By Hightower H.B. No. 2448 75R7030 T A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, administration, powers, duties, 1-3 operations, and financing of the Lake Livingston Special Utility 1-4 District; providing for severability and declaring an emergency. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 ARTICLE 1. GENERAL PROVISIONS 1-7 Sec. 1.01. CREATION OF THE DISTRICT. Lake Livingston 1-8 Special Utility District may be created pursuant to the provisions 1-9 of this Act and under and subject to the authority, conditions, and 1-10 restrictions of, and is considered a conservation and reclamation 1-11 district under, Article XVI, Section 59, of the Texas Constitution. 1-12 The District will be a government agency and a body politic and 1-13 corporate. 1-14 Sec. 1.02. Definitions. In this chapter: 1-15 (1) "District" means Lake Livingston Special Utility 1-16 District. 1-17 (2) "Board" means the board of directors of the 1-18 District. 1-19 (3) "Director" means a member of the board of 1-20 directors of the District. 1-21 (4) "Commission" means the Texas Natural Resource 1-22 Conservation Commission. 1-23 (5) "Executive director" means the executive director 1-24 of the Texas Natural Resource Conservation Commission. 2-1 (6) "City" means any incorporated city or town. 2-2 (7) "Extraterritorial jurisdiction" means the 2-3 extraterritorial jurisdiction of a city as determined under Chapter 2-4 42, Local Government Code. 2-5 (8) "Public agency" means any city, the United States 2-6 and its agencies, the State of Texas and its agencies, and any 2-7 district or authority created under Article XVI, Section 59, or 2-8 Article III, Sections 52(b)(1) and (2), of the Texas Constitution. 2-9 (9) "Corporation" means Lake Livingston Water Supply 2-10 and Sewer Service Corporation, a corporation organized and existing 2-11 under Tex. Rev. Civ. Stat. Anno. Art. 1434a. 2-12 Sec. 1.03. Purposes of the District. The District may be 2-13 created for the following purposes: 2-14 (1) to purchase, own, hold, lease, and otherwise 2-15 acquire sources of water supply; to build, operate, and maintain 2-16 facilities for the transportation of water; and to sell water to 2-17 towns, cities, and other political subdivisions of this state, to 2-18 private business entities, and to individuals; 2-19 (2) the protection, preservation, and restoration of 2-20 the purity and sanitary condition of water within the District. 2-21 Sec. 1.04. Composition of District. The District shall 2-22 include the area in all or part of any one or more counties 2-23 including all or part of any cities and other public agencies 2-24 within the Certificate of Convenience and Necessity No. 10147 (East 2-25 Texas Hydrotechnology, Inc.), 11364 (Paradise Cove), No. 12668 2-26 (Green Acres), No. 12633 (Lake Shore Hide-a-Way) and the Riverview 2-27 Subdivision (located in Walker County), all of the above being 3-1 situated in San Jacinto, Tyler, Polk, Trinity, Hardin, Liberty or 3-2 Walker Counties. 3-3 Sec. 1.05. OPEN MEETINGS. All meetings of the Corporation 3-4 and the District shall be held and conducted in accordance with 3-5 Chapter 551, Government Code. 3-6 ARTICLE 2. ADMINISTRATIVE PROVISIONS 3-7 Sec. 2.01. RESOLUTION PROPOSING CREATION OF DISTRICT. (a) 3-8 The board of directors of the Corporation shall adopt a resolution 3-9 recommending to the members of the Corporation that it be converted 3-10 to the District; that upon the confirmation of the District as 3-11 provided below, all of the assets of the corporation be conveyed to 3-12 the District and the Corporation be dissolved. 3-13 (b) By September 15, 1997, the board of directors of the 3-14 Corporation shall submit the resolution to the membership for their 3-15 vote on the question of the conversion of the Corporation to the 3-16 District. The vote shall be conducted in accordance with the 3-17 by-laws of the Corporation. 3-18 Sec. 2.02. CONSENT OF CITY. A District may operate within 3-19 the corporate limits of a city or within the extraterritorial 3-20 jurisdiction of a city, provided that a city may require that the 3-21 District construct all facilities to serve the land in accordance 3-22 with plans and specifications that are approved by the city. The 3-23 city may also require that the city be entitled to inspect 3-24 facilities being constructed by a District within the corporate 3-25 limits or extraterritorial jurisdiction of the city. 3-26 Sec. 2.03. If the members of the Corporation approve the 3-27 resolution on the question of converting to the District by a 4-1 simple majority, the board of directors of the Corporation shall 4-2 than call for and conduct a confirmation and director election as 4-3 provided in Chapter 49, Subchapter D of the Water Code. The board 4-4 of directors of the Corporation shall serve as the temporary 4-5 directors for the confirmation and director election. 4-6 Sec. 2.04. For election of directors, the District shall be 4-7 divided into three numbered single member precinct, one precinct 4-8 for Polk County, one precinct for Trinity County, and one precinct 4-9 for San Jacinto County. One director shall be elected from each 4-10 precinct and four directors will be elected at large. 4-11 Sec. 2.05. The District's powers, rights, duties and 4-12 functions are exercised by a board of directors. 4-13 Sec. 2.06. The Board shall consist of seven members all of 4-14 whom must reside in the District. To serve as Director, a person 4-15 must be at least eighteen years old, a resident citizen of this 4-16 State and a qualified voter of the District. 4-17 ARTICLE 3. POWERS AND DUTIES 4-18 Sec. 3.01. POWERS. (a) The District has the functions, 4-19 powers, authority, and rights that will permit accomplishment of 4-20 the purposes for which it is created. 4-21 (b) The District may purchase, construct, acquire, own, 4-22 operate, maintain, repair, improve, or extend inside and outside 4-23 its boundaries any works, improvements, facilities, plants, 4-24 equipment, and appliances necessary to accomplish the purposes for 4-25 which it was created, including works, improvements, facilities, 4-26 plants, equipment, and appliances incident, helpful, or necessary 4-27 to: 5-1 (1) supply water for municipal uses, domestic uses, 5-2 power and commercial purposes, and other beneficial uses or 5-3 controls; 5-4 (2) collect, transport, process, dispose of, store, 5-5 and control domestic, industrial, or interest on wastes whether in 5-6 fluid, solid, or composite state; 5-7 (3) irrigate the land in a District; 5-8 (4) alter land elevation in a District where it is 5-9 needed; and 5-10 (c) Such other powers, except as expressly limited below in 5-11 Section 3.02, given to a District under Chapter 49, Subchapter H, 5-12 of the Water Code. 5-13 Sec. 3.02. SOLID WASTE. A District may not collect 5-14 municipal solid waste as defined as Health & Safety Code Section 5-15 361.003 or purchase, construct, acquire, own, operate, maintain, 5-16 repair, improve, and extend a municipal solid waste collection and 5-17 disposal system. 5-18 Sec. 3.03. ADOPTING RULES. The District may adopt and 5-19 enforce reasonable rules to: 5-20 (1) secure and maintain safe, sanitary, and adequate 5-21 plumbing installations, connections, and appurtenances as 5-22 subsidiary parts of its sanitary sewer system; 5-23 (2) preserve the purity and the sanitary condition of 5-24 all water controlled by the District; 5-25 (3) prevent waste or the unauthorized use of water 5-26 controlled by the District; 5-27 (4) regulate privileges on any land or easement owned 6-1 or controlled by the District; and 6-2 (5) provide and regulate a safe and adequate 6-3 freshwater distribution system. 6-4 Sec. 3.04. EFFECT OF RULES. After the required publication, 6-5 rules adopted by the District under Section 3.03 of this Act shall 6-6 be recognized by the courts as if they were penal ordinances of a 6-7 city. 6-8 Sec. 3.05. PUBLICATION OF RULES. (a) The board shall 6-9 publish a substantive statement of each rule and the penalty for 6-10 its violation once a week for two consecutive weeks in one or more 6-11 newspapers with general circulation in the area in which the 6-12 District is located. 6-13 (b) The substantive statement shall be condensed as far as 6-14 possible to intelligently explain the purpose to be accomplished or 6-15 the act forbidden by each rule. 6-16 (c) The notice must advise that breach of a rule will 6-17 subject the violator to a penalty and that the full text of each 6-18 rule is on file in the principal office of the District at which it 6-19 may be read by any interested person. 6-20 (d) Any number of rules may be included in one notice. 6-21 Sec. 3.06. EFFECTIVE DATE OF RULES. The penalty for 6-22 violation of a rule is not effective and enforceable until five 6-23 days after the last publication of the notice. Five days after the 6-24 last publication, the published rule takes effect and ignorance of 6-25 the rule is not a defense to a prosecution for the enforcement of 6-26 the penalty. 6-27 Sec. 3.07. PROHIBITION ON ASSESSMENT OR COLLECTION OF TAXES. 7-1 Section 49.107 of the Water Code does not apply to the District. 7-2 ARTICLE 4. BONDS AND NOTES 7-3 Sec. 4.01. ISSUANCE OF BONDS AND NOTES. The District may 7-4 issue its bonds or notes for the purpose of purchasing, 7-5 constructing, acquiring, owning, operating, repairing, improving, 7-6 or extending any District works, improvements, facilities, plants, 7-7 equipment, and appliances needed to accomplish the purposes listed 7-8 in Section 1.03 of this Act, including works, improvements, 7-9 facilities, plants, equipment, and appliances needed to provide a 7-10 waterworks system, sanitary sewer system, storm sewer system, solid 7-11 waste disposal system, or to provide for solid waste collection or 7-12 fire-fighting services and facilities. 7-13 Sec. 4.02. Form of Bonds and Notes. (a) The District may 7-14 issue its bonds or notes in various series or issues. 7-15 (b) Bonds or notes shall mature serially or otherwise not 7-16 more than 40 years from their date and shall bear interest at any 7-17 rate permitted by the constitution and laws of this state. The 7-18 board shall determine the maturity and the interest rate of the 7-19 bonds and notes. 7-20 (c) The District's bonds, notes, and interest coupons, if 7-21 any, are investment securities under Chapter 8, Business & Commerce 7-22 Code, and may be issued registrable as to principal or as to both 7-23 principal and interest. The board may make the bonds redeemable 7-24 before maturity, at the option of the District, or may include in 7-25 the bonds a mandatory redemption provision. 7-26 (d) The District's bonds or notes may be issued in the form, 7-27 denominations, and manner and under the terms, conditions, and 8-1 details, and must be signed and executed, as provided by the board 8-2 in the resolution or order authorizing the issuance of the bonds or 8-3 notes. 8-4 Sec. 4.03. Manner of Repayment of Bonds or Notes. The board 8-5 may provide for the payment of principal of and interest and 8-6 redemption price, if any, on the bonds or notes by pledging all or 8-7 any part of the designated revenues to result from the ownership or 8-8 operation of the District's works, improvements, facilities, 8-9 plants, equipment, and appliances or under specific contracts for 8-10 the period of time the board determines. 8-11 Sec. 4.04. Additional Security for Bonds or Notes. (a) The 8-12 bonds or notes, within the discretion of the board, may be 8-13 additionally secured by a deed of trust or mortgage lien on all or 8-14 part of the physical properties of the District, and franchises, 8-15 easements, water rights, and appropriation permits, leases, and 8-16 contracts and all rights appurtenant to those properties, vesting 8-17 in the trustee power to sell the property for payment of the 8-18 indebtedness, power to operate the property, and all other 8-19 authority necessary for the further security of the bonds or notes. 8-20 (b) The trust indenture, regardless of the existence of the 8-21 deed of trust or mortgage lien on any property, may: 8-22 (1) include provisions prescribed by the board for the 8-23 security of the bonds or notes and the preservation of the trust 8-24 estate; 8-25 (2) make provision for amendment or modification; 8-26 (3) condition the right to spend District money or 8-27 sell District property on approval of a registered professional 9-1 engineer selected as provided in the trust indenture; and 9-2 (4) make provision for investment of funds of the 9-3 District. 9-4 (c) Any purchaser under a sale under the deed of trust or 9-5 mortgage lien, if one is given, is absolute owner of the property, 9-6 facilities, and rights purchased and is entitled to maintain and 9-7 operate them. 9-8 Sec. 4.05. Method for Issuance of Bonds and Notes. Bonds or 9-9 notes may be issued by resolution or order of the board. 9-10 Sec. 4.06. Provisions of Bonds or Notes. (a) In an order 9-11 or resolution authorizing the issuance of bonds or notes, including 9-12 refunding bonds, the board may provide for the flow of funds, the 9-13 establishment and maintenance of the interest and sinking fund, the 9-14 reserve fund, and other funds, and may enter into additional 9-15 covenants relating to the bonds or notes and the pledged revenues 9-16 and to the operation and maintenance of those works, improvements, 9-17 facilities, plants, equipment, and appliances the revenues of which 9-18 are pledged, including provision for the operation or for the 9-19 leasing of all or any part of the improvements and the use or 9-20 pledge of money derived from the operation contracts and leases, as 9-21 the board considers appropriate. 9-22 (b) An order or resolution of the board authorizing the 9-23 issuance of bonds or notes also may prohibit the further issuance 9-24 of bonds, notes, or other obligations payable from the pledged 9-25 revenue or may reserve the right to issue additional bonds to be 9-26 secured by a pledge of and payable from the revenue on a parity 9-27 with or subordinate to the lien and pledge in support of the bonds 10-1 being issued, subject to the conditions that may be set forth in 10-2 the order or resolution. 10-3 (c) An order or resolution of the board issuing bonds or 10-4 notes may include other provisions and covenants determined by the 10-5 board that are not prohibited by the constitution or by this 10-6 chapter. 10-7 (d) The board may adopt and have executed any other 10-8 proceedings or instruments necessary and convenient in the issuance 10-9 of bonds or notes. 10-10 Sec. 4.07. Use of Bond or Note Proceeds. The District may 10-11 use bond or note proceeds to pay interest, administrative, and 10-12 operating expenses expected to accrue during the period of 10-13 construction. The period of construction under this section may 10-14 not exceed three years as provided by the bond order or resolution. 10-15 The District also may use bond or note proceeds to pay expenses 10-16 incurred and to be incurred in the issuance, sale, and delivery of 10-17 the bonds or notes. 10-18 Sec. 4.08. Sale or Exchange of Bonds. (a) The board shall 10-19 sell the bonds on the best terms and for the best possible price, 10-20 but the bonds may not be sold for less than 95 percent of their 10-21 face value. 10-22 (b) The District may exchange bonds for property acquired by 10-23 purchase or in payment of the contract price of work done or 10-24 services performed for the use and benefit of the District. 10-25 Sec. 4.09. Refunding Bonds. (a) The District may issue 10-26 bonds to refund all or any part of its outstanding bonds, notes, or 10-27 other obligations, including matured but unpaid interest coupons. 11-1 (b) Refunding bonds shall mature serially or otherwise not 11-2 more than 40 years from their date and shall bear interest at any 11-3 rate or rates permitted by the constitution and laws of this state. 11-4 (c) Refunding bonds may be payable from the same source as 11-5 the bonds, notes, or other obligations being refunded or from other 11-6 additional sources. 11-7 (d) The refunding bonds shall be approved by the attorney 11-8 general and shall be registered by the comptroller on the surrender 11-9 and cancellation of the bonds being refunded. 11-10 (e) An order or resolution authorizing the issuance of 11-11 refunding bonds may provide that the refunding bonds will be sold 11-12 and the proceeds deposited in the place or places at which the 11-13 bonds being refunded are payable, and the refunding bonds may be 11-14 issued before the cancellation of the bonds being refunded provided 11-15 an amount sufficient to pay the principal of and interest on the 11-16 bonds being refunded to their maturity dates, or to their option 11-17 dates if the bonds have been duly called for payment prior to 11-18 maturity according to their terms, is deposited in the place or 11-19 places at which the bonds being refunded are payable. The 11-20 comptroller shall register the refunding bonds without the 11-21 surrender and cancellation of bonds being refunded. 11-22 (f) A refunding may be accomplished in one or in several 11-23 installment deliveries. Refunding bonds and their interest coupons 11-24 are investment securities under Chapter 8, Business & Commerce 11-25 Code. 11-26 (g) In lieu of the method set forth in this section, a 11-27 district may refund bonds, notes, or other obligations as provided 12-1 by the general laws of this state. 12-2 Sec. 4.10. Obligations; Legal Investment; Security for 12-3 Funds. (a) Bonds, notes, and other obligations issued by a 12-4 District are legal and authorized investments for all banks, 12-5 savings banks, trust companies, savings and loan associations, 12-6 insurance companies, fiduciaries, and trustees, guardians, and for 12-7 interest and sinking funds and other public funds of the state and 12-8 its agencies, including the permanent school fund, and counties, 12-9 cities, school Districts, and other political subdivisions of the 12-10 state. 12-11 (b) The District's bonds, notes, and other obligations are 12-12 eligible to secure deposits of public funds of the state and its 12-13 agencies and counties, cities, school Districts, and other 12-14 political subdivisions of the state. The bonds, notes, and other 12-15 obligations are lawful and sufficient security to the extent of 12-16 their market value if accompanied by all unmatured interest coupons 12-17 attached to them. 12-18 Sec. 4.11. Mandamus by Bondholders. In addition to other 12-19 rights and remedies provided by the law of this state, if the 12-20 District defaults in the payment of principal of, interest on, or 12-21 redemption price on its bonds when due, or if the District fails to 12-22 make payments into any fund created in the order or resolution 12-23 authorizing the issuance of the bonds, or defaults in the 12-24 observation or performance of any other covenants, conditions, or 12-25 obligations stated in the resolution or order authorizing the 12-26 issuance of its bonds, the owners of any of the bonds are entitled 12-27 to a writ of mandamus issued by a court of competent jurisdiction 13-1 compelling the District and its officials to observe and perform 13-2 the covenants, the obligations, or conditions prescribed in the 13-3 order or resolution authorizing the issuance of the District's 13-4 bonds. 13-5 Sec. 4.12. Cancellation of Unsold Bonds. (a) The board, by 13-6 order or resolution, may provide for the cancellation of all or any 13-7 part of any bonds that have been submitted to and approved by the 13-8 attorney general and registered by the comptroller, but not yet 13-9 sold, and may provide for the issuance of new bonds in lieu of the 13-10 old bonds in the manner provided by this chapter for the issuance 13-11 of the original bonds including their approval by the attorney 13-12 general and their registration by the comptroller. 13-13 (b) The order or resolution of the board shall describe the 13-14 bonds to be canceled, and also shall describe the new bonds to be 13-15 issued in lieu of the old bonds. 13-16 (c) A certified copy of the order or resolution of the board 13-17 providing for the cancellation of the old bonds, together with the 13-18 old bonds, shall be delivered to the comptroller, who shall cancel 13-19 and destroy the old bonds and make a record of the cancellation. 13-20 Sec. 4.13. Cancellation of Unsold Bonds. (a) The board, by 13-21 order or resolution, may provide for the cancellation of all or any 13-22 part of any bonds that have been submitted to and approved by the 13-23 attorney general and registered by the comptroller, but not yet 13-24 sold, and may provide for the issuance of new bonds in lieu of the 13-25 old bonds in the manner provided by this chapter for the issuance 13-26 of the original bonds including their approval by the attorney 13-27 general and their registration by the comptroller. 14-1 (b) The order or resolution of the board shall describe the 14-2 bonds to be canceled, and also shall describe the new bonds to be 14-3 issued in lieu of the old bonds. 14-4 (c) A certified copy of the order or resolution of the board 14-5 providing for the cancellation of the old bonds, together with the 14-6 old bonds, shall be delivered to the comptroller, who shall cancel 14-7 and destroy the old bonds and make a record of the cancellation. 14-8 ARTICLE 5. CONSOLIDATION OF DISTRICTS 14-9 The District may consolidate with any District governed by 14-10 Chapter 65 of the Water Code in accordance with the procedures 14-11 provided in Water Code Section 65.723, et seq, as may be amended. 14-12 ARTICLE 6. MISCELLANEOUS 14-13 Sec. 6.01. SEVERABILITY. If any portion of this Act or the 14-14 application of any portion of this Act to any person or set of 14-15 circumstances is held by a court to be unconstitutional, void, 14-16 invalid, or unenforceable, the validity of the remaining portions 14-17 of this Act or the application of the challenged portion of the Act 14-18 to other persons or sets of circumstances shall not be affected by 14-19 the court's holding. It is the intent of the legislature in 14-20 adopting this Act that no portion of the Act become inoperative or 14-21 fail by reason of the unconstitutionality or invalidity of any 14-22 other portion of the Act. 14-23 Sec. 6.02. EMERGENCY. The importance of this legislation 14-24 and the crowded condition of the calendars in both houses create an 14-25 emergency and an imperative public necessity that the 14-26 constitutional rule requiring bills to be read on three several 14-27 days in each house be suspended, and this rule is hereby suspended, 15-1 and that this Act take effect and be in force from and after its 15-2 passage, and it is so enacted.