HBA-ALS C.S.H.B. 2761 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2761 By: Williams Land & Resource Management 4/22/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE The Woodlands is a large master planned community located in Montgomery County in the extraterritorial jurisdiction (ETJ) of the City of Houston. Because the original developer petitioned for inclusion in Houston's ETJ, The Woodlands has been developed with the oversight of the City of Houston Planning and Development Department for subdivision and thoroughfare standards, and the city's Department of Public Works and Engineering for utility development. The Woodlands is located upstream of the City of Houston's primary water reservoir, Lake Houston, but is not under the jurisdiction of the Harris-Galveston Subsidence District, which has been a primary agent for regional planning water resources in those two counties. The Woodlands utility districts have contracted for their own source of surface water with the San Jacinto River Authority. Because The Woodlands utility districts are not under the jurisdiction of a subsidence district, there is no authority governing the possible conversion of its water sources from well to surface water. To address this problem, the City of Houston and The Woodlands utility districts have proposed a contract which requires enabling legislation to become effective. Although such a contract would not normally require legislation, the proposed agreement includes a provision guaranteeing that The Woodlands utility districts will not be annexed by the City for twelve years, which must be authorized by state law. Because a district facing potential dissolution may have little incentive to undertake long-term planning and infrastructure development work, this provision is included to ensure that annexation will not result in dissolution of the districts during this twelve-year period. C.S.H.B. 2761 sets forth that certain municipalities and conservation and reclamation districts located in an extraterritorial jurisdiction may enter into written regional development agreements to further regional cooperation between districts. In addition, this bill sets forth the required and optional provisions of such an agreement and its recording requirements. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Sets forth legislative intent. SECTION 2. Amends Subchapter D, Chapter 43, Local Government Code, by adding Section 43.0752, as follows: Sec. 43.0752. REGIONAL DEVELOPMENT AGREEMENTS. (a) Defines "district," "municipality," "planned community," and "regional development agreement." (b) Authorizes the governing body of a municipality and the governing body of one or more districts to enter into a regional development agreement (agreement) to further regional cooperation between the district and the municipality, notwithstanding any other law or municipality charter provision to the contrary. (c) Describes the types of provisions which are authorized to be included in an agreement. (d) Provides that an agreement must be in writing, approved by the governing body of the municipality and the district, and recorded in a specified place and manner. (e) Authorizes another district to join or become a party to an agreement if the district complies with Subsection (d). (f) Provides that a regional development agreement is not required to include a description of the land contained within the boundaries of a district that is a party to the agreement. Provides that the agreement must be recorded in the deed records of any county in which the land in the district is located. (g) Provides that an agreement binds each party and present and future owner of land that is subject to the agreement. Provides that the removal or exclusion of a party or landowner from an agreement is effective on the recordation required under Subsection (d). (h) Prohibits an agreement from requiring a district to provide public services and facilities to a person to whom the district is not otherwise authorized to provide them or to make payments from any source from which the district is not otherwise authorized. (i) Authorizes a district to contract with a person for services to be provided at no cost to the district or for the payment of funds by the person in support of a regional development agreement to which the district is a party. (j) Provides that an agreement and any action taken by the parties pursuant to such an agreement is not subject to approval or an appeal brought under the Water Code. (k) Provides that Sections 42.023 (Reduction of Extraterritorial Jurisdiction) and 42.041(b)-(e) (Municipal Incorporation in Extraterritorial Jurisdiction), Local Government Code, do not apply to any land or the owner of land within a district that is a party to the agreement and prohibits the governing body of the municipality from including the area covered by the agreement in a municipality annexation plan and from initiating or continuing an annexation proceeding relating to the area after the effective date of this section, notwithstanding any defect, ambiguity, discrepancy, invalidity, or unenforceability of an agreement that has been voluntarily entered into and fully executed by the parties, or any contrary law, common law doctrine, or municipality charter provision, and for the duration of any annexation deferral period under the agreement during which a district continues to perform its obligations under the agreement. (l) Requires that this section be liberally construed so as to give effect to its legislative purposes and to sustain the validity of regional development agreements, whether entered into pursuant to or in anticipation of the authority granted by this section. SECTION 3. Provides that an agreement entered into in anticipation of this Act is not invalid because of the agreement's authorization, execution, or delivery before the effective date of this Act. SECTION 4. Sets forth legislative findings. SECTION 5.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in SECTION 1 to provide additional legislative intent. The substitute modifies the original in SECTION 2 (proposed Section 43.0752, Local Government Code), by redesignating it from SECTION 1 of the original and further modifying it as follows: Redesignates Subsection (b) of the original to Subsection (a) of the substitute. Redefines "municipality" as a municipality, rather than a home-rule municipality, with a population of 1.6 million or more. Redefines "regional development agreement" to include a proceeding relating to the contract or agreement. Makes nonsubstantive changes. Redesignates language in Subsection (c) of the original (authorizing a municipality's governing body to enter into regional development agreements with the governing body of one or more districts) to Subsection (b) of the substitute. The substitute modifies the original by authorizing a municipality's governing body and the governing body of one or more district to enter into a regional development agreement, notwithstanding a contrary law or municipality charter provision, rather than notwithstanding a contrary general or special law or home rule charter provision. The substitute modifies the original in Subsection (c) by authorizing a regional development agreement (agreement) to: allow, rather than provide for, a procedure for requesting and receiving, rather than just receiving any form of required consent or approval from the municipality; allow, rather than provide for the standards for, a district to issue bonds, notes, refunding bonds, and other forms of indebtedness; allow third-party beneficiaries to be specifically assigned rights or remedies under the agreement, rather that provide for the designation of express third party beneficiaries and the rights and remedies of such beneficiaries to the extent not inconsistent with general law; and allow any other tem to which the parties agree, rather than provide for other lawful terms that the parties consider appropriate. The substitute modifies the original in Subsection (d) by providing that an agreement must be approved by the governing body of the municipality and the district, rather than providing that the agreement is not effective until approved by such governing bodies. Provides that the agreement must be recorded in the real property records of a county in which any part of a district that is party to the agreement is located and in an manner that complies with Subchapter J, Chapter 49, Water Code (Annexation or Exclusion of Land). Deletes language authorizing a subsequent joinder of another district if authorized and evidenced in the manner provided by the agreement. Deletes language providing that an agreement is binding on subsequently joined governing bodies or parties throughout the term of the agreement. The substitute modifies the original in Subsection (e) by authorizing another district to join or become a party to an agreement if the district complies with Subsection (d). Redesignates Subsection (e) of the original to Subsection (f) of the substitute. Makes conforming and nonusubstantive changes. Redesignates Subsection (f) of the original to Subsection (g) of the substitute. Provides that an agreement binds each party to the agreement, in addition to each owner and future owner of land that is subject to the agreement. Provides that the removal or exclusion of a landowner or party from an agreement is effective on the recordation requirement of Subsection (d). Deletes language provided in Subsection (f) of the original which provided that, upon recordation, an agreement and any proceedings evidencing the joinder or addition of one or more other districts as parties binds each present and future owner of land which is included within the districts included or added as parties. Deletes language which provided that the future and present owners of added or excluded lands are to be bound or released accordingly, upon compliance with the requirements for recordation included in Subchapter J, Chapter 49, Water Code (Annexation or Exclusion of Land). Deletes language providing that certain sections of the Local Government Code do not applicable to specified landowners and land within a district that is included or added as parties of an agreement. The substitute modifies the original in Subsection (h) prohibiting an agreement from requiring a district to provide public services and facilities to a person to whom the district is not otherwise authorized to provide services or facilities or to make payments from any source from which the district is not otherwise authorized to make payments. Deletes language prohibiting this section from being construed to permit a district to provide public services and facilities or to make payment of public funds from sources not otherwise authorized by law. Redesignates text in Subsection (h) of the original (authorizing a district, for specified consideration, to contract with a person to provide services or facilities or to make payment of funds by the person, at no cost to the district, in support of a regional development agreement) to Subsection (i) of the substitute. Redesignates Subsection (i) of the original to Subsection (j) of the substitute. The substitute modifies the original by adding Subsection (k) to provide that Sections 42.023 (Reduction of Extraterritorial Jurisdiction) and 42.041(b)-(e) (Municipal Incorporation in Extraterritorial Jurisdiction), Local Government Code, do not apply to any land or the owner of land within a district that is a party to the agreement. Subsection (k) also prohibits the governing body of the municipality from including the area covered by the agreement in a municipality annexation plan and from initiating or continuing an annexation proceeding relating to the area after the effective date of this section, notwithstanding any defect, ambiguity, discrepancy, invalidity, or unenforceability of an agreement that has been voluntarily entered into and fully executed by the parties, or any contrary law, common law doctrine, or municipality charter provision, and for the duration of any annexation deferral period under the agreement during which a district continues to perform its obligations under the agreement. Redesignates Subsection (j) of the original to new Subsection (l) of the substitute Redesignates SECTION 2 of the original to SECTION 3 of the substitute. Redesignates SECTIONS 4 and 5 of the original to SECTION 4 of the substitute. Modifies legislative findings. Redesignates SECTION 6 of the original to SECTION 5 of the substitute and replaces the short emergency clause of the original with the long emergency clause in the substitute.