Real Estate / 4 min read
On September 1, 2023, Subchapters D and E in Chapter 42 of the Local Government Code went into effect, giving landowners the ability to exclude their land from the extraterritorial jurisdiction of a municipality (ETJ), either by petition or by election. This was one of many laws that came out of the 88th Texas Legislative Session aiming to restrict the broad regulatory powers of municipalities. The authors of the new law described its purpose as providing landowners a means to escape municipal land regulations in which they have no say or vote.
As with most laws, Subchapters D and E do not come without exceptions. Specifically, exclusion of land does not apply to land that:
- is within 5 miles of a military base at which active training is conducted,
- was voluntarily annexed into an ETJ in a county whose population grew by more than 50% from the last census or a county with a population over 240,000,
- is within the ETJ of a municipality with a population over 1.4 million that is within 15 miles of a military base at which an active training program is conducted and in a county with a population over 2 million,
- is designated as an industrial district under Section 42.044 of the Local Government Code, or
- is subject to a strategic planning partnership agreement as described in Section 43.0751 of the Local Government Code.
Subchapter D: Release by Petition
Under Subchapter D, a resident or a majority owner of an area consisting of one or more parcels of land in an ETJ may file a "petition" with the municipality to have the area released. A landowner can single-handedly release their land from an ETJ, as the statute only requires a minimum of one parcel to file a petition.
A "petition" requires the following:
- handwritten signatures of over 50% of registered voters or a majority in value of all title holders to the area,
- printed names of each signatory,
- the date of birth or voter registration number of each signatory,
- each signatory's address,
- each signatory's date of signing, which must be no more than 180 days from the time the petition is filed, and
- a map and legal description of the area to be released.
After submitting the petition, the municipality will notify the submitter of its approval and the area shall be immediately released from the ETJ. It is worth noting that the statute does not provide a municipality any discretion to deny petitions. Thus, if the process and procedures outlined above are adhered to, the municipality must approve the petition and release the area. Should the municipality fail to take action, the area will be released by operation of law upon the latter of 45 days after it is submitted to the municipality, or on the date the municipality holds its next meeting which is greater than 30 days from the date the municipality received the petition. Further, a municipality may not thereafter be re-annexed into the municipality's ETJ or corporate boundaries without approval by the owner(s) of the area which was previously excluded.
Subchapter E: Release by Election
Subchapter E allows the release of an area by election. To initiate such an election, a resident of the area must file a petition with the municipality requesting that an election be held to exclude the area. The petition must contain signatures of at least five percent of the registered voters in the area to be released, as well as a map and legal description of the area. Upon receiving the election petition, the municipality may opt to hold (and fund) an election or voluntarily release the area without an election.
If the municipality opts to hold an election, such election must be held on the first general election date which is on or after 90 days from receipt of the election petition and such election must be in conformance with other general elections held by the municipality. Within 48 hours after the election, the municipality shall announce the results to the residents of the area. If a majority of registered voters in the area approve the release, the municipality must immediately release the area from the ETJ. If the municipality fails to act, the area will be released by operation of law upon the latter of the next meeting of the municipality, or the 15th day after the canvass date of the election. If a majority of registered voters do not vote to exclude the area, a resident may not file another election petition for two years after the date the most recent failed election petition was submitted to the municipality.
Before beginning the process to exclude land from an ETJ, landowners should pay careful attention to the costs and benefits of exclusion. On one hand, exclusion may allow landowners to bypass certain municipal regulations, such as building codes or platting requirements. On the other hand, exclusion of land may result in limitation or cessation of certain services the municipality was previously providing to the area.
So far, municipalities across Texas have pushed back on the law, arguing that it hinders a municipality's ability to effectively plan for future developments and will fragment the municipality's service and regulatory application. However, many landowners have already taken advantage of the law, citing that burdensome municipal regulations and unresponsive officials have held back projects for far too long. As we continue to await further legislative and judicial guidance, proper application of this new law could potentially result in greater feasibility for landowners looking to purchase and/or develop land located in an ETJ.