H.B. No. 2726
AN ACT
relating to regional participation agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 43.0754(a)(2), Local Government Code, is
amended to read as follows:
(2) "Eligible municipality" means a municipality:
(A) that has a population of 1.5 million or more
and that includes in its extraterritorial jurisdiction at least 90
percent by area of the territory of a district; [or]
(B) that includes in its extraterritorial
jurisdiction not more than 10 percent of the territory of a district
that has entered into a regional participation agreement under this
section with another eligible municipality described by Paragraph
(A); or
(C) with corporate boundaries contiguous to the
boundaries of a district that has entered into a regional
participation agreement under this section with another eligible
municipality described by Paragraph (A) [under this section].
SECTION 2. Section 43.0754, Local Government Code, is
amended by amending Subsections (c), (g), (h), (i), and (m) and
adding Subsection (q) to read as follows:
(c) A regional participation agreement may provide or allow
for:
(1) the establishment, administration, use,
investment, and application of a regional participation fund, which
shall be a special fund or escrow account to be used solely for
funding the costs and expenses of eligible programs or projects;
(2) payments to be made by a party into the regional
participation fund for application, currently or in the future,
toward eligible programs or projects;
(3) the methods and procedures by which eligible
programs or projects are prioritized, identified, and selected for
implementation and are planned, designed, bid, constructed,
administered, inspected, and completed;
(4) the methods and procedures for accounting for
amounts on deposit in, to the credit of, or expended from the
regional participation fund, as well as any related investment
income or amounts due and owing to or from any party to the fund;
(5) credits against payments otherwise due by any
party under the agreement resulting from taxes, charges, fees,
assessments, tolls, or other payments in support of or related to
the usage or costs of eligible programs or projects that are levied
or imposed upon, assessed against, or made applicable to a party or
its citizens, ratepayers, taxpayers, or constituents after the
effective date of the agreement;
(6) any type of annexation of any part of the territory
of a district to be deferred by an eligible municipality that is a
party for a mutually agreeable period;
(7) the release of [all or part of the] territory [of a
district] from the extraterritorial jurisdiction of an eligible
municipality that is a party at a specified time or upon the
occurrence of specified events;
(8) the consent of an eligible municipality that is a
party to the incorporation of, or the adoption of an alternate form
of government by, all or part of the territory of a district at a
specified time or upon the occurrence of specified events;
(9) remedies for breach of the agreement;
(10) the modification, amendment, renewal, extension,
or termination of the agreement;
(11) other districts, eligible municipalities, or
persons to join the agreement as a party at any time;
(12) third-party beneficiaries to be specifically
designated and conferred rights or remedies under the agreement;
(13) the duration of the agreement, including an
unlimited term;
(14) the creation and administration of a nonprofit
corporation, joint powers agency, local government corporation, or
other agency for the purpose of administration and management of a
regional participation fund, program, or project under the
agreement; and
(15) any other provision or term to which the parties
agree.
(g) A regional participation agreement is not required to
describe the land contained within the boundaries of [a district
that is] a party to the agreement, but any territory to be released
from the extraterritorial jurisdiction of an eligible municipality
that is a party under an agreement must be described in sufficient
detail to convey title to land and the description must be made a
part of the agreement.
(h) A regional participation agreement binds each party and
its legal successor, including a municipality or other form of
local government, to the agreement for the term specified in the
agreement and each owner and future owner of land that is subject to
the agreement during any annexation deferral period established in
the agreement. If a party, land, or landowner is excluded or
removed from an agreement, the removal or exclusion is effective on
the recordation of the amendment, supplement, modification, or
restatement of the agreement implementing the removal or exclusion.
(i) A regional participation agreement may not require a
party [district] to make payments from any funds that are
restricted, encumbered, or pledged for the payment of contractual
obligations or indebtedness of the party [district]. Otherwise,
any party may commit or pledge or may issue bonds payable from or
secured by a pledge of any available source of funds, including
unencumbered sales and use taxes, to make payments due or to become
due under an agreement.
(m) Notwithstanding any defect, ambiguity, discrepancy,
invalidity, or unenforceability of a regional participation
agreement that has been voluntarily entered into and fully executed
by the parties, or any contrary law, common law doctrine, or
municipal charter provision, and for the duration of any annexation
deferral period established in the agreement during which a
district continues to perform its obligations under the agreement:
(1) Section 42.023 and any other law or municipal
charter provision relating to the reduction of the extraterritorial
jurisdiction of an eligible municipality that is a party do not
apply, and Sections 42.041(b)-(e) do not apply to any land or owner
of land within a district that is a party;
(2) the governing body of an eligible municipality
that is a party may not initiate or continue an annexation
proceeding relating to that area but may include the area covered by
the agreement in a municipal annexation plan; and
(3) any area [of a district] that is [a party] to be
released from the extraterritorial jurisdiction of an eligible
municipality that is a party under an agreement, or that is to be
incorporated or included within an alternate form of government
with the consent of a municipality that is a party under an
agreement, shall, by operation of law and without further action by
a party or its governing body, be released from the
extraterritorial jurisdiction, or consent of the municipality to
the incorporation or adoption of an alternate form of government by
the district shall be deemed to have been given, as appropriate
under the agreement, at the time or upon the occurrence of the
events specified in the agreement.
(q) For purposes of Subchapter I, Chapter 271:
(1) a district or eligible municipality is a "local
governmental entity" within the meaning of Section 271.151(3); and
(2) a regional participation agreement is a "contract
subject to this subchapter" within the meaning of Section
271.151(2), without regard to whether the agreement is for
providing goods or services.
SECTION 3. Section 43.0754(q), Local Government Code, as
added by this Act, applies only to a cause of action that accrues on
or after the effective date of this Act. A cause of action that
accrues before the effective date of this Act is governed by the law
in effect immediately before that date, and that law is continued in
effect for that purpose.
SECTION 4. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2726 was passed by the House on April
22, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2726 was passed by the Senate on May
20, 2009, by the following vote: Yeas 29, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor