JBM S.B. 1656 75(R)BILL ANALYSIS NATURAL RESOURCES S.B. 1656 By: Truan (Rangel) 4-30-97 Committee Report (Unamended) BACKGROUND The Sebastian Municipal Utility District (MUD) was created by the Texas Natural Resource Conservation Commission (TNRCC) under general law powers in Chapter 54, Water Code. The MUD was created out of and replaced the Sebastian Water Supply Corporation (WSC). General law MUDs are governed by Chapter 54, Water Code. There is no legislation specific to Sebastian. Sebastian is a colonias which received a $3 million grant and $60,000 loan from the Texas Water Development Board (TWDB) to construct a wastewater system. The water system already existed and had been operated by Sebastian WSC. A MUD board can dissolve a district only if it has not issued bonds. Sebastian's loan from the TWDB is in the form of bonds so the board of directors of the Sebastian Municipal Utility District cannot dissolve the district without legislative permission. This legislation would provide for another water supplier to assume the MUD's debt. PURPOSE To outline provisions regarding the authority to dissolve the Sebastian Municipal Utility District or transfer certain of its assets and obligations. 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. DEFINITIONS. Defines "board," "district," and "corporation." SECTION 2. AGREEMENT AND ORDER RELATING TO DISSOLUTION OF DISTRICT. Sets forth instances in which a qualified water supply corporation as described by Section 7 of this Act (corporation) is authorized to enter into an agreement with the Sebastian Municipal Utility District (district) relating to dissolution of the district. Requires the board of directors of the Sebastian Municipal Utility District (board) to issue an order that dissolves the district if a corporation enters into an agreement described by Subsection (a) of this section with the district. Provides that the dissolution of the district becomes effective on the 30th day after the date the board issues the order dissolving the district. Provides that on the effective date of the dissolution all property and other assets of the district are transferred to the corporation; all debts, liabilities, and other obligations of the district are assumed by the corporation; and the district's certificate of public convenience and necessity and any right obtained under the certificate is assigned to the corporation in the manner prescribed by Section 13.251, Water Code. SECTION 3. AGREEMENT AND ORDER RELATING TO WATER AND WASTEWATER SERVICE. Sets forth instances in which a corporation is authorized to enter into an agreement with the district relating to water and wastewater service. Requires the board to issue an order transferring the district's debts, liabilities, obligations, assets, and facilities relating to water and wastewater service to the corporation if a corporation enters into an agreement described by Subsection (a) of this section with the district and the Texas Natural Resource Conservation Commission (TNRCC) grants to the corporation a certificate of public convenience and necessity as described by Subsection (a)(3) of this section. Provides that on the 30th day after the date the board issues the order transferring the district's debts, liabilities, obligations, assets and facilities all property and other assets of the district relating to water and wastewater service are transferred to the corporation and all debts, liabilities, and other obligations of the district relating to water and wastewater service are assumed by the corporation. SECTION 4. PETITION TO DISSOLVE DISTRICT. Authorizes a petition to be filed with the board requesting an election in the district to decide if the board must enter into an agreement as described by Section 2(a). Sets forth the required language for a petition required to be filed under this section, to be printed in English and Spanish. SECTION 5. ELECTION. Requires the board to call an election as requested by the petition filed under Section 4 of this Act if the board determines that the petition is signed by at least 10 percent of the registered voters in the district. Provides that the board shall make the determination under Subsection (a) of this section not later than the seventh day after the date on which the board receives the petition. Sets forth requirements and outlines provisions pertaining to the holding of an election, including notice, balloting, and result provisions. SECTION 6. FILING REQUIREMENT. Requires the board to file a copy of the agreement described by Section 2(a) or 3(a), as appropriate, and a copy of the board's order dissolving the district issued under Section 2(b), or a copy of the board's order transferring the district's obligations and assets issued under Section 3(b), as appropriate, not later than the 15th day after the date the board issues the dissolution or transfer order with the TNRCC and in the deed records of Willacy and Cameron counties. SECTION 7. QUALIFIED WATER SUPPLY CORPORATION. Sets forth instances in which a corporation is qualified to assume the district's debts, liabilities, and obligations and assume ownership of the district's facilities. SECTION 8. Emergency clause. Effective date: upon passage.