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.