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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
On June 18, 2023, SB 1916 was vetoed by the Governor. The changes to the PID Act introduced by SB 1916 were not revisited in the 1st special session which adjourned on June 28, 2023. The Governor called a 2nd special session commencing June 28, 2023. While the Governor’s special session call did not include a reference to public improvement districts, bills impacting PIDs may be filed in the special session or any subsequent session. If the changes introduced to the PID Act by SB 1916 are reintroduced, a subsequent update will be circulated by our team of experts.
The Regular Session of the 88th Texas Legislature convened on January 10, 2023 and adjourned on May 29, 2023. As of adjournment, 1,423 bills and joint resolutions have been sent to the Governor for signature. A number of these bills, if signed by the Governor, will have a direct impact on public finance in Texas. This article focuses on legislation passed during the 88th Regular Session relating to Public Improvement Districts (PIDs) and Chapter 372 of the Texas Local Government Code (the PID Act).
SB 1916, which will become effective January 1, 2024 (unless vetoed by the Governor), sets out new notice requirements related to the levy of assessments within a PID. Specifically, SB 1916 requires an issuer post a copy of a service plan on its internet website not later than seven days after it approves, amends or updates the service plan. This service plan must include the form of notice of assessments provided to homeowners pursuant to Chapter 5 of the Texas Property Code must be included in the internet posting.
SB 1916 also requires all issuers submit an assessment roll relating to any assessment it levies to each appraisal district in which property subject to assessment is located. The assessment roll must contain information regarding the total assessment levied against each parcel of land in the PID, the amount of the annual assessment and the total amount of each periodic installment, if applicable. The law requires that this information be provided to the appraisal district not later than the seventh day after an assessment is levied, a supplemental assessment is levied or a reassessment or new assessment is levied. Further, the assessment roll submitted to an appraisal district must be in an electronic format capable of being incorporated into the property tax database maintained by each appraisal district under Chapter 26, Texas Tax Code.
The new law also requires each appraisal district include the information it receives as a part of the assessment rolls filed with it as a part of its online database.
Some of the provisions of the above described bill are intended to work in conjunction with the recent changes to the PID Act enacted during the 87th Texas Legislature's Regular Session. These prior updates to the PID Act requires issuers file creation resolutions and service and assessment plans with a county clerk, similar to SB 1916's new posting requirements. Additionally, provisions of the Texas Property Code were amended in 2021 to require written notice be provided to a purchaser of property located within a PID, the same notice that will be required to be posted on issuers' websites upon an assessment levy in a PID.
PIDs offer an innovative and flexible financing tool available to issuers to address growth while maintaining control over the character and extent of the growth. Additionally, issuers have and can continue to utilize PIDs to encourage new development within their corporate boundaries. The changes contemplated by SB 1916 provide additional methods by which issuers must give notice of assessments levied against property to homeowners and sets forth a uniform method by which this information is submitted to and presented by the appraisal district(s) in which a PID is located. Issuers, and their bond counsel, will need to remain vigilant to ensure that the notice requirements prescribed by SB 1916 are satisfied and that owners of property within a PID are able to access the information.
The 88th Regular Session adjourned on May 29, 2023. The Governor has called a 1st special session that commenced on May 30, 2023. Though potentially not germane to the Governor's 1st special session call, bills impacting PIDs may be filed in the special session or any subsequent special session. The outcome for any particular bill considered during the 88th Legislature's 1st Special Session will be known as of its conclusion, however, the Governor may call one or more additional special sessions thereafter. Issuers and developers seeking to create or utilize PIDs for development financing should reach out to their respective counsel to determine the status of any newly adopted or proposed legislation which may affect PIDs.
Additionally, while not directly modifying the PID Act, other bills impacting Texas public finance may also impact the viability and success of developments created under the PID Act. For additional information related to these other legislative updates read our legal update, "Texas legislature considers further limitations on local government debt."
Please reach out to the Norton Rose Fulbright US LLP Public Finance team to discuss the PID bills and any other public finance bill that has been passed during the 88th Legislature Regular Session, the 88th Legislature 1st Special Session, or any subsequent special session. A full summary of the legislative updates introduced during the 88th Legislative Session is being prepared by the Norton Rose Fulbright Public Finance Team and will be published online this summer.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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