S.B. No. 1535
 
 
 
 
AN ACT
  relating to the issuance of bonds by a municipality for a defined
  area in an abolished municipal utility district; authorizing a tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle A, Title 4, Local Government Code, is
  amended by adding Chapter 108 to read as follows:
  CHAPTER 108.  MUNICIPAL BONDS FOR CERTAIN DEFINED AREAS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 108.001.  DEFINITION.  In this chapter, "defined area" 
  means a defined area created by a municipal utility district under
  Subchapter J, Chapter 54, Water Code.
         Sec. 108.002.  APPLICATION OF CHAPTER.  This chapter applies
  only to a municipality that under Section 43.075 or any other law
  abolishes a municipal utility district created under Section 59,
  Article XVI, Texas Constitution, that contains a defined area.
         Sec. 108.003.  CONFLICT WITH OTHER LAWS. To the extent of a
  conflict between this chapter and any other law, including
  Subchapter A, Chapter 372, this chapter controls.
  [Sections 108.004-108.050 reserved for expansion]
  SUBCHAPTER B.  BONDS USED TO CARRY OUT PURPOSES OF
  DEFINED AREA IN ABOLISHED MUNICIPAL UTILITY DISTRICT
         Sec. 108.051.  BONDS ORIGINALLY AUTHORIZED IN ABOLISHED
  MUNICIPAL UTILITY DISTRICT; PROPERTY TAXES.  (a)  If, before its
  abolition, a municipal utility district voted to issue bonds
  secured by property taxes for a defined area under Section 54.806,
  Water Code, and if some or all of the bonds were not issued, sold,
  and delivered before the abolition, the governing body of the
  municipality that abolished the district may issue and sell
  municipal bonds:
               (1)  in an amount not to exceed the amount of the
  unissued district bonds approved by the voters; and
               (2)  for the purpose of carrying out the purposes for
  which the district bonds were voted.
         (b)  The bonds are issued under the authority under which
  they were voted, particularly Section 59, Article XVI, Texas
  Constitution. The bonds must be secured by a tax under the
  authority under which they were voted, particularly a tax on the
  property in the defined area of the abolished district.
         (c)  The bonds must be authorized by ordinance of the
  governing body of the municipality. The ordinance must provide for
  the levy of taxes on all taxable property in the defined area of the
  abolished district to pay the principal of and interest on the bonds
  when due.
         Sec. 108.052.  BONDS AUTHORIZED UNDER PUBLIC IMPROVEMENT
  DISTRICT; ASSESSMENTS.  (a)  If, before its abolition, a municipal
  utility district voted to issue bonds secured by property taxes for
  a defined area under Section 54.806, Water Code, and if some or all
  of the bonds were not issued, sold, and delivered before the
  abolition, the governing body of the municipality that abolished
  the district may, on its own motion, establish a public improvement
  district under Subchapter A, Chapter 372, for the purpose of
  issuing and selling municipal bonds:
               (1)  in an amount not to exceed the amount of the
  unissued district bonds approved by the voters; and
               (2)  for the purpose of carrying out the purposes for
  which the district bonds were voted, including the cost of
  facilities constructed after creation of the defined area in
  accordance with the plan for improvements adopted by the board of
  directors of the abolished district.
         (b)  A municipality that establishes a public improvement
  district under this section may:
               (1)  enter into agreements with developers of property
  in the public improvement district for the construction,
  acquisition, expansion, improvement, or extension of improvements
  in the public improvement district;
               (2)  reimburse a developer for the costs of the
  improvements through assessments payable in installments on
  property in the public improvement district;
               (3)  pledge any type of assessment, including
  installment assessments, levied against property in the public
  improvement district as security for bonds and agreements; and
               (4)  structure the assessments in any manner determined
  by the governing body of the municipality.
         (c)  In structuring an assessment under this section, the
  municipality may include in the assessment:
               (1)  a coverage factor;
               (2)  any prepayment dates;
               (3)  terms or amounts; and
               (4)  any other methodology or amounts determined
  necessary or convenient by the governing body of the municipality.
         (d)  Any bonds issued by the municipality under this section
  must be authorized by ordinance of the governing body of the
  municipality and shall provide for the collection of the
  assessments as authorized by Subchapter A, Chapter 372, and this
  chapter.
         (e)  The bonds may be payable in installments, as determined
  by the governing body of the municipality, against the property in
  the defined area.
         (f)  The municipality may use the bonds to:
               (1)  pay or reimburse a developer for public
  improvements in the public improvement district under a development
  or other agreement with the developer;
               (2)  pay the principal of and interest on the bonds when
  due; or
               (3)  pay any combination of purposes described by
  Subdivisions (1) and (2).
         Sec. 108.053.  PLEDGES TO SECURE BONDS.  The municipality
  may further pledge any available funds to secure the bonds,
  including taxes or other revenue.
         Sec. 108.054.  CHOICE OF LAWS.  (a)  A municipality may
  exercise powers under Section 108.051 or 108.052, but may not
  exercise powers under both sections for the same defined area.
         (b)  A municipality that exercises powers under Section
  108.051 or 108.052 to reimburse a developer's infrastructure costs
  in a defined area shall not be required to provide payment to the
  developer under Section 43.0715.
         Sec. 108.055.  CONFLICT WITH MUNICIPAL CHARTER.  This
  subchapter prevails over a municipal charter provision to the
  extent of a conflict with this subchapter.
         Sec. 108.056.  EFFECT ON OTHER MUNICIPAL BONDS.  This
  subchapter does not affect the authority of a municipality to issue
  bonds for other purposes.
         SECTION 2.  Chapter 108, Local Government Code, as added by
  this Act, applies to a municipal utility district abolished, or a
  district vote to issue bonds that occurred, before, on, or after the
  effective date of this Act.
         SECTION 3.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2007.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1535 passed the Senate on
  April 16, 2007, by the following vote: Yeas 30, Nays 0; and that
  the Senate concurred in House amendment on May 25, 2007, by the
  following vote: Yeas 30, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1535 passed the House, with
  amendment, on May 23, 2007, by the following vote: Yeas 144,
  Nays 0, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor