BILL ANALYSIS



S.B. 731
By: Galloway (Brady)
4-24-95
Committee Report (Unamended)


BACKGROUND
The Oak Ridge Municipal Utility District and the City of Oak Ridge
North each passed resolutions in 1994 endorsing legislation to
merge the two entities into one more cost-effective system.

PURPOSE
To authorize a municipality to dissolve the Oak Ridge Municipal
District and assume its assets and obligations.

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. Amends Chapter 615, Acts of the 60th Legislature,
Regular Session, 1967, by adding Section 25, as follows:

     Sec. 25.  (a)  Authorizes the board of directors of the Oak
     Ridge Municipal District (district) to issue an order that
     dissolves the district after:
     
     (1)  the board calls and conducts an election to authorize
         dissolution of the district in the manner provided by
         Chapter 54, Water Code, for an election to approve
         issuance of bonds;
         
         (2)  a majority of the resident electors who vote in an
         election authorized by Subdivision (1) vote on the
         dissolution of the district;
         
         (3)  the board creates a special reserve fund consisting
         of a sum certain from money contained in the district's
         bond retirement fund; and
         
         (4)  a qualified municipality issues an ordinance by
         which, on a specified date, the municipality agrees to
         perform certain functions.
         
       (b)  Provides that a municipality is qualified to assume the
       districts debts, liabilities, and obligations and assume
       ownership of the district's assets and facilities if:
       
       (1)  the municipality has a better investment grade credit
         rating from Standard & Poor's Investor Services, Inc., on
         its outstanding bonds; and
         
         (2)  the combined debt principal of the municipality and
         the district does not exceed 12 percent of the total
         assessed valuation of the municipality's property.
         
         (c)  Requires the municipality that assumes the district's
       debts, liabilities, and obligations and assumes ownership of
       the district's assets and facilities to levy an ad valorem
       tax for bond debt service as authorized by the district at
       the time of the district's dissolution on all property
       formerly in the district.  Prohibits a tax on the property
       outside the municipality's boundaries at the time of the
       district's dissolution from exceeding that area's pro rata
       share of the annual debt service obligations on the
       district's outstanding bonds.
       
       (d)  Prohibits the municipality from levying an ad valorem
       tax to pay annual debt service obligations on the district's
       outstanding bonds on property that at the time the district
       is dissolved, is not within the district.
       
       (e)  Authorizes the municipality to charge for water and
       sewer services to areas that are within the district but not
       within the municipality's boundaries rates not to exceed 125
       percent of the rates charged to residents of the
       municipality as necessary to provide services to those
       areas.
        
       SECTION 2.   Emergency clause.


SUMMARY OF COMMITTEE ACTION
S.B.731 was considered by the committee in a public hearing on
April 24, 1995.
The following person testified in favor of the bill: 
     Mr. Gary A. Louie, Mayor, City of Oak Ridge North,
representing himself.
The following person testified against the bill: 
     Ms. Kerstan Whitlow, representing herself.
The following persons testified on the bill: None (0).

The bill was reported favorably without amendment, with the
recommendation that it do pass and be printed, by a record vote of
8 ayes, 0 nays, 0 pnv, 1 absent.