(a) If, before its abolition, a municipal utility district voted to issue bonds secured by property taxes for a defined area under Section 54.806 , Water Code, and if some or all of the bonds were not issued, sold, and delivered before the abolition, the governing body of the municipality that abolished the district may, on its own motion, establish a public improvement district under Subchapter A , Chapter 372 , for the purpose of issuing and selling municipal bonds:
(1) in an amount not to exceed the amount of the unissued district bonds approved by the voters; and
(2) for the purpose of carrying out the purposes for which the district bonds were voted, including the cost of facilities constructed after creation of the defined area in accordance with the plan for improvements adopted by the board of directors of the abolished district.
(b) A municipality that establishes a public improvement district under this section may:
(1) enter into agreements with developers of property in the public improvement district for the construction, acquisition, expansion, improvement, or extension of improvements in the public improvement district;
(2) reimburse a developer for the costs of the improvements through assessments payable in installments on property in the public improvement district;
(3) pledge any type of assessment, including installment assessments, levied against property in the public improvement district as security for bonds and agreements; and
(4) structure the assessments in any manner determined by the governing body of the municipality.
(c) In structuring an assessment under this section, the municipality may include in the assessment:
(1) a coverage factor;
(2) any prepayment dates;
(3) terms or amounts; and
(4) any other methodology or amounts determined necessary or convenient by the governing body of the municipality.
(d) Any bonds issued by the municipality under this section must be authorized by ordinance of the governing body of the municipality and shall provide for the collection of the assessments as authorized by Subchapter A , Chapter 372 , and this chapter.
(e) The bonds may be payable in installments, as determined by the governing body of the municipality, against the property in the defined area.
(f) The municipality may use the bonds to:
(1) pay or reimburse a developer for public improvements in the public improvement district under a development or other agreement with the developer;
(2) pay the principal of and interest on the bonds when due; or
(3) pay any combination of purposes described by Subdivisions (1) and (2).
Added by Acts 2007, 80th Leg., R.S., Ch. 813 (S.B. 1535 ), Sec. 1, eff. June 15, 2007.
