The Senate Local Government Committee met on May 8th to take up several bills. This report covers HB 3514 (Burns), HB 260 (Murr), HB 2701 (Guillen), HB 3053 (Dean | et al.), HB 1285 (Shine), HB 3526 (Raymond), HB 4101 (Shine), HB 3301 (Oliverson), HB 3899 (Troxclair | et al.). The notice for the hearing can be found here. Part 1 of the hearing can be found here and part 2 here.
This report is intended to give you an overview and highlight of the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer.
HB 3514 (Burns) Relating to the authority of a municipality to annex property in certain water districts.
- Birdwell – Bill allows the property owner to be annexed by a municipality with a population of less than 3k if the water district consents to the annexation
Demetra Conrad, City of Glen Rose – for
- Property owners want to come into the city, but the city has a limitation of 525ft
- It’s a property rights situation
- Springer – The bill is not bracketed to just Glen Rose, so Munster would be under this; could the water district force annex everybody else?
- Birdwell – It makes it optional it doesn’t make it a requirement
- Springer – Optional on the cities though?
- Birdwell – If its mutual agreeable, if it’s not mutual agreeable it does not compel the water district to behave a certain way
- Springer – But that’s between the city and the water district, it doesn’t have the people who potentially live in a water district that are already there, what if the water and city annexed people in when they didn’t want to be?
- I don’t believe there is any involuntary annexation involved with this; first the property owner has to agree to the annexation, then the water district, then there is the 525ft
- Springer – so you see this on large undeveloped property, more than say if there were 8 farmhouses and 1 of them wanted in but the other 7 didn’t?
- You still have the requirements of property of property touching, so we can not take any property that isn’t wanting to
HB 3514 left pending
HB 260 (Murr) Relating to the calculation of net to land in the appraisal of open-space land for ad valorem tax purposes.
- Perry – Bill is a CWD tax exemption, takes the property that was put under a surveillance zone and the one next to it and gives the appraiser to reduce the value of that property if the appraiser so choses to use it
- Bettencourt – What’s the survivability of CWD?
- Zero
- Springer – but it doesn’t always go to others in the heard which is why they quarantine them, which is the issues because your value is under quarantine for other animals, and it drops the value of your property?
- Yes, in general we are trying to genetically breed that out of the process
- Hall – Its long term it’s not just at that moment, because there are concerns that the prion is in the soil making that property unusable?
- From what we can tell they are dormant, and they are highly contagious in a herd, it started back in the 50s
- Perry – If you get that surveillance zone it does affect your ability to transfer your property of value
HB 260 left pending
HB 2701 (Guillen) Relating to public utility agencies; providing authority to issue bonds; providing authority to impose assessments.
- LaMantia – Bill adds clarity and additional protection for certain public entities and a PUA, to encourage cooperative considerations
- Bill grants certain authorities to public entities, and authorizes rate payers of related POAs to appeal agency decisions that affect their water, drainage, or sewer rates to the PUC of Texas
Carlos Rubinstein, Anser Advisory – for
- Bill seeks to incentives public entities to cooperate at regional level
- Bill is clear that public entities will maintain control
- Bill does not change eminent domain, does not create a taxing authority or any taxing ability
- Bill preserves the right of the participating public entity to have a seat on the board in a public subdivision of the state on how they are going to work together
- Prohibition in the bill that cross collateralization is not allowed
Jeremy Mazur, Texas 2036 – for
- According to TCEQ Texas has over 10k public water system, number contributes to inefficiencies in water sector
- Regional solutions are the answer to the problem, bill expands the policy options available in the state’s legal toolbox for implementing more regional solutions
- Bill expands and modifies the powers of a PUA, in order to make it more attractive for the regionalization of water and wastewater services
- Changes are model after Florida statues
HB 2701 left pending
HB 3053 (Dean | et al.) Relating to the municipal disannexation of certain areas annexed during a certain period of time.
- Paxton – Bill preserves property rights for areas that were forcibly annexed by municipalities between March 3rd, 2015, and December 1st, 2017, by providing residence of those areas with an opportunity to vote on whether they wish to remain in the annexing city
James Quintero, Texas Public Policy Foundation – for
- Bill seeks to right a wrong since the 85th legislature banned forceful annexation
- Bill upholds an important constitutional principal, all inherent power is with the people
- Eckhardt – I don’t see a provision in the bill for the disannexed area to be immediately annexed into the ESD territory for taxing purposes is that correct?
- My understanding is that if the ESD did not already exist, then the region would have to create an ESD to receive services in that way
- Eckhardt – I believe it say the area immediately adjacent must serve the area even though it would not be in that ESDs jurisdiction, nor would it contribute to the ESDs cost for services
- Presumably that area might be able to workout a contract with the area to provide services, so that they are paying their fair share
- Eckhardt – But the bill doesn’t require that, it requires that they serve them period
- That might be an amendment worth considering
- Bettencourt – We just passed SB 2038, how does this bill interact with that?
- I think quite well, with the passage of that bill and this one we are restoring property right to Texans
Craig Farmer, American Planning Association of Texas – opposed
- Concern with the precedent being set
- Concerned that properties will be retroactively disannexed that were legally annexed at the time
- There as been 5 years of service for some of these areas, and the bond indebtedness will not address repaying taxpayers
- There is an involuntary disannexation of up to 49% of the people living in the area that may not want to be outside the city
- The petition process is not there like it is with annexation
- Issues of small annexations, if they are put back out in the county there will be a checkerboard of regulations across the county
HB 3503 left pending
HB 1285 (Shine) Relating to the training and duties of a taxpayer liaison officer for an appraisal district.
- Springer – Bill will help Taxpayer Liaison Officers (TLOs) become more effective in the position in helping property owners navigate the appraisal district process in helping property owners address nonvalue related grievances
Ray Head, Texas Association of Property Tax Professionals – for
- Here to answer any questions
HB 1285 left pending
HB 3526 (Raymond) Relating to the application of a municipal building code to the construction of a solar pergola.
- Springer – Bill creates and exemption for solar pergolas from municipal building codes
- Eckhardt explains what a pergola is
Craig Farmer, American Planning Association of Texas – opposed
- Confused with this because cities are restricted and cannot require anything more than the national building codes, no real city abuse with pergolas
- Building codes have exemptions for structures under a certain size that don’t have electricity
- Springer – so if a pergola is of certain size but doesn’t have electricity its not regulated but because they chose to use solar panels it is regulated, but happy to talk to you more about it
- You bring up a good point, I don’t know the answer to that one
HB 3526 left pending
HB 4101 (Shine) Relating to the matters that may be the subject of limited binding arbitration to compel compliance with procedural requirements related to protests before appraisal review boards.
- Springer – bill seeks to allow property owners to compel compliance with the hearing procedures that have been adopted by the appraisal review board through limited binding arbitration
Ray Head, Texas Association of Property Tax Professionals – for
- Here to answer any questions
HB 4101 left pending
HB 3301 (Oliverson) Relating to the dissolution of the Green Tree Park Municipal Utility District.
- Bettencourt – Bill seeks to dissolve the Green Tree Park MUD in Huston
- MUD was originally intended to build single family housing after its creation original owner has sought to repurpose the land
HB 3301 left pending
HB 3899 (Troxclair | et al.) Relating to the issuance of bonds by certain local government corporations.
- Bettencourt – Bill provides limitations on local government corporations authority to issues bonds, limitations are similar to limitations placed on cities and counties
Gerald Daugherty, Travis County Commissioner – for
- In Nov. 2020 there was a vote to increase tax by ₡75
- In the last 3 years city has gotten $500m, think the vote did not ensure the community that the tax increase was forever
- If Austin transfers over to LGC they would have more authority than a city or a county
- Bettencourt – Was there anything they had on the amount they were going to go get in the future on bonds
- Everyone thought this was going to be applied to a $7.1b light rail system, within the first 3 years it ballooned to $11.6b
Susan Spataro, self – for
- Was a Travis county auditor
- There needs to be guardrails around LGS to protect people from property tax abuse
- If an LGS wants to issue a bond, they need to get it on a ballot and the ballot needs to say it’s a bond
- Integrity of the property tax system needs to be protected
- Springer – That 8.75 doesn’t fluctuate, is it not subject to the 3% cap?
- The year it was adopted it was 21% of the M&O rate; the implication was that it was going to continue on
- Springer – If it continues on does it stay at 21% so there for it is subject to the %3.5
- That’s my understanding
Leslie Brock, Office of Attorney General – on
- Bettencourt – What are the complexities of this, I don’t know of anything anywhere else that has taken an M&O vote by the people and taken it to another government corporation and now we are trying to establish bonding with it
- I am not aware, this appear to be new for us as well
Kim Olivares, City of Austin – on
- For clarification that percentage is what will be used going forward so it adjusts
- Bettencourt – So what are you down to now?
- Right now it is ₡63
- Bettencourt – We assume that the word bond did not appear on the ballot language, is that correct
- It did not, it did speak to financing and loans
- Bettencourt – The city believed this ballot language authorized the issuance of bonds, yes, or no?
- The type of debt that Austin Transit Partnership intends to issue is a contract revenue bond; it’s not debt as defined in chapter 26 of the tax code
Casey Burack, Austin Transit Partnership – on
- Bettencourt – Did the ballot langue tell voters that would tell voters the LGS was going to issue bonds
- The ballot language did not reference the contract with the voters however the city did pass a resolution ordinance that also had with it a financing plan
- Bettencourt – Did the ballot language reference that contract with voters?
- No
Bill Aleshire, Self – for
- Bill does not apply to all LGS only to those that issue debt to be repaid from a transfer of property tax derived from a tax rate increase election
- It is strange to have M&O tax be used as debt service
- In the funding formula, ATP under law is going to be able to issue debt
- Bettencourt – The contract was not referred to in the ballot language?
- No sir; if you look at the contract there is no actual commitment that they adopted
- Bettencourt – Look at the language, it’s clear that 58% of the folks voted for some type of tax increase, true?
- They voted for some type of tax increase for some purpose
Gonzalo Barrientos, self – for
- Ask for your consideration, it’s a good bill
James Quintero, Texas Public Policy Foundation – for
- Think this is commonsense measure to solve a unique situation
- Current law allows LGCs to municipality generate property tax revenue, to go into debt without voter permission
- Would restore the democratic process, especially with the provision with given that bonds be held on the uniform election date in November
- Bettencourt – To your knowledge do we have an M&O transfer to I&S anywhere?
- I’ve never see a situation like this, and it worries me that it has the potential to spread
HB 3899 left pending