BILL ANALYSIS H.B. 3179 By: Harris (Brown) Water 5-25-95 Senate Committee Report (Unamended) BACKGROUND The Clear Creek Watershed falls into Fort Bend, Brazoria, Galveston and Harris counties, and encompasses numerous political subdivisions that include counties, cities, utility districts and drainage districts. Presently, the watershed area covers approximately 260 square miles of land and has a population of approximately 274,000 which is expected to grow to 380,000 by the year 2000. Since about 1960, increases in area development have combined with the flat land surfaces and clay soils to produce runoff rates that exceed the capacity of the watershed drainage system and make flooding a costly problem. Tropical storm Claudette in July 1979 delivered 10-25 inches of rainfall across the entire watershed, which resulted in flooding that caused residential and commercial damages estimated at over $90 million. Total property damages in the watershed were estimated at $230 million. Under existing conditions, average annual flood damages in the watershed are estimated at about $6.6 million. PURPOSE As proposed, H.B. 3179 provides for the creation, administration, powers, duties, operation, and financing of the Clear Creek Watershed Regional Flood Control District, granting the power of eminent domain, authorizing the issuance of bonds, providing for the levy, assessment, and collection of ad valorem taxes, and providing for a civil penalty. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the board of directors of the Clear Creek Watershed Regional Flood Control District under SECTION 17 of this bill. SECTION BY SECTION ANALYSIS SECTION 1. DEFINITIONS. Defines "board," "commission," "commissioners courts," "director," "district," and "person." SECTION 2. Creates the Clear Creek Watershed Regional Flood Control District (district) as a conservation and reclamation district under Section 59, Article XVI, Texas Constitution, subject to approval at a confirmation election under Section 5 of this Act. Provides that the district is a governmental agency and body politic and corporate. SECTION 3. BOUNDARIES OF DISTRICT. Sets forth the boundaries of the district. SECTION 4. BOARD OF DIRECTORS. (a) Provides that the district is governed by a board of five directors appointed as provided by this section. (b) Sets forth provisions to take place on or before 90 days after the effective date of this Act. (c) Requires the commissioners court that appointed the director, on expiration of a director's term, to appoint a successor to serve a four-year term that expires on September 30 of the fourth year after the expiration of the previous director's term. (d) Requires the commissioners court that appointed the director, on vacancy of a director's office during the director's term, to appoint a person to serve as director for the remainder of the term. (e) Prohibits a commissioners court from appointing a person as a director unless at the time of appointment the person holds an elective office of a political subdivision in the district other than the office of county commissioner. Authorizes a person to be reappointed for multiple terms as a director if the person holds, at the time of each appointment, an elective office as required for initial appointment. (f) Requires a director to qualify by taking the official oath of office required of state officers. (g) Provides that a director holds office until a successor is appointed and qualifies for office. (h) Provides that a director is not entitled to receive compensation for service on the board, but may be reimbursed for actual travel expenses. (i) Requires the initial board to hold a regular meeting and elect officers as soon as practicable after appointment. (j) Requires the board to elect from its members a chair, vice chair, and secretary. Provides that a director elected to a board office serves in that position for one year. Requires the chair, or if the chair is absent, the vice chair, to preside over meetings of the board. Provides that the chair, vice chair, and secretary shall perform the duties and may exercise the powers specifically given them by this Act or by resolution or order of the board. (k) Provides that three directors constitute a quorum for the transaction of district business. Provides that an action of the board is valid only with the affirmative vote of three directors. (l) Authorizes the board to adopt bylaws consistent with this Act. Authorizes the bylaws to be amended as necessary for the management and operation of the district. Requires the board to hold regular and special meetings at times and dates determined by the board. Requires the board to maintain complete and accurate records of the district's accounts, contracts, plans, notices, receipts, and meetings and other proceedings in a secure manner at the district's principal office. Requires the records to be open to public inspection at reasonable times. (m) Requires an advisory committee to the board composed of one representative from each political subdivision within the district to be established. Requires members of the advisory committee to be appointed by each political subdivision from elected members of the subdivision's governing body. SECTION 5. CONFIRMATION ELECTION. (a) Prohibits the district from exercising a power granted by this Act other than a power granted by this section until the creation of the district is confirmed by a majority of the resident electors of the district voting at a confirmation election called under this section. Requires the initial board to call a confirmation election to be held no later than two years after the effective date of this Act within the boundaries of the proposed district. Authorizes the board to call subsequent confirmation elections if the district is not confirmed at the first election. Requires expenses of a confirmation election to be paid in equal shares by each of the commissioners courts and to be repaid by the district if creation of the district is confirmed. Provides that Section 41.001(a), Election Code, does not apply to a confirmation election. (b) Requires the board to give notice of a confirmation election. Requires the notice to state the date and polling places for the election and the proposition to be voted on. Requires the board to publish the notice once in a newspaper or newspapers of general circulation in the proposed district. Requires the notice to be published at least 35 days before the date set for the election. (c) Sets forth the required language for the ballot at a confirmation election. (d) Requires the presiding judge of each polling place, immediately after a confirmation election, to return the results of the election to the board. Requires the board to canvass the returns. (e) Requires the board, if a majority of the votes cast at a confirmation election favor the creation of the district, to declare the district confirmed and enter the results in its minutes. Requires the board to also file a copy of the election results with the commission. (f) Prohibits another election to confirm creation of the district, if a majority of the voters at a confirmation election vote against the creation of the district, from being called and held for at least 12 months following the most recent confirmation election. Provides that if the district is not confirmed before the fifth anniversary of the effective date of this Act, this Act expires. SECTION 6. PERSONNEL. (a) Authorizes the board to employ a general manager as the chief administrative officer of the district. Authorizes the board to delegate to the general manager full authority to manage and operate the affairs of the district, subject only to orders of the board. Requires the general manager to execute a bond in an amount determined by the board, payable to the district, conditioned on the faithful performance of the general manager's duties. Requires the district to pay for the bond. (b) Requires the board to appoint a professional civil engineer for the district, who shall be entitled to the compensation provided in the district's budget. Requires the district engineer to execute a bond in an amount determined by the board, payable to the district, conditioned on the faithful performance of the district engineer's duties. Requires the district to pay for the bond. (c) Authorizes the board to authorize the employment of other persons necessary for the proper management of the business and operation of the district, ant to employ or contract with specialized personnel necessary to implement this Act. Requires the board to determine the terms of employment or contracts and the compensation to be paid to employees or persons under contract under this section. Requires the board to require each employee or person under contract who collects, pays, or handles district money to furnish a bond, payable to the district, in an amount sufficient to protect the district from financial loss resulting from actions of the employee or person under contract. Requires each bond to be conditioned on the faithful performance of the duties of the employee or person under contract and on accounting for all money and property of the district that the employee or person under contract handles. Requires the district to pay for each bond. SECTION 7. DISTRICT OFFICE. Requires the board to designate the location of the principal office of the district at any place in the district. SECTION 8. GENERAL POWERS AND DUTIES. (a) Requires the district to develop a flood control and drainage plan under the provisions of this Act for all land in the district, including the main channel and all tributaries of Clear Creek. (b) Sets forth requirements in accordance with the flood control and drainage plan for the district. (c) Sets forth provisions under which the district, under a written agreement with a political subdivision and in accordance with the flood control and drainage plan, may construct in whole or in part improvements on any water course or land in the district. (d) Authorizes the district to issue bonds under this Act supported by ad valorem taxes on property in the district to finance up to one-half the cost of construction under Subsection (c) if the district finds that the project will not be constructed without the use of the ad valorem taxes. (e) Authorizes the district to issue bonds supported by revenues from contracts with political subdivisions under Section 39 to finance all or part of the cost of construction under this section. (f) Sets forth authorized provisions for the district. (g) Requires the district to advise, consult, and cooperate with local governments on matters regarding the watershed. SECTION 9. FLOOD CONTROL AND DRAINAGE PLAN. (a) Requires the board to direct the district engineer to prepare a flood control and drainage plan including certain provisions. (b) Requires the district engineer to file the completed plan with the board and the commissioners courts. (c) Provides that the district engineer, in preparing the plan, may exercise the powers and shall exercise the duties provided by Sections 56.022 and 56.023, Water Code. (d) Authorizes the district engineer, in preparing the plan, to consider and use all or part of any previously prepared flood control and drainage plan that covers any area in the district, including the Clear Creek Regional Watershed Plan as adopted by the Clear Creek Watershed Steering Committee. SECTION 10. NOTICE AND HEARING ON FLOOD CONTROL AND DRAINAGE PLAN. (a) Requires the board, on receipt of the completed flood control and drainage plan, to schedule a public hearing to consider adoption of the plan. Requires the board to publish notice of the hearing at least once in a newspaper with general circulation in the district not less than 30 days before the date set for the hearing. (b) Authorizes any person who resides or owns property in the district or a political subdivision located in whole or in part in the district, to appear at the hearing before the board and present evidence or testify for or against all or part of the plan. SECTION 11. ADOPTION OF FLOOD CONTROL AND DRAINAGE PLAN. (a) Requires the board, after holding the public hearing required by Section 10, to issue its findings and decisions. (b) Requires the board, if the board finds that the flood control and drainage plan requires changes before it can be adopted, to direct the district engineer to make the necessary changes. Requires the district engineer to make the changes and resubmit the plan to the board. (c) Authorizes the board, without further public hearing, to continue to direct the district engineer to make changes to the plan until the board finds the plan acceptable for adoption. (d) Requires the board, if the board finds that no changes are required in the plan, or if the district engineer has made all necessary changes to the plan under Subsections (b) and (c), to submit the plan to the commissioners courts. Authorizes the commissioners courts to consider the plan and recommend changes to the plan. Requires the board, if the board and commissioners courts cannot agree on changes to the plan, to submit the provisions in the plan that are in dispute to the district engineer for resolution of the dispute. Provides that the decision of the district engineer is final. Requires the board, not earlier than 30 days after the plan is submitted to the commissioners courts, to adopt the plan as revised to reflect all necessary changes. SECTION 12. AMENDMENT OF FLOOD CONTROL AND DRAINAGE PLAN. Authorizes the board to amend the flood control and drainage plan as necessary to accomplish the purpose stated in Section 9. SECTION 13. IMPROVEMENTS TO BE CONSTRUCTED. (a) Authorizes only improvements compatible with the flood control and drainage plan and adopted by the board to be constructed. (b) Requires improvements and maintenance on the main channel of Clear Creek to be constructed and performed only by the district. Authorizes the district to cause improvements and maintenance to the main channel of Clear Creek to be constructed and performed through contracts with other persons and political subdivisions, but the district retains responsibility for assuring that all construction and maintenance is done in conformance with the plan. (c) Authorizes all improvements and maintenance on lands draining into Clear Creek or its tributaries and improvements and maintenance to channels other than the main channel of Clear Creek to be constructed or performed by other political subdivisions or persons in conformance with the plan. Authorizes the district to construct improvements and perform maintenance under this subsection only under agreements with other political subdivisions. SECTION 14. LOCAL COOPERATION. Requires the district to cooperate with other political subdivisions as much as possible to provide uniform programs and coordinated planning. SECTION 15. DISTRICT SUPERIOR IN FLOOD CONTROL AND DRAINAGE MATTERS. Provides that the district has primary jurisdiction within its boundaries over all matters affecting flood control and drainage of land and may take any action necessary to assure compliance with the flood control and drainage plan. SECTION 16. CERTIFICATE REQUIRED FOR ACTIVITY AFFECTING FLOOD CONTROL OR DRAINAGE. Prohibits a person or political subdivision from engaging in an activity that will affect flood control or drainage in the district without obtaining a certificate from the board. SECTION 17. EXEMPTIONS. Authorizes the board, after notice and hearing, to adopt a rule or issue and order that exempts a specified activity from Section 16. Provides that if a political subdivision has its plan approved by the board, any improvements within the subdivision which are consistent with the approved plan are exempt from certification by the board. Authorizes the board to exempt an activity only if the board, after consultation with the district engineer, finds that the activity will have at most a minimal impact on flood control and drainage. SECTION 18. NOTICE OF ACTIVITIES AFFECTING FLOOD CONTROL OR DRAINAGE. (a) Requires a person or political subdivision that plans to engage in an activity that will affect flood control or drainage in the district to submit written notice to the board of the intent to engage in the activity, accompanied by plans, specifications, and other information relating to the activity. (b) Requires a person or political subdivision to submit the notice and other information required by Subsection (a) in the form and manner and within the time provided by board rules. SECTION 19. CONSIDERATION OF ACTIVITY BY ENGINEER. (a) Requires the board, on receiving notice of a proposed activity under Section 18, to submit the notice and other information to the district engineer for consideration. (b) Requires the district engineer to examine the notice and other information to make certain determinations. (c) Requires the district engineer to consult with the person or political subdivision submitting the notice and information and suggest changes in the proposed plans and specifications for the activity necessary to make the activity compatible with the flood control and drainage plan. (d) Requires the district engineer, if the district engineer and the person or political subdivision proposing an activity agree to plans and specifications for the activity that are compatible with the flood control and drainage plan as determined by the district engineer, to recommend that the board issue a certificate authorizing the activity. Requires the district engineer, if the district engineer and the person or political subdivision proposing an activity cannot agree, to recommend that the board decline to issue a certificate authorizing the activity. Requires the district engineer's recommendation to be included in a brief written report to the board stating the district engineer's reasons for the recommendation. SECTION 20. BOARD CONSIDERATION AND ACTION. (a) Authorizes the board, on receiving the district engineer's report, to issue a certificate without giving notice or holding a public hearing to consider the issuance. (b) Requires the board, if the board intends to deny issuance of a certificate, to first give notice and hold a public hearing in accordance with the district's rules to consider the issuance of the certificate. Requires the board, after conducting the hearing, to issue a written decision granting or denying the certificate or granting the certificate subject to specific requirements. Requires the decision to state the findings of the board in making the decision. SECTION 21. OBSTRUCTIONS AND STRUCTURES. (a) Prohibits a person or political subdivision from placing an obstruction or construct or alter a structure on land in the district if the obstruction or structure is not compatible with the flood control and drainage plan and the district has not issued a certificate for the activity. (b) Authorizes the board, after notice and hearing, to issue an order directing a person or political subdivision to remove or make changes to an obstruction or structure constructed after adoption of the flood control and drainage plan as necessary to comply with the plan. SECTION 22. INJUNCTIVE RELIEF. Authorizes the board, if a person or political subdivision engages in an activity that will affect the flood control or drainage in the district without a certificate or places an obstruction or constructs or alters a structure in violation of an order issued by the board under Section 21, to sue in a district court in any county in which the activity is occurring or obstruction is built for injunctive relief to restrain the person or political subdivision from continuing or threatening to continue the violation or to require the person or political subdivision to remove an obstruction or structure. SECTION 23. CIVIL PENALTY. (a) Subjects a person or political subdivision that violates Section 16 or 21 or any order issued by the board under Section 16 or 21 to a civil penalty of not less than $100 nor more than $1,000 for each violation or each day of a continuing violation. (b) Authorizes the court, if a suit is filed under this section to recover a civil penalty, to include in any final judgment in favor of the district an award to cover court costs and reasonable attorney's fees. SECTION 24. EMINENT DOMAIN. (a) Authorizes the district to acquire land for district improvements by condemnation when the board determines, after notice and hearing, that condemnation is necessary. (b) Provides that the district shall exercise the power of eminent domain as provided by Chapter 21, Property Code, but is not required in an appeal to post a bond or make a deposit. (c) Requires the district, if the district, in the exercise of the power of eminent domain, makes necessary any alteration of the construction of a highway, railroad, electric transmission line, telephone, or telegraph property or facility, or pipeline, to pay the cost of the necessary action so as to provide comparable replacement of any replaced facility, less the replaced facility's net salvage value. SECTION 25. CONSTRUCTION CONTRACTS. (a) Requires construction contracts of the district to be competitively bid in accordance with Chapter 271B, Local Government Code. (b) Requires the district to comply with Sections 66.208-66.213, Water Code. SECTION 26. USE OF DISTRICT MONEY. (a) Authorizes the board to use district money for construction costs, acquisition of property, maintenance of and improvements to flood control and drainage systems of the district, payment of debt service requirements, and establishment of appropriate reserves. (b) Authorizes the district's money to be disbursed only be check, draft, order, or other written instrument that is signed by a person or persons authorized by the board. SECTION 27. INVESTMENTS. Requires the board to invest district money in accordance with the Public Funds Investment Act (Section 2256.001 et seq., Government Code). Authorizes the board to allow an authorized district representative to invest and reinvest the district's money and withdraw money from appropriate district accounts for investments on terms the board considers advisable. SECTION 28. BUDGET. (a) Requires the board to annually prepare a budget covering all proposed expenditures for the succeeding year. Requires the budget to contain a complete financial statement of the district. (b) Requires the board to conduct a public hearing on the proposed budget on a date set by the board after August 15 and before the levy of district taxes. Requires the board to give public notice of the hearing by publication in a newspaper of general circulation in the district at least 15 days before the hearing. SECTION 29. ISSUANCE OF BONDS. (a) Sets forth authorizations for the district. (b) Authorizes the district to issue bonds in various series or issues. Authorizes the bonds to mature serially or otherwise but may not mature more than 40 years from their date or dates of issuance. (c) Provides that the district's bonds and interest coupons, if any, are investment securities under the terms of Chapter 8, Business and Commerce Code, and may be registered as to principal or principal and interest or may be issued in book entry form. Authorizes the district's bonds to be made redeemable before maturity at the option of the district or to contain a mandatory redemption provision. Authorizes the district's bonds to be issued in the form, denomination and manner provided by the board in the resolution or order authorizing issuance of the bonds. Authorizes the district to provide for the flow of funds, the establishment and maintenance of an interest, sinking, reserve, or other fund, and to make covenants with respect to the bonds and the ad valorem taxes or revenues pledged to secure the bonds. (d) Authorizes the district to prohibit the further issuance of bonds or other obligations payable from any pledged ad valorem taxes or revenues or to reserve the right to issue additional bonds secured by a pledge of ad valorem taxes or revenues on a parity with or subordinate to the pledge securing bonds issued earlier. (e) Provides that the orders or resolutions of the board issuing bonds to contain other provisions and covenants as the board may determine. Authorizes the board to adopt and have executed any other proceedings or instruments necessary in connection with the issuance of bonds. (f) Subjects the district's bonds to Article 717k-6, V.T.C.S., except as provided by this Act. SECTION 30. BOND ELECTION. (a) Prohibits the district from issuing bonds secured by ad valorem taxes, other than refunding bonds, until the bonds have been authorized by a majority vote of the voters qualified to vote and actually voting in the district at an election called and held for that purpose. (b) Requires the board order calling a bond election under this section to state the nature and date of the election, the hours and location of the polling places, the amount of bonds to be authorized, and the maximum maturity of the bonds. Requires notice of a bond election to be given as provided by Section 5. Requires the election to be held in accordance with the Election Code, except as provided by this Act. Authorizes a bond election to be called in conjunction with a confirmation election under Section 5. Requires the ballots to provide for voting for or against the issuance of bonds and the levy of ad valorem taxes to secure payment of the bonds. Requires the board to canvass the returns and declare the results of the election. Authorizes the board, if a majority of the qualified voters voting at the election vote in favor of the issuance of bonds and the levy of taxes, to issue, sell, and deliver the authorized bonds, receive and use the bond proceeds for their intended purposes, and levy, assess, and collect ad valorem taxes on all taxable property in the district in an amount sufficient to pay interest on and principal of the bonds. SECTION 31. REFUNDING BONDS. Authorizes the district to issue refunding bonds for the purpose and in the manner provided by general law. SECTION 32. APPROVAL AND REGISTRATION OF BONDS. Requires the board to submit all bonds issued by the district to the attorney general for examination. Requires the attorney general, if the attorney general finds that the bonds have been authorized in accordance with law, to approve the bonds, and the comptroller of public accounts shall register the bonds. Provides that after approval and registration the bonds are incontestable in any court or other forum for any reason and are valid and binding obligations in accordance with their terms for all purposes. SECTION 33. USE OF BOND PROCEEDS. Authorizes the board, from the proceeds of the sale of bonds, to set aside an amount for the payment of interest expected to accrue during a period of construction of improvements or facilities not to exceed three years, and an amount necessary to pay all expense incurred and to be incurred in the issuance, sale, and delivery of the bonds. Authorizes the proceeds from the initial sale of the district's bonds to be used to pay expenses related to the district's confirmation. SECTION 34. BONDS AUTHORIZED INVESTMENTS. Sets forth entities for which bonds issued by the district are legal and authorized investments. Sets forth entities for which district bonds are eligible and lawful security. SECTION 35. REMEDIES. Sets forth provisions under which the owner of a bond issued by the district may obtain a writ of mandamus requiring the district to perform its obligations under the bond. SECTION 36. TAX-FREE STATUS. Provides that bonds issued by the district, any transaction relating to the district's bonds, and profits made in the sale of district bonds are free from taxation by the state or a political subdivision of the state. SECTION 37. MAINTENANCE TAX. (a) Authorizes the district to levy, asses, and collect an annual ad valorem tax on all taxable property in the district for the maintenance, operation, upkeep, and improvement of the district and its facilities, properties, and improvements. (b) Requires an ad valorem maintenance tax under Subsection (a) to be authorized by a majority vote of the voters qualified to vote and voting in the district at an election called and held for that purpose. (c) Sets forth additional language for the ballot. (d) Authorizes subsequent elections to be called to increase, reduce, or abate a maintenance tax. (e) Requires notice of the election and the manner of holding the election to be as provided in Section 5. (f) Authorizes maintenance taxes and bonds to be authorized at the same election, including an election held in conjunction with a district confirmation election under Section 5. (g) Requires an election authorizing a maintenance tax to be held in accordance with the Election Code, except as provided in this Act. SECTION 38. IMPOSITION OF TAXES. (a) Authorizes the district to annually levy ad valorem taxes approved in elections under Sections 30 and 37 to pay the principal of and interest on district bonds, the expense of assessing and collecting taxes, and the expense of operating and maintaining the district and its facilities. Authorizes the board to levy taxes for the entire year in the year in which the district is confirmed. (b) Requires the district to levy taxes on all property in the district subject to taxation. Requires the board, in setting the rate, to take into consideration the income of the district from sources other than taxation. Requires the board to make the levy and certify it to the tax assessor-collector. (c) Provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. Authorizes the board to provide for the appointment of a tax assessor-collector for the district or to contract for the assessment and collection of taxes as provided by the Tax Code. SECTION 39. JOINT PROJECTS. (a) Authorizes the district to issue bonds secured by revenues arising from a contract with a political subdivision located in the district for the construction of an improvement identified in the flood control and drainage plan. Requires the district to provide the proceeds from the bonds to the local political subdivision for the construction of the improvement, or, if the contract with the political subdivision requires the district to construct said improvements, the district shall use the proceeds for the required construction. Subjects bonds issued under this section to Sections 29, 31, 32, and 33, except that any provision associated with the authorization, levy, or collection of an ad valorem tax does not apply. (b) Authorizes a political subdivision located in the district to enter into any contract with the district that is considered appropriate by its governing body. Authorizes the political subdivision to pledge to the payment of the contract any source of revenue available to the political subdivision, including the levy and collection of ad valorem taxes, if the political subdivision has the authority to levy and collect those taxes. Provides that to the extent a political subdivision pledges money to be derived from any of its own systems, the payments constitute an operating expense of that system. SECTION 40. CONSTRUCTION. Requires this Act to be liberally construed to accomplish the Act's purposes. SECTION 41. FINDING OF BENEFIT. Provides that all property in the district will be benefited by the district and by the district's improvements and facilities acquired or constructed under this Act. SECTION 42. LEGISLATIVE FINDING. Provides that the requirements of Section 59, Article XVI, Texas Constitution, have been met and accomplished in due course and time. SECTION 43. Emergency clause. Effective date: upon passage.