HBA-DMD, ALS H.B. 641 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 641
By: Howard
Business and Industry
7/27/1999
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, there was no requirement to notify a
prospective purchaser of residential property that the property may be
subject to future annexation because it is located within a city's
extraterritorial jurisdiction. H.B. 641 requires a municipal utility
district to disclose to the purchaser of residential real property that the
district is located in the extraterritorial jurisdiction of a municipality
and for that reason the district may be annexed by the municipality, or
that the district is located within the corporate boundaries of a
municipality, and prescribes the statutory language that is required to be
used for such notice.   

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.  Amends Section 49.452, Water Code, as follows:

Section 49.452. NOTICE TO PURCHASERS. (a) Provides that the provisions of
this section do not apply to transfers of title to a governmental entity.   

(b) Requires the prescribed notice for municipal utility districts
(districts) located in the extraterritorial jurisdiction of one or more
home-rule municipalities and not within the corporate boundaries of the
municipality, rather than all districts, to be executed by the seller.
Deletes the words "debt service" from the description of the most recent
projected rate of tax which is required to appear in the prescribed notice
required to be executed by a seller of real property.  Adds the phrase
"excluding refunding bonds and any bonds or any portion of bonds issued
that are payable solely from revenues received or expected to be received
under a contract with a governmental entity from the total amount of bonds"
to the notification of the total amount of the bonds that is required to
appear in the prescribed notice required to be executed by a seller of real
property.  Adds language requiring districts to disclose to the purchaser
of residential real property whether the property is located in a
municipality's extraterritorial jurisdiction and detailing the results of
annexation by the municipality.  Makes conforming and nonsubstantive
changes. 

(c) Sets forth the prescribed notice  required to be executed by the seller
of real property for districts located in whole or in part within the
corporate boundaries of a municipality. 

(d) Sets forth the prescribed notice required to be executed by the seller
of real property for districts that are not located in whole or in part
within the corporate boundaries of a municipality or the extraterritorial
jurisdictions of one or more home-rule cities. 

(e) Requires the district, if the law relating to annexation or district
dissolution is amended and causes inaccuracies in the content of the
prescribed notices under this section, to revise the content of the notices
to accurately reflect current law. 

(f) Provides that real estate brokers, in addition to sellers, title
companies, and examining  attorneys, and any person acting on those
persons' behalf are not liable for damages to a person for: 

(1) failing to provide required notice to a purchaser at or prior to the
closing of the purchase and sale contract, or  

(2) unintentionally providing an incorrect notice prior to the execution of
a contract of purchase and sale or at or prior to the closing of the
contract. 

Redesignated from existing Subsection (c).  Makes conforming and
nonsubstantive changes. 

Subsections (g)-(s) redesignated from existing Subsections (d)-(p),
respectively. Makes conforming changes. 

SECTION 2.  Effective date: September 1, 1999. 
                       Makes application of this Act prospective.   

SECTION 3.  Emergency clause.