Sec. 775.022.  REMOVAL OF TERRITORY BY MUNICIPALITY.  (a)  If a municipality completes all other procedures necessary to annex territory in a district and if the municipality intends to remove the territory from the district and be the sole provider of emergency services to the territory by the use of municipal personnel or by some method other than by use of the district, the municipality shall send written notice of those facts to the board.  The municipality must send the notice to the secretary of the board by certified mail, return receipt requested.  The territory remains part of the district and does not become part of the municipality until the secretary of the board receives the notice.  On receipt of the notice, the board shall immediately change its records to show that the territory has been disannexed from the district and shall cease to provide further services to the residents of that territory.  This subsection does not require a municipality to remove from a district territory the municipality has annexed.
(b)  The disannexation of territory under this section does not diminish or impair the rights of the holders of any outstanding and unpaid bonds, warrants, or other obligations of the district including loans and lease-purchase agreements.
(c)  If a municipality removes territory from a district that the municipality has annexed, the municipality shall compensate the district immediately after disannexation of the territory under Subsection (a) in an amount equal to the annexed territory's pro rata share of the district's bonded and other indebtedness as computed according to the formula in Subsection (e) or (e-1), whichever yields the greater amount.  The district shall apply compensation received from a municipality under this subsection exclusively to the payment of the annexed territory's pro rata share of the district's bonded and other indebtedness.
(d)  On the district's request, a municipality shall purchase from the district at fair market value any real or personal property used to provide emergency services in territory disannexed under this section.
(e)  Unless Subsection (e-1) would yield a greater amount, the amount of compensation under Subsection (c) shall be determined by multiplying the district's total indebtedness at the time of the annexation by a fraction the numerator of which is the assessed value of the property to be annexed based on the most recent certified county property tax rolls at the time of annexation and the denominator of which is the total assessed value of the property of the district based on the most recent certified county property tax rolls at the time of annexation.
(e-1)  Unless Subsection (e) would yield a greater amount, the amount of compensation under Subsection (c) shall be determined by multiplying the district's total indebtedness at the time of the annexation by a fraction:
(1)  the numerator of which is the assessed value of the property to be annexed based on the most recent certified county property tax rolls at the time of annexation plus the total amount of the district's sales and use tax revenue collected by retailers located in the property to be annexed in the 12 months preceding the date of annexation, as reported by the comptroller; and
(2)  the denominator of which is the total assessed value of the property of the district based on the most recent certified county property tax rolls at the time of annexation plus the total amount of the district's sales and use tax revenue collected by retailers located in the district in the 12 months preceding the date of annexation, as reported by the comptroller.
(f)  For purposes of this section, total indebtedness includes loans and lease-purchase agreements but does not include:
(1)  a loan or lease-purchase agreement the district enters into after the district receives notice of the municipality's intent to annex district territory;  or
(2)  any indebtedness attributed to any real or personal property that the district requires a municipality to purchase under Subsection (d).
(g)  The amount of compensation under Subsection (c) shall be determined under Subsection (e) regardless of whether Subsection (e-1) would yield a greater amount if:
(1)  the municipality has a population of more than one million and the majority of the territory inside the municipality's corporate boundaries is located inside a county with a population of less than 2.1 million; and
(2)  the municipality and the district enter into an agreement on or before September 1, 2019, regarding the district's bonded and other indebtedness.
Added by Acts 1991, 72nd Leg., ch. 620, Sec. 1, eff. June 16, 1991.  Amended by Acts 1997, 75th Leg., ch. 392, Sec. 1, eff. Sept. 1, 1997;  Acts 1999, 76th Leg., ch. 496, Sec. 4, eff. Sept. 1, 1999;  Acts 2003, 78th Leg., ch. 235, Sec. 2, eff. Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 907, Sec. 1, eff. Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 930, Sec. 2, eff. Sept. 1, 2003.
Amended by: 
Acts 2013, 83rd Leg., R.S., Ch. 1363 (S.B. 1596), Sec. 1, eff. September 1, 2013.
Acts 2019, 86th Leg., R.S., Ch. 618 (S.B. 1083), Sec. 1, eff. September 1, 2019.
Acts 2023, 88th Leg., R.S., Ch. 298 (S.B. 1794), Sec. 6, eff. March 1, 2024.