Texas Local Government Code § 43.0715 Annexation Of Water-related Special District: Reimbursement Of Landowner Or Developer; Continuation Of District And Taxing Authority

Sec. 43.0715. ANNEXATION OF WATER-RELATED SPECIAL DISTRICT: REIMBURSEMENT OF LANDOWNER OR DEVELOPER; CONTINUATION OF DISTRICT AND TAXING AUTHORITY. (a) In this section:

(1) "Special district" means a political subdivision one purpose of which is to supply fresh water for domestic or commercial use or to furnish sanitary sewer services or drainage.

(2) "Delinquent sum" means the sum a municipality has failed to timely pay to a landowner or developer under Subsection (b).

(b) If a municipality with a population of less than 1.5 million annexes a special district for full or limited purposes and the annexation precludes or impairs the ability of the district to issue bonds, the municipality shall, prior to the effective date of the annexation, 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 the district has, in writing, agreed to pay and that would otherwise have been eligible for reimbursement from bond proceeds under the rules and requirements of the Texas Natural Resource Conservation Commission as such rules and requirements exist on the date of annexation. For an annexation that is subject to preclearance by a federal authority, a payment will be considered timely if the municipality: (i) escrows the reimbursable amounts determined in accordance with Subsection (c) prior to the effective date of the annexation; and (ii) subsequently causes the escrowed funds and accrued interest to be disbursed to the developer within five business days after the municipality receives notice of the preclearance.

(c) At the time notice of the municipality's intent to annex the land within the district is first published in accordance with Section 43.052, the municipality shall 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. In the event the municipality is unable to complete the report prior to the effective date of the annexation as a result of the developer's failure to provide information to the municipality which cannot be obtained from other sources, the municipality shall obtain from the district the estimated costs of each project previously undertaken by a developer which are eligible for reimbursement. The amount of such costs, as estimated by the district, shall 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. To compensate the developer for the municipality's use of the infrastructure facilities pending the determination of the reimbursement amount or federal preclearance, all interest accrued on the escrowed funds shall be paid to the developer whether or not the annexation is valid. Upon placement of the funds in the escrow account, the annexation may become effective. In the event a municipality timely escrows all estimated reimbursable amounts as required by this subsection and all such amounts, determined to be owed, including interest, are subsequently disbursed to the developer within five days of final determination in immediately available funds as required by this section, no penalties or interest shall accrue during the pendency of the escrow. Either the municipality or developer may, by written notice to the other party, require disputes regarding the amount owed under this section to be subject to nonbinding arbitration in accordance with the rules of the American Arbitration Association.

(d) A delinquent sum incurs a penalty of six percent of the amount of the sum for the first calendar month it is delinquent plus one percent for each additional month or portion of a month the sum remains unpaid. For an annexation occurring prior to the effective date of the changes in law made by this Act in amending Subsection (b), a delinquent sum begins incurring a penalty on the first day of the eighth month following the month in which the municipality enacted its annexation ordinance. For an annexation occurring after the effective date of this Act, a delinquent sum begins incurring a penalty on the first day after the date the municipality enacts its annexation ordinance.

Added by Acts 1989, 71st Leg., ch. 1, Sec. 3(g), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg., ch. 17, Sec. 1(2), eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1058, Sec. 2, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 597, Sec. 81, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, Sec. 11.255, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 544, Sec. 1, eff. June 18, 1999.

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Last modified: September 28, 2016