Texas 2009 - 81st Regular

Texas House Bill HB621 Compare Versions

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1	1	H.B. No. 621
2	2
3	3
4	4	AN ACT
5	5	relating to public improvement districts designated by a county or
6	6	municipality.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 372.017(b), Local Government Code, is
9	9	amended to read as follows:
10	10	(b) After all objections have been heard and the governing
11	11	body has passed on the objections, the governing body by ordinance
12	12	or order shall levy the assessment as a special assessment on the
13	13	property. The governing body by ordinance or order shall specify
14	14	the method of payment of the assessment. The governing body may
15	15	provide that assessments be paid in periodic installments, at an
16	16	interest rate and for a period approved by the governing body. The
17	17	provision that assessments be paid in periodic installments may,
18	18	but is not required to, result in level annual installment
19	19	payments. The installments must be in amounts necessary to meet
20	20	annual costs for improvements and must continue for:
21	21	(1) the [a] period necessary to retire the
22	22	indebtedness on the improvements; or
23	23	(2) the period approved by the governing body for the
24	24	payment of the installments.
25	25	SECTION 2. Section 372.018, Local Government Code, is
26	26	amended to read as follows:
27	27	Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An
28	28	assessment bears interest at the rate specified by the governing
29	29	body of the municipality or county beginning at the time or times or
30	30	on the occurrence of one or more events specified by the governing
31	31	body. If general obligation bonds, revenue bonds, time warrants,
32	32	or temporary notes are issued to finance the improvement for which
33	33	the assessment is assessed, the interest rate for that assessment
34	34	[, but] may not exceed a rate that is one-half of one percent higher
35	35	than the actual interest rate paid on the [public] debt [used to
36	36	finance the improvement]. Interest on the assessment between the
37	37	effective date of the ordinance or order levying the assessment and
38	38	the date the first installment is payable shall be added to the
39	39	first installment. The interest on any delinquent installment
40	40	shall be added to each subsequent installment until all delinquent
41	41	installments are paid.
42	42	(b) An assessment or reassessment, with interest, the
43	43	expense of collection, and reasonable attorney's fees, if incurred,
44	44	is:
45	45	(1) a first and prior lien against the property
46	46	assessed;
47	47	(2)[,] superior to all other liens and claims except
48	48	liens or claims for state, county, school district, or municipality
49	49	ad valorem taxes;[,] and
50	50	(3) [is] a personal liability of and charge against the
51	51	owners of the property regardless of whether the owners are named.
52	52	(c) The lien is effective from the date of the ordinance or
53	53	order levying the assessment until the assessment is paid.
54	54	(d) The lien runs with the land and that portion of an
55	55	assessment payment that has not yet come due is not eliminated by
56	56	foreclosure of an ad valorem tax lien.
57	57	(e) The assessment lien [and] may be enforced by the
58	58	governing body in the same manner that an ad valorem tax lien
59	59	against real property may be enforced by the governing body.
60	60	Foreclosure of accrued installments does not eliminate the
61	61	outstanding principal balance of the assessment. Any purchaser of
62	62	the property in foreclosure takes the property subject to the
63	63	assessment lien and any associated obligations.
64	64	(f) Delinquent installments of the assessment shall incur
65	65	interest, penalties, and attorney's fees in the same manner as
66	66	delinquent ad valorem taxes. The owner of assessed property may pay
67	67	at any time all or any part of the [entire] assessment, with
68	68	interest that has accrued on the assessment, on any lot or parcel.
69	69	SECTION 3. Section 372.022, Local Government Code, is
70	70	amended to read as follows:
71	71	Sec. 372.022. SEPARATE FUNDS. If bonds are issued, a [A]
72	72	separate public improvement district fund shall be created in the
73	73	municipal or county treasury for each district. Proceeds from the
74	74	sale of bonds, temporary notes, and time warrants, and other sums
75	75	appropriated to the fund by the governing body of the municipality
76	76	or county shall be credited to the fund. The fund may be used solely
77	77	to pay costs incurred in making an improvement. When an improvement
78	78	is completed, the balance of the part of the assessment that is for
79	79	improvements shall be transferred to the fund established for the
80	80	retirement of bonds.
81	81	SECTION 4. Section 372.023, Local Government Code, is
82	82	amended by amending Subsections (d), (e), (f), and (g) and adding
83	83	Subsection (h) to read as follows:
84	84	(d) A cost payable from a special assessment that is to be
85	85	paid in installments and a cost payable by the municipality or
86	86	county as a whole but not payable from available general funds or
87	87	other available general improvement funds shall be paid:
88	88	(1) under an installment sale contract or a
89	89	reimbursement agreement with the person who contracts to install or
90	90	construct the improvement for which the costs apply;
91	91	(2) as provided by a temporary note or time warrant
92	92	issued by the municipality or county to reimburse a person for money
93	93	advanced or work performed in connection with an improvement; or
94	94	(3) by the issuance and sale of revenue or general
95	95	obligation bonds.
96	96	(e) The net effective interest rate, as computed for a
97	97	public security under Section 1204.005, Government Code, on money
98	98	owed or paid under Subsection (d) may not exceed one-half of one
99	99	percent above the highest average interest rate reported by a
100	100	newspaper in a weekly bond index in the month before the date of the
101	101	contract or agreement or the issuance of the bond, temporary note,
102	102	or time warrant. The newspaper must specialize in bonds and be
103	103	acceptable as a reliable source for bond interest rates to the
104	104	governing body of the municipality or county that enters into the
105	105	contract or agreement or that issues the bond, temporary note, or
106	106	time warrant.
107	107	(f) [(e)] While an improvement is in progress, the governing
108	108	body of the municipality or county, to pay the costs of the
109	109	improvement, may issue temporary notes for money advanced or time
110	110	warrants to pay for work performed in connection with [the costs of]
111	111	the improvement and, on completion of the improvement, issue
112	112	revenue or general obligation bonds. The bond proceeds may be used
113	113	to repay the obligations incurred under this subsection.
114	114	(g) [(f)] The cost of more than one improvement may be paid:
115	115	(1) from a single issue and sale of bonds without other
116	116	consolidation proceedings before the bond issue; or
117	117	(2) under an agreement with a person who contracts to
118	118	install or construct the improvement and who sells the improvement
119	119	to the municipality or county.
120	120	(h) [(g)] The costs of any improvement include interest
121	121	payable on a temporary note or time warrant and all costs incurred
122	122	in connection with the issuance of bonds under Section 372.024 and
123	123	may be included in the assessments against the property in the
124	124	improvement district as provided by this subchapter.
125	125	SECTION 5. Section 372.026, Local Government Code, is
126	126	amended to read as follows:
127	127	Sec. 372.026. PLEDGES. (a) In this section, "obligation"
128	128	means bonds, temporary notes, time warrants, or an obligation under
129	129	an installment sale contract or reimbursement agreement.
130	130	(b) For the payment of obligations [bonds] issued or agreed
131	131	to under this subchapter and the payment of principal, interest,
132	132	and any other amounts required or permitted in connection with the
133	133	obligations [bonds], the governing body of the municipality or
134	134	county may pledge all or part of the income from improvements
135	135	financed under this subchapter, including income received in
136	136	installment payments under Section 372.023.
137	137	(c) [(b)] Pledged income must be fixed and collected in
138	138	amounts sufficient, with other pledged resources, to pay principal,
139	139	interest, and other expenses related to the obligations [bonds],
140	140	and to the extent required by the ordinance, [or] order, or
141	141	agreement authorizing the obligations [bonds], to pay for the
142	142	operation, maintenance, and other expenses related to improvements
143	143	authorized by this subchapter.
144	144	(d) [(c)] The obligations [bonds] may also be secured by
145	145	mortgages or deeds of trust on any real property related to the
146	146	facilities authorized under this subchapter that are owned or are
147	147	to be acquired by the municipality or county and by chattel
148	148	mortgages, liens, or security interests on any personal property
149	149	appurtenant to that real property. The governing body may
150	150	authorize the execution of trust indentures, mortgages, deeds of
151	151	trust, or other forms of encumbrance [encumbrances] as evidence of
152	152	the indebtedness.
153	153	(e) [(d)] The governing body may pledge to the payment of
154	154	obligations [bonds] all or part of a grant, donation, revenue, or
155	155	income received or to be received from the government of the United
156	156	States or any other public or private source, whether or not it is
157	157	received pursuant to an agreement or otherwise.
158	158	(f) The governing body may enter into an agreement with a
159	159	corporation created by the municipality or county under the Texas
160	160	Constitution or other law that provides for payment of amounts
161	161	pledged under this section to the corporation to secure
162	162	indebtedness issued by the corporation to finance an improvement
163	163	project, including indebtedness to pay capitalized interest and a
164	164	reserve fund permitted by this subchapter for revenue or general
165	165	obligation bonds issued under this subchapter and indebtedness
166	166	issued to pay the corporation's costs of issuance. In addition, the
167	167	agreement may provide that:
168	168	(1) the corporation is responsible for managing the
169	169	district; or
170	170	(2) title to one or more improvements will be held by
171	171	the corporation.
172	172	SECTION 6. (a) All acts and proceedings related to the
173	173	authorization of any taxes or bonds, including acts and proceedings
174	174	related to an election, by a district created under Subchapter A,
175	175	Chapter 372, Local Government Code, before the effective date of
176	176	this Act are validated, ratified, and confirmed in all respects as
177	177	if the acts and proceedings occurred as authorized by law.
178	178	(b) This section does not apply to any matter that on the
179	179	effective date of this Act:
180	180	(1) is involved in litigation if the litigation
181	181	ultimately results in the matter being held invalid by a final court
182	182	judgment; or
183	183	(2) has been held invalid by a final court judgment.
184	184	SECTION 7. (a) An installment sales contract made or
185	185	attempted to be made by a county or municipality with the party
186	186	constructing an improvement relating to an improvement district is
187	187	validated as of the date the contract was made or attempted to be
188	188	made if the contract:
189	189	(1) was made or attempted to be made before the
190	190	effective date of this Act; and
191	191	(2) complies with Section 372.023, Local Government
192	192	Code, as amended by this Act.
193	193	(b) This section does not apply to any matter that on the
194	194	effective date of this Act:
195	195	(1) is involved in litigation if the litigation
196	196	ultimately results in the matter being held invalid by a final court
197	197	judgment; or
198	198	(2) has been held invalid by a final court judgment.
199	199	SECTION 8. This Act takes effect immediately if it receives
200	200	a vote of two-thirds of all the members elected to each house, as
201	201	provided by Section 39, Article III, Texas Constitution. If this
202	202	Act does not receive the vote necessary for immediate effect, this
203	203	Act takes effect September 1, 2009.
204	204	______________________________ ______________________________
205	205	President of the Senate Speaker of the House
206	206	I certify that H.B. No. 621 was passed by the House on March
207	207	26, 2009, by the following vote: Yeas 146, Nays 0, 2 present, not
208	208	voting; and that the House concurred in Senate amendments to H.B.
209	209	No. 621 on May 23, 2009, by the following vote: Yeas 135, Nays 0, 1
210	210	present, not voting.
211	211	______________________________
212	212	Chief Clerk of the House
213	213	I certify that H.B. No. 621 was passed by the Senate, with
214	214	amendments, on May 21, 2009, by the following vote: Yeas 31, Nays
215	215	0.
216	216	______________________________
217	217	Secretary of the Senate
218	218	APPROVED: __________________
219	219	Date
220	220	__________________
221	221	Governor