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  H.B. No. 347
 
 
 
 
AN ACT
  relating to consent annexation requirements.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. REPEAL OF TIER SYSTEM
         SECTION 1.01.  The following provisions of Chapter 43, Local
  Government Code, are repealed:
               (1)  Sections 43.001(2), (3), (4), and (5);
               (2)  Section 43.011;
               (3)  Subchapter B;
               (4)  Section 43.0505(b);
               (5)  Section 43.052;
               (6)  Section 43.053;
               (7)  Section 43.056(q);
               (8)  Section 43.0561;
               (9)  Section 43.0562;
               (10)  Section 43.0563;
               (11)  Section 43.0564;
               (12)  Section 43.061(b);
               (13)  Section 43.066;
               (14)  Section 43.067;
               (15)  Section 43.068;
               (16)  Section 43.069;
               (17)  Section 43.0751(o);
               (18)  Section 43.0752;
               (19)  Section 43.103;
               (20)  Section 43.105; and
               (21)  Subchapter Y.
         SECTION 1.02.  The heading to Subchapter C-2, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C-2. GENERAL ANNEXATION AUTHORITY AND PROCEDURES
  REGARDING CONSENT ANNEXATIONS[: TIER 2 MUNICIPALITIES]
         SECTION 1.03.  The heading to Subchapter C-3, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C-3. ANNEXATION OF AREA ON REQUEST OF OWNERS[: TIER 2
  MUNICIPALITIES]
         SECTION 1.04.  The heading to Subchapter C-4, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C-4. ANNEXATION OF AREAS WITH POPULATION OF LESS THAN
  200 BY PETITION [: TIER 2 MUNICIPALITIES]
         SECTION 1.05.  The heading to Subchapter C-5, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C-5. ANNEXATION OF AREAS WITH POPULATION OF AT LEAST 200
  BY ELECTION [: TIER 2 MUNICIPALITIES]
         SECTION 1.06.  Section 43.1025(c), Local Government Code, is
  amended to read as follows:
         (c)  The area described by Subsection (b) may be annexed
  under the requirements prescribed by Subchapter C-3, C-4, or C-5,
  as applicable [to a tier 2 municipality], but the annexation may not
  occur unless each municipality in whose extraterritorial
  jurisdiction the area may be located:
               (1)  consents to the annexation; and
               (2)  reduces its extraterritorial jurisdiction over
  the area as provided by Section 42.023.
         SECTION 1.07.  Section 43.1211, Local Government Code, is
  amended to read as follows:
         Sec. 43.1211.  USE OF CONSENT PROCEDURES [AUTHORITY OF
  CERTAIN TIER 2 MUNICIPALITIES] TO ANNEX FOR LIMITED PURPOSES.  
  Except as provided by Section 43.0751, beginning December 1, 2017,
  a [tier 2] municipality described by Section 43.121(a) may annex an
  area for the limited purposes of applying its planning, zoning,
  health, and safety ordinances in the area using the procedures
  under Subchapter C-3, C-4, or C-5, as applicable.
  ARTICLE 2. CONFORMING CHANGES
         SECTION 2.01.  The following provisions of the Special
  District Local Laws Code are repealed:
               (1)  Section 8374.252(a);
               (2)  Section 8375.252(a);
               (3)  Section 8376.252(a);
               (4)  Section 8377.252(a);
               (5)  Section 8378.252(a);
               (6)  Section 8382.252(a);
               (7)  Section 8383.252(a);
               (8)  Section 8384.252(a);
               (9)  Section 8385.252(a); and
               (10)  Section 8477.302(a).
         SECTION 2.02.  Section 43.0116(a), Local Government Code, is
  amended to read as follows:
         (a)  Notwithstanding any other law and subject to Subsection
  (b), a municipality may annex all or part of the area located in an
  industrial district designated by the governing body of the
  municipality under Section 42.044 under the procedures prescribed
  by Subchapter C-1 [the requirements applicable to a tier 1
  municipality].
         SECTION 2.03.  The heading to Subchapter C, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C.  LIMITATIONS AND REQUIREMENTS REGARDING ANNEXATIONS
  EXEMPTED FROM CONSENT ANNEXATION PROCEDURES [PROCEDURE FOR AREAS
  ANNEXED UNDER MUNICIPAL ANNEXATION PLAN: TIER 1 MUNICIPALITIES]
         SECTION 2.04.  Section 43.0505(a), Local Government Code, is
  amended to read as follows:
         (a)  This [Except as provided by Subsection (b), this]
  subchapter applies only to an annexation under Subchapter C-1 [a
  tier 1 municipality].
         SECTION 2.05.  Sections 43.056(a), (b), (j), and (k), Local
  Government Code, are amended to read as follows:
         (a)  This section applies to a service plan under Section
  43.065 [Before the first day of the 10th month after the month in
  which the inventory is prepared as provided by Section 43.053, the
  municipality proposing the annexation shall complete a service plan
  that provides for the extension of full municipal services to the
  area to be annexed. The municipality shall provide the services by
  any of the methods by which it extends the services to any other
  area of the municipality].
         (b)  The service plan, which must be completed [in the period
  provided by Subsection (a)] before the annexation, must include a
  program under which the municipality will provide full municipal
  services in the annexed area no later than 2-1/2 years after the
  effective date of the annexation, in accordance with Subsection
  (e), unless certain services cannot reasonably be provided within
  that period and the municipality proposes a schedule for providing
  those services, and must include a list of all services required by
  this section to be provided under the plan.  If the municipality
  proposes a schedule to extend the period for providing certain
  services, the schedule must provide for the provision of full
  municipal services no later than 4-1/2 years after the effective
  date of the annexation.  However, under the program if the
  municipality provides any of the following services within the
  corporate boundaries of the municipality before annexation, the
  municipality must provide those services in the area proposed for
  annexation on the effective date of the annexation of the area:
               (1)  police protection;
               (2)  fire protection;
               (3)  emergency medical services;
               (4)  solid waste collection, except as provided by
  Subsection (o);
               (5)  operation and maintenance of water and wastewater
  facilities in the annexed area that are not within the service area
  of another water or wastewater utility;
               (6)  operation and maintenance of roads and streets,
  including road and street lighting;
               (7)  operation and maintenance of parks, playgrounds,
  and swimming pools; and
               (8)  operation and maintenance of any other publicly
  owned facility, building, or service.
         (j)  The proposed service plan must be made available for
  public inspection and explained to the inhabitants of the area at
  the public hearings held under Section 43.063 [43.0561]. The plan
  may be amended through negotiation at the hearings, but the
  provision of any service may not be deleted. On completion of the
  public hearings, the service plan shall be attached to the
  ordinance annexing the area and approved as part of the ordinance.
         (k)  On approval by the governing body, the service plan is a
  contractual obligation that is not subject to amendment or repeal
  except that if the governing body determines at the public hearings
  required by this subsection that changed conditions or subsequent
  occurrences make the service plan unworkable or obsolete, the
  governing body may amend the service plan to conform to the changed
  conditions or subsequent occurrences. An amended service plan must
  provide for services that are comparable to or better than those
  established in the service plan before amendment. Before any
  amendment is adopted, the governing body must provide an
  opportunity for interested persons to be heard at public hearings
  called and held in the manner provided by Section 43.063 [43.0561].
         SECTION 2.06.  The heading to Subchapter C-1, Chapter 43,
  Local Government Code, is amended to read as follows:
  SUBCHAPTER C-1. ANNEXATION PROCEDURE FOR AREAS EXEMPTED FROM
  CONSENT [MUNICIPAL] ANNEXATION PROCEDURES [PLAN: TIER 1
  MUNICIPALITIES]
         SECTION 2.07.  Section 43.061(a), Local Government Code, is
  amended to read as follows:
         (a)  Unless otherwise specifically provided by this chapter
  or another law [Except as provided by Subsection (b)], this
  subchapter applies only to an annexation under:
               (1)  Section 43.0115 (Enclave);
               (2)  Section 43.0116 (Industrial District);
               (3)  Section 43.012 (Area Owned by Type-A
  Municipality);
               (4)  Section 43.013 (Navigable Stream);
               (5)  Section 43.0751(h) (Strategic Partnership);
               (6)  Section 43.101 (Municipally Owned Reservoir);
               (7)  Section 43.102 (Municipally Owned Airport); and
               (8)  Section 43.1055 (Road and Right-of-Way) [area that
  is proposed for annexation by a tier 1 municipality and that is not
  required to be included in a municipal annexation plan under
  Section 43.052(h)].
         SECTION 2.08.  Section 43.062(b), Local Government Code, is
  amended to read as follows:
         (b)  This subsection applies only to an area that contains
  fewer than 100 separate tracts of land on which one or more
  residential dwellings are located on each tract [described by
  Section 43.052(h)(1)]. Before the 30th day before the date of the
  first hearing required under Section 43.063, a municipality shall
  give written notice of its intent to annex the area to:
               (1)  each property owner in an area proposed for
  annexation, as indicated by the appraisal records furnished by the
  appraisal district for each county in which the area is located;
               (2)  each public entity[, as defined by Section
  43.053,] or private entity that provides services in the area
  proposed for annexation, including each:
                     (A)  municipality, county, fire protection
  service provider, including a volunteer fire department, and
  emergency medical services provider, including a volunteer
  emergency medical services provider; and
                     (B)  municipal utility district, water control
  and improvement district, or other district created under Section
  52, Article III, or Section 59, Article XVI, Texas Constitution;
  and
               (3)  each railroad company that serves the municipality
  and is on the municipality's tax roll if the company's right-of-way
  is in the area proposed for annexation.
         SECTION 2.09.  Section 43.0715(c), Local Government Code, is
  amended to read as follows:
         (c)  At the time notice of the municipality's intent to annex
  the land within the district is first given in accordance with
  Section [43.052,] 43.0683[,] or 43.0693, as applicable, the
  municipality shall proceed to initiate and complete a report for
  each developer conducted in accordance with the format approved by
  the Texas Commission on Environmental Quality 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,
  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.
         SECTION 2.10.  Sections 43.0751(b) and (h), Local Government
  Code, are amended to read as follows:
         (b)  The governing bodies of a municipality and a district
  may negotiate and enter into a written strategic partnership
  agreement for the district by mutual consent. [The governing body
  of a municipality, on written request from a district included in
  the municipality's annexation plan under Section 43.052, shall
  negotiate and enter into a written strategic partnership agreement
  with the district. A district included in a municipality's
  annexation plan under Section 43.052:
               [(1)     may not submit its written request before the
  date of the second hearing required under Section 43.0561; and
               [(2)     must submit its written request before the 61st
  day after the date of the second hearing required under Section
  43.0561.]
         (h)  On the full-purpose annexation conversion date set
  forth in the strategic partnership agreement pursuant to Subsection
  (f)(5), the land included within the boundaries of the district
  shall be deemed to be within the full-purpose boundary limits of the
  municipality without the need for further action by the governing
  body of the municipality. The full-purpose annexation conversion
  date established by a strategic partnership agreement may be
  altered only by mutual agreement of the district and the
  municipality. However, nothing herein shall prevent the
  municipality from terminating the agreement and instituting
  proceedings to annex the district, on request by the governing body
  of the district, on any date prior to the full-purpose annexation
  conversion date established by the strategic partnership agreement
  under the procedures prescribed by Subchapter C-1 [applicable to a
  tier 1 municipality]. Land annexed for limited or full purposes
  under this section shall not be included in calculations prescribed
  by Section 43.055(a).
         SECTION 2.11.  Section 43.07515(a), Local Government Code,
  is amended to read as follows:
         (a)  A municipality may not regulate under Section 43.0751
  [or 43.0752] the sale, use, storage, or transportation of fireworks
  outside of the municipality's boundaries.
         SECTION 2.12.  Section 43.101(c), Local Government Code, is
  amended to read as follows:
         (c)  A municipality may annex the [The] area described by
  this section [may be annexed] without the consent of any owners or
  residents of the area under the procedures prescribed by Subchapter
  C-1 [applicable to a tier 1 municipality by:
               [(1)  a tier 1 municipality; and
               [(2)]  if there are no owners other than the
  municipality or residents of the area[, a tier 2 municipality].
         SECTION 2.13.  Section 43.102(c), Local Government Code, is
  amended to read as follows:
         (c)  A municipality may annex the [The] area described by
  this section [may be annexed] without the consent of any owners or
  residents of the area under the procedures prescribed by Subchapter
  C-1 [applicable to a tier 1 municipality by:
               [(1)  a tier 1 municipality; and
               [(2)]  if there are no owners other than the
  municipality or residents of the area[, a tier 2 municipality].
         SECTION 2.14.  Section 43.1055, Local Government Code, is
  amended to read as follows:
         Sec. 43.1055.  ANNEXATION OF ROADS AND RIGHTS-OF-WAY [IN
  CERTAIN LARGE COUNTIES]. Notwithstanding any other law, a [tier 2]
  municipality may by ordinance annex a road or the right-of-way of a
  road on request of the owner of the road or right-of-way or the
  governing body of the political subdivision that maintains the road
  or right-of-way under the procedures prescribed by Subchapter C-1
  [applicable to a tier 1 municipality].
         SECTION 2.15.  Section 43.141(a), Local Government Code, is
  amended to read as follows:
         (a)  A majority of the qualified voters of an annexed area
  may petition the governing body of the municipality to disannex the
  area if the municipality fails or refuses to provide services or to
  cause services to be provided to the area:
               (1)  if the area was annexed under Subchapter C-1
  [municipality is a tier 1 municipality], within the period
  specified by Section 43.056 or by the service plan prepared for the
  area under that section; or
               (2)  if the area was annexed under Subchapter C-3, C-4,
  or C-5 [municipality is a tier 2 municipality], within the period
  specified by the written agreement under Section 43.0672 or the
  resolution under Section 43.0682 or 43.0692, as applicable.
         SECTION 2.16.  Section 43.203(b), Local Government Code, is
  amended to read as follows:
         (b)  On receipt of the district's petition, the governing
  body of the municipality shall enter into negotiations with the
  district for an agreement to alter the status of annexation that
  must:
               (1)  specify the period, which may not be less than 10
  years beginning on January 1 of the year following the date of the
  agreement, in which limited-purpose annexation is in effect;
               (2)  provide that, at the expiration of the period, the
  district's annexation status will automatically revert to
  full-purpose annexation without following procedures provided by
  Section [Sections] 43.014 [and 43.052 through 43.055] or any
  [other] procedural requirement for annexation not in effect on
  January 1, 1995; and
               (3)  specify the financial obligations of the district
  during and after the period of limited-purpose annexation for:
                     (A)  facilities constructed by the municipality
  that are in or that serve the district;
                     (B)  debt incurred by the district for water and
  sewer infrastructure that will be assumed by the municipality at
  the end of the period of limited-purpose annexation; and
                     (C)  use of the municipal sales taxes collected by
  the municipality for facilities or services in the district.
         SECTION 2.17.  Section 43.905(a), Local Government Code, is
  amended to read as follows:
         (a)  A municipality that proposes to annex an area shall
  provide written notice of the proposed annexation to each public
  school district located in the area proposed for annexation within
  the period prescribed for providing the notice of, as applicable:
               (1)  the hearing under Section 43.0673; or
               (2)  the first hearing under Section [43.0561,] 43.063,
  [43.0673,] 43.0683, or 43.0693[, as applicable].
         SECTION 2.18.  Sections 43.9051(a) and (b), Local Government
  Code, are amended to read as follows:
         (a)  In this section, "public entity" includes a county, fire
  protection service provider, including a volunteer fire
  department, emergency medical services provider, including a
  volunteer emergency medical services provider, or special district
  described[, as that term is defined] by Section 43.062(b)(2)(B)
  [43.052].
         (b)  A municipality that proposes to annex an area shall
  provide to each public entity that is located in or provides
  services to the area proposed for annexation written notice of the
  proposed annexation within the period prescribed for providing the
  notice of, as applicable:
               (1)  the hearing under Section 43.0673; or
               (2)  the first hearing under Section [43.0561,] 43.063,
  [43.0673,] 43.0683, or 43.0693[, as applicable, to each public
  entity that is located in or provides services to the area proposed
  for annexation].
  ARTICLE 3.  HEARING REQUIREMENTS FOR CERTAIN CONSENT ANNEXATIONS
         SECTION 3.01.  Section 43.0673, Local Government Code, is
  amended to read as follows:
         Sec. 43.0673.  PUBLIC HEARING [HEARINGS].  (a)  Before a
  municipality may adopt an ordinance annexing an area under this
  subchapter [section], the governing body of the municipality must
  conduct one [at least two] public hearing [hearings].
         [(b)     The hearings must be conducted not less than 10
  business days apart.]
         (c)  During the [first] public hearing, the governing body:
               (1)  must provide persons interested in the annexation
  the opportunity to be heard; and
               (2)  [. During the final public hearing, the governing
  body] may adopt an ordinance annexing the area.
         (d)  The municipality must post notice of the hearing
  [hearings] on the municipality's Internet website if the
  municipality has an Internet website and publish notice of the
  hearing [hearings] in a newspaper of general circulation in the
  municipality and in the area proposed for annexation.  The notice
  for the [each] hearing must be:
               (1)  published at least once on or after the 20th day
  but before the 10th day before the date of the hearing; and
               (2)  [. The notice for each hearing must be] posted on
  the municipality's Internet website on or after the 20th day but
  before the 10th day before the date of the hearing and must remain
  posted until the date of the hearing.
  ARTICLE 4. TRANSITION AND EFFECTIVE DATE
         SECTION 4.01.  (a)  Except as provided by Subsections (b) and
  (c) of this section, the changes in law made by this Act apply only
  to an annexation of an area that is not final on the effective date
  of this Act. An annexation of an area that was final before the
  effective date of this Act is governed by those portions of Chapter
  43, Local Government Code, that relate to post-annexation
  procedures and requirements in effect immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         (b)  The changes in law made by this Act do not apply to the
  annexation of an area for which the governing body of a municipality
  has adopted a resolution to direct the municipality's city manager
  to prepare a service plan for the area on or before the effective
  date of this Act. An annexation of an area for which the governing
  body adopted a resolution to direct the municipality's city manager
  to prepare a service plan for the area before the effective date of
  this Act is governed by Chapter 43, Local Government Code, as it
  existed on January 1, 2019.
         (c)  Until the fourth anniversary of the date that final
  judgment in an action described by this subsection is rendered, the
  changes in law made by this Act do not apply to an annexation of an
  area described by this subsection, and an annexation of an area
  described by this subsection is governed by Chapter 43, Local
  Government Code, as it existed on January 1, 2019.  This subsection
  applies only to an area that is:
               (1)  wholly located in a county that:
                     (A)  borders the Gulf of Mexico; and
                     (B)  contains an international border; and
               (2)  proposed to be annexed by a municipality that is a
  named party in an action:
                     (A)  involving issues of fact or law relating to
  the annexation; and
                     (B)  commenced before January 1, 2019.
         
         SECTION 4.02.  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, 2019.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 347 was passed by the House on April
  9, 2019, by the following vote:  Yeas 133, Nays 14, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 347 on May 13, 2019, by the following vote:  Yeas 131, Nays 9, 1
  present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 347 was passed by the Senate, with
  amendments, on May 8, 2019, by the following vote:  Yeas 25, Nays 6.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor