89R10466 MP-D
By: Hickland H.B. No. 4978
A BILL TO BE ENTITLED
AN ACT
relating to the creation of municipal utility districts in the
extraterritorial jurisdiction of a municipality.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 42.042(c), (f), and (g), Local
Government Code, are amended to read as follows:
(c) If, within 120 days after the date the governing body
receives the petition, the governing body fails to make a contract
with a majority of the qualified voters of the area of the proposed
political subdivision and the owners of at least 50 percent of the
land in the proposed political subdivision to provide the services,
that failure constitutes the governing body's consent to the
creation of the proposed political subdivision. This subsection
does not apply to the creation of a municipal utility district.
(f) If the municipality fails or refuses to give its consent
to the creation of the political subdivision, including a water
district previously created by an act of the legislature, or fails
or refuses to execute a contract providing for the water or sanitary
sewer services requested within the time limits prescribed by this
section, the applicant may petition the Texas Commission on
Environmental Quality for the creation of the political subdivision
or the inclusion of the land in a political subdivision. The
commission shall allow creation or confirmation of the creation of
the political subdivision or inclusion of the land in a proposed
political subdivision on finding that the municipality either does
not have the reasonable ability to serve or has failed to make a
legally binding commitment with sufficient funds available to
provide water and wastewater service adequate to serve the proposed
development at a reasonable cost to the landowner. The commitment
must provide that construction of the facilities necessary to serve
the land will begin within two years and will be substantially
completed within 4-1/2 years after the date the petition was filed
with the municipality. This subsection does not apply to the
creation of a municipal utility district.
(g) On an appeal taken to the district court from the ruling
of the Texas Commission on Environmental Quality, all parties to
the commission hearing must be made parties to the appeal. The
court shall hear the appeal within 120 days after the date the
appeal is filed. If the case is continued or appealed to a higher
court beyond the 120-day period, the court shall require the
appealing party or party requesting the continuance to post a bond
or other adequate security in the amount of damages that may be
incurred by any party as a result of the appeal or delay from the
commission action. The amount of the bond or other security shall
be determined by the court after notice and hearing. On final
disposition, a court may award damages, including any damages for
delays, attorney's fees, and costs of court to the prevailing
party. This subsection does not apply to the creation of a
municipal utility district.
SECTION 2. Section 54.016(a), Water Code, is amended to
read as follows:
(a) No land within the corporate limits of a city or within
the extraterritorial jurisdiction of a city, shall be included in a
district created under this chapter or by local law unless the city
grants its written consent, by resolution or ordinance, to the
inclusion of the land within the district in accordance with
Section 42.042, Local Government Code, and this section. The
request to a city for its written consent to the creation of a
district, shall be signed by a majority in value of the holders of
title of the land within the proposed district as indicated by the
county tax rolls. A petition for the written consent of a city to
the inclusion of land within a district shall describe the
boundaries of the land to be included in the district by metes and
bounds or by lot and block number, if there is a recorded map or plat
and survey of the area, and state the general nature of the work
proposed to be done, the necessity for the work, and the cost of the
project as then estimated by those filing the petition. [If, at the
time a petition is filed with a city for creation of a district, the
district proposes to connect to a city's water or sewer system or
proposes to contract with a regional water and wastewater provider
which has been designated as such by the commission as of the date
such petition is filed, to which the city has made a capital
contribution for the water and wastewater facilities serving the
area, the proposed district shall be designated as a "city service
district." If such proposed district does not meet the criteria for
a city service district at the time the petition seeking creation is
filed, such district shall be designated as a "noncity service
district." The city's consent shall not place any restrictions or
conditions on the creation of a noncity service district as defined
by this chapter other than those expressly provided in Subsection
(e) of this section and shall specifically not limit the amounts of
the district's bonds.] A city may not require annexation as a
consent to creation of any district. A city shall not refuse to
approve a district bond issue for any reason except that the
district is not in compliance with valid consent requirements
applicable to the district. [If a city grants its written consent
without the concurrence of the applicant to the creation of a
noncity service district containing conditions or restrictions
that the petitioning land owner or owners reasonably believe exceed
the city's powers, such land owner or owners may petition the
commission to create the district and to modify the conditions and
restrictions of the city's consent. The commission may declare any
provision of the consent to be null and void. The commission may
approve the creation of a district that includes any portion of the
land covered by the city's consent to creation of the district. The
legislature may create and may validate the creation of a district
that includes any portion of the land covered by the city's consent
to the creation of the district.]
SECTION 3. Section 8324.107, Special District Local Laws
Code, is amended to read as follows:
Sec. 8324.107. LIMITATION ON ANNEXATION OF LAND BY
DISTRICT. The [Notwithstanding Section 54.016(d), Water Code,
the] district may not annex land that is located in the
extraterritorial jurisdiction of a municipality unless the City of
Weatherford provides written consent to that annexation.
SECTION 4. Section 8325.107, Special District Local Laws
Code, is amended to read as follows:
Sec. 8325.107. LIMITATION ON ANNEXATION OF LAND BY
DISTRICT. The [Notwithstanding Section 54.016(d), Water Code, the]
district may not annex land that is located in the extraterritorial
jurisdiction of a municipality unless the City of Weatherford
provides written consent to that annexation.
SECTION 5. Subchapter B, Chapter 54, Water Code, is amended
by adding Section 54.017 to read as follows:
Sec. 54.017. MEMORANDUM OF UNDERSTANDING BETWEEN DISTRICT,
MUNICIPALITY, AND COUNTY. (a) If a municipality approves the
creation of a district within the extraterritorial jurisdiction of
the municipality under Section 54.016, the district, municipality,
and county in which the district will be located shall enter into a
memorandum of understanding as to how services will be provided to
the district.
(b) The memorandum of understanding entered into under this
section must detail the provision of:
(1) water services; and
(2) road services.
SECTION 6. The following provisions of the Water Code are
repealed:
(1) Sections 54.016(c) and (d); and
(2) Sections 54.0165(b) and (c).
SECTION 7. The changes in law made by this Act apply only to
the creation of a municipal utility district on or after the
effective date of this Act. A petition for the creation of a
municipal utility district pending before the Texas Commission on
Environmental Quality on the effective date of this Act is governed
by the law in effect on the date the petition was filed, and the
former law is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2025.