BLS H.B. 3597 75(R) BILL ANALYSIS NATURAL RESOURCES H.B. 3597 By: Williamson 5-5-97 Committee Report (Unamended) BACKGROUND An entity is needed in the rural areas of Parker County to provide for the orderly development of water and wastewater services. A utility district created under Section 59, Article XVI, with the powers of Chapters 49, 54, and 65, Water Code, would provide these needed services. PURPOSE To create the Parker County Utility District No. 1 to provide water and waste water facilities for the rural areas of Parker and Wise Counties. 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. (a) Creates the Parker County Utility District No. 1. This section also provides that the district is a governmental agency and a body politic and a corporate. (b) Provides that the district is created under and is essential to accomplish the purposes of Article XVI, Section 59, Texas Constitution. SECTION 1.02. Provides definitions used in the bill. SECTION 1.03. Provides the purpose of the bill is to: (1) purchase, own, hold, lease, or otherwise acquire wastewater collection facilities; (2) build, operate, and maintain facilities to treat and transport wastewater; (3) to protect, preserve, and restore the purity and sanitary condition of water within the district, and (4) to provide other utilities within the district if the utilities are not otherwise provided. SECTION 1.04. Sets forth the boundaries and territory included in the district. SECTION 1.05 Sets forth the finds of the legislature relating to the boundaries of the district. SECTION 1.06. Sets forth the findings of benefits to all of the land in the district. SECTION 1.07 Sets forth the legislative findings of state benefit. SECTION 1.08. (a)Sets forth the powers of the district as provided by the general law of this state, including Chapters 49, 54, and 65, Water Code. (b) Provides that the district may not levy or collect ad valorem taxes. (c) Provides that the rights, powers, privileges, authority, functions, and duties of the district are subject to the continuing right of supervision of the TNRCC. SECTION 1.09 Provides that a confirmation election is not required. SECTION 2.01 (a) Provides the district is governed by a board of directors. (b) Provides the governing bodies of the City of Springtown and Walnut Creek Special Utility District shall each appoint three initial directors. (c) Provides that initial directors shall serve until permanent directors are appointed. (d) Provided the County Judge of Parker county, or his designee, shall serve as an ex officio director. (e) Provides permanent directors shall be appointed not earlier than April 1 or later than April 30, 1998. (f) Provides for the appointment of directors by member entities. (g) Provides for the appointment of directors not later that April 1 and not later than April 30 of each year after 1998. (h) Provides that permanent directors serve staggered four year terms, unless required under subsection (j) to serve less than four years. (i) Provides that permanent directors appointed begin serving on May 1 of each year. (j) Provides that, for purposes of staggering the terms of directors, the board shall develop a procedure to determine which directors appointed under subsections (e) through (g) shall serve four-year terms and which shall serve terms of less than four years. (k) Provides provisions to fill a vacancy. (l) Provides that the appointment of a director is invalid unless made as provided in this act. (m) Provides a participant entity or customer may not appoint a director for any reason. SECTION 2.02. Delineates provisions for removal of directors. SECTION 2.03. Set forth the qualifications for directors SECTION 2.04 Provides that all directors, to include the chairman, may vote on any matter considered by the board. SECTION 2.05 (a) Provides that no director may receive compensation for serving on the board. (b) Provides that a director may receive reimbursement for travel or other expenses reasonably incurred by the director while acting on behalf of the district. SECTION 2.06 Provides the board may appoint or elect ex officio directors, and provide for the powers and duties of such directors in the bylaws, rules or regulations of the district. SECTION 2.07. Provides that the board has exclusive authority to manage the district. SECTION 2.08. Sets forth the powers and duties of the board of directors. SECTION 2.09. (a) Provides that officers will be elected at the first board meeting following the appointment of initial directors. Officers shall be elected from the initial directors. (b) Provides for the elections of officers under Section 2.01(e) (c) Provides that each subsequent year at the first board meeting following the appointment of the directors under Section 2.01(g) the board will elect from the directors new officers for the district. (d) Provides that officers serve until the election of new officers. SECTION 2.10. Delineates the powers and duties of the officers SECTION 2.11 Provides that the board my appoint and employ persons, firms, corporations, partnerships, or other entities that the board determines is necessary to conduct the affairs of the district. SECTION 2.12. Provides that the officers and directors are subject to the conflict of interest provisions of Chapter 572, Government Code. SECTION 2.13. Provides the open records provisions of Chapter 551, Government Code, apply to the district. SECTION 2.14. Provides that a quorum of the directors of the district is required to be present at a board meeting for the board to conduct district business., and provides the bylaws must provide what constitutes a quorum, except that a quorum may not be less than a majority of the directors serving on the board. (b) Provides the bylaws shall specify the number of votes necessary to approve a matter considered by the board, except that the number of votes specified may not be less than a majority of the directors present at the meeting. SECTION 2.15 Provides for the establishment of a customer advisory council. SECTION 2.16. Provides that the district may charge an annual pro rata fee to pay for administration and planning costs incurred by the district. Such fee may not exceed $2.00 per member entity per capita population of the member entity, unless the board and at least 75 percent of the member entities of the district agree to a different fee. SECTION 2.17 Provides for the expansion of district boundaries if the boundaries of the member entity are contiguous to the boundaries of the district, and the requested expansion is approved by a three-quarters majority vote of the directors of the district. SECTION 2.18. Provides the board may adopt and enforce reasonable rules and regulations to exercise the powers and perform the duties of the board. SECTION 3.01 (a) Provides the district may provide wastewater collection, treatment, or service within the district. (b) Provides the district may own, operate, and provide other necessary utilities and services within the district, to include raw water, potable water, water distribution and treatment , solid waste, collection and disposal, fire, police, and ambulance services, if the right to own, operate, or provide the utility or service has not been conveyed to another entity. (c) Provides that they district is not required to own, operate, or provide other necessary utilities or services unless the district is required to under its permit, certificate, or license issued by the state. SECTION 3.02. Delineates protection provisions for customers and other entities in the district. SECTION 3.03 Provides that the district may purchase, construct, or acquire works and facilities. SECTION 3.04 Provides that the district is a political subdivision for the purposes of Chapter 395, Local Government Code. SECTION 3.05. Delineates additional powers of the district. SECTION 3.06. Grants the district the right of eminent domain and prescribes procedures and limitations on the exercise of this power. SECTION 3.07. Provides that the district may provide services outside the service area of the district as provides by state law. SECTION 3.08. Provides the district may establish, acquire, operate, and maintain a regional solid waste disposal system and a nonhazardous liquid waste disposal system. SECTION 3.09. Provides the district may adopt and enforce rules relating to protection of the quality of water flowing to or from the areas in or surrounding the lakes, reservoirs, and other sources of water supply owned, operated, or controlled by the district, consistent with rules and regulations of the state. SECTION 3.10. Provides that the district may adopt, enforce, and collect all assessed charges, fees, rates, and rentals that are necessary to provide services and facilities to customers and users of the district. SECTION 3.11. Provides the district and the land within the district are subject to any ordinances, codes, resolutions, rules, or regulations of a municipality, including platting and zoning requirements, that have jurisdiction over territory within the district. SECTION 3.12. Provides the district may enter into contracts with the United States, any agency of the state of Texas, a municipality, county, water supply corporation, an entity created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, or other public or private entities. SECTION 3.13. Provides that the entities identified in Section 3.12 above, may contract with the district. SECTION 3.14. Provides the board of directors , by order or resolution, shall designate one or more bank inside the district to serve as depository for the funds of the district. SECTION 3.15. Provides the district may enter into agreements with local governments under the Interlocal Cooperation Act, Chapter 791, Government Code, and enter into joint agreements or contracts with a water supply corporation, municipality, an entity created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, a county, a political subdivision of the state, the state, or other private or public entity. . SECTION 4.01 Requires that all funds and accounts of the district by audited by an independent auditor. SECTION 4.02. Provides the district may pay the costs and expenses incurred in obtaining the Walnut Basin Regional Wastewater Study, and if conducted, other feasibility studies and other costs and expenses incurred in creating and organizing the district, including reimbursement of costs and expenses incurred by the City of Springtown and the Walnut Creek Special Utility District. SECTION 4.03. Provides that the functions of the district are essential public functions under the Texas Constitution , and is not required to pay any tax or assessment on any property or project owned, operated, leased, or controlled by the district. SECTION 5.01. Provides the district may issue bonds to provide district funds to carry out the purposes and exercise the powers of the district. SECTION 5.02 (a) Provides that obligations created from the issuance of bonds may be made payable from all or part of the revenues of the district derived from any lawful source, including revenues derived from a contract with a customer or other user of facilities owned or operated by the district, and may be paid from and secured by liens on the pledges of all or part of the revenue, income, or receipts derives from the districts ownership, operation, lease, or sale of property, or revenues from contracts with any person, firm, corporation, municipality, public agency, or other political subdivision or entity. (b) Provides that bonds and other obligations of the district may be additionally secured my mortgages or deeds of trust on real property owned or to be acquired by the district and by chattel mortgages or liens on personalty appurtenant to the realty. The board may authorize certain encumbrances. The district may also pledge certain receivables to the payment of the obligations. (c) Provides that the district may pledge all or part of the district's revenue, income, or receipts from fees, rental, rates, charges, or contract proceed or payments to the payment of the district's bonds. (c) Defines payments and revenues that are pledged for the benefit of the district are those revenues of the district set forth in Section 3.13(a) and (b) Article 3 of this act. SECTION 5.03. Provides the terms and conditions for any bonds or other obligations of the district. SECTION 5.04 Provides that obligations under this article are negotiable instruments for the purposes of Chapter 8, Business and Commerce Code. SECTION 5.05. Provides for the use of proceeds from any bonds. SECTION 5.06. (a)Provides that all bonds issued by the district and the appropriate proceedings authorizing the issuance of the bonds shall be submitted to the attorney general for examination under Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987, (Article 717k-8 Vernon's Texas Civil Statutes). (b) Provides that the district may issue bonds and other obligations as provided by Article 717q, Vernon's Texas Civil Statutes, and as provided by the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes). SECTION 6.01. (a)Provides that upon receipt of a petition submitted by the governing body of a local government, other political subdivision, or private entity, the board may add a member entity to the district. (b) Provides a petition must be submitted as provided by district bylaws. (c) Provides the board shall give notice and hold a hearing on the petition to determine if adding the member entity to the district will benefit the territory or service area with the member entity, and is in the best interest of the district. (d) Provides, if accepted, the board shall issue an order adding the member entity and the territory of service area of the member entity to the district; making the member entity subject to the privileges, duties, assets, and financial obligations of the district. (e) Provides the board shall require that the member entities added to the district must reimburse the existing member entities of the district for the costs incurred in creating and operating the district . Reimbursement under this subsection must be an equitable pro rate share of the costs paid by the existing member entities of the district. SECTION 6.02. Provides for the appointment of directors by a new member entity. SECTION 7.01 (a) Requires the governing bodies of the City of Springtown and the Walnut Creek Special Utility District to appoint the appropriate number of initial directors not later than the 30th day after the effective date of this act. (b) Provides that the County Judge of Parker County, Texas shall begin serving as an ex officio director on the effective date of this act. SECTION 7.02 (a) Provides that the proper and legal notice setting forth the substance of this Act has been published a provided by law. Provides that a notice of a copy of this Act has been furnished to the required person, agencies, officials and entities according to the constitution and other laws of this state. (b) Provides that the TNRCC has filed its recommendations relating to this Act with the governor, lieutenant governor, and the speaker of the house of representatives within the required time. (c) Provides that all requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished. SECTION 7.03. Emergency clause and effective date upon passage.