A Public Improvement District (P.I.D.) in Texas is a common way for a subdivision developer to create infrastructure for the subdivision they are creating. The developer will choose their location and begin laying out what the development would look like. The developer would also get in contact with the city that the property is in so that the development follows the local guidelines. The developer may see a need to create a P.I.D. so that they can recoup money they pay upfront for lights, sidewalks or many other uses. Once the developer sees the need to establish a P.I.D. they request the city to sponsor their P.I.D. through the city’s formal process. There are two local government codes that P.I.D.’s can be created under in Texas: 372 and 382. For example, the P.I.D.’s in Conroe and Tomball are created through government code 372. Once the city has approved the P.I.D. the citizens that live in that subdivision will be assessed a P.I.D. tax and it can be seen under the jurisdiction section of the taxes. A citizen that is paying a P.I.D. tax can pay off their portion at any time. IMPORTANT NOTE—there may be some lag time from the creation of the P.I.D. and the P.I.D. tax showing up on the tax records. This can vary but is typically when the subdivision has it’s first completed home. New home developers in Tomball and Conroe have been given information from their respective cities for the public about the P.I.D.’s they have created. The total number of P.I.D.’s in Tomball and Conroe at the time of this article was 17. The trend is for new developments to create a P.I.D.
Can an existing subdivision create a P.I.D.? The answer is they can, but they usually don’t.
Let’s say you live in a subdivision that has sidewalks that are cracked badly, they look horrible, and you can’t even push a stroller without it being dangerous. The homeowners in that subdivision could approach their Homeowners Association and ask them to create a P.I.D. to fix the sidewalks. The H.O.A. would need to gather a petition with more than 50% of the homeowners agreeing to the P.I.D. tax. That petition would then be taken to the city for a hearing. The hearing is where it goes bad if the H.O.A. did not get a large majority agreeing to the P.I.D. Citizens do not usually give themselves a new tax to pay, but it can be done and that’s pretty much the process. It is rare to see a new P.I.D. created in a subdivision that is established.
Here are some other details you might want to be aware of. If a person lives in a P.I.D. and they wish to sell, they MUST provide notice of the P.I.D. to the buyer before the contract is executed. Sellers that are selling condominiums, new construction, raw land, commercial and residential homes all must provide the P.I.D. notice. The seller should be aware that they are in a P.I.D. for one of two reasons. The first way a seller should be aware if they are in a P.I.D. is they are and have been receiving a bill for that P.I.D. If this is the case the P.I.D. should show up in the Jurisdiction section of the tax records. The second is that if a new P.I.D. has been created or is in the process of being created the seller would have received notices in the mail for hearings about the P.I.D. that was created or in the process of being created. In this case the tax records may not show the P.I.D. since it is new or still in the creation process. Click here to review EXEMPTIONS under the Texas Property Code but remember Condominiums are NO LONGER exempt.