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  H.B. No. 2726
 
 
 
 
AN ACT
  relating to regional participation agreements.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 43.0754(a)(2), Local Government Code, is
  amended to read as follows:
               (2)  "Eligible municipality" means a municipality:
                     (A)  that has a population of 1.5 million or more
  and that includes in its extraterritorial jurisdiction at least 90
  percent by area of the territory of a district; [or]
                     (B)  that includes in its extraterritorial
  jurisdiction not more than 10 percent of the territory of a district
  that has entered into a regional participation agreement under this
  section with another eligible municipality described by Paragraph
  (A); or
                     (C)  with corporate boundaries contiguous to the
  boundaries of a district that has entered into a regional
  participation agreement under this section with another eligible
  municipality described by Paragraph (A) [under this section].
         SECTION 2.  Section 43.0754, Local Government Code, is
  amended by amending Subsections (c), (g), (h), (i), and (m) and
  adding Subsection (q) to read as follows:
         (c)  A regional participation agreement may provide or allow
  for:
               (1)  the establishment, administration, use,
  investment, and application of a regional participation fund, which
  shall be a special fund or escrow account to be used solely for
  funding the costs and expenses of eligible programs or projects;
               (2)  payments to be made by a party into the regional
  participation fund for application, currently or in the future,
  toward eligible programs or projects;
               (3)  the methods and procedures by which eligible
  programs or projects are prioritized, identified, and selected for
  implementation and are planned, designed, bid, constructed,
  administered, inspected, and completed;
               (4)  the methods and procedures for accounting for
  amounts on deposit in, to the credit of, or expended from the
  regional participation fund, as well as any related investment
  income or amounts due and owing to or from any party to the fund;
               (5)  credits against payments otherwise due by any
  party under the agreement resulting from taxes, charges, fees,
  assessments, tolls, or other payments in support of or related to
  the usage or costs of eligible programs or projects that are levied
  or imposed upon, assessed against, or made applicable to a party or
  its citizens, ratepayers, taxpayers, or constituents after the
  effective date of the agreement;
               (6)  any type of annexation of any part of the territory
  of a district to be deferred by an eligible municipality that is a
  party for a mutually agreeable period;
               (7)  the release of [all or part of the] territory [of a
  district] from the extraterritorial jurisdiction of an eligible
  municipality that is a party at a specified time or upon the
  occurrence of specified events;
               (8)  the consent of an eligible municipality that is a
  party to the incorporation of, or the adoption of an alternate form
  of government by, all or part of the territory of a district at a
  specified time or upon the occurrence of specified events;
               (9)  remedies for breach of the agreement;
               (10)  the modification, amendment, renewal, extension,
  or termination of the agreement;
               (11)  other districts, eligible municipalities, or
  persons to join the agreement as a party at any time;
               (12)  third-party beneficiaries to be specifically
  designated and conferred rights or remedies under the agreement;
               (13)  the duration of the agreement, including an
  unlimited term;
               (14)  the creation and administration of a nonprofit
  corporation, joint powers agency, local government corporation, or
  other agency for the purpose of administration and management of a
  regional participation fund, program, or project under the
  agreement; and
               (15)  any other provision or term to which the parties
  agree.
         (g)  A regional participation agreement is not required to
  describe the land contained within the boundaries of [a district
  that is] a party to the agreement, but any territory to be released
  from the extraterritorial jurisdiction of an eligible municipality
  that is a party under an agreement must be described in sufficient
  detail to convey title to land and the description must be made a
  part of the agreement.
         (h)  A regional participation agreement binds each party and
  its legal successor, including a municipality or other form of
  local government, to the agreement for the term specified in the
  agreement and each owner and future owner of land that is subject to
  the agreement during any annexation deferral period established in
  the agreement.  If a party, land, or landowner is excluded or
  removed from an agreement, the removal or exclusion is effective on
  the recordation of the amendment, supplement, modification, or
  restatement of the agreement implementing the removal or exclusion.
         (i)  A regional participation agreement may not require a
  party [district] to make payments from any funds that are
  restricted, encumbered, or pledged for the payment of contractual
  obligations or indebtedness of the party [district].  Otherwise,
  any party may commit or pledge or may issue bonds payable from or
  secured by a pledge of any available source of funds, including
  unencumbered sales and use taxes, to make payments due or to become
  due under an agreement.
         (m)  Notwithstanding any defect, ambiguity, discrepancy,
  invalidity, or unenforceability of a regional participation
  agreement that has been voluntarily entered into and fully executed
  by the parties, or any contrary law, common law doctrine, or
  municipal charter provision, and for the duration of any annexation
  deferral period established in the agreement during which a
  district continues to perform its obligations under the agreement:
               (1)  Section 42.023 and any other law or municipal
  charter provision relating to the reduction of the extraterritorial
  jurisdiction of an eligible municipality that is a party do not
  apply, and Sections 42.041(b)-(e) do not apply to any land or owner
  of land within a district that is a party;
               (2)  the governing body of an eligible municipality
  that is a party may not initiate or continue an annexation
  proceeding relating to that area but may include the area covered by
  the agreement in a municipal annexation plan; and
               (3)  any area [of a district] that is [a party] to be
  released from the extraterritorial jurisdiction of an eligible
  municipality that is a party under an agreement, or that is to be
  incorporated or included within an alternate form of government
  with the consent of a municipality that is a party under an
  agreement, shall, by operation of law and without further action by
  a party or its governing body, be released from the
  extraterritorial jurisdiction, or consent of the municipality to
  the incorporation or adoption of an alternate form of government by
  the district shall be deemed to have been given, as appropriate
  under the agreement, at the time or upon the occurrence of the
  events specified in the agreement.
         (q)  For purposes of Subchapter I, Chapter 271:
               (1)  a district or eligible municipality is a "local
  governmental entity" within the meaning of Section 271.151(3); and
               (2)  a regional participation agreement is a "contract
  subject to this subchapter" within the meaning of Section
  271.151(2), without regard to whether the agreement is for
  providing goods or services.
         SECTION 3.  Section 43.0754(q), Local Government Code, as
  added by this Act, applies only to a cause of action that accrues on
  or after the effective date of this Act. A cause of action that
  accrues before the effective date of this Act is governed by the law
  in effect immediately before that date, and that law is continued in
  effect for that purpose.
         SECTION 4.  This Act takes effect September 1, 2009.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2726 was passed by the House on April
  22, 2009, by the following vote:  Yeas 149, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2726 was passed by the Senate on May
  20, 2009, by the following vote:  Yeas 29, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor