JBM H.B. 3549 75(R)BILL ANALYSIS NATURAL RESOURCES H.B. 3549 By: Lewis, Ron 4-16-97 Committee Report (Amended) BACKGROUND This bill will create a conservation and reclamation district in southern Newton County and northern Orange County in the state of Texas. The area is served currently with water service by the South Newton Water Supply Corporation. However, public sanitary sewer service is not available, and all sewer systems are private on-site systems. Further, Newton County, Texas, was designated by the Texas Water Development Board (TWDB) as qualifying for assistance in financing waterworks and wastewater improvements under the TWDB's Economically Distressed Area Program. The Board of Directors of the South Newton Water Supply Corporation together with an advisory board decided to create a governmental entity to provide for improved water and a wastewater collection system. In order to accomplish this, the group plans to use financing available through the TWDB. Conversion of the South Newton Water Supply Corporation to the South Newton Special Utility District is provided for in accordance with Chapter 65 of the Texas Water Code, which contemplates the conversion of member-owned water supply corporations to special utility districts. The South Newton Water Supply Corporation currently holds a certificate of convenience and necessity issued by the Texas Natural Resource Conservation Commission (TNRCC) for provision of water service only. PURPOSE To create a conservation and reclamation district to be known as the South Newton Special Utility District. The District will be subject to voter approval at a confirmation election as specified in the bill. 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. Creates the South Newton Special Utility District as a conservation and reclamation district in accordance with Article XVI, Section 59, Texas Constitution. SECTION 2. Defines "district" for purposes of the Act. SECTION 3. Establishes the boundaries of the District; provides that they do not overlap with any other governmental entities providing water or sewer services and do not enter the extraterritorial jurisdiction of any city. SECTION 4. Establishes that the boundaries are to form a closure. SECTION 5. Establishes that the land and property within the boundaries of the proposed district will be benefited by its proposed expansion of water and construction of sanitary sewer service system and as such serve a public use and benefit. SECTION 6. Provides that the district would have the powers conferred on special utility districts under Chapter 49 of the Water Code and under Chapter 65, which allows the utility district to operate as a non-taxing, revenue-only district. The operations of the district would be under the continuing supervision of the TNRCC. SECTION 7. Provides that the district would be governed by a board of seven directors, five of the members to be residents of Newton County and two to be residents of Orange County. This would be amended as necessary to comply with federal law to meet popular requirements. SECTION 8. Provides that the initial directors serve until permanent directors are appointed; permanent directors are to serve staggered four year terms. SECTION 9. Provides that the temporary directors are comprised of three current Board members, three members of the Advisory Board and a resident from Orange County who has not previously served as either a Board member of the South Newton Water Supply Corporation or the Advisory Board. SECTION 10. Establishes that the temporary board will call and hold confirmation elections and elect seven directors. SECTION 11. Establishes that, on the first Saturday in May of the first even numbered year following a confirmation election, an election will be held for board of directors members; four shall serve two-year terms and three shall serve four-year terms; on the same date in subsequent years, the appropriate number of members shall be elected. SECTION 12. Establishes that, as a special utility district, the South Newton Special Utility District shall issue bonds and pay for them through collection of ad valorem taxes and revenues as authorized by Chapter 65 of the Water Code; the District is also granted additional powers as may be necessary and beneficial for providing potable water and treating wastewater within the district. SECTION 13. Provides that the facilities of the district shall be those as are necessary to be designed and constructed for the enhancement of the water supply system of the current Water Supply Corporation and to allow for the collection, treatment and disposal of sewage, including solid waste; the District will have to hold public hearings on the adoption of standards for facilities within the district and will have to give notice of the hearings to the TNRCC; all district standard specifications shall be filed with the Commission. SECTION 14. Provides that the District is authorized to acquire any existing water, sewer or other systems inside or outside the boundaries of the district. SECTION 15. Establishes that all procedural requirements have been met. SECTION 16. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1: In Section 12, the amendment strikes the words "ad valorem taxes and" on page 7, line 6, between the words "through" on line 5 and "revenues" on line 6.