CHAPTER 372. IMPROVEMENT DISTRICTS IN MUNICIPALITIES AND COUNTIES
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT
CHAPTER 372. IMPROVEMENT DISTRICTS IN MUNICIPALITIES AND COUNTIES
SUBCHAPTER A. PUBLIC IMPROVEMENT DISTRICTS
Sec. 372.001. SHORT TITLE. This subchapter may be cited as the
Public Improvement District Assessment Act.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 372.0015. DEFINITION. In this subchapter,
"extraterritorial jurisdiction" means extraterritorial
jurisdiction as determined under Chapter 42.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 76(b), eff. Aug. 28,
1989.
Sec. 372.002. EXERCISE OF POWERS. Powers granted under this
subchapter may be exercised by a municipality or county in which
the governing body of the municipality or county initiates or
receives a petition requesting the establishment of a public
improvement district. A petition must comply with the
requirements of Section 372.005.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 2, eff. June 16,
2001.
Sec. 372.003. AUTHORIZED IMPROVEMENTS. (a) If the governing
body of a municipality or county finds that it promotes the
interests of the municipality or county, the governing body may
undertake an improvement project that confers a special benefit
on a definable part of the municipality or county or the
municipality's extraterritorial jurisdiction. A project may be
undertaken in the municipality or county or the municipality's
extraterritorial jurisdiction.
(b) A public improvement project may include:
(1) landscaping;
(2) erection of fountains, distinctive lighting, and signs;
(3) acquiring, constructing, improving, widening, narrowing,
closing, or rerouting of sidewalks or of streets, any other
roadways, or their rights-of-way;
(4) construction or improvement of pedestrian malls;
(5) acquisition and installation of pieces of art;
(6) acquisition, construction, or improvement of libraries;
(7) acquisition, construction, or improvement of off-street
parking facilities;
(8) acquisition, construction, improvement, or rerouting of mass
transportation facilities;
(9) acquisition, construction, or improvement of water,
wastewater, or drainage facilities or improvements;
(10) the establishment or improvement of parks;
(11) projects similar to those listed in Subdivisions (1)-(10);
(12) acquisition, by purchase or otherwise, of real property in
connection with an authorized improvement;
(13) special supplemental services for improvement and promotion
of the district, including services relating to advertising,
promotion, health and sanitation, water and wastewater, public
safety, security, business recruitment, development, recreation,
and cultural enhancement;
(14) payment of expenses incurred in the establishment,
administration, and operation of the district; and
(15) the development, rehabilitation, or expansion of affordable
housing.
(c) A public improvement project may be limited to the provision
of the services described by Subsection (b)(13).
(d) A county may establish a public improvement district unless
within 30 days of a county's action to approve such a district, a
home rule municipality objects to its establishment within the
municipality's corporate limits or extraterritorial jurisdiction.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(c), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 3, eff. June 16, 2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
340, Sec. 1, eff. June 19, 2009.
Sec. 372.004. COMBINED IMPROVEMENTS. An improvement project may
consist of an improvement on more than one street or of more than
one type of improvement. A project described by this section may
be included in one proceeding and financed as one improvement
project.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(d), eff. Aug. 28,
1989.
Sec. 372.005. PETITION. (a) A petition for the establishment
of a public improvement district must state:
(1) the general nature of the proposed improvement;
(2) the estimated cost of the improvement;
(3) the boundaries of the proposed assessment district;
(4) the proposed method of assessment, which may specify
included or excluded classes of assessable property;
(5) the proposed apportionment of cost between the public
improvement district and the municipality or county as a whole;
(6) whether the management of the district is to be by the
municipality or county, the private sector, or a partnership
between the municipality or county and the private sector;
(7) that the persons signing the petition request or concur with
the establishment of the district; and
(8) that an advisory body may be established to develop and
recommend an improvement plan to the governing body of the
municipality or county.
(b) The petition is sufficient if signed by:
(1) owners of taxable real property representing more than 50
percent of the appraised value of taxable real property liable
for assessment under the proposal, as determined by the current
roll of the appraisal district in which the property is located;
and
(2) record owners of real property liable for assessment under
the proposal who:
(A) constitute more than 50 percent of all record owners of
property that is liable for assessment under the proposal; or
(B) own taxable real property that constitutes more than 50
percent of the area of all taxable real property that is liable
for assessment under the proposal.
(c) The petition may be filed with the municipal secretary or
other officer performing the functions of the municipal
secretary.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(e), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 4, eff. June 16, 2001.
Sec. 372.006. FINDINGS. If a petition that complies with this
subchapter is filed, the governing body of the municipality or
county may make findings by resolution as to the advisability of
the proposed improvement, its estimated cost, the method of
assessment, and the apportionment of cost between the proposed
improvement district and the municipality or county as a whole.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 5, eff. June 16,
2001.
Sec. 372.007. FEASIBILITY REPORT. (a) Before holding the
hearing required by Section 372.009, the governing body of the
municipality may use the services of municipal employees, the
governing body of the county may use the services of county
employees, or the governing body of the municipality or county
may employ consultants to prepare a report to determine whether
an improvement should be made as proposed by petition or
otherwise or whether the improvement should be made in
combination with other improvements authorized under this
subchapter. The governing body may also require that a
preliminary estimate of the cost of the improvement or
combination of improvements be made.
(b) For the purpose of determining the feasibility and
desirability of an improvement district, the governing body may
take other preliminary steps before the hearing required by
Section 372.009, before establishing a public improvement
district, or before entering into a contract.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 6, eff. June 16,
2001.
Sec. 372.008. ADVISORY BODY. (a) After receiving a petition
that complies with Section 372.005, the governing body of the
municipality or county may appoint an advisory body with the
responsibility of developing and recommending an improvement plan
to the governing body.
(b) The composition of the advisory body must include:
(1) owners of taxable real property representing more than 50
percent of the appraised value of taxable real property liable
for assessment under the proposal, as determined by the current
roll of the appraisal district in which the property is located;
and
(2) record owners of real property liable for assessment under
the proposal who:
(A) constitute more than 50 percent of all record owners of
property that is liable for assessment under the proposal; or
(B) own taxable real property that constitutes more than 50
percent of the area of all taxable real property that is liable
for assessment under the proposal.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 7, eff. June 16,
2001.
Sec. 372.009. HEARING. (a) A public improvement district may
be established and improvements provided by the district may be
financed under this subchapter only after the governing body of
the municipality or county holds a public hearing on the
advisability of the improvement.
(b) The hearing may be adjourned from time to time until the
governing body makes findings by resolution as to:
(1) the advisability of the improvement;
(2) the nature of the improvement;
(3) the estimated cost of the improvement;
(4) the boundaries of the public improvement district;
(5) the method of assessment; and
(6) the apportionment of costs between the district and the
municipality or county as a whole.
(c) Notice of the hearing must be given in a newspaper of
general circulation in the municipality or county. If any part of
the improvement district is to be located in the municipality's
extraterritorial jurisdiction or if any part of the improvements
is to be undertaken in the municipality's extraterritorial
jurisdiction, the notice must also be given in a newspaper of
general circulation in the part of the extraterritorial
jurisdiction in which the district is to be located or in which
the improvements are to be undertaken. The final publication of
notice must be made before the 15th day before the date of the
hearing. The notice must state:
(1) the time and place of the hearing;
(2) the general nature of the proposed improvement;
(3) the estimated cost of the improvement;
(4) the boundaries of the proposed assessment district;
(5) the proposed method of assessment; and
(6) the proposed apportionment of cost between the improvement
district and the municipality or county as a whole.
(d) Written notice containing the information required by
Subsection (c) must be mailed before the 15th day before the date
of the hearing. The notice must be addressed to "Property Owner"
and mailed to the current address of the owner, as reflected on
tax rolls, of property subject to assessment under the proposed
public improvement district.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(f), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 8, eff. June 16, 2001.
Sec. 372.010. IMPROVEMENT ORDER. (a) During the six-month
period after the date of the final adjournment of the hearing
under Section 372.009, the governing body of the municipality or
county may authorize an improvement district if, by majority vote
of all members of the governing body, the members adopt a
resolution authorizing the district in accordance with its
finding as to the advisability of the improvement.
(b) An authorization takes effect when it has been published one
time in a newspaper of general circulation in the municipality or
county. If any part of the improvement district is located in the
municipality's extraterritorial jurisdiction or if any part of
the improvements is to be undertaken in the municipality's
extraterritorial jurisdiction, the authorization does not take
effect until the notice is also given one time in a newspaper of
general circulation in the part of the extraterritorial
jurisdiction in which the district is located or in which the
improvements are to be undertaken.
(c) Actual construction of an improvement may not begin until
after the 20th day after the date the authorization takes effect
and may not begin if during that 20-day period written protests
signed by at least two-thirds of the owners of record of property
within the improvement district or by the owners of record of
property comprising at least two-thirds of the total area of the
district are filed with the municipal or county secretary or
other officer performing the duties of the municipal or county
secretary. A person whose name appears on a protest may withdraw
the name from the protest at any time before the governing body
of the municipality or county convenes to determine the
sufficiency of the protest.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(g), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 9, eff. June 16, 2001.
Sec. 372.011. DISSOLUTION. A public hearing may be called and
held in the same manner as a hearing under Section 372.009 for
the purpose of dissolving a district if a petition requesting
dissolution is filed and the petition contains the signatures of
at least enough property owners in the district to make a
petition sufficient under Section 372.005(b). If the district is
dissolved, the district nonetheless shall remain in effect for
the purpose of meeting obligations of indebtedness for
improvements.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 372.012. AREA OF DISTRICT. The area of a public
improvement district to be assessed according to the findings of
the governing body of the municipality or county may be less than
the area described in the proposed boundaries stated by the
notice under Section 372.009. The area to be assessed may not
include property not described by the notice as being within the
proposed boundaries of the district unless a hearing is held to
include the property and notice for the hearing is given in the
same manner as notice under Section 372.009.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 10, eff. June 16,
2001.
Sec. 372.013. SERVICE PLAN. (a) The advisory body shall
prepare an ongoing service plan and present the plan to the
governing body of the municipality or county for review and
approval. The governing body may assign responsibility for the
plan to another entity in the absence of an advisory body.
(b) The plan must cover a period of at least five years and must
also define the annual indebtedness and the projected costs for
improvements. The plan shall be reviewed and updated annually for
the purpose of determining the annual budget for improvements.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 11, eff. June 16,
2001.
Sec. 372.014. ASSESSMENT PLAN; PAYMENT BY EXEMPT JURISDICTIONS.
(a) An assessment plan must be included in the annual service
plan.
(b) The municipality or county is responsible for payment of
assessments against exempt municipal or county property in the
district. Payment of assessments by other exempt jurisdictions
must be established by contract. An assessment paid by the
municipality or county under this subsection is considered to
have been paid by special assessment for the purposes of
Subsection (a).
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(h), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 12, eff. June 16,
2001.
Sec. 372.015. DETERMINATION OF ASSESSMENT. (a) The governing
body of the municipality or county shall apportion the cost of an
improvement to be assessed against property in an improvement
district. The apportionment shall be made on the basis of special
benefits accruing to the property because of the improvement.
(b) Cost of an improvement may be assessed:
(1) equally per front foot or square foot;
(2) according to the value of the property as determined by the
governing body, with or without regard to improvements on the
property; or
(3) in any other manner that results in imposing equal shares of
the cost on property similarly benefitted.
(c) The governing body may establish by ordinance or order:
(1) reasonable classifications and formulas for the
apportionment of the cost between the municipality or county and
the area to be assessed; and
(2) the methods of assessing the special benefits for various
classes of improvements.
(d) The amount of assessment for each property owner may be
adjusted following the annual review of the service plan.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 13, eff. June 16,
2001.
Sec. 372.016. ASSESSMENT ROLL. (a) After the total cost of an
improvement is determined, the governing body of the municipality
or county shall prepare a proposed assessment roll. The roll must
state the assessment against each parcel of land in the district,
as determined by the method of assessment chosen by the
municipality or county under this subchapter.
(b) The governing body shall file the proposed assessment roll
with the municipal secretary or other officer performing the
functions of the municipal secretary or in a district formed by a
county, the county tax assessor-collector. The proposed
assessment roll is subject to public inspection. The governing
body shall require the municipal secretary or other officer or
county tax assessor-collector to publish notice of the governing
body's intention to consider the proposed assessments at a public
hearing. The notice must be published in a newspaper of general
circulation in the municipality or county before the 10th day
before the date of the hearing. If any part of the improvement
district is located in the municipality's extraterritorial
jurisdiction or if any part of the improvements is to be
undertaken in the municipality's extraterritorial jurisdiction,
the notice must also be published, before the 10th day before the
date of the hearing, in a newspaper of general circulation in the
part of the extraterritorial jurisdiction in which the district
is located or in which the improvements are to be undertaken. The
notice must state:
(1) the date, time, and place of the hearing;
(2) the general nature of the improvement;
(3) the cost of the improvement;
(4) the boundaries of the assessment district; and
(5) that written or oral objections will be considered at the
hearing.
(c) When the assessment roll is filed under Subsection (b), the
municipal secretary or other officer shall mail to the owners of
property liable for assessment a notice of the hearing. The
notice must contain the information required by Subsection (b)
and the secretary or other officer shall mail the notice to the
last known address of the property owner. The failure of a
property owner to receive notice does not invalidate the
proceeding.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(i), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 14, eff. June 16,
2001.
Sec. 372.017. LEVY OF ASSESSMENT. (a) At or on the adjournment
of the hearing referred to by Section 372.016 on proposed
assessments, the governing body of the municipality or county
must hear and pass on any objection to a proposed assessment. The
governing body may amend a proposed assessment on any parcel.
(b) After all objections have been heard and the governing body
has passed on the objections, the governing body by ordinance or
order shall levy the assessment as a special assessment on the
property. The governing body by ordinance or order shall specify
the method of payment of the assessment. The governing body may
provide that assessments be paid in periodic installments, at an
interest rate and for a period approved by the governing body.
The provision that assessments be paid in periodic installments
may, but is not required to, result in level annual installment
payments. The installments must be in amounts necessary to meet
annual costs for improvements and must continue for:
(1) the period necessary to retire the indebtedness on the
improvements; or
(2) the period approved by the governing body for the payment of
the installments.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 15, eff. June 16,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
320, Sec. 1, eff. June 19, 2009.
Sec. 372.018. INTEREST ON ASSESSMENT; LIEN. (a) An assessment
bears interest at the rate specified by the governing body of the
municipality or county beginning at the time or times or on the
occurrence of one or more events specified by the governing body.
If general obligation bonds, revenue bonds, time warrants, or
temporary notes are issued to finance the improvement for which
the assessment is assessed, the interest rate for that assessment
may not exceed a rate that is one-half of one percent higher than
the actual interest rate paid on the debt. Interest on the
assessment between the effective date of the ordinance or order
levying the assessment and the date the first installment is
payable shall be added to the first installment. The interest on
any delinquent installment shall be added to each subsequent
installment until all delinquent installments are paid.
(b) An assessment or reassessment, with interest, the expense of
collection, and reasonable attorney's fees, if incurred, is:
(1) a first and prior lien against the property assessed;
(2) superior to all other liens and claims except liens or claims
for state, county, school district, or municipality ad valorem
taxes; and
(3) a personal liability of and charge against the owners of the
property regardless of whether the owners are named.
(c) The lien is effective from the date of the ordinance or
order levying the assessment until the assessment is paid.
(d) The lien runs with the land and that portion of an
assessment payment that has not yet come due is not eliminated by
foreclosure of an ad valorem tax lien.
(e) The assessment lien may be enforced by the governing body in
the same manner that an ad valorem tax lien against real property
may be enforced by the governing body. Foreclosure of accrued
installments does not eliminate the outstanding principal balance
of the assessment. Any purchaser of the property in foreclosure
takes the property subject to the assessment lien and any
associated obligations.
(f) Delinquent installments of the assessment shall incur
interest, penalties, and attorney's fees in the same manner as
delinquent ad valorem taxes. The owner of assessed property may
pay at any time all or any part of the assessment, with interest
that has accrued on the assessment, on any lot or parcel.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(j), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 16, eff. June 16,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
320, Sec. 2, eff. June 19, 2009.
Sec. 372.019. SUPPLEMENTAL ASSESSMENTS. After notice and a
hearing, the governing body of the municipality or county may
make supplemental assessments to correct omissions or mistakes in
the assessment relating to the total cost of the improvement.
Notice must be given and the hearing held under this section in
the same manner as required by Sections 372.016 and 372.017.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 17, eff. June 16,
2001.
Sec. 372.020. REASSESSMENT. The governing body of the
municipality or county may make a reassessment or new assessment
of a parcel of land if:
(1) a court of competent jurisdiction sets aside an assessment
against the parcel;
(2) the governing body determines that the original assessment
is excessive; or
(3) on the written advice of counsel, the governing body
determines that the original assessment is invalid.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 18, eff. June 16,
2001.
Sec. 372.021. SPECIAL IMPROVEMENT DISTRICT FUND. (a) A
municipality or county that intends to create a public
improvement district may by ordinance or order establish a
special improvement district fund in the municipal or county
treasury.
(b) The municipality or county annually may levy a tax to
support the fund.
(c) The fund may be used to:
(1) pay the costs of planning, administration, and an
improvement authorized by this subchapter;
(2) prepare preliminary plans, studies, and engineering reports
to determine the feasibility of an improvement; and
(3) if ordered by the governing body of the municipality or
county, pay the initial cost of the improvement until temporary
notes, time warrants, or improvement bonds have been issued and
sold.
(d) The fund is not required to be budgeted for expenditure
during any year, but the amount of the fund must be stated in the
municipality's or county's annual budget. The amount of the fund
must be based on an annual service plan that describes the public
improvements for the fiscal year.
(e) A grant-in-aid or contribution made to the municipality or
county for the planning and preparation of plans for an
improvement authorized under this subchapter may be credited to
the special improvement district fund.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 19, eff. June 16,
2001.
Sec. 372.022. SEPARATE FUNDS. If bonds are issued, a separate
public improvement district fund shall be created in the
municipal or county treasury for each district. Proceeds from
the sale of bonds, temporary notes, and time warrants, and other
sums appropriated to the fund by the governing body of the
municipality or county shall be credited to the fund. The fund
may be used solely to pay costs incurred in making an
improvement. When an improvement is completed, the balance of
the part of the assessment that is for improvements shall be
transferred to the fund established for the retirement of bonds.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 20, eff. June 16,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
320, Sec. 3, eff. June 19, 2009.
Sec. 372.023. PAYMENT OF COSTS. (a) The cost of an improvement
made under this subchapter must be paid in accordance with this
section.
(b) A cost payable by the municipality or county as a whole may
be paid from general funds available for the purpose or other
available general funds.
(c) A cost payable from a special assessment that has been paid
in full shall be paid from that assessment.
(d) A cost payable from a special assessment that is to be paid
in installments and a cost payable by the municipality or county
as a whole but not payable from available general funds or other
available general improvement funds shall be paid:
(1) under an installment sale contract or a reimbursement
agreement with the person who contracts to install or construct
the improvement for which the costs apply;
(2) as provided by a temporary note or time warrant issued by
the municipality or county to reimburse a person for money
advanced or work performed in connection with an improvement; or
(3) by the issuance and sale of revenue or general obligation
bonds.
(e) The net effective interest rate, as computed for a public
security under Section 1204.005, Government Code, on money owed
or paid under Subsection (d) may not exceed one-half of one
percent above the highest average interest rate reported by a
newspaper in a weekly bond index in the month before the date of
the contract or agreement or the issuance of the bond, temporary
note, or time warrant. The newspaper must specialize in bonds
and be acceptable as a reliable source for bond interest rates to
the governing body of the municipality or county that enters into
the contract or agreement or that issues the bond, temporary
note, or time warrant.
(f) While an improvement is in progress, the governing body of
the municipality or county, to pay the costs of the improvement,
may issue temporary notes for money advanced or time warrants to
pay for work performed in connection with the improvement and, on
completion of the improvement, issue revenue or general
obligation bonds. The bond proceeds may be used to repay the
obligations incurred under this subsection.
(g) The cost of more than one improvement may be paid:
(1) from a single issue and sale of bonds without other
consolidation proceedings before the bond issue; or
(2) under an agreement with a person who contracts to install or
construct the improvement and who sells the improvement to the
municipality or county.
(h) The costs of any improvement include interest payable on a
temporary note or time warrant and all costs incurred in
connection with the issuance of bonds under Section 372.024 and
may be included in the assessments against the property in the
improvement district as provided by this subchapter.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 76(k), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 1341, Sec. 21, eff. June 16,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
320, Sec. 4, eff. June 19, 2009.
Sec. 372.024. GENERAL OBLIGATION AND REVENUE BONDS. General
obligation bonds issued to pay costs under Section 372.023(d)
must be issued under the provisions of Subtitles A and C, Title
9, Government Code. Revenue bonds issued to pay costs under that
subsection may be issued from time to time in one or more series
and are to be payable from and secured by liens on all or part of
the revenue derived from improvements authorized under this
subchapter, including revenue derived from installment payments
of special assessments.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.330, eff. Sept.
1, 2001.
Sec. 372.025. TERMS AND CONDITIONS OF BONDS. (a) Revenue bonds
may be issued to mature serially or in any other manner but must
mature not later than 40 years after their date. A provision may
be made for the subsequent issuance of additional parity bonds or
subordinate lien bonds under terms and conditions specified in
the ordinance or order authorizing the issuance of the bonds.
(b) The bonds shall be executed and the bonds and interest
coupons appertaining to them are negotiable instruments within
the meaning and for all purposes of the Uniform Commercial Code
(Section 1.101 et seq., Business & Commerce Code). The
ordinance or order authorizing the issuance of the bonds must
specify:
(1) whether the bonds are issued registrable as to principal
alone or as to both principal and interest;
(2) whether the bonds are redeemable before maturity;
(3) the form, denomination, and manner of issuance;
(4) the terms, conditions, and other details applying to the
bonds including the price, terms, and interest rates on the
bonds; and
(5) the manner of sale of the bonds.
(c) The ordinance or order authorizing the issuance of the bonds
may specify that the proceeds from the sale of the bonds:
(1) be used to pay interest on the bonds during and after the
period of acquisition or construction of an improvement financed
through the sale of the bonds;
(2) be used for creating a reserve fund for payment of the
principal of and interest on the bonds and for creating other
funds; and
(3) may be placed in time deposit or invested, until needed.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 22, eff. June 16,
2001.
Sec. 372.026. PLEDGES. (a) In this section, "obligation" means
bonds, temporary notes, time warrants, or an obligation under an
installment sale contract or reimbursement agreement.
(b) For the payment of obligations issued or agreed to under
this subchapter and the payment of principal, interest, and any
other amounts required or permitted in connection with the
obligations, the governing body of the municipality or county may
pledge all or part of the income from improvements financed under
this subchapter, including income received in installment
payments under Section 372.023.
(c) Pledged income must be fixed and collected in amounts
sufficient, with other pledged resources, to pay principal,
interest, and other expenses related to the obligations, and to
the extent required by the ordinance, order, or agreement
authorizing the obligations, to pay for the operation,
maintenance, and other expenses related to improvements
authorized by this subchapter.
(d) The obligations may also be secured by mortgages or deeds of
trust on any real property related to the facilities authorized
under this subchapter that are owned or are to be acquired by the
municipality or county and by chattel mortgages, liens, or
security interests on any personal property appurtenant to that
real property. The governing body may authorize the execution of
trust indentures, mortgages, deeds of trust, or other forms of
encumbrance as evidence of the indebtedness.
(e) The governing body may pledge to the payment of obligations
all or part of a grant, donation, revenue, or income received or
to be received from the government of the United States or any
other public or private source, whether or not it is received
pursuant to an agreement or otherwise.
(f) The governing body may enter into an agreement with a
corporation created by the municipality or county under the Texas
Constitution or other law that provides for payment of amounts
pledged under this section to the corporation to secure
indebtedness issued by the corporation to finance an improvement
project, including indebtedness to pay capitalized interest and a
reserve fund permitted by this subchapter for revenue or general
obligation bonds issued under this subchapter and indebtedness
issued to pay the corporation's costs of issuance. In addition,
the agreement may provide that:
(1) the corporation is responsible for managing the district; or
(2) title to one or more improvements will be held by the
corporation.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 23, eff. June 16,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
320, Sec. 5, eff. June 19, 2009.
Sec. 372.027. REFUNDING BONDS. (a) Revenue bonds issued under
this subchapter may be refunded or refinanced by the issuance of
refunding bonds, under terms or conditions set forth in
ordinances or orders of the municipality or county issuing the
bonds. The provisions of this subchapter applying generally to
revenue bonds, including provisions related to the issuance of
those bonds, apply to refunding bonds authorized by this section.
The refunding bonds may be sold and delivered in amounts
necessary for the principal, interest, and any redemption premium
of the bonds to be refunded, on the date of the maturity of the
bond or any redemption date of the bond.
(b) Refunding bonds may be issued for exchange with the bonds
they are refunding. The comptroller of public accounts shall
register refunding bonds described by this subsection and deliver
the bonds to holders of bonds being refunded in accordance with
the ordinance or order authorizing the issuance of refunding
bonds. The exchange may be made in one delivery or several
installment deliveries.
(c) General obligation bonds issued under this subchapter may be
refunded in the manner provided by law.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1341, Sec. 24, eff. June 16,
2001.
Sec. 372.028. APPROVAL AND REGISTRATION. (a) Revenue bonds
issued under this subchapter and a record of the proceedings
authorizing their issuance must be submitted to the attorney
general for examination. If bonds state that they are secured by
a pledge of revenue or rentals from a contract or lease, a copy
of the contract or lease and a description of the proceedings
authorizing the contract or lease must also be submitted to the
attorney general.
(b) If the attorney general determines that the bonds were
authorized and the contracts or leases related to the bonds were
made in accordance with the law, the attorney general shall
approve the bonds and the contract or lease. On the approval of
the attorney general, the comptroller of public accounts shall
register the bonds.
(c) Bonds and contracts or leases approved and registered under
this section are valid and binding obligations for all purposes
in accordance with their terms and are incontestable in any court
or other forum.
(d) General obligation bonds issued under this subchapter shall
be approved and registered as provided by law.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 372.029. AUTHORIZED INVESTMENTS; SECURITY. (a) Bonds
issued under this subchapter are legal and authorized investments
for:
(1) banks, trust companies, and savings and loan associations;
(2) all insurance companies;
(3) fiduciaries, trustees, and guardians; and
(4) interest funds, sinking funds, and other public funds of the
state or of an agency, subdivision, or instrumentality of the
state, including a county, municipality, school district, or
other district, public agency, or body politic.
(b) Bonds issued under this subchapter may be security for
deposits of public funds of the state or of an agency,
subdivision, or instrumentality of the state, including a county,
municipality, school district, or other district, public agency,
or body politic, to the extent of the market value of the bonds,
if accompanied by any appurtenant unmatured interest coupons.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 372.030. SUBCHAPTER NOT EXCLUSIVE. This subchapter is an
alternative to other methods by which a municipality may finance
public improvements by assessing property owners.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
SUBCHAPTER B. IMPROVEMENT DISTRICTS IN HOME-RULE MUNICIPALITIES
Sec. 372.041. AUTHORITY OF HOME-RULE MUNICIPALITY. (a) A
home-rule municipality may create improvement districts for the
purposes of:
(1) levying, straightening, widening, enclosing, or otherwise
improving a river, creek, bayou, stream, other body of water,
street, or alley;
(2) draining, grading, filling, and otherwise protecting and
improving the territory within the municipality's limits; and
(3) issuing bonds to finance improvements listed in this
subsection.
(b) If a home-rule municipality creates an improvement district
in order to make improvements authorized by this subsection, the
municipality must comply with the general law of the state
relating to the creation of improvement districts. Bonds issued
for improvements under this section must be issued in a manner
that complies with the general authority of a home-rule
municipality to issue bonds.
(c) A home-rule municipality may require the owners of property
in the territory specially benefitted in enhanced value by
improvements made under this section to pay the costs of the
improvement. If a municipality finances an improvement under this
subsection, the municipality shall make a personal charge against
those property owners and fix a lien against that property by
special assessment. The municipality may issue assignable or
negotiable certificates to pay for the costs of improvements and
require the property owners to make deferred payments to retire
the certificates. Interest on deferred payments may not exceed
eight percent. The municipality may appoint special commissioners
or provide otherwise for the making and levying of special
assessments under this subsection, or may provide that the making
and levying of the assessment be performed by the governing body
of the municipality, in compliance with requirements for hearings
and other procedures as may be adopted under or required by the
municipal charter.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
SUBCHAPTER D. REIMBURSEMENT FOR PUBLIC IMPROVEMENTS IN CERTAIN
COUNTIES
Sec. 372.151. APPLICABILITY. This subchapter applies only to a
county that:
(1) contains no municipality with a population of more than
50,000; and
(2) is adjacent to at least two counties, each with a population
of more than one million.
Added by Acts 2009, 81st Leg., R.S., Ch.
645, Sec. 1, eff. June 19, 2009.
Sec. 372.152. ISSUANCE OF BONDS TO REIMBURSE ACQUIRED PUBLIC
IMPROVEMENTS. (a) The governing body of a municipality or
county may issue and sell general obligation bonds or revenue
bonds to reimburse a developer for the cost of a public
improvement if:
(1) the public improvement is located in a public improvement
district created on or after January 1, 2005;
(2) the public improvement has been dedicated to and accepted by
the municipality or county; and
(3) before the public improvement was dedicated to and accepted
by the municipality or county, the governing body of the
municipality or county entered into an agreement with the
developer to pay for the public improvement.
(b) General obligation bonds or revenue bonds issued under this
subchapter must comply with the provisions relating to general
obligation bonds or revenue bonds issued under Subchapter A.
Added by Acts 2009, 81st Leg., R.S., Ch.
645, Sec. 1, eff. June 19, 2009.