1-1     By:  Truan                                            S.B. No. 1656

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Natural Resources;

 1-4     April 7, 1997, reported favorably by the following vote:  Yeas 10,

 1-5     Nays 0; April 7, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the authority to dissolve the Sebastian Municipal

 1-9     Utility District or transfer certain of its assets and obligations.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  DEFINITIONS.  In this Act:

1-12                 (1)  "Board" means the board of directors of the

1-13     Sebastian Municipal Utility District.

1-14                 (2)  "District" means the Sebastian Municipal Utility

1-15     District.

1-16                 (3)  "Corporation" means a qualified water supply

1-17     corporation as described by Section 7 of this Act.

1-18           SECTION 2.  AGREEMENT AND ORDER RELATING TO DISSOLUTION OF

1-19     DISTRICT.  (a)  A corporation may enter into an agreement with the

1-20     district to:

1-21                 (1)  assume the district's debts, liabilities, and

1-22     obligations;

1-23                 (2)  assume ownership of the district's assets and

1-24     facilities;

1-25                 (3)  accept assignment of the district's certificate of

1-26     public convenience and necessity obtained under Section 13.246,

1-27     Water Code, and any right obtained under the certificate after the

1-28     Texas Natural Resource Conservation Commission determines that the

1-29     corporation is capable of rendering adequate and continuous service

1-30     as required by Section 13.251, Water Code; and

1-31                 (4)  perform the district's functions and provide all

1-32     services previously provided by the district.

1-33           (b)  If a corporation enters into an agreement described by

1-34     Subsection (a) of this section with the district, the board shall

1-35     issue an order that dissolves the district.

1-36           (c)  The dissolution of the district becomes effective on the

1-37     30th day after the date the board issues the order dissolving the

1-38     district.

1-39           (d)  On the effective date of the dissolution:

1-40                 (1)  all property and other assets of the district are

1-41     transferred to the corporation;

1-42                 (2)  all debts, liabilities, and other obligations of

1-43     the district are assumed by the corporation; and

1-44                 (3)  the district's certificate of public convenience

1-45     and necessity and any right obtained under the certificate is

1-46     assigned to the corporation in the manner prescribed by Section

1-47     13.251, Water Code.

1-48           SECTION 3.  AGREEMENT AND ORDER RELATING TO WATER AND

1-49     WASTEWATER SERVICE.  (a)  A corporation may enter into an agreement

1-50     with the district to:

1-51                 (1)  assume the district's debts, liabilities, and

1-52     obligations relating to water and wastewater service;

1-53                 (2)  assume ownership of the district's assets and

1-54     facilities relating to water and wastewater service;

1-55                 (3)  apply to the Texas Natural Resource Conservation

1-56     Commission to obtain a certificate of public convenience and

1-57     necessity, or an amendment of a certificate, under Section 13.244,

1-58     Water Code, to render water and wastewater service to the area

1-59     served by the district; and

1-60                 (4)  perform the district's functions relating to water

1-61     and wastewater service and provide all services relating to those

1-62     services previously provided by the district.

1-63           (b)  If a corporation enters into an agreement described by

1-64     Subsection (a) of this section with the district and the Texas

 2-1     Natural Resource Conservation Commission grants to the corporation

 2-2     a certificate of public convenience and necessity as described by

 2-3     Subdivision (3) of Subsection (a) of this section, the board shall

 2-4     issue an order transferring the district's debts, liabilities,

 2-5     obligations, assets, and facilities relating to water and

 2-6     wastewater service to the corporation.

 2-7           (c)  On the 30th day after the date the board issues the

 2-8     order transferring the district's debts, liabilities, obligations,

 2-9     assets, and facilities:

2-10                 (1)  all property and other assets of the district

2-11     relating to water and wastewater service are transferred to the

2-12     corporation; and

2-13                 (2)  all debts, liabilities, and other obligations of

2-14     the district relating to water and wastewater service are assumed

2-15     by the corporation.

2-16           SECTION 4.  PETITION TO DISSOLVE DISTRICT.  (a)  A petition

2-17     may be filed with the board requesting an election in the district

2-18     to decide if the board must enter into an agreement as described by

2-19     Subsection (a) of Section 2 of this Act.

2-20           (b)  A petition filed under this section shall be printed in

2-21     English and Spanish and read as follows:

2-22           "We, the undersigned, being registered voters in the

2-23     Sebastian Municipal Utility District, request the board of

2-24     directors of the Sebastian Municipal Utility District to hold an

2-25     election to decide if the board must enter into an agreement with a

2-26     qualified water supply corporation in which the district's debts,

2-27     liabilities, obligations, assets, and facilities are transferred to

2-28     the qualified water supply corporation and the district is

2-29     dissolved."

2-30           SECTION 5.  ELECTION.  (a)  The board shall call an election

2-31     as requested by a petition filed under Section 4 of this Act if the

2-32     board determines that the petition is signed by at least 10 percent

2-33     of the registered voters in the district.

2-34           (b)  The board shall make the determination under Subsection

2-35     (a) of this section not later than the seventh day after the date

2-36     on which the board receives the petition.

2-37           (c)  The board shall hold an election required by Subsection

2-38     (a) of this section on the first authorized uniform election date

2-39     after the date the board determines an election is required that

2-40     allows sufficient time for the board to comply with all applicable

2-41     provisions of the Election Code.

2-42           (d)  The board shall publish notice of the election in a

2-43     newspaper of general circulation in the district once each week for

2-44     three weeks before the date the election is scheduled to be held.

2-45     The notice must include:

2-46                 (1)  the time and place of the election; and

2-47                 (2)  a description of the issue to be decided by the

2-48     election.

2-49           (e)  The ballot for an election ordered in response to a

2-50     petition filed under Section 4 of this Act shall be printed in

2-51     English and Spanish and read as follows:

2-52           "By voting YES on this ballot, you are voting in favor of

2-53     requiring the Sebastian Municipal Utility District to enter into an

2-54     agreement with a qualified water supply corporation in which the

2-55     district's debts, liabilities, obligations, assets, and facilities

2-56     are transferred to the corporation and the district is dissolved.

2-57     By voting NO on this ballot, you are voting against requiring the

2-58     Sebastian Municipal Utility District to enter into such an

2-59     agreement."

2-60           (f)  If a majority of the electors vote in favor of the

2-61     ballot proposition stated in Subsection (e) of this section, the

2-62     board shall enter into an agreement as described by Subsection (a)

2-63     of Section 2 of this Act if:

2-64                 (1)  a corporation agrees to the terms specified by

2-65     Subsection (a) of Section 2 of this Act; and

2-66                 (2)  the Texas Natural Resource Conservation Commission

2-67     determines that the corporation is capable of rendering adequate

2-68     and continuous service as required by Section 13.251, Water Code.

2-69           (g)  If a majority of the electors vote against the ballot

 3-1     proposition stated in Subsection (e) of this section, the board may

 3-2     not enter into an agreement as described by Subsection (a) of

 3-3     Section 2 of this Act before the district conducts the first board

 3-4     election held after the date on which the electors voted against

 3-5     the ballot proposition.

 3-6           SECTION 6.  FILING REQUIREMENT.  The board shall file a copy

 3-7     of the agreement described by Subsection (a) of Section 2 or

 3-8     Subsection (a) of Section 3 of this Act, as appropriate, and a copy

 3-9     of the board's order dissolving the district issued under

3-10     Subsection (b) of Section 2 of this Act, or a copy of the board's

3-11     order transferring the district's obligations and assets issued

3-12     under Subsection (b) of Section 3 of this Act, as appropriate, not

3-13     later than the 15th day after the date the board issues the

3-14     dissolution or transfer order:

3-15                 (1)  with the Texas Natural Resource Conservation

3-16     Commission; and

3-17                 (2)  in the deed records of Willacy and Cameron

3-18     counties.

3-19           SECTION 7.  QUALIFIED WATER SUPPLY CORPORATION.  A

3-20     corporation is qualified to assume the district's debts,

3-21     liabilities, and obligations and assume ownership of the district's

3-22     assets and facilities if the corporation:

3-23                 (1)  is member-owned and member-controlled and formed

3-24     under Chapter 76, Acts of the 43rd Legislature, 1st Called Session,

3-25     1933 (Article 1434a, Vernon's Texas Civil Statutes); and

3-26                 (2)  possesses a valid certificate of public

3-27     convenience and necessity obtained under Section 13.246, Water

3-28     Code.

3-29           SECTION 8.  EMERGENCY.  The importance of this legislation

3-30     and the crowded condition of the calendars in both houses create an

3-31     emergency and an imperative public necessity that the

3-32     constitutional rule requiring bills to be read on three several

3-33     days in each house be suspended, and this rule is hereby suspended,

3-34     and that this Act take effect and be in force from and after its

3-35     passage, and it is so enacted.

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