HBA-NIK S.B. 262 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 262
By: Brown
Land & Resource Management
4/8/1999
Engrossed


BACKGROUND AND PURPOSE 

Currently, when a municipality with a population of less than 1.5 million
annexes a water district, including a municipal utility district (MUD), the
municipality must pay any amounts owed to developers who paid for
installing water and wastewater systems in the district.  Upon annexation,
the city becomes the owner of the utility system; therefore, the city must
make reimbursement payments to developers simultaneously with the
annexation.  S.B. 262 requires the annexing municipality to pay utility
reimbursements to the developers prior to the annexation of a district.
This bill also imposes penalties and interest on reimbursement payments
that are delinquent on the effective date of this bill.   

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 43.0715, Local Government Code, as follows:

Sec.43.0715. ANNEXATION OF WATER-RELATED SPECIAL DISTRICT: REIMBURSEMENT OF
LANDOWNER OR DEVELOPER; CONTINUATION OF DISTRICT AND TAXING AUTHORITY (a)
Defines "delinquent sum." Makes a nonsubstantive change. 

(b) Requires the municipality, prior to the effective date of, rather than
simultaneously with, the annexation, to pay in cash to the landowner or
developer of the district a sum equal to all actual costs and expenses
incurred by the landowner or developer in connection with the district that
adhere to specified provisions. Provides that for an annexation that is
subject to preclearance by a federal authority a payment will be considered
timely if the municipality adheres to specified provisions. 

(c) Requires the municipality to proceed to initiate and complete a report
for each developer conducted in accordance with the format approved by the
Texas Natural Resource Conservation Commission for audits at the specified
time. 

_Requires the municipality to obtain from the districts the estimated costs
of each project previously undertaken by a developer which are eligible for
reimbursement under specified circumstances. 

_Requires the amount of such costs, as estimated by the district, to be
escrowed by the municipality for the benefit of the persons entitled to
receive payment in an insured interest-bearing account with a financial
institution authorized to do business in the state. 

_Requires all interest accrued on the escrowed funds to be paid to the
developer whether or not the annexation  is valid to compensate the
developer for the municipality's use of the infrastructure facilities
pending the determination of the reimbursement amount or federal
preclearance. 
 
_Authorizes the annexation to become effective upon placement of the funds
in the escrow account. 

_Prohibits penalties or interest from accruing during the pendency of the
escrow under specified circumstances. 

(d) Provides the certain provisions whereby a delinquent sum incurs a
specified penalty. 

SECTION 2. Makes application of this Act prospective with respect to any
sum that is delinquent on the effective date of this Act. 

SECTION 3. Emergency clause.
  Effective date: upon passage.