S.B. No. 731
AN ACT
1-1 relating to the authority to dissolve the Oak Ridge Municipal
1-2 Utility District and the assumption of its assets and obligations
1-3 by a municipality.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 615, Acts of the 60th Legislature,
1-6 Regular Session, 1967, is amended by adding Section 25 to read as
1-7 follows:
1-8 Sec. 25. (a) The district's board of directors may issue an
1-9 order that dissolves the district after:
1-10 (1) the board calls and conducts an election to
1-11 authorize dissolution of the district in the manner provided by
1-12 Chapter 54, Water Code, for an election to approve issuance of
1-13 bonds;
1-14 (2) a majority of the resident electors who vote in an
1-15 election authorized by Subdivision (1) vote for the proposition:
1-16 "The dissolution of the district";
1-17 (3) the board creates a special reserve fund
1-18 consisting of a sum certain from money contained in the district's
1-19 bond retirement fund; and
1-20 (4) a qualified municipality issues an ordinance by
1-21 which, on a specified date after the dissolution of the district
1-22 that is not later than the 90th day after the date an election is
1-23 held under Subdivision (1), the municipality agrees to:
1-24 (A) assume the district's debts, liabilities,
2-1 and obligations;
2-2 (B) assume ownership of the district's assets
2-3 and facilities;
2-4 (C) perform the district's functions and provide
2-5 all services previously provided by the district; and
2-6 (D) use the money in the district's special
2-7 reserve fund created under Subdivision (3) only to retire debt
2-8 incurred by the district, unless another purpose is approved by at
2-9 least four members of the municipality's governing body.
2-10 (b) A municipality is qualified to assume the district's
2-11 debts, liabilities, and obligations and assume ownership of the
2-12 district's assets and facilities if:
2-13 (1) the municipality has, at the time of assumption, a
2-14 "bbb" or better investment grade credit rating from Standard &
2-15 Poor's Investor Services, Inc., on its outstanding bonds, if any;
2-16 and
2-17 (2) the combined debt principal of the municipality
2-18 and the district does not exceed 12 percent of the total assessed
2-19 valuation of the municipality's property, as determined by the most
2-20 recent valuation certified by the applicable county appraisal
2-21 district.
2-22 (c) The municipality that assumes the district's debts,
2-23 liabilities, and obligations and assumes ownership of the
2-24 district's assets and facilities shall levy an ad valorem tax for
2-25 bond debt service as authorized by the district at the time of the
2-26 district's dissolution on all property formerly in the district,
2-27 including property outside the municipality's boundaries, but the
3-1 tax on the property outside the municipality's boundaries at the
3-2 time of the district's dissolution may not exceed that area's pro
3-3 rata share of the annual debt service obligations on the district's
3-4 outstanding bonds.
3-5 (d) The municipality may not levy an ad valorem tax to pay
3-6 annual debt service obligations on the district's outstanding bonds
3-7 on property that, at the time the district is dissolved, is not
3-8 within the district.
3-9 (e) The municipality may charge for water and sewer services
3-10 to areas that, at the time the district is dissolved, are within
3-11 the district but not within the municipality's boundaries rates not
3-12 to exceed 125 percent of the rates charged to residents of the
3-13 municipality as necessary to provide services to those areas.
3-14 SECTION 2. The importance of this legislation and the
3-15 crowded condition of the calendars in both houses create an
3-16 emergency and an imperative public necessity that the
3-17 constitutional rule requiring bills to be read on three several
3-18 days in each house be suspended, and this rule is hereby suspended,
3-19 and that this Act take effect and be in force from and after its
3-20 passage, and it is so enacted.