1-1 AN ACT
1-2 relating to the creation, administration, powers, duties,
1-3 operation, and financing of the Lake Livingston Special Utility
1-4 District; granting the authority to issue bonds.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. GENERAL PROVISIONS
1-7 SECTION 1.01. CREATION; LEGISLATIVE DECLARATION. (a) A
1-8 conservation and reclamation district to be known as the Lake
1-9 Livingston Special Utility District is created in Hardin, Liberty,
1-10 Polk, San Jacinto, Trinity, Tyler, and Walker counties, subject to
1-11 approval at a confirmation election under Section 2.04 of this Act.
1-12 The district is a governmental agency and a body politic and
1-13 corporate.
1-14 (b) The district is created under and is essential to the
1-15 accomplishment of the purposes of Section 59, Article XVI, Texas
1-16 Constitution.
1-17 SECTION 1.02. DEFINITIONS. In this chapter:
1-18 (1) "Board" means the board of directors of the
1-19 district.
1-20 (2) "Commission" means the Texas Natural Resource
1-21 Conservation Commission.
1-22 (3) "Director" means a member of the board of
1-23 directors of the district.
1-24 (4) "District" means Lake Livingston Special Utility
2-1 District.
2-2 (5) "Corporation" means Lake Livingston Water Supply
2-3 and Sewer Service Corporation, a corporation organized and existing
2-4 under Article 1434a, Vernon's Texas Civil Statutes.
2-5 (6) "Executive director" means the executive director
2-6 of the commission.
2-7 (7) "Extraterritorial jurisdiction" means the
2-8 extraterritorial jurisdiction of a municipality as determined under
2-9 Chapter 42, Local Government Code.
2-10 (8) "Public agency" means a municipality, the United
2-11 States and its agencies, the state and its agencies, or any
2-12 district or authority created under Section 59, Article XVI, or
2-13 Sections 52(b)(1) and (2), Article III, Texas Constitution.
2-14 SECTION 1.03. PURPOSES OF DISTRICT. The district is created
2-15 for the following purposes:
2-16 (1) to purchase, own, hold, lease, or otherwise
2-17 acquire sources of water supply; to build, operate, and maintain
2-18 facilities for the transportation of water; and to sell water to
2-19 municipalities or other political subdivisions of the state, to
2-20 private business entities, or to individuals; and
2-21 (2) to protect, preserve, and restore the purity and
2-22 the sanitary condition of water within the district.
2-23 SECTION 1.04. Boundaries of District. The district includes
2-24 all the territory within the boundaries of the area covered by
2-25 Certificates of Convenience and Necessity No. 10147 (East Texas
2-26 Hydrotechnology, Inc.), No. 11364 (Paradise Cove), No. 12668 (Green
2-27 Acres), and No. 12633 (Lake Shore Hide-a-Way) and within the
3-1 boundaries of the Riverview Subdivision as described by the plat
3-2 filed with the county clerk of Walker County.
3-3 SECTION 1.05. OPEN MEETINGS. All meetings of the
3-4 corporation or the district shall be held and conducted in
3-5 accordance with Chapter 551, Government Code.
3-6 ARTICLE 2. ADMINISTRATIVE PROVISIONS
3-7 SECTION 2.01. RESOLUTION PROPOSING CREATION OF DISTRICT.
3-8 (a) The board of directors of the corporation shall adopt a
3-9 resolution recommending to the members of the corporation that the
3-10 corporation be converted to the district and that on the
3-11 confirmation of the district as provided below, all of the assets
3-12 of the corporation be conveyed to the district and the corporation
3-13 be dissolved.
3-14 (b) Not later than November 15, 1997, the board of directors
3-15 of the corporation shall submit the resolution to the membership
3-16 for their vote on the question of the conversion of the corporation
3-17 to the district. The vote shall be conducted in accordance with
3-18 the bylaws of the corporation.
3-19 SECTION 2.02. CONSENT OF MUNICIPALITY. The district may
3-20 operate within the corporate limits of a municipality or within the
3-21 extraterritorial jurisdiction of a municipality. The municipality
3-22 may require that the district construct all facilities to serve the
3-23 land in accordance with plans and specifications that are approved
3-24 by the municipality. The municipality may also require that the
3-25 municipality be entitled to inspect facilities being constructed by
3-26 the district within the corporate limits or extraterritorial
3-27 jurisdiction of the municipality.
4-1 SECTION 2.03. BOARD OF DIRECTORS. (a) The district is
4-2 governed by a board of seven directors. To serve as a director, a
4-3 person must be at least 18 years old and a qualified voter of the
4-4 district. Two directors must be residents of Polk County, two
4-5 directors must be residents of San Jacinto County, and one director
4-6 must be a resident of Trinity County.
4-7 (b) Temporary directors serve until initial directors are
4-8 elected under Section 2.04 of this Act.
4-9 (c) Initial directors serve until permanent directors are
4-10 elected under Section 2.05 of this Act.
4-11 (d) Permanent directors serve staggered four-year terms.
4-12 (e) Each director must qualify to serve as director in the
4-13 manner provided by Section 49.055, Water Code.
4-14 SECTION 2.04. CONFIRMATION ELECTION; ELECTION OF INITIAL
4-15 DIRECTORS. If the members of the corporation by a simple majority
4-16 approve the resolution to convert to the district, the board of
4-17 directors of the corporation shall call and conduct a confirmation
4-18 and directors election as provided by Subchapter D, Chapter 49,
4-19 Water Code. The board of directors of the corporation shall serve
4-20 as the temporary directors for the confirmation and directors
4-21 election.
4-22 SECTION 2.05. ELECTION OF DIRECTORS. On the first Saturday
4-23 in May of the first even-numbered year after the year in which the
4-24 confirmation election is held, an election shall be held in the
4-25 district for the election at large of three directors who shall
4-26 each serve two-year terms and four directors who shall each serve
4-27 four-year terms. Thereafter, on the same date in each subsequent
5-1 even-numbered year, the appropriate number of directors shall be
5-2 elected to the board.
5-3 ARTICLE 3. POWERS AND DUTIES
5-4 SECTION 3.01. GENERAL POWERS. (a) The district has all of
5-5 the rights, powers, privileges, authority, functions, and duties
5-6 provided by the general law of this state, including Chapters 49
5-7 and 65, Water Code, applicable to special utility districts created
5-8 under Section 59, Article XVI, Texas Constitution. This Act
5-9 prevails over any provision of general law that is in conflict or
5-10 inconsistent with this Act.
5-11 (b) The rights, powers, privileges, authority, functions,
5-12 and duties of the district are subject to the continuing right of
5-13 supervision of the state to be exercised by and through the Texas
5-14 Natural Resource Conservation Commission.
5-15 SECTION 3.02. ADDITIONAL POWERS. The district may purchase,
5-16 construct, acquire, own, operate, maintain, repair, improve, or
5-17 extend inside and outside its boundaries any works, improvements,
5-18 facilities, plants, equipment, and appliances necessary to
5-19 accomplish the purposes for which it was created, including works,
5-20 improvements, facilities, plants, equipment, and appliances
5-21 incident, helpful, or necessary to:
5-22 (1) supply water for municipal uses, domestic uses,
5-23 power and commercial purposes, and other beneficial uses or
5-24 controls;
5-25 (2) collect, transport, process, dispose of, store, or
5-26 control solid waste other than municipal solid waste;
5-27 (3) irrigate the land in the district; and
6-1 (4) alter land elevation in the district where it is
6-2 needed.
6-3 SECTION 3.03. MUNICIPAL SOLID WASTE. The district may not
6-4 collect municipal solid waste as defined by Section 361.003, Health
6-5 and Safety Code, or purchase, construct, acquire, own, operate,
6-6 maintain, repair, improve, or extend a municipal solid waste
6-7 collection and disposal system.
6-8 SECTION 3.04. ADOPTING RULES. (a) The district may adopt
6-9 and enforce reasonable rules to:
6-10 (1) secure and maintain safe, sanitary, and adequate
6-11 plumbing installations, connections, and appurtenances as
6-12 subsidiary parts of the district's sanitary sewer system;
6-13 (2) preserve the purity and the sanitary condition of
6-14 all water controlled by the district;
6-15 (3) prevent waste or the unauthorized use of water
6-16 controlled by the district;
6-17 (4) regulate privileges on any land or easement owned
6-18 or controlled by the district; and
6-19 (5) provide and regulate a safe and adequate
6-20 freshwater distribution system.
6-21 (b) In adopting rules under this Act, the district is
6-22 subject to Subchapter B, Chapter 2001, Government Code, as if the
6-23 district were a state agency.
6-24 SECTION 3.05. EFFECT OF RULES. After the required
6-25 publication, rules adopted by the district under Section 3.04 of
6-26 this Act shall be recognized by the courts as if the rules were
6-27 penal ordinances of a municipality.
7-1 SECTION 3.06. PUBLICATION OF RULES. (a) The board shall
7-2 publish a substantive statement of each rule adopted and the
7-3 penalty for a violation once a week for two consecutive weeks in
7-4 one or more newspapers with general circulation in the area in
7-5 which the district is located.
7-6 (b) The substantive statement shall be condensed as far as
7-7 possible to intelligently explain the purpose to be accomplished or
7-8 the act forbidden by each rule.
7-9 (c) The notice must advise that breach of a rule will
7-10 subject the violator to a penalty and that the full text of each
7-11 rule is on file in the principal office of the district, where it
7-12 may be read by any interested person.
7-13 (d) Any number of rules may be included in one notice.
7-14 SECTION 3.07. EFFECTIVE DATE OF RULES. The penalty for
7-15 violation of a rule is not effective and enforceable until the
7-16 fifth day after the date of the last publication of the notice. On
7-17 the fifth day after the date of the last publication, the published
7-18 rule takes effect, and ignorance of the rule is not a defense to a
7-19 prosecution for the enforcement of the penalty.
7-20 SECTION 3.08. PROHIBITION ON ASSESSMENT OR COLLECTION OF
7-21 TAXES. The district may not assess or collect a tax of any kind.
7-22 ARTICLE 4. BONDS AND NOTES
7-23 SECTION 4.01. ISSUANCE OF BONDS AND NOTES. The district may
7-24 issue bonds or notes for the purpose of purchasing, constructing,
7-25 acquiring, owning, operating, repairing, improving, or extending
7-26 any district works, improvements, facilities, plants, equipment, or
7-27 appliances needed to accomplish the purposes listed in Section 1.03
8-1 of this Act, including works, improvements, facilities, plants,
8-2 equipment, or appliances needed to provide a waterworks system,
8-3 sanitary sewer system, storm sewer system, or solid waste disposal
8-4 system, or to provide for the collection of solid waste other than
8-5 municipal solid waste, or for fire-fighting services and
8-6 facilities.
8-7 SECTION 4.02. Form of Bonds and Notes. (a) The district
8-8 may issue bonds or notes in various series or issues.
8-9 (b) Bonds or notes shall mature serially or otherwise not
8-10 more than 40 years from the date of issuance and shall bear
8-11 interest at any rate permitted by the constitution and laws of this
8-12 state. The board shall determine the maturity and the interest
8-13 rate of the bonds and notes.
8-14 (c) The district's bonds and notes and any interest coupons
8-15 are investment securities under Chapter 8, Business & Commerce
8-16 Code, and may be issued registrable as to principal or as to both
8-17 principal and interest. The board may make the bonds redeemable
8-18 before maturity or may include in the bonds a mandatory redemption
8-19 provision.
8-20 (d) The district's bonds or notes may be issued in the form,
8-21 denominations, and manner and under the terms and conditions
8-22 prescribed, and must be signed and executed as provided, by the
8-23 board in the resolution or order authorizing the issuance of the
8-24 bonds or notes.
8-25 SECTION 4.03. Repayment of Bonds or Notes. The board may
8-26 provide for the payment of principal of and interest on and any
8-27 redemption price for the bonds or notes by pledging all or any part
9-1 of the designated revenues to result from the ownership or
9-2 operation of the district's works, improvements, facilities,
9-3 plants, equipment, or appliances or under specific contracts for
9-4 the period the board determines.
9-5 SECTION 4.04. Additional Security for Bonds or Notes. (a)
9-6 The district's bonds or notes, as the board determines, may be
9-7 additionally secured by a deed of trust or mortgage lien on all or
9-8 part of the physical properties of the district, and franchises,
9-9 easements, water rights, and appropriation permits, leases, and
9-10 contracts, and any right appurtenant to those properties, vesting
9-11 in the trustee the power to sell the property for payment of the
9-12 indebtedness, the power to operate the property, and any other
9-13 authority necessary for the further security of the bonds or notes.
9-14 (b) The trust indenture, regardless of the existence of the
9-15 deed of trust or mortgage lien on any property, may:
9-16 (1) include provisions prescribed by the board for the
9-17 security of the bonds or notes and the preservation of the trust
9-18 estate;
9-19 (2) provide for amendment or modification;
9-20 (3) condition the right to spend district money or
9-21 sell district property on approval of a registered professional
9-22 engineer selected as provided in the trust indenture; and
9-23 (4) provide for investment of district money.
9-24 (c) Any purchaser under a sale under the deed of trust or
9-25 mortgage lien, if one is given, is the absolute owner of the
9-26 property, facilities, and rights purchased and is entitled to
9-27 maintain and operate them.
10-1 SECTION 4.05. Method for Issuance of Bonds and Notes. Bonds
10-2 or notes may be issued by resolution or order of the board.
10-3 SECTION 4.06. Provisions of Bonds or Notes. (a) In an
10-4 order or resolution authorizing the issuance of bonds or notes,
10-5 including refunding bonds, the board may provide for the flow of
10-6 funds, the establishment and maintenance of the interest and
10-7 sinking fund, the reserve fund, and other funds, and may enter into
10-8 additional covenants relating to the bonds or notes and the pledged
10-9 revenues and to the operation and maintenance of those works,
10-10 improvements, facilities, plants, equipment, or appliances the
10-11 revenues of which are pledged, including provision for the
10-12 operation of, or the leasing of all or any part of, the
10-13 improvements and for the use or pledge of money derived from the
10-14 operation contracts and leases, as the board considers appropriate.
10-15 (b) An order or resolution of the board authorizing the
10-16 issuance of bonds or notes also may prohibit the further issuance
10-17 of bonds, notes, or other obligations payable from the pledged
10-18 revenue or may reserve the right to issue additional bonds to be
10-19 secured by a pledge of and payable from the revenue on a parity
10-20 with or subordinate to the lien and pledge in support of the bonds
10-21 being issued, subject to any conditions set forth in the order or
10-22 resolution.
10-23 (c) An order or resolution of the board issuing bonds or
10-24 notes may include other provisions and covenants determined by the
10-25 board that are not prohibited by the Texas Constitution or by this
10-26 Act.
10-27 (d) The board may adopt and have executed any other
11-1 proceedings or instruments necessary and convenient in the issuance
11-2 of bonds or notes.
11-3 SECTION 4.07. Use of Bond or Note Proceeds. The district
11-4 may use bond or note proceeds to pay interest and administrative
11-5 and operating expenses expected to accrue during the period of
11-6 construction. The period of construction under this section may
11-7 not exceed three years as provided by the bond order or resolution.
11-8 The district also may use bond or note proceeds to pay expenses
11-9 incurred and to be incurred in the issuance, sale, and delivery of
11-10 the bonds or notes.
11-11 SECTION 4.08. Sale or Exchange of Bonds. (a) The board
11-12 shall sell the bonds on the best terms and for the best possible
11-13 price, but the bonds may not be sold for less than 95 percent of
11-14 their face value.
11-15 (b) The district may exchange bonds for property acquired by
11-16 purchase or in payment of the contract price of work done or
11-17 services performed for the use and benefit of the district.
11-18 SECTION 4.09. Refunding Bonds. (a) The district may issue
11-19 bonds to refund all or any part of its outstanding bonds, notes, or
11-20 other obligations, including matured but unpaid interest coupons.
11-21 (b) Refunding bonds shall mature serially or otherwise not
11-22 more than 40 years from their date and shall bear interest at any
11-23 rate or rates permitted by the constitution and laws of this state.
11-24 (c) Refunding bonds may be payable from the same source as
11-25 the bonds, notes, or other obligations being refunded or from other
11-26 sources.
11-27 (d) The refunding bonds shall be approved by the attorney
12-1 general and shall be registered by the comptroller on the surrender
12-2 and cancellation of the bonds being refunded.
12-3 (e) An order or resolution authorizing the issuance of
12-4 refunding bonds may provide that the refunding bonds will be sold
12-5 and the proceeds deposited in the place or places at which the
12-6 bonds being refunded are payable, and the refunding bonds may be
12-7 issued before the cancellation of the bonds being refunded provided
12-8 an amount sufficient to pay the principal of and interest on the
12-9 bonds being refunded to their maturity dates, or to their option
12-10 dates if the bonds have been properly called for payment before
12-11 maturity according to their terms, is deposited in the place or
12-12 places at which the bonds being refunded are payable. The
12-13 comptroller shall register the refunding bonds without the
12-14 surrender and cancellation of bonds being refunded.
12-15 (f) A refunding may be accomplished in one or in several
12-16 installment deliveries. Refunding bonds and their interest coupons
12-17 are investment securities under Chapter 8, Business & Commerce
12-18 Code.
12-19 (g) In lieu of the method set forth in this section, a
12-20 district may refund bonds, notes, or other obligations as provided
12-21 by the general laws of this state.
12-22 SECTION 4.10. Obligations; Legal Investment; Security for
12-23 Funds. (a) Bonds, notes, and other obligations issued by the
12-24 district are legal and authorized investments for all banks,
12-25 savings banks, trust companies, savings and loan associations,
12-26 insurance companies, fiduciaries, trustees, and guardians, and for
12-27 interest and sinking funds and other public funds of the state and
13-1 its agencies, including the permanent school fund, and counties,
13-2 cities, school districts, and other political subdivisions of the
13-3 state.
13-4 (b) The district's bonds, notes, and other obligations are
13-5 eligible to secure deposits of public funds of the state and its
13-6 agencies and counties, cities, school districts, and other
13-7 political subdivisions of the state. The bonds, notes, and other
13-8 obligations are lawful and sufficient security to the extent of
13-9 their market value if accompanied by all unmatured interest coupons
13-10 attached to them.
13-11 SECTION 4.11. Mandamus by Bondholders. In addition to other
13-12 rights and remedies provided by law, if the district defaults in
13-13 the payment of principal of, interest on, or redemption price for
13-14 its bonds when due, fails to make payments into any fund created
13-15 in the order or resolution authorizing the issuance of the bonds,
13-16 or defaults in the observation or performance of any other
13-17 covenants, conditions, or obligations stated in the resolution or
13-18 order authorizing the issuance of the bonds, the owners of any of
13-19 the bonds are entitled to a writ of mandamus issued by a court of
13-20 competent jurisdiction compelling the district and its officials to
13-21 observe and perform the covenants, obligations, or conditions
13-22 prescribed in the order or resolution authorizing the issuance of
13-23 the district's bonds.
13-24 SECTION 4.12. Cancellation of Unsold Bonds. (a) The board
13-25 by order or resolution may provide for the cancellation of all or
13-26 any part of any bonds that have been submitted to and approved by
13-27 the attorney general and registered by the comptroller but not yet
14-1 sold and may provide for the issuance of new bonds in lieu of the
14-2 old bonds in the manner provided by this Act for the issuance of
14-3 the original bonds, including approval of the bonds by the attorney
14-4 general and registration of the bonds by the comptroller.
14-5 (b) The order or resolution of the board shall describe the
14-6 bonds to be canceled and the new bonds to be issued in lieu of the
14-7 old bonds.
14-8 (c) A certified copy of the order or resolution of the board
14-9 providing for the cancellation of the old bonds, together with the
14-10 old bonds, shall be delivered to the comptroller, who shall cancel
14-11 and destroy the old bonds and make a record of the cancellation.
14-12 ARTICLE 5. CONSOLIDATION OF DISTRICTS
14-13 SECTION 5.01. CONSOLIDATION. The district may consolidate
14-14 with any district governed by Chapter 65, Water Code, in
14-15 accordance with Section 65.723 et seq., Water Code.
14-16 ARTICLE 6. EMERGENCY
14-17 SECTION 6.01. EMERGENCY. The importance of this legislation
14-18 and the crowded condition of the calendars in both houses create an
14-19 emergency and an imperative public necessity that the
14-20 constitutional rule requiring bills to be read on three several
14-21 days in each house be suspended, and this rule is hereby suspended,
14-22 and that this Act take effect and be in force from and after its
14-23 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2448 was passed by the House on May
2, 1997, by the following vote: Yeas 142, Nays 0, 2 present, not
voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2448 was passed by the Senate on May
22, 1997, by the following vote: Yeas 31, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor