Sec. 43.0755. PROCEDURES FOR INCORPORATION OR ESTABLISHMENT OF ANOTHER FORM OF LOCAL GOVERNMENT FOR CERTAIN AREAS SUBJECT TO REGIONAL PARTICIPATION AGREEMENT. (a) In this section, "district," "eligible municipality," and "regional participation agreement" have the meanings assigned by Section 43.0754.

(b) This section applies only to a district and an eligible municipality that have entered into a regional participation agreement under Section 43.0754 that authorizes any of the actions described by Section 43.0754(c)(6), (7), or (8).

(c) Notwithstanding any other law, including laws prescribing population or territorial requirements for incorporation under Section 5.901, 6.001, 7.001, or 8.001, the governing body of a district may order an election as provided by this subsection to be held on a uniform election date prescribed by Section 41.001, Election Code. An election under this subsection may, consistent with the regional participation agreement, be ordered for the purpose of:

(1) submitting to the qualified voters of the district the question of whether the territory of the district should be incorporated as a municipality;

(2) submitting to the qualified voters of a designated area of the district the question of whether that designated area should be incorporated as a municipality;

(3) submitting to the qualified voters of the district the question of whether the territory of the district should adopt a specific alternate form of local government other than a municipality; or

(4) submitting to the qualified voters of a designated area of the district the question of whether that designated area should adopt a specific alternate form of local government other than a municipality.

(d) Notwithstanding any other law:

(1) the authority of the governing body of a district to order an election under Subsection (c) is separate and independent and is the exclusive means of ordering any such election;

(2) all or any part of the territory of a district may be incorporated as a Type A, Type B, or Type C municipality, as determined by the governing body of the district ordering the incorporation election under Subsection (c)(1) or (2); and

(3) the requirements of Sections 7.002 and 8.002 do not apply to an election ordered under Subsection (c)(1) or (2).

(e) In an election ordered under Subsection (c)(2) or (4), the governing body of the district may order elections in multiple designated areas on the same date or order elections in designated areas periodically on a uniform election date.

(f) In any election ordered under Subsection (c), the governing body of the district shall also submit for confirmation to the voters voting in the election the proposed initial property tax rate determined for the municipality or alternate form of government, as applicable, which may not exceed the maximum rate authorized by law. The ballot in an election held under Subsection (c) shall be printed to permit voting for or against the proposition: "Authorizing the (specify the incorporation of or the adoption of an alternate form of local government for) (insert name of local government) and the adoption of an initial property tax rate of not more than (specify the maximum rate determined)."

(g) In any election ordered under Subsection (c), the governing body of the district may also submit to the voters voting in the election any other measure the governing body considers necessary and convenient to effectuate the transition to a municipal or alternate form of local government, including a measure on the question of whether, on incorporation as a municipality or establishment of an alternate form of local government, any rights, powers, privileges, duties, purposes, functions, or responsibilities of the district or the district's authority to issue bonds and impose a tax is transferred to the municipality or alternate form of local government.

(h) If a majority of the voters voting in an election under Subsection (c)(2) or (4) approve the proposition submitted on the form of local government, the county judge of the county in which the municipality or alternate form of local government is located shall order an election for the governing body of the municipality or alternate form of local government to be held on a date that complies with the provisions of the Election Code, except that Section 41.001(a), Election Code, does not apply. A municipality or alternate form of local government resulting from an election described by this subsection is incorporated or established on the date a majority of the members of the governing body qualify and take office.

(i) If a majority of the voters voting in an election under Subsection (c)(1) or (3) approve the proposition submitted on the form of local government, the district is dissolved and the governing body of the district will serve as the temporary governing body of the municipality or alternate form of local government until a permanent governing body is elected as provided by Subsection (j).

(j) The temporary governing body under Subsection (i) shall order an election to elect the permanent governing body of the municipality or alternate form of local government to occur on a date that complies with the provisions of the Election Code, except that Section 41.001(a), Election Code, does not apply.

(k) An election ordered under Subsection (h) or (j) to elect members of the governing body of a municipality must be held under the applicable provisions of Chapter 22, 23, or 24, to the extent consistent with this section. An election for members of the governing body of an alternate form of government must be held under the law applicable to that form of government, to the extent consistent with this section.

(l) If a majority of the voters voting in an election under Subsection (c)(1) or (3) approve the proposition submitted on the form of local government for the territory of the district, the assets, liabilities, and obligations of the district are transferred to the form of government approved at the election.

(m) If a majority of the voters voting in an election under Subsection (c)(2) or (4) approve the proposition submitted on the form of local government in a designated area of the district and if, on the date of the election approving the form of local government, the district owes any debts, by bond or otherwise, the designated area is not released from its pro rata share of the indebtedness.

(n) For purposes of determining the initial tax rate of a municipality or an alternate form of local government, the tax rate of the district when the territory incorporated or established as an alternate form of government was part of the district is not considered for purposes of the calculations required by Section 26.04(c), Tax Code.

Added by Acts 2017, 85th Leg., R.S., Ch. 593 (S.B. 1015), Sec. 1, eff. June 9, 2017.