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.