JBM H.B. 2919 75(R)BILL ANALYSIS NATURAL RESOURCES H.B. 2919 By: Stiles 4-2-97 Committee Report (Amended) BACKGROUND The Lower Neches Valley Authority (LNVA) was created in 1933 by the 43rd Legislature. Its purpose was and still is to promote the delivery of a dependable water supply and distribution system to serve the expanding industrial, municipal and agricultural water requirements in the lower Neches Basin. The LNVA has the power to construct, maintain and operate facilities. With no authority to levy taxes and no funding appropriated, the LNVA operates as a non-profit organization relying on the revenue generated by the sale of water and services. Currently, a 55 member staff manages five pumping plants and 400 miles of canals and associated structures operated by the LNVA. A nine member Board, appointed by the Texas Water Development Board (TWDB) and confirmed by the Senate following statutory membership requirements, is responsible for setting LNVA policy and overseeing its operations. The LNVA is one of only two river authorities appointed in this manner. Seventeen out of the twenty-two river authorities in the state are appointed by the governor, with approval by the Senate; two river authority boards are elected; and one is appointed by the Commissioner's Court in its service area. In January 1996, the House Committee on Natural Resources was charged to conduct an interim study to review the design, mission, and goals of the LNVA. A subcommittee appointed to address this charge conducted a public hearing on April 10, 1996. Changes to the LNVA contained in this bill are the result of the subcommittee's recommendations. PURPOSE To implement the recommendations of the Subcommittee on the Lower Neches Valley Authority regarding appointment of the Board of Directors and the mission of the LNVA to increase economic development efforts in its service area. 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 Section 3, Chapter 63, Acts of the 43rd Legislature, 1st Called Session, 1933 (Article 8280-103, Vernon's Texas Civil Statutes), as follows: Sec. 3. Changes the appointment of the Board from the TWDB to the governor; changes who can remove a director from majority vote of TWDB to the governor; changes who a newly appointed director must file a bond with, and get approval on, from TWDB to the secretary of state; requires directors to employ a general manager. SECTION 2. Redesignates Section 13(one), Chapter 63, Acts of the 43rd Legislature, 1st Called Session, 1933(Article 8280-103, Vernon's Texas Civil Statutes) as Section 13A. SECTION 3. Amends Chapter 63, Acts of the 43rd Legislature, 1st Called Session, 1933 (Articles 8280-103, Vernon's Texas Civil Statutes) by adding Section 13B to provide as follows: (a) Allows the district to sponsor or participate in economic development programs within or outside the areas served by the district. (b) Requires each program to be established by formal action of the Board; requires the Board to establish goals of the program, impose participation requirements on persons receiving benefits of the program, provide necessary restrictions, procedures, and budget limits to ensure that governmental purposes are achieved. (c) Allows programs under this section to include grants or loans of money, services or equipment to people engaged in economic development activities. (d) Allows the district to employ staff and expend resources to further an economic development program, except that the district may not use property tax revenue or general appropriation to further a program; allows the district to apply for grants and receive monetary assistance from any source to carry out an economic development program. (e) Allows the district and any other public or private person to enter into an agreement regarding an economic development program. (f) Requires the district to adopt guidelines if it provides scholarships, grants, loans, or financial assistance to a public fire-fighting organization; sets out requirements for what the guidelines must determine. (g) Provides that a determination by the Board that a program is intended and expected to carry out the program's purpose is conclusive for satisfying this section. (h) Defines economic development program for the purposes of this section. SECTION 4. Finds that the economic development programs authorized by additions to this Act to be a specific public purpose and governmental function of the LNVA in accordance with Section 52-a, Article III, Texas Constitution; and for assistance to public fire-fighting organizations, Section 51-a-1, Article III, Texas Constitution. SECTION 5. Provides that the effective date for Section 1 does not affect the entitlement of a director serving on the Board on May 1, 1997 to continue to hold office for the remainder of the term; requires the governor to appoint directors as vacancies occur after the effective date of Section 1. SECTION 6. Effective date: September 1, 1997; except as provided by Section 7. SECTION 7. Provides that amendments to Section 3, Chapter 63, Acts of the 43rd Legislature, 1st Called Session, 1933, take effect immediately. SECTION 8. Emergency clause. EXPLANATION OF AMENDMENTS Committee amendment #1: In Section 3 of the bill, proposed Subsection 13B(a) of Chapter 63, Acts of the 43rd Legislature, 1st Called Session, 1933, is amended to clarify that the district may sponsor and participate in an economic development program only within the areas served by the district, except that the program may be outside the areas served by the district if the district has entered into an interlocal agreement with an entity under Subsection (c) of this Section 3 of the bill.