Texas 2021 - 87th Regular

Texas House Bill HB1543 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 1543
	1	+	By: Parker (Senate Sponsor - Creighton) H.B. No. 1543
	2	+	(In the Senate - Received from the House April 19, 2021;
	3	+	May 4, 2021, read first time and referred to Committee on Local
	4	+	Government; May 13, 2021, reported favorably by the following
	5	+	vote: Yeas 9, Nays 0; May 13, 2021, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to certain procedural requirements for public improvement
6	12		districts and transfers of property located in public improvement
7	13		districts.
8	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	15		SECTION 1. Sections 372.010(a) and (b), Local Government
10	16		Code, are amended to read as follows:
11	17		(a) During the six-month period after the date of the final
12	18		adjournment of the hearing under Section 372.009, the governing
13	19		body of the municipality or county may authorize an improvement
14	20		district if, by majority vote of all members of the governing body,
15	21		the members adopt a resolution authorizing the district in
16	22		accordance with its finding as to the advisability of the
17	23		improvement. Except for a resolution authorizing a district
18	24		described by Section 372.0035, the resolution must provide that the
19	25		authorization takes effect on the date the resolution is adopted.
20	26		(b) Not later than the seventh day after the date the
21	27		governing body of a municipality or county adopts a resolution
22	28		under Subsection (a), the municipality or county shall file a copy
23	29		of the resolution with the county clerk of each county in which all
24	30		or part of the improvement district is located [An authorization
25	31		takes effect when it has been published one time in a newspaper of
26	32		general circulation in the municipality or county. If any part of
27	33		the improvement district is located in the municipality's
28	34		extraterritorial jurisdiction or if any part of the improvements is
29	35		to be undertaken in the municipality's extraterritorial
30	36		jurisdiction, the authorization does not take effect until the
31	37		notice is also given one time in a newspaper of general circulation
32	38		in the part of the extraterritorial jurisdiction in which the
33	39		district is located or in which the improvements are to be
34	40		undertaken].
35	41		SECTION 2. Section 372.013, Local Government Code, is
36	42		amended to read as follows:
37	43		Sec. 372.013. SERVICE PLAN. (a) The advisory body shall
38	44		prepare an ongoing service plan and present the plan to the
39	45		governing body of the municipality or county for review and
40	46		approval. The governing body may approve the plan only by ordinance
41	47		or order. The governing body may assign responsibility for the plan
42	48		to another entity in the absence of an advisory body.
43	49		(b) The service plan must:
44	50		(1) cover a period of at least five years;
45	51		(2) [and must also] define the annual indebtedness and
46	52		the projected costs for improvements; and
47	53		(3) include a copy of the notice form required by
48	54		Section 5.014, Property Code.
49	55		(c) Not later than the seventh day after the date the
50	56		governing body of a municipality or county approves a service plan,
51	57		the municipality or county shall file a copy of the plan with the
52	58		county clerk of each county in which all or part of the public
53	59		improvement district is located.
54	60		(d) The governing body of the municipality or county [plan]
55	61		shall review and update the service plan [be reviewed and updated]
56	62		annually for the purpose of determining the annual budget for
57	63		improvements. Except for the service plan for a district described
58	64		by Section 372.0035, the governing body may amend or update the plan
59	65		only by ordinance or order.
60	66		(e) Not later than the seventh day after the date the
61	67		governing body of a municipality or county amends or updates the
62	68		service plan, including the notice form required by Section 5.014,
63	69		Property Code, the municipality or county shall file a copy of the
64	70		amended or updated plan with the county clerk of each county in
65	71		which all or part of the public improvement district is located.
66	72		SECTION 3. Section 5.014, Property Code, is amended to read
67	73		as follows:
68	74		Sec. 5.014. NOTICE OF OBLIGATIONS RELATED TO PUBLIC
69	75		IMPROVEMENT DISTRICT. (a) A person who proposes to sell or
70	76		otherwise convey [A seller of residential] real property that is
71	77		located in a public improvement district established under
72	78		Subchapter A, Chapter 372, Local Government Code, or Chapter 382,
73	79		Local Government Code, [and that consists of not more than one
74	80		dwelling unit located in this state] shall first give to the
75	81		purchaser of the property the [a] written notice prescribed by
76	82		Subsection (a-1) or (a-2), as applicable.
77	83		(a-1) Except for the notice prescribed by Subsection (a-2),
78	84		the notice required by Subsection (a) shall be executed by the
79	85		seller and must, except as provided by Subsection (b), read as
80	86		follows [that reads substantially similar to the following]:
81	87		NOTICE OF OBLIGATION TO PAY [PUBLIC] IMPROVEMENT DISTRICT
82	88		ASSESSMENT TO (insert name of municipality or county levying
83	89		assessment), TEXAS
84	90		CONCERNING THE FOLLOWING PROPERTY [AT]
85	91		(insert property [street] address)
86	92		As the [a] purchaser of the [this parcel of] real property
87	93		described above, you are obligated to pay assessments [an
88	94		assessment] to (insert name of [a] municipality or county, as
89	95		applicable), Texas, for the costs of a portion of a public [an]
90	96		improvement or services project (the "Authorized Improvements")
91	97		undertaken for the benefit of the property within (insert name of
92	98		public improvement district) (the "District") created [by a public
93	99		improvement district] under (insert Subchapter A, Chapter 372,
94	100		Local Government Code, or Chapter 382, Local Government Code, as
95	101		applicable).
96	102		AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE
97	103		AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF
98	104		THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN
99	105		ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON
100	106		THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE
101	107		COSTS, AND DELINQUENCY COSTS.
102	108		The exact amount of the assessment may be obtained from
103	109		(insert name of municipality or county, as applicable). The exact
104	110		amount of each annual installment will be approved each year by
105	111		(insert name of city council or county commissioners court, as
106	112		applicable) in the annual service plan update for the district [The
107	113		assessment may be due annually or in periodic installments]. More
108	114		information about the assessments, including [concerning] the
109	115		amounts [amount of the assessment] and [the] due dates, [of that
110	116		assessment] may be obtained from (insert name of [the] municipality
111	117		or county, as applicable) [levying the assessment].
112	118		[The amount of the assessments is subject to change.] Your
113	119		failure to pay any assessment or any annual installment may [the
114	120		assessments could] result in penalties and interest being added to
115	121		what you owe or in a lien on and the foreclosure of your property.
116	122		The undersigned purchaser acknowledges receipt of this
117	123		notice before the effective date of a binding contract for the
118	124		purchase of the real property at the address described above.
119	125		Date: __________________ ________________________________
120	126		Signature of Purchaser
121	127		(a-2) For a district described by Section 372.0035, Local
122	128		Government Code, the notice required by Subsection (a) shall be
123	129		executed by the seller and must, except as provided by Subsection
124	130		(b), read as follows:
125	131		NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO
126	132		(insert name of municipality levying assessment), TEXAS
127	133		CONCERNING THE FOLLOWING HOTEL PROPERTY
128	134		(insert property address)
129	135		As the purchaser of the real property described above, you
130	136		are obligated to pay assessments to (insert name of municipality),
131	137		Texas, for the costs of a portion of a public improvement or
132	138		services project (the "Authorized Services") undertaken for the
133	139		benefit of the property within (insert name of public improvement
134	140		district) (the "District") created under Subchapter A, Chapter 372,
135	141		Local Government Code.
136	142		AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE
137	143		AUTHORIZED SERVICES, WHICH MUST BE PAID IN FULL WITH EVERY PAYMENT
138	144		BY THE HOTEL OF LOCAL HOTEL OCCUPANCY TAX REMITTANCES TO THE
139	145		MUNICIPALITY. YOUR FAILURE TO PAY THE ASSESSMENT MAY RESULT IN
140	146		PENALTIES AND INTEREST BEING ADDED TO WHAT YOU OWE, AND MAY INCLUDE
141	147		THE PURSUIT OF ANY OTHER REMEDY THAT IS AUTHORIZED UNDER SECTION
142	148		372.0035(d), LOCAL GOVERNMENT CODE.
143	149		Information about the calculation of the assessment may be
144	150		obtained from (insert name of the municipality). The exact
145	151		assessment rate will be approved each year by (insert name of city
146	152		council) in the annual service plan update for the district. More
147	153		information about the assessments, including the assessment rate
148	154		and due dates, may be obtained from (insert name of municipality).
149	155		The undersigned purchaser acknowledges receipt of this
150	156		notice before the effective date of a binding contract for the
151	157		purchase of the real property at the address described above.
152	158		Date: __________________ ________________________________
153	159		Signature of Purchaser
154	160		(b) The seller or the municipality or county that created
155	161		the public improvement district may provide additional information
156	162		regarding the district in the notice prescribed by Subsection (a-1)
157	163		or (a-2), including whether an assessment has been levied, the
158	164		amount of the assessment, and the payment schedule for assessments.
159	165		[The seller shall deliver the notice required under Subsection (a)
160	166		to the purchaser before the effective date of an executory contract
161	167		binding the purchaser to purchase the property. The notice may be
162	168		given separately, as part of the contract during negotiations, or
163	169		as part of any other notice the seller delivers to the purchaser.
164	170		If the notice is included as part of the executory contract or
165	171		another notice, the title of the notice prescribed by this section,
166	172		the references to the street address and date in the notice, and the
167	173		purchaser's signature on the notice may be omitted.]
168	174		(c) This section does not apply to a transfer:
169	175		(1) under a court order or foreclosure sale;
170	176		(2) by a trustee in bankruptcy;
171	177		(3) to a mortgagee by a mortgagor or successor in
172	178		interest or to a beneficiary of a deed of trust by a trustor or
173	179		successor in interest;
174	180		(4) by a mortgagee or a beneficiary under a deed of
175	181		trust who has acquired the land at a sale conducted under a power of
176	182		sale under a deed of trust or a sale under a court-ordered
177	183		foreclosure or has acquired the land by a deed in lieu of
178	184		foreclosure;
179	185		(5) by a fiduciary in the course of the administration
180	186		of a decedent's estate, guardianship, conservatorship, or trust;
181	187		(6) from one co-owner to another co-owner of an
182	188		undivided interest in the real property;
183	189		(7) to a spouse or a person in the lineal line of
184	190		consanguinity of the seller;
185	191		(8) to or from a governmental entity; or
186	192		(9) of only a mineral interest, leasehold interest, or
187	193		security interest[; or
188	194		[(10) of a real property interest in a condominium].
189	195		(d) For the purposes of this section, a [If an executory]
190	196		contract for the purchase and sale of real property having a
191	197		performance period of less than six months is considered a sale
192	198		requiring notice [is entered into without the seller providing the
193	199		notice required by this section, the purchaser may terminate the
194	200		contract for any reason not later than the earlier of:
195	201		[(1) the seventh day after the date the purchaser
196	202		receives the notice; or
197	203		[(2) the date the transfer occurs as provided by the
198	204		executory contract].
199	205		[(e) The purchaser's right to terminate the executory
200	206		contract under Subsection (d) is the purchaser's exclusive remedy
201	207		for the seller's failure to provide the notice required by this
202	208		section.]
203	209		SECTION 4. Subchapter A, Chapter 5, Property Code, is
204	210		amended by adding Sections 5.0141, 5.0142, 5.0143, 5.0144, and
205	211		5.0145 to read as follows:
206	212		Sec. 5.0141. NOTICE REQUIRED BEFORE CONTRACT EXECUTION.
207	213		(a) The notice required by Section 5.014 shall be given to the
208	214		prospective purchaser before the execution of a binding contract of
209	215		purchase and sale, either separately or as an addendum or paragraph
210	216		of a purchase contract.
211	217		(b) In the event a contract of purchase and sale is entered
212	218		into without the seller providing the notice, the purchaser is
213	219		entitled to terminate the contract.
214	220		(c) If, however, the seller furnishes the notice at or
215	221		before closing the purchase and sale contract and the purchaser
216	222		elects to close even though the notice was not timely furnished
217	223		before execution of the contract, it shall be conclusively presumed
218	224		that the purchaser has waived all rights to terminate the contract
219	225		under Subsection (b) or recover damages or other remedies or rights
220	226		under Section 5.0145.
221	227		(d) Notwithstanding any provision of this section, Section
222	228		5.014, 5.0142, 5.0143, 5.0144, or 5.0145, all sellers, title
223	229		companies, real estate brokers, and examining attorneys, and any
224	230		agent, representative, or person acting on their behalf, are not
225	231		liable for damages under Section 5.0145, or for any other damages to
226	232		any person, for:
227	233		(1) failing to provide the notice to a purchaser
228	234		before execution of a binding contract of purchase and sale or at or
229	235		before the closing of the purchase and sale contract when the
230	236		municipality or county has not filed the service plan as required by
231	237		Section 372.013, Local Government Code; or
232	238		(2) unintentionally providing a notice that is not the
233	239		correct notice under the circumstances before execution of a
234	240		binding contract of purchase and sale, or at or before the closing
235	241		of the purchase and sale contract.
236	242		Sec. 5.0142. PURCHASER SIGNATURE REQUIRED. The purchaser
237	243		shall sign the notice required by Section 5.014 or the purchase
238	244		contract including the notice to evidence the receipt of notice.
239	245		Sec. 5.0143. RECORDING OF NOTICE AT CLOSING. At the closing
240	246		of purchase and sale, a separate copy of the notice required by
241	247		Section 5.014 with current information shall be executed by the
242	248		seller and purchaser, acknowledged, and recorded in the deed
243	249		records of the county in which the property is located.
244	250		Sec. 5.0144. RELIANCE ON FILED SERVICE PLAN. (a) For the
245	251		purposes of the notice required by Section 5.014, all sellers,
246	252		title companies, real estate brokers, and examining attorneys, and
247	253		any agent, representative, or person acting on their behalf, are
248	254		entitled to rely on the accuracy of the service plan as last filed
249	255		by each municipality or county under Section 372.013, Local
250	256		Government Code, in completing the notice form to be executed by the
251	257		seller and purchaser at the closing of purchase and sale.
252	258		(b) Any information taken from the service plan as last
253	259		filed by the municipality or county and the information contained
254	260		in or shown on the notice form contained in the service plan under
255	261		Section 372.013, Local Government Code, not including information
256	262		provided as to the assessments or annual installment amounts as
257	263		authorized by Section 5.014(b), shall be, for purposes of the
258	264		notice required by Section 5.014, conclusively presumed as a matter
259	265		of law to be correct.
260	266		(c) All subsequent sellers, purchasers, title insurance
261	267		companies, real estate brokers, examining attorneys, and
262	268		lienholders are entitled to rely on the service plan filed by the
263	269		municipality or county, including the notice form contained in the
264	270		service plan, under Section 372.013, Local Government Code.
265	271		(d) If the notice required by Section 5.014 is given at
266	272		closing as provided by Section 5.0141(c), a purchaser, or the
267	273		purchaser's heirs, successors, or assigns, are not entitled to
268	274		maintain an action for damages against a seller, title insurance
269	275		company, real estate broker, or lienholder, or any agent,
270	276		representative, or person acting on their behalf, because the
271	277		seller:
272	278		(1) used the notice form included in the service plan
273	279		filed by the municipality or county under Section 372.013, Local
274	280		Government Code; or
275	281		(2) relied on the filed legal description of the
276	282		public improvement district in determining whether the property is
277	283		located in the district.
278	284		(e) No action may be maintained against any title company
279	285		for failure to disclose the inclusion of the property in a public
280	286		improvement district when the municipality or county has not filed
281	287		the service plan under Section 372.013, Local Government Code, with
282	288		the clerk of each county in which the district is located.
283	289		(f) All sellers, title insurance companies, examining
284	290		attorneys, vendors of property and tax information, real estate
285	291		brokers, and lienholders, and any agent, representative, or person
286	292		acting on their behalf, are entitled to rely on the accuracy of:
287	293		(1) the service plan last filed by the municipality or
288	294		county or the information in the notice form filed by the district
289	295		under Section 372.013, Local Government Code; or
290	296		(2) for the purposes of the notice required by Section
291	297		5.014, the information in the service plan filed by the
292	298		municipality or county in effect as of January 1 of each year for
293	299		the period January 1 through December 31 of such calendar year.
294	300		Sec. 5.0145. SUITS FOR DAMAGES. (a) If any sale or
295	301		conveyance of real property within a public improvement district is
296	302		not made in compliance with Section 5.014, 5.0141, 5.0142, or
297	303		5.0143, the purchaser may institute a suit for damages under the
298	304		provisions of Subsection (b) or (e).
299	305		(b) A purchaser of real property whose sale or conveyance is
300	306		subject to the notice requirement under Section 5.014, if the sale
301	307		or conveyance of the property is not made in compliance with that
302	308		section or Section 5.0141, 5.0142, or 5.0143, may institute a suit
303	309		for damages in the amount of all costs relative to the purchase of
304	310		the property at the time of purchase, plus interest and reasonable
305	311		attorney's fees.
306	312		(c) The suit for damages under Subsection (b) may be
307	313		instituted jointly or severally against the person, firm,
308	314		corporation, partnership, organization, business trust, estate,
309	315		trust, association, or other legal entity that sold or conveyed the
310	316		property to the purchaser.
311	317		(d) Following the recovery of damages under Subsection (b),
312	318		the amount of the damages shall first be paid to satisfy all unpaid
313	319		obligations on each outstanding lien on the property and the
314	320		remainder of the damage amount shall be paid to the purchaser. On
315	321		payment of all damages respectively to the lienholders and
316	322		purchaser, the purchaser shall reconvey the property to the seller.
317	323		(e) A purchaser of real property whose sale or conveyance is
318	324		subject to the notice requirement under Section 5.014, if the sale
319	325		or conveyance of the property is not made in compliance with that
320	326		section or Section 5.0141, 5.0142, or 5.0143, may institute a suit
321	327		for damages in an amount not to exceed $5,000, plus reasonable
322	328		attorney's fees.
323	329		(f) A purchaser is not entitled to recover damages under
324	330		both Subsections (b) and (e), and entry of a final decision awarding
325	331		damages to the purchaser under either Subsection (b) or (e) shall
326	332		preclude the purchaser from recovering damages under the other
327	333		subsection.
328	334		(g) The relief provided under Subsections (b) and (e) shall
329	335		be the exclusive remedies for a purchaser aggrieved by the seller's
330	336		failure to comply with the provisions of Section 5.014, 5.0141,
331	337		5.0142, or 5.0143.
332	338		(h) An action for damages does not apply to, affect, alter,
333	339		or impair the validity of any existing vendor's lien, mechanic's
334	340		lien, or deed of trust lien on the property.
335	341		(i) A suit for damages under this section must be brought
336	342		not later than the earlier of:
337	343		(1) the 90th day after the date the purchaser receives
338	344		the first public improvement district annual assessment
339	345		installment or tax notice; or
340	346		(2) the fourth anniversary of the date the property is
341	347		sold or conveyed to the purchaser.
342	348		(j) Notwithstanding a provision of this section, a
343	349		purchaser may not recover damages under this section if the
344	350		purchaser:
345	351		(1) purchases an equity in real property and in
346	352		conjunction with the purchase assumes any liens, whether purchase
347	353		money or otherwise; and
348	354		(2) does not require proof of title by abstract, title
349	355		policy, or any other proof of title.
350	356		(k) A purchaser who purchases real property in a public
351	357		improvement district and who then sells or conveys the property
352	358		shall on closing of the subsequent sale or conveyance be
353	359		conclusively considered to have waived any prior right to damages
354	360		under this section.
355	361		SECTION 5. Section 372.010, Local Government Code, as
356	362		amended by this Act, applies only to a resolution adopted under that
357	363		section on or after the effective date of this Act. A resolution
358	364		adopted before the effective date of this Act is governed by the law
359	365		in effect on the date the resolution was adopted, and the former law
360	366		is continued in effect for that purpose.
361	367		SECTION 6. Sections 372.013(a) and (b), Local Government
362	368		Code, as amended by this Act, and Section 372.013(c), Local
363	369		Government Code, as added by this Act, apply only to a service plan
364	370		approved under that section on or after the effective date of this
365	371		Act. A service plan approved before the effective date of this Act
366	372		is governed by the law in effect on the date the service plan was
367	373		approved, and the former law is continued in effect for that
368	374		purpose.
369	375		SECTION 7. Sections 372.013(d) and (e), Local Government
370	376		Code, as added by this Act, apply only to a service plan amended or
371	377		updated under that section on or after the effective date of this
372	378		Act.
373	379		SECTION 8. Section 5.014, Property Code, as amended by this
374	380		Act, and Sections 5.0141, 5.0142, 5.0143, 5.0144, and 5.0145,
375	381		Property Code, as added by this Act, apply only to a sale or
376	382		conveyance of property for which a binding contract is executed on
377	383		or after the effective date of this Act. A sale or conveyance for
378	384		which a binding contract is executed before the effective date of
379	385		this Act is governed by the law in effect on the date the contract is
380	386		executed, and the former law is continued in effect for that
381	387		purpose.
382	388		SECTION 9. This Act takes effect September 1, 2021.
383		-	______________________________ ______________________________
384		-	President of the Senate Speaker of the House
385		-	I certify that H.B. No. 1543 was passed by the House on April
386		-	16, 2021, by the following vote: Yeas 142, Nays 3, 2 present, not
387		-	voting.
388		-	______________________________
389		-	Chief Clerk of the House
390		-	I certify that H.B. No. 1543 was passed by the Senate on May
391		-	19, 2021, by the following vote: Yeas 31, Nays 0.
392		-	______________________________
393		-	Secretary of the Senate
394		-	APPROVED: _____________________
395		-	Date
396		-	_____________________
397		-	Governor
	389	+	* * * * *