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.