Several Texas laws have evolved during the past 15 years to prevent problems associated with colonias. Although specifics change from law to law, some of the laws share common approaches, such as assuring water and sewer services for new residential developments, forbidding sales of lots not properly platted, limiting some utility connections to discourage growth in substandard developments, and restricting the use of contracts for deeds. Cities, counties, the state, and private individuals have various roles in carrying out and enforcing these laws.
Typically, special requirements apply when a person seeks to "subdivide" land -- that is, divide the land into residential lots for future sale or lease. The division of the land into lots is shown on a map called a "plat." Local governmental approval (city or county, and sometimes both) is required before a plat may be recorded at the courthouse and the new lots may be sold.
In the border area and in certain economically distressed areas of Texas, the colonias-prevention laws generally require a subdivider to provide water and sewer services (as well as good roads and drainage) for new residential developments. Information about the utilities must be stated on the proposed subdivision plat. The subdivider may choose either (1) to install the utilities prior to obtaining final plat approval from the city and/or county, or (2) to post with the city or county a financial guarantee to cover the utilities' cost if they are not installed by a promised operability date stated on the plat. This requirement is referred to as "Build it or bond it."
In counties within 50 miles of the border, the sale of a rural lot that lacks water and sewer services (or a financial guarantee for their construction) is forbidden, except by someone who resides on the lot. The sales prohibition applies even to a lot that was platted long ago. This prohibition dates from the 1995 enactment of Subchapter B of Chapter 232, Local Govt. Code, but it was expanded in 1999 to cover virtually any lot outside city limits in a subdivision of lots intended primarily for residential use.
Utility service to residential land is restricted both by cities (under Subchapter A of Chapter 212, Local Govt. Code) and by counties (under Subchapters B and C of Chapter 232, Local Govt. Code). To be eligible for utility service a residential lot must qualify under one or more of several sets of conditions. Over the years these eligibility conditions have become somewhat complex. They can involve such factors as the location of the land, the history of subdividing and selling and development of the property, the type and history of utility service, and the availability or feasibility of water service.
An overview of these requirements is shown on maps of selected border counties.
The chief colonias-prevention laws include:
In 1989 the Texas Legislature set up the Economically Distressed Areas Program (EDAP) to assist local governments in providing water and sewer facilities to needy residential areas (like colonias) existing as of 1989. As part of the bargain for receiving millions of dollars from the state for remedial work, EDAP areas must enforce strict rules (the "model rules") assuring that water and sewer facilities in new residential developments meet minimum state standards. (Under older laws, residential subdividers were typically not required to provide water and sewer services.)
Subchapter K of Chapter 17 of the Water Code contains the statutory framework under which the Texas Water Development Board (TWDB) provides EDAP funds for qualifying projects in eligible economically distressed areas. EDAP funds may only go to projects in counties along the border or counties having high unemployment (at least 25% above the statewide average) and low per-capita income (at least 25% below the statewide average). These statistics are averaged over the preceding three years; so eligible counties change from year to year. The state now has several other programs providing various kinds of financial assistance to colonia residents.
Subchapter J of Chapter 16 of the Water Code outlines the framework for the so-called model subdivision rules. The legislature directed state agencies to come up with "model rules" to assure safe and sanitary water and sewer services in residential areas. The model rules must prohibit the establishment of residential developments with lots of five acres or less without adequate water and sewer. The model rules also must include setbacks and prohibit more than one single-family detached dwelling per lot. An entity seeking EDAP funds must be in a city or county that has adopted the model rules.
Initially drafted in 1990, the Model Subdivision Rules were revised and formally adopted by the Texas Water Development Board (TWDB) effective in February 2000. The main thrust of the model rules is to assure adequate water supply and sewer service in new residential developments, thereby preventing new colonias. Services are generally adequate if they meet minimum state standards established by the Texas Natural Resource Conservation Commission (TNRCC). In border counties and in counties with low per capita income and high unemployment, EDAP funding for water and sewer projects is available only if the county and the local city adopt and enforce the model rules. Further, even if no EDAP funding is sought, counties within 50 mile of the border ("Subchapter B" counties) must adopt the model rules and apply them to all residential subdivisions outside city limits.
The model rules impose special platting requirements when residential lots of five acres or less are created. In accord with the directives in Subchapter J of Chapter 16 of the Water Code, the model rules require subdividers to provide water and sewer facilities meeting minimum state standards for new residential developments with two or more lots of five acres or less. A plat must include an engineer's report explaining how water and sewer will be provided to the lots, including the costs and the date by which the facilities will be operable. If water or sewer is to be provided by a utility, the subdivider must pay all costs of service connections and enter into an agreement with the utility provider to guarantee the service for 30 years. If the lots will have water wells, the quantity and quality of the groundwater must be analyzed. If on-site sewage facilities (like septic systems) are to be used, the lots must be septic suitable. The subdivider and the city or county must enter into a "Subdivision Construction Agreement" backed by a financial guarantee (bond, letter of credit, etc.) assuring construction by the promised operability date of all water and sewer facilities (including on-site sewage facilities) not completed at the time of final plat approval.
Plats must also prohibit more than one single-family detached dwelling per lot. Setbacks are required from adjoining lots (5') and streets (10'). Instead of adopting the model rules verbatim, cities may amend their existing subdivision ordinances to incorporate the basic minimum requirements of the model rules. There are special provisions for platting older unplatted subdivisions. An appendix to the model rules includes needed forms.
Subchapter A contains the statutes under which cities in Texas typically regulate subdivisions of land. It applies to land within a city's limits or the city's surrounding "extraterritorial jurisdiction." Special provisions (§§ 212.0105 and 212.0106) in Subchapter A apply in border counties and counties where a political subdivision has received funding under the Economically Distressed Area Program (EDAP). Under these provisions, a plat of a residential subdivision must have information about water and sewer facilities, and a city may require the subdivider to provide a financial guarantee that the facilities will be built by a chosen operability date. Under §§ 212.0115 and 212.012, Subchapter A also generally requires that a lot be platted to be eligible for utility service, but there are several exceptions.
Subchapter B applies in the 28 Texas counties having some part within 50 miles of the Texas-Mexico border. First adopted in 1995, Subchapter B now applies to virtually all residential subdivisions located outside city limits. Beginning Sept. 1, 2003, Subchapter B does not apply to a subdivision in which each lot is 10 acres or larger.
For new residential subdivisions, the subdivider is responsible for providing utilities, roads, and drainage. Plats must have information and certifications about the utilities and drainage. If the water and sewer facilities have not been built at the time of plat approval, the subdivider must provide a financial guarantee that they will be completed by a chosen operability date. This requirement is termed "Build it or bond it." Further, Subchapter B requires the county to adopt and enforce the model rules of the TWDB, even if the county is not seeking EDAP funds.
Subchapter B also contains restrictions on selling and advertising lots, generally forbidding the sale of a lot lacking water and sewer (or a guarantee for them) unless the seller resides on the lot.
A lot is eligible for connection to utilities (water, sewer, electric, and gas) only if certain listed conditions are met. Typically, a lot must be platted to be eligible for water or sewer service. For electric or gas service to a lot, the subdivision must have water and sewer facilities installed (although suitability for septic systems suffices). However, there are several categories of exceptions and exemptions.
Subchapter C applies to counties eligible for funding under the Economically Distressed Areas Program (EDAP) but not within 50 miles of the border. These counties can change from year to year with changes in unemployment and per capita income. For new subdivisions with two or more lots of five acres or less intended for residential purposes, plats must include information about water and sewer service. An engineer must certify that the water and sewer facilities comply with the model rules. The subdivider must construct those facilities or financially guarantee their construction. The law forbids the sale of a lot that should have but has not been platted under Subchapter C. It also forbids utility connections to such unplatted lots. The requirements for residential subdivisions in Subchapter C apply in addition to the county's general subdivision platting requirements (for example, for roads and drainage) in Subchapter A of Chapter 232.
New in 2001, Subchapter E allows commissioners courts in certain populous counties broad powers to adopt rules for subdivisions and to require wider rights-of-way, minimum lot frontages, set-backs, etc. These new county powers are similar to the controls that cities can exercise over subdivisions within their extraterritorial jurisdictions (ETJ's).
Subchapter E applies outside city limits in the four border counties with populations of 150,000 or more: Cameron, El Paso, Hidalgo, and Webb. In the rest of Texas it applies to counties with populations of 700,000 or more and certain adjoining counties.
Subchapter D applies statewide to executory contracts (typically called contracts for deeds) involving property used or to be used as the residence of the purchaser or a close relative of the purchaser. It contains a number of provisions designed to inform the buyer and protect the buyer's investment in the property. The provisions in Subchapter D remedy abuses by a few who would sell lots through contracts for deed at high interest rates and later summarily repossess the lots (and any improvements built by the buyers) for some minor breaches of the contract. In the border area, Subchapter B of Chapter 232, Local Govt. Code, contains further restrictions on contracts for deeds when a residential lot is being sold by the subdivider of the land.