1-1  By:  Madla                                            S.B. No. 1093
    1-2        (In the Senate - Filed March 12, 1993; March 15, 1993, read
    1-3  first time and referred to Committee on Intergovernmental
    1-4  Relations; April 22, 1993, reported adversely, with favorable
    1-5  Committee Substitute by the following vote:  Yeas 9, Nays 0;
    1-6  April 22, 1993, sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Armbrister         x                               
   1-10        Leedom             x                               
   1-11        Carriker           x                               
   1-12        Henderson                                      x   
   1-13        Madla              x                               
   1-14        Moncrief           x                               
   1-15        Patterson          x                               
   1-16        Rosson             x                               
   1-17        Shapiro            x                               
   1-18        Wentworth          x                               
   1-19        Whitmire                                       x   
   1-20  COMMITTEE SUBSTITUTE FOR S.B. No. 1093                   By:  Madla
   1-21                         A BILL TO BE ENTITLED
   1-22                                AN ACT
   1-23  relating to authorization for a county to create a county utility
   1-24  system board to operate and manage certain utility systems.
   1-25        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-26        SECTION 1.  Section 1, Chapter 616, Acts of the 72nd
   1-27  Legislature, Regular Session, 1991 (Article 717v, Vernon's Texas
   1-28  Civil Statutes), is amended to read as follows:
   1-29        Sec. 1.  COUNTIES SUBJECT TO ACT.  This Act applies only to a
   1-30  county that on the date an order is adopted under Section 2A(a) of
   1-31  this Act has <with> a population of 10,000 <1,500> or less,
   1-32  according to the most recent federal census.
   1-33        SECTION 2.  Chapter 616, Acts of the 72nd Legislature,
   1-34  Regular Session, 1991 (Article 717v, Vernon's Texas Civil
   1-35  Statutes), is amended by adding Section 2A to read as follows:
   1-36        Sec. 2A.  COUNTY UTILITY SYSTEM BOARD.  (a)  Instead of being
   1-37  directly responsible for the entire operation and management of the
   1-38  county's wastewater collection and treatment system, water supply
   1-39  and distribution system, or solid waste collection and disposition
   1-40  system, the commissioners court by an order adopted at a regular
   1-41  meeting  may make this section applicable to the county and
   1-42  establish a county utility system board.
   1-43        (b)  The board is responsible for the operation and
   1-44  management of each utility system placed under its control by the
   1-45  commissioners court's order under Subsection (a) of this section
   1-46  that is owned or in the process of being acquired by the county.
   1-47        (c)  The board is composed of five directors.  One director
   1-48  must be a member of the commissioners court appointed by the court
   1-49  at its first meeting of each county fiscal year.  Four directors
   1-50  shall serve in positions designated as positions 1, 2, 3, and 4 and
   1-51  shall be elected by qualified voters in the county and shall serve
   1-52  for two-year terms beginning October 1 after the election.  An
   1-53  election shall be held on the second Saturday of each September.
   1-54  Positions 1 and 3 shall be elected in odd-numbered years and
   1-55  positions 2 and 4 shall be elected in even-numbered years.  A
   1-56  candidate must be a qualified voter of the county.  The election
   1-57  shall be administered by the county election administrator or by
   1-58  the county clerk if the county does not have a county election
   1-59  administrator.  The election shall be governed by the Election
   1-60  Code.
   1-61        (d)  The commissioners court shall appoint members to the
   1-62  board to serve until October 1 after the first election is held as
   1-63  provided by Subsection (c) of this section.
   1-64        (e)  The directors shall organize by the selection, for a
   1-65  one-year period, of a president, vice-president, secretary, and
   1-66  treasurer.  The offices of secretary and treasurer may be combined.
   1-67  The president and vice-president must be members of the board.  The
   1-68  person serving as secretary, treasurer, or both need not be a
    2-1  member of the board.  The president shall preside at the meetings
    2-2  of the board and act as the board's chief executive officer and
    2-3  budget officer.  The vice-president shall assume the duties of the
    2-4  president if the president is incapacitated or absent from a
    2-5  meeting.  The secretary shall keep the records and the minutes of
    2-6  the meetings of the board.  The treasurer shall be responsible for
    2-7  the deposit of all revenues of any system operated and managed by
    2-8  the board in one or more separate accounts with the county
    2-9  depository, except that any funds set aside for the payment or
   2-10  security of obligations issued on behalf of the board may be
   2-11  deposited with the paying agent for which provision is made in the
   2-12  order authorizing the issuance of the obligations.  The board shall
   2-13  require the treasurer to execute a bond in an amount equal to the
   2-14  estimated amount to be  held, at any time, by the treasurer.  The
   2-15  premium of the bond shall be paid by the board.
   2-16        (f)  The president, with the assistance of the business
   2-17  manager, shall prepare a tentative budget showing the anticipated
   2-18  revenues by sources and the expenses of the utility system and the
   2-19  board for the next county fiscal year and submit it to the board no
   2-20  later than June 1.  The board shall schedule a public hearing to
   2-21  consider the budget no later than July 1.  The final budget shall
   2-22  be adopted by the board no later than July 15 and submitted to the
   2-23  commissioners court for consideration by the commissioners court as
   2-24  a part of the county budget.  If a county budget has not been
   2-25  adopted, the budget for the utility system or systems is the same
   2-26  as for the preceding fiscal year, except that the budget is
   2-27  increased proportionally if the previous budget was not for a
   2-28  complete fiscal year.  The board and the commissioners court shall
   2-29  include in the budget an amount sufficient to provide for the
   2-30  payment and security of any outstanding obligations approved by the
   2-31  attorney general to the extent the obligations are payable from the
   2-32  revenues of the utility system or systems.
   2-33        (g)  The board in its bylaws shall provide procedures for the
   2-34  disbursement of funds it has deposited with the county depository
   2-35  only after the board has determined that the funds for payment were
   2-36  properly budgeted.  However, approval of the board is not required
   2-37  for the transfer of funds to a paying agent for the payment and
   2-38  security of outstanding obligations approved as to legality by the
   2-39  attorney general.  All checks issued by the board shall be signed
   2-40  by at least two persons, one of whom must be an officer of the
   2-41  board.
   2-42        (h)  The board may establish rates and charges for services,
   2-43  fees for connections and reconnections, security deposits, and
   2-44  other charges required for efficient operation of each utility
   2-45  system for which it has responsibility.
   2-46        (i)  The board may not:
   2-47              (1)  incur or issue any obligation payable, in whole or
   2-48  in part, from ad valorem taxes; or
   2-49              (2)  exercise the power of eminent domain.
   2-50        (j)  The board may provide for extensions and improvements to
   2-51  a system but may not provide for the extension of service to any
   2-52  area within the boundaries or extraterritorial jurisdiction of a
   2-53  municipality or conservation and reclamation district established
   2-54  under Article XVI, Section 59, of the Texas Constitution without
   2-55  the consent of the governing body of the municipality or district.
   2-56        (k)  With the approval of the commissioners court, the board
   2-57  may purchase an existing privately owned wastewater collection and
   2-58  treatment system or water supply and distribution system that
   2-59  supplies retail utility service in the county.  With the consent of
   2-60  the directors of a conservation and reclamation district
   2-61  established within the county, the commissioners court may assume
   2-62  the outstanding obligations of the district and provide for the
   2-63  abolition of the district.  The area of the former district must
   2-64  remain secondarily liable for the payment of any taxes pledged to
   2-65  the payment of outstanding indebtedness of the former district
   2-66  until the indebtedness has been paid, provision has been made for
   2-67  the payment of the obligations, or the obligations have been
   2-68  refunded by the county.  These taxes, if required, shall be levied
   2-69  against the area of the former district by the commissioners court
   2-70  as the successor to the district.
    3-1        (l)  The board may adopt bylaws consistent with this Act to
    3-2  regulate its affairs and establish the area within the county in
    3-3  which it has responsibility for providing utility service.  The
    3-4  service area of the board may not include territory that on the
    3-5  effective date of this Act is served by another utility under a
    3-6  certificate of public convenience and necessity unless the
    3-7  certificate ceases to be effective.  The bylaws may provide for a
    3-8  seal for the board.
    3-9        (m)  The board is subject to the open meetings law, Chapter
   3-10  271, Acts of the 60th Legislature, Regular Session, 1967 (Article
   3-11  6252-17, Vernon's Texas Civil Statutes), the open records law,
   3-12  Chapter 424, Acts of the 63rd Legislature, Regular Session, 1973
   3-13  (Article 6252-17a, Vernon's Texas Civil Statutes), Subchapter C,
   3-14  Chapter 262, Local Government Code, and the Public Funds Investment
   3-15  Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes) and
   3-16  their subsequent amendments.  The board is a governmental unit for
   3-17  the purpose of Chapter 101, Civil Practice and Remedies Code, and
   3-18  its subsequent amendments and all of its activities are in the
   3-19  performance of an essential governmental function.
   3-20        (n)  The county, by the adoption of an order at a regular
   3-21  meeting of the commissioners court, may authorize the issuance of
   3-22  obligations payable in whole or in part from ad valorem taxes on
   3-23  behalf of the board for the purpose of acquiring, improving,
   3-24  repairing, or extending the county's wastewater collection system,
   3-25  treatment system, water supply and distribution system, or solid
   3-26  waste collection and disposition system.  If the obligations are
   3-27  payable from ad valorem taxes and revenues, the board must also
   3-28  approve the issuance of the obligations.  If obligations are to be
   3-29  issued for one or more of those purposes and are to be payable
   3-30  solely from the gross revenues of one or more systems, the board,
   3-31  by resolution, may authorize the issuance.  This section does not
   3-32  prohibit an appropriation by the county of any available funds for
   3-33  assistance in the maintenance or operation of a system, but an
   3-34  agreement or pledge to do so beyond the then current fiscal year is
   3-35  not effective unless there is compliance with Article XI, Section
   3-36  7, of the Texas Constitution.  The following provisions and their
   3-37  subsequent amendments apply to and govern the county and the board
   3-38  when operating under this section:
   3-39              (1)  Chapter 271, Local Government Code;
   3-40              (2)  the Bond Procedures Act of 1981 (Article 717k-6,
   3-41  Vernon's Texas Civil Statutes);
   3-42              (3)  Chapter 784, Acts of the 61st Legislature, Regular
   3-43  Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes);
   3-44              (4)  Chapter 503, Acts of the 54th Legislature, 1955
   3-45  (Article 717k, Vernon's Texas Civil Statutes);
   3-46              (5)  Chapter 656, Acts of the 68th Legislature, Regular
   3-47  Session, 1983 (Article 717q, Vernon's Texas Civil Statutes);
   3-48              (6)  Chapter 3, Acts of the 61st Legislature, Regular
   3-49  Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes); and
   3-50              (7)  Sections 2 to 9 of this Act.
   3-51        (o)  The maturity of an obligation issued under this section
   3-52  may not exceed 40 years.
   3-53        (p)  Each member of the board is entitled to reimbursement
   3-54  for actual expenses incurred in the conduct of the business of the
   3-55  board and a fee for each meeting attended as established by the
   3-56  commissioners court.
   3-57        SECTION 3.  An action taken by or on behalf of the
   3-58  commissioners court of a county in the acceptance of grants for the
   3-59  construction of a water supply and distribution system or a
   3-60  wastewater collection and treatment system or the acceptance of a
   3-61  conveyance of such a system, or an action taken by or on behalf of
   3-62  the county since the acquisition of such a system, including the
   3-63  operation of the system, is ratified, confirmed, and validated.
   3-64  This section does not validate an action that is the subject of
   3-65  litigation on the effective date of this Act.
   3-66        SECTION 4.  After the effective date of this Act and before
   3-67  the beginning of the next county fiscal year, the board shall
   3-68  operate with the budget applicable to the utility systems for the
   3-69  current fiscal year.
   3-70        SECTION 5.  At the first election following the creation of a
    4-1  county utility system board, four directors shall be elected.
    4-2  After taking office the directors shall draw lots to determine
    4-3  which directors serve one-year terms and which directors serve
    4-4  two-year terms.
    4-5        SECTION 6.  The importance of this legislation and the
    4-6  crowded condition of the calendars in both houses create an
    4-7  emergency and an imperative public necessity that the
    4-8  constitutional rule requiring bills to be read on three several
    4-9  days in each house be suspended, and this rule is hereby suspended,
   4-10  and that this Act take effect and be in force from and after its
   4-11  passage, and it is so enacted.
   4-12                               * * * * *
   4-13                                                         Austin,
   4-14  Texas
   4-15                                                         April 22, 1993
   4-16  Hon. Bob Bullock
   4-17  President of the Senate
   4-18  Sir:
   4-19  We, your Committee on Intergovernmental Relations to which was
   4-20  referred S.B. No. 1093, have had the same under consideration, and
   4-21  I am instructed to report it back to the Senate with the
   4-22  recommendation that it do not pass, but that the Committee
   4-23  Substitute adopted in lieu thereof do pass and be printed.
   4-24                                                         Armbrister,
   4-25  Chairman
   4-26                               * * * * *
   4-27                               WITNESSES
   4-28  No witnesses appeared on S.B. No. 1093.