Bill Text: TX HB2435 | 2017-2018 | 85th Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to public improvement projects financed by or through assessments levied on property by municipalities and counties.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2017-05-10 - Referred to Intergovernmental Relations [HB2435 Detail]
Download: Texas-2017-HB2435-Comm_Sub.html
Bill Title: Relating to public improvement projects financed by or through assessments levied on property by municipalities and counties.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2017-05-10 - Referred to Intergovernmental Relations [HB2435 Detail]
Download: Texas-2017-HB2435-Comm_Sub.html
85R22111 SCL-F | |||
By: Wray | H.B. No. 2435 | ||
Substitute the following for H.B. No. 2435: | |||
By: Alvarado | C.S.H.B. No. 2435 |
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relating to public improvement projects financed by or through | ||
assessments levied on property by municipalities and counties. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter C, Chapter 262, Local Government | ||
Code, is amended by adding Section 262.0242 to read as follows: | ||
Sec. 262.0242. MANDATORY EXEMPTIONS: PUBLIC IMPROVEMENTS | ||
PARTIALLY FUNDED BY SPECIAL ASSESSMENTS. The competitive bidding | ||
and competitive proposal procedures prescribed by this subchapter | ||
do not apply to contracts relating to a public improvement, | ||
including paving, drainage, or street widening, and matters related | ||
to the public improvement if at least one-third of the cost of the | ||
public improvement is to be paid by or through special assessments | ||
levied on property that will benefit from the improvement. | ||
SECTION 2. Sections 372.003(b), (b-1), and (c), Local | ||
Government Code, are amended to read as follows: | ||
(b) A public improvement project may include: | ||
(1) landscaping; | ||
(2) erection of fountains, distinctive lighting, and | ||
signs; | ||
(3) acquiring, constructing, improving, widening, | ||
narrowing, closing, or rerouting of sidewalks or of streets, any | ||
other roadways, or their rights-of-way; | ||
(4) construction or improvement of pedestrian malls; | ||
(5) acquisition and installation of pieces of art; | ||
(6) acquisition, construction, or improvement of | ||
libraries; | ||
(7) acquisition, construction, or improvement of | ||
off-street parking facilities; | ||
(8) acquisition, construction, improvement, or | ||
rerouting of mass transportation facilities; | ||
(9) acquisition, construction, or improvement of | ||
water, wastewater, or drainage facilities or improvements; | ||
(10) the establishment or improvement of parks and | ||
recreational facilities; | ||
(11) acquisition, construction, or improvement of a | ||
facility related to a water feature, including a recreational | ||
lagoon or artificial body of water used for: | ||
(A) aesthetic purposes; or | ||
(B) swimming, boating, or other aquatic | ||
recreational sports or activities; | ||
(12) projects similar to those listed in Subdivisions | ||
(1)-(11) [ |
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(13) [ |
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real property, including a right-of-way, in connection with an | ||
authorized improvement; | ||
(14) [ |
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improvement and promotion of the district, including services | ||
relating to advertising, promotion, health and sanitation, water | ||
and wastewater, public safety, security, business recruitment, | ||
development, recreation, and cultural enhancement; | ||
(15) [ |
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establishment, administration, and operation of the district; and | ||
(16) [ |
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expansion of affordable housing. | ||
(b-1) Payment of expenses under Subsection (b)(15) | ||
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maintenance of a public improvement project [ |
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(c) A public improvement project may be limited to the | ||
provision of the services described by Subsection (b)(14) | ||
[ |
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SECTION 3. Section 372.010(c), Local Government Code, is | ||
amended to read as follows: | ||
(c) Actual construction of an improvement other than an | ||
improvement financed under Section 372.152 may not begin until | ||
after the 20th day after the date the authorization takes effect and | ||
may not begin if during that 20-day period written protests signed | ||
by at least two-thirds of the owners of record of property within | ||
the improvement district or by the owners of record of property | ||
comprising at least two-thirds of the total area of the district are | ||
filed with the municipal or county secretary or other officer | ||
performing the duties of the municipal or county secretary. A | ||
person whose name appears on a protest may withdraw the name from | ||
the protest at any time before the governing body of the | ||
municipality or county convenes to determine the sufficiency of the | ||
protest. | ||
SECTION 4. Sections 372.012, 372.019, and 372.020, Local | ||
Government Code, are amended to read as follows: | ||
Sec. 372.012. AREA OF DISTRICT; INCREASE OF AREA. (a) The | ||
area of a public improvement district to be assessed according to | ||
the findings of the governing body of the municipality or county may | ||
be less than the area described in the proposed boundaries stated by | ||
the notice under Section 372.009. The area to be assessed may not | ||
include property not described by the notice as being within the | ||
proposed boundaries of the district unless a hearing is held to | ||
include the property and notice for the hearing is given in the same | ||
manner as notice under Section 372.009. | ||
(b) The governing body of the municipality or county may | ||
call and hold a public hearing in the same manner as a hearing under | ||
Section 372.009 for the purpose of increasing the area of a public | ||
improvement district if a petition requesting the increase is filed | ||
by the owners of property to be added to the district in the manner | ||
provided by Section 372.005, considering only the area to be added | ||
for the purposes of Sections 372.005(b) and (b-1). After the | ||
hearing, the governing body may by ordinance or order increase the | ||
area of the district in accordance with the increase proposed in the | ||
hearing. | ||
(c) If the governing body of the municipality or county | ||
increases the area of a public improvement district under | ||
Subsection (b) and the governing body has levied an assessment on | ||
property in the district before the increase, the governing body | ||
may: | ||
(1) make a supplemental assessment under Section | ||
372.019; or | ||
(2) reapportion the existing assessment in a manner | ||
consistent with Section 372.015 after notice is given and a hearing | ||
is held in the same manner as required by Sections 372.016 and | ||
372.017. | ||
Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. (a) After notice | ||
and a hearing in accordance with Subsection (b), the governing body | ||
of the municipality or county may make supplemental assessments to: | ||
(1) correct omissions or mistakes in the assessment | ||
relating to the total cost of the improvement; or | ||
(2) levy an assessment on property added to the public | ||
improvement district under Section 372.012. | ||
(b) Notice must be given and the hearing held under this | ||
section in the same manner as required by Sections 372.016 and | ||
372.017. | ||
Sec. 372.020. REASSESSMENT. The governing body of the | ||
municipality or county may make a reassessment or new assessment of | ||
a parcel of land if: | ||
(1) a court of competent jurisdiction sets aside an | ||
assessment against the parcel; | ||
(2) the governing body determines that the original | ||
assessment is excessive; [ |
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(3) on the written advice of counsel, the governing | ||
body determines that the original assessment is invalid; or | ||
(4) the governing body increases the area of the | ||
public improvement district under Section 372.012. | ||
SECTION 5. Section 372.021(c), Local Government Code, is | ||
amended to read as follows: | ||
(c) The fund may be used to: | ||
(1) pay the costs of planning, administration, and an | ||
improvement authorized by this subchapter; | ||
(2) prepare preliminary plans, studies, and | ||
engineering reports to determine the feasibility of an improvement; | ||
and | ||
(3) if ordered by the governing body of the | ||
municipality or county, pay the initial cost of the improvement | ||
until temporary notes, time warrants, or general obligation bonds | ||
or revenue [ |
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SECTION 6. Section 372.022, Local Government Code, is | ||
amended to read as follows: | ||
Sec. 372.022. SEPARATE FUNDS. If bonds are issued under | ||
this chapter, a separate public improvement district fund shall be | ||
created in the municipal or county treasury for each | ||
district. Proceeds from the sale of bonds, temporary notes, and | ||
time warrants, and other sums appropriated to the fund by the | ||
governing body of the municipality or county shall be credited to | ||
the fund. The fund may be used solely to pay costs incurred in | ||
making an improvement. When an improvement is completed, the | ||
balance of the part of the assessment that is for the improvement | ||
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retirement of bonds. | ||
SECTION 7. Sections 372.023(a) and (e), Local Government | ||
Code, are amended to read as follows: | ||
(a) Costs of improvements may be paid or reimbursed by any | ||
combination of the methods described by this section if the | ||
improvements are dedicated, conveyed, leased, or otherwise | ||
provided to or for the benefit of: | ||
(1) a municipality or county; | ||
(2) this state, a political subdivision of this state, | ||
or other entity exercising the powers granted under this subchapter | ||
as authorized by other law; [ |
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(3) an entity created or operating under Section | ||
52(b)(1) or (2), Article III, or Section 59, Article XVI, Texas | ||
Constitution; | ||
(4) a district created and operating under Chapter 65, | ||
Water Code; | ||
(5) an entity otherwise authorized under the laws of | ||
this state to own the improvements, operate the improvements, and, | ||
as applicable, provide services using the improvements; or | ||
(6) an entity that: | ||
(A) is approved by the governing body of an | ||
entity described by Subdivision (1), [ |
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(B) is authorized by order, ordinance, | ||
resolution, or other official action to act for an entity described | ||
by Subdivision (1), [ |
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(e) The interest rate on unpaid amounts due under an | ||
installment sales contract, reimbursement agreement, temporary | ||
note, or time warrant described by Subsection (d): | ||
(1) may not exceed, for a period of not more than seven | ||
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municipality or county, five percent above the highest average | ||
index rate for tax-exempt revenue bonds reported in a daily or | ||
weekly bond index approved by the governing body and reported in the | ||
month before the date the obligation was incurred; and | ||
(2) after the period described by Subdivision (1), may | ||
not exceed two percent above the bond index rate described by | ||
Subdivision (1). | ||
SECTION 8. Section 372.026, Local Government Code, is | ||
amended by amending Subsections (a), (b), and (f) and adding | ||
Subsection (g) to read as follows: | ||
(a) In this section, "obligation" means bonds, temporary | ||
notes, time warrants, or an obligation under: | ||
(1) an installment sale contract or reimbursement | ||
agreement; or | ||
(2) an agreement entered into under Subsection (f). | ||
(b) For the payment of obligations issued or agreed to under | ||
this subchapter and the payment of principal, interest, and any | ||
other amounts required or permitted in connection with the | ||
obligations, the governing body of the municipality or county may | ||
pledge: | ||
(1) all or part of the income from improvements | ||
financed under this subchapter, including income received in | ||
installment payments under Section 372.023; or | ||
(2) for a municipality, tax increment revenue | ||
generated from ad valorem and sales taxes imposed in a reinvestment | ||
zone: | ||
(A) designated by the municipality under Chapter | ||
311, Tax Code; and | ||
(B) located wholly or partly within the | ||
boundaries of the public improvement district. | ||
(f) The governing body may enter into an agreement with an | ||
entity described by Subsection (g) [ |
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that provides for payment of amounts pledged under this section to | ||
the entity [ |
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entity [ |
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indebtedness to pay capitalized interest and a reserve fund | ||
permitted by this subchapter for revenue or general obligation | ||
bonds issued under this subchapter and indebtedness issued to pay | ||
the entity's [ |
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agreement may [ |
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(1) for an agreement with a corporation, provide that | ||
the corporation is responsible for managing the district; or | ||
(2) designate the entity that will hold title to the | ||
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an entity described by Section 372.023(a) [ |
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(g) The governing body of the municipality or county may | ||
enter into an agreement described by Subsection (f) only with: | ||
(1) a corporation created by a municipality or county | ||
under the Texas Constitution or other law; | ||
(2) a corporation created under Subchapter D, Chapter | ||
431, Transportation Code; or | ||
(3) a political subdivision, instrumentality, or | ||
entity created and authorized to issue bonds secured by pledged | ||
revenue from a municipality or county. | ||
SECTION 9. Section 372.027(a), Local Government Code, is | ||
amended to read as follows: | ||
(a) Revenue bonds issued under this subchapter may be | ||
refunded or refinanced by the issuance of refunding bonds, under | ||
terms or conditions set forth in ordinances, [ |
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resolutions of the municipality, [ |
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issuing the bonds. The provisions of this subchapter applying | ||
generally to revenue bonds, including provisions related to the | ||
issuance of those bonds, apply to refunding bonds authorized by | ||
this section. The refunding bonds may be sold and delivered in | ||
amounts necessary for the principal, interest, and any redemption | ||
premium of the bonds to be refunded, on the date of the maturity of | ||
the bond or any redemption date of the bond. Refunding bonds may be | ||
issued in a principal amount in excess of the bonds to be refunded. | ||
SECTION 10. Section 372.152(a), Local Government Code, is | ||
amended to read as follows: | ||
(a) General [ |
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reimburse a developer for the cost of a public improvement may be | ||
issued and sold in accordance with this chapter if: | ||
(1) the public improvement is located in a public | ||
improvement district created on or after January 1, 2005; | ||
(2) the public improvement is [ |
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and accepted by the municipality, [ |
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to receive the improvement under Section 372.023(a); and | ||
(3) before the public improvement was dedicated to and | ||
accepted by the municipality or county, the governing body of the | ||
municipality or county entered into an agreement with the developer | ||
to pay for the public improvement. | ||
SECTION 11. Section 5.014(a), Property Code, is amended to | ||
read as follows: | ||
(a) A seller of residential real property that is located in | ||
a public improvement district established under Subchapter A, | ||
Chapter 372, Local Government Code, or Chapter 382, Local | ||
Government Code, and that consists of not more than one dwelling | ||
unit located in this state shall give to the purchaser of the | ||
property a written notice that reads substantially similar to the | ||
following: | ||
NOTICE OF OBLIGATION TO PAY PUBLIC IMPROVEMENT DISTRICT ASSESSMENT | ||
TO (municipality or county levying assessment) CONCERNING THE | ||
PROPERTY AT (street address) | ||
As a purchaser of this parcel of real property you are | ||
obligated to pay an assessment to ([ |
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levying assessment) for an improvement project undertaken by a | ||
public improvement district under Subchapter A, Chapter 372, Local | ||
Government Code, or Chapter 382, Local Government Code. [ |
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information concerning the amount of the assessment and the due | ||
dates of that assessment may be obtained from ([ |
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or county levying [ |
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The total unpaid principal amount of the assessment levied | ||
against this parcel is (dollar amount) which may be paid in one lump | ||
sum or in annual installments over (number of years). If paid in | ||
annual installments, the unpaid principal amount of the assessment | ||
bears interest at (percentage) and includes additional charges in | ||
connection with administrative expenses associated with the public | ||
improvement district. The amount of the assessment is subject to | ||
change, but the principal amount of the assessment may not be | ||
increased without a public hearing. | ||
YOUR FAILURE TO PAY THE ASSESSMENTS COULD RESULT IN A LIEN ON | ||
AND THE FORECLOSURE OF YOUR PROPERTY. [ |
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Date: __________________ ________________________________ | ||
Signature of Purchaser | ||
SECTION 12. This Act takes effect immediately if it | ||
receives a vote of two-thirds of all the members elected to each | ||
house, as provided by Section 39, Article III, Texas Constitution. | ||
If this Act does not receive the vote necessary for immediate | ||
effect, this Act takes effect September 1, 2017. |