AN ACT

 1-1     relating to certain conservation and reclamation districts that are

 1-2     part of more than one municipality.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subsection (a), Section 43.076, Local Government

 1-5     Code, is amended to read as follows:

 1-6           (a)  This section applies to a municipality that contains, as

 1-7     a result of the annexation by or the incorporation of the

 1-8     municipality, any part of the area in a water control and

 1-9     improvement district, fresh water supply district, or municipal

1-10     utility district organized for the primary purpose of providing

1-11     municipal functions such as the supplying of fresh water for

1-12     domestic or commercial uses or the furnishing of sanitary sewer

1-13     service, if:

1-14                 (1)  the balance of the area in the district is located

1-15     in one or more other municipalities;  [or]

1-16                 (2)  the district is not created by a special act of

1-17     the legislature and the balance of the area is located in one or

1-18     more other municipalities and in an unincorporated area; or

1-19                 (3)  the district is a conservation and reclamation

1-20     district of more than 10,000 acres which provides water and

1-21     sanitary sewer service to households and parts of which are located

1-22     in two or more municipalities, one of which has a population of

1-23     more than 1.6 million.

 2-1           SECTION 2.  Subchapter D, Chapter 43, Local Government Code,

 2-2     is amended by adding Section 43.0761 to read as follows:

 2-3           Sec. 43.0761.  PROVISION OF WATER AND SANITARY SEWER UTILITY

 2-4     SERVICE.  (a)  A district existing on September 1, 1997, that,

 2-5     within 10 years after the date of its creation, has not provided

 2-6     water and sanitary sewer utility service from its facilities to all

 2-7     household users in its territory shall:

 2-8                 (1)  provide water and sanitary sewer utility service

 2-9     from its facilities to all household users in its territory not

2-10     later than September 1, 1998; or

2-11                 (2)  for that part of the district for which the

2-12     district does not provide water and sanitary sewer utility service,

2-13     and for which a municipality does provide those services, provide

2-14     for periodic payments, as described by Subsection (b), by the

2-15     district to the municipality that provides the services.

2-16           (b)  Payments made under Subsection (a)(2) are operation and

2-17     maintenance expenses of the district and shall be made at least

2-18     every three months.  The total annual amount of the payments may

2-19     not exceed the lesser of:

2-20                 (1)  the total annual cost to the municipality of

2-21     providing the water and sanitary sewer utility service, including

2-22     both capital and operation and maintenance costs and expenses; or

2-23                 (2)  the total annual amount of maintenance and

2-24     operation taxes and debt service or bond taxes paid to the district

2-25     by the owners of taxable property within the district that receives

 3-1     water and sanitary sewer utility service from the municipality.

 3-2           (c)  For purposes of Subsection (b)(2), the value of taxable

 3-3     property that receives the utility service shall be determined by

 3-4     the most recent certified tax roll provided by the central

 3-5     appraisal district in which the property is located.  The amount of

 3-6     the taxes shall be determined using rates from the district's most

 3-7     recent tax levies.

 3-8           (d)  A district that on January 1, 1997, was providing water

 3-9     and sanitary sewer utility service to households outside the

3-10     territory of the district may not discontinue that service and

3-11     shall continue to provide that service on the basis of rates

3-12     established by the district in accordance with Chapter 13, Water

3-13     Code.

3-14           (e)  In this section, "district" means a conservation and

3-15     reclamation district of more than 10,000 acres that provides water

3-16     and sanitary sewer utility service to households and parts of which

3-17     are located in two or more municipalities, one of which has a

3-18     population of more than 1.6 million.

3-19           SECTION 3.  Sections 43.077 and 43.078, Local Government

3-20     Code, are repealed.

3-21           SECTION 4.  This Act takes effect September 1, 1997.

3-22           SECTION 5.  The importance of this legislation and the

3-23     crowded condition of the calendars in both houses create an

3-24     emergency and an imperative public necessity that the

3-25     constitutional rule requiring bills to be read on three several

 4-1     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 1888 passed the Senate on

         April 17, 1997, by the following vote:  Yeas 31, Nays 0; and that

         the Senate concurred in House amendment on May 26, 1997, by a

         viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 1888 passed the House, with

         amendment, on May 21, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor