HBA-ALS C.S.H.B. 641 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 641
By: Howard
Business and Industry
4/16/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, there is 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.
C.S.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 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 a municipal utility district 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. 

(g)-(s) Redesignated from existing Subsections (d)-(p), respectively, and
makes conforming changes. 

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

SECTION 3.  Emergency clause. 
 
COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original in SECTION 1 (Section 49.452, Water
Code) to amend Subsection (a)(1) by adding Paragraph (D) to provide that
the provisions of this section do not apply to transfers of title to a
governmental entity.   

The substitute modifies the original in SECTION 1 (Section 49.452(b), Water
Code) to amend the prescribed statutory disclosure notice requirement of a
seller of real property in a district located in the extraterritorial
jurisdiction of one or more home-rule municipalities and not within the
corporate boundaries of the municipality, rather than merely for property
located in all districts.  The substitute adds new bonds language to
exclude from the total amount of bonds  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.
The substitute deletes language in the original which required a notice to
disclose whether the district is located within the corporate boundaries or
extraterritorial jurisdiction of a municipality.  Makes nonsubstantive
changes.  

The substitute modifies the original in SECTION 1 (Section 49.452(c), Water
Code) by adding Subsection (c) to set forth the statutory notice
requirement of a seller of real property for districts located in whole or
in part within the corporate boundaries of a municipality.  

The substitute modifies the original in SECTION 1 (Section 49.452, Water
Code) by adding Subsection (d) to set forth the prescribed notice required
to be executed by the seller of real propery 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. 

The substitute modifies the original in SECTION 1 (Section 49.452, Water
Code) by adding Subsection (e) to require a district to revise the content
of prescribed notices to accurately reflect amendments to current law that
result in inaccuracies in the content of the prescribed notices under this
section. 

The substitute modifies the original in SECTION 1 (Section 49.452, Water
Code) to redesignate existing Subsection (c) to Subsection (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 for failing to provide notice to a purchaser at or
prior to the closing of the purchase and sales contract or for
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. Redesignates existing Subsections (d)-(p) to Subsections (g)-(s).
Makes conforming and nonsubstantive changes.