By: Elkins H.B. No. 3246
A BILL TO BE ENTITLED
AN ACT
relating to public improvement districts designated by a
municipality or county.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 372.0015, Local Government Code, is
amended to read as follows:
Sec. 372.0015. DEFINITION. In this subchapter,
DEFINITIONS. In this subchapter:
(1) "costs" mean costs and expenses paid or incurred
before, during, or after a public improvement district is
established and in connection with or related to the undertaking
and funding of public improvement projects authorized by Section
372.003; and
(2) "extraterritorial jurisdiction" means
extraterritorial jurisdiction as determined under Chapter 42,
Local Government Code.
SECTION 2. Subchapter A, Chapter 372, Local Government
Code, is amended by adding Section 372.0025 to read as follows:
Sec. 372.0025 PUBLIC IMPROVEMENT DISTRICT. A public
improvement district may include two or more noncontiguous areas
separated by:
(1) right-of-way or other land dedicated to or owned,
leased, or used by a political subdivision or other governmental
entity, tax-exempt entity, public or private utility, or railroad;
or
(2) not more than 1,000 feet, as measured in a straight
line, between the nearest points on the property lines of the
closest situated noncontiguous areas.
SECTION 3. Sections 372.003(a), (b), and (c), Local
Government Code, are amended to read as follows:
Sec. 372.003. AUTHORIZED IMPROVEMENTS. (a) If the
governing body of a municipality or county finds that it promotes
the interests of the municipality or county, the governing body may
undertake an improvement project that confers a special benefit on
a definable part of the municipality or county or the
municipality's extraterritorial jurisdiction. A project may be
undertaken in the municipality or county or the municipality's
extraterritorial jurisdiction.
(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,
including the right to receive or provide utility service;
(10) the establishment or improvement of parks and
recreation facilities;
(11) facilities and equipment for firefighters,
police, sheriffs, and emergency service providers;
(1112) projects similar to those listed in
Subdivisions (1)-(1011);
(1213) acquisition, by purchase or otherwise, of real
property in connection with an authorized improvement;
(1314) special supplemental services for improvement
and promotion of the district, including services relating to
advertising, promotion, health and sanitation, water and
wastewater, firefighters, police, sheriffs, emergency service
providers, and other public safety, and security personnel,
business recruitment, development, recreation, and cultural
enhancement;
(1415) payment of expenses incurred in the
establishment, administration, and operation of the district;
(1516) the development, rehabilitation, or expansion
of affordable housing;
(17) acquisition, construction, maintenance, or
improvement of buildings and other facilities commonly used for
teaching, research, or the preservation of knowledge by an
institution of higher education or for auxiliary purposes of the
institution, including administration, student services and
housing, athletics, performing arts, and alumni support;
(c) A public improvement project may be limited to the
provision of the services described by Subsection (b)(1314).
SECTION 3. Chapter 372, Local Government Code, is amended
by adding Section 372.0035 to read as follows:
Sec. 372.0035. AUTHORIZED HIGHER EDUCATION FACILITIES;
LEASE TO INSTITUTION OF HIGHER EDUCATION. (a) In this section,
"institution of higher education" has the meaning assigned by
Section 61.003, Education Code.
(b) The governing body of a municipality or county that
establishes a public improvement district to finance a public
improvement project described by Section 372.003(b)(17) may enter
into a memorandum of understanding with an institution of higher
education that provides educational services in the municipality or
county under which the municipality or county leases the public
improvement project to the institution, at a nominal rate, for use
by the institution in providing teaching, research, public service,
or auxiliary enterprise activities to students of the institution.
SECTION 5. Section 372.014, Local Government Code, is
amended to add subsection (c) to read as follows:
(c) The assessment plan is intended to be flexible to
accommodate a variety of development scenarios, including:
(1) assessments against all property to pay the costs
of improvements that benefit all the property and additional
assessments levied against portions of the property to pay the
costs of improvements that benefit those portions of the property;
and
(2) assessments to pay the costs for all improvements
contemplated for all phases of development of the property with
different payment and collection dates for the different phases
determined by events established by the plan, including events
related to the future phased development of the property.
SECTION 6. Section 372.015, Local Government Code, is
amended to add subsections (e), (f), (g), and (h) to read as
follows:
(e) The annual installment of an assessment payable in
installments may be increased or decreased by the governing body of
the municipality or county as reflected in the updated annual
service plan and corresponding updated assessment roll.
(f) If a parcel is subdivided, the assessment against the
parcel before the subdivision may be reallocated among the
subdivided parcels.
(g) If two or more parcels are consolidated, the assessments
may be reallocated to the consolidated parcel.
(h) If a proposed use of an undeveloped parcel changes after
the assessment is levied against the parcel, the change in use does
not affect the validity of the assessment, and the aggregate amount
of the assessments levied against the undeveloped parcels may be
reallocated among the undeveloped parcels.
SECTION 7. Subchapter A, Chapter 372, Local Government
Code, is amended by adding Section 372.0175 to read as follows:
Sec. 372.0175. CONTRACTS FOR COLLECTION OF ASSESSMENTS.
The governing body of a municipality or county may contract with the
governing body of another taxing unit, as defined by Section 1.04,
Tax Code, or the board of directors of an appraisal district to
perform the duties of the municipality or county relating to
collection of special assessments levied under this subchapter.
SECTION 8. Sections 372.018(a), (f), and (g), Local
Government Code, are amended to read as follows:
(a) An assessment bears interest at the rate specified by
the governing body of the municipality or county beginning at the
time or times or on the occurrence of one or more events specified
by the governing body. If general obligation bonds, revenue bonds,
reimbursement agreements, installment sales contracts, time
warrants, or temporary notes are issued to finance the improvement
for which the assessment is assessed levied, the interest rate for
that the assessment may not exceed a rate that is one-half of one
percent higher than the actual interest rate paid on the debt
Interest on the assessment between the effective date of the
ordinance or order levying the assessment and the date the first
installment is payable shall be added to the first installment. The
interest on any delinquent installment shall be added to each
subsequent installment until all delinquent installments are paid.
The added interest may be used to pay administrative costs, costs of
improvements, and costs of financing, including reserves for debt
service and prepayments of assessments.
(f) Delinquent installments of the assessment shall incur
interest, penalties, and attorney's fees in the same manner as
delinquent ad valorem taxes. The owner of assessed property may pay
at any time all or any part of the assessment, with interest that
has accrued on the assessment, on any lot or parcel.
(g) The owner of assessed property may pay at any time all or
any part of the assessment, with interest that:
(1) has accrued on the assessment; and
(2) will accrue on the assessment until the next
scheduled prepayment or redemption date on the bonds, installment
sales contracts, reimbursement agreements, temporary notes, or
time warrants issued or entered into to finance or pay for the
improvements.
SECTION 9. Section 372.023, Local Government Code, is
amended by amending Subsections (a), (d), (e), and (g) and adding
Subsections (a-1) and (d-1) 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) a political subdivision or other entity exercising
the powers granted under this subchapter as authorized by other
law; or
(3) an entity that:
(A) is approved by the governing body of an
entity described by Subdivision (1) or (2); and
(B) is authorized by order, ordinance,
resolution, or other official action to act for an entity described
by Subdivision (1) or (2) [The cost of an improvement made under
this subchapter must be paid in accordance with this section].
(a-1) The payment or reimbursement may be provided before or
after a method of payment or reimbursement authorized by this
section is entered into or issued.
(d) Costs [A cost] payable from a special assessment that is
payable [to be paid] in installments may be paid by any combination
of the following methods [and a cost payable by the municipality or
county as a whole but not payable from available general funds or
other available general improvement funds shall be paid]:
(1) under an installment sales [sale] contract or a
reimbursement agreement between the municipality or county and
[with] the person who acquires, installs, or constructs the
improvements [contracts to install or construct the improvement for
which the costs apply];
(2) as provided by a temporary note or time warrant
issued by the municipality or county and payable to the [reimburse
a] person who acquires, installs, or constructs the improvements
[for money advanced or work performed in connection with an
improvement]; or
(3) by the issuance and sale of [revenue or general
obligation] bonds under Section 372.024.
(d-1) An installment sales contract, reimbursement
agreement, temporary note, or time warrant described by Subsection
(d) may be assigned by the payee without the consent of the
municipality or county.
(e) The [net effective] interest rate[, as computed for a
public security under Section 1204.005, Government Code,] on unpaid
amounts due under an installment sales contract, reimbursement
agreement, temporary note, or time warrant described by [money owed
or paid under] Subsection (d):
(1) may not exceed, for a period of not more than five
years, as determined by the governing body of the municipality or
county, five [one half of one] percent above the highest average
index [interest] rate for tax-exempt bonds reported in a daily or
[by a newspaper in a] 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) [of the contract or agreement or the issuance of the
bond, temporary note, or time warrant. The newspaper must
specialize in bonds and be acceptable as a reliable source for bond
interest rates to the governing body of the municipality or county
that enters into the contract or agreement or that issues the bond,
temporary note, or time warrant].
(g) The cost of more than one improvement may be paid:
(1) from a single issue and sale of bonds without other
consolidation proceedings before the bond issue; or
(2) under a single installment sales contract,
reimbursement agreement, temporary note, or time warrant [an
agreement with a person who contracts to install or construct the
improvement and who sells the improvement to the municipality or
county].
SECTION 10. Section 372.023(f), Local Government Code, is
repealed
SECTION 11. Section 372.024, Local Government Code, is
amended to read as follows:
Sec. 372.024. GENERAL OBLIGATION AND REVENUE BONDS.
General(a) The governing body of a municipality or county may
issue:
(1) general obligation bonds issued to pay costs under
Section 372.023(d) must be issued under the provisions of under
Subtitles A and C, Title 9, Government Code. Revenue bonds issued
to pay costs under that subsection may be issued from time to time
in one or more series and are to be payable from and secured by liens
on all or part of the revenue derived from improvements authorized
under this subchapter,;
(2) certificates of obligation under Subchapter C,
Chapter 271; and
(3) revenue bonds issued in one or more series.
(b) The bonds or obligations authorized by Subsection (a):
(1) shall be issued upon such terms as the governing
body of the municipality or county shall determine;
(2) may be issued to pay costs;
(3) may be issued to refund any bonds or obligations
entered into or issued under this subchapter (including revenue
derived from installment payments of special assessments., but not
limited to, installment sales contracts; reimbursement agreements,
temporary notes, and time warrants); and
(4) may be payable from and secured by special
assessments.
(c) If bonds or obligations are issued for the purposes
described in Subsection (b)(3) and are secured wholly or partly by
special assessments, the lien created by the originally levied
special assessments shall continue uninterrupted as security for
the bonds or obligations.
SECTION 12. Section 372.026, Local Government Code, is
amended to add Subsection (g) to read as follows:
(g) If assessment revenue is being collected to pay an
installment sales contract, reimbursement agreement, temporary
note, or time warrant, the governing body of a municipality or
county may pledge all or any part of the assessment revenue being
collected as security for and to pay general obligation bonds,
certificates of obligation, or revenue bonds issued to refund the
installment sales contract, reimbursement agreement, temporary
note, or time warrant. The pledge authorized by this subsection
shall not constitute a reassessment or new assessment and shall not
affect the original lien of the pledged assessment which shall
continue uninterrupted.
SECTION 13. 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, 2011.
COMMITTEE AMENDMENT NO. 1
Amend H.B. 3246 (introduced version), after Section 12 of the
bill, by inserting the following new Section 13 and renumbering the
subsequent section accordingly:
SECTION 13. Chapter 372, Local Government Code is amended
to add Sec. 372.031 as follows:
Sec. 372.031. ECONOMIC FEASIBILITY OF BONDS PAYABLE FROM
ASSESSMENTS. (a) Prior to the issuance of bonds or obligations
payable wholly or partly from assessments, a municipality or county
issuing such bonds must find and determine the following:
(i) all underground water, wastewater, and drainage
facilities and all road and street construction to serve assessed
property necessary to support the bonds shall be 95% complete; and
(ii) at least 25% of the property assessed necessary
to support the bonds must be developed with completed houses,
buildings or other vertical improvements.
(b) This section does not apply to general obligation bonds
or certificates of obligations.
Callegari