Texas 2009 - 81st Regular

Texas Senate Bill SB978 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	S.B. No. 978
2	2
3	3
4	4	AN ACT
5	5	relating to the creation and financing of public improvement
6	6	districts.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Subchapter A, Chapter 372, Local Government
9	9	Code, is amended to read as follows:
10	10	SUBCHAPTER A. PUBLIC IMPROVEMENT DISTRICTS
11	11	Sec. 372.001. SHORT TITLE. This subchapter may be cited as
12	12	the Public Improvement District Assessment Act.
13	13	Sec. 372.0015. DEFINITIONS [DEFINITION]. In this
14	14	subchapter:
15	15	(1) "Authorized instrumentality" means a public
16	16	facility corporation created by the governing body of a
17	17	municipality or county under Chapter 303 or a local government
18	18	corporation created by the governing body of a municipality or
19	19	county under Subchapter D, Chapter 431, Transportation Code.
20	20	(2) "Extraterritorial[, "extraterritorial]
21	21	jurisdiction" means extraterritorial jurisdiction of a
22	22	municipality as determined under Chapter 42.
23	23	(3) "Public improvement district" or "district" means
24	24	an area defined by the governing body of a municipality or county
25	25	that:
26	26	(A) consists of one or more contiguous or
27	27	noncontiguous tracts of land; and
28	28	(B) will be specially benefited as determined by
29	29	the municipality or county by any or all of the public improvements
30	30	or services.
31	31	(4) "Qualified costs" means the costs and expenses
32	32	incurred in establishing, administering, managing, and operating a
33	33	public improvement district, including:
34	34	(A) costs and expenses of or related to the
35	35	construction of an improvement project;
36	36	(B) financing of an improvement project by a
37	37	municipality, county, or authorized instrumentality, including the
38	38	debt service requirements owed or to be owed under installment
39	39	purchase or reimbursement contracts, temporary notes, time
40	40	warrants, revenue bonds, special assessment bonds, or certificates
41	41	of obligation, including reserve funds and capitalized interest;
42	42	(C) costs and expenses of or related to the
43	43	negotiation, development, and execution of the obligations
44	44	described by Paragraph (B);
45	45	(D) costs and expenses of or related to credit
46	46	and interest rate management agreements entered into under Chapter
47	47	1371, Government Code;
48	48	(E) costs of attorneys and other professional
49	49	advisors, including consultants; and
50	50	(F) costs related to the administrative
51	51	oversight of public improvements, services, and operations of the
52	52	public improvement district.
53	53	(5) "Revenue bonds" means bonds, notes, or other
54	54	securities issued by a municipality, county, or authorized
55	55	instrumentality that are payable from and secured by liens on all or
56	56	part, or a combination of, the revenue derived from installment
57	57	payments of special assessments plus any other revenues, donations,
58	58	grants, or income described by Section 372.026(e).
59	59	(6) "Special assessment bonds" means bonds, notes, or
60	60	other securities issued by a municipality, county, or authorized
61	61	instrumentality that are payable solely from and secured by special
62	62	assessments levied by the governing body of the municipality or
63	63	county in a public improvement district.
64	64	(7) "Special district" means a political subdivision
65	65	of this state with a limited geographic area created by local law or
66	66	under general law for a special purpose.
67	67	Sec. 372.002. EXERCISE OF POWERS. (a) A public
68	68	improvement district is not a separate body politic or corporate
69	69	from the municipality or county that created the district.
70	70	(b) Subject to Section 372.010(c), powers [Powers] granted
71	71	under this subchapter in an area comprising a public improvement
72	72	district may be exercised by a municipality or county on and after
73	73	the date [in which] the governing body of the municipality or county
74	74	[initiates or] receives a petition requesting the establishment of
75	75	a public improvement district that complies[. A petition must
76	76	comply] with the requirements of Section 372.005.
77	77	(c) The powers granted under this subchapter may be
78	78	exercised by the governing body of any other political subdivision
79	79	if the law creating or governing the political subdivision grants
80	80	the political subdivision authority described by this subchapter.
81	81	The governing body of the political subdivision has the same powers
82	82	and is subject to the same limitations as are applicable to the
83	83	governing body of a municipality or a county under this subchapter
84	84	unless and except as modified by the law creating or governing the
85	85	political subdivision.
86	86	Sec. 372.003. AUTHORIZED IMPROVEMENTS AND SERVICES.
87	87	(a) If the governing body of a municipality or county finds that it
88	88	promotes the interests of the municipality or county, the governing
89	89	body may create one or more public improvement districts under this
90	90	subchapter and undertake one or more [an] improvement projects
91	91	[project] that confer [confers] a special benefit on the property
92	92	located in the public improvement district [a definable part of the
93	93	municipality or county or the municipality's extraterritorial
94	94	jurisdiction]. A project may be undertaken within or outside the
95	95	district in the municipality or county or in the municipality's
96	96	extraterritorial jurisdiction if the project benefits the
97	97	district.
98	98	(b) A public improvement project may include:
99	99	(1) landscaping;
100	100	(2) erection of fountains, distinctive lighting, and
101	101	signs;
102	102	(3) acquiring, constructing, improving, repairing,
103	103	widening, narrowing, closing, or rerouting of sidewalks or of
104	104	streets, roads, highways, bridges, culverts, water retention
105	105	walls, [any other roadways,] or related [their] rights-of-way owned
106	106	by or to be conveyed to the municipality, the county, the federal
107	107	government, or another political subdivision or entity exercising
108	108	powers granted under this subchapter;
109	109	(4) construction or improvement of pedestrian malls;
110	110	(5) acquisition and installation of pieces of art;
111	111	(6) acquisition, construction, or improvement of
112	112	[libraries;
113	113	[(7) acquisition, construction, or improvement of]
114	114	off-street parking facilities;
115	115	(7) [(8)] acquisition, construction, or improvement[,
116	116	or rerouting] of mass transportation facilities, including light
117	117	rail mass transit, streetcar, or similar systems, and related
118	118	vehicle parking facilities;
119	119	(8) [(9)] acquisition, construction, or improvement
120	120	of water, wastewater, or drainage facilities or improvements;
121	121	(9) [(10)] the establishment or improvement of parks,
122	122	playgrounds, lakes, and open spaces, including paths, trails, boat
123	123	docks, and wharves;
124	124	(10) acquisition, construction, or improvement of
125	125	other public projects that are determined by the municipality or
126	126	county to promote the interests of the municipality or county and to
127	127	be of a special benefit to the public improvement district,
128	128	including:
129	129	(A) community centers, recreation centers, and
130	130	recreation facilities;
131	131	(B) libraries;
132	132	(C) facilities for police, sheriffs, or
133	133	firefighters;
134	134	(D) municipal or county administration centers;
135	135	and
136	136	(E) other governmental buildings for the
137	137	provision of governmental services;
138	138	(11) acquisition, construction, or improvement of
139	139	other public projects, facilities, or services required by a
140	140	development agreement, interlocal agreement, zoning regulation, or
141	141	permit issued by a municipality or county having jurisdiction in
142	142	the public improvement district;
143	143	(12) acquisition, construction, maintenance, or
144	144	improvement of buildings and other facilities commonly used for
145	145	teaching, research, or the preservation of knowledge by an
146	146	institution of higher education or for auxiliary purposes of the
147	147	institution, including administration, student services and
148	148	housing, athletics, performing arts, and alumni support;
149	149	(13) [(11) projects similar to those listed in
150	150	Subdivisions (1)-(10);
151	151	[(12)] acquisition, by purchase or otherwise, of real
152	152	property in connection with an authorized improvement;
153	153	(14) [(13)] special supplemental services for
154	154	improvement and promotion of the district, including services
155	155	relating to:
156	156	(A) advertising;
157	157	(B) [,] promotion;
158	158	(C) [,] health and sanitation;
159	159	(D) [,] water and wastewater;
160	160	(E) enhanced fire protection, police, sheriff,
161	161	and other[,] public safety and[,] security;
162	162	(F) [,] business recruitment;
163	163	(G) [,] development;
164	164	(H) [,] recreation;[,] and
165	165	(I) cultural enhancement; and
166	166	(15)acquisition, construction, or improvement of a rainwater harvesting system[(14)payment of expenses incurred in the establishment, administration, and operation of the district].
167	167	a rainwater harvesting system [(14) payment of expenses [(14) payment of expenses
168	168	incurred in the establishment, administration, and operation of
169	169	the district].].
170	170	(c) A public improvement project may include or may be
171	171	limited to the provision of all or any part of the services
172	172	described by Subsection (b)(14) [(b)(13)].
173	173	(d) A municipality that exercises powers under this
174	174	subchapter may establish a public improvement district in the
175	175	corporate limits or the extraterritorial jurisdiction of the
176	176	municipality. A county or other political subdivision that
177	177	exercises powers under this subchapter may establish a public
178	178	improvement district in the county or the area of the political
179	179	subdivision, including in the corporate limits or the
180	180	extraterritorial jurisdiction of a municipality unless within 30
181	181	days after the date notice is provided to the municipality of an [a
182	182	county's] action to approve [such] a public improvement district,
183	183	the [a home rule] municipality objects to the district's [its]
184	184	establishment within the municipality's corporate limits or
185	185	extraterritorial jurisdiction.
186	186	Sec. 372.004. COMBINED IMPROVEMENTS. A public [An]
187	187	improvement project may consist of an improvement on more than one
188	188	street or of more than one type of improvement. An improvement [A]
189	189	project described by this section may be included in one proceeding
190	190	and financed as one improvement project.
191	191	Sec. 372.0045. AUTHORIZED HIGHER EDUCATION FACILITIES;
192	192	LEASE TO INSTITUTION OF HIGHER EDUCATION. (a) In this section,
193	193	"institution of higher education" has the meaning assigned by
194	194	Section 61.003, Education Code.
195	195	(b) The governing body of a municipality or county that
196	196	establishes a public improvement district to finance a public
197	197	improvement project described by Section 372.003(b)(12) may enter
198	198	into a memorandum of understanding with an institution of higher
199	199	education that provides educational services in the municipality or
200	200	county under which the municipality or county leases the public
201	201	improvement project to the institution, at a nominal rate, for use
202	202	by the institution in providing teaching, research, public service,
203	203	or auxiliary enterprise activities to students of the institution.
204	204	(c) A memorandum of understanding entered into by a
205	205	municipality or county under this section must include adequate
206	206	controls to ensure that the lease of the public improvement project
207	207	promotes the municipality's or county's interests and provides a
208	208	public benefit to the area served by the district.
209	209	Sec. 372.005. PETITION. (a) A petition for the
210	210	establishment of a public improvement district must state:
211	211	(1) the general nature of the proposed improvements
212	212	[improvement];
213	213	(2) the estimated qualified costs [cost] of the
214	214	improvements [improvement];
215	215	(3) the boundaries of the proposed [assessment]
216	216	district;
217	217	(4) the proposed method of assessment, which may
218	218	specify included or excluded classes of assessable property;
219	219	(5) [the proposed apportionment of cost between the
220	220	public improvement district and the municipality or county as a
221	221	whole;
222	222	[(6)] whether the management of the district is to be
223	223	by:
224	224	(A) the municipality;
225	225	(B) the [or] county;
226	226	(C) an authorized instrumentality;
227	227	(D) [,] the private sector;[,] or
228	228	(E) a partnership between the private sector and
229	229	one of the entities described by Paragraphs (A)-(C) [municipality
230	230	or county and the private sector];
231	231	(6) [(7)] that the persons signing the petition
232	232	request or concur with the establishment of the district; and
233	233	(7) [(8)] that an advisory body may be established or
234	234	an authorized instrumentality may be incorporated to develop and
235	235	recommend an improvement plan to the governing body of the
236	236	municipality or county.
237	237	(b) The petition is sufficient if signed by:
238	238	(1) owners of taxable real property representing more
239	239	than 50 percent of the appraised value of taxable real property
240	240	liable for assessment under the proposal, as determined by the
241	241	current roll of the appraisal district in which the property is
242	242	located; and
243	243	(2) record owners of real property liable for
244	244	assessment under the proposal who:
245	245	(A) constitute more than 50 percent of all record
246	246	owners of property that is liable for assessment under the
247	247	proposal; or
248	248	(B) own taxable real property that constitutes
249	249	more than 50 percent of the area of all taxable real property that
250	250	is liable for assessment under the proposal.
251	251	(c) A [The] petition filed with the municipality may be
252	252	filed with the municipal secretary or other officer performing the
253	253	functions of the municipal secretary. A petition filed with the
254	254	county may be filed with the county clerk or other officer
255	255	designated by the commissioners court. A petition filed with any
256	256	other political subdivision exercising powers under this
257	257	subchapter may be filed with the political subdivision's governing
258	258	body.
259	259	Sec. 372.006. FINDINGS. (a) If a petition that complies
260	260	with this subchapter is filed, the governing body of the
261	261	municipality or county may make findings by resolution as to:
262	262	(1) the advisability of the proposed improvements;
263	263	(2) the [improvement, its] estimated qualified costs
264	264	of the proposed improvements; and
265	265	(3) [cost,] the method of assessment[, and the
266	266	apportionment of cost between the proposed improvement district and
267	267	the municipality or county as a whole].
268	268	(b) The governing body's findings under this section are
269	269	conclusive.
270	270	Sec. 372.007. FEASIBILITY REPORT. (a) Before holding the
271	271	hearing required by Section 372.009, the governing body of the
272	272	municipality may use the services of municipal employees, the
273	273	governing body of the county may use the services of county
274	274	employees, or the governing body of the municipality or county may
275	275	employ consultants to prepare a report to determine whether
276	276	improvements [an improvement] should be made as proposed by
277	277	petition or otherwise or whether improvements [the improvement]
278	278	should be made in combination with other improvements authorized
279	279	under this subchapter. The governing body may also require that a
280	280	preliminary estimate of the qualified costs [cost] of improvements
281	281	[the improvement] or a combination of improvements be made.
282	282	(b) For the purpose of determining the feasibility and
283	283	desirability of a public [an] improvement district, the governing
284	284	body may take other preliminary steps before the hearing required
285	285	by Section 372.009 and[,] before establishing a public improvement
286	286	district[, or before entering into a contract].
287	287	Sec. 372.008. ADVISORY BODY. (a) The [After receiving a
288	288	petition that complies with Section 372.005, the] governing body of
289	289	the municipality or county, on the governing body's own initiative
290	290	or after receiving a petition that complies with Section 372.005,
291	291	may appoint an advisory body with the responsibility of developing
292	292	and recommending an improvement plan to the governing body.
293	293	(b) The composition of an [the] advisory body, if
294	294	established, must include:
295	295	(1) owners of taxable real property representing more
296	296	than 50 percent of the appraised value of taxable real property
297	297	liable for assessment under the proposal, as determined by the
298	298	current roll of the appraisal district in which the property is
299	299	located; and
300	300	(2) record owners of real property liable for
301	301	assessment under the proposal who:
302	302	(A) constitute more than 50 percent of all record
303	303	owners of property that is liable for assessment under the
304	304	proposal; or
305	305	(B) own taxable real property that constitutes
306	306	more than 50 percent of the area of all taxable real property that
307	307	is liable for assessment under the proposal.
308	308	(c) The members of the advisory body serve at the will of the
309	309	governing body of the municipality or county creating the public
310	310	improvement district and may be removed at any time.
311	311	Sec. 372.009. HEARING. (a) A public improvement district
312	312	may be established and improvements provided by the district may be
313	313	financed under this subchapter only after the governing body of the
314	314	municipality or county holds a public hearing on the advisability
315	315	of the improvements [improvement].
316	316	(b) The hearing may be adjourned from time to time until the
317	317	governing body makes findings by resolution as to:
318	318	(1) the advisability of each [the] improvement;
319	319	(2) the nature of each [the] improvement;
320	320	(3) the estimated qualified costs [cost] of each [the]
321	321	improvement;
322	322	(4) the boundaries of the [public improvement]
323	323	district; and
324	324	(5) the method of assessment[; and
325	325	[(6) the apportionment of costs between the district
326	326	and the municipality or county as a whole].
327	327	(c) Notice of the hearing must be given in a newspaper of
328	328	general circulation in the municipality or county. If any part of
329	329	the public improvement district is to be located in the
330	330	municipality's extraterritorial jurisdiction or if any part of the
331	331	improvements is to be undertaken in the municipality's
332	332	extraterritorial jurisdiction, the notice must also be filed with
333	333	the municipal secretary or other officer performing the duties of
334	334	the municipal secretary and published [given] in a newspaper of
335	335	general circulation in the part of the extraterritorial
336	336	jurisdiction in which the district is to be located or in which the
337	337	improvements are to be undertaken. The final publication of notice
338	338	must be made before the 15th day before the date of the hearing. The
339	339	notice must state:
340	340	(1) the time and place of the hearing;
341	341	(2) the general nature of the proposed improvements
342	342	[improvement];
343	343	(3) the estimated qualified costs [cost] of the
344	344	proposed improvements [improvement];
345	345	(4) the boundaries of the proposed public improvement
346	346	[assessment] district; and
347	347	(5) the proposed method of assessment[; and
348	348	[(6) the proposed apportionment of cost between the
349	349	improvement district and the municipality or county as a whole].
350	350	(d) Written notice containing the information required by
351	351	Subsection (c) must be mailed before the 15th day before the date of
352	352	the hearing. The notice must be addressed to "Property Owner" and
353	353	mailed to the current address of the owner, as reflected on tax
354	354	rolls, of property subject to assessment under the proposed public
355	355	improvement district.
356	356	Sec. 372.010. IMPROVEMENT ORDER. (a) During the six-month
357	357	period after the date of the final adjournment of the hearing under
358	358	Section 372.009, the governing body of the municipality or county
359	359	may authorize the creation of a public [an] improvement district
360	360	subject to Section 372.012 if, by majority vote of all members of
361	361	the governing body, the governing body adopts [members adopt] a
362	362	resolution authorizing the district in accordance with its finding
363	363	as to the advisability of the improvements [improvement].
364	364	(b) An authorization takes effect when it has been published
365	365	one time in a newspaper of general circulation in the municipality
366	366	or county. If any part of the [improvement] district is located in
367	367	the municipality's extraterritorial jurisdiction or if any part of
368	368	the improvements is to be undertaken in the municipality's
369	369	extraterritorial jurisdiction, the authorization does not take
370	370	effect until the notice is also given one time in a newspaper of
371	371	general circulation in the part of the extraterritorial
372	372	jurisdiction in which the district is located or in which the
373	373	improvements are to be undertaken.
374	374	(c) Actual construction of improvements [an improvement]
375	375	may not begin, and acquisition of existing improvements may not
376	376	occur, until after the 20th day after the date the authorization
377	377	takes effect and may not begin if during that 20-day period written
378	378	protests signed by at least two-thirds of the owners of record of
379	379	property within the [improvement] district or by the owners of
380	380	record of property comprising at least two-thirds of the total area
381	381	of the district are filed with the municipal [or county] secretary
382	382	or other officer performing the duties of the municipal [or county]
383	383	secretary or the county clerk or other officer designated by the
384	384	commissioners court. A person whose name appears on a protest may
385	385	withdraw the name from the protest at any time before the governing
386	386	body of the municipality or county convenes to determine the
387	387	sufficiency of the protest.
388	388	(d) Before the levy of assessments under Section 372.017,
389	389	the property owners in the district who signed the original
390	390	petition may petition the governing body to amend the resolution
391	391	creating the district adopted under Subsection (a) to amend the
392	392	estimated qualified costs of the improvements, including adding or
393	393	deleting improvement projects. The governing body shall provide
394	394	notice of the owners' petition and hold a public hearing as provided
395	395	by Section 372.009 to make findings, by amended resolution, of the
396	396	nature and estimated qualified costs of each improvement. A county
397	397	or other entity that proposes to amend a resolution under this
398	398	subsection in the corporate boundaries or extraterritorial
399	399	jurisdiction of a municipality shall provide notice to the
400	400	municipality on or before the 30th day before the date the entity
401	401	amends the resolution.
402	402	Sec. 372.011. DISSOLUTION. (a) A public hearing may be
403	403	[called and] held after giving notice in the same manner as a
404	404	hearing under Section 372.009 for the purpose of dissolving a
405	405	district if a petition requesting dissolution is filed and the
406	406	petition contains the signatures of at least enough property owners
407	407	in the district to make a petition sufficient under Section
408	408	372.005(b). If the district is dissolved, the district nonetheless
409	409	shall remain in effect for the purpose of meeting obligations of
410	410	indebtedness for improvements.
411	411	(b) A district may be dissolved at the discretion of the
412	412	governing body without a petition only if no assessments have been
413	413	levied on property in the district or if assessments previously
414	414	levied have been paid in full and the district has no other
415	415	outstanding obligations. A dissolution under this subsection may
416	416	not occur until after the governing body holds a hearing and gives
417	417	notice in the manner required by Section 372.009.
418	418	Sec. 372.012. AREA OF DISTRICT. The area of a public
419	419	improvement district to be assessed according to the findings of
420	420	the governing body of the municipality or county establishing the
421	421	boundaries may include contiguous and noncontiguous tracts of land
422	422	and may be less than the area described in the proposed boundaries
423	423	stated by the notice under Section 372.009. The area to be assessed
424	424	may not include property not described by the notice as being within
425	425	the proposed boundaries of the district unless a hearing is held to
426	426	include the property and notice for the hearing is given in the same
427	427	manner as notice under Section 372.009.
428	428	Sec. 372.013. SERVICE PLAN. (a) The advisory body shall
429	429	prepare an ongoing service plan and present the plan to the
430	430	governing body of the municipality or county for review and
431	431	approval. The governing body may assign responsibility for the
432	432	plan to the employees of the governing body or an authorized
433	433	instrumentality or to another entity instead [in the absence] of an
434	434	advisory body.
435	435	(b) The plan must cover a period of at least five years and
436	436	must also define the annual indebtedness and the projected
437	437	qualified costs for improvements.
438	438	(c) The plan shall be reviewed and updated annually for the
439	439	purpose of determining the annual budget for improvements. As part
440	440	of the annual update, a revised assessment roll must be prepared to
441	441	reflect any division of parcels and any reallocation of assessments
442	442	based on the division.
443	443	Sec. 372.014. ASSESSMENT PLAN; PAYMENT BY EXEMPT
444	444	JURISDICTIONS. (a) An assessment plan must be included in the
445	445	annual service plan prepared under Section 372.013.
446	446	(b) The municipality or county is responsible for payment of
447	447	assessments against exempt municipal or county property in the
448	448	district if any assessments are levied. Payment of assessments by
449	449	other exempt jurisdictions must be established by contract.
450	450	(c) The assessment plan may require the district to be
451	451	divided into development phases and, subject to Sections 372.016
452	452	and 372.017, may levy assessments periodically in separate
453	453	development phases or may stagger the collection of assessments,
454	454	with different development phases in the district assigned
455	455	different payment and collection dates. The development phases and
456	456	staggered collection dates may be coordinated with the installation
457	457	of the improvements or with the maturity dates of installation
458	458	purchase or reimbursement contract obligations or with temporary
459	459	notes, time warrants, or bonds [An assessment paid by the
460	460	municipality or county under this subsection is considered to have
461	461	been paid by special assessment for the purposes of Subsection
462	462	(a)].
463	463	Sec. 372.015. DETERMINATION OF ASSESSMENT. (a) The
464	464	governing body of the municipality or county shall apportion the
465	465	qualified costs [cost] of an improvement to be assessed against
466	466	property in a public [an] improvement district. The apportionment
467	467	shall be made on the basis of special benefits accruing to the
468	468	property because of the improvement.
469	469	(b) The qualified costs [Cost] of an improvement may be
470	470	assessed:
471	471	(1) equally per front foot or square foot;
472	472	(2) according to the value of the property as
473	473	determined by the governing body, with or without regard to
474	474	improvements on the property; or
475	475	(3) in any other manner that results in imposing equal
476	476	shares of the qualified costs [cost] on property similarly
477	477	benefitted.
478	478	(c) The governing body may establish by ordinance or order:
479	479	(1) reasonable classifications and formulas for the
480	480	apportionment of the qualified costs [cost] between the
481	481	municipality or county and the area to be assessed; and
482	482	(2) the methods of assessing the special benefits for
483	483	various classes of improvements.
484	484	(d) The amount of assessment for each property owner may be:
485	485	(1) adjusted following the annual review of the
486	486	service plan; and
487	487	(2) reallocated, but not increased, if an assessed
488	488	parcel has been divided.
489	489	(e) Notice of any reallocation of assessments shall be given
490	490	to the property owner of the divided parcel.
491	491	(f) The findings, determinations, and assessments made by
492	492	the governing body under this section are conclusive.
493	493	Sec. 372.016. ASSESSMENT ROLL. (a) The [After the total
494	494	cost of an improvement is determined, the governing body of the]
495	495	municipality or county shall prepare a proposed assessment roll
496	496	based on the estimated qualified costs of the improvements. The
497	497	roll must state the assessment against each parcel of land in the
498	498	district and[, as determined by] the method of assessment [chosen
499	499	by the municipality or county under this subchapter].
500	500	(b) The [governing body shall file the] proposed assessment
501	501	roll must be filed with the municipal secretary or other officer
502	502	performing the functions of the municipal secretary or in a
503	503	district formed by a county, the county tax assessor-collector.
504	504	The proposed assessment roll is subject to public inspection. When
505	505	the assessment roll is filed, the appropriate designated officer
506	506	described by this subsection shall [The governing body shall
507	507	require the municipal secretary or other officer or county tax
508	508	assessor-collector to] publish notice of the governing body's
509	509	intention to consider the proposed assessments at a public hearing.
510	510	The notice must be published in a newspaper of general circulation
511	511	in the municipality or county before the 10th day before the date of
512	512	the hearing. If any part of the public improvement district is
513	513	located in the municipality's extraterritorial jurisdiction or if
514	514	any part of the improvements is to be undertaken in the
515	515	municipality's extraterritorial jurisdiction, the notice must also
516	516	be published, before the 10th day before the date of the hearing, in
517	517	a newspaper of general circulation in the part of the
518	518	extraterritorial jurisdiction in which the district is located or
519	519	in which the improvements are to be undertaken. The notice must
520	520	state:
521	521	(1) the date, time, and place of the hearing;
522	522	(2) the general nature of the improvements
523	523	[improvement];
524	524	(3) the qualified costs [cost] of the improvements
525	525	[improvement];
526	526	(4) the boundaries of the [assessment] district; and
527	527	(5) that written or oral objections will be considered
528	528	at the hearing.
529	529	(c) When the assessment roll is filed under Subsection (b),
530	530	the appropriate designated [municipal secretary or other] officer
531	531	shall mail to the owners of property liable for assessment a notice
532	532	of the hearing. The notice must contain the information required by
533	533	Subsection (b) and the appropriate designated [secretary or other]
534	534	officer shall mail the notice to the last known address of the
535	535	property owner. The failure of a property owner to receive notice
536	536	does not invalidate the proceeding.
537	537	Sec. 372.017. LEVY OF ASSESSMENTS [ASSESSMENT]. (a) At or
538	538	on the adjournment of the hearing referred to by Section 372.016 on
539	539	proposed assessments, the governing body of the municipality or
540	540	county must hear and pass on any objection to a proposed assessment.
541	541	The governing body may:
542	542	(1) amend a proposed assessment on any parcel; and
543	543	(2) initially or by amendment, provide for reductions
544	544	of the amount of the annual assessment installments if and to the
545	545	extent other revenues of the municipality or county of any of the
546	546	types described by Section 372.026(e) are pledged or become
547	547	available to pay all or part of installment purchase or
548	548	reimbursement contract obligations or temporary notes, time
549	549	warrants, revenue bonds, special assessment bonds, or certificates
550	550	of obligation that are payable in whole or in part from the
551	551	assessment installments.
552	552	(b) After all objections have been heard and the governing
553	553	body has passed on the objections, the governing body by ordinance
554	554	or order shall levy the assessment in the amount required to pay
555	555	qualified costs as a special assessment on the property. The
556	556	governing body by ordinance or order shall specify the method of
557	557	payment of the assessment. The governing body may provide that
558	558	assessments be paid in periodic installments. The installments may
559	559	be in equal or different annual amounts, but must be in amounts each
560	560	year necessary to meet annual qualified costs. The installments
561	561	[for improvements and] must continue for a period and be in amounts
562	562	necessary to retire any [the] indebtedness or obligation to pay or
563	563	reimburse for the qualified costs, including the proper
564	564	administration of the district [on the improvements]. The
565	565	obligation to pay installments may be conditioned on the occurrence
566	566	of a future event or condition if the first periodic installment
567	567	payment of the assessment occurs on a date not later than the fifth
568	568	anniversary of the date the assessment was levied.
569	569	(c) The governing body may:
570	570	(1) levy multiple assessments on property in the
571	571	district to finance all or part of public improvements and must
572	572	comply with Section 372.016 for each assessment;
573	573	(2) execute and deliver installment purchase or
574	574	reimbursement contracts or temporary notes or time warrants or
575	575	issue revenue bonds, special assessment bonds, or certificates of
576	576	obligation to pay the qualified costs or to refund previously
577	577	executed installment purchase or reimbursement contracts or
578	578	temporary notes or time warrants; and
579	579	(3) secure the obligations described by Subdivision
580	580	(2) by pledging one or more of the assessments levied under this
581	581	subchapter.
582	582	Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An
583	583	assessment bears interest at the rate and for the period specified
584	584	by the governing body of the municipality or county, but may not
585	585	exceed a rate that is [one-half of] one percent higher than the
586	586	actual interest rate paid on any installment purchase or
587	587	reimbursement contract obligation or temporary note or time warrant
588	588	[the public debt] used to finance or to evidence an obligation to
589	589	pay for the improvement. If revenue bonds, special assessment
590	590	bonds, or certificates of obligation are issued to pay or refund any
591	591	of the obligations described by this subsection, the annual
592	592	interest rate is adjusted to a rate not to exceed one percent higher
593	593	than the actual rate paid on the bonds or certificates, if the rate
594	594	is lower than the rate on the obligations. Interest on the
595	595	assessment between the effective date of the ordinance or order
596	596	levying the assessment and the date the first installment is
597	597	payable shall be added to the first installment. The interest on
598	598	any delinquent installment shall be added to each subsequent
599	599	installment until all delinquent installments are paid. The added
600	600	interest payable on an installment purchase or reimbursement
601	601	contract or a temporary note, time warrant, or bond under this
602	602	subsection may be used by a municipality or county to pay qualified
603	603	costs of improvements or the costs of administration of the
604	604	district, including the enforcement of assessments or the payment
605	605	or prepayment of obligations.
606	606	(b) An assessment or reassessment, with interest, the
607	607	expense of collection, and reasonable attorney's fees, if incurred,
608	608	is a first and prior lien against the property assessed, superior to
609	609	all other liens and claims except liens or claims for [state,]
610	610	county, special [school] district, or municipality ad valorem
611	611	taxes, and is a personal liability of and charge against the owners
612	612	of the property regardless of whether the owners are named. The
613	613	lien is effective from the date of the ordinance or order levying
614	614	the assessment until the assessment is paid in full and may be
615	615	enforced by the governing body in the same manner that an ad valorem
616	616	tax lien against real property may be enforced by the governing
617	617	body. On the sale of assessed property, any installment or portion
618	618	of an assessment that is or will be payable for the property during
619	619	the year of the sale shall be prorated between the buyer and the
620	620	seller in the same manner as ad valorem taxes are prorated between a
621	621	buyer and seller. Delinquent installments of the assessment shall
622	622	incur interest, penalties, and [attorney's] fees in the same manner
623	623	as delinquent ad valorem taxes.
624	624	(c) A district assessment on property under this subchapter
625	625	runs with the land. Any portion of an assessment payment obligation
626	626	that is not yet due is not eliminated by the foreclosure of an ad
627	627	valorem tax lien. Any purchaser of property at a foreclosure sale
628	628	under an ad valorem tax lien takes the property subject to any
629	629	assessment payment obligation that is not yet due and to the terms
630	630	of payment under the applicable assessment ordinance or order.
631	631	(d) The owner of assessed property may pay at any time on any
632	632	parcel or lot the entire assessment, with interest that:
633	633	(1) has accrued on the assessment; and
634	634	(2) will accrue on the assessment until the next
635	635	scheduled prepayment or redemption date on the installment purchase
636	636	or reimbursement contract or temporary note, time warrant, revenue
637	637	bond, special assessment bond, or certificate of obligation that
638	638	secured the assessment[, on any lot or parcel].
639	639	Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. After notice and a
640	640	hearing, the governing body of the municipality or county may make
641	641	supplemental assessments to correct omissions or mistakes in the
642	642	assessment relating to the qualified costs [total cost] of the
643	643	improvement. Notice must be given and the hearing held under this
644	644	section in the same manner as required by Sections 372.016 and
645	645	372.017.
646	646	Sec. 372.020. REASSESSMENT. The governing body of the
647	647	municipality or county may make a reassessment or new assessment of
648	648	a parcel of land if:
649	649	(1) a court [of competent jurisdiction] sets aside an
650	650	assessment against the parcel;
651	651	(2) the governing body determines that the original
652	652	assessment is excessive; or
653	653	(3) on the written advice of counsel, the governing
654	654	body determines that the original assessment is invalid.
655	655	Sec. 372.021. SPECIAL IMPROVEMENT DISTRICT FUND. (a) A
656	656	municipality or county that intends to create a public improvement
657	657	district may by ordinance or order establish a special improvement
658	658	district fund in the municipal or county treasury or in a bank
659	659	designated by the municipality or county to serve as a depository
660	660	bank for the district's funds.
661	661	(b) The municipality or county annually may levy a tax to
662	662	support the fund established under this section.
663	663	(c) The fund may be used to:
664	664	(1) pay the qualified costs of improvements [planning,
665	665	administration, and an improvement authorized by this subchapter];
666	666	(2) prepare preliminary plans, studies, and
667	667	engineering reports to determine the feasibility of improvements
668	668	[an improvement]; and
669	669	(3) if ordered by the governing body of the
670	670	municipality or county, pay the initial qualified costs of
671	671	improvements [cost of the improvement] until installment purchase
672	672	contracts or reimbursement contracts are entered into or temporary
673	673	notes or[,] time warrants are issued or revenue bonds, special
674	674	assessment bonds, or certificates of obligation are[, or
675	675	improvement bonds have been] issued and sold.
676	676	(d) The fund is not required to be budgeted for expenditure
677	677	during any year, but the amount of the fund must be stated in the
678	678	municipality's or county's annual budget. The amount of the fund
679	679	must be based on an annual service plan that describes the public
680	680	improvements for the fiscal year.
681	681	[(e) A grant-in-aid or contribution made to the
682	682	municipality or county for the planning and preparation of plans
683	683	for an improvement authorized under this subchapter may be credited
684	684	to the special improvement district fund.]
685	685	Sec. 372.022. SEPARATE FUNDS. (a) A separate public
686	686	improvement district fund shall be created in the municipal or
687	687	county treasury or in a designated depository bank as provided by
688	688	Section 372.021 for each district.
689	689	(b) The following revenues shall be deposited to the fund:
690	690	(1) special assessments;
691	691	(2) money, if any, contributed by the municipality or
692	692	county to pay qualified costs;
693	693	(3) proceeds [Proceeds] from the sale of revenue
694	694	bonds, if payable in part from special assessments;
695	695	(4) proceeds from the sale of special assessment bonds
696	696	or certificates of obligation;[, temporary notes, and time
697	697	warrants,] and
698	698	(5) any other sums appropriated to the fund by the
699	699	governing body of the municipality or county for the district
700	700	[shall be credited to the fund].
701	701	(c) The fund may be used solely to pay:
702	702	(1) qualified costs of improvement;
703	703	(2) amounts due on an installment purchase contract or
704	704	reimbursement amounts owed under a reimbursement contract,
705	705	temporary note, or time warrant; or
706	706	(3) any revenue bonds, special assessment bonds, or
707	707	certificates of obligation that are payable in whole or in part from
708	708	special assessments levied under this subchapter [incurred in
709	709	making an improvement].
710	710	(d) When an improvement is completed and all of the
711	711	obligations are paid in full, the balance on deposit in the special
712	712	improvement district fund that was derived from special
713	713	assessments, if any, [of the part of the assessment that is for
714	714	improvements] shall be transferred to a [the] fund established for
715	715	the retirement of bonds that are payable in whole or in part from
716	716	assessments.
717	717	Sec. 372.023. PAYMENT OF QUALIFIED COSTS. (a) The
718	718	qualified costs [cost] of an improvement made under this subchapter
719	719	may [must] be paid by a method or by a combination of methods
720	720	described by [in accordance with] this section and Section 372.024.
721	721	(b) The [A cost payable by the] municipality or county [as a
722	722	whole] may, on its own or under an installment purchase,
723	723	reimbursement, or other contract with a third party:
724	724	(1) erect, acquire, construct, improve, repair,
725	725	establish, install, or equip improvements; and
726	726	(2) pay all or part of the qualified costs of the
727	727	improvements [be paid] from:
728	728	(A) general funds or other revenues available for
729	729	that [the] purpose;
730	730	(B) special assessments; or
731	731	(C) the issuance and sale of general obligation
732	732	bonds, certificates of obligation, revenue bonds, or special
733	733	assessment bonds [other available general funds].
734	734	(c) The municipality or county may enter into and execute an
735	735	installment purchase or reimbursement contract with or may deliver
736	736	a nonnegotiable but transferable temporary note or time warrant to
737	737	a third party under which:
738	738	(1) the third party agrees to:
739	739	(A) erect, acquire, construct, improve, repair,
740	740	establish, install, or equip public improvements; and
741	741	(B) dedicate or sell the improvements to the
742	742	municipality, county, or authorized instrumentality; and
743	743	(2) the municipality, county, or authorized
744	744	instrumentality agrees to pay or reimburse the third party for the
745	745	qualified costs by paying accumulated amounts due under the
746	746	installment purchase or reimbursement contract, temporary note, or
747	747	time warrant from any and all of the sources described by Subsection
748	748	(b)(2) [A cost payable from a special assessment that has been paid
749	749	in full shall be paid from that assessment].
750	750	(d) Subject to Section 372.018, an installment purchase or
751	751	reimbursement contract, temporary note, or time warrant may bear
752	752	interest at a rate and for a period determined by the governing body
753	753	of the municipality or county [A cost payable from a special
754	754	assessment that is to be paid in installments and a cost payable by
755	755	the municipality or county as a whole but not payable from available
756	756	general funds or other available general improvement funds shall be
757	757	paid by the issuance and sale of revenue or general obligation
758	758	bonds].
759	759	(e) An installment purchase or reimbursement contract,
760	760	temporary note, or time warrant that is payable from installments
761	761	of assessments is subject to prepayment and redemption at any time
762	762	from the proceeds of prepayment of assessments made by a property
763	763	owner under Section 372.018(d) [While an improvement is in
764	764	progress, the governing body of the municipality or county may
765	765	issue temporary notes or time warrants to pay for the costs of the
766	766	improvement and, on completion of the improvement, issue revenue or
767	767	general obligation bonds.
768	768	[(f) The cost of more than one improvement may be paid from a
769	769	single issue and sale of bonds without other consolidation
770	770	proceedings before the bond issue.
771	771	[(g) The costs of any improvement include all costs incurred
772	772	in connection with the issuance of bonds under Section 372.024 and
773	773	may be included in the assessments against the property in the
774	774	improvement district as provided by this subchapter].
775	775	Sec. 372.024. GENERAL OBLIGATION BONDS, [AND] REVENUE AND
776	776	SPECIAL ASSESSMENT BONDS, CERTIFICATES OF OBLIGATION, AND BONDS
777	777	ISSUED BY AUTHORIZED INSTRUMENTALITY. (a) The governing body of a
778	778	municipality or county may issue:
779	779	(1) general [General] obligation bonds [issued to pay
780	780	costs under Section 372.023(d) must be issued] under [the
781	781	provisions of] Subtitles A and C, Title 9, Government Code;
782	782	(2) revenue bonds or special assessment bonds in one
783	783	or more series; and
784	784	(3) certificates of obligation under Subchapter C,
785	785	Chapter 271.
786	786	(b) A bond or obligation described by Subsection (a) may be
787	787	issued to:
788	788	(1) pay qualified costs under Section 372.023(b),
789	789	including the costs of issuing bonds; and
790	790	(2) pay or refund obligations executed or issued under
791	791	Section 372.023(c).
792	792	(c) Certificates of obligation may be payable from and
793	793	secured by installment payments of special assessments levied under
794	794	this subchapter.
795	795	(d) The governing body of the municipality or county or the
796	796	authorized instrumentality may include any term or provision
797	797	consistent with this subchapter in a revenue bond or a special
798	798	assessment bond issued under this section.
799	799	(e) The governing body of a municipality or county may
800	800	incorporate an authorized instrumentality to act on its behalf to
801	801	issue revenue bonds or special assessment bonds under this section.
802	802	The governing body may enter into agreements and contracts with the
803	803	authorized instrumentality to transfer pledged revenues, funds,
804	804	and special assessments to or for the account of the authorized
805	805	instrumentality at the times and as required by the terms of the
806	806	resolution authorizing the issuance of the revenue bonds or special
807	807	assessment bonds. Any bonds issued by an authorized
808	808	instrumentality must be approved by the governing body of the
809	809	municipality or county before issuance and delivery to the
810	810	purchaser.
811	811	(f) To the extent consistent with this subchapter, an
812	812	authorized instrumentality shall issue revenue bonds or special
813	813	assessment bonds under:
814	814	(1) Chapter 303, if the authorized instrumentality is
815	815	a public facility corporation; or
816	816	(2) Subchapter D, Chapter 431, Transportation Code, if
817	817	the authorized instrumentality is a local government corporation
818	818	[Revenue bonds issued to pay costs under that subsection may be
819	819	issued from time to time in one or more series and are to be payable
820	820	from and secured by liens on all or part of the revenue derived from
821	821	improvements authorized under this subchapter, including revenue
822	822	derived from installment payments of special assessments].
823	823	Sec. 372.0241. SPECIAL ASSESSMENT PUBLIC IMPROVEMENT
824	824	DISTRICT MANAGEMENT POLICY. (a) The governing body of a
825	825	municipality or county may develop, adopt, and amend a special
826	826	assessment public improvement district management policy.
827	827	(b) The policy may establish the general requirements and
828	828	standards for and the preconditions to:
829	829	(1) the creation of a public improvement district
830	830	under this subchapter;
831	831	(2) the execution and issuance of installment purchase
832	832	or reimbursement contracts or temporary notes or time warrants; and
833	833	(3) the issuance of any bonds or certificates of
834	834	obligation payable in whole or in part from special assessments.
835	835	(c) If a management policy is adopted, compliance with the
836	836	terms of the policy, including any amendments to the policy, is
837	837	required for:
838	838	(1) the execution of any installment purchase or
839	839	reimbursement contracts or temporary notes or time warrants;
840	840	(2) the issuance of any revenue bonds or special
841	841	assessment bonds by the municipality or county or by an authorized
842	842	instrumentality; and
843	843	(3) the issuance of any certificates of obligation by
844	844	a municipality or county.
845	845	Sec. 372.025. TERMS AND CONDITIONS OF BONDS. (a) Revenue
846	846	bonds and special assessment bonds issued under Section 372.024
847	847	must be authorized by:
848	848	(1) ordinance, if issued by a municipality;
849	849	(2) order, if issued by a county; and
850	850	(3) resolution, if issued by an authorized
851	851	instrumentality.
852	852	(b) Revenue bonds and special assessment bonds may be issued
853	853	to mature serially or in any other manner but must mature not later
854	854	than 40 years after their date. A provision may be made for the
855	855	subsequent issuance of additional parity bonds or subordinate lien
856	856	bonds secured in whole or in part by any assessments or any other
857	857	revenues authorized by this subchapter under terms and conditions
858	858	specified in the ordinance, [or] order, or resolution authorizing
859	859	the issuance of the bonds.
860	860	(c) Revenue bonds, special assessment bonds, and
861	861	certificates of obligation may be subject to redemption before
862	862	maturity at the option of the issuer and at the times and in the
863	863	manner provided by the ordinance, order, or resolution authorizing
864	864	the issuance. Revenue bonds and certificates of obligation that
865	865	are secured in part by a pledge of special assessments and all
866	866	special assessment bonds are subject to mandatory redemption at
867	867	least semiannually from funds provided by assessed parties, if any,
868	868	as prepayment of installments of special assessments under Section
869	869	372.018(d).
870	870	(d) Revenue bonds and special assessment bonds shall be
871	871	executed in the manner and by the persons required by the ordinance,
872	872	order, or resolution authorizing the issuance.
873	873	(e) Revenue bonds and special assessment [(b) The] bonds
874	874	[shall be executed and the bonds] and any interest coupons
875	875	appertaining to the bonds [them] are negotiable instruments within
876	876	the meaning and for all purposes of the Uniform Commercial Code
877	877	(Section 1.101 et seq., Business & Commerce Code).
878	878	(f) The ordinance, [or] order, or resolution authorizing
879	879	the issuance of the revenue bonds or special assessment bonds must
880	880	specify:
881	881	(1) whether the bonds may be registered [are issued
882	882	registrable] as to principal alone or as to both principal and
883	883	interest;
884	884	(2) whether the bonds are redeemable before maturity;
885	885	(3) the form, denomination, and manner of issuance;
886	886	(4) the terms, conditions, and other details applying
887	887	to the bonds including the price, terms, and interest rates on the
888	888	bonds; and
889	889	(5) the manner of sale of the bonds.
890	890	(g) [(c)] The ordinance, [or] order, or resolution
891	891	authorizing the issuance of the bonds may specify that the proceeds
892	892	from the sale of the bonds:
893	893	(1) be used to pay interest on the bonds during and
894	894	after the period of acquisition or construction of an improvement
895	895	financed through the sale of the bonds;
896	896	(2) be used for creating a reserve fund for payment of
897	897	the principal of and interest on the bonds and for creating other
898	898	funds; [and]
899	899	(3) be used for the payment of any other qualified
900	900	costs as determined by the governing body of the municipality or
901	901	county or by the authorized instrumentality; and
902	902	(4) may be placed in time deposit or invested, until
903	903	needed.
904	904	Sec. 372.026. PLEDGES. (a) For the payment of [bonds
905	905	issued under this subchapter and the payment of] principal,
906	906	interest, and any other amounts payable on or with respect to any
907	907	bonds issued by a municipality or county under this subchapter
908	908	[required or permitted in connection with the bonds], the governing
909	909	body of the municipality or county may pledge:
910	910	(1) all or part of the income from improvements
911	911	financed under this subchapter, including income received in
912	912	installment payments from special assessments; and
913	913	(2) if the payment is for the payment of revenue bonds,
914	914	any other revenue described by Subsection (e) [under Section
915	915	372.023].
916	916	(b) For the payment of principal, interest, and any other
917	917	amounts payable on or with respect to bonds issued by an authorized
918	918	instrumentality under this subchapter, the authorized
919	919	instrumentality may pledge all or part of the assessments or other
920	920	revenues, if any, that are to be transferred and paid to the
921	921	authorized instrumentality by the municipality or county under an
922	922	agreement entered into between the parties under Section
923	923	372.024(e).
924	924	(c) Pledged income must be [fixed and collected in amounts]
925	925	sufficient, with other pledged resources, if any, to pay principal,
926	926	interest, and other expenses related to the bonds, and to the extent
927	927	required by the ordinance, [or] order, or resolution authorizing
928	928	the bonds, to pay for the operation, maintenance, and other
929	929	expenses related to improvements authorized by this subchapter.
930	930	(d) Bonds issued by a municipality or county [(c) The
931	931	bonds] may also be secured by mortgages or deeds of trust on any
932	932	real property related to the facilities authorized under this
933	933	subchapter that are owned or are to be acquired by the municipality
934	934	or county and by chattel mortgages, liens, or security interests on
935	935	any personal property appurtenant to that real property. The
936	936	governing body may authorize the execution of trust indentures,
937	937	mortgages, deeds of trust, or other forms of encumbrances as
938	938	evidence of the security interest of the holders of the bonds in the
939	939	related property [indebtedness].
940	940	(e) [(d)] The governing body may pledge to the payment of
941	941	certificates of obligation issued by the governing body or to the
942	942	payment of revenue bonds issued by the governing body or by an
943	943	authorized instrumentality all or part of a grant, donation,
944	944	revenue, or income received or to be received from the government of
945	945	the United States or any other public or private source, whether or
946	946	not it is received pursuant to an agreement or otherwise, including
947	947	impact fees and incremental ad valorem tax revenues collected by a
948	948	municipality or by another taxing unit and municipal sales tax
949	949	collected by a municipality from all or part of a tax increment
950	950	reinvestment zone created under Chapter 311, Tax Code.
951	951	Sec. 372.027. REFUNDING BONDS. (a) Revenue bonds and
952	952	special assessment bonds issued under this subchapter and
953	953	certificates of obligation payable solely from special assessments
954	954	may be refunded or refinanced by the issuance of refunding bonds,
955	955	under terms or conditions provided [set forth] in the ordinance,
956	956	order, or resolution authorizing the issuance [ordinances or
957	957	orders] of the [municipality or county issuing the] bonds. The
958	958	provisions of this subchapter applying generally to revenue bonds
959	959	and special assessment bonds, including provisions related to the
960	960	issuance of those bonds, apply to refunding bonds of like kind
961	961	authorized by this section. The refunding bonds may be sold and
962	962	delivered in amounts necessary to pay [for] the principal,
963	963	interest, and any redemption premium of the bonds [to be refunded],
964	964	on the date of the maturity of the bonds [bond] or any redemption
965	965	date of the bonds [bond].
966	966	(b) Refunding bonds may be issued for exchange with the
967	967	bonds they are refunding. The comptroller of public accounts shall
968	968	register refunding bonds described by this subsection and deliver
969	969	the bonds to holders of bonds being refunded in accordance with the
970	970	ordinance, [or] order, or resolution authorizing the issuance of
971	971	refunding bonds. The exchange may be made in one delivery or
972	972	several installment deliveries.
973	973	(c) General obligation bonds and certificates of obligation
974	974	issued under this subchapter may be refunded in the manner provided
975	975	by law.
976	976	Sec. 372.028. APPROVAL AND REGISTRATION. (a) Revenue
977	977	bonds and special assessment bonds issued under this subchapter and
978	978	a record of the proceedings authorizing their issuance must be
979	979	submitted to the attorney general for examination. If revenue
980	980	bonds state that they are secured by a pledge of revenue or rentals
981	981	from a contract or lease, a copy of the contract or lease and a
982	982	description of the proceedings authorizing the contract or lease
983	983	must also be submitted to the attorney general.
984	984	(b) If the attorney general determines that the bonds were
985	985	authorized and the contracts or leases related to the bonds were
986	986	made in accordance with the law, the attorney general shall approve
987	987	the bonds and the contract or lease. After [On the approval of] the
988	988	attorney general approves the bonds and the contract or lease, the
989	989	comptroller of public accounts shall register the bonds.
990	990	(c) Bonds and contracts or leases approved and registered
991	991	under this section are:
992	992	(1) valid and binding obligations for all purposes in
993	993	accordance with their terms; and
994	994	(2) [are] incontestable in any court or other forum.
995	995	(d) General obligation bonds and certificates of obligation
996	996	issued under this subchapter shall be approved and registered as
997	997	provided by law.
998	998	Sec. 372.029. AUTHORIZED INVESTMENTS; SECURITY.
999	999	(a) Bonds issued under this subchapter are legal and authorized
1000	1000	investments for:
1001	1001	(1) banks, trust companies, and savings and loan
1002	1002	associations;
1003	1003	(2) all insurance companies;
1004	1004	(3) fiduciaries, trustees, and guardians; and
1005	1005	(4) interest funds, sinking funds, and other public
1006	1006	funds of the state or of an agency, subdivision, or instrumentality
1007	1007	of the state, including a county, municipality, school district, or
1008	1008	other district, public agency, or body politic.
1009	1009	(b) Bonds issued under this subchapter may be security for
1010	1010	deposits of public funds of the state or of an agency, subdivision,
1011	1011	or instrumentality of the state, including a county, municipality,
1012	1012	school district, or other district, public agency, or body politic,
1013	1013	to the extent of the market value of the bonds, if accompanied by
1014	1014	any appurtenant [unmatured] interest coupons that have not matured.
1015	1015	Sec. 372.030. SUBCHAPTER NOT EXCLUSIVE. This subchapter is
1016	1016	an alternative to other methods by which a municipality may finance
1017	1017	public improvements under applicable law [by assessing property
1018	1018	owners].
1019	1019	SECTION 2. Section 61.0572, Education Code, is amended by
1020	1020	adding Subsection (f) to read as follows:
1021	1021	(f) Approval of the board is not required for buildings or
1022	1022	other facilities financed by a public improvement district under
1023	1023	Subchapter A, Chapter 372, Local Government Code.
1024	1024	SECTION 3. Section 61.058, Education Code, is amended by
1025	1025	adding Subsection (c) to read as follows:
1026	1026	(c) This section does not apply to construction, repair, or
1027	1027	rehabilitation of buildings or other facilities financed by a
1028	1028	public improvement district under Subchapter A, Chapter 372, Local
1029	1029	Government Code.
1030	1030	SECTION 4. All governmental acts and proceedings of a
1031	1031	governmental body of a municipality or county under Subchapter A,
1032	1032	Chapter 372, Local Government Code, as that subchapter existed
1033	1033	before the effective date of this Act, to establish a public
1034	1034	improvement district, designate improvements, levy assessments,
1035	1035	and finance costs of improvements in response to a petition filed
1036	1036	with the governing body that conformed to the requirements of
1037	1037	Section 372.005, Local Government Code, as that section existed
1038	1038	before the effective date of this Act, are validated and confirmed
1039	1039	in all respects.
1040	1040	SECTION 5. This Act takes effect immediately if it receives
1041	1041	a vote of two-thirds of all the members elected to each house, as
1042	1042	provided by Section 39, Article III, Texas Constitution. If this
1043	1043	Act does not receive the vote necessary for immediate effect, this
1044	1044	Act takes effect September 1, 2009.
1045	1045	______________________________ ______________________________
1046	1046	President of the Senate Speaker of the House
1047	1047	I hereby certify that S.B. No. 978 passed the Senate on
1048	1048	May 7, 2009, by the following vote: Yeas 29, Nays 2; and that the
1049	1049	Senate concurred in House amendment on May 30, 2009, by the
1050	1050	following vote: Yeas 29, Nays 2.
1051	1051	______________________________
1052	1052	Secretary of the Senate
1053	1053	I hereby certify that S.B. No. 978 passed the House, with
1054	1054	amendment, on May 27, 2009, by the following vote: Yeas 148,
1055	1055	Nays 0, one present not voting.
1056	1056	______________________________
1057	1057	Chief Clerk of the House
1058	1058	Approved:
1059	1059	______________________________
1060	1060	Date
1061	1061	______________________________
1062	1062	Governor