BILL ANALYSIS H.B. 1187 By: Pickett 3-13-95 Committee Report (Amended) BACKGROUND Westway is an unincorporated community located just west of El Paso, Texas. Water and wastewater projects were coordinated by the El Paso County Water Control and Improvement District - Westway ( the Westway district). In 1992, the Westway district's only well failed which created an emergency situation for the citizens of that community. Seeking an affordable solution, the Westway district, the City of El Paso (El Paso), and the El Paso Water Utilities Public Service Board (PSB) entered into a water supply contract under which the PSB constructed a well and transmission line to provide the Westway district with a permanent water supply. One of the conditions of that contract required the parties to negotiate another contract allowing the PSB to completely manage and operate the Westway water and wastewater system (Westway system) and to eventually transfer the Westway system into the El Paso system. In May, 1994, all parties entered into a management and transfer agreement to accomplish the transfer subject to three conditions being met. Those three conditions were the renewal of the Westway district's wastewater permit by the Texas Natural Resource Conservation Commission (TNRCC), the construction of all necessary improvements financed by the Texas Water Development Board (TWDB) to the Westway system to bring it into full compliance with all applicable laws, and the passage of this legislation to allow for the dissolution and transfer of the Westway system into the El Paso system. This would allow El Paso, through its PSB, to charge rates for water and sewer service in the Westway district service area, which exceed similar rates to its municipal customers, so that El Paso could fully recover the costs of serving Westway customers. These costs would include the costs of repaying the debt incurred by El Paso on behalf of the Westway district for the necessary improvements to the Westway system. PURPOSE To allow for the dissolution and transfer of the Westway system into the El Paso system, and permit El Paso, through its PSB, to charge rates for water and sewer service in the Westway district service area which exceed similar rates charged to its municipal customers, but would still result in a savings to the Westway customers over the rates they currently must pay from the Westway system. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. (a) Grants authority to the Westway district to transfer, through its board of directors, district assets and liabilities to the City of El Paso in accordance with the management and transfer agreement executed between the parties involved on May 16, 1994. (b) Provides for notifying the TNRCC and requesting an order of dissolution once the conditions of the management and transfer agreement have been met. (c) Provides that the Executive Director of the TNRCC will monitor the Westway district's progress in meeting the conditions of the management and transfer agreement. SECTION 2. (a) Directs the Executive Director of the TNRCC to investigate to determine if all parties to the management and transfer agreement have met all of the conditions required therein to be met before the transfer. (b) Directs the Executive Director of the TNRCC to issue a dissolution order if the Executive Director determines: (1) the Westway district is ready to be dissolved in accordance with the management and transfer agreement; (2) all of the Westway district's assets and liabilities are ready for transfer; (3) the City of El Paso and the PSB are prepared to accept the transfer; and (4) the El Paso City Council has adopted a resolution accepting the transfer. (c) Sets out the actions of the Executive Director of the TNRCC in issuing an order of dissolution regarding the transferring of documents from the Westway district's control to El Paso, the PSB, and the secretary of state and after dissolution ordering all assets and liabilities transferred to El Paso. (d) Provides that the consideration and adoption of an order of dissolution under this section is not a contested case under Chapter 2001, Government Code. (e) Provides that the order of dissolution will be wholly sufficient and effective in accomplishing the dissolution and transfer, regardless of any other provision of law. (f) Provides for filing certified copies of the dissolution order and the resolution of the city council of El Paso accepting the transfer. SECTION 3. Authorizes the City of El Paso to collect all money owed to the Westway district after the dissolution order is issued. SECTION 4. (a) Allows the City of El Paso to charge residents of the Westway service area higher rates for service than those charged to residents of the municipality if the higher rates are necessary or appropriate to fully cover the cost of service to the area. (b) Stipulates what recovery costs the PSB may include in the rates charged to residents of the Westway system after dissolution. SECTION 5. Provides for ratification, adoption, validation, and confirmation of decisions and actions reached by the board of directors of the Westway district in the past and provides exceptions for actions which were knowingly illegal or held invalid by a final judgement. SECTION 6. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment No. 1: Adds the words "may be" before the word "as" at both page 1, line 17 and page 2, line 11; after the word "area" on page 4, line 26, deletes the word "or" and adds the word "and". SUMMARY OF COMMITTEE ACTION H.B.1187 was considered by the committee in a public hearing on March 13, 1995. The following persons testified in favor of the bill: Mr. Jack Vowell, representing El Paso Chamber of Commerce; Mr. Jesus Luna, representing El Paso Interreligous Sponsoring Organization; Mr. Herbert L. Prouty, General Counsel, El Paso Water Utilities, Public Service Board, representing himself; Mr. Ernesto Chavez, representing El Paso Water Control and Improvement District - Westway. The following persons testified against the bill: None (0). The following persons testified on the bill: Mr. Tom Brown, representing the Texas Water Development Board. The committee considered one (1) amendment to the bill. The amendment was adopted without objection. The bill was reported favorably, as amended, with the recommendation that it do pass and be printed and be sent to the Committee on Local and Consent Calendars, by a record vote of 7 ayes, 0 nays, 0 pnv, 2 absent.