By:  Rosson                                           S.B. No. 1374
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the regionalization of utility services in El Paso
    1-2  County by providing for consolidation of certain water and
    1-3  wastewater service corporations and utility districts into a
    1-4  regional utility, and methods for planning, funding, including the
    1-5  issuance of bonds, and operation of a regional utility.
    1-6        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-7        SECTION 1.  DEFINITIONS.  In this Act:
    1-8              (1)  "Assets" means all physical assets, contract
    1-9  rights, water rights, and all other rights or privileges of any
   1-10  kind or nature which belong to a district.
   1-11              (2)  "City" means the City of El Paso, a home-rule city
   1-12  pursuant to the laws of the State of Texas.
   1-13              (3)  "City's municipal jurisdiction" means the city's
   1-14  authority within the city limits and the extraterritorial
   1-15  jurisdiction of the city.
   1-16              (4)  "Commission" means the Texas Natural Resource
   1-17  Conservation Commission.
   1-18              (5)  "Committee" means the interim and permanent
   1-19  Regional Utility Advisory Committee as hereinafter created.
   1-20              (6)  "County" means El Paso County.
   1-21              (7)  "Debts" means bonded indebtedness and all
   1-22  contractual obligations, claims, judgments, and contingent
   1-23  liabilities for which a person or entity is legally liable.
    2-1              (8)  "Districts" means the following:  Deerfield Park
    2-2  Water Supply Corporation, East El Paso Water Supply Corporation, El
    2-3  Paso County Lower Valley Water District Authority, El Paso County
    2-4  Water Authority, El Paso County Water Control and Improvement
    2-5  District No. 4, El Paso County Tornillo Water Improvement District,
    2-6  El Paso County Water Control and Improvement District--Westway,
    2-7  Homestead Municipal Utility District, Haciendas del Norte Water
    2-8  Improvement District, San Elizario Grant Municipal Utility
    2-9  District, Tornillo Water Supply Corporation, any other water supply
   2-10  corporation, or  any other district in the county created by
   2-11  Article XVI, Section 59, of the Texas Constitution providing
   2-12  utility service as defined herein and located in the county, but
   2-13  excluding the El Paso County Water Improvement District No. 1.
   2-14              (9)  "PSB" means the Public Service Board, a board of
   2-15  trustees having management and control of the water and wastewater
   2-16  utility systems of the city as established through the encumbrances
   2-17  of the system as provided in Article 1115, Revised Statutes,
   2-18  Ordinance No. 752 (May 22, 1952) and any subsequent ordinance
   2-19  adopted by the city authorizing the issuance of water and
   2-20  wastewater system revenue bonds.
   2-21              (10)  "Regional utility" means the city, acting through
   2-22  its water and wastewater utility systems.
   2-23              (11)  "Regional service" means water and wastewater
   2-24  services.
   2-25        SECTION 2.  PURPOSES OF ACT.  The purposes of this Act are:
    3-1              (1)  to encourage and provide for the orderly
    3-2  consolidation of the districts in the county into a regional
    3-3  utility in order to:
    3-4                    (A)  ensure the provision of utility services to
    3-5  all residents of the county at the lowest possible cost according
    3-6  to a regional plan;
    3-7                    (B)  eliminate unnecessary competition by the
    3-8  districts for limited water, financial, and other valuable
    3-9  resources;
   3-10                    (C)  take advantage of economies of scale with
   3-11  regard to the provision of utility services in the county; and
   3-12                    (D)  conjunctively manage the limited resources
   3-13  of surface water and groundwater of the county so that the
   3-14  integrity and quality of these limited resources are protected and
   3-15  extended to the greatest extent reasonably possible;
   3-16              (2)  to enable the city, acting through its water and
   3-17  wastewater utility as managed and operated by the PSB, or the city
   3-18  council as the case may be, to operate as the regional utility in
   3-19  the county;
   3-20              (3)  to give the regional utility the authority to
   3-21  plan, operate, and provide for utility services on a regional
   3-22  basis;
   3-23              (4)  to provide a framework for the management and
   3-24  operation of a regional utility within and outside of the city's
   3-25  municipal jurisdiction;
    4-1              (5)  to provide for the assumption of the assets and
    4-2  debts of the districts on consolidation into a regional utility;
    4-3  and
    4-4              (6)  to authorize the regional utility to provide water
    4-5  and wastewater services outside of the extraterritorial
    4-6  jurisdiction of the city with the ability to contract and to issue
    4-7  its bonds to buy, own, and construct facilities outside of the
    4-8  municipal jurisdiction.
    4-9        SECTION 3.  DESIGNATION OF CITY AS EL PASO COUNTY REGIONAL
   4-10  UTILITY.  (a)  On the enactment of an enabling resolution by the
   4-11  City Council of the City of El Paso, the city, through its water
   4-12  and wastewater utility systems as managed by its PSB or by the city
   4-13  council, as the case may be, is hereby designated as the regional
   4-14  utility provider in the county for the purpose of providing utility
   4-15  services within the county.  After the enactment of the enabling
   4-16  resolution by the City Council of the City of El Paso, the
   4-17  obligation of the regional utility to act as the regional utility
   4-18  provider as provided by the terms of this Act shall continue in
   4-19  full force and effect and shall only be amended or abolished by the
   4-20  Legislature of the State of Texas.
   4-21        (b)  On enactment of the enabling resolution of the city
   4-22  council of the city or on the effective date of this Act, whichever
   4-23  is later, the regional utility shall:
   4-24              (1)  file an application with the Texas Water
   4-25  Development Board for a regional water supply and wastewater
    5-1  facilities planning grant study pursuant to the provisions of
    5-2  Section 15.406, Water Code, and the applicable rules promulgated by
    5-3  the Texas Water Development Board.  In the event of approval of the
    5-4  application by the Texas Water Development Board pursuant to the
    5-5  statute and rules, the regional utility shall enter into a contract
    5-6  with the Texas Water Development Board to conduct a regional water
    5-7  supply and wastewater facilities planning study which shall include
    5-8  all of the county and incorporate any water supply and wastewater
    5-9  facilities currently being designed or constructed in the county.
   5-10  Results of this planning effort shall be completed within 12 months
   5-11  after execution of a contract with the Texas Water Development
   5-12  Board and shall result in a plan which shall include an
   5-13  implementation schedule and associated preliminary costs for water
   5-14  and wastewater facilities to provide service and a financial plan
   5-15  and rate study to meet the projected water and wastewater needs
   5-16  within the county to the year 2040.  The regional utility shall
   5-17  review the plan every five years to consider any amendment or
   5-18  modification that may be needed because of changed conditions.  The
   5-19  regional utility shall amend or modify the plan as experience and
   5-20  changed conditions require.  Any such amendment or modification
   5-21  becomes a part of the plan; and
   5-22              (2)  file an application with the Texas Water
   5-23  Development Board for a regional water supply planning grant
   5-24  pursuant to the provisions of Section 15.406, Water Code, and the
   5-25  applicable rules promulgated by the Texas Water Development Board.
    6-1  In the event of approval of the application by the Texas Water
    6-2  Development Board pursuant to the applicable statute and rules, the
    6-3  regional utility shall enter into a contract with the Texas Water
    6-4  Development Board for the preparation of a regional water supply
    6-5  planning study which shall include all of the county.  Results of
    6-6  the planning effort shall be completed within six months after
    6-7  execution of a contract with the Texas Water Development Board and
    6-8  shall result in a plan which shall identify projected water demands
    6-9  and available and potential supplies to meet the water supply needs
   6-10  within the county to the year 2040.
   6-11        (c)  Subject to the provisions of all outstanding water or
   6-12  wastewater system revenue bonds of the city, the regional utility
   6-13  shall serve any area or areas within the county, is hereby
   6-14  designated as the utility service provider within the county, and
   6-15  shall receive priority consideration for purposes of state funding.
   6-16        (d)  As the regional utility provider, the regional utility
   6-17  shall receive priority consideration for purposes of state funding
   6-18  of regional planning for the provision of utility service outside
   6-19  the city's municipal jurisdiction.  The regional utility may enter
   6-20  into agreements and cooperative projects with political
   6-21  subdivisions and other governmental entities in this state, the
   6-22  State of New Mexico, the International Boundary and Water
   6-23  Commission, and the Republic of Mexico or any responsible political
   6-24  subdivision thereof to:
   6-25              (1)  promote regional planning for the provision of
    7-1  utility services;
    7-2              (2)  promote regional planning which is consistent with
    7-3  the United States-Mexico integrated border plan;
    7-4              (3)  coordinate the regional planning with the
    7-5  comprehensive state water plan;
    7-6              (4)  finance or seek financing for the water and
    7-7  wastewater infrastructure, especially in economically distressed
    7-8  areas;
    7-9              (5)  provide for regional drought and water supply
   7-10  management;
   7-11              (6)  collect and disseminate water and wastewater
   7-12  regional data;
   7-13              (7)  coordinate state level financial and technical
   7-14  assistance in extending or creating water and wastewater service;
   7-15              (8)  promote conservation planning, education, and
   7-16  research of surface water and groundwater resources;
   7-17              (9)  promote preservation of human health and the
   7-18  environment;
   7-19              (10)  promote water quality; and
   7-20              (11)  accomplish any other related regional utility
   7-21  purpose.
   7-22        SECTION 4.  ORGANIZATION OF THE REGIONAL UTILITY ADVISORY
   7-23  COMMITTEE.  (a)  Within 30 days of the resolution of the city
   7-24  council provided for in Subsection (a) of Section 3 of this Act
   7-25  there shall be created a committee known as the Regional Utility
    8-1  Advisory Committee, consisting during the first terms of office of
    8-2  nine appointed members.  Of these nine members, the commissioners
    8-3  court of the county shall appoint five members and the city shall
    8-4  appoint four members.  Of the five members appointed by the
    8-5  commissioners court:
    8-6              (1)  one appointee shall be a qualified voter residing
    8-7  within the jurisdiction of the El Paso County Lower Valley Water
    8-8  District Authority;
    8-9              (2)  one appointee shall be a qualified voter residing
   8-10  within the jurisdiction of the El Paso County Water Authority;
   8-11              (3)  one appointee shall be a qualified voter residing
   8-12  within the jurisdiction of either the El Paso County Water Control
   8-13  and Improvement District--Westway or the City of Anthony Water
   8-14  Utility;
   8-15              (4)  one appointee shall be a qualified voter residing
   8-16  within the jurisdiction or the service area of Deerfield Park Water
   8-17  Supply Corporation, East El Paso Water Supply Corporation,
   8-18  Homestead Municipal Utility District, or Haciendas del Norte Water
   8-19  Improvement District; and
   8-20              (5)  one appointee shall be a qualified voter residing
   8-21  within the jurisdiction or service area of El Paso County Tornillo
   8-22  Water Improvement District, Tornillo Water Supply Corporation, El
   8-23  Paso County Water Control and Improvement District No. 4, or San
   8-24  Elizario Grant Municipal Utility District.
   8-25        (b)  The terms for these interim committee members shall be
    9-1  three years.  After the expiration of the terms of office of the
    9-2  interim nine-member committee, the permanent committee shall
    9-3  consist of seven members, five of whom are to be appointed by the
    9-4  commissioners court of the county and two of whom are to be jointly
    9-5  appointed by the mayors of the incorporated municipalities, other
    9-6  than the city, within the county.  The duties of both the interim
    9-7  and permanent committees shall be to act as an advisory body to the
    9-8  regional utility on matters related to:
    9-9              (1)  the priorities in the provision of utility
   9-10  services;
   9-11              (2)  the rates and charges for the services outside of
   9-12  the corporate limits of the city;
   9-13              (3)  regional planning;
   9-14              (4)  adoption of or amendments to rules and regulations
   9-15  affecting provision of utility service outside of the corporate
   9-16  limits of the city; and
   9-17              (5)  any other matter requested by the regional
   9-18  authority.
   9-19        (c)  Each member of the permanent committee appointed by the
   9-20  commissioners court of the county shall be a qualified voter
   9-21  residing within the county and outside the city's municipal
   9-22  jurisdiction.  Each member of the committee appointed by the mayors
   9-23  of the other incorporated cities within the county shall be a
   9-24  qualified voter residing within the county and within one or the
   9-25  other of the incorporated municipalities other than the city.  Each
   10-1  member of both the interim and permanent committees shall also be
   10-2  over 18 years of age and shall have resided in the county for a
   10-3  minimum of six months immediately prior to the date of appointment.
   10-4        (d)  Two of the members of the permanent committee appointed
   10-5  by the commissioners court of the county and the two members
   10-6  appointed by the mayors of the incorporated municipalities in the
   10-7  county shall serve for three years. All other members of the
   10-8  permanent committee, after the first term of the first four members
   10-9  of the permanent committee, shall be appointed to serve two-year
  10-10  terms.  A vacancy on the permanent committee shall be filled by
  10-11  appointment for the unexpired term by the commissioners court or
  10-12  the mayors of the incorporated municipalities, whichever appointed
  10-13  the member whose seat was vacated.
  10-14        (e)  A person is disqualified from serving as a member of
  10-15  either committee if:
  10-16              (1)  he is related within the third degree of affinity
  10-17  or consanguinity to:
  10-18                    (A)  a developer of property in the county;
  10-19                    (B)  any elected official of the city or county;
  10-20                    (C)  any manager of the regional utility; or
  10-21                    (D)  any other member of the committee;
  10-22              (2)  he is an employee or officer of:
  10-23                    (A)  any developer of property in the county;
  10-24                    (B)  any elected official of the city, other
  10-25  incorporated cities within the county, or the county;
   11-1                    (C)  any manager of the regional utility; or
   11-2                    (D)  any manager, engineer, or attorney for a
   11-3  district, the county, the city, or other incorporated municipality
   11-4  within the county;
   11-5              (3)  he is a developer of property in the county;
   11-6              (4)  he is serving as an attorney, consultant,
   11-7  engineer, manager, architect, or in some other professional
   11-8  capacity for the regional utility, the county, a district or an
   11-9  incorporated city within the county, or for a developer of property
  11-10  within the county in connection with the regional utility service;
  11-11  or
  11-12              (5)  he is a party to a contract with or along with the
  11-13  regional utility except for the purchase of public services
  11-14  furnished by the regional utility to the public generally.
  11-15        SECTION 5.  ADDITIONAL RIGHTS AND POWERS OF THE REGIONAL
  11-16  UTILITY.  (a)  For the purposes of providing utility service and
  11-17  operating a regional utility in the county, the regional utility
  11-18  shall have all powers and authority provided in Sections 402.001
  11-19  and 402.002, Local Government Code.  The regional utility shall
  11-20  specifically have the authority to apply for and obtain grants and
  11-21  loans for the purpose of providing utility service outside of the
  11-22  city's municipal jurisdiction and for the purpose of funding and
  11-23  providing for regional projects with other states and the Republic
  11-24  of Mexico.  This Act authorizes the regional utility pursuant to
  11-25  the regional water supply and wastewater facilities plan prepared
   12-1  pursuant to Subsection (b) of Section 3 of this Act to:
   12-2              (1)  contract with other local governments,
   12-3  municipalities, districts, river authorities, or other state or
   12-4  governmental entities within this state, within other states, or
   12-5  within the Republic of Mexico;
   12-6              (2)  obtain grants and loans to provide utility service
   12-7  outside of the city's municipal jurisdiction;
   12-8              (3)  provide for planning and construction of regional
   12-9  projects including water supply or wastewater treatment facilities;
  12-10  and
  12-11              (4)  otherwise promote the regionalization of utility
  12-12  services within the county and surrounding areas.
  12-13        (b)(1)  For the purposes of providing utility service and
  12-14  operating a regional utility in the county outside of the municipal
  12-15  jurisdiction of the city, the regional utility may issue its
  12-16  revenue bonds, notes, revenue anticipation notes, bond anticipation
  12-17  notes, short-term obligations, refunding bonds, or other
  12-18  obligations for any of its purposes without an election and on
  12-19  terms the city council of the city determines to be appropriate.
  12-20              (2)  Obligations may be made payable from all or part
  12-21  of the revenues of the regional utility derived from any lawful
  12-22  source, including any contract with any customer or user of the
  12-23  facilities owned or operated by the regional utility under this Act
  12-24  or from the ownership and operation of any waterworks system,
  12-25  wastewater system, sewer system, solid waste disposal system,
   13-1  nonhazardous liquid waste system, or any combination of those
   13-2  systems.  Additionally, those obligations may be paid from and
   13-3  secured by liens on and pledges of all or part of any of the
   13-4  revenue, income, or receipts derived by the regional utility from
   13-5  its ownership, operation, lease, or sale of the property,
   13-6  buildings, structures, or facilities, including the proceeds or
   13-7  revenues from contracts with any person, firm, corporation,
   13-8  municipality, public agency, or other political subdivision or
   13-9  entity.
  13-10              (3)  Bonds or other obligations may be issued to mature
  13-11  serially or otherwise in not to exceed 40 years from their date of
  13-12  issuance, and provision may be made for the subsequent issuance of
  13-13  additional parity obligations or subordinate lien obligations under
  13-14  terms or conditions that may be set forth in the ordinance
  13-15  authorizing the issuance of the obligations.
  13-16              (4)  The bonds or other obligations are negotiable
  13-17  instruments within the meaning of Chapter 8, Business & Commerce
  13-18  Code.
  13-19              (5)  The bonds or other obligations shall be executed
  13-20  and made redeemable before maturity, issued in the form,
  13-21  denominations, and manner and under the terms, conditions, and
  13-22  details, and sold in the manner, at the price, and under the terms
  13-23  provided by the bond ordinance.
  13-24              (6)  The bonds or other obligations shall bear interest
  13-25  at rates provided in the ordinance authorizing the issue of the
   14-1  bonds or other obligations.
   14-2              (7)  If provided in the bond ordinance, the proceeds
   14-3  from the sale of the bonds or other obligations may be used for
   14-4  paying interest on those bonds or other obligations during the
   14-5  period of the acquisition or construction of any facilities to be
   14-6  provided through the issuance of the bonds or other obligations,
   14-7  paying expenses of operation and maintenance of facilities,
   14-8  creating a reserve fund for the payment of principal of and
   14-9  interest on the bonds or other obligations, and creating any other
  14-10  funds.
  14-11              (8)  The proceeds from the sale of the bonds or other
  14-12  obligations may be placed on time deposit or invested to the extent
  14-13  and in the manner provided by the bond ordinance.
  14-14              (9)  The regional utility may pledge all or any part of
  14-15  its revenue, income, or receipts from fees, rentals, rates,
  14-16  charges, or contract proceeds or payments to the payment of such
  14-17  bonds or other obligations, including the payment of principal,
  14-18  interest, and any other amounts required or permitted in connection
  14-19  with the bonds or other obligations.  The pledged fees, rentals,
  14-20  rates, charges, proceeds, or payments shall  be established and
  14-21  collected in amounts that will be at least sufficient, together
  14-22  with any other pledged resources, to provide for the payment of
  14-23  expenses in connection with the bonds or other obligations and for
  14-24  the operation, maintenance, and other expenses in connection with
  14-25  those facilities.
   15-1              (10)  Such bonds and other obligations may be
   15-2  additionally secured by mortgages or deeds of trust on real
   15-3  property owned or to be acquired by the regional utility and by
   15-4  chattel mortgages or liens on any personal property appurtenant to
   15-5  the real property.  The regional utility may authorize the
   15-6  execution of trust indentures, mortgages, deeds of trust, or other
   15-7  forms of encumbrances.  It may pledge to the payment of the
   15-8  obligations all or any part of any grant, donation, revenue, or
   15-9  income received or to be received from the United States government
  15-10  or any other public or private source.
  15-11              (11)  The regional utility is the issuer within the
  15-12  meaning of Chapter 53, Acts of the 70th Legislature, 2nd Called
  15-13  Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes), and
  15-14  bonds issued pursuant to this Act and the appropriate proceedings
  15-15  authorizing their issuance must be submitted to the attorney
  15-16  general for examination if required to be submitted by Chapter 53,
  15-17  Acts of the 70th Legislature, 2nd Called Session, 1987 (Article
  15-18  717k-8, Vernon's Texas Civil Statutes).  If the bonds recite that
  15-19  they are secured by a pledge of revenue from a contract, a copy of
  15-20  the contract and the proceedings relating to the contract must be
  15-21  submitted to the attorney general.  If the attorney general finds
  15-22  that the bonds are authorized and the contract is entered in
  15-23  accordance with law, the attorney general shall approve the bonds
  15-24  and the contract, and the bonds shall be registered by the
  15-25  comptroller.  After approval and registration, the bonds and the
   16-1  contract are incontestable in any court or other forum for any
   16-2  reason and are valid and binding obligations in accordance with
   16-3  their terms for all purposes.
   16-4              (12)  The regional utility shall issue its bonds and
   16-5  other obligations in accordance with Chapter 656, Acts of the 68th
   16-6  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
   16-7  Civil Statutes), and the Bond Procedures Act of 1981 (Article
   16-8  717k-6, Vernon's Texas Civil Statutes), as applicable.
   16-9        (c)(1)  The regional utility may enter into contracts with
  16-10  any public or private party or body considered necessary in the
  16-11  exercise of the powers and purposes of the regional utility under
  16-12  this Act.  This authority shall extend to those areas outside of
  16-13  the municipal jurisdiction of the city.
  16-14              (2)  Pursuant to provisions of Subdivision (1) of this
  16-15  subsection, the regional utility may enter into contracts for the
  16-16  acquisition, purchase, rental, lease, or operations of the water
  16-17  production, water supply, water filtration or purification, water
  16-18  supply facilities, or other water or wastewater facilities that are
  16-19  owned or operated by the contracting party.
  16-20              (3)  Contracts that require a payment of money by the
  16-21  regional utility may be made payable from any general or specific
  16-22  source of funds.
  16-23        (d)  So long as the regional utility complies with Chapter
  16-24  13, Water Code, and the applicable provisions of Section 6 of this
  16-25  Act and except as expressly limited in this Act, the rights and
   17-1  powers described in this Act shall prevail over any limitations
   17-2  contained in any other law.
   17-3        (e)  Notwithstanding any other provisions of this Act, this
   17-4  Act shall not operate to authorize the regional utility to condemn
   17-5  land owned by the state and shall not authorize the regional
   17-6  utility to condemn land or assets owned by any other political
   17-7  subdivision of the state outside of the city's municipal
   17-8  jurisdiction including the districts.
   17-9        (f)  Except to the extent of any tax obligation imposed by
  17-10  any district and necessary to retire any debt existing on the date
  17-11  of consolidation as hereinafter provided, this Act shall not
  17-12  operate to allow the regional utility to tax property outside of
  17-13  the city's corporate limits.
  17-14        SECTION 6.  CONSOLIDATION OF DISTRICTS.  (a)  The regional
  17-15  utility shall have the authority to consolidate one or more of the
  17-16  districts into the regional utility on the occurrence of one or
  17-17  more of the following events:
  17-18              (1)  a majority vote of the membership of a district
  17-19  operating as a water supply corporation or a majority vote of the
  17-20  board of directors of an investor-owned utility;
  17-21              (2)  a majority vote of the board of directors of a
  17-22  district other than a water supply corporation to dissolve the
  17-23  district by consolidation into the regional utility, followed by an
  17-24  election in the district, at the earliest available uniform
  17-25  election date, at which a majority of the voters voting in the
   18-1  election vote to dissolve the district by consolidation into the
   18-2  regional utility;
   18-3              (3)  on the filing of a petition with the county judge
   18-4  signed by 10 percent of the registered voters of the subject
   18-5  district, other than a water supply corporation, followed by an
   18-6  election on an order by the board of directors of the district.  An
   18-7  election held in accordance with this procedure must be held on the
   18-8  next available uniform election date following certification of the
   18-9  petition in accordance with Section 41.001, Election Code.
  18-10        (b)  Notwithstanding the occurrence of a vote or election as
  18-11  provided in Subsection (a) of this section, as to each district
  18-12  with bonds, notes, obligations, or taxes owed, contracted, or
  18-13  authorized at the time of the district's vote into the regional
  18-14  utility, consolidation of a district into the regional utility
  18-15  shall not be final and effective until:
  18-16              (1)  the boards of directors of the regional utility
  18-17  and the district have entered into a consolidation agreement;
  18-18              (2)  as to each district other than a district
  18-19  operating as a water supply corporation, the board has ordered and
  18-20  held an election in the district at which a majority of voters
  18-21  voting in the election approved the terms and conditions of the
  18-22  consolidation agreement;
  18-23              (3)  the district's debts, bonds, notes, obligations
  18-24  and taxes, as applicable, have been paid in full, assumed, or
  18-25  satisfactorily addressed in the consolidation agreement; and
   19-1              (4)  a regional utility consolidation order has been
   19-2  filed by the regional utility in the real property records of the
   19-3  county and the Texas Water Commission.
   19-4        (c)  If an election is required to be held in a district for
   19-5  the purposes of consolidation into the regional utility, then the
   19-6  election shall be held in conformity with the Election Code, as
   19-7  amended, or the Texas Non-Profit Corporation Act (Article 1396-1.01
   19-8  et seq., Vernon's Texas Civil Statutes), and all applicable
   19-9  election law.
  19-10        (d)  At all times prior to final consolidation of a district
  19-11  which has debts or other obligations which may be owed, contracted,
  19-12  or authorized, the district shall:
  19-13              (1)  protect the assets of the district and ensure that
  19-14  they are not impaired;
  19-15              (2)  where applicable and necessary, assess and collect
  19-16  taxes on property in the district to pay debts created by the
  19-17  district; and
  19-18              (3)  pay debts of the district and manage the assets of
  19-19  the district through the sale, lease, or other management of
  19-20  district lands.
  19-21        (e)  If taxes were levied on land within a district
  19-22  consolidated into the regional utility at the time of consolidation
  19-23  and if taxes are necessary to retire existing debt, the regional
  19-24  utility shall continue to assess and collect the taxes, but the
  19-25  regional utility shall not increase tax rates in the district in
   20-1  order to retire debts of the district unless such increase is
   20-2  authorized as provided by existing law.
   20-3        (f)  Consolidation shall be achieved in such a way that it
   20-4  does not violate existing bond covenants and other contractual
   20-5  obligations of the city and its public service board or any
   20-6  district and does not adversely affect their bond ratings.
   20-7        (g)  The regional utility may apply to the Texas Water
   20-8  Development Board for up to $3 million appropriated during the
   20-9  1994-1995 biennium for grants or loans to encourage and facilitate
  20-10  the regionalization of water and wastewater services in counties
  20-11  directly adjacent to the international border with the Republic of
  20-12  Mexico through Section 15.102, Water Code.  Any funds awarded
  20-13  pursuant to this provision shall be used by the regional utility to
  20-14  purchase and refinance district debt in order to achieve a
  20-15  reasonable cost of service to existing customers and facilitate
  20-16  consolidation of water and wastewater services in the county.
  20-17        SECTION 7.  UTILITY SERVICE RATES.  (a)  The regional utility
  20-18  may establish fees and charges for initiating service to service
  20-19  applicants and rates, fees, and charges for utility service
  20-20  provided to retail customers in the expanded service area or to
  20-21  wholesale customers outside the expanded service areas.
  20-22  Notwithstanding Subsection (b), Section 16.349, Water Code, the
  20-23  regional utility may charge retail service applicants and customers
  20-24  in an area outside the corporate boundaries of the city rates for
  20-25  utility service actually provided based on the actual, documentable
   21-1  cost of providing that service even if the rates so charged exceed
   21-2  the rates charged by the utility to ratepayers inside the corporate
   21-3  boundaries of the city.
   21-4        (b)  The regional utility shall not use utility revenues
   21-5  received from ratepayers inside the corporate boundaries of the
   21-6  city to subsidize costs of providing utility service to ratepayers
   21-7  outside the boundaries of the city nor shall it use utility
   21-8  revenues received from retail ratepayers outside the city to
   21-9  subsidize costs of providing utility service inside the city.  The
  21-10  utility shall not pay to or deposit in the general revenue fund
  21-11  revenues received from the rates charged to retail customers
  21-12  outside the city except as required by any existing bond covenant
  21-13  or by any future bond covenant unless the new bonds which are
  21-14  issued are used to fund utility services to ratepayers outside the
  21-15  corporate boundaries of the city.
  21-16        (c)  Ratepayers of the regional utility residing outside the
  21-17  boundaries of the city shall have all rights provided in Chapter
  21-18  13, Water Code, as applicable.
  21-19        SECTION 8.  PROVISION OF UTILITY SERVICE.  (a)  As a
  21-20  condition of providing utility service, the regional utility may
  21-21  require that all development in the county meet the minimum
  21-22  construction and development standards established by the Texas
  21-23  Water Development Board for economically distressed areas in
  21-24  accordance with Section 16.343, Water Code, as adopted by the
  21-25  county, and comply with the Rules and Regulation Number 11 of the
   22-1  PSB concerning extension of utility services outside of the city
   22-2  limits to the extent that they do not conflict with any provisions
   22-3  of this Act and the plans developed pursuant to Subsection (b) of
   22-4  Section 3 of this Act.
   22-5        (b)  On consolidation of a district into the regional
   22-6  utility, the regional utility shall be required to provide utility
   22-7  service to those residents of the district pursuant to the
   22-8  provisions of the regional water supply and wastewater facilities
   22-9  plan developed pursuant to Subsection (b) of Section 3 of this Act.
  22-10  Notwithstanding any other provision in this Act, any water supply
  22-11  or wastewater facilities being constructed or designed on the
  22-12  effective date of this Act through grants from the Texas Water
  22-13  Development Board or Farmers Home Administration shall be continued
  22-14  by the regional utility uninterrupted by any delay and be
  22-15  incorporated into the regional water supply and wastewater
  22-16  facilities plan developed pursuant to Subsection (b) of Section 3
  22-17  of this Act.
  22-18        (c)  In order to plan for regional utility service within the
  22-19  county, the regional utility shall include land which belongs to
  22-20  the permanent school fund of the state within a regional plan.  In
  22-21  such event, the provisions of a regional plan shall be binding on
  22-22  permanent school fund land only after the regional utility provides
  22-23  acceptable utility service commitments to the affected land and
  22-24  obtains the written consent of the School Land Board in accordance
  22-25  with its rules and regulations.
   23-1        SECTION 9.  SEVERABILITY AND CONSTRUCTION.  (a)  If any
   23-2  provisions of this Act or the application thereof to any person or
   23-3  circumstance is held invalid, such invalidity shall not affect
   23-4  other provisions or applications of this Act that can be given
   23-5  effect without the invalid provision or application, and to this
   23-6  end the provisions of this Act are declared to be severable.  All
   23-7  the terms and provisions of this Act are declared severable.  All
   23-8  the terms and provisions of this Act are to be liberally construed
   23-9  to effectuate the purposes, powers, rights, functions, and
  23-10  authorities herein set forth.
  23-11        (b)  Nothing contained in this Act shall be construed to
  23-12  limit the power of the governing body of the city to control the
  23-13  governing body of the city's water and wastewater utility systems
  23-14  as provided for in Articles 1111 and 1115, Revised Statutes.
  23-15        (c)  Nothing contained in this Act shall be construed to
  23-16  require the city or the governing body of the city's water and
  23-17  wastewater utility systems to provide services other than the water
  23-18  and wastewater services described herein.
  23-19        SECTION 10.  The importance of this legislation and the
  23-20  crowded condition of the calendars in both houses create an
  23-21  emergency and an imperative public necessity that the
  23-22  constitutional rule requiring bills to be read on three several
  23-23  days in each house be suspended, and this rule is hereby suspended,
  23-24  and that this Act take effect and be in force from and after its
  23-25  passage, and it is so enacted.