By Lewis of Orange                                    H.B. No. 1602
         76R5330 MI-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the exclusion of land or other property from a district
 1-3     with outstanding bond debt.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter J, Chapter 49, Water Code, is amended
 1-6     by adding Section 49.315 to read as follows:
 1-7           Sec. 49.315.  EXCLUSION OF LAND WITH OUTSTANDING BOND DEBT.
 1-8     (a)  A landowner or other property owner in a district with
 1-9     outstanding bonds, warrants, or other certificates of indebtedness
1-10     secured in part by the land or other property may petition the
1-11     district to exclude the owner's land or other property.  A petition
1-12     must:
1-13                 (1)  be in writing and filed with the secretary of the
1-14     board;
1-15                 (2)  describe by metes and bounds or lot and block
1-16     number any land to be excluded;
1-17                 (3)  describe any property other than land to be
1-18     excluded; and
1-19                 (4)  state clearly the particular grounds under
1-20     Subsection (b) on which exclusion is sought.
1-21           (b)  Exclusion of land or other property under this section
1-22     may be made only on the grounds that:
1-23                 (1)  the district has never provided utility service to
1-24     the land or other property;
 2-1                 (2)  the district has discontinued utility service to
 2-2     the land or other property;
 2-3                 (3)  the cost of providing service to the land or other
 2-4     property makes any service offered by the district so prohibitively
 2-5     expensive that it effectively constitutes denial of service; or
 2-6                 (4)  for a commercial development or a residential
 2-7     development with lot sizes of less than two acres, the cost of
 2-8     obtaining service from the district makes the development
 2-9     economically infeasible but not necessarily prohibitively
2-10     expensive.
2-11           (c)  The board shall consider all engineering data and other
2-12     evidence presented and determine if the facts support an
2-13     affirmative finding on the grounds alleged for exclusion.  If the
2-14     board finds in the affirmative, the board shall enter an order
2-15     excluding the land or other property and redefining the boundaries
2-16     of the district to reflect the exclusion.  Not later than the 30th
2-17     day after the date of the board's order under this section, the
2-18     board shall:
2-19                 (1)  submit a copy of the exclusion order and a
2-20     detailed description of the land or other property excluded to the
2-21     executive director of the commission; and
2-22                 (2)  file a copy of the exclusion order in the deed
2-23     records of the county or counties in which the district is
2-24     situated.
2-25           (d)  The exclusion of land or other property under this
2-26     section does not impair the rights of the holders of any
2-27     outstanding bonds, warrants, or other certificates of indebtedness
 3-1     of the district.
 3-2           (e)  Excluded land or other property pledged as security for
 3-3     any outstanding debt of the district remains pledged for its pro
 3-4     rata share of that debt until final payment is made.  The district
 3-5     shall continue to levy and collect taxes on the excluded property
 3-6     at the same rate levied on property remaining in the district until
 3-7     the amount of taxes collected from the excluded property equals the
 3-8     pro rata share of the district's debt outstanding at the time the
 3-9     property was excluded attributable to the excluded property.  The
3-10     taxes collected on the excluded property shall be applied only to
3-11     the payment of the excluded property's pro rata share of that debt.
3-12           (f)  The owner of any part of the excluded land or other
3-13     property at any time may pay in full the owner's share of the pro
3-14     rata share of the district's debt outstanding at the time the
3-15     property is excluded.
3-16           (g)  After any land or other property is excluded under this
3-17     section, the district may issue any unissued additional debt
3-18     approved by the voters of the district before exclusion without
3-19     holding a new election.  Additional debt issued after property is
3-20     excluded from the district may not be payable from and does not
3-21     create a lien against the taxable value of the excluded property.
3-22           SECTION 2.  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
3-26     days in each house be suspended, and this rule is hereby suspended,
3-27     and that this Act take effect and be in force from and after its
 4-1     passage, and it is so enacted.