BILL ANALYSIS
S.B. 1663
By: Rosson (Serna)
5-16-95
Committee Report (Amended)
BACKGROUND
The Texas General Land Office, under the direction of the Texas
Land Commissioner and the School Land Board, manages the real
estate holdings of the Permanent School Fund. The fund owns a
4,500 acre block of land that is in the pathway of growth in east
El Paso County, but the land has no access to utilities.
PURPOSE
As proposed, S.B. 1663 sets forth provisions relating to the
creation, administration, powers, duties, operation, and financing
of the Paseo del Este Municipal Utility District; providing for the
authorization of bonds and the levy of taxes; providing civil
penalties.
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
ARTICLE 1. GENERAL PROVISIONS
SECTION 1.01. CREATION. (a) Creates a conservation and
reclamation district known as Paseo del Este Municipal Utility
District (district) which is a governmental agency and a body
politic and corporate.
(b) Provides that the district is created under and is
essential to accomplish the purposes of Article XVI, Section
59, Texas Constitution. Requires the district to have all of
the powers of the municipal utility districts (MUDs)
established under Chapter 54, Water Code, and the district to
conduct its affairs subject to Chapters 50 and 54, Water Code,
unless otherwise provided in this Act.
SECTION 1.02. TERRITORY. (a) Sets forth the territories that
constitute the district.
(b) Provides that the legislature finds that the boundaries,
patents or field notes of the district form a closure.
Provides that a mistake in the patents or field notes, or in
copying the patents or field notes in the legislative process,
does not affect the organization, existence, or validity of
the district, the rights of the district to issue bonds or
refunding bonds, or to pay the principal of or interest on the
bonds, the right of the district to levy and collect taxes, or
the legality or operation of the district or its board.
(c) Prohibits land included within the boundaries of a
special utility district created under Section 59, Article
XVI, Texas Constitution, which is subject to a district's
outstanding indebtedness secured by taxes or net revenues on
the effective date of this Act from being included within the
district. Provides that if the property described in
Subsection (a) includes any land subject to a tax or net
revenue pledge by a district, it shall be excluded, and the
remainder of this Act shall not be affected thereby.
ARTICLE 2. ADMINISTRATIVE PROVISIONS
SECTION 2.01. BOARD. Requires the district to be governed by, and
all powers of the district to be exercised by, a board of five
directors.
SECTION 2.02. DIRECTOR ELIGIBILITY. Requires a person, other than
initial directors, to be an owner of land in the district to be
eligible for appointment as a director. Requires a person to be a
member of the School Land Board or a resident of El Paso County or
Travis County to be eligible for appointment as an initial
director. Employment with a state agency shall not disqualify a
person for appointment to the board under Section 50.026, Water
Code.
SECTION 2.03. TERMS OF DIRECTORS AND APPOINTMENT PROCEDURES. (a)
Provides that directors, other than initial directors, serve
staggered four-year terms that expire September 1 of each odd-numbered year.
(b) Requires appointment of initial directors to be made
promptly by the School Land Board (school board) after this
Act takes effect. Requires the school board to appoint two
initial directors to serve terms expiring September 1, 1997,
and three initial directors to serve terms expiring September
1, 1999. Requires the school board to appoint a successor to
serve an unexpired term if an initial director dies, resigns,
or is otherwise removed. Requires a successor to be elected
as provided in Section 2.04 of this Act when a director's term
expires.
SECTION 2.04. ELECTION OF PERMANENT DIRECTORS. (a) Requires each
director to serve a term of office until his successor shall be
appointed or elected and qualified. Provides that elections for
permanent directors are to be held on the first Saturday in May of
each odd-numbered year, to serve until September 1 of the second
odd-numbered year after the expiration of two years from the date
of the election.
(b) Requires notice of elections to be given by the board by
publishing a copy once a week for two consecutive weeks in a
newspaper of general circulation in the district, the first
publication being at least 14 days prior to the election.
SECTION 2.05. QUALIFIED VOTERS. If any owner of over 500 acres of
land within the district is a constitutional fund of the state, the
members of the state board responsible for administering the land
holdings of such fund shall each be qualified voters within the
district
SECTION 2.06. QUALIFICATION OF DIRECTORS. Provides that no
person, except for initial directors, shall be qualified to serve
as a director unless the person resides in and owns taxable
property in the district. Requires initial directors to be over 18
years of age and residents of either El Paso County or Travis
County. Provides that no employee of the district shall serve as
director. Requires directors, except for the initial directors, to
subscribe the constitutional oath of office. Requires each
director to give bond for the faithful performance of duties as is
required by Section 54.116, Water Code, the cost of which shall be
paid by the district.
SECTION 2.07. MEETINGS AND ACTIONS OF BOARD. (a) Authorizes the
board to establish and hold regular and special meetings, to
conduct district business, within the district unless the board, by
a majority vote at a public meeting, votes to hold a meeting or
meetings outside the district.
(b) Requires a majority of the directors to constitute a
quorum of the board. Requires a vote of a majority of the
quorum present to be necessary to pass on any question before
the board. Authorizes the board to adopt bylaws to govern its
affairs and to adopt a seal for the district. Authorizes the
board to provide in the bylaws that, except for the initial
directors, each director shall receive a fee of $20 for
attending each meeting of the board, provided that not more
than $40 shall be paid to any director for meetings held in
any one calendar month.
SECTION 2.08. ORGANIZATION OF BOARD. Sets forth the composition
of the board. Requires the president to be the chief executive
officer of the district and the presiding officer of the board and
to have the same right to vote as any other director. Requires the
vice-president to perform all duties and exercise all powers
conferred by this Act upon the president when the president is
absent or fails or declines to act. Provides that the board shall
also appoint a secretary and a treasurer who may or may not be
members of the board, and to combine such offices. Requires the
treasurer, except for the initial treasurer, to give bond in such
amount as may be required by the board, but in no event less than
$100,000. Requires the condition of the bond to be that the
treasurer will faithfully account for all money which comes into
the treasurer's custody. Authorizes the amount of the official
bond of the treasurer to be fixed by the board of directors in an
amount not less than $5,000 until the district authorizes the
issuance of bonds.
SECTION 2.09. INTEREST IN CONTRACT. Requires a director who is
financially interested in a contract proposed to be executed by the
district for the purchase of property or services or the
construction of facilities to disclose the interest to the board
and may not vote on the acceptance of the contract.
SECTION 2.10. DISTRICT EMPLOYEES. Requires the board to have
authority to employ a general manager and all consulting engineers,
financial consultants, attorneys, and auditors. Sets forth certain
administrative duties of the general manager.
SECTION 2.11. EMPLOYEE BONDS. (a) Requires the general manager
and each employee of the district who is charged with the
collection, custody, or payment of any money of the district to
execute a fidelity bond in an amount determined by the board and in
a form and with a surety approved by the board.
(b) Requires the district to pay the premium on each employee
bond under this section.
SECTION 2.12. PRINCIPAL OFFICE. Authorizes the district to
maintain its principal office in either El Paso County or Travis
County; provided that, if the district maintains its principal
office in Travis county, it shall maintain duplicate records in El
Paso County, and the duplicate records to be available for
inspection during regular business hours. Requires the district to
maintain its office in El Paso County after it issues bonds.
SECTION 2.13. RECORDS. (a) Requires the district to keep certain
complete and accurate documents at its principal office.
(b) Requires the district to permit reasonable public
inspection of its records during regular business hours.
SECTION 2.14. SUIT. Authorizes the district to sue and be sued in
its corporate name.
ARTICLE 3. POWERS AND DUTIES
SECTION 3.01. POWERS AND DUTIES. (a) Requires the district to
administer and enforce the terms of this Act, use its facilities
and powers to accomplish the purposes of this Act, coordinate the
provision of certain utility services, and control and abate water
pollution within the district.
(b) Requires the district to submit for review to any
municipal corporation with a population in excess of 300,000
according to most recent federal census, provided the
corporate boundary of such municipal corporation is contiguous
to the district, its design plans and specifications in a
design for the utility infrastructure and related systems.
Requires the district, in connection with the submission, to
pay to the municipal corporation the fee for review, if any,
which has been established by municipal ordinance and has
general application for reviews of this type, and the
corporation to complete its review of the design plans and
specifications within 60 days after their delivery. In
connection with the constructing of its utility
infrastructure, the district shall meet or exceed the
construction standards with regard to materials and
installation specifications of any municipal corporation with
a population in excess of 300,000 according to the most recent
federal census, provided the corporate boundary of such
municipal corporation is contiguous to the district.
(c) Provides that the district has the authority to control
and abate water pollution within the district subject only to
the authority of the Texas Natural Resource Conservation
Commission (TNRCC). Provides that such authority of the
district will neither reduce nor eliminate the authority of a
municipal corporation to control and abate water pollution
within the district under applicable state or federal law.
(d) Requires the district to have all the powers, rights, and
privileges necessary and convenient for accomplishing the
purposes of this Act conferred by general law on any municipal
utility district or water control and improvement district
created under Section 59, Article XVI, Texas Constitution,
except as expressly limited by this Act.
(e) Provides that the powers granted to the district in this
Act are cumulative of all powers granted by other law.
SECTION 3.02. DISTRICT RULES. (a) Authorizes the district to
adopt and enforce rules reasonably required to implement this Act,
including rules governing procedure and practice before the board.
(b) Requires the district to print its rules and furnish
copies of the rules to any person on written request.
SECTION 3.03. INSPECTIONS AND INVESTIGATIONS. Authorizes the
district to enter public or private property in the district for
the purpose of inspecting and investigating conditions relating to
its authorized purposes under the same provisions and restrictions
applicable to the TNRCC.
SECTION 3.04. HEARINGS AND ORDERS. (a) Authorizes the board to
hold hearings, receive evidence from any party in interest who
appears before the board, compel the attendance of witnesses, and
make findings of fact and determinations with respect to
administering this Act or any order of rule of the district; and
delegate to one or more of its members or employees the authority
to take testimony and administer oaths in any hearing held or
authorized to be held by the district.
(b) Requires an order of the board to be in the district's
name and attested by members under the district's rules.
SECTION 3.05. CIVIL PENALTY; INJUNCTION. (a) Subjects a person
who violates a rule, permit, or order of the district to a civil
penalty of between $50 and $1,000 for each violation or each day of
a continuing violation.
(b) Authorizes the district to sue to enjoin a threatened or
present activity, or to recover the penalty, in a district
court in the county where the violation occurred. Requires
the penalty to be paid to the district.
SECTION 3.06. PERMITS; CONTRACTS; COOPERATIVE AGREEMENTS. (a)
Provides that the district is authorized to acquire certain permits
directly from TNRCC or from owners of permits; and to acquire water
or a water supply from any person, firm, corporation, municipal
corporation, public agency, the State of Texas, or from the U.S.
government, or any of its agencies (certain entities). Authorizes
the district, within the discretion of its board, to contract with
one or more substantial users of water to acquire such water supply
on an agreed allocation of storage space as between the district
and such user, or may contract independently for the district's
water supply. Provides that the district is authorized to collect,
transport, process, dispose of, and control all domestic,
industrial, or communal wastes (wastes), whether in fluid, solid,
or composite state. Provides that the district is authorized to
contract with certain entities for services relating to the
management of wastes. Provides that such contracting authority
includes the authority to enter into coordinated infrastructure
plans or regional utility plans.
(b) Provides that the district is authorized to enter into
contracts with the state, cities, and districts organized
pursuant to Article XVI, Section 59, Texas Constitution, and
others for supplying water or providing services pertaining to
wastes; and for the rental or leasing of, or for the operation
of certain water services and waste utilities for
consideration as the district, city, or other person may agree
on. Authorizes the contract to be upon terms and for the time
as the parties may agree, and it may provide that it shall
continue in effect until bonds or notes specified therein and
refunding bonds issued in lieu of the bonds or notes are paid.
Provides that all the cities and districts are authorized to
enter into contracts with the district and to fix, charge, and
collect fees, rates, charges, rentals, and other amounts for
any service or facilities provided pursuant to or in
connection with any contract with this district, and to pledge
such amounts sufficient to make all payments required under
the contract.
(c) Requires the district to encourage owners and developers
of land within the district to use and develop their land and
buildings in a manner consistent with certain land
developments and safety regulations of each adjacent municipal
corporation with a population in excess of 300,000 according
to the most recent federal census, with regard to land use
planning.
SECTION 3.07. FACILITIES. Provides the district is authorized to
make certain transactions and perform certain actions at any
location, in the sole discretion of the district, land, and any
interest in land, any and all works, improvements, facilities,
plants, equipment, and appliances incident, helpful, or necessary
to provide for certain water maintenance and waste maintenance.
Grants the district the authority to enter into any contract with
certain entities and to perform any other act consistent with the
powers herein granted to carry out any such power.
SECTION 3.08. ACQUISITION AND DISPOSITION OF PROPERTY. Provides
that the district is authorized to use any public roadway, street,
alley, or easement in El Paso County to accomplish its purposes,
without the necessity of securing a franchise or other governmental
agreement, provided that, with regard to the use of roadways,
streets, alleys, or easements which belong to an adjacent municipal
corporation with a population in excess 300,000, the district shall
obtain the written consent of the municipal corporation prior to
use within the corporate limits of the municipal corporation.
SECTION 3.09. RELOCATION OF FACILITIES. Requires construction to
be accomplished at the sole expense of the district, unless
otherwise agreed upon in writing by interested parties, in the
event that the district, in its exercise of its powers, makes
necessary the relocation, raising, rerouting, or changing the grade
of, or altering the construction of certain infrastructures;
provided, however, in the case of replacement, the cost of the
action to be limited to the comparable replacement of any replaced
facility, less the replaced facility's net salvage value.
ARTICLE 4. GENERAL FISCAL PROVISIONS
SECTION 4.01. DISBURSEMENT OF MONEY. Authorizes the district to
disburse money only by check, draft, order, or other instrument
signed by the person or persons authorized in the board's bylaws or
by board resolution.
SECTION 4.02. FEES AND CHARGES. Authorizes the district to
establish fees and charges not to exceed the amounts necessary to
enable the district to fulfill the obligations imposed on it by
this Act.
SECTION 4.03. LOANS AND GRANTS. Authorizes the district to apply
for and receive loans and grants from the federal government, the
state government, or any agencies thereof, or from a private
source, for the purpose of carrying out one or more its powers.
Authorizes the district to enter into any agreement in connection
with a loan or grant that does not conflict with federal or state
law.
SECTION 4.04. FISCAL YEAR. Requires the board to establish the
district's fiscal year.
SECTION 4.05. DEPOSITORY BANKS. (a) Requires the board to
designate one or more banks to serve as depository or depositories
for the funds of the district. Subject to Section 54.307, Water
Code, all funds of the district shall be deposited in the
depository bank or banks.
(b) Requires the board to publish notice at least once in a
newspaper of general circulation in the district requesting
applications from banks interested in serving as depository,
before designating a depository bank. Requires the notice to
include the time and location of the board meeting at which
the board proposes to designate a depository bank. Requires
the board to prescribe the term of service of a depository
bank.
(c) Requires the board to consider the applications received
and the management and condition of each bank that files an
application at the time stated in the notice required by
Subsection (b) of this section. Authorizes the board to
designate as a depository the bank or banks that offer the
most favorable terms and conditions for the handling of the
district's money and that have proper management and the
ability to handle the district's money properly. Provides
that membership of an officer or director of a bank on the
board of the district does not qualify the bank from being
designated as a depository.
(d) Authorizes the board to designate a bank or banks on such
terms and conditions as the board considers prudent if no
application is received by the time stated in the notice.
ARTICLE 5. BOND AND TAX PROVISIONS
SECTION 5.01. TAX; REVENUE BONDS. (a) Authorizes the district to
issue its bonds or other obligations in three general classes of
security for the purpose of carrying out any power or authority
conferred by this Act.
(b) Requires the obligations to be authorized by resolution
of the board and to be issued and validated by certain persons
and in a certain manner. Requires the obligations to be in
the form prescribed by the board, to be in any denomination or
denominations, to mature serially or otherwise in not to
exceed 50 years from their date, to bear any interest, and may
be sold at a price and under terms determined by the board to
be the most advantageous reasonably obtainable, and within the
discretion of the board, and to be made callable prior to
maturity at the times and prices prescribed in the
obligations, and to be made registrable as to principal or as
to both principal and interest. Authorizes the obligations to
be further secured by an indenture of trust with a corporate
trustee.
(c) Authorizes obligations to be issued in more than one
series as required for carrying out the purposes of this Act.
Authorizes any pledge of revenue to reserve the right, under
the conditions therein specified, to issue additional
obligations which will be on a parity with or subordinate to
the obligations then being issued.
(d) Provides that the district is an "issuer" for the purpose
of definitions in Article 717q, V.T.C.S.
(e) Authorizes the resolution authorizing the obligations or
the trust indenture further securing the obligations to
specify additional provisions which shall constitute a
contract between the district and the owners of such
obligations. Requires the board to have full discretion in
providing for the additional provisions.
(f) Prohibits the district from issuing bonds secured by or
otherwise encumbering Permanent School Fund (fund) land
contained within the boundaries of the district.
SECTION 5.02. BOND ANTICIPATION NOTES. Authorizes the district to
issue bond anticipation notes, that may or may not be secured by a
pledge of all or part of revenues of the district, for the purpose
of carrying out any one or more of its powers. Authorizes the
district to authorize the issuance of bonds for the purpose of
providing proceeds to pay the principal of and interest on bond
anticipation notes. Requires the bonds to be secured by a pledge
of all or part of the revenues of the district, and may be issued
on a parity with or subordinate to outstanding bonds of the issuer.
Provides that if a resolution or trust agreement authorizing the
issuance of bond anticipation notes contains a covenant to the
effect that such notes shall be payable from the proceeds of the
subsequently issued bonds, it shall not be necessary to demonstrate
for the purposes of receiving the approval of the attorney general
or registration by the comptroller that the revenues that may be
pledged to such notes will be sufficient to pay the principal of
and interest on the notes.
SECTION 5.03. REFUNDING BONDS. (a) Authorizes the district to
issue refunding bonds to refund outstanding bonds and interest
authorized by this Act.
(b) Authorizes refunding bonds to be issued to refund one or
more series of outstanding bonds, combine the pledges for the
outstanding bonds for the security of the refunding bonds, and
to be secured by other or additional revenues.
(c) Authorizes the refunding bonds to be issued without
having been authorized at an election. Provides that the
provisions of this Act applicable to the district's issuance
of other bonds, their security, their approval by the attorney
general, and the remedies of the holders are applicable to
refunding bonds.
(d) Requires refunding bonds to be registered by the
comptroller of public accounts on surrender and cancellation
of the bonds to be refunded. Authorizes the resolution
authorizing the issuance of refunding bonds to provide that
the bonds shall be sold and the resulting proceeds deposited
in the bank where the bonds to be refunded are payable, in
which case the refunding bonds may be issued in an amount
sufficient to pay the principal and interest of the bonds to
be refunded to their option or maturity date. Requires the
comptroller to register the refunding bonds without concurrent
surrender and cancellation of the bonds to be refunded.
SECTION 5.04. APPROVAL AND REGISTRATION OF BONDS. Requires
district bond review and approval to be governed by the provisions
of Subchapter F, Chapter 54, Water Code.
SECTION 5.05. TAXATION. (a) Authorizes the board to levy and
collect ad valorem taxes for the maintenance of the district and
its improvements or for administrative expenses of the district, or
for both purposes, in such amounts as are voted in accordance with
this Act, except for land owned by the fund.
(b) Prohibits the maintenance tax and administration tax from
exceeding the maximum rate voted, and the authorized rate
shall remain in effect until or unless changed by subsequent
vote.
SECTION 5.06. BONDS ARE AUTHORIZED INVESTMENTS. Requires all
bonds and notes of the district to be declared legal and authorized
investments for certain financial institutions and for the sinking
funds of political corporations or subdivisions of the state.
Requires the bonds and notes to be eligible to secure the deposit
of any and all public funds of the state, and of political
corporations or subdivisions of the state; and the bonds to be
lawful and sufficient security for deposits to the extent of their
value.
SECTION 5.07. PROPERTY: RENDITION; VALUATION; LEVY. (a)
Requires the rendition and assessment of property for taxation, the
equalization of values, and the collection of taxes for the benefit
of the district to be in accordance with the law applicable to
counties, insofar as such law can be made applicable, and except as
hereinafter specifically provided.
(b) Requires the tax assessor-collector of each county to act
as the tax assessor-collector for the district for property in
the district located in such county who is required to place
on the county tax rolls the additional column or columns
needed to show the taxes levied by the district and the amount
thereof, based on the value of property as approved and
equalized. Sets forth the amount of the fee to be paid to the
tax assessor-collector for assessing and collecting taxes.
(c) Requires all laws for the enforcement of state and county
taxes to be available to the district. Requires the district
to have the right to cause the officers of each county to
enforce and collect the taxes due to the district in that
county, as provided in the law for the enforcement of state
and county taxes.
(d) Requires taxes assessed and levied for the benefit of the
district to be payable and to become delinquent at the same
time, in the same manner, and subject to the same discount for
advance payment as taxes levied by and for the benefit of the
county in which the property is taxable. Requires the fee for
collecting delinquent taxes through prosecution of the suit to
be 15 percent of the taxes collected by the suit, to be paid
over and disbursed in each county as are other fees of office.
(e) Requires the board to levy the tax on all taxable
property in the district which is subject to taxation and to
immediately certify the tax rate to the tax assessors-collector of each county which lies inside the district
concurrently with the levy of county taxes by the
commissioners court.
ARTICLE 6. ADDITION OF LAND TO DISTRICT
SECTION 6.01. ANNEXATION. Authorizes other territory to be
included in the district as provided in Section 6.02, 6.03, and
6.04 of this Act.
SECTION 6.02. PETITION. (a) Authorizes the owner or owners of
land contiguous to the district or otherwise to file with the board
a petition requesting that there be included in the district the
land described in the petition by metes and bounds or by lot and
block number if there is a recorded plat of the area to be included
in the district.
(b) Requires the petition of the landowner or landowners to
add land to the district to be signed and executed in the
manner provided by law for the conveyance of real estate.
(c) Provides that the board shall hear and consider the
petition and may add to the district the land described in the
petition if it is considered to be the advantage of the
district and if the water system and other improvements of the
district are sufficient or will be sufficient to supply the
added land without injuring land already in the district.
SECTION 6.03. NOTICE AND HEARING. (a) Requires a petition
requesting the annexation of a defined area to be filed with the
secretary of the board, and to be signed by a majority in value of
the owners of land in the defined area or signed by 50 landowners,
if the number of landowners in such defined area is more than 50.
(b) Requires it to be the duty of the board to pass an order
fixing a time and place at which the petition for annexation
shall be heard which shall not be less than 15 days from the
day of the order calling the hearing.
(c) Requires the secretary to issue a notice setting forth
the time and place of the hearing and describing the area
proposed to be annexed. Requires notice of the hearing to be
given by posting copies of the notice in certain public places
for a certain time period.
(d) Authorizes the board, by order entered in its minutes
describing such area, to receive the proposed areas as an
addition to and to become a part of the district, if upon the
hearing of the petition it is found by the board that the
proposed annexation of the area to the district is feasible
and practicable and would be of benefit both to the area and
to part of the district. Provides that the order adding the
proposed territory to the district need not include all of the
land described in the petition, if on the hearing a
modification or change is found necessary or desirable by the
board.
SECTION 6.04. ANNEXATION ORDER. (a) Requires a copy of the order
adding or annexing land to the district, signed by a majority of
the members of the board and attested by the secretary of the
board, to be filed and recorded in the deed records of the county
or counties in which the district is located if the land is finally
annexed to the district.
(b) Requires the area to be a part of the district after the
order is recorded.
ARTICLE 7. EXCLUSION OF LAND FROM DISTRICT
SECTION 7.01. PETITION. (a) Authorizes the district, provided it
does not have any outstanding indebtedness secured by taxes or net
revenues of the district, to exclude land from the district by
petition of a landowner or on motion of the board.
(b) Requires a petition for exclusion of land to accurately
describe the land to be excluded by metes and bounds or by
reference to a plat recorded in the plat records of the county
or counties in which the land is located. Requires the
petition to be signed by certain persons and filed with the
district at least 15 days before the hearing on the petition
for exclusion and to clearly state the particular grounds on
which the exclusion is sought. Provides that only the ground
stated in the petition shall be considered.
SECTION 7.02. NOTICE AND HEARING. (a) Requires a hearing to be
held on any petition for exclusion, but shall not be required for
exclusion by motion of the board.
(b) Requires notice of the hearing to be published by the
board once a week for two consecutive weeks in one or more
newspapers of general circulation in the district. Requires the
first publication to appear at least 14 days and not more than 40
days before the date of the hearing.
(c) Requires the board to find that the district has no
obligations that will be impaired by the exclusion of the
land, the district will incur no obligations because of the
exclusion, and that the exclusion is in the best interests of
the district, before determining to exclude any land.
(d) Requires the board to enter an order excluding all land
meeting the conditions and to redefine the boundaries of the
district in order to embrace all land not excluded after
considering all engineering data and other evident presented
to it, if the board makes the findings set forth in Subsection
(b) of this section. Requires customers to remain customers
of district, and owners of lots to which water and wastewater
facilities have already been extended to also be allowed to
connect to the district's system and to be customers of the
district, if the land to be excluded contains water or
wastewater customers of the district.
SECTION 7.03. EFFECTIVE DATE OF ORDER EXCLUDING LAND. (a)
Provides that an order excluding land pursuant to a petition signed
by the owner or owners of the land to be excluded takes effect on
the date the board enters the order, except as provided by
Subsection (c) of this section.
(b) Provides that an order excluding land pursuant to a
petition signed by less than all of the owners to be excluded
takes effect if the district does not receive a timely
petition on the day following the petition deadline or if the
district receives a timely petition and the exclusion is
ratified at an election held for that purpose, except as
provided by Subsection (c) of this section.
(c) Requires all taxes levied and assessed by the district on
the land to be excluded to be fully paid before an order
excluding land under this section becomes effective.
SECTION 7.04. PETITION FOR RATIFICATION ELECTION. (a) Requires
the board to publish notice, if the board issues an order excluding
land pursuant to a petition signed by less than all of the owners
of the land to be excluded, describing the excluded land and
stating that the exclusion becomes final if the district does not
receive by a certain date a petition requesting a ratification
election that is signed by at least 10 percent of the qualified
voters that reside in the land area to be excluded.
(b) Requires notice of the exclusion to be published once a
week for two consecutive weeks in a newspaper of general
circulation in the district, and the first notice to be
published not later than the fifth day after the date of the
board's order. Provides that the board's order does not take
effect unless approved by a majority vote at a ratification
election held for that purpose of the residents of the
district, if the district receives, not later than the 25th
day after the date of the board's order, the petition
requesting a ratification election that is signed by at least
10 percent of the qualified voters that reside in the land
area to be excluded.
(c) Requires the notice of the election, the manner and time
of giving the notice, the manner of holding the election, and
qualifications of the voters to be governed by Subchapter E,
Chapter 51, Water Code.
ARTICLE 8. DIVISION OF DISTRICT
SECTION 8.01. CONDITIONS OF DIVISION. (a) Authorizes the
district, provided it does not have any outstanding indebtedness
secured by taxes or net revenues, to divide into two or more
districts; provided, however, no division shall occur that would
result in the creation of a district of less than 100 acres in
size. Authorizes the board to consider a proposal to divide the
original district or any district subsequently created by division,
upon petition of any landowner, or upon the board's own motion.
(b) Provides that it is not the intent of this Act to
encourage or promote the proliferation of numerous utility
providers within the subject territory, with regard to the
foregoing authority to divide the district into one or more
districts. Sets forth the intention of this Act.
SECTION 8.02. ELECTION; AUTHORITY OF NEW DISTRICTS. (a) Requires
the board to order an election to be held in the district to
determine whether the original district should be divided as
proposed, after the board of the original district has agreed upon
the terms and conditions of division and has prepared a metes and
bounds description of the proposed districts.
(b) Requires the board of the original district to be divided
if a majority of the qualified voters in the original district
vote in favor of the division. Requires the resulting
districts to be designated by consecutive letters,
corresponding to the number of the original district. Sets
forth an example. Provides that no other confirmation
election shall be necessary; provided, however, each resulting
district desiring to issue bonds payable wholly or partially
from ad valorem taxes shall be required to obtain
authorization for the issuance of such bonds by a majority
vote of the resident electors of such district voting in an
election called for that purpose. Requires notice of such an
election to be given as generally set forth for bond elections
in Chapter 54, Water Code. Requires each resulting district
desiring to levy a maintenance tax to be required to obtain
authorization by a majority vote of the qualified resident
electors of such district voting in an election called for
that purpose. Requires notice of such election to be given as
generally set forth for such elections in Chapter 54, Water
Code.
SECTION 8.03. APPOINTMENT AND ELECTION OF DIRECTORS. (a)
Requires the resulting districts to be separate districts and to be
governed as separate districts; provided that, however, during a
period of 90 days after the date of the election to approve
division, the board of the original district shall continue to act
on behalf of the original district to wind up its affairs, and the
directors of the original district shall continue to act as
directors of one of the resulting districts until the next general
election. Sets forth the schedule for appointing the five initial
directors to each resulting district. Authorizes a board member of
the original district to be appointed as a director of one of the
resulting districts.
(b) Requires the board of the new district to appoint a
successor to serve an unexpired term of an initial director
who dies, resigns, or is otherwise removed. Requires the
successor to be elected as provided in Section 2.04 of this
Act.
SECTION 8.04. PAYMENT OF DISTRICT DEBTS. Provides that the
current obligations and any bond authorizations of the original
district are protected and are not impaired after the division of
the original district into two or more districts. Authorizes the
debts to be paid by taxes, revenues, or assessments levied on the
land in the original district as if it had not divided or with
contributions from each of the resulting districts on terms stated
in the division proposed by the board and approved by the election
under Section 8.02 of this Act.
SECTION 8.05. AUTHORITY OF RESULTING DISTRICTS. Requires each of
the resulting districts to have the power to incur and pay debts
created by each district and in every respect have the full power
and authority of a district created and governed by the provisions
of this Act, after division. Requires each of the resulting
districts to have the authority to contract with one another for
the provision of water, wastewater, and other matters deemed
appropriate by the board.
SECTION 8.06. ASSUMPTION OF OBLIGATIONS. Requires each of the
resulting districts, after division, to assume the obligations of
the original district under any agreements or resolutions
consenting to the creation of the original district to the extent
that such agreements and resolutions do not impose obligations that
limit the district's powers and authority to issue bonds for any
purpose authorized by this Act. Requires any other obligations of
the original district to be divided pro rata among the resulting
districts either on an acreage basis or on such other terms as are
satisfactory to such resulting districts.
SECTION 8.07. NOTICE TO TEXAS NATURAL RESOURCE CONSERVATION
COMMISSION. Requires the original district that confirms a plant
for division to provide written notice of such plan to TNRCC within
30 days after a division election.
ARTICLE 9. ANNEXATION AND DISSOLUTION OF DISTRICT
SECTION 9.01. ANNEXATION. (a) Requires the annexing municipality
to assume all of the outstanding indebtedness of the district,
dissolve the district within six months of annexation and become
the owner of all district assets, refrain from imposing city taxes
on property located within the district at any time prior to
dissolution of the district, to provide certain municipal services,
and honor regional land use planning within the district.
(b) The annexing municipality may, following annexation and
dissolution of the district, impose water supply fees, impact
fees, and other assessments allowed by state law on property
previously located within the district, provided that the annexing
municipality shall not impose any such fee or assessment on
property which had received a utility service allocation by the
district or property for which site development has been authorized or on which site development has commenced,
notwithstanding Subsection (a),(4) of this section.
(c) Requires the district to transfer all district assets to
the annexing municipal corporation in accordance with the
instruments approved by the annexing municipal corporation and
the district on annexation of the district.
ARTICLE 10. AFFORDABLE HOUSING
SECTION 10.01. Requires a minimum of five percent of the
residential housing units within the district to be utilized for
the construction of affordable housing, such affordable housing to
be distributed among different residential areas within the
district. Defines "affordable housing."
ARTICLE 11. MISCELLANEOUS PROVISIONS
SECTION 11.01. NO TAXATION. Provides that the district in
carrying out the purposes of this Act shall not be required to pay
any tax or assessment on the project or any part thereof, and the
bonds and notes issued hereunder and their transfer and the income
therefrom, including the profits made on the sale thereof, shall at
all times be free from taxation within this state.
SECTION 11.02. FINDINGS RELATING TO PROCEDURAL REQUIREMENTS.
Provides that the requirements of proper and legal notice of the
this Act required to be furnished by the constitution and laws of
this state have been fulfilled and accomplished.
SECTION 11.03. Severability clause.
SECTION 11.04. Emergency clause.
Effective date: upon passage.
EXPLANATION OF AMENDMENTS
COMMITTEE AMENDMENT NO.1: (1) On page 7, line 10, after "of the
contract.", adds language providing that, in connection with
contracts entered into by the district, state officers and
employees, and/or officers and employees of political subdivisions
of the state, shall be considered employees of the district and
shall be subject to the provisions of Section 572.054, Government
Code, that apply to employees of the state.
(2) On page 13, line 20, before "(c)", inserts a new section
that provides that with regard to the financing of infrastructure
prior to the issuance of bonds, the district shall require each
developer of land within the district to provide a bond or other
surety to assure payment for such infrastructure; provides that
the bond or other surety shall be payable to the district in the
event of default in the payment of infrastructure indebtedness or
developer bankruptcy, receivership, or liquidation; provides that
upon receipt, the district shall apply all proceeds of such bond or
surety to payment of such infrastructure indebtedness.
SUMMARY OF COMMITTEE ACTION
S.B.1663 was considered by the committee in a formal meeting on May
16, 1995.
No testimony was received.
The committee considered one (1) amendment to the bill. The
amendment was adopted without objection.
The bill was reported favorably as amended to the House, with the
recommendation that it do pass and be printed, by a record vote of
7 ayes, 0 nays, 0 pnv, and 2 absent.