JBM C.S.H.B. 2463 75(R)BILL ANALYSIS NATURAL RESOURCES C.S.H.B. 2463 By: Moffat 4-9-97 Committee Report (Substituted) BACKGROUND Current law (Section 53.029, Texas Water Code) permits fresh water supply districts located in a county of a population greater than 1.18 million or in a county adjacent to such a county to divide into two new districts. However, the district must meet the following requirements in order to divide: 1) there must be no outstanding bonded indebtedness and no ad valorem tax being levied; 2) after approval at an election, the powers of road district must be adopted. PURPOSE To permit districts which have converted into water control and improvement districts on or before the effective date of this Act to have elections and divide into two new districts. 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 Subchapter D, Chapter 51, Water Code by adding Sections 51.19151.193, 51.196 and 51.197 to provide as follows: Section 51.191. States that this Section applies only to a district converted under Subchapter B on or before the effective date of the Section. Further, this Sections states that a district that reserved, under Section 51.044, the powers provided by Sections 53.029-53.034, 53.040 and 53.041 after conversion under Subchapter B may divide into two or more new districts in the manner provided in those sections. This Section also requires such a district to conduct elections to divide into two or more districts in the manner provided by Sections 49.101 and 49.102(a)-(h) except that the ballots must be printed to permit voting for or against the proposition of dividing the district. Further, this section allows each district that results from a division of a district under this Section to divide into two or more districts in the same manner. Section 51.192. (a) States that this Section applies only to a district that, after conversion under Subchapter B reserved, under Section 51.044, the powers provided by Sections 53.029-53.034, 53.040, and 53.041 and was converted on or before the effective date of this Section. (b) Allows the governing body of a district that does not have bonded indebtedness to change the district's name by resolution. (c) Allows a district that has the rights, authority, privileges, and functions of a road district created under Article III, Section 52, Texas Constitution, to do the following: (1) acquire, construct, or finance a road, roadway, street, entry way, alley, easement, right-of-way, bridge, or drainage facility inside or outside the boundaries of the district, or inside the boundaries of a municipality if approved by the municipality's governing body; (2) enter into a franchise agreement; (3) grant a license; (4) grant a right-of-way; (5) enter into an agreement with a public utility to permit the utility's use of a district road, roadway, street, entry way, alley, easement, right-of-way, bridge, drainage facility or other facility or interest in real or personal property; and (6) use for any purpose revenue derived from an agreement entered under Subdivision (5). (d) Provides that the governing body of a district may exercise authority provided by this section without the approval or consent of another political subdivision, except as provided by Subsection (c)(1)(B) or an agreement that provides otherwise. (e) Requires that the district, at the district's sole expense, shall accomplish the alteration if in exercising the authority provided by this Section the district requires the alteration, including relocation, adjustment, raising, lowering, rerouting, or changing the grade or the construction of a: (1) street, alley, highway, overpass, underpass, road, railroad track, or bridge; (2) electric line or conduit; (3) telephone or telegraph line or conduit; (4) gas transmission or distribution pipeline, main, or other gas transmission or distribution facility or property; (5) water, sanitary sewer, or storm sewer pipe, pipeline, main, or other facility or property; or (6) cable television line, cable, or conduit. (f) Requires the district to pay damages suffered by owners of the property or facility because of an activity described by Subsection (e). Section 51.193. (a) States that this Section applies only to a district that after conversion under Subsection B reserved, under Section 51.044, the powers provided by Sections 53.02953.034, 53.040, and 53.041 and was converted on or before the effective date of this section. (b) Allows a person to present a petition to the governing body of a district requesting that the district undertake a particular development project. The Section also requires that the petition be signed by the holders of fee simple title to all of the land in the district; state the general nature of the proposed project and the cost of the project as estimated by the petitioners; and state the necessity and feasibility of the project and whether the project will serve the public purpose of attracting visitors and tourists to the district. (c) Requires that not later than the 60th day after the district receives the petition, the governing body shall set a date, time, and place for a hearing on the subject of the petition and provide notice provided in accordance with Sections 312.607 and 312.608, Tax Code. (d) Requires the governing body to examine the petition at the hearing to ascertain its sufficiency. This subsection also allows any interested party to appear before the governing body at the hearing and present testimony on the sufficiency of the petition and the question of whether the district should undertake the project. (e) Requires the governing body of the district to enter an order calling an election on the question of whether the district should undertake the project if, after the hearing, the body finds that: (1) the petition conforms to the requirements of this section; (2) the project is feasible and necessary, and (3) the project would attract visitors and tourists to the district. (f) Requires that the district's governing body deny the petition if the body finds none of the elements provided by Subsection (d). (g) Requires that an order calling an election under this section conform to Section 312.614, Tax Code. Requires that the district shall give notice of and hold the election in accordance with Sections 312.614-312.617, Tax Code. This Section also requires the ballots to be printed to permit voting for or against a proposition of permitting the district to: (1) undertake the proposed project, ad (2) impose a sales and use tax and a hotel occupancy tax. (h) Allows the governing body to exercise the powers of a district created under Subchapter D, Chapter 312, Tax Code, and impose a hotel occupancy tax as provided by, and subject to the limitations of, Section 352.107, Tax Code, if the voters approve the project and taxes under this Section. (i) Prohibits the district from pledging a sales and use tax imposed under this section to secure the payment of a bond or other obligation. (j) Allows the district to pledge a hotel occupancy tax imposed under this section to secure the payment of a bond or other obligation. Section 51.196. (a) Provides that a district created before the effective date of this section may acquire real property, personal property, or mixed property by a lease purchase contract. (b) Allows the district to make payments on a lease purchase contract from the District's annual revenues that accrue from the district's system and properties on approval by the governing body. (c) Allows the district to make payments on a lease purchase contract from tax revenues pledged to the payment of the contract if the tax is approved after an election held as provided by Section 49.108. Section 51.197. (a) Allows a district created before the effective date of this section to annex land adjacent to the district and provide services to that land as provided under section 49.301. In order to annex the land, the district must have a fresh water supply and sanitary sewer capacity that exceeds the amount necessary to provide water and sewer services to all property in the district, as well as the voter-approved bonding authority sufficient to provide these services. (b) Provides that, if the annexed property is not in the boundaries of a municipality, the annexation of the property is presumed valid and incontestable. However, if the property is in the boundaries or extraterritorial jurisdiction (ETJ) of a municipality before annexation, then the district must obtain written consent from the municipality. Finally, for the purposes of this section, property separated from the district by a public road is considered adjacent to the district. COMPARISON OF ORIGINAL TO SUBSTITUTE In the original, the changes and additions to the Water Code were made under Section 51.044 of the Water Code. However, in the substitute, the changes and additions to the Water Code were instead made by adding Sections 51.191- 51.193, 51.196, and 51.197 of the Water Code. Additionally, in the original, the power of a district to divide was not limited to districts which had converted by the effective date of the Act. However, in the substitute, the power to divide into two districts (as well as the powers and authorities given to the districts after division) is granted only to Water Control and Improvement Districts (WCIDs) which have converted to a WCIDs prior to the effective date of this Act and which reserved certain powers under Section 51.044, Water Code, at the time of conversion. Section 51.044(f)(2) of the original granted the authority to districts governed by the Act to acquire "interests in real and personal property." In the comparable Section of the substitute, Section 51.192(c)(1), the power of districts to acquire "interests in real and personal property" is deleted. Section 51.044(f)(2) of the original does not require the consent of a municipality for facilities to be acquired. However, in the comparable Section of the substitute, Section 51.192(c)(1)(B), the consent of a municipality to acquire, construct or finance facilities within a municipality is required. Section 51.044(f)(3) of the original a reference is made to "other facilities and property." In the comparable Section of the substitute, Section 51.192(e), this reference is deleted. Section 51.044(f)(4) of the original incorporates by reference the provisions of the County Development District Act. In the comparable Section of the substitute, Section 51.193, the steps which converted WCIDs must follow to conduct an election and adopt the powers of a county development district are specified. Further, in Section 51.193 of the substitute, the bill requires an election to adopt a hotel occupancy tax and prohibits the pledge of the sales tax to secure the payment of a bond or other obligation. None of these requirements are included in the original bill. Finally, in Section 51.044(f)(4) of the original, the district is given the authority to impose a hotel occupancy tax through incorporation of the County Development District Act. However, in the comparable section of the substitute, Sections 51.193(g)(2) and 51.193(j), the district is given the direct authority to pledge and impose a hotel occupancy tax after obtaining voter approval. Section 51.044(g)(1) of the original authorized all WCIDs to acquire real property with lease purchase contracts. In the comparable Section of the substitute, Section 51.196, only those WCIDs created before the effective date of the substitute have the authority to acquire real property with a lease purchase contract. Section 51.044(g)(2) of the original requires municipal consent to add land only if the lands being added are within the boundaries of the district. However, in the comparable Section of the substitute, Section 51.197, WCIDs are required to obtain the consent of a municipality if the lands being added to the WCID are within the ETJ or the boundaries of the municipality.