NMO H.B. 2965 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2965 By: Hilbert Natural Resources 4/5/1999 Introduced BACKGROUND AND PURPOSE The Texas Constitution provides for the creation of certain conservation and reclamation districts. H.B. 2965 creates the North Harris County Regional Water Authority. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS ARTICLE 1. GENERAL PROVISIONS. SECTION 1.01. CREATION. Creates a conservation and reclamation district, known as the North Harris County Regional Water Authority (district). Provides that the district is a governmental agency and a body politic and corporate. Provides that the district is created under and is essential to accomplish the purposes provided by Section 59, Article XVI, Texas Constitution. SECTION 1.02. DEFINITIONS. Defines "board," "commission," "director," "district," "local government," "person," "subsidence district," "system," and "water." SECTION 1.03. DESCRIPTION OF BOUNDARIES. Describes the boundaries of the district. SECTION 1.04. EXCLUSION OF CERTAIN TERRITORY. (a) Authorizes the governing body of a political subdivision within the boundaries to request the Harris-Galveston Coastal Subsidence District (subsidence district) to certify that water systems serving the political subdivision are in compliance with the subsidence district's rules. Requires the subsidence district to issue a letter granting or denying certification not later than the 30th day after the date it receives the request for certification. (b) Authorizes the governing body of a political subdivision whose water systems the subsidence district has certified, by order, to exclude from the district the area inside the subdivision's territorial limits. (c) Provides that such an order must include an accurate description of the boundaries of the excluded territory. (d) Sets forth filing and presentation requirements for the order and the filing requirement for the description of the district's boundaries after the territory is excluded. Provides that immediately after the county clerk of Harris County records the order and description in the county records, the excluded territory is no longer a part of the district. (e) Provides that the excluded territory is responsible for its pro rata share of the district's indebtedness at the time the territory was excluded. SECTION 1.05. APPLICABILITY OF OTHER LAW. Provides that this Act prevails over any inconsistent provision of general law. SECTION 1.06. FINDING OF BENEFIT. Sets forth finding of benefit. ARTICLE 2. DIRECTORS SECTION 2.01. BOARD OF DIRECTORS. Provides that the district is governed by board, consisting of nine directors. Requires a vacancy in the office of director to be filled by appointment of the board until the next election for directors. Requires the person elected to fill the position to serve only for the remainder of the unexpired term, if the position is not scheduled to be filled at the election. Provides that a person, to be eligible to serve as director, must be a qualified voter in the voting district from which the person is elected or appointed if representing a voting district or in the district if representing the district at large. SECTION 2.02. METHOD OF ELECTION OF DIRECTORS. Requires one director to be elected from each of 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 census and any change in district boundaries. Requires the election of nine new directors, at the first election after each time the voting districts are redrawn. Requires the newly elected directors to draw lots regarding staggered terms. Provides that Subchapter C (Write-in Candidate in City Election), Chapter 146, Election Code, applies to the consideration of voters for a write-in candidate for initial permanent director or permanent director as if the district 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. Sets forth the terms of the directors. 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 the 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 any time there are fewer than two qualified 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. INITIAL PERMANENT DIRECTORS. Requires the temporary board of directors to establish nine single-member voting districts and on the third Saturday in January, 2000, hold an election to elect nine initial permanent directors. 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. Requires the temporary board of directors to have placed on the ballot certain provisions for the initial permanent directors' election. Requires the initial permanent directors to draw lots regarding staggered terms. Provides that Section 41.001(a) (Uniform Election Dates), Election Code, does not apply to the initial permanent directors' election held under this section. SECTION 2.06. ELECTION DATES. Requires election of the appropriate number of directors to the board on the third Saturday in January in each subsequent even-numbered year. SECTION 2.07. COST OF ELECTION OF INITIAL PERMANENT DIRECTORS. Requires the temporary board of directors and the board of directors of the subsidence district to execute an agreement requiring the subsidence district to pay the costs of the election under Section 2.05 and the district to repay the subsidence district for those costs. ARTICLE 3. ADMINISTRATIVE PROVISIONS SECTION 3.01. MEETINGS AND ACTIONS OF BOARD. Requires the board to meet at least four times each year and authorizes it to meet at any other time considered appropriate. SECTION 3.02. EMPLOYEE BONDS. Requires each employee or contractor of the district who is charged with the collection, custody, or payment of any money of the district 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 district to pay the premiums on any bonds required under this section. ARTICLE 4. POWERS AND DUTIES SECTION 4.01. GENERAL POWERS AND DUTIES. Authorizes the district to exercise all of the rights, privileges, authority, functions, and duties necessary and convenient to accomplish the purposes of this Act, including those provided by Chapters 36 (Groundwater Conservation Districts) and 49 (Provisions Applicable to All Districts), Water Code, except the Sections 36.101 (Rulemaking Power), 36.116 (Regulation of Spacing and Production), and 36.205(c)(2) (relating to the authority to set certain fees). Prohibits the district from taking any action under Section 36.113(e), Water Code, related to the control or prevention of subsidence. Authorizes the district take certain enumerated actions. Requires the district to consult with the subsidence district on any matter involving subsidence inside the district's boundaries. Provides that the rights, powers, privileges, authority, functions, and duties of the district are subject to the continuing right of supervision of the state to be as exercised by and through TNRCC. SECTION 4.02. DISTRICT RULES. Requires the district to adopt certain rules reasonably required to implement this Act, including rules governing procedure and practice before the board. Requires the district to print its rules and furnish copies of the rules to any person on written request. SECTION 4.03. FEES AND CHARGES. Authorizes the district to establish fees and charges necessary to enable the district to fulfill the district's obligations under this Act. Authorizes the district to establish fees and to recover capital expenditures as provided by Chapter 395 (Financing Capital Improvements Required by New Development in Municipalities, Counties, and Certain Other Local Governments), Local Government Code. SECTION 4.04. INSPECTIONS AND INVESTIGATIONS. Authorizes the district to enter public or private property in the district to inspect or investigate conditions relating to the district's authorized purposes under the same provisions and restrictions applicable to TNRCC under general law. SECTION 4.05. HEARING AND ORDER. Authorizes the board to take certain actions regarding the holding of hearings. Provides that an order of the board must be in the district's name and attested by proper members of the board under the district's rules. SECTION 4.06. CIVIL PENALTY; INJUNCTION. Provides that a person who violates a rule, permit, or order of the district is subject to a civil penalty of not less than $50 and not more than $5,000 for each violation or each day of a continuing violation. Authorizes the district to sue to recover the penalty in a district court in the county where the violation occurred. Requires payment of the penalty to the district. Requires the district to sue for injunctive relief in a district court in the county where a violation of a district rule, permit, or order occurs or is threatened to occur. Authorizes the court to grant to the district, without bond or other undertaking, a prohibitory or mandatory injunction that the facts warrant, including a temporary restraining order, temporary injunction, or permanent injunction. Authorizes the district to sue for a civil penalty and injunctive relief in the same proceeding. SECTION 4.07. JUDICIAL REVIEW. Authorizes a rule, order, or other official action of the district under this chapter to be appealed to a district court in Harris County by any adversely affected person. Provides that an appeal must be filed not later than the 45th day after the date the rule is adopted, order is issued, or other action takes effect. Requires the board, on written request of a person who resides or owns real property in the district, to make written findings of fact and conclusions of law regarding a rule, order, or other action of the district and provide a certified copy of the findings and conclusions to the person not later than the 35th day after the date the district receives the request. Provides that the review on appeal is under the substantial evidence rule as described by Section 2001.174 (Review Under Substantial Evidence Rule or Undefined Scope of Review), Government Code. SECTION 4.08. WATER SUPPLY PLANS. Requires the district, by rule, as needed but not less frequently than every five years, to develop, prepare, revise, and adopt comprehensive water supply plans for various areas of the district. Sets forth requirements of the plan. SECTION 4.09. ACQUISITION, CONSTRUCTION, AND OPERATION OF SYSTEMS. Authorizes the district to take certain actions relating to the acquisition, construction, and operation of systems. SECTION 4.10. SYSTEM CONTRACTS. Authorizes the district to contract to receive, treat, and supply water to or from any person inside or outside the district. Requires the district, in a contract under this section, to set fees according to certain criteria. SECTION 4.11. SALE OR REUSE OF WATER OR BY-PRODUCT. Authorizes the district to store, sell, or reuse water or any by-product from the district's operation. SECTION 4.12. EMINENT DOMAIN. Authorizes the district to exercise the power of eminent domain under Chapter 21 (Eminent Domain), Property Code, to acquire property of any kind to further authorize district purposes. Provides that the district is not required to deposit a bond under Section 21.021(a) (relating to possession pending litigation), Property Code. SECTION 4.13. CONTRACTS. Authorizes the district to enter into a contract with any person or legal entity regarding the performance of any purpose or function of the district to accomplish a purpose or function of the district. Authorizes a contract to be of unlimited duration. Authorizes the district to purchase an interest in a project used for a purpose or a function of the district. Authorizes the district to contract for certain purposes. Authorizes the district 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 district who is financially interested in a contract of the type described in a surplus property contract to disclose the interest to the board before the board votes on the acceptance of the contract. Provides that a contract between the district and the municipality is not required to be submitted to the municipality's electorate. SECTION 4.14. GIFTS AND GRANTS. Authorizes the district to accept and use a gift or grant from the subsidence district from money collected by the subsidence district under Chapter 36, Water Code, to fund a water treatment or supply system in the district. ARTICLE 5. NOTES, BONDS, AND TAXATION SECTION 5.01. REVENUE NOTES. Authorizes the board, without an election, to borrow money on negotiable notes of the district to be paid solely from the revenue derived from any source other than ad valorem taxes. Authorizes that the notes be first or subordinate lien notes at the board's discretion. Prohibits an obligation from being a charge on the property of the district or on taxes imposed by the district. Authorizes that an obligation only be a charge on revenue pledged for the payment of the obligation. Prohibits a tax imposed by the district from being used to pay any part of the obligation. SECTION 5.02. BONDS. Authorizes the district, to carry out a power or authority conferred by this Act, to issue bonds secured by a pledge of ad valorem taxes or of all or part of the revenue derived from any source other than ad valorem taxes. Authorizes the district, in securing a bond or note of the district, to exercise any power of an issuer under Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, V.T.C.S.). Authorizes the district to conduct a public, private, or negotiated sale of the bonds. Prohibits bonds secured in whole or in part by taxes from being issued until authorized at an election called and held in compliance with Section 36.180 (Election), Water Code. Provides that the district's bonds conform to certain standards. Authorizes that a district bond be secured by an indenture of trust with a corporate trustee. Authorizes the district to issue bonds in more than one series as required for carrying out the purposes of this Act. Authorizes the district, in issuing bonds secured by the district's ad valorem taxes or by revenue, to reserve the right to issue additional bonds secured by the district's ad valorem taxes or by revenue that are on a parity with or are senior or subordinate to the bonds issued earlier. Authorizes that the resolution authorizing the bonds or the trust indenture securing the bonds specify additional provisions that constitute a contract between the district and its bondholders. Authorizes the board to provide for additional bond provisions and for a corporate trustee or receiver to take possession of the district's facilities if the district defaults. Provides that Sections 36.171 (Issuance of Bonds and Notes) and 49.181 (Authority of Commission Over Issuance of District Bonds), Water Code, to not apply to bonds or notes issued by the district. SECTION 5.03. REFUNDING BONDS. Provides that the provisions of this Act that apply to the district'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 district to submit the bonds and the record relating to their issuance to the attorney general for approval, after the district authorizes bonds. Requires the district 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 district 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, on approval, to be registered by the comptroller. SECTION 5.05. FUNDING BY OTHER CONSERVATION AND RECLAMATION DISTRICTS. Requires the district to develop a procedure for cooperatively funding a district project with money from other conservation and reclamation districts inside the district's boundaries if the district project fulfills a governmental purpose of both districts. Requires the district by a certain date to provide written notice of the district's intention to issue the bonds to each conservation and reclamation district inside the district's boundaries that may be benefited or affected by the project. Provides that the notice must include certain information related to the value of the bonds planned to be issued. Provides that the schedule must be prepared by means of a formula certified by the district engineer. Authorizes a conservation or reclamation district to enter into a certain contract with the district. Requires the contract to be executed before the district issues the bonds. Prohibits the project from being financed in any part with bonds payable with revenue derived from ad valorem taxes. Requires the district to take certain actions as provided by the contract. ARTICLE 6. COMPETITIVE PROPOSALS AND CONTRACTS SECTION 6.01. PROPOSALS FOR CONTRACTS AND SERVICES GENERALLY. Provides that the board is not required to solicit proposals for contracts or services, but authorizes the board to solicit proposals to further the interests of the district. Requires the board, if it elects to solicit proposals, to make the solicitation in accordance with Subchapter B (Competitive Bidding on Certain Public Works Contracts), Chapter 271, Local Government Code, except as provided by this article. SECTION 6.02. REQUESTS FOR PROPOSAL; NOTICE. Provides that the district must solicit quotations through a request for proposal. Sets forth composition of public notice of the request for proposal. SECTION 6.03. OPENING PROPOSALS AND PRICED BIDS. Requires the board or a person the board appoints to open the proposals and solicit priced bids from the persons whose proposals qualify under the criteria stated in the solicitation of proposals. Provides that the solicitation for priced bids must be mailed not later than the seventh day after the date the proposals are opened. SECTION 6.04. CONSIDERATION OF PRICED BIDS; AWARD. Requires the board to consider the priced bids in open session not later than the 30th day after the date the proposals are opened under Section 6.03 of this Act. Requires the board to award the contract to the responsible offeror whose bid is the lowest evaluated offer resulting from the negotiation. SECTION 6.05. PUBLIC INSPECTION OF BIDS AND PROPOSALS. Requires the board to make all proposals and bids available for public inspection after the board awards the contract. SECTION 6.06. NEGOTIATION WITH BIDDERS. Sets forth requirements for the board in conducting negotiations with bidders. SECTION 6.07. CONTRACT MODIFICATION. Authorizes the board or a person the board appoints to make purchases or act on the board's behalf to negotiate a modified contract, at any time after the contract is awarded under this article and before the contract executed, if the modification meets certain requirements. SECTION 6.08. CHANGE OF CONTRACT AMOUNT. Authorizes the board to grant an employee of the district general authority to approve a change order that involves an increase in contract costs of $50,000 or less. Prohibits the board or employee from approving certain change orders. SECTION 6.09. BID BOND. Authorizes the board to include in the request for proposals or bid specifications a requirement that the bidder provide a good and sufficient bid bond in the amount of five percent of the total contract price if certain conditions exist. Provides that a bid bond required by this section must be executed with a surety company authorized to do business in this state. Provides that this section does not apply to a contract for which Subchapter B (General Requirements; Liability), Chapter 2253, Government Code, requires a performance bond. SECTION 6.10. PERFORMANCE BOND. Authorizes the board to require an offeror of a proposal or a bidder to provide a performance bond to the district for the full amount of the contract if the contract price exceeds $50,000. Provides that the bond must be provided before the contract work begins and not later than a certain date. ARTICLE 7. MISCELLANEOUS PROVISIONS SECTION 7.01. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. Sets forth certain findings related to procedural requirements. SECTION 7.02. Emergency clause. Effective date: upon passage.