76(R) HB 2965 Engrossed version

SRC-JXG H.B. 2965 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2965
By: Hilbert (Lindsay)
Natural Resources
5/5/1999
Engrossed


DIGEST 

Currently, the Texas Constitution provides for the creation of certain
conservation and reclamation districts. H.B. 2965 would create the North
Harris County Regional Water Authority, subject to a confirmation election. 

PURPOSE

As proposed, H.B. 2965 sets forth the creation of the North Harris County
Regional Water Authority.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to the North Harris County Regional Water
Authority in SECTIONS 4.02 and 4.05; and to the board of directors of North
Harris County Regional Water Authority in SECTION 4.03 of this bill. 

SECTION BY SECTION ANALYSIS

ARTICLE 1. GENERAL PROVISIONS

SECTION 1.01. CREATION. (a) Provides that a regional water authority, to be
known as the North Harris County Regional Water Authority (authority), is
created in Harris County, subject to a confirmation election held under
SECTION 2.05 of this Act. Provides that the authority is a governmental
agency and a body politic and corporate. 

(b) Provides that the authority is created under and is essential to
accomplish the purposes provided by Section 59, Article XVI, Texas
Constitution. 
 
SECTION 1.02. DEFINITIONS. Defines "authority," "board," "commission,"
"director," "local government," "person," "subsidence district," "system,"
"water," "subsidence," and "agricultural crop." 

SECTION 1.03. DESCRIPTION OF BOUNDARIES.  Sets forth the legal description
of the boundaries of the authority. Sets forth the districts included under
Subsection (a). Provides that the authority does not include any area that,
on the effective date of this Act, is inside the municipal limits of the
City of Houston or inside the municipal limits of the City of Humble,
notwithstanding Subsections (a) and (b) of this section.  

SECTION 1.04. APPLICABILITY OF OTHER LAW. Provides that this Act prevails
over any inconsistent provision of general law. Provides that this Act does
not prevail over or preempt a provision  of Chapter 151, Water Code, or
Chapter 36, Water Code, that is being implemented by the subsidence
district. 

SECTION 1.05. FINDING OF BENEFIT. Provides that all the land and other
property included within the boundaries of the authority will be benefited
by the works and projects that are to be accomplished by the authority
under powers conveyed by this Act. Provides that the authority is created
to serve a public use and benefit. 


 ARTICLE 2. DIRECTORS 

SECTION 2.01. BOARD OF DIRECTORS. Provides that the authority is governed
by a board of nine directors. Requires the board of directors of North
Harris County Regional Water Authority (board) to appoint a person to fill
a vacancy in the office of director until the next election for directors.
Provides that the person elected to fill the position serves only for the
remainder of the unexpired term, if the position is not scheduled to be
filled at the election. Requires a person to be a qualified voter in the
voting district from which the person is elected or appointed, to be
eligible to serve as director.  

SECTION 2.02. METHOD OF ELECTION OF DIRECTORS. Requires one board director
to be elected from each of the nine single-member voting districts by the
qualified voters of the voting district. Requires a person to indicate on
the person's application for a place on the ballot the voting district that
the person seeks to represent. Requires the board to redraw the
single-member voting districts as soon as practicable after each federal
decennial census, and any change in the boundaries of the authority, in the
manner described by Section 49.109(d). Sets forth  directors elected to
serve after the districts are redrawn. Provides that Chapter 146C, Election
Code, applies to the consideration of votes for a write-in candidate for
the initial permanent director or permanent director as if the authority
were a municipality.  

SECTION 2.03. SERVICE OF DIRECTORS. Provides that temporary directors serve
until the initial permanent directors are elected under Section 2.05 of
this Act. Provides that initial permanent directors serve until  permanent
directors are elected under Section 2.06 of this Act. Provides that
permanent directors serve staggered four-year terms. Provides that a
director serves until the director's successor has qualified.  

SECTION 2.04. TEMPORARY DIRECTORS. Provides that the temporary board of
directors is composed of three individuals appointed by the Texas Natural
Resource Conservation Commission (TNRCC). Requires temporary directors who
have qualified to appoint a person to fill the vacancy, if a temporary
director fails to qualify for office. Requires TNRCC to appoint the
necessary number of persons to fill all vacancies on the board, if at the
time there are fewer than two qualified temporary directors, or if the
temporary directors cannot agree on the appointment. Provides that a
temporary director is not eligible to be elected under Section 2.05 of this
Act. 

SECTION 2.05. CONFIRMATION AND INITIAL PERMANENT DIRECTORS ELECTION. (a)
Requires the temporary board to establish nine single-member voting
districts in the manner described by Section 49.103(d), Water Code, and on
the first Saturday in May 2000 hold an election to confirm the
establishment of the authority and to elect nine initial permanent
directors.  

(b) Authorizes a person who desires to be a candidate for the office of
initial permanent director to file an application with the temporary board
to have the candidate's name printed on the ballot. 

(c) Requires the temporary board to have placed on the ballot the name of
each candidate filing for the office of director, and blank spaces to write
in the names of other persons, at the confirmation and initial permanent
directors election.  

(d) Requires the temporary board to take certain actions, at the time the
voter is canvassed, if the authority is created at the election.  

(e) Sets forth the conditions for permanent directors to draw lots to
determine their terms.  
 
(f) Provides that Section 41.001(a), Election Code, does not apply to the
confirmation and initial permanent directors election held under Section
2.06 of this Act. 
 
(g) Requires the temporary board to draft language for the ballot
proposition used for the confirmation election. Sets forth the requirements
for the ballot proposition.  

(h) Requires the ballot language to explain the nature of any fees or taxes
the authority has  the authority to impose. 

SECTION 2.06. ELECTION OF DATES. Requires the appropriate number of
directors to be elected to the board, on the first Saturday in May in each
subsequent even-numbered year. 

SECTION 2.07. COST OF ELECTION. Requires the temporary board of the
authority to fund the cost of the confirmation and initial permanent
director election if the temporary board is able to find a reasonable means
of fund the election. Authorizes the temporary board of the authority and
the board of directors of the Harris-Galveston Coastal Subsidence District
(HGCSD) to execute an agreement by which HGCSD shall pay the portion of the
costs that could not be funded by the district, and the authority shall
repay HGCSD for those costs within a reasonable period, if the temporary
board is unable to fund the entire cost of the election.  

ARTICLE 3. ADMINISTRATIVE PROVISIONS

SECTION 3.01. MEETINGS AND ACTIONS OF BOARD. Requires the board to meet at
least four times each year and to meet at any other time the board
considers appropriate. 

SECTION 3.02. GENERAL MANAGER. Requires the board to employ a general
manager as the chief administrative officer of the authority. Authorizes
the board to delegate to the general manager full authority to manage and
operate the affairs of the authority subject only to the orders of the
board. Provides that the duties of the general manger include the
administration of the orders of the board, coordination with state,
federal, and local agencies, the oversight of development of authority
plans and programs, and other duties assigned by the board. Requires the
board to determine the terms of office and employment and the compensation
to be paid the general manager. Authorizes the general manager to be
discharged by majority vote of the board. 

SECTION 3.03. EMPLOYEES; BOND. Requires the general manager of the
authority to employ all persons necessary for the proper handling of the
business and operations of the authority and to employ attorneys,
bookkeepers, engineers, and other expert and specialized personnel the
board considers necessary. Requires the general manager to determine
compensation to be paid by the authority. Authorizes the general manager to
discharge employees of the authority. Requires the general manager of the
authority and each employee or contractor of the authority who is charged
with the collection, custody, or payment of any money of the authority to
execute a fidelity bond in an amount determined by the board and in a form
and with a surety approved by the board. Requires the authority to pay for
the bond. 

ARTICLE 4. POWERS AND DUTIES

SECTION 4.01. GENERAL POWERS AND DUTIES. Provides that the authority has
all of the rights, powers, privileges, authority, functions, and duties
necessary and convenient to accomplish the purposes of this Act, including
those provided by Chapter 49, Water Code. Authorizes the authority to take
certain actions.  

SECTION 4.02. AUTHORITY RULES. Authorizes the authority to adopt and
enforce rules reasonably required to implement this Act, including rules
governing procedures before the board. Requires the board to compile its
rules in a book and make them available for use and inspection at the
authority's principal office. 

SECTION 4.03. FEES AND CHARGES. Authorizes the authority to establish fees
and charges as necessary to enable the authority to fulfill the authority's
regulatory obligations provided by this Act. Authorizes the authority to
charge against the owner of a well located in the authority's boundaries a
fee on the amount of water pumped from the well. Requires the board to
establish the rate of a fee under this subsection only after a special
meeting on the fee. Authorizes the board, by rule, to exempt classes of
wells from the fee under this subsection. Prohibits the board from applying
the fee to a well with a casing diameter of less than five inches that
serves a single-family dwelling, regulated under Chapter 27, Water Code, or
used for irrigation of agricultural crops. Requires the fees the board
establishes to be sufficient to meet certain conditions. Authorizes the
temporary board to set fees to pay for the initial operation of the
authority and the election of the initial permanent board  until the
permanent board has been elected. 

SECTION 4.04. CIVIL PENALTY; INJUNCTION. Provides that a person who
violates a rule or order of the authority is subject to a civil penalty of
no less than $50 and no more than $5,000 for each violation or each day of
a continuing violation. Authorizes the authority to bring an action to
recover the penalty in a district court in the county where the violations
occurred. Requires the penalty to be paid to the authority. Authorizes the
authority to bring an action for injunctive relief in a district court in a
county where a violation of an authority rule or order occurs or is
threatened to occur. Authorizes the court to grant to the authority,
without bond or other undertaking, a prohibitory or mandatory injunction
that the facts warrant. Authorizes the authority to bring an action for a
civil penalty and injunctive relief in the same proceeding.  

SECTION 4.05. WATER SUPPLY PLANS. Authorizes the authority, by rule, as
needed but no less frequently than every five years, to develop, prepare,
revise, and adopt comprehensive water supply and drought contingency plans
for various areas of the authority. Requires the plan to be consistent with
regional planning, and to include 10-year, 20-year, and 50-year projections
of water needs within the authority. 

SECTION 4.06. ACQUISITION, CONSTRUCTION, AND OPERATION OF SYSTEMS. Sets
forth provisions regarding the authority.  

SECTION 4.07. SALE OR REUSE OF WATER OR BY-PRODUCT. Authorizes the
authority to store, sell, or reuse water, or any by-product from the
authority's operations. 

SECTION 4.08. EMINENT DOMAIN. Authorizes the authority to exercise the
power of eminent domain in the manner provided in Chapter 21, Property
Code, to acquire property of any kind to further authorized purposes of the
authority. Prohibits the authority from exercising the power of eminent
domain outside of the boundaries of the authority. 

SECTION 4.09. CONTRACTS. Authorizes the authority to enter into a contract
with any person or legal entity regarding the performance of any purpose or
function of the authority. Authorizes a contract to be of unlimited
duration. Authorizes the authority to purchase an interest in a project
used for a purpose or function of the authority. Authorizes the authority
to contract for certain provisions. Authorizes the authority to purchase
surplus property from this state, the United States, or another public
entity through a negotiated contract without bids. Requires an officer,
agent, or employee of the authority who is financially interested in the
contract of the type described by Subsection (d) of this section to
disclose the interest to the board before the board votes on the acceptance
of the contract.  

SECTION 4.10. COOPERATION WITH AND ASSISTANCE OF OTHER GOVERNMENTAL
ENTITIES. Authorizes the board, to cooperate with and request the
assistance of the Texas Water Development Board, TNRCC, the United States
Geological Survey, HGCSD, other local governments, and other agencies of
the United States and this state, in implementing this Act. Authorizes
HGCSD to enter into an interlocal contract with the authority to carry out
the authority's purposes and to carry out the governmental functions and
services specified in the interlocal contract.  

SECTION 4.11. GIFTS AND GRANTS. Provides that the authority is authorized
to accept a gift or grant from money collected by HGCSD under Chapter 151,
Water Code, to fund a water treatment or supply system. Provides that the
authorization in this section is in addition to the authorization provided
in Section 49.229, Water Code. 

SECTION 4.12. EXPENDITURES. Authorizes the authority's money to be
disbursed only by check, draft, order, or other instrument. Requires
disbursements of the authority to be signed by at least two directors,
except the board by resolution may allow the general manager, treasurer,
bookkeeper, or other employee of the authority to sign disbursements.
Authorizes the board by resolution to allow disbursements to be transferred
by federal reserve wire system to accounts in the name of the authority. 

SECTION 4.13. TAXATION. Prohibits HGCSD from imposing an ad valorem tax. 
 
ARTICLE 5. NOTES AND BONDS  

SECTION 5.01. REVENUE NOTES. Authorizes the board, without an election, to
borrow money on negotiable notes of the authority to be paid solely from
the revenue derived from any legal source, including certain items.
Authorizes the notes to be first or subordinate lien notes at the board's
discretion. Prohibits an obligation from being a charge on the property of
the authority. Authorizes an obligation to only be a charge on revenue
pledged for the payment of the obligation.  

SECTION 5.02. BONDS. (a) Authorizes the authority to issue bonds secured by
all or part of the revenue derived from any source, including any source
described by SECTION 5.01(a) of this Act, to carry out a power or authority
conferred by this Act.  

(b) Authorizes the authority to exercise any power of an issuer under
Chapter 656, Article 717q, V.T.C.S., in issuing or securing a bond or note
of the authority. 

 (c) Authorizes the authority to conduct a public, private, or negotiated
sale of the bonds. 

 (d) Sets forth the requirements for authority bonds.

(e) Authorizes an authority bond to be secured by an indenture of trust
with a corporate trustee.  

(f) Authorizes the authority to issue bonds in more than one series as
required for carrying out the purposes of this Act. Authorizes the
authority to reserve the right to issue additional bonds secured by the
authority's revenue that are on a parity with or are senior or subordinate
to the bonds issued earlier, in issuing bonds secured by revenue of the
district.  

(g) Authorizes the resolution authorizing the bonds or the trust indenture
securing the bonds to specify additional provisions that constitute a
contract between the authority and its bondholders. Authorizes the board to
provide for additional bond provisions, and  for a corporate trustee or
receiver to take possession of the authority's facilities if the authority
defaults. 

(h) Provides that Section 49.181, Water Code, does not apply to bonds or
notes issued by the authority. 

SECTION 5.03. REFUNDING BONDS. Provides that the provisions of this Act
that apply to the authority's issuance of other bonds, their security, and
the remedies of the holders apply to refunding bonds. 

SECTION 5.04. APPROVAL AND REGISTRATION OF BONDS. Requires the authority to
submit the bonds and the record relating to their issuance to the attorney
general for approval, after the authority authorizes bonds. Requires the
authority to submit to the attorney general a copy of the contract and the
proceedings of the municipality or other governmental agency, authority, or
district authorizing the contract, if the bonds are secured by a pledge of
the proceeds  of a contract between the authority and a municipality or
other governmental agency, authority, or district. Requires the attorney
general to approve the bonds and contracts, if the attorney general finds
that the bonds have been authorized and each contract has been made in
accordance with the constitution and laws of this state. Requires the bonds
to be registered by the comptroller, on approval. 

SECTION 5.05. FUNDING BY OTHER DISTRICTS. Requires the authority to develop
a procedure for cooperatively funding a project of the authority with money
from other districts inside of the authority's boundaries if the authority
project fulfills a governmental purpose of both the authority and other
HGCSD. Requires the authority to provide written notice of the authority's
intention to issue the bonds to each district inside of the authority's
boundaries that may be benefitted or affected by the project, no later than
the 90th day before the date the authority issues bonds, other than
refunding bonds, to finance a project. Requires the notice to include
certain information. Requires the schedule to be prepared by means of a
formula certified by the authority's engineer. Authorizes a district to
enter into a contract with the authority for HGCSD to finance a portion of
the proposed  project with HGCSD resources instead of using proceeds from
bonds of the authority for that purpose. Requires the contract to be
executed before the authority issues the bonds. Sets forth contract
requirements for the authority.  

ARTICLE 6. MISCELLANEOUS PROVISIONS

SECTION 6.01. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. Provides that
the proper and legal notice of the intention to introduce this Act, setting
out the general substance of this Act, has been published as provided by
law, and the notice and a copy of this Act have been furnished to all
persons, agencies, officials, or entities to which they are required to be
furnished by the constitution and other law of this state, including the
governor, who has submitted the notice and the Act to TNRCC. Provides that
TNRCC has filed its recommendations relating to this Act with the governor,
lieutenant governor, and speaker of the house of representatives within the
required time. Provides that all requirements of the constitution and laws
of this state and the rules and procedures of the legislature with respect
to notice, introduction, and passage of this Act are fulfilled and
accomplished. 

SECTION 6.02. Emergency clause.
     Effective date: upon passage.