76R13301 DRH-F
By Keel H.B. No. 3165
Substitute the following for H.B. No. 3165:
By Walker C.S.H.B. No. 3165
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the invalid annexation of a water or sewer district.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter D, Chapter 43, Local Government Code,
1-5 is amended by adding Section 43.0716 to read as follows:
1-6 Sec. 43.0716. INVALID ANNEXATION OF WATER OR SEWER DISTRICT.
1-7 (a) A water or sewer district, as defined by Section 43.071, that
1-8 was purportedly dissolved by a municipal annexation that is later
1-9 invalidated, shall resume its functions and duties as they existed
1-10 immediately before the invalidated annexation on the 30th day after
1-11 the date a final court judgment:
1-12 (1) invalidates the annexation of the land contained
1-13 in the district; or
1-14 (2) upholds the constitutionality of a statute that
1-15 effectively prohibits the annexation of the land by the
1-16 municipality.
1-17 (b) Not later than the date described by Subsection (a) or,
1-18 if that date occurs before the effective date of this section, on
1-19 the effective date of this section, the municipality shall:
1-20 (1) transfer all of the district's assets in the
1-21 possession of the municipality back to the district, including
1-22 revenue from taxes levied by the district;
1-23 (2) provide written notice of the resumption of the
1-24 district's functions and duties to:
2-1 (A) each financial institution that held assets
2-2 of the district at the time of the invalidated annexation;
2-3 (B) all holders of district bonds; and
2-4 (C) all persons who will receive water or sewer
2-5 service from the district;
2-6 (3) provide a written accounting to the board of
2-7 directors of the district of all assets of the district held by the
2-8 municipality and of all assets or obligations disposed of by the
2-9 municipality, including the proceeds of the sale of a district
2-10 asset; and
2-11 (4) provide to the board of directors of the district
2-12 a written accounting of all revenues received from and expenses
2-13 incurred for the municipality's operation of the district's water
2-14 and sewer systems and provide the district with an amount equal to
2-15 the excess of the revenues over the expenses.
2-16 (c) The board of directors of the district may provide for
2-17 an independent appraisal of an asset of the district that was sold
2-18 by the municipality. If the independent appraisal of the asset is
2-19 for more than the amount of the proceeds the municipality received
2-20 for the asset, the municipality shall, not later than the time
2-21 required for an action under Subsection (b), transfer to the
2-22 district an amount equal to:
2-23 (1) the difference between the amount of the
2-24 independent appraisal and the amount the municipality received; and
2-25 (2) interest on the difference under Subdivision (1)
2-26 computed at the rate of six percent a year from the date the
2-27 municipality received the proceeds from the sale of the asset.
3-1 (d) A person who was serving as a director of the district
3-2 immediately before the invalidated annexation resumes service as a
3-3 director on the date described by Subsection (a). If a person is
3-4 no longer qualified under law to serve as director, the vacancy
3-5 shall be filled by appointment of the board. If less than a
3-6 majority of the members of the board are qualified to serve, the
3-7 Texas Natural Resource Conservation Commission shall fill the
3-8 vacancies by appointment not later than the 20th day after the day
3-9 the commission receives a written request from a director or a
3-10 resident of the district.
3-11 (e) A contract or other outstanding obligation of the
3-12 district at the time of the invalidated annexation is not affected
3-13 by the annexation and its subsequent invalidation except that a
3-14 condition imposed by the municipality under Section 54.016, Water
3-15 Code, is no longer valid.
3-16 (f) An obligation incurred by the municipality for the
3-17 direct benefit of the land in the district or water or sewer
3-18 customers of the district during the period of invalid annexation
3-19 may be assumed by the district at the discretion of the board of
3-20 directors. An obligation that is not assumed by the district under
3-21 this subsection remains an obligation of the municipality.
3-22 (g) The municipality may not seek reimbursement from the
3-23 district for money spent or an asset of the municipality consumed
3-24 by the municipality for the benefit of the district, a landowner in
3-25 the district, or a water or sewer customer of the district during
3-26 the period of invalid annexation by the municipality.
3-27 (h) A person is a water or sewer customer of the district on
4-1 the date described by Subsection (a) if the person:
4-2 (1) is located in the district or in the area the
4-3 district served before the invalid annexation by the municipality;
4-4 and
4-5 (2) is connected to the water or sewer facilities of
4-6 the district either before or after the invalidated annexation by
4-7 the municipality.
4-8 (i) The municipality may not terminate water or sewer
4-9 service to a customer of the district until the district is able to
4-10 resume the operation of its water or sewer facilities.
4-11 (j) All authority of the district that was approved at an
4-12 election held before the invalidated annexation, including the
4-13 authority to tax and the authority to issue bonded indebtedness
4-14 secured by taxes or revenues or a combination of taxes and
4-15 revenues, is effective as of the date described by Subsection (a).
4-16 SECTION 2. The importance of this legislation and the
4-17 crowded condition of the calendars in both houses create an
4-18 emergency and an imperative public necessity that the
4-19 constitutional rule requiring bills to be read on three several
4-20 days in each house be suspended, and this rule is hereby suspended,
4-21 and that this Act take effect and be in force from and after its
4-22 passage, and it is so enacted.