No More Tiers: Annexation Becomes More Challenging for All Texas Cities
Annexations have been a hot-button issue in Texas in recent years. Texas annexation laws, which underwent major changes a couple of years ago, were again addressed by the Texas legislature in the most recent legislative session.
In 2017, Senate Bill 6, also known as The Texas Annexation Right to Vote Act, was aimed at curbing involuntary annexations by requiring elections for cities located in the states’ largest counties before a city could annex new territory. As we discussed in a previous blog post, Senate Bill 6 divided counties into two “tiers” based on county population. Tier 1 cities were those located in counties with a population of 500,000 or less. Tier 2 cities were those located in a county with a population of more than 500,000. The tier system complicated the rules surrounding annexations significantly.
Under the 2017 changes, Tier 1 cities could continue to annex unilaterally, while Tier 2 cities lost this ability almost entirely. Legislators viewed the changes as a huge win for citizens. From the perspective of cities located in populous counties, however, this was a major blow to their ability to expand and generate new tax revenue. The ability to annex new territory is vitally important to many growing cities. In Texas, cities do not receive any state tax revenue to provide services. Cities are instead, left to raise their own revenues to provide services to citizens. Often times, those living just outside the city limits avail themselves of many city benefits, but they largely avoid paying taxes and fees to the city.
During the 86th legislative session, which just concluded, Texas lawmakers decided to address annexations once again, and push voluntary annexations even further. The 2019 annexation changes set out in HB 347 will eliminate any distinction between Tier 1 and Tier 2 cities. Under the new rules, all Texas cities must annex under what was previously known as the Tier 2 procedures (although the Tier 2 moniker will no longer be used). While there are some very minor changes for Tier 2 cities under HB 347, Tier 1 cities will see a complete overhaul in annexation procedures.
The new rules are aimed at eliminating annexations without voter consent virtually entirely. Under the new annexation laws, cities are no longer be able to annex any property using the old Tier 1 procedures. Tier 1 General Authority to Annex, previously Subchapter B, has been fully repealed. The new annexation laws, with few exceptions, will require consent of either the landowners or the voters in the area to be annexed. In fact, under HB 347, some existing consent annexation procedures will be eliminated as well. For example, under the new annexation laws, cities can no longer utilize Texas Local Government Code Section 43.028 – Authority of Municipalities to Annex Sparsely Occupied Area on Petition of Area Landowners; since this procedure was under the old Subchapter B. This Section has been repealed entirely, as it was a Tier 1 procedure.
Having passed by a 2/3 majority in both the Texas House and the State Senate, HB 347 became immediately effective when signed by the Governor on May 24, 2019. The new changes will not affect an annexations which were final on or before the new law’s effective date. Likewise, the changes will not affect annexations in which cities have adopted a resolution directing the city manager to prepare a service plan for the area on or before the May 24th effective date. These changes are viewed by many as a win for citizens who may not want to be annexed, but it is certainly a detriment to growing cities and their ability to provide services to their residents.
Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our municipal law practice can be found here.