73R11368 E
          By Rosson                                             S.B. No. 1374
          Substitute the following for S.B. No. 1374:
          By Counts                                         C.S.S.B. No. 1374
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the regionalization of utility services in El Paso
    1-3  County by providing 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, including the
    1-6  issuance of bonds, and operation of a regional utility.
    1-7        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-8        SECTION 1.  DEFINITIONS.  In this Act:
    1-9              (1)  "Assets" means all physical assets, contract
   1-10  rights, water rights, and all other rights or privileges of any
   1-11  kind or nature which belong to a district.
   1-12              (2)  "City" means the city of El Paso, a home-rule city
   1-13  pursuant to the laws of the State of Texas.
   1-14              (3)  "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              (4)  "Commission" means the Texas Natural Resource
   1-18  Conservation Commission.
   1-19              (5)  "Committee" means the interim and permanent
   1-20  Regional Utility Advisory Committee as hereinafter created.
   1-21              (6)  "County" means El Paso County.
   1-22              (7)  "Debts" means bonded indebtedness and all
   1-23  contractual obligations, claims, judgments, and contingent
   1-24  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:
   2-26              (1)  to encourage and provide for the orderly
   2-27  consolidation of the districts in the county into a regional
    3-1  utility in order to:
    3-2                    (A)  ensure the provision of utility services to
    3-3  all residents of the county at the lowest possible cost according
    3-4  to a regional plan;
    3-5                    (B)  eliminate unnecessary competition by the
    3-6  districts for limited water, financial, and other valuable
    3-7  resources;
    3-8                    (C)  take advantage of economies of scale with
    3-9  regard to the provision of utility services in the county; and
   3-10                    (D)  conjunctively manage the limited resources
   3-11  of surface water and groundwater of the county so that the
   3-12  integrity and quality of these limited resources are protected and
   3-13  extended to the greatest extent reasonably possible;
   3-14              (2)  to enable the city, acting through its water and
   3-15  wastewater utility as managed and operated by the PSB, or the city
   3-16  council as the case may be, to operate as the regional utility in
   3-17  the county;
   3-18              (3)  to give the regional utility the authority to
   3-19  plan, operate, and provide for utility services on a regional
   3-20  basis;
   3-21              (4)  to provide a framework for the management and
   3-22  operation of a regional utility within and outside of the city's
   3-23  municipal jurisdiction;
   3-24              (5)  to provide for the assumption of the assets and
   3-25  debts of the districts on consolidation into a regional utility;
   3-26  and
   3-27              (6)  to authorize the regional utility to provide water
    4-1  and wastewater services outside of the extraterritorial
    4-2  jurisdiction of the city with the ability to contract and to issue
    4-3  its bonds to buy, own, and construct facilities outside of the
    4-4  municipal jurisdiction.
    4-5        SECTION 3.  DESIGNATION OF CITY AS EL PASO COUNTY REGIONAL
    4-6  UTILITY.  (a)  The city of El Paso, through its water and
    4-7  wastewater utility systems as managed by its PSB or by the city
    4-8  council, as the case may be, is hereby designated as the regional
    4-9  utility provider in the county for the purpose of providing utility
   4-10  services within the county.  The obligation of the regional utility
   4-11  to act as the regional utility provider as provided by the terms of
   4-12  this Act shall continue in full force and effect and shall only be
   4-13  amended or abolished by the legislature of the State of Texas.
   4-14        (b)  The regional utility shall:
   4-15              (1)  file an application with the Texas Water
   4-16  Development Board for a regional water supply and wastewater
   4-17  facilities planning grant study pursuant to the provisions of
   4-18  Section 15.406, Water Code, and the applicable rules promulgated by
   4-19  the Texas Water Development Board.  In the event of approval of the
   4-20  application by the Texas Water Development Board pursuant to the
   4-21  statute and rules, the regional utility shall enter into a contract
   4-22  with the Texas Water Development Board to conduct a regional water
   4-23  supply and wastewater facilities planning study that shall include
   4-24  all of the county and incorporate any water supply and wastewater
   4-25  facilities currently being designed or constructed in the county.
   4-26  Results of this planning effort shall be completed within 12 months
   4-27  after execution of a contract with the Texas Water Development
    5-1  Board and shall result in a plan that shall include an
    5-2  implementation schedule and associated preliminary costs for water
    5-3  and wastewater facilities to provide service and a financial plan
    5-4  and rate study to meet the projected water and wastewater needs
    5-5  within the county to the year 2040.  The regional utility shall
    5-6  review the plan every five years to consider any amendment or
    5-7  modification that may be needed because of changed conditions.  The
    5-8  regional utility shall amend or modify the plan as experience and
    5-9  changed conditions require.  Any such amendment or modification
   5-10  becomes a part of the plan; and
   5-11              (2)  file an application with the Texas Water
   5-12  Development Board for a regional water supply planning grant
   5-13  pursuant to the provisions of Section 15.406, Water Code, and the
   5-14  applicable rules promulgated by the Texas Water Development Board.
   5-15  In the event of approval of the application by the Texas Water
   5-16  Development Board pursuant to the applicable statute and rules, the
   5-17  regional utility shall enter into a contract with the Texas Water
   5-18  Development Board for the preparation of a regional water supply
   5-19  planning study that shall include all of the county.  Results of
   5-20  the planning effort shall be completed within six months after
   5-21  execution of a contract with the Texas Water Development Board and
   5-22  shall result in a plan that shall identify projected water demands
   5-23  and available and potential supplies to meet the water supply needs
   5-24  within the county to the year 2040.
   5-25        (c)  Subject to the provisions of all outstanding water or
   5-26  wastewater system revenue bonds of the city, the regional utility
   5-27  shall serve any area or areas within the county and is hereby
    6-1  designated as the utility service provider within the county.
    6-2        (d)  The regional utility may enter into agreements and
    6-3  cooperative projects with political subdivisions and other
    6-4  governmental entities in this state, the State of New Mexico, the
    6-5  International Boundary and Water Commission, and the Republic of
    6-6  Mexico or any responsible political subdivision thereof to:
    6-7              (1)  promote regional planning for the provision of
    6-8  utility services;
    6-9              (2)  promote regional planning that is consistent with
   6-10  the United States-Mexico integrated border plan;
   6-11              (3)  coordinate the regional planning with the
   6-12  comprehensive state water plan;
   6-13              (4)  finance or seek financing for the water and
   6-14  wastewater infrastructure, especially in economically distressed
   6-15  areas;
   6-16              (5)  provide for regional drought and water supply
   6-17  management;
   6-18              (6)  collect and disseminate water and wastewater
   6-19  regional data;
   6-20              (7)  coordinate state level financial and technical
   6-21  assistance in extending or creating water and wastewater service;
   6-22              (8)  promote conservation planning, education, and
   6-23  research of surface water and groundwater resources;
   6-24              (9)  promote preservation of human health and the
   6-25  environment;
   6-26              (10)  promote water quality; and
   6-27              (11)  accomplish any other related regional utility
    7-1  purpose.
    7-2        (e)  On or within 90 days after the effective date of this
    7-3  Act, the PSB shall adopt such policies and rules as may be
    7-4  necessary to ensure, through the regular nomination and selection
    7-5  process required of the PSB, that:
    7-6              (1)  the next vacancy occurring on the PSB shall be
    7-7  filled by a qualified candidate residing within El Paso County but
    7-8  outside the boundaries of the city's municipal jurisdiction;
    7-9              (2)  at least one member of the PSB shall always be a
   7-10  resident of El Paso County residing outside the boundaries of the
   7-11  city's municipal jurisdiction; and
   7-12              (3)  if the city of El Paso has not adopted the above
   7-13  policies within the time stated, this Act shall be null and void.
   7-14        SECTION 4.  ORGANIZATION OF REGIONAL UTILITY ADVISORY
   7-15  COMMITTEE.  (a)  There shall be created a committee known as the
   7-16  Regional Utility Advisory Committee, consisting during the first
   7-17  terms of office of nine appointed members.  Of these nine members,
   7-18  the commissioners court of the county shall appoint five members
   7-19  and the city shall appoint four members.  Of the five members
   7-20  appointed by the commissioners court:
   7-21              (1)  one appointee shall be a qualified voter residing
   7-22  within the jurisdiction of the El Paso County Lower Valley Water
   7-23  District Authority;
   7-24              (2)  one appointee shall be a qualified voter residing
   7-25  within the jurisdiction of the El Paso County Water Authority;
   7-26              (3)  one appointee shall be a qualified voter residing
   7-27  within the jurisdiction of either the El Paso County Water Control
    8-1  and Improvement District--Westway or the City of Anthony Water
    8-2  Utility;
    8-3              (4)  one appointee shall be a qualified voter residing
    8-4  within the jurisdiction or the service area of Deerfield Park Water
    8-5  Supply Corporation, East El Paso Water Supply Corporation,
    8-6  Homestead Municipal Utility District, or Haciendas del Norte Water
    8-7  Improvement District; and
    8-8              (5)  one appointee shall be a qualified voter residing
    8-9  within the jurisdiction or service area of El Paso County Tornillo
   8-10  Water Improvement District, Tornillo Water Supply Corporation, El
   8-11  Paso County Water Control and Improvement District No. 4, or San
   8-12  Elizario Grant Municipal Utility District.
   8-13        (b)  The terms for these interim committee members shall be
   8-14  three years.  After the expiration of the terms of office of the
   8-15  interim nine-member committee, the permanent committee shall
   8-16  consist of seven members, five of whom are to be appointed by the
   8-17  commissioners court of the county and two of whom are to be jointly
   8-18  appointed by the mayors of the incorporated municipalities, other
   8-19  than the city, within the county.  The duties of both the interim
   8-20  and permanent committees shall be to act as an advisory body to the
   8-21  regional utility on matters related to:
   8-22              (1)  the priorities in the provision of utility
   8-23  services;
   8-24              (2)  the rates and charges for the services outside of
   8-25  the corporate limits of the city;
   8-26              (3)  regional planning;
   8-27              (4)  adoption of or amendments to rules and regulations
    9-1  affecting provision of utility service outside of the corporate
    9-2  limits of the city; and
    9-3              (5)  any other matter requested by the regional
    9-4  authority.
    9-5        (c)  Each member of the permanent committee appointed by the
    9-6  commissioners court of the county shall be a qualified voter
    9-7  residing within the county and outside the city's municipal
    9-8  jurisdiction.  Each member of the committee appointed by the mayors
    9-9  of the other incorporated cities within the county shall be a
   9-10  qualified voter residing within the county and within one or the
   9-11  other of the incorporated municipalities other than the city.  Each
   9-12  member of both the interim and permanent committees shall also be
   9-13  over 18 years of age and shall have resided in the county for a
   9-14  minimum of six months immediately prior to the date of appointment.
   9-15        (d)  Two of the members of the permanent committee appointed
   9-16  by the commissioners court of the county and the two members
   9-17  appointed by the mayors of the incorporated municipalities in the
   9-18  county shall serve for three years.  All other members of the
   9-19  permanent committee, after the first term of the first four members
   9-20  of the permanent committee, shall be appointed to serve two-year
   9-21  terms.  A vacancy on the permanent committee shall be filled by
   9-22  appointment for the unexpired term by the commissioners court or
   9-23  the mayors of the incorporated municipalities, whichever appointed
   9-24  the member whose seat was vacated.
   9-25        (e)  A person is disqualified from serving as a member of
   9-26  either committee if:
   9-27              (1)  the person is related within the third degree of
   10-1  affinity or consanguinity to:
   10-2                    (A)  a developer of property in the county;
   10-3                    (B)  any elected official of the city or county;
   10-4                    (C)  any manager of the regional utility; or
   10-5                    (D)  any other member of the committee;
   10-6              (2)  the person is an employee or officer of:
   10-7                    (A)  any developer of property in the county;
   10-8                    (B)  any elected official of the city, other
   10-9  incorporated cities within the county, or the county;
  10-10                    (C)  any manager of the regional utility; or
  10-11                    (D)  any manager, engineer, or attorney for a
  10-12  district, the county, the city, or other incorporated municipality
  10-13  within the county;
  10-14              (3)  the person is a developer of property in the
  10-15  county;
  10-16              (4)  the person is serving as an attorney, consultant,
  10-17  engineer, manager, architect, or in some other professional
  10-18  capacity for the regional utility, the county, a district or an
  10-19  incorporated city within the county, or for a developer of property
  10-20  within the county in connection with the regional utility service;
  10-21  or
  10-22              (5)  the person is a party to a contract with or along
  10-23  with the regional utility except for the purchase of public
  10-24  services furnished by the regional utility to the public generally.
  10-25        SECTION 5.  ADDITIONAL RIGHTS AND POWERS OF REGIONAL UTILITY.
  10-26  (a)  For the purposes of providing utility service and operating a
  10-27  regional utility in the county, the regional utility shall have all
   11-1  powers and authority provided in Sections 402.001 and 402.002,
   11-2  Local Government Code.  The regional utility shall specifically
   11-3  have the authority to apply for and obtain grants and loans for the
   11-4  purpose of providing utility service outside of the city's
   11-5  municipal jurisdiction and for the purpose of funding and providing
   11-6  for regional projects with other states and the Republic of Mexico.
   11-7  This Act authorizes the regional utility pursuant to the regional
   11-8  water supply and wastewater facilities plan prepared pursuant to
   11-9  Subsection (b) of Section 3 of this Act to:
  11-10              (1)  contract with other local governments,
  11-11  municipalities, districts, river authorities, or other state or
  11-12  governmental entities within this state, within other states, or
  11-13  within the Republic of Mexico;
  11-14              (2)  obtain grants and loans to provide utility service
  11-15  outside of the city's municipal jurisdiction;
  11-16              (3)  provide for planning and construction of regional
  11-17  projects including water supply or wastewater treatment facilities;
  11-18  and
  11-19              (4)  otherwise promote the regionalization of utility
  11-20  services within the county and surrounding areas.
  11-21        (b)(1)  For the purposes of providing utility service and
  11-22  operating a regional utility in the county outside of the municipal
  11-23  jurisdiction of the city, the regional utility may issue its
  11-24  revenue bonds, notes, revenue anticipation notes, bond anticipation
  11-25  notes, short-term obligations, refunding bonds, or other
  11-26  obligations for any of its purposes without an election and on
  11-27  terms the city council of the city determines to be appropriate.
   12-1              (2)  Obligations may be made payable from all or part
   12-2  of the revenues of the regional utility derived from any lawful
   12-3  source, including any contract with any customer or user of the
   12-4  facilities owned or operated by the regional utility under this Act
   12-5  or from the ownership and operation of any waterworks system,
   12-6  wastewater system, sewer system, solid waste disposal system,
   12-7  nonhazardous liquid waste system, or any combination of those
   12-8  systems.  Additionally, those obligations may be paid from and
   12-9  secured by liens on and pledges of all or part of any of the
  12-10  revenue, income, or receipts derived by the regional utility from
  12-11  its ownership, operation, lease, or sale of the property,
  12-12  buildings, structures, or facilities, including the proceeds or
  12-13  revenues from contracts with any person, firm, corporation,
  12-14  municipality, public agency, or other political subdivision or
  12-15  entity.
  12-16              (3)  Bonds or other obligations may be issued to mature
  12-17  serially or otherwise in not to exceed 40 years from their date of
  12-18  issuance, and provision may be made for the subsequent issuance of
  12-19  additional parity obligations or subordinate lien obligations under
  12-20  terms or conditions that may be set forth in the ordinance
  12-21  authorizing the issuance of the obligations.
  12-22              (4)  The bonds or other obligations are negotiable
  12-23  instruments within the meaning of Chapter 8, Business & Commerce
  12-24  Code.
  12-25              (5)  The bonds or other obligations shall be executed
  12-26  and made redeemable before maturity, issued in the form,
  12-27  denominations, and manner and under the terms, conditions, and
   13-1  details, and sold in the manner, at the price, and under the terms
   13-2  provided by the bond ordinance.
   13-3              (6)  The bonds or other obligations shall bear interest
   13-4  at rates provided in the ordinance authorizing the issue of the
   13-5  bonds or other obligations.
   13-6              (7)  If provided in the bond ordinance, the proceeds
   13-7  from the sale of the bonds or other obligations may be used for
   13-8  paying interest on those bonds or other obligations during the
   13-9  period of the acquisition or construction of any facilities to be
  13-10  provided through the issuance of the bonds or other obligations,
  13-11  paying expenses of operation and maintenance of facilities,
  13-12  creating a reserve fund for the payment of principal of and
  13-13  interest on the bonds or other obligations, and creating any other
  13-14  funds.
  13-15              (8)  The proceeds from the sale of the bonds or other
  13-16  obligations may be placed on time deposit or invested to the extent
  13-17  and in the manner provided by the bond ordinance.
  13-18              (9)  The regional utility may pledge all or any part of
  13-19  its revenue, income, or receipts from fees, rentals, rates,
  13-20  charges, or contract proceeds or payments to the payment of such
  13-21  bonds or other obligations, including the payment of principal,
  13-22  interest, and any other amounts required or permitted in connection
  13-23  with the bonds or other obligations.  The pledged fees, rentals,
  13-24  rates, charges, proceeds, or payments shall  be established and
  13-25  collected in amounts that will be at least sufficient, together
  13-26  with any other pledged resources, to provide for the payment of
  13-27  expenses in connection with the bonds or other obligations and for
   14-1  the operation, maintenance, and other expenses in connection with
   14-2  those facilities.
   14-3              (10)  Such bonds and other obligations may be
   14-4  additionally secured by mortgages or deeds of trust on real
   14-5  property owned or to be acquired by the regional utility and by
   14-6  chattel mortgages or liens on any personal property appurtenant to
   14-7  the real property.  The regional utility may authorize the
   14-8  execution of trust indentures, mortgages, deeds of trust, or other
   14-9  forms of encumbrances.  It may pledge to the payment of the
  14-10  obligations all or any part of any grant, donation, revenue, or
  14-11  income received or to be received from the United States government
  14-12  or any other public or private source.
  14-13              (11)  The regional utility is the issuer within the
  14-14  meaning of Chapter 53, Acts of the 70th Legislature, 2nd Called
  14-15  Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes), and
  14-16  bonds issued pursuant to this Act and the appropriate proceedings
  14-17  authorizing their issuance must be submitted to the attorney
  14-18  general for examination if required to be submitted by Chapter 53,
  14-19  Acts of the 70th Legislature, 2nd Called Session, 1987 (Article
  14-20  717k-8, Vernon's Texas Civil Statutes).  If the bonds recite that
  14-21  they are secured by a pledge of revenue from a contract, a copy of
  14-22  the contract and the proceedings relating to the contract must be
  14-23  submitted to the attorney general.  If the attorney general finds
  14-24  that the bonds are authorized and the contract is entered in
  14-25  accordance with law, the attorney general shall approve the bonds
  14-26  and the contract, and the bonds shall be registered by the
  14-27  comptroller.  After approval and registration, the bonds and the
   15-1  contract are incontestable in any court or other forum for any
   15-2  reason and are valid and binding obligations in accordance with
   15-3  their terms for all purposes.
   15-4              (12)  The regional utility shall issue its bonds and
   15-5  other obligations in accordance with Chapter 656, Acts of the 68th
   15-6  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
   15-7  Civil Statutes), and the Bond Procedures Act of 1981 (Article
   15-8  717k-6, Vernon's Texas Civil Statutes), as applicable.
   15-9        (c)  Notwithstanding the provisions of Subsection (b) of this
  15-10  section, it is the express intent of the legislature to ensure the
  15-11  continuity and facilitation of the purpose of this Act by
  15-12  establishing an emergency clause as follows:
  15-13              (1)  The regional utility may declare an emergency
  15-14  exists when in the normal operation of the district the loss of
  15-15  participation by the United States government and its agencies, the
  15-16  State of Texas and its agencies, or joint interstate or
  15-17  international agreements authorized by this Act results in
  15-18  unsustainable increases to participants within El Paso County and
  15-19  outside the city limits of El Paso who would be so severely
  15-20  impacted as to render the purpose of providing water and wastewater
  15-21  treatment as defined in this Act an economic, environmental, or
  15-22  health crisis.
  15-23              (2)  During an emergency and after review by the Texas
  15-24  Natural Resource Conservation Commission and Texas Water
  15-25  Development Board, the regional utility shall request the city of
  15-26  El Paso to utilize  revenues received from ratepayers inside the
  15-27  corporate boundaries of the city to subsidize the cost of providing
   16-1  utility service to ratepayers outside the boundaries of the city.
   16-2        (d)(1)  The regional utility may enter into contracts with
   16-3  any public or private party or body considered necessary in the
   16-4  exercise of the powers and purposes of the regional utility under
   16-5  this Act.  This authority shall extend to those areas outside of
   16-6  the municipal jurisdiction of the city.
   16-7              (2)  Pursuant to provisions of Subdivision (1) of this
   16-8  subsection, the regional utility may enter into contracts for the
   16-9  acquisition, purchase, rental, lease, or operations of the water
  16-10  production, water supply, water filtration or purification, water
  16-11  supply facilities, or other water or wastewater facilities that are
  16-12  owned or operated by the contracting party.
  16-13              (3)  Contracts that require a payment of money by the
  16-14  regional utility may be made payable from any general or specific
  16-15  source of funds.
  16-16        (e)  So long as the regional utility complies with Chapter
  16-17  13, Water Code, and the applicable provisions of Section 6 of this
  16-18  Act and except as expressly limited in this Act, the rights and
  16-19  powers described in this Act shall prevail over any limitations
  16-20  contained in any other law.
  16-21        (f)  Notwithstanding any other provisions of this Act, this
  16-22  Act shall not operate to authorize the regional utility to condemn
  16-23  land owned by the state and shall not authorize the regional
  16-24  utility to condemn land or assets owned by any other political
  16-25  subdivision of the state outside of the city's municipal
  16-26  jurisdiction including the districts.  Nothing in this Act shall
  16-27  allow the condemnation or transfer of surface water rights granted
   17-1  to the El Paso County Water Improvement District No. 1, and those
   17-2  surface water rights may only be transferred by contract with the
   17-3  El Paso County Water Improvement District No. 1.
   17-4        (g)  Except to the extent of any tax obligation imposed by
   17-5  any district and necessary to retire any debt existing on the date
   17-6  of consolidation as hereinafter provided, this Act shall not
   17-7  operate to allow the regional utility to tax property outside of
   17-8  the city's corporate limits.
   17-9        SECTION 6.  CONSOLIDATION OF DISTRICTS.  (a)  The regional
  17-10  utility shall have the authority to consolidate one or more of the
  17-11  districts into the regional utility on the occurrence of one or
  17-12  more of the following events:
  17-13              (1)  a majority vote of the membership of a district
  17-14  operating as a water supply corporation or a majority vote of the
  17-15  board of directors of an investor-owned utility;
  17-16              (2)  a majority vote of the board of directors of a
  17-17  district other than a water supply corporation to dissolve the
  17-18  district by consolidation into the regional utility, followed by an
  17-19  election in the district, at the earliest available uniform
  17-20  election date, at which a majority of the voters voting in the
  17-21  election vote to dissolve the district by consolidation into the
  17-22  regional utility;
  17-23              (3)  on the filing of a petition with  the board of
  17-24  directors of the subject district, presented at a regularly
  17-25  scheduled open meeting of the board, signed by 20 percent of the
  17-26  registered voters of the subject district, other than a water
  17-27  supply corporation, followed by an election on an order by the
   18-1  board of directors of the district.  An election held in accordance
   18-2  with this procedure must be held on the next available uniform
   18-3  election date following certification of the petition in accordance
   18-4  with Section 41.001, Election Code, provided, however, that such an
   18-5  election shall not be required more than once in any consecutive
   18-6  24-month period.
   18-7        (b)  Notwithstanding the occurrence of a vote or election as
   18-8  provided in Subsection (a) of this section, as to each district
   18-9  with bonds, notes, obligations, or taxes owed, contracted, or
  18-10  authorized at the time of the district's vote into the regional
  18-11  utility, consolidation of a district into the regional utility
  18-12  shall not be final and effective until:
  18-13              (1)  the boards of directors of the regional utility
  18-14  and the district have entered into a consolidation agreement;
  18-15              (2)  as to each district other than a district
  18-16  operating as a water supply corporation, the board has ordered and
  18-17  held an election in the district at which a majority of voters
  18-18  voting in the election approved the terms and conditions of the
  18-19  consolidation agreement;
  18-20              (3)  the district's debts, bonds, notes, obligations
  18-21  and taxes, as applicable, have been paid in full, assumed, or
  18-22  satisfactorily addressed in the consolidation agreement; and
  18-23              (4)  a regional utility consolidation order has been
  18-24  filed by the regional utility in the real property records of the
  18-25  county and the Texas Water Commission.
  18-26        (c)  If an election is required to be held in a district for
  18-27  the purposes of consolidation into the regional utility, then the
   19-1  election shall be held in conformity with the Election Code, as
   19-2  amended, or the Texas Non-Profit Corporation Act (Article 1396-1.01
   19-3  et seq., Vernon's Texas Civil Statutes), and all applicable
   19-4  election law.
   19-5        (d)  At all times prior to final consolidation of a district
   19-6  which has debts or other obligations which may be owed, contracted,
   19-7  or authorized, the district shall:
   19-8              (1)  protect the assets of the district and ensure that
   19-9  they are not impaired;
  19-10              (2)  where applicable and necessary, assess and collect
  19-11  taxes on property in the district to pay debts created by the
  19-12  district; and
  19-13              (3)  pay debts of the district and manage the assets of
  19-14  the district through the sale, lease, or other management of
  19-15  district lands.
  19-16        (e)  If taxes were levied on land within a district
  19-17  consolidated into the regional utility at the time of consolidation
  19-18  and if taxes are necessary to retire existing debt, the regional
  19-19  utility shall continue to assess and collect the taxes, but the
  19-20  regional utility shall not increase tax rates in the district in
  19-21  order to retire debts of the district unless such increase is
  19-22  authorized as provided by existing law.
  19-23        (f)  Consolidation shall be achieved in such a way that it
  19-24  does not violate existing bond covenants and other contractual
  19-25  obligations of the city and its public service board or any
  19-26  district and does not adversely affect their bond ratings.
  19-27        (g)  The regional utility may apply to the Texas Water
   20-1  Development Board for up to $3 million appropriated during the
   20-2  1994-1995 biennium for grants or loans to encourage and facilitate
   20-3  the regionalization of water and wastewater services in El Paso
   20-4  County.  Any funds awarded pursuant to this provision shall be used
   20-5  by the regional utility to purchase and refinance district debt in
   20-6  order to achieve a reasonable cost of service to existing customers
   20-7  and facilitate consolidation of water and wastewater services in
   20-8  the county.
   20-9        SECTION 7.  UTILITY SERVICE RATES.  (a)  The regional utility
  20-10  may establish fees and charges for initiating service to service
  20-11  applicants and rates, fees, and charges for utility service
  20-12  provided to retail customers in the expanded service area or to
  20-13  wholesale customers outside the expanded service areas.
  20-14  Notwithstanding Subsection (b), Section 16.349, Water Code, the
  20-15  regional utility may charge retail service applicants and customers
  20-16  in an area outside the corporate boundaries of the city rates for
  20-17  utility service actually provided based on the actual, documentable
  20-18  cost of providing that service even if the rates so charged exceed
  20-19  the rates charged by the utility to ratepayers inside the corporate
  20-20  boundaries of the city.
  20-21        (b)  The regional utility shall not use utility revenues
  20-22  received from ratepayers inside the corporate boundaries of the
  20-23  city to subsidize costs of providing utility service to ratepayers
  20-24  outside the boundaries of the city nor shall it use utility
  20-25  revenues received from retail ratepayers outside the city to
  20-26  subsidize costs of providing utility service inside the city.  The
  20-27  utility shall not pay to or deposit in the general revenue fund
   21-1  revenues received from the rates charged to retail customers
   21-2  outside the city except as required by any existing bond covenant
   21-3  or by any future bond covenant unless the new bonds that are issued
   21-4  are used to fund utility services to ratepayers outside the
   21-5  corporate boundaries of the city.
   21-6        (c)  Ratepayers of the regional utility residing outside the
   21-7  boundaries of the city shall have all rights provided in Chapter
   21-8  13, Water Code, as applicable.
   21-9        SECTION 8.  PROVISION OF UTILITY SERVICE.  (a)  As a
  21-10  condition of providing utility service, the regional utility may
  21-11  require that all development in the county meet the minimum
  21-12  construction and development standards established by the Texas
  21-13  Water Development Board for economically distressed areas in
  21-14  accordance with Section 16.343, Water Code, as adopted by the
  21-15  county, and comply with the Rules and Regulation Number 11 of the
  21-16  PSB concerning extension of utility services outside of the city
  21-17  limits to the extent that they do not conflict with any provisions
  21-18  of this Act and the plans developed pursuant to Subsection (b) of
  21-19  Section 3 of this Act.
  21-20        (b)  On consolidation of a district into the regional
  21-21  utility, the regional utility shall be required to provide utility
  21-22  service to those residents of the district pursuant to the
  21-23  provisions of the regional water supply and wastewater facilities
  21-24  plan developed pursuant to Subsection (b) of Section 3 of this Act.
  21-25  Notwithstanding any other provision in this Act, any water supply
  21-26  or wastewater facilities being constructed or designed on the
  21-27  effective date of this Act through grants from the Texas Water
   22-1  Development Board or Farmers Home Administration shall be continued
   22-2  by the regional utility uninterrupted by any delay and be
   22-3  incorporated into the regional water supply and wastewater
   22-4  facilities plan developed pursuant to Subsection (b) of Section 3
   22-5  of this Act.
   22-6        (c)  In order to plan for regional utility service within the
   22-7  county, the regional utility shall include land that belongs to the
   22-8  permanent school fund of the state within a regional plan.  In such
   22-9  event, the provisions of a regional plan shall be binding on
  22-10  permanent school fund land only after the regional utility provides
  22-11  acceptable utility service commitments to the affected land and
  22-12  obtains the written consent of the School Land Board in accordance
  22-13  with its rules and regulations.
  22-14        (d)  In order to assist in ensuring the public health and
  22-15  welfare of the residents of El Paso County, the regional utility,
  22-16  before making any water service available to residents of El Paso
  22-17  County not currently being served with water from the PSB, must
  22-18  first provide water service to residents of the county that are
  22-19  being served by a public or private entity water system that
  22-20  provides water that fails to meet any federal or state laws,
  22-21  regulations, requirements, or rules in effect for public drinking
  22-22  water systems.  Such water service must be offered by the regional
  22-23  utility as soon as possible at a rate based on the actual,
  22-24  documentable cost of providing that service as agreed to by the
  22-25  regional utility and entity, or at a just and reasonable rate
  22-26  established by the Texas Water Commission if the regional utility
  22-27  and entity cannot agree on such a rate, but in no event shall such
   23-1  offer for water service from the regional utility be made any later
   23-2  than nine months after enactment of this Act.
   23-3        SECTION 9.  SEVERABILITY AND CONSTRUCTION.  (a)  If any
   23-4  provisions of this Act or the application thereof to any person or
   23-5  circumstance is held invalid, such invalidity shall not affect
   23-6  other provisions or applications of this Act that can be given
   23-7  effect without the invalid provision or application, and to this
   23-8  end the provisions of this Act are declared to be severable.  All
   23-9  the terms and provisions of this Act are declared severable.  All
  23-10  the terms and provisions of this Act are to be liberally construed
  23-11  to effectuate the purposes, powers, rights, functions, and
  23-12  authorities herein set forth.
  23-13        (b)  Nothing contained in this Act shall be construed to
  23-14  limit the power of the governing body of the city to control the
  23-15  governing body of the city's water and wastewater utility systems
  23-16  as provided for in Articles 1111 and 1115, Revised Statutes.
  23-17        (c)  Nothing contained in this Act shall be construed to
  23-18  require the city or the governing body of the city's water and
  23-19  wastewater utility systems to provide services other than the water
  23-20  and wastewater services described herein.
  23-21        SECTION 10.  APPLICATION.  This Act applies only to a county
  23-22  that has a population of 400,000 or more according to the most
  23-23  recent federal census, borders the Republic of Mexico, and does not
  23-24  have three or more cities that each have a population of more than
  23-25  17,500.
  23-26        SECTION 11.  EMERGENCY.  The importance of this legislation
  23-27  and the crowded condition of the calendars in both houses create an
   24-1  emergency and an imperative public necessity that the
   24-2  constitutional rule requiring bills to be read on three several
   24-3  days in each house be suspended, and this rule is hereby suspended,
   24-4  and that this Act take effect and be in force from and after its
   24-5  passage, and it is so enacted.