BILL ANALYSIS Senate Research Center S.B. 369 88R2824 DRS-F By: Campbell Local Government 2/27/2023 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT In 1989, The Municipal Annexation Act added Section 43.130 to the Texas Local Government Code which states that a municipality shall not impose a tax on any property annexed for limited purposes. This addition was intended to protect residents in limited purpose areas from unfair taxation when they do not benefit from municipal services, including water and wastewater services. The City of Austin has been taxing residents who live within a limited purposes area on Lake Austin without providing any services; including direct access to emergency services. This has led to longer than usual wait times on first responders arriving to the scene, which resulted in the untimely death of a Lake Austin resident. Even after this tragic event ensued, the city argues that they are not legally obligated to provide municipal services because the land was annexed before the 1989 Municipal Annexation Act was put into statute. Two Texas municipalities, who had limited purpose districts before 1989, have decided to act in good faith and not tax their residents without rendering municipal services. The City of Austin is the lone bad actor in Texas when it comes to taxing limited purpose areas without providing services. The treatment of these residents has been unfair, unreasonable, unjust, and un-Texian. It must be stopped. The Bill S.B. 369 seeks to automatically disannex certain areas, such as limited purpose districts, who are paying municipal property taxes without receiving full municipal services. (This does not apply to Sec. 43.1415 Subsection (b) 1-2) S.B. 369 is not expanding municipal requirements. The requirements listed are already in statute. This bill seeks to enforce the law and to protect residents in limited purpose districts who are unfairly taxed. Municipalities will have until December 31, 2023, to be in compliance. If the municipality fails to comply, then a person partly or wholly owning real property in the area may bring an action against the municipality. As proposed, S.B. 369 amends current law relating to disannexation of certain areas that do not receive full municipal services. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter G, Chapter 43, Local Government Code, by adding Section 43.1415, as follows: Sec. 43.1415. DISANNEXATION OF CERTAIN AREAS NOT RECEIVING FULL SERVICES. (a) Defines "full municipal services." (b) Provides that this section does not apply to an area for which the municipality: (1) is not currently required to provide full municipal services under a service plan described by Section 43.056 (Provision of Services to Annexed Area); or (2) has entered into a regulatory plan or other written agreement to extend the time for providing or waive provision of full municipal services. (c) Provides that, notwithstanding any other law, on December 31, 2023, any area in which the municipality is not providing or causing the provision of full municipal services is disannexed. (d) Authorizes a person owning real property wholly or partly located in the area, if a municipality fails or refuses to recognize the disannexation of an area under this section, to bring an action against the municipality to compel disannexation of the portion of the property located in the municipality. Authorizes the person to recover attorney's fees and court costs resulting from bringing the action if the person prevails. (e) Provides that a municipality's governmental immunity to suit and governmental immunity from liability are waived to the extent of liability created by this section. SECTION 2. Effective date: upon passage or September 1, 2023.
BILL ANALYSIS
Senate Research Center S.B. 369
88R2824 DRS-F By: Campbell
Local Government
2/27/2023
As Filed
Senate Research Center
S.B. 369
88R2824 DRS-F
By: Campbell
Local Government
2/27/2023
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
In 1989, The Municipal Annexation Act added Section 43.130 to the Texas Local Government Code which states that a municipality shall not impose a tax on any property annexed for limited purposes. This addition was intended to protect residents in limited purpose areas from unfair taxation when they do not benefit from municipal services, including water and wastewater services.
The City of Austin has been taxing residents who live within a limited purposes area on Lake Austin without providing any services; including direct access to emergency services. This has led to longer than usual wait times on first responders arriving to the scene, which resulted in the untimely death of a Lake Austin resident. Even after this tragic event ensued, the city argues that they are not legally obligated to provide municipal services because the land was annexed before the 1989 Municipal Annexation Act was put into statute.
Two Texas municipalities, who had limited purpose districts before 1989, have decided to act in good faith and not tax their residents without rendering municipal services. The City of Austin is the lone bad actor in Texas when it comes to taxing limited purpose areas without providing services. The treatment of these residents has been unfair, unreasonable, unjust, and un-Texian. It must be stopped.
The Bill
As proposed, S.B. 369 amends current law relating to disannexation of certain areas that do not receive full municipal services.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter G, Chapter 43, Local Government Code, by adding Section 43.1415, as follows:
Sec. 43.1415. DISANNEXATION OF CERTAIN AREAS NOT RECEIVING FULL SERVICES. (a) Defines "full municipal services."
(b) Provides that this section does not apply to an area for which the municipality:
(1) is not currently required to provide full municipal services under a service plan described by Section 43.056 (Provision of Services to Annexed Area); or
(2) has entered into a regulatory plan or other written agreement to extend the time for providing or waive provision of full municipal services.
(c) Provides that, notwithstanding any other law, on December 31, 2023, any area in which the municipality is not providing or causing the provision of full municipal services is disannexed.
(d) Authorizes a person owning real property wholly or partly located in the area, if a municipality fails or refuses to recognize the disannexation of an area under this section, to bring an action against the municipality to compel disannexation of the portion of the property located in the municipality. Authorizes the person to recover attorney's fees and court costs resulting from bringing the action if the person prevails.
(e) Provides that a municipality's governmental immunity to suit and governmental immunity from liability are waived to the extent of liability created by this section.
SECTION 2. Effective date: upon passage or September 1, 2023.