The proposed legislation below was initiated by the City of Waller and was passed in the 2015 Texas Legislature in House Bill 1949. This resulted in the City of Waller being able to annex two business parks that were already on city utilities and whose owners had agreed to petition for annexation. This resulted in an increase of about 20% in the city’s tax base. This new flexibility in the law is available to approximately 800 general law cities in Texas without changing the principle of voluntary annexation.”
***
Proposed Change in Annexation Law
General Law Cities
PURPOSE OF PROPOSED CHANGE
to allow general law cities to establish contiguity to a property within their ETJ whose owner has petitioned for annexation by annexing public right-of-way between the current city limits and the property.
SUMMARY
This change to Texas law would enable a general law city to provide services to a property owner within its extra-territorial jurisdiction (ETJ) who is interested in developing, receiving utilities, and becoming part of the city tax base - without infringing on the rights of intermediate owners (properties between the subject property and the current city limits) to make their own voluntary choice as to when, or if, they want to be part of the city.
BACKGROUND
Current law prohibits a general law city such as Waller from annexing a property unless the owner petitions for annexation and the property is touching, or contiguous to, the current city limits. These restrictions are designed in law to prohibit smaller cities from unilateral annexing of properties whose owners do not want to be in the city.
NEED
The current legal restriction on contiguity can create a problem for general law cities, when a property owner within the ETJ (but not touching the city limits) wants to develop the property and wants to be annexed by the city, generally in return for provision of city services such as utilities.
If the intermediate property owners (between the current city limits and the subject property owner desiring services) are willing to also be annexed, then the city can annex the subject property and the provision of services can be matched to revenue from increasing the city tax base.
If, however, the intermediate property owners do not want to be annexed, then the city is being asked to provide utilities without any certainty that the property can one day be annexed and added to the city tax base.
If the city does not provide utilities, and the owner has to provide well and septic to facilitate development, then that owner may never be motivated to come into the city in the future, and the city
a) will have lost the opportunity to add to its tax base, and
b) may be blocked by that property from being able to reach the next property when it becomes ready for development.
PROPOSED CHANGE
In the case where a property owner within a general law city’s ETJ petitions for annexation and contiguity to the city’s corporate limits cannot be established by annexation of the intermediate properties, then contiguity may be established by annexation of adjacent public road right-of-way without petition from the public entity in whose jurisdiction the right-of-way lies.
If the change in law is allowed, then a general law city will be empowered to provide requested city services to a property owner without infringing on the current rights of property owners to choose not to be a part of the city, thus continuing to fulfill the original intent of the restrictions.
FISCAL ANALYSIS
There is no direct cost to implementing the change in law.
If the change is not implemented, then a general law city may be unable to effectively expand its tax base as development occurs within its extra-territorial jurisdiction but non-contiguous to its current corporate limits. This may result in a general law city in the path of development being surrounded by development using well and septic systems.
