By Galloway S.B. No. 731
74R4179 KKA-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority to dissolve the Oak Ridge Municipal
1-3 Utility District and the assumption of its assets and obligations
1-4 by a municipality.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 615, Acts of the 60th Legislature,
1-7 Regular Session, 1967, is amended by adding Section 25 to read as
1-8 follows:
1-9 Sec. 25. (a) The district's board of directors may issue an
1-10 order that dissolves the district after:
1-11 (1) the board calls and conducts an election to
1-12 authorize dissolution of the district in the manner provided by
1-13 Chapter 54, Water Code, for an election to approve issuance of
1-14 bonds;
1-15 (2) a majority of the resident electors who vote in an
1-16 election authorized by Subdivision (1) vote for the proposition:
1-17 "The dissolution of the district";
1-18 (3) the board creates a special reserve fund
1-19 consisting of a sum certain from money contained in the district's
1-20 bond retirement fund; and
1-21 (4) a qualified municipality issues an ordinance by
1-22 which, on a specified date after the dissolution of the district
1-23 that is not later than the 90th day after the date an election is
1-24 held under Subdivision (1), the municipality agrees to:
2-1 (A) assume the district's debts, liabilities,
2-2 and obligations;
2-3 (B) assume ownership of the district's assets
2-4 and facilities;
2-5 (C) perform the district's functions and provide
2-6 all services previously provided by the district; and
2-7 (D) use the money in the district's special
2-8 reserve fund created under Subdivision (3) only to retire debt
2-9 incurred by the district or improve facilities previously owned or
2-10 managed by the district, unless another purpose is approved by at
2-11 least four members of the municipality's governing body.
2-12 (b) A municipality is qualified to assume the district's
2-13 debts, liabilities, and obligations and assume ownership of the
2-14 district's assets and facilities if:
2-15 (1) the municipality has, at the time of assumption, a
2-16 "bbb" or better investment grade credit rating from Standard &
2-17 Poor's Investor Services, Inc., on its outstanding bonds, if any;
2-18 and
2-19 (2) the combined debt principal of the municipality
2-20 and the district does not exceed 12 percent of the total assessed
2-21 valuation of the municipality's property, as determined by the most
2-22 recent valuation certified by the applicable county appraisal
2-23 district.
2-24 (c) The municipality that assumes the district's debts,
2-25 liabilities, and obligations and assumes ownership of the
2-26 district's assets and facilities shall levy an ad valorem tax for
2-27 bond debt service as authorized by the district at the time of the
3-1 district's dissolution on all property formerly in the district,
3-2 including property outside the municipality's boundaries, but the
3-3 tax on the property outside the municipality's boundaries at the
3-4 time of the district's dissolution may not exceed that area's pro
3-5 rata share of the annual debt service obligations on the district's
3-6 outstanding bonds.
3-7 (d) The municipality may not levy an ad valorem tax to pay
3-8 annual debt service obligations on the district's outstanding bonds
3-9 on property that at the time the district is dissolved, is not
3-10 within the district.
3-11 (e) Except as provided by Subsection (f), the municipality
3-12 may charge for water and sewer services to areas that, at the time
3-13 the district is dissolved, are within the district but not within
3-14 the municipality's boundaries rates that are higher than rates
3-15 charged within the municipality's boundaries as necessary to
3-16 provide services to those areas and may charge those areas their
3-17 pro rata shares of new debt service obligations incurred by the
3-18 municipality after dissolution of the district and related to the
3-19 provision of water and sewer services.
3-20 (f) Before the second anniversary of the date of the
3-21 dissolution of the district, the municipality may not charge for
3-22 water and sewer services to areas that, at the time the district is
3-23 dissolved, are within the district but not within the
3-24 municipality's boundaries rates that exceed the total effective
3-25 cost of services, after applying any available income tax
3-26 deductions related to the services, in the areas immediately before
3-27 dissolution.
4-1 SECTION 2. The importance of this legislation and the
4-2 crowded condition of the calendars in both houses create an
4-3 emergency and an imperative public necessity that the
4-4 constitutional rule requiring bills to be read on three several
4-5 days in each house be suspended, and this rule is hereby suspended,
4-6 and that this Act take effect and be in force from and after its
4-7 passage, and it is so enacted.