BILL ANALYSIS C.S.H.B. 546 By: Brimer (Harris) Natural Resources 05-17-95 Senate Committee Report (Substituted) BACKGROUND Currently, there are no provisions in state law authorizing a property owner to petition for property exclusion from a water or reclamation district's tax roll if the district does not provide services. PURPOSE As proposed, C.S.H.B. 546 authorizes a property owner in a water or reclamation district to petition the district for exclusion of the property from the district's property tax roll if the district does not provide services. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Texas Natural Resource Conservation Commission under SECTION 1 (Section 50.504(j), Water Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 50, Water Code, by adding Subchapter N, as follows: SUBCHAPTER N. EXCLUSION OF CERTAIN UNSERVED PROPERTY Sec. 50.501. APPLICABILITY. Makes this subchapter applicable to certain districts or authorities created by Article III, Section 52, or Article XVI, Section 59, Texas Constitution (district) that provides potable or treated water supply services or wastewater services; and imposes a tax on property in the district at a rate that does not exceed $1.20 per $100 assessed valuation; and does not impose a standby fee, as defined by Section 50.056. Sec. 50.502. PETITION FOR EXCLUSION OF UNSERVED PROPERTY. (a) Authorizes the owner of property in a district on which the district has imposed a tax but to which the district does not provide services to petition the governing body of the district (board) to exclude the property from the district if certain criteria is met. (b) Requires the owner to send the petition to the district's main office by certified mail. Sec. 50.503. CONTENT OF PETITION. Sets forth information required to be contained in the petitition for exclusion (petition). Sec. 50.504. ACTION ON PETITION; ENFORCEMENT. (a) Requires the board to consider a petition as an application for services. (b) Requires the board, by the 35th day after receiving the petition, to decide whether to provide services to the property; or decide not to provide services and decide to request approval from the executive director of the Texas Natural Resource Conservation Commission (executive director) to exclude the property. (c) Requires the board, if it decides not to provide the services, to make the request under Subsection (b)(2) by the 35th day after receiving the petition. (d) Requires the executive director to approve or disapprove the request before the 61st day after the request is received. Requires the executive director to approve the property exclusion if the executive director makes certain findings. (e) Requires the board, if the executive director approves the exclusion, to grant the petition and issue an order excluding the property if the board decides not to approve the services. Provides that the order takes effect immediately. Sets forth information required to be in an order to exclude property. (f) Requires the board to file for record a certified copy of the order in the real property records of the county where the property is located. (g) Requires the board, by the 35th day after receiving the petition, to prepare and present to the petitioner a plan and schedule for providing service to the property if the board decides to provide the services in lieu of exclusion. Requires the district to begin operations to carry out the plan by the 90th day after the date the plan is presented. (h) Authorizes the petitioner to petition the Texas Natural Resource Conservation Commission (commission) to order the board to exclude the property or carry out the plan for providing service to the property if the board fails to meet the deadline in Subsection (b), (c), (d), or (g). Requires the petition to be filed by the 30th day after the deadline that was not met. (i) Authorizes the petitioner to appeal the board's decision to provide service to the property by filing a petition requesting the commission to order the board to exclude the property from the district. Requires the petition to be filed by the 30th day after the board provides the plan for providing service to the property. Authorizes the board to suspend preparations or operations to carry out the plan pending hearing on the appeal. (j) Requires the commission to order a hearing on the petition to be held before the 61st day after receipt of a petition under Subsection (h) or (i). Requires the commission to give notice of the hearing as provided by commission rule to all persons affected the hearing's outcome. Authorizes the commission, by rule, to require a petitioner to include with the petition a deposit to pay the costs of the notice. (k) Requires the commission to order the board to exclude the property if it finds at a hearing for a petition filed under Subsection (h) that the board failed without cause to provide the petitioner with a plan for providing services or fails in the implementation of the plan. (l) Requires the commission to order the board to exclude the property if it finds at a hearing for a petition filed under Subsection (i) that the plan for providing services to the property is unreasonable or impracticable. (m) Authorizes a property owner who has filed a petition to bring suit in district court to order the board to provide services or issue an exclusion order in accordance with periods provided by this section if it appears that the board is not complying with this section. Sec. 50.505. EFFECT OF ORDER. (a) Provides that an exclusion order removes the identified property from the jurisdiction of the district. Provides that the exclusion of property does not diminish or impair the rights of holders of any outstanding or unpaid bonds, warrants, or other obligations of the district. (b) Provides that the excluded property is not released from payment of its pro rata share of the district's debt existing on the date of the exclusion order. Requires the district to continue to levy taxes each year on the excluded property equal to the property's share of the debt. Requires the taxes collected to be exclusively applied to the payment of that debt. Authorizes the owner of the excluded property to pay the debt in full without penalty at any time. (c) Provides that the excluded property is not subject to any debt of the district incurred after the date of the exclusion order. Sec. 50.506. EXPIRATION OF SUBCHAPTER. Provides that this subchapter expires September 1, 1997. SECTION 2. Effective date: September 1, 1995. SECTION 3. Emergency clause.