide [provided] the land with retail utility services;
               (3)  describes the property to be excluded; and
               (4)  provides facts necessary for the board to make the
  findings required by Subsection (b)[; and
               [(5) is filed before August 31, 2007].
         (b)  The board of a district shall [may] exclude land under
  this section if [only on finding that]:
               (1)  the district does not provide [has never provided]
  retail utility service [services] to the land described by the
  petition;
               (2)  the district has imposed a tax on more than half
  the acreage of the land for at least 20 years [more than:
                     [(A) 28 years if the board calls a hearing under
  Subsection (a); or
                     [(B) 40 years if the board calls a hearing under
  Subsection (a-1)]; and
               (3)  all taxes the district has levied and assessed
  against the land and all fees and assessments the district has
  imposed against the land or the owner that are due and payable on or
  before the date of the petition are fully paid.
         (c)  Subject to Subsection (c-1), unless [Unless] the
  district presents evidence at the hearing that conclusively
  demonstrates that the requirements and grounds for exclusion
  described by Subsection (a) [or (a-1), as appropriate, and
  Subsection (b)] have not been met, the board shall enter an order
  excluding the land from the district and shall redefine in the order
  the boundaries of the district to embrace all land not excluded.
         (c-1)  If on or before the date of the exclusion hearing
  required by Subsection (a) the district and the owner or owners
  enter into an agreement for utility service to the land proposed to
  be excluded, the district is not required to enter an order
  excluding the land from the district. An owner of all or part of the
  land is not required to enter into a utility agreement that as of
  the date of the petition:
               (1)  is not comparable economically or in the level of
  service provided to the land to the owner's current source of
  utility service, as may be determined by the owner; or
               (2)  does not include all utility services required to
  serve the land.
         (d)  A copy of an order excluding land and redefining the
  boundaries of the district shall be filed in the deed records of
  each county in which the district is located and with the
  commission.
         (f)  After any land is excluded under this section, the
  district may issue any unissued additional debt approved by the
  voters of the district before exclusion of the land under this
  section without holding a new election. Additional debt issued
  after land is excluded from the district may not be payable from
  taxes levied against and does not create a lien against the taxable
  value of the excluded land.
         (g-1)  This section does not apply to a district:
               (1)  whose primary activity is the wholesale supply of
  raw water and that has fewer than 500 retail customers; or
               (2)  whose jurisdiction covers four counties and that
  was created under Section 59, Article XVI, Texas Constitution.
         SECTION 2.  Section 49.3077, Water Code, is amended to read
  as follows:
         Sec. 49.3077.  TAX LIABILITY OF EXCLUDED LAND; BONDS
  OUTSTANDING.  (a)  In this section:
               (1)  "Adjusted gross value" means the gross assessed
  value of property, as of January 1, including land, improvements,
  and personal property, as determined by the appraisal district for
  the tax year in which the determination is made, reduced by any
  state-mandated exemptions but not reduced for any exemptions from
  taxation that are within the discretion of the governing body of the
  district.
               (2)  "Carry costs" means interest calculated at an
  annual rate equal to the weighted average interest rate of the
  district debt that accrues on the excluded land's share of the
  district debt, with reductions for prior payments, from the later
  of the exclusion date or the last interest payment date for district
  debt for which district taxes have been levied and collected to the
  earlier of:
                     (A)  the date of the final interest payment on
  district debt before the next delinquency for the district's tax
  collection; or
                     (B)  the earliest dates on which an aggregate
  amount of district obligations equal to the district debt may be
  paid at maturity or redeemed at the option of the district, provided
  the amount is paid in advance of any future district tax levy, using
  the redemption dates available for the district's outstanding
  obligations as of the exclusion date.
               (3)  "District debt" means the principal outstanding
  from time to time of the tax-supported debt of the district
  outstanding on the exclusion date, including debt used to refund
  district debt outstanding on the exclusion date.
               (4)  "Excluded land" means land that is excluded from a
  district under Section 49.3076.
               (5)  "Excluded land payment" means, with respect to
  excluded land, the sum of the excluded land's share of district debt
  plus the carry costs, less any taxes collected by the district under
  Subsection (b).
               (6)  "Excluded land's share of district debt" means the
  portion of the district debt that is calculated by multiplying the
  district debt by a fraction the numerator of which is the adjusted
  gross value of the excluded land on the exclusion date and the
  denominator of which is the adjusted gross value of all property in
  the district on the exclusion date.
               (7)  "Exclusion date" means the date that the owner
  files the petition requesting that the excluded land be excluded
  from the district with the district secretary.
               (8)  "Termination date" means the earlier of:
                     (A)  the date on which the amount of taxes
  collected from the excluded land equals the excluded land payment;
  or
                     (B)  the date on which the excluded land payment
  is made in full.
         (b)  Excluded land that has been pledged as security for any
  outstanding debt of the district remains pledged for the excluded
  land's share of district debt until the excluded land payment is
  paid. A district is entitled to continue to levy and collect debt
  service taxes on the excluded land until the termination date at the
  same rate those taxes are levied on the land remaining in the
  district. From the exclusion date to the termination date, the
  excluded land remains in the district for the limited purpose of
  assessment and collection of such taxes. After the termination
  date, the excluded land is excluded from the district for all
  purposes, and the district may not levy any further tax on the
  excluded land.
         (c)  The district shall apply the taxes collected on the
  excluded land only to payment of the excluded land payment, which
  shall be reduced by the amount of taxes collected.
         (d)  A person is entitled to pay to the district the excluded
  land payment, in whole or in part, at any time on or after the
  exclusion date by delivering payment to the district tax
  assessor-collector. If partial payment is made, the payment is
  credited first against all carry costs due and owing, and any
  remainder is credited against the excluded land's share of district
  debt. After a partial payment, carry costs must be calculated and
  assessed and collected only on the remaining excluded land's share
  of district debt. [Land excluded from a district under Section
  49.3076 that is pledged as security for any outstanding debt of the
  district remains pledged for its pro rata share of the debt until
  final payment is made. The district shall continue to levy and
  collect taxes on the excluded land at the same rate levied on land
  remaining in the district until the amount of taxes collected from
  the excluded land equals the land's pro rata share of the district's
  debt outstanding at the time the land was excluded from the
  district.
         [(b) The district shall apply the taxes collected on the
  excluded land only to the payment of the excluded land's pro rata
  share of the debt.
         [(c) The owner of any part of the excluded land may pay in
  full the owner's share of the pro rata share of the district's debt
  outstanding at the time the land is excluded.]
         SECTION 3.  Subchapter J, Chapter 49, Water Code, is amended
  by adding Section 49.3078 to read as follows:
         Sec. 49.3078.  PETITION FOR EXCLUSION: ADDITIONAL DUTIES. A
  landowner who signs a petition for the exclusion of land that is
  filed with a district under Section 49.3076 must submit a copy of
  the petition to the commission. On receipt of a copy of a petition,
  the executive director shall review the most recent financial
  information for the applicable district, including current debt
  requirements, debt service cash flow, and proposed debt
  obligations, to confirm that an exclusion of land conducted in
  accordance with Sections 49.3076 and 49.3077 does not adversely
  affect the interests of district bondholders. The executive
  director shall notify the landowner and the district when the
  review is complete.
         SECTION 4.  Sections 49.312(a) and (c), Water Code, are
  amended to read as follows:
         (a)  Except as provided by Section 49.3077, on [Upon]
  issuance of an order excluding property, that property is no longer
  a part of the district and is not entitled to water service from the
  district.
         (c)  Except as provided by Section 49.3077, once land is
  [Once] excluded, the landowner has no further liability to the
  district for future taxes, assessments, or other charges of the
  district.
         SECTION 5.  Section 49.3076(a-1), Water Code, is repealed.
         SECTION 6.  Section 49.3076, Water Code, as amended by this
  Act, applies only to a petition for exclusion of land that is filed
  with a district on or after the effective date of this Act. A
  petition filed before the effective date of this Act is governed by
  the law in effect on the date the petition is filed, and that law
  continues in effect for that purpose.
         SECTION 7.  This Act takes effect September 1, 2013.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1324 was passed by the House on May 3,
  2013, by the following vote:  Yeas 144, Nays 0, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1324 on May 24, 2013, by the following vote:  Yeas 145, Nays 0,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1324 was passed by the Senate, with
  amendments, on May 22, 2013, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor       
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