By Vowell                                             H.B. No. 2704
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the regionalization of utility services in El Paso
    1-3  County, provisions for consolidation of certain water and
    1-4  wastewater service corporations and utility districts into a
    1-5  regional utility, and methods for planning, funding and operation
    1-6  of a regional Utility.
    1-7        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-8        SECTION 1.  DEFINITIONS.
    1-9        (a)  "assets" means all physical assets, contract rights,
   1-10  water rights and all other rights or privileges of any kind or
   1-11  nature whether tangible or intangible.
   1-12        (b)  "city" means the City of El Paso, a home rule city
   1-13  pursuant to the laws of the State of Texas.
   1-14        (c)  "city's municipal jurisdiction" means the city's
   1-15  authority within the city limits and the extraterritorial
   1-16  jurisdiction of the city.
   1-17        (d)  "county" means El Paso County.
   1-18        (e)  "debts" means bonded indebtedness, all contractual
   1-19  obligations, claims, judgment, and contingent liabilities for which
   1-20  a person or entity is legally liable.
   1-21        (f)  "districts" means the following:  Deerfield Park Water
   1-22  Supply Corporation, East El Paso Water Supply Corporation, El Paso
   1-23  County Lower Valley Water District Authority, El Paso County Water
    2-1  Authority, El Paso County Water Control and Improvement District
    2-2  No. 4, El Paso County Tornillo Water Improvement District, El Paso
    2-3  County Water Control and Improvement District - Westway, Homestead
    2-4  Municipal Utility District, Haciendas del Norte Water Improvement
    2-5  District, San Elizario Grant Municipal Utility District, Tornillo
    2-6  Water Supply Corporation, Fabens Water Control Improvement
    2-7  District, Anthony Water District, any other district in the county
    2-8  created by Art. XVI, Sec. 59 of the Texas Constitution providing
    2-9  utility service as defined herein and located in the county.
   2-10        (g)  "PSB" means the Public Service Board, a board of
   2-11  trustees having complete management and control of the water and
   2-12  wastewater utility systems of the city pursuant to the authority
   2-13  contained in Article 1115, Tex. Rev. Civ. Stat.  and Ordinance No.
   2-14  752 (May 22, 1952) of the city, as amended.
   2-15        (h)  "regional utility" is the city, acting through its water
   2-16  utility as managed and operated by its PSB.
   2-17        (i)  "utility service" means water supply, wastewater, and
   2-18  flood control services.
   2-19        (j)  "committee" is the Regional Utility Advisory Committee
   2-20  as herein after created.
   2-21        SECTION 2.  PURPOSES OF ACT.  The purposes of this Act are as
   2-22  follows:
   2-23        (a)  to encourage and provide for the orderly consolidation
   2-24  of the districts in the county into a regional utility in order to:
   2-25              (1)  insure the provision of utility services to all
    3-1  residents of the county at the lowest possible cost according to a
    3-2  regional plan;
    3-3              (2)  eliminate unnecessary competition by the districts
    3-4  for limited water, financial and other valuable resources;
    3-5              (3)  take advantage of economies of scale with regard
    3-6  to the provision of utility services in the county;
    3-7              (4)  conjunctively manage the limited resources of
    3-8  surface and ground water of the county so that the integrity and
    3-9  quality of these limited resources is protected and extended to the
   3-10  greatest extent reasonably possible.
   3-11        (b)  to enable the city acting through its water utility as
   3-12  managed and operated by the PSB to operate as the regional utility
   3-13  in the county;
   3-14        (c)  to give the regional utility the authority to plan,
   3-15  operate, and provide for utility services on a regional basis;
   3-16        (d)  to provide a framework for the management and operation
   3-17  of the regional utility within and outside of the city's municipal
   3-18  jurisdiction; and
   3-19        (e)  to provide for the assumption of the assets and debts of
   3-20  the districts upon consolidation into the regional utility.
   3-21        SECTION 3.  DESIGNATION OF CITY AS EL PASO COUNTY REGIONAL
   3-22  UTILITY.
   3-23        (a)  Upon the enactment of an enabling resolution by the City
   3-24  Council of the City of El Paso, the city, through its PSB, is
   3-25  hereby designated as the regional utility provider in the county
    4-1  for the purpose of providing utility services within the county.
    4-2  After the enactment of the enabling resolution by the City Council
    4-3  of the City of El Paso, the obligation of the regional utility to
    4-4  act as the regional utility provider as provided by the terms of
    4-5  this act shall continue in full force and effect and shall only be
    4-6  amended or abolished by the legislature of the state of Texas.
    4-7        (b)  Upon the effective date of this act, the regional
    4-8  utility shall:
    4-9              (1)  file an application with the Texas Water
   4-10  Development Board for a regional water supply and wastewater
   4-11  facilities planning grant study pursuant to the provisions of
   4-12  Section 15.406 of the Water Code and the applicable rules
   4-13  promulgated by the Texas Water Development Board.  In the event of
   4-14  approval of the application by Texas Water Development Board
   4-15  pursuant to the statute and rules, the regional utility shall enter
   4-16  into a contract with the Texas Water Development Board to conduct a
   4-17  regional water supply and wastewater facilities planning study
   4-18  which shall include all of the county and incorporate any water
   4-19  supply and wastewater facilities currently being designed or
   4-20  constructed in the county.  Results of the planning effort shall be
   4-21  completed by December 31, 1993, and shall include an implementation
   4-22  schedule and associated preliminary costs for water and wastewater
   4-23  facilities to provide service to meet the projected water and
   4-24  wastewater needs within the county to the year 2040.
   4-25              (2)  file an application with the Texas Water
    5-1  Development Board for a regional water supply planning grant
    5-2  pursuant to the provisions of Section 15.406 of the Water Code and
    5-3  the applicable rules promulgated by the Texas Water Development
    5-4  Board.  In the event of approval of the application by Texas Water
    5-5  Development Board pursuant to the applicable statute and rules, the
    5-6  regional utility shall enter into a contract with the Texas Water
    5-7  Development Board for the preparation of a regional water supply
    5-8  planning study which shall include all of the county.  Results of
    5-9  the planning effort shall be completed by December 31, 1993, and
   5-10  shall identify projected water demands and available and potential
   5-11  supplies to meet the water supply needs within the county to the
   5-12  year 2040.
   5-13        (c)  Subject to the provisions of all outstanding bonds of
   5-14  the city, the regional utility shall serve any area or areas within
   5-15  the county, and is hereby designated as the utility service
   5-16  provider within the county which shall receive priority
   5-17  consideration for purposes of state funding.
   5-18        (d)  As the regional utility provider, the regional utility
   5-19  shall receive priority consideration for purposes of state funding
   5-20  of regional planning for the provision of utility service outside
   5-21  the city's municipal jurisdiction.  The regional utility may enter
   5-22  into agreements and cooperative projects with political
   5-23  subdivisions and other governmental entities in this State, the
   5-24  state of New Mexico, the International Boundary and Water
   5-25  Commission, and with the Republic of Mexico or any responsible
    6-1  political subdivision thereof, to:
    6-2              (1)  promote regional planning for the provision of
    6-3  utility services;
    6-4              (2)  promote regional planning which is consistent with
    6-5  the United States/Mexico integrated border plan;
    6-6              (3)  coordinate the regional planning with the
    6-7  comprehensive state water plan;
    6-8              (4)  finance, or seek financing for, the water and
    6-9  wastewater infrastructure, especially in economically distressed
   6-10  areas;
   6-11              (5)  provide for regional drought and water supply
   6-12  management;
   6-13              (6)  collect and disseminate water and wastewater
   6-14  regional data;
   6-15              (7)  coordinate state level financial and technical
   6-16  assistance in extending or creating water and wastewater service;
   6-17              (8)  promote conservation planning, education, and
   6-18  research of surface water and ground water resources;
   6-19              (9)  promote preservation of human health and the
   6-20  environment;
   6-21              (10)  promote water quality; and
   6-22              (11)  accomplish any other related regional utility
   6-23  purpose.
   6-24        SECTION 4.  ORGANIZATION OF LOCAL GOVERNMENT ADVISORY
   6-25  COMMITTEE.  (a)  Within thirty days of the effective date of this
    7-1  Act, there shall also be created a committee known as the Regional
    7-2  Utility Advisory Committee, consisting of seven members, five (5)
    7-3  of whom are to be appointed by the commissioners court of the
    7-4  county and two (2) of whom are to be jointly appointed by the
    7-5  mayors of the incorporated municipalities, other than the city,
    7-6  within the county.  The duties of the committee shall be to act as
    7-7  an advisory body to the regional utility on matters related to:
    7-8              (1)  the priorities in the provision of utility
    7-9  services;
   7-10              (2)  the rates and charges for service outside of the
   7-11  corporate limits of the city;
   7-12              (3)  regional planning; and
   7-13              (4)  adoption of or amendments to rules and regulation
   7-14  affecting provision of utility service outside of the corporate
   7-15  limits of the city.
   7-16        (b)  Each member of the committee appointed by the
   7-17  commissioners court of the county shall be a qualified voter
   7-18  residing within the county and outside the city's municipal
   7-19  jurisdiction.  Each member of the committee appointed by the mayors
   7-20  of the other incorporated cities within the county shall be a
   7-21  qualified voter residing within the county and within one or the
   7-22  other of the incorporated municipalities other than the city.  Each
   7-23  member of the committee shall also be over eighteen years of age
   7-24  and shall have resided in the county for a minimum of six months
   7-25  immediately prior to the date of appointment.
    8-1        (c)  The two member appointed by each the commissioners court
    8-2  of the county and the mayors of the incorporated municipalities in
    8-3  the county but not including the city shall serve for three years.
    8-4  All other members of the committee, and after the first term of the
    8-5  first four members of the committee, shall be appointed to serve a
    8-6  two year term.  A vacancy on the committee shall be filled by
    8-7  appointment for the unexpired term by the commissioner's court or
    8-8  the mayors of the incorporated whichever appointed the member whose
    8-9  seat was vacated.
   8-10        (d)  A person is disqualified from serving as a member of the
   8-11  committee if:
   8-12              (1)  he is related within the third degree of affinity
   8-13  or consanguinity to:
   8-14                    (A)  a developer of property in the county,
   8-15                    (B)  any elected official of the city or county,
   8-16                    (C)  any manager of the regional utility,
   8-17                    (D)  or any other member of the committee;
   8-18              (2)  he is an employee or officer of:
   8-19                    (A)  any developer of property in the county,
   8-20                    (b)  any elected official of the city, or other
   8-21  incorporated cities within the county, or the county,
   8-22                    (C)  any manager of the regional utility,
   8-23                    (D)  or any manager, engineer or attorney for a
   8-24  district, the county, the city, or other incorporated municipality
   8-25  within the county;
    9-1              (3)  he is a developer of property in the county;
    9-2              (4)  he is serving as an attorney, consultant,
    9-3  engineer, manager, architect or in some other professional capacity
    9-4  for the regional utility, the county, a district or an incorporated
    9-5  city within the county, or of a developer of property within the
    9-6  county, in connection with the regional utility service;
    9-7              (5)  he is a party to a contract with or along with the
    9-8  regional utility except for the purchase of public services
    9-9  furnished by the regional utility to the public generally.
   9-10        SECTION 5.  ADDITIONAL RIGHTS AND POWERS OF REGIONAL UTILITY.
   9-11        (a)  For the purposes of providing utility services and
   9-12  operating a regional utility in the county, the regional utility
   9-13  shall have all powers and authority provided in Sections 402.001
   9-14  and 402.002 of the Local Government Code.  The regional utility
   9-15  shall specifically have the authority to apply for and obtain
   9-16  grants and loans for the purpose of providing utility service
   9-17  outside the city's municipal jurisdiction and for the purpose of
   9-18  funding and providing for regional projects with other states and
   9-19  the Republic of Mexico.  This Act amends Sections 791.011 and
   9-20  791.026 of the Government Code to authorize the regional utility
   9-21  pursuant to the regional water supply and wastewater facilities
   9-22  planning study report prepared pursuant to Section 3(b) of this act
   9-23  to:
   9-24              (1)  contract with other local governments,
   9-25  municipalities, districts, river authorities, or other state or
   10-1  governmental entities within this State, or within other states,
   10-2  and with the Republic of Mexico,
   10-3              (2)  obtain grants and loans to provide utility service
   10-4  outside of the city's municipal jurisdiction,
   10-5              (3)  provide for planning and construction of regional
   10-6  projects including water supply or wastewater treatment facilities,
   10-7  and
   10-8              (4)  otherwise promote the regionalization of utility
   10-9  services within the county and surrounding areas.
  10-10        (b)  This act shall not operate to authorize the regional
  10-11  utility to condemn land owned by the state or any other political
  10-12  subdivision of the state outside the city's municipal jurisdiction.
  10-13        (c)  Except to the extent of any tax obligation imposed by
  10-14  any district and necessary to retire any debt existing on the date
  10-15  of consolidation as hereinafter provided, this Act shall not
  10-16  operate to allow the regional utility to tax property outside of
  10-17  the city's corporate limits.
  10-18        SECTION 6.  CONSOLIDATION OF DISTRICTS.
  10-19        (a)  The regional utility shall have the authority to
  10-20  consolidate one or more of the districts into the regional utility
  10-21  upon the occurrence of one or more the following events:
  10-22              (1)  a majority vote of the board of directors of a
  10-23  district operating as a water supply corporation or investor owned
  10-24  utility,
  10-25              (2)  a majority vote of the board of directors of a
   11-1  district other than a water supply corporation to dissolve the
   11-2  district by consolidation into the regional utility, followed by an
   11-3  election in the district within one year of the date of the
   11-4  petition at which a majority of the voters voting in the election
   11-5  vote to dissolve the district by consolidation into the regional
   11-6  utility;
   11-7              (3)  a petition requesting dissolution of the district
   11-8  by consolidation into the regional utility signed by ten percent
   11-9  (10%) or more of the residents of the subject district and
  11-10  delivered to the board of directors of the subject district,
  11-11  followed by an election within one year of the date of the petition
  11-12  at which a majority of the voters voting in the election vote to
  11-13  dissolve the district by consolidation into the regional utility;
  11-14  or
  11-15              (4)  an agreement between the regional utility and the
  11-16  county, which agreement may be made without the consent of the
  11-17  district as to the abolition of the district as it exists within
  11-18  the county, but outside of any other municipality's boundaries.
  11-19        (b)  Notwithstanding the occurrence of a vote or election as
  11-20  provided in (a) above, as to each district with bonds, notes,
  11-21  obligations or taxes owed, contracted, or authorized at the time of
  11-22  the district's vote to consolidate into PSB, consolidation of a
  11-23  district into PSB shall not be final and effective until:
  11-24              (1)  the boards of directors of PSB and the district
  11-25  have entered into a consolidation agreement; and
   12-1              (2)  as to each district other than a district
   12-2  operating as a water supply corporation, the board has ordered and
   12-3  held an election in the district at which a majority of the
   12-4  district's residents approved the terms and conditions of the
   12-5  consolidation agreement;
   12-6              (3)  The district's debts, bonds, notes, obligations
   12-7  and taxes, as applicable, have been paid in full; and
   12-8              (4)  a PSB consolidation order has been filed in the
   12-9  real property records of the county and the Texas Water Commission.
  12-10        (c)  If an election is required to be held in a district for
  12-11  the purposes of consolidation into the regional utility, then the
  12-12  election shall be held in conformity with the Texas Election Code,
  12-13  as amended, and all applicable election law.
  12-14        (d)  At all times prior to final consolidation of a district
  12-15  which has debts or other obligations which may be owed, contracted,
  12-16  or authorized, the district shall:
  12-17              (1)  protect the assets of the district and insure that
  12-18  they are not impaired;
  12-19              (2)  where applicable and necessary, assess and collect
  12-20  taxes on property in the district to pay debts created by the
  12-21  district; and
  12-22              (3)  pay debts of the district and manage the assets of
  12-23  the district through the sale, lease or other management of
  12-24  district lands.
  12-25        (e)  If taxes were levied on land within a district
   13-1  consolidated into the regional utility at the time of
   13-2  consolidation, and if taxes are necessary to retire existing debt,
   13-3  the regional utility shall continue to assess and collect the
   13-4  taxes, but the regional utility shall not increase tax rates in the
   13-5  district in order to retire debts of the district unless such
   13-6  increase is authorized as provided by existing law.
   13-7        (f)  Consolidation shall be achieved in such a way that it
   13-8  does not actually violate any existing bond covenants or other
   13-9  existing contractual obligations of the city, its public service
  13-10  board, or any district and does not adversely affect their bond
  13-11  rating.
  13-12        (g)  The regional utility may apply to the Texas Water
  13-13  Development Board for up to $3 million appropriated during the
  13-14  1994-95 biennium for grants or loans to encourage and facilitate
  13-15  the regionalization of water and wastewater services in counties
  13-16  directly adjacent to the international border with Mexico through
  13-17  Section 15.102 Water Code.  Any funds awarded pursuant to this
  13-18  provision shall be used by the regional utility to purchase and
  13-19  refinance district debt in order to achieve a reasonable cost of
  13-20  service to existing customers and facilitate consolidation of water
  13-21  and wastewater services in the county.
  13-22        SECTION 7. UTILITY SERVICE RATES.
  13-23        (a)  The regional utility shall have the authority to charge
  13-24  persons receiving utility service in the expanded service areas,
  13-25  such rates for the sources allowed by law.  Notwithstanding Section
   14-1  16.349(b) of the Texas Water Code, the regional utility may charges
   14-2  persons in an area outside the corporate boundaries of the city
   14-3  rates for utility service actually provided even though the rate so
   14-4  charged may exceed the rate paid by ratepayers inside the corporate
   14-5  boundaries of the city for the utility service.
   14-6        (b)  In no event shall the regional utility increase the
   14-7  rates charged for utility service to ratepayers within the
   14-8  corporate boundaries of the city for the purpose of providing
   14-9  utility service or reducing the rates charges for utility service
  14-10  to ratepayers outside the corporate boundaries of the city.  In no
  14-11  event shall any revenue generated from the rates charged customers
  14-12  outside the city be paid to or deposited in the general revenue
  14-13  fund of the city except as required by any existing bond covenant.
  14-14        SECTION 8.  PROVISION OF UTILITY SERVICE.
  14-15        (a)  As a condition of providing utility service, the
  14-16  regional utility may require that all development in the county
  14-17  meet the minimum construction and development standards established
  14-18  for economically distressed areas in the Water Code and in the
  14-19  Rules of the Texas Water Development Board.
  14-20        (b)  Upon consolidation of a district into the regional
  14-21  utility, the regional utility shall be required to provide utility
  14-22  service to those residents of the district.  The regional utility
  14-23  shall provide for the extension of service to existing customers
  14-24  and any new customers within the consolidated district pursuant to
  14-25  the provisions of the regional water supply and wastewater
   15-1  facilities plan developed pursuant to Section 3(b) of this act.
   15-2  Notwithstanding any other provision in this act, any water supply
   15-3  or wastewater facilities being constructed or designed on the
   15-4  effective date of this act shall be continued by the regional
   15-5  utility uninterrupted by any delay and be incorporated into the
   15-6  regional water supply and wastewater facilities plan developed
   15-7  pursuant to Section 3(b) of this act.
   15-8        (c)  In order to plan for regional utility service within the
   15-9  county, the regional shall include land which belongs to the
  15-10  permanent school fund of the state within a regional plan.  In such
  15-11  event, the provisions of a regional plan shall be binding upon
  15-12  permanent school fund land only after the regional utility provides
  15-13  acceptable utility service commitments to the affected land and
  15-14  obtains the written consent of the school land board in accordance
  15-15  with its Rules and Regulations.
  15-16        SECTION 9.  SEVERABILITY AND CONSTRUCTION.  If any provision
  15-17  of this Act or the application thereof to any person or
  15-18  circumstances be held invalid, such invalidity shall not affect
  15-19  other provisions or applications of this Act that can be given
  15-20  effect without the invalid provision or application, and to this
  15-21  end the provisions of this Act are declared to be severable.  All
  15-22  the terms and provisions of this Act are declared to be severable.
  15-23  All the terms and provisions of this Act are to be liberally
  15-24  construed to effectuate the purpose, powers, rights, functions, and
  15-25  authorities herein set forth.
   16-1        SECTION 10.  DECLARATION OF EMERGENCY.  The importance of
   16-2  this legislation and the crowded condition of the calendars in both
   16-3  houses create an emergency and an imperative public necessity that
   16-4  the constitutional rule requiring bills to be read on three several
   16-5  days in each house be suspended, and this rule is hereby suspended
   16-6  and this act shall be effective on September 1, 1993.