Bill Text: TX SB1281 | 2019-2020 | 86th Legislature | Engrossed
Bill Title: Relating to assessments for water and energy improvements in certain municipalities and counties.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2019-05-14 - Left pending in committee [SB1281 Detail]
Download: Texas-2019-SB1281-Engrossed.html
By: Birdwell | S.B. No. 1281 |
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relating to assessments for water and energy improvements in | ||
certain municipalities and counties. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. The heading to Chapter 399, Local Government | ||
Code, is amended to read as follows: | ||
CHAPTER 399. MUNICIPAL AND COUNTY WATER AND ENERGY IMPROVEMENT | ||
PROPERTY ASSESSMENTS [ |
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SECTION 2. Section 399.002, Local Government Code, is | ||
amended by adding Subdivisions (1-a) and (2-a) and amending | ||
Subdivision (2) to read as follows: | ||
(1-a) "Office" means the state energy conservation | ||
office. | ||
(2) "Program" means the [ |
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this chapter. | ||
(2-a) "Program administrator" means the third party | ||
selected by the office to administer the program. | ||
SECTION 3. Chapter 399, Local Government Code, is amended | ||
by adding Sections 399.0023, 399.0025, 399.0027, and 399.0029 to | ||
read as follows: | ||
Sec. 399.0023. RULES. The office shall adopt rules to | ||
administer the program. | ||
Sec. 399.0025. PROGRAM ADMINISTRATOR. (a) The office | ||
shall administer the program through a third-party administrator | ||
selected under this section. | ||
(b) In selecting the program administrator, the office | ||
shall select the candidate that demonstrates: | ||
(1) best practices in program design; | ||
(2) compliance with applicable ethics requirements; | ||
and | ||
(3) appropriate underwriting and technical standards. | ||
(c) The program administrator shall oversee program | ||
elements, including implementing: | ||
(1) guidelines; | ||
(2) documentation, underwriting, and technical | ||
standards; and | ||
(3) administrative protocols as described by Section | ||
399.0027. | ||
Sec. 399.0027. ADMINISTRATION. (a) The office shall | ||
review and either approve or request revision of administrative | ||
protocols developed under this section. | ||
(b) The program administrator shall develop: | ||
(1) a form contract between the local government and | ||
the property owner specifying the terms of: | ||
(A) assessment under the program; and | ||
(B) financing provided by a third party or the | ||
local government, as appropriate; | ||
(2) if the proposed program provides for third-party | ||
financing, a form contract between the local government and the | ||
third party regarding the servicing of the debt through | ||
assessments; | ||
(3) a description of types of qualified projects that | ||
may be subject to contractual assessments; | ||
(4) a method for ranking requests from property owners | ||
for financing through contractual assessments in priority order if | ||
requests appear likely to exceed the amount authorized for funding | ||
by a local government; | ||
(5) a method for determining: | ||
(A) the interest rate and period during which | ||
contracting owners would pay an assessment; and | ||
(B) the maximum amount of an assessment; | ||
(6) a method for ensuring that the period of the | ||
contractual assessment does not exceed the useful life of the | ||
qualified project that is the basis for the assessment; | ||
(7) a description of the application process and | ||
eligibility requirements for financing qualified projects to be | ||
repaid through contractual assessments under the program; | ||
(8) a method for ensuring that property owners | ||
requesting to participate in the program demonstrate the financial | ||
ability to fulfill financial obligations to be repaid through | ||
contractual assessments; | ||
(9) the manner in which property will be assessed and | ||
assessments will be collected; | ||
(10) the lender notice required by Section 399.010; | ||
(11) the review required by Section 399.011; | ||
(12) marketing and participant education services to | ||
be provided for the program; | ||
(13) quality assurance and antifraud measures; | ||
(14) procedures for collecting the proposed | ||
contractual assessments; and | ||
(15) any other item necessary for the administration | ||
of the program or as directed by the office. | ||
Sec. 399.0029. DEMONSTRATION OF FINANCIAL ABILITY. The | ||
method for ensuring a demonstration of financial ability under | ||
Section 399.0027(b)(8) must be based on appropriate underwriting | ||
factors, including: | ||
(1) providing for verification that: | ||
(A) the property owner requesting to participate | ||
under the program: | ||
(i) is the legal owner of the benefited | ||
property; | ||
(ii) is current on mortgage and property | ||
tax payments; and | ||
(iii) is not insolvent or in bankruptcy | ||
proceedings; and | ||
(B) the title of the benefited property is not in | ||
dispute; and | ||
(2) requiring an appropriate ratio of the amount of | ||
the assessment to the assessed value of the property. | ||
SECTION 4. Section 399.003, Local Government Code, is | ||
amended to read as follows: | ||
Sec. 399.003. EXERCISE OF POWERS BY LOCAL GOVERNMENT. | ||
(a) In addition to the authority provided by Chapter 376 for | ||
municipalities, the governing body of a local government that | ||
participates in the [ |
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granted under the program [ |
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(b) Participation in the program [ |
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a governmental function for all purposes. | ||
SECTION 5. Section 399.004(a), Local Government Code, is | ||
amended to read as follows: | ||
(a) An assessment under this chapter may be imposed to repay | ||
the financing of qualified projects on real property located in the | ||
territory of a local government participating in the program | ||
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municipality's extraterritorial jurisdiction may be included in | ||
the municipality's territory for the purposes of participation in | ||
the program. | ||
SECTION 6. Chapter 399, Local Government Code, is amended | ||
by adding Section 399.0045 to read as follows: | ||
Sec. 399.0045. AUTHORIZED USER FEE. (a) The program | ||
administrator may collect a user fee imposed on each contract | ||
entered into under the program. | ||
(b) Fees collected under this section may be used only to | ||
pay the costs of administering the program. | ||
SECTION 7. The heading to Section 399.006, Local Government | ||
Code, is amended to read as follows: | ||
Sec. 399.006. LOCAL GOVERNMENT PARTICIPATION IN | ||
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SECTION 8. Sections 399.006(a), (b), and (e), Local | ||
Government Code, are amended to read as follows: | ||
(a) The governing body of a local government may determine | ||
that it is convenient and advantageous to participate in | ||
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(b) An authorized representative of the local government | ||
that participates in the [ |
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written contract with a record owner of real property in the | ||
territory of the local government [ |
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qualified project on the owner's property. The financing to be | ||
repaid through assessments may be provided by a third party or, if | ||
authorized by the program, by the local government. | ||
(e) The financing for which assessments are imposed may | ||
include: | ||
(1) the cost of materials and labor necessary for | ||
installation or modification of a qualified improvement; | ||
(2) permit fees; | ||
(3) inspection fees; | ||
(4) lender's fees; | ||
(5) program application and administrative fees; | ||
(6) project development and engineering fees; | ||
(7) third-party review fees, including verification | ||
review fees, under Section 399.011; [ |
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(8) a user fee authorized under Section 399.0045; and | ||
(9) any other fees or costs that may be incurred by the | ||
property owner incident to the installation, modification, or | ||
improvement on a specific or pro rata basis, as determined by the | ||
office [ |
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SECTION 9. The heading to Section 399.008, Local Government | ||
Code, is amended to read as follows: | ||
Sec. 399.008. PROCEDURE FOR PARTICIPATION IN | ||
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SECTION 10. Section 399.008, Local Government Code, is | ||
amended by amending Subsections (a), (b), and (d) and adding | ||
Subsection (f) to read as follows: | ||
(a) Except as provided by Subsection (f), to participate in | ||
the [ |
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body of a local government must [ |
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(1) [ |
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qualified projects through contractual assessments is a valid | ||
public purpose; | ||
(2) [ |
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intends to make contractual assessments to repay financing for | ||
qualified projects available to property owners; | ||
(3) [ |
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projects that may be subject to contractual assessments; | ||
(4) [ |
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for third-party financing to be available or any local government | ||
financing to be provided for qualified projects; | ||
(5) [ |
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servicing procedures if third-party financing will be provided and | ||
assessments will be collected to service a third-party debt; | ||
(6) [ |
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program prepared as provided by Section 399.009 and a statement | ||
identifying the location where the report is available for public | ||
inspection; | ||
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(7) [ |
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representative of the local government and the appropriate | ||
assessor-collector for purposes of consulting regarding collecting | ||
the proposed contractual assessments imposed on the assessed | ||
property[ |
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(b) For purposes of Subsection (a)(1) [ |
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resolution may incorporate the report required by Section 399.009 | ||
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reference. | ||
(d) A local government may: | ||
(1) hire and set the compensation of staff necessary | ||
to participate in the program [ |
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(2) contract for professional services necessary to | ||
participate in the [ |
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(f) A local government that established a program under this | ||
chapter before September 1, 2019, may participate in the program by | ||
passing a resolution stating that the local government is | ||
participating. The resolution is not required to meet the | ||
requirements of Subsection (a) or to include the report described | ||
by Section 399.009. | ||
SECTION 11. The heading to Section 399.009, Local | ||
Government Code, is amended to read as follows: | ||
Sec. 399.009. REPORT REGARDING PROGRAM [ |
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SECTION 12. Sections 399.009(a) and (c), Local Government | ||
Code, are amended to read as follows: | ||
(a) Before adopting a resolution under Section 399.008 to | ||
join the program, a local government must prepare a [ |
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consistent with guidelines adopted by the program administrator, | ||
that includes [ |
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(1) the items described by Section 399.0027(b) [ |
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(2) [ |
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representative authorized to enter into written contracts on behalf | ||
of the local government; | ||
(3) [ |
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third-party financing and, if appropriate, raising capital for | ||
local government financing for qualified projects; and | ||
(4) [ |
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to finance qualified projects as part of the program as provided by | ||
Section 399.016,[ |
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for financing through contractual assessments to be provided by the | ||
local government under the program[ |
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(c) The local government shall make the report available for | ||
public inspection[ |
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SECTION 13. Section 399.010, Local Government Code, is | ||
amended to read as follows: | ||
Sec. 399.010. NOTICE TO MORTGAGE HOLDER REQUIRED FOR | ||
PARTICIPATION. Before a local government may enter into a written | ||
contract with a record owner of real property to impose an | ||
assessment to repay the financing of a qualified project under this | ||
chapter: | ||
(1) the holder of any mortgage lien on the property | ||
must be given written notice of the owner's intention to | ||
participate in the [ |
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30th day before the date the written contract for assessment | ||
between the owner and the local government is executed; and | ||
(2) a written consent from the holder of the mortgage | ||
lien on the property must be obtained. | ||
SECTION 14. Section 399.011(a), Local Government Code, is | ||
amended to read as follows: | ||
(a) The [ |
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require for each proposed qualified project: | ||
(1) a review of water or energy baseline conditions | ||
and the projected water or energy savings to establish the | ||
projected water or energy savings; and | ||
(2) a verification that a proposed qualified | ||
improvement meets the requirements of a qualified project. | ||
SECTION 15. Section 399.013(a), Local Government Code, is | ||
amended to read as follows: | ||
(a) The program administrator shall file on behalf of a [ |
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local government that authorizes financing through contractual | ||
assessments under this chapter [ |
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contractual assessment in the real property records of the county | ||
in which the property is located. | ||
SECTION 16. Section 399.016(b), Local Government Code, is | ||
amended to read as follows: | ||
(b) Bonds or notes issued under this section may not be | ||
general obligations of the local government. The bonds or notes | ||
must be secured by one or more of the following as provided by the | ||
governing body of the local government in the resolution or | ||
ordinance approving the bonds or notes: | ||
(1) payments of contractual assessments on benefited | ||
property [ |
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(2) reserves established by the local government from | ||
grants, bonds, or net proceeds or other lawfully available funds; | ||
(3) municipal bond insurance, lines of credit, public | ||
or private guaranties, standby bond purchase agreements, | ||
collateral assignments, mortgages, or any other available means of | ||
providing credit support or liquidity; and | ||
(4) any other funds lawfully available for purposes | ||
consistent with this chapter. | ||
SECTION 17. Section 399.018, Local Government Code, is | ||
amended to read as follows: | ||
Sec. 399.018. PROHIBITED ACTS. A local government that | ||
participates in the program [ |
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(1) make the issuance of a permit, license, or other | ||
authorization from the local government to a person who owns | ||
property in the territory of the local government [ |
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contingent on the person entering into a written contract to repay | ||
the financing of a qualified project through contractual | ||
assessments under this chapter; or | ||
(2) otherwise compel a person who owns property in the | ||
territory of the local government [ |
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contract to repay the financing of a qualified project through | ||
contractual assessments under this chapter. | ||
SECTION 18. Section 399.019, Local Government Code, is | ||
amended to read as follows: | ||
Sec. 399.019. NO PERSONAL LIABILITY. The members of the | ||
governing body of a local government, other elected officials of a | ||
local government, employees of a local government, [ |
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members, executives, employees, and employees of the office or the | ||
program administrator [ |
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liable as a result of exercising any rights or responsibilities | ||
granted under this chapter. | ||
SECTION 19. The following provisions of Chapter 399, Local | ||
Government Code, are repealed: | ||
(1) Section 399.002(6); | ||
(2) Section 399.007; | ||
(3) Sections 399.008(c) and (e); | ||
(4) Section 399.009(b); and | ||
(5) Section 399.017. | ||
SECTION 20. (a) A local government that has established a | ||
program for assessments for water and energy improvements under | ||
Chapter 399, Local Government Code, as it existed before the | ||
effective date of this Act, may continue the program only as | ||
necessary for the fulfillment of contractual obligations. A local | ||
government may not extend a contractual obligation in lieu of | ||
satisfying the requirements for participation in the program for | ||
assessments for water and energy improvements under Section | ||
399.006, Local Government Code, as amended by this Act. | ||
(b) A contract entered into under Chapter 399, Local | ||
Government Code, as it existed before the effective date of this | ||
Act, continues in effect until the term specified in the contract is | ||
complete and is governed by the law in effect on the date the | ||
contract was executed, and the former law is continued for that | ||
purpose. | ||
(c) The changes in law made by this Act do not invalidate or | ||
otherwise affect bonds issued under Chapter 399, Local Government | ||
Code, as it existed before the effective date of this Act, for the | ||
purpose of financing a contract made under that chapter. | ||
SECTION 21. This Act takes effect September 1, 2019. |