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. 3-36 * * * * *