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A BILL TO BE ENTITLED
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AN ACT
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relating to exclusion of land from certain water districts that |
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fail to provide service to the land; clarifying and limiting the |
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authority of those districts with outstanding bonds payable from ad |
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valorem taxes to impose taxes on excluded land; providing for a |
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financial review. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 49.3076, Water Code, is amended by |
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amending Subsections (a), (b), (c), (d), and (f) and adding |
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Subsections (c-1) and (g-1) to read as follows: |
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(a) The board of a district that has a total area of more |
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than 10,000 [5,000] acres shall call a hearing on the exclusion of |
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land from the district on or before the 60th day after receiving a |
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written petition filed with the secretary of the board by one or |
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more owners of [a landowner whose] land more than half the acreage |
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of which has been for more than 20 years included in and taxable by |
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the district [for more than 28 years] if any bonds issued by the |
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district payable in whole or in part from taxes of the district are |
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outstanding and the petition: |
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(1) is [includes a] signed by [petition evidencing the
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consent of] the owners of a majority of the acreage proposed to be |
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excluded, as reflected by the most recent certified tax roll of the |
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district; |
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(2) includes a claim that the district does [has] not |
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provide [provided] the land with retail utility services; |
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(3) describes the property to be excluded; and |
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(4) provides facts necessary for the board to make the |
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findings required by Subsection (b)[; and
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[(5) is filed before August 31, 2007]. |
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(b) The board of a district shall [may] exclude land under |
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this section if [only on finding that]: |
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(1) the district does not provide [has never provided] |
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retail utility service [services] to the land described by the |
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petition; |
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(2) the district has imposed a tax on more than half |
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the acreage of the land for at least 20 years [more than:
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[(A)
28 years if the board calls a hearing under
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Subsection (a); or
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[(B)
40 years if the board calls a hearing under
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Subsection (a-1)]; and |
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(3) all taxes the district has levied and assessed |
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against the land and all fees and assessments the district has |
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imposed against the land or the owner that are due and payable on or |
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before the date of the petition are fully paid. |
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(c) Subject to Subsection (c-1), unless [Unless] the |
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district presents evidence at the hearing that conclusively |
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demonstrates that the requirements and grounds for exclusion |
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described by Subsection (a) [or (a-1), as appropriate, and
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Subsection (b)] have not been met, the board shall enter an order |
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excluding the land from the district and shall redefine in the order |
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the boundaries of the district to embrace all land not excluded. |
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(c-1) If on or before the date of the exclusion hearing |
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required by Subsection (a) the district and the owner or owners |
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enter into an agreement for utility service to the land proposed to |
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be excluded, the district is not required to enter an order |
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excluding the land from the district. An owner of all or part of the |
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land is not required to enter into a utility agreement that as of |
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the date of the petition: |
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(1) is not comparable economically or in the level of |
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service provided to the land to the owner's current source of |
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utility service, as may be determined by the owner; or |
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(2) does not include all utility services required to |
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serve the land. |
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(d) A copy of an order excluding land and redefining the |
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boundaries of the district shall be filed in the deed records of |
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each county in which the district is located and with the |
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commission. |
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(f) After any land is excluded under this section, the |
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district may issue any unissued additional debt approved by the |
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voters of the district before exclusion of the land under this |
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section without holding a new election. Additional debt issued |
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after land is excluded from the district may not be payable from |
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taxes levied against and does not create a lien against the taxable |
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value of the excluded land. |
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(g-1) This section does not apply to a district: |
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(1) whose primary activity is the wholesale supply of |
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raw water; and |
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(2) that has fewer than 500 retail customers. |
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SECTION 2. Section 49.3077, Water Code, is amended to read |
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as follows: |
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Sec. 49.3077. TAX LIABILITY OF EXCLUDED LAND; BONDS |
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OUTSTANDING. (a) In this section: |
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(1) "Adjusted gross value" means the gross assessed |
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value of property, as of January 1, including land, improvements, |
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and personal property, as determined by the appraisal district for |
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the tax year in which the determination is made, reduced by any |
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state-mandated exemptions but not reduced for any exemptions from |
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taxation that are within the discretion of the governing body of the |
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district. |
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(2) "Carry costs" means interest calculated at an |
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annual rate equal to the weighted average interest rate of the |
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district debt that accrues on the excluded land's share of the |
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district debt, with reductions for prior payments, from the later |
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of the exclusion date or the last interest payment date for district |
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debt for which district taxes have been levied and collected to the |
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earlier of: |
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(A) the date of the final interest payment on |
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district debt before the next delinquency for the district's tax |
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collection; or |
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(B) the earliest dates on which an aggregate |
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amount of district obligations equal to the district debt may be |
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paid at maturity or redeemed at the option of the district, provided |
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the amount is paid in advance of any future district tax levy, using |
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the redemption dates available for the district's outstanding |
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obligations as of the exclusion date. |
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(3) "District debt" means the principal outstanding |
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from time to time of the tax-supported debt of the district |
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outstanding on the exclusion date, including debt used to refund |
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district debt outstanding on the exclusion date. |
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(4) "Excluded land" means land that is excluded from a |
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district under Section 49.3076. |
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(5) "Excluded land payment" means, with respect to |
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excluded land, the sum of the excluded land's share of district debt |
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plus the carry costs, less any taxes collected by the district under |
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Subsection (b). |
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(6) "Excluded land's share of district debt" means the |
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portion of the district debt that is calculated by multiplying the |
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district debt by a fraction the numerator of which is the adjusted |
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gross value of the excluded land on the exclusion date and the |
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denominator of which is the adjusted gross value of all property in |
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the district on the exclusion date. |
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(7) "Exclusion date" means the date that the owner |
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files the petition requesting that the excluded land be excluded |
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from the district with the district secretary. |
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(8) "Termination date" means the earlier of: |
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(A) the date on which the amount of taxes |
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collected from the excluded land equals the excluded land payment; |
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or |
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(B) the date on which the excluded land payment |
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is made in full. |
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(b) Excluded land that has been pledged as security for any |
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outstanding debt of the district remains pledged for the excluded |
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land's share of district debt until the excluded land payment is |
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paid. A district is entitled to continue to levy and collect debt |
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service taxes on the excluded land until the termination date at the |
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same rate those taxes are levied on the land remaining in the |
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district. From the exclusion date to the termination date, the |
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excluded land remains in the district for the limited purpose of |
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assessment and collection of such taxes. After the termination |
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date, the excluded land is excluded from the district for all |
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purposes, and the district may not levy any further tax on the |
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excluded land. |
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(c) The district shall apply the taxes collected on the |
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excluded land only to payment of the excluded land payment, which |
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shall be reduced by the amount of taxes collected. |
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(d) A person is entitled to pay to the district the excluded |
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land payment, in whole or in part, at any time on or after the |
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exclusion date by delivering payment to the district tax |
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assessor-collector. If partial payment is made, the payment is |
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credited first against all carry costs due and owing, and any |
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remainder is credited against the excluded land's share of district |
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debt. After a partial payment, carry costs must be calculated and |
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assessed and collected only on the remaining excluded land's share |
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of district debt. [Land excluded from a district under Section
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49.3076 that is pledged as security for any outstanding debt of the
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district remains pledged for its pro rata share of the debt until
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final payment is made.
The district shall continue to levy and
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collect taxes on the excluded land at the same rate levied on land
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remaining in the district until the amount of taxes collected from
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the excluded land equals the land's pro rata share of the district's
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debt outstanding at the time the land was excluded from the
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district.
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[(b)
The district shall apply the taxes collected on the
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excluded land only to the payment of the excluded land's pro rata
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share of the debt.
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[(c)
The owner of any part of the excluded land may pay in
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full the owner's share of the pro rata share of the district's debt
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outstanding at the time the land is excluded.] |
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SECTION 3. Subchapter J, Chapter 49, Water Code, is amended |
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by adding Section 49.3078 to read as follows: |
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Sec. 49.3078. PETITION FOR EXCLUSION: ADDITIONAL DUTIES. |
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A landowner who signs a petition for the exclusion of land that is |
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filed with a district under Section 49.3076 must submit a copy of |
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the petition to the commission. On receipt of a copy of a petition, |
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the executive director shall review the most recent financial |
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information for the applicable district, including current debt |
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requirements, debt service cash flow, and proposed debt |
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obligations, to confirm that an exclusion of land conducted in |
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accordance with Sections 49.3076 and 49.3077 does not adversely |
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affect the interests of district bondholders. The executive |
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director shall notify the landowner and the district when the |
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review is complete. |
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SECTION 4. Subsections (a) and (c), Section 49.312, Water |
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Code, are amended to read as follows: |
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(a) Except as provided by Section 49.3077, on [Upon] |
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issuance of an order excluding property, that property is no longer |
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a part of the district and is not entitled to water service from the |
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district. |
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(c) Except as provided by Section 49.3077, once land is |
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[Once] excluded, the landowner has no further liability to the |
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district for future taxes, assessments, or other charges of the |
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district. |
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SECTION 5. Subsection (a-1), Section 49.3076, Water Code, |
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is repealed. |
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SECTION 6. Section 49.3076, Water Code, as amended by this |
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Act, applies only to a petition for exclusion of land that is filed |
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with a district on or after the effective date of this Act. A |
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petition filed before the effective date of this Act is governed by |
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the law in effect on the date the petition is filed, and that law |
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continues in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2013. |
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