Texas 2023 - 88th Regular

Texas Senate Bill SB2349 Compare Versions

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1	1	2023S0288-1 03/09/23
2	2	By: Bettencourt S.B. No. 2349
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to consent to the creation of certain political
8	8	subdivisions.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 42.042(a), (b), (c), and (f), Local
11	11	Government Code, are amended to read as follows:
12	12	(a) A political subdivision, one purpose of which is to
13	13	supply fresh water for domestic or commercial use or to furnish
14	14	sanitary sewer services, roadways, or drainage, may not be created
15	15	in the extraterritorial jurisdiction of a municipality unless the
16	16	governing body of the municipality gives its written consent by
17	17	ordinance or resolution in accordance with this subsection and the
18	18	Water Code upon the written request to the municipality by the
19	19	persons required by law to seek creation of the political
20	20	subdivision. In giving its consent, the municipality may not place
21	21	any conditions or other restrictions on the creation of the
22	22	political subdivision other than those expressly permitted by
23	23	Sections 54.016(i) and 54.0167 [54.016(e) and (i)], Water Code. A
24	24	request for municipal consent to create a political subdivision and
25	25	the provision of related documents does not constitute an event
26	26	that triggers or deems consent to municipal annexation of the land
27	27	pursuant to an agreement under Subchapter G, Chapter 212, or
28	28	Section 43.016.
29	29	(b) If the governing body fails or refuses to give its
30	30	consent for the creation of the political subdivision, including a
31	31	water district previously created by an act of the legislature, on
32	32	mutually agreeable terms within 30 [90] days after the date the
33	33	governing body receives a written request for the consent, [a
34	34	majority of the qualified voters of the area of the proposed
35	35	political subdivision and the owners of at least 50 percent of the
36	36	land in the proposed political subdivision may petition the
37	37	governing body to make available to the area the water, sanitary
38	38	sewer services, or both that would be provided by the political
39	39	subdivision.
40	40	[(c) If, within 120 days after the date the governing body
41	41	receives the petition, the governing body fails to make a contract
42	42	with a majority of the qualified voters of the area of the proposed
43	43	political subdivision and the owners of at least 50 percent of the
44	44	land in the proposed political subdivision to provide the
45	45	services,] that failure or refusal constitutes the governing body's
46	46	consent to the creation of the proposed political subdivision.
47	47	(f) The persons who requested city consent, or their
48	48	successors and assigns, [If the municipality fails or refuses to
49	49	give its consent to the creation of the political subdivision,
50	50	including a water district previously created by an act of the
51	51	legislature, or fails or refuses to execute a contract providing
52	52	for the water or sanitary sewer services requested within the time
53	53	limits prescribed by this section, the applicant] may petition the
54	54	Texas Commission on Environmental Quality for the creation of the
55	55	political subdivision or the inclusion of the land in a political
56	56	subdivision. The commission shall allow creation or confirmation
57	57	of the creation of the political subdivision or inclusion of the
58	58	land in a proposed political subdivision on finding that the
59	59	municipality [either does not have the reasonable ability to serve
60	60	or] has failed or refused to give consent [to make a legally binding
61	61	commitment with sufficient funds available to provide water and
62	62	wastewater service adequate to serve the proposed development at a
63	63	reasonable cost to the landowner. The commitment must provide that
64	64	construction of the facilities necessary to serve the land will
65	65	begin within two years and will be substantially completed within
66	66	4-1/2 years after the date the petition was filed with the
67	67	municipality].
68	68	SECTION 2. Section 42.0425(a), Local Government Code, is
69	69	amended to read as follows:
70	70	(a) A political subdivision, one purpose of which is to
71	71	supply fresh water for domestic or commercial use or to furnish
72	72	sanitary sewer services, roadways, or drainage, may not add land
73	73	that is located in the extraterritorial jurisdiction of a
74	74	municipality unless the governing body of the municipality gives
75	75	its written consent by ordinance or resolution in accordance with
76	76	Section 42.042 [this section] and the Water Code. In giving its
77	77	consent, the municipality may not place any conditions or other
78	78	restrictions on [the expansion of] the political subdivision other
79	79	than those expressly permitted by Section 54.0167 [54.016(e)],
80	80	Water Code.
81	81	SECTION 3. The heading to Section 54.016, Water Code, is
82	82	amended to read as follows:
83	83	Sec. 54.016. CONSENT OF CITY TO IN-CITY DISTRICT.
84	84	SECTION 4. Section 54.016, Water Code, is amended by
85	85	amending Subsections (a), (b), (c), and (d) and adding Subsections
86	86	(a-1), (a-2), and (a-3) to read as follows:
87	87	(a) This section applies only to the inclusion of land
88	88	within the corporate limits of a city in a district. Section
89	89	42.042, Local Government Code, applies to the inclusion of land
90	90	within the extraterritorial jurisdiction of a city in a district.
91	91	(a-1) No land within the corporate limits of a city [or
92	92	within the extraterritorial jurisdiction of a city,] shall be
93	93	included in a district unless the city grants its written consent,
94	94	by resolution or ordinance, to the inclusion of the land within the
95	95	district in accordance with [Section 42.042, Local Government Code,
96	96	and] this section.
97	97	(a-2) The request to a city for its written consent to the
98	98	creation of a district, shall conform to the requirements of
99	99	Section 54.0166 [be signed by a majority in value of the holders of
100	100	title of the land within the proposed district as indicated by the
101	101	county tax rolls. A petition for the written consent of a city to
102	102	the inclusion of land within a district shall describe the
103	103	boundaries of the land to be included in the district by metes and
104	104	bounds or by lot and block number, if there is a recorded map or plat
105	105	and survey of the area, and state the general nature of the work
106	106	proposed to be done, the necessity for the work, and the cost of the
107	107	project as then estimated by those filing the petition. If, at the
108	108	time a petition is filed with a city for creation of a district, the
109	109	district proposes to connect to a city's water or sewer system or
110	110	proposes to contract with a regional water and wastewater provider
111	111	which has been designated as such by the commission as of the date
112	112	such petition is filed, to which the city has made a capital
113	113	contribution for the water and wastewater facilities serving the
114	114	area, the proposed district shall be designated as a "city service
115	115	district." If such proposed district does not meet the criteria for
116	116	a city service district at the time the petition seeking creation is
117	117	filed, such district shall be designated as a "noncity service
118	118	district." The city's consent shall not place any restrictions or
119	119	conditions on the creation of a noncity service district as defined
120	120	by this chapter other than those expressly provided in Subsection
121	121	(e) of this section and shall specifically not limit the amounts of
122	122	the district's bonds. A city may not require annexation as a
123	123	consent to creation of any district. A city shall not refuse to
124	124	approve a district bond issue for any reason except that the
125	125	district is not in compliance with valid consent requirements
126	126	applicable to the district].
127	127	(a-3) If a city grants its written consent without the
128	128	concurrence of the petitioner [applicant] to the creation of a
129	129	[noncity service] district containing conditions or restrictions
130	130	that the petitioning land owner or owners reasonably believe exceed
131	131	the city's powers, such land owner or owners, or their successors
132	132	and assigns, may petition the commission to create the district and
133	133	to modify the conditions and restrictions of the city's consent.
134	134	The commission may declare any provision of the consent to be null
135	135	and void. The commission may approve the creation of a district
136	136	that includes any portion of the land covered by the city's consent
137	137	to creation of the district. The legislature may create and may
138	138	validate the creation of a district that includes any portion of the
139	139	land covered by the city's consent to the creation of the district.
140	140	(b) If the governing body of a city fails or refuses to grant
141	141	permission for the inclusion of land [within its extraterritorial
142	142	jurisdiction] in a district, including a district created by a
143	143	special act of the legislature, within 60 [90] days after receipt of
144	144	a written request, the petitioning land [a majority of the electors
145	145	in the area proposed to be included in the district or the] owner or
146	146	owners, or their successors and assigns, [of 50 percent or more of
147	147	the land to be included] may petition the governing body of the city
148	148	and request the city to provide [make available to the land] the
149	149	water or sanitary sewer service on the terms, conditions, cost, and
150	150	time frame as contemplated to be provided by the district.
151	151	(c) If the governing body of the city and [a majority of the
152	152	electors or] the petitioning land owner or owners, or their
153	153	successors and assigns, [of 50 percent or more of the land to be
154	154	included] in the district fail to execute a mutually agreeable
155	155	contract providing for the water or sanitary sewer service
156	156	requested within 60 [120] days after receipt of the petition, the
157	157	failure shall constitute authorization for the inclusion of the
158	158	land in the district under the provisions of this section.
159	159	Authorization for the inclusion of such land within the district
160	160	under the provisions of this section shall mean only authorization
161	161	to initiate proceedings to include the land within the district as
162	162	otherwise provided by this Act.
163	163	(d) [The provisions of this section relating to the method
164	164	of including land in a district without securing the written
165	165	consent of a city applies only to land within the extraterritorial
166	166	jurisdiction of a city and does not apply to land within the
167	167	corporate limits of a city.] If the city fails or refuses to grant
168	168	permission for the inclusion of land in a district or to execute a
169	169	mutually agreeable contract providing for the water or sanitary
170	170	sewer service requested within the time limits contained within
171	171	Subsection (b) or (c) of this section, the petitioning land owner or
172	172	owners, or their successors or assigns, [applicant] may petition
173	173	the commission for creation of the district or inclusion of the land
174	174	in a district. The commission shall allow creation or inclusion of
175	175	the land in a proposed district upon a finding that the city either
176	176	does not have the reasonable ability to serve or has failed to
177	177	execute a mutually agreeable contract. [make a legally binding
178	178	commitment with sufficient funds available to provide water and
179	179	wastewater service adequate to serve the proposed development at a
180	180	reasonable cost to the landowner. The commitment shall provide
181	181	that construction of the facilities necessary to serve the land
182	182	shall be commenced within two years, and shall be substantially
183	183	complete within four and one-half years from the date the petition
184	184	was filed with the city.] Upon any appeal taken to the district
185	185	court from the commission ruling, all parties to the commission
186	186	hearing shall be made parties to the appeal. The court shall hear
187	187	the case within 120 days from the date the appeal is filed. If the
188	188	case is continued or appealed to a higher court beyond such 120-day
189	189	period, the court shall require the appealing party in the case of
190	190	appeal to a higher court or party requesting such continuance to
191	191	post a bond or other adequate security in the amount of damages that
192	192	may be incurred by any party as a result of such appeal or delay from
193	193	the commission action. The amount of the bond or other security
194	194	shall be determined by the court after notice and hearing. Upon
195	195	final disposition, a court may award damages, including any damages
196	196	for delays, attorney's fees, and costs of court to the prevailing
197	197	party. [Under no circumstances shall land within the corporate
198	198	limits of a city be included in a district without the written
199	199	consent, by ordinance or resolution, of the city.] The provisions
200	200	of this section shall apply whether the land is proposed to be
201	201	included in the district at the time of creation of a district or to
202	202	be included by annexation to a district. A district shall not allow
203	203	the owner of a tract to connect to the district's water or
204	204	wastewater system unless such tract is a legally subdivided lot
205	205	which is part of a recorded subdivision plat or is otherwise legally
206	206	exempt from the subdivision requirements of the applicable
207	207	governmental authority.
208	208	SECTION 5. Section 54.0161, Water Code, is amended to read
209	209	as follows:
210	210	Sec. 54.0161. REVIEW OF CREATION BY CITY AND COUNTY. (a) A
211	211	petitioner seeking to create a district all or part of which is to
212	212	be located in the extraterritorial jurisdiction of a city shall
213	213	provide evidence to the commission that the petitioner provided the
214	214	city with a copy of the petition requesting creation and the
215	215	associated application [This section applies only to a proposed
216	216	district all of which is to be located outside the corporate limits
217	217	of a municipality].
218	218	(b) A petitioner seeking [(a-1) Promptly after a petition
219	219	is filed with the commission] to create a district all of which is
220	220	to be located outside the corporate limits of a city shall provide
221	221	evidence to the commission that the petitioner provided the county
222	222	with a copy of the petition requesting creation and the associated
223	223	application [to which this section applies, the commission shall
224	224	notify the commissioners court of any county in which the proposed
225	225	district is to be located].
226	226	(c) As applicable under Subsection (a) or (b), a city or
227	227	county may review the petition requesting creation and the
228	228	associated application as to whether the project is feasible and
229	229	practicable, is necessary, and would be a benefit to the land to be
230	230	included in the district under Section 54.021. A city or county may
231	231	reasonably request to meet with the petitioner.
232	232	(d) The governing body of a city or [(a-2) The
233	233	commissioners court of a county in which the district is to be
234	234	located may review the petition for creation and other evidence and
235	235	information relating to the proposed district that the
236	236	commissioners consider necessary. Petitioners for the creation of a
237	237	district shall submit to the county commissioners court any
238	238	relevant information requested by the commissioners court.
239	239	[(b) In the event the] county may vote [commissioners court
240	240	votes] to submit information to the commission. In such instance,
241	241	the governing body [or to make a recommendation regarding the
242	242	creation of the proposed district, the commissioners court] shall
243	243	submit to the commission, at least 30 [10] days before the date set
244	244	for action on the petition, a written opinion stating:
245	245	(1) whether the governing body [commissioners court]
246	246	recommends the creation of the proposed district; and
247	247	(2) any findings, conclusions, and other information
248	248	that the governing body [commissioners court] thinks would assist
249	249	the commission in making a final determination on the petition
250	250	under Section 54.021.
251	251	(e) [(c)] In passing on a petition subject to this section,
252	252	the commission shall consider information relevant to the
253	253	determination under Section 54.021 [the written opinion] submitted
254	254	by the governing body [county commissioners court].
255	255	SECTION 6. Subchapter B, Chapter 54, Water Code, is amended
256	256	by adding Sections 54.0166 and 54.0167 to read as follows:
257	257	Sec. 54.0166. PETITION FOR CITY CONSENT. A petition to a
258	258	city for consent for inclusion of land within the corporate limits
259	259	of a city in a district must:
260	260	(1) be signed by a majority in value of the holders of
261	261	title of the land within the proposed district, as indicated by the
262	262	county tax rolls;
263	263	(2) describe the boundaries of the land to be included
264	264	in the district by metes and bounds or by lot and block number, if
265	265	there is a recorded map or plat and survey of the area; and
266	266	(3) state the general nature of the work proposed to be
267	267	done, the necessity for the work, and the cost of the project as
268	268	then estimated by those filing the petition.
269	269	Sec. 54.0167. CITY CONSENT CONDITIONS. (a) A city consent
270	270	to the inclusion of land within the corporate limits of the city or
271	271	within the extraterritorial jurisdiction of a city in a district
272	272	may impose no condition, restriction, or requirement other than the
273	273	requirements that:
274	274	(1) the district design and construct all water and
275	275	sewer facilities to serve the land in accordance with the
276	276	requirements of the commission or, for a district within the
277	277	corporate limits of a city, the generally applicable city
278	278	requirements;
279	279	(2) the district design and construct all streets,
280	280	roads, and drainage facilities to serve the land in accordance with
281	281	subdivision requirements adopted by the county in which the
282	282	district is located under Section 232.003, Local Government Code,
283	283	or, for a district within the corporate limits of a city, the
284	284	generally applicable city requirements;
285	285	(3) the district engineer certify to the city that all
286	286	district facilities are designed and constructed in accordance with
287	287	applicable regulatory requirements;
288	288	(4) the purposes for which the district may issue
289	289	bonds are restricted to purposes authorized by law for the
290	290	district;
291	291	(5) bonds issued by the district will expressly
292	292	provide that the district reserves the right to redeem the bonds on
293	293	any date subsequent to a date not later than the 15th anniversary of
294	294	the date of issuance without premium;
295	295	(6) bonds, other than refunding bonds, be sold by
296	296	public sale only after the taking of bids;
297	297	(7) no bonds, other than refunding bonds, will be sold
298	298	by the district for less that 95 percent of par;
299	299	(8) the net effective interest rate on bonds sold by
300	300	the district, taking into account any discount or premium as well as
301	301	the interest rate borne by the bonds, will not exceed two percent
302	302	above the highest average interest rate reported by the Bond Buyer
303	303	in its weekly "20-Bond Index" during the one-month period next
304	304	preceding the date notice of the sale of the bonds is given, and
305	305	that bids for the bonds will be received not more than 45 days after
306	306	notice of sale of the bonds is given, unless otherwise approved by
307	307	the city or the commission;
308	308	(9) refunding bonds provide both gross debt service
309	309	savings and net present value savings of three percent or more of
310	310	the principal amount of the refunded bonds, as determined by the
311	311	district financial advisor, unless otherwise approved by the city
312	312	or the commission; and
313	313	(10) the date of the latest scheduled maturity of
314	314	refunding bonds be not later than the date of the latest scheduled
315	315	maturity of the refunded bonds, unless otherwise approved by the
316	316	city or the commission.
317	317	(b) A city consent to the inclusion of land in a district may
318	318	not impose a condition, restriction, or requirement other than the
319	319	requirements of Subsection (a). By way of illustration, a city
320	320	consent may not include a condition, restriction, or requirement
321	321	that:
322	322	(1) limits the amounts or the timing of issuance of the
323	323	bonds of the district;
324	324	(2) limits the maturities of the bonds of the
325	325	district;
326	326	(3) requires annexation into the city or inclusion in
327	327	the extraterritorial jurisdiction of the city;
328	328	(4) requires connection to the water or wastewater
329	329	system of the city or requires the city to be the retail or
330	330	wholesale water or wastewater provider, except for a district
331	331	within the corporate limits of a city;
332	332	(5) requires the payment of costs to design and
333	333	construct streets, roads, or bridges in excess of the proposed
334	334	project's rough proportionate share under Section 212.904, Local
335	335	Government Code;
336	336	(6) requires the payment of costs to design and
337	337	construct water, sewer, or drainage facilities in excess of the
338	338	district's pro rata share under the rules of the commission;
339	339	(7) requires the design or construction of facilities,
340	340	including water, sewer, drainage, and roads, in excess of
341	341	facilities otherwise necessary to serve the proposed project;
342	342	(8) requires a payment to the city, except for a
343	343	reasonable fee not to exceed $5,000 to cover the costs of processing
344	344	the city's review of the creation petition and application;
345	345	(9) requires the district or a developer of land
346	346	within the district to pay to the city a portion of the proceeds of
347	347	bonds issued by the district or any funds used by the district to
348	348	reimburse a developer;
349	349	(10) imposes any land use controls or zoning;
350	350	(11) imposes any ordinances or platting, subdivision,
351	351	or development requirements not generally applicable in the
352	352	extraterritorial jurisdiction; and
353	353	(12) requires a developer of land within the district
354	354	to enter into a development agreement.
355	355	(c) If a city grants its written consent to the creation of a
356	356	district containing conditions or restrictions that violate this
357	357	section, such conditions or restrictions are null, void, and
358	358	unenforceable and a landowner may petition the commission to create
359	359	the district and to modify the conditions and restrictions of a
360	360	city's consent. If a city has previously granted its written
361	361	consent to the creation of a district containing conditions or
362	362	restrictions that violate this section, such conditions or
363	363	restrictions are null, void, and unenforceable and a landowner or
364	364	district may petition the commission to modify the conditions and
365	365	restrictions of the city's consent. Upon the petition of a
366	366	landowner or a district, or upon the commission's own motion, the
367	367	commission shall declare any provision of the consent that violates
368	368	this section to be null, void, and unenforceable.
369	369	SECTION 7. The following laws are repealed:
370	370	(1) Section 42.0425(c), Local Government Code;
371	371	(2) Section 42.043, Local Government Code; and
372	372	(3) Sections 54.016(e) and (f), Water Code.
373	373	SECTION 8. This Act takes effect immediately if it receives
374	374	a vote of two-thirds of all the members elected to each house, as
375	375	provided by Section 39, Article III, Texas Constitution. If this
376	376	Act does not receive the vote necessary for immediate effect, this
377	377	Act takes effect September 1, 2023.