EFFECT OF ANNEXATION BY CITY

(a) Notwithstanding any other law, if all of the territory of the district or a district created by the division of the district is annexed by the city into the corporate limits of the city, the district may not be dissolved and continues in existence following annexation until: (1) water, sanitary sewer, and drainage improvements and roads have been constructed to serve at least 90 percent of the territory of the district capable of development; or (2) the board adopts a resolution consenting to the dissolution of the district. (b) After annexation by the city: (1) the district may impose a special assessment in the manner provided by Subchapter F, Chapter 375, Local Government Code; and (2) Section 375.161, Local Government Code, does not apply to the district. (c) Notwithstanding Section 54.016(f)(2), Water Code, an allocation agreement between the city and the district that provides for the allocation of the taxes or revenues of the district and the city following the date of inclusion of the district's territory in the corporate limits of the city may provide that the total annual ad valorem taxes collected by the city and the district from taxable property within the city's corporate limits may exceed the city's ad valorem tax on that property.