By Lewis of Orange H.B. No. 702
77R4646 SGA-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration of drainage districts and the
1-3 issuance of bonds and other instruments of indebtedness by drainage
1-4 districts; increasing a criminal penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 56.015(a), Water Code, is amended to read
1-7 as follows:
1-8 (a) Any person filing a petition shall deposit with the
1-9 clerk of the commissioners court [$200 in] cash, in an amount to be
1-10 determined by the county election officer, which shall be held by
1-11 the clerk until the result of the election to create the district
1-12 and issue bonds is officially announced.
1-13 SECTION 2. Section 56.032(b), Water Code, is amended to read
1-14 as follows:
1-15 (b) To operate under Article XVI, Section 59, of the Texas
1-16 Constitution, the board must adopt a resolution proposing the
1-17 change and schedule [district shall present the petition and make
1-18 the deposit required by Sections 56.014 and 56.015 of this code.
1-19 The commissioners court, by order entered in its minutes, shall
1-20 give notice and hold] a hearing on the resolution. The hearing
1-21 must be held not earlier than the 30th day but not later than the
1-22 60th day after the date the resolution is adopted. The board shall
1-23 give notice of the time and place of the hearing on the resolution
1-24 by posting a copy of the resolution for at least the 20 days
2-1 preceding the date of the hearing in five public places in the
2-2 county. One of the copies shall be posted on the courthouse door
2-3 and the other copies shall be posted within the boundaries of the
2-4 district. Following the hearing, the board may adopt a resolution
2-5 authorizing [petition as required by Sections 56.017 and 56.018 of
2-6 this code and may by order authorize] the district to operate under
2-7 the provisions of Article XVI, Section 59, of the Texas
2-8 Constitution.
2-9 SECTION 3. Subchapter C, Chapter 56, Water Code, is amended
2-10 by adding Section 56.062 to read as follows:
2-11 Sec. 56.062. ELIGIBILITY REQUIREMENTS FOR DIRECTORS. To be
2-12 eligible to serve as a director, a person must satisfy the
2-13 requirements of Section 141.001(a), Election Code.
2-14 SECTION 4. Section 56.069(a), Water Code, is amended to read
2-15 as follows:
2-16 (a) The functions, powers, rights, and duties exercised by
2-17 or relating to the board of any district may be transferred to the
2-18 commissioners court of the county in which the district is wholly
2-19 located, but before the transfer is made, the commissioners court
2-20 and the board must pass resolutions authorizing the transfer. In
2-21 any district in which the board is elected, the transfer may not be
2-22 made unless the transfer is approved by a majority of the voters
2-23 voting on that issue at an election held in the district.
2-24 SECTION 5. Section 56.128, Water Code, is amended to read as
2-25 follows:
2-26 Sec. 56.128. INJURING DRAINAGE CANAL OR DITCH. Any person
2-27 who wilfully fills up, cuts, injures, destroys, or impairs the
3-1 usefulness of any canal, drain, ditch, watercourse, or other work
3-2 constructed, repaired, or improved by a district to drain and
3-3 protect from overflow of water, upon conviction is punishable by
3-4 confinement in the county jail for not more than two months or by a
3-5 fine of not more than $1,000 [$100].
3-6 SECTION 6. Sections 56.182(b) and (c), Water Code, are
3-7 amended to read as follows:
3-8 (b) The interest and sinking fund consists of that portion
3-9 of tax collections necessary for paying principal and interest on
3-10 bonded indebtedness, and this fund may be invested for the benefit
3-11 of the district as provided by law [in bonds and securities
3-12 approved by the attorney general].
3-13 (c) Each fund shall be held for the purpose for which it was
3-14 created, and if money is improperly paid from either fund, the
3-15 board [commissioners court] may [have the county treasurer]
3-16 transfer money in the two funds to restore the fund which was
3-17 improperly used.
3-18 SECTION 7. Sections 56.202 and 56.203, Water Code, are
3-19 amended to read as follows:
3-20 Sec. 56.202. ISSUANCE OF BONDS. When maps, profiles, and
3-21 estimates are filed, the board [commissioners court] shall issue an
3-22 order directing the issuance of bonds sufficient to pay for
3-23 proposed improvements together with necessary, actual, and
3-24 incidental expenses. The bonds may not be issued in an amount
3-25 greater than the amount specified in the order and notice of
3-26 election, and in districts operating under Article III, Section 52,
3-27 of the Texas Constitution, the bonds may not be issued in an amount
4-1 greater than one-fourth of the assessed valuation of the real
4-2 property of the district.
4-3 Sec. 56.203. RECORD BOOK FOR BONDS. (a) Before any bonds
4-4 are issued, the board [commissioners court] shall provide a
4-5 well-bound book in which the board [county clerk] shall keep a
4-6 record of:
4-7 (1) all bonds which have been issued;
4-8 (2) the numbers of the bonds;
4-9 (3) the amount of the bonds;
4-10 (4) the rate of interest on the bonds;
4-11 (5) the date of issuance of the bonds;
4-12 (6) the date on which the bonds are due;
4-13 (7) the place where the bonds are payable;
4-14 (8) the amount received for the bonds;
4-15 (9) the annual rate of assessment to pay interest on
4-16 and provide a sinking fund for the bonds; and
4-17 (10) the payment of each bond.
4-18 (b) The board [county clerk] shall keep the book open at all
4-19 times for public inspection by district taxpayers and bondholders.
4-20 [(c) The county clerk is entitled to receive for recording
4-21 district bonds and other instruments the same fees allowed by law
4-22 for recording other similar records.]
4-23 SECTION 8. Sections 56.204(a), (b), and (c), Water Code, are
4-24 amended to read as follows:
4-25 (a) Bonds shall be issued in the name of the district,
4-26 signed by the board president [county judge], and attested by the
4-27 board secretary [county clerk], and each bond shall have the seal
5-1 of the district [commissioners court] affixed to it.
5-2 (b) The bonds shall be issued in denominations [of not less
5-3 than $100 nor more than $1,000] and shall bear interest as
5-4 authorized by the board [which is payable annually or
5-5 semiannually].
5-6 (c) The terms of the bonds shall include the time, places,
5-7 manner, and conditions of payment and the rate of interest
5-8 determined and ordered by the board [commissioners court].
5-9 SECTION 9. Section 56.205(a), Water Code, is amended to read
5-10 as follows:
5-11 (a) After the [Before any] bonds are sold [offered for
5-12 sale], the district shall submit to the attorney general:
5-13 (1) [a copy of] the actual bonds;
5-14 (2) a certified copy of the board's [commissioners
5-15 court] order levying a tax to pay interest and create a sinking
5-16 fund;
5-17 (3) a statement of the district's total bonded
5-18 indebtedness including the value of the bonds proposed to be issued
5-19 and the value of taxable property in the district as shown by the
5-20 last official assessment of the appraisal district in which the
5-21 district participates [county]; and
5-22 (4) other information the attorney general requires.
5-23 SECTION 10. Sections 56.207, 56.209, and 56.210, Water Code,
5-24 are amended to read as follows:
5-25 Sec. 56.207. BONDS: SALE. (a) The board [When the bonds are
5-26 registered, the county judge, under the direction of the
5-27 commissioners court,] shall advertise and sell the bonds on the
6-1 best terms and for the best price possible.
6-2 (b) The board [county judge] shall deposit [pay to the
6-3 county treasurer] all money from the sale of the bonds as it is
6-4 received into [, and the county treasurer shall place the money in]
6-5 the construction and maintenance fund [to the credit] of the
6-6 district.
6-7 [(c) The county judge is entitled to receive one-half of one
6-8 percent of the amount received from the sale of bonds sold by him
6-9 as payment for his services.]
6-10 Sec. 56.209. USE OF UNSOLD BONDS FOR MAINTENANCE PURPOSES.
6-11 If any bonds remain unsold which are not required to complete
6-12 improvements, the board [commissioners court] may enter its consent
6-13 on the public record to sell the bonds and place the proceeds in
6-14 the construction and maintenance fund for use in accomplishing the
6-15 purposes stated in Section 56.242 of this code.
6-16 Sec. 56.210. REFUNDING BONDS. (a) A [With the consent of
6-17 the bondholders, a] district may refund outstanding bonds by
6-18 issuing new [coupon] bonds as provided by Chapter 1207, Government
6-19 Code [in their place].
6-20 (b) [Interest is shown by coupons attached to the bonds.
6-21 The commissioners court may pay the interest on the bonds annually
6-22 or semiannually.]
6-23 [(c) The commissioners court may pay the refunding bonds
6-24 serially, or in any other manner they choose, but in districts
6-25 which are not operating under Article XVI, Section 59, of the Texas
6-26 Constitution, it shall pay the bonds not later than 40 years from
6-27 the date the bonds are issued.]
7-1 [(d)] The district shall issue the bonds in denominations to
7-2 be determined by the board [of $100 or a multiple of $100,] and
7-3 shall levy a tax sufficient to meet the payment of principal and
7-4 interest of the refunding bonds before the bonds are delivered.
7-5 [(e) The commissioners court shall issue refunding bonds in
7-6 the manner provided for other district bonds, and shall deduct any
7-7 sum on hand to the credit of any sinking fund account in
7-8 ascertaining the amount of refunding bonds to be issued. This sum
7-9 shall be applied to the payment of the outstanding bonds.]
7-10 [(f) The commissioners court shall not issue refunding bonds
7-11 until they are approved by the attorney general and registered by
7-12 the comptroller. The comptroller shall not register the refunding
7-13 bonds until the old bonds being replaced are presented to him for
7-14 cancellation. After the comptroller registers the new bonds, he
7-15 shall cancel the old bonds and interest coupons and deliver the new
7-16 bonds to the proper bondholders. The district may present the old
7-17 bonds for cancellation in installments, and the comptroller may
7-18 register and deliver a like amount of the new bonds.]
7-19 [(g) In a district operating under Article XVI, Section 59,
7-20 of the Texas Constitution, if the holders of outstanding bonds do
7-21 not consent to the exchange of their bonds for refunding bonds, the
7-22 refunding bonds may be sold and the proceeds applied to the
7-23 purchase of the outstanding bonds when they become payable under an
7-24 option of prepayment contained in the bonds or when the bondholders
7-25 will accept payment.]
7-26 SECTION 11. Sections 56.211(b) and (c), Water Code, are
7-27 amended to read as follows:
8-1 (b) The board [commissioners court] shall call the election
8-2 and the secretary [clerk] of the board [court] shall give notice of
8-3 the time and places for holding the election.
8-4 (c) The notice shall be signed by the secretary [clerk] and
8-5 shall
8-6 (1) state the purpose of the election;
8-7 (2) state the proposition to be voted on;
8-8 (3) define the election precincts;
8-9 (4) prescribe the polling places in the district; and
8-10 (5) list the names of the election officers.
8-11 SECTION 12. Sections 56.212(a), (b), and (c), Water Code, are
8-12 amended to read as follows:
8-13 (a) If the board [commissioners court] declares the result
8-14 of the election under Section 56.211 of this code to favor the
8-15 issuance of refunding bonds and the levy of a tax to pay for the
8-16 bonds, refunding bonds with the seal of the district [commissioners
8-17 court] affixed to them may be issued in the name of the district.
8-18 The bonds shall be signed by the board president and [county
8-19 judge,] attested [by the county clerk,] and registered by the board
8-20 secretary [county treasurer].
8-21 (b) The bonds together with the record relating to them
8-22 shall be submitted to the attorney general for his approval, as
8-23 required by Section 49.184.
8-24 (c) When the attorney general approves the bonds, they shall
8-25 be delivered to the comptroller who shall register them and deliver
8-26 them in exchange for or on release of the obligations being
8-27 refunded at the time, in the manner, and in the amounts prescribed
9-1 in the order of the board [commissioners court]. If the
9-2 obligations being refunded are evidenced by outstanding securities,
9-3 the comptroller shall cancel the outstanding securities
9-4 concurrently with the registration and delivery of the bonds.
9-5 SECTION 13. Section 56.241, Water Code, is amended to read as
9-6 follows:
9-7 Sec. 56.241. LEVY OF TAXES TO PAY FOR BONDS. After bonds are
9-8 authorized at an election, the board [commissioners court] shall
9-9 have taxes annually assessed and collected on all property in the
9-10 district sufficient to pay interest and principal on the bonds.
9-11 Taxes collected under this section shall be placed in the interest
9-12 and sinking fund.
9-13 SECTION 14. Section 56.242, Water Code, is amended by
9-14 amending Subsection (a) and by adding Subsections (c) and (d) to
9-15 read as follows:
9-16 (a) The board [At the same time that taxes are levied to pay
9-17 bonded indebtedness, the commissioners court] shall have a tax
9-18 assessed and collected on district property sufficient to maintain,
9-19 repair, and preserve district improvements and to pay legal debts,
9-20 demands, and obligations of the district, but in districts
9-21 operating under Article III, Section 52, of the Texas
9-22 Constitution, the tax may not be in an amount greater than one-half
9-23 of one percent of the total assessed valuation of the district for
9-24 that year.
9-25 (c) The board may issue negotiable notes payable from the
9-26 maintenance tax authorized by Subsection (a) to meet the financial
9-27 obligations of the district, as described by Subsection (a). The
10-1 notes shall be payable over a period not to exceed five years from
10-2 the date of issuance. Notes issued under this subsection are not
10-3 required to be approved by the Texas Natural Resource Conservation
10-4 Commission. A district may not have outstanding, at any one time,
10-5 notes in excess of $3 million under this subsection.
10-6 (d) The board may issue negotiable notes to pay any lawful
10-7 expenditure of the district, other than principal and interest on
10-8 debt, including all costs to improve or repair any existing
10-9 drainage canal, ditch, watercourse, or other work constructed,
10-10 repaired, or improved by the district. The notes may be payable
10-11 from and secured by a lien on and pledge of any available funds of
10-12 the district, including the proceeds of a maintenance tax. Notes
10-13 issued under this subsection shall be payable over a period not to
10-14 exceed 20 years from the date of issuance and if issued for a term
10-15 longer than one year must be treated as "debt" as defined by
10-16 Section 26.012, Tax Code. The maximum debt service on all notes
10-17 issued under this subsection may not exceed in any fiscal year of a
10-18 district an amount that could be paid from the proceeds of
10-19 one-fourth of the maximum tax the district is authorized by law to
10-20 levy on the date any notes are issued.
10-21 SECTION 15. Sections 56.249, 56.251, 56.292, and 56.293,
10-22 Water Code, are amended to read as follows:
10-23 Sec. 56.249. AUTHORIZING TAXATION ON THE BENEFIT BASIS FOR
10-24 EXISTING DISTRICT. (a) A district [operating under Article XVI,
10-25 Section 59, of the Texas Constitution,] may levy taxes on the
10-26 benefit basis as provided in this section.
10-27 (b) Any person may present to the board [commissioners
11-1 court] a petition, signed by 75 of the resident freehold taxpayers
11-2 of the district whose land would be affected or by one-third of the
11-3 freehold resident taxpayers of the district whose land would be
11-4 affected if there are less than 75 in the district, requesting that
11-5 taxes of the district be levied on the benefit basis and showing
11-6 that the levy of taxes on the benefit basis will be fair and
11-7 equitable to all landowners in the district.
11-8 (c) At the same meeting at which the petition is presented,
11-9 the board [commissioners court] shall schedule a hearing on the
11-10 petition for either a regular meeting or a special meeting called
11-11 for that purpose to be held during the period beginning on the 30th
11-12 day and ending with the 60th day after the day the petition is
11-13 presented.
11-14 (d) The board [commissioners court] shall [order the clerk
11-15 to] give notice of the time and place of the hearing by posting a
11-16 copy of the petition and the order of the board [commissioners
11-17 court] at five public places in the county during the 20-day period
11-18 immediately preceding the day of the hearing. The board [clerk]
11-19 shall post one of the copies at the courthouse door and the other
11-20 four copies at four places within the boundaries of the district[,
11-21 and the district shall pay the clerk $1 for each notice he posts
11-22 and five cents a mile for each mile traveled in posting the
11-23 notices].
11-24 (e) At the hearing, any person whose land would be affected
11-25 may appear before the board [commissioners court] and may support
11-26 or oppose the levy of taxes on a benefit basis and may offer
11-27 testimony to show whether or not the levy of taxes on the benefit
12-1 basis will be fair and equitable to landowners in the district. The
12-2 board [commissioners court] has exclusive jurisdiction to hear and
12-3 determine this issue and matters relating to it and has exclusive
12-4 jurisdiction in all subsequent proceedings. The board
12-5 [commissioners court] may adjourn the hearing from day to day, and
12-6 judgments of the board [commissioners court] are final.
12-7 (f) If the board [commissioners court] finds that levying
12-8 taxes on the benefit basis will not be fair and equitable to
12-9 landowners in the district, an order shall be entered dismissing
12-10 the petition, and the district shall continue to levy taxes on an
12-11 ad valorem basis, but if the board [commissioners court] finds that
12-12 levying taxes on the benefit basis will be fair and equitable to
12-13 landowners in the district, the board [commissioners court] shall
12-14 order an election to be held in the district.
12-15 (g) An election to approve the levy of taxes on the benefit
12-16 basis must be held on the earliest legal date that occurs on or
12-17 after the 30th day after the date the board orders the election
12-18 [during the period beginning on the 30th day and ending with the
12-19 60th day after the date of the election order]. Notice of the
12-20 election shall be given in the same manner as notice is given for
12-21 the hearing on the petition. The board [commissioners court] shall
12-22 name polling places within the district and shall appoint judges
12-23 and other necessary election officers. The ballots shall be
12-24 printed to provide for voting for or against the following
12-25 proposition: "The levy of taxes in the district on the benefit
12-26 basis."
12-27 (h) At least two-thirds of those persons voting in the
13-1 election must vote in favor of the proposition for it to carry.
13-2 (i) If the proposition carries at the election, the order of
13-3 the board [commissioners court] canvassing the election shall
13-4 provide that taxes of the district are to be levied on the benefit
13-5 basis, but if the proposition fails to carry at the election, the
13-6 order of the board [commissioners court] canvassing the election
13-7 shall provide that taxes of the district are to continue to be
13-8 levied on an ad valorem basis.
13-9 Sec. 56.251. DETERMINING ACREAGE IN THE DISTRICT. (a) In
13-10 districts levying taxes on the benefit basis, the board
13-11 [commissioners court] shall appoint three freehold taxpaying voters
13-12 in the district [county] as a committee [board] to determine the
13-13 number of acres of land owned by each landowner in the district. A
13-14 [The] person appointed by the board [commissioners court] shall
13-15 qualify by taking an oath to fairly and impartially hold hearings
13-16 and determine acreage.
13-17 (b) The committee [board] to determine acreage shall give
13-18 notice of the time and place of the hearing on the acreage before
13-19 the 10-day period immediately preceding the day of the hearing.
13-20 (c) At the hearing each landowner may testify about the
13-21 amount of land owned by him in the district. The committee [board]
13-22 has final jurisdiction to determine the exact acreage of each
13-23 landowner in the district.
13-24 (d) After the committee [board] makes its determination, the
13-25 land in the district shall be annually placed on the tax rolls
13-26 according to the acreage determined without rendition of taxes.
13-27 Sec. 56.292. PETITION. At a regular meeting of the board
14-1 [commissioners court], any resident freehold taxpayer of the
14-2 district [person] may present a petition signed by at least five
14-3 percent of the qualified voters [50 of the resident freehold
14-4 taxpayers] of the district, or if there are fewer [less] than 100
14-5 resident freehold taxpayers in the district, then by one-third of
14-6 the resident freehold taxpayers [them] requesting the dissolution
14-7 of the district, and on verification of the petition signatures,
14-8 the board [commissioners court] shall order an election to be held
14-9 in the district at the earliest legal time to determine whether or
14-10 not the district should be dissolved.
14-11 Sec. 56.293. DEPOSIT. (a) Any person filing a petition
14-12 shall deposit with the board an amount sufficient to pay the cost
14-13 of conducting an election within the district [county clerk $200 in
14-14 cash] which shall be held by the board [county clerk] until the
14-15 result of the election to dissolve the district is officially
14-16 announced and entered in the record of the district [commissioners
14-17 court].
14-18 (b) If the result of the election favors dissolving the
14-19 district, the board [county clerk] shall return the deposit to the
14-20 petitioners or their agent or attorney, and the cost and expenses
14-21 of holding the election shall be paid by [charged to] the district
14-22 [and collected as other debts in this subchapter], but if the
14-23 result of the election is against dissolving the district, the
14-24 board [county clerk] shall pay the cost and expenses of the
14-25 election from the deposit [with vouchers signed by the county
14-26 judge] and return the balance of the deposit to the petitioners or
14-27 their agent or attorney.
15-1 SECTION 16. Section 56.295(b), Water Code, is amended to read
15-2 as follows:
15-3 (b) If the proposition carries, the board [commissioners
15-4 court] shall declare the result and enter it in its minutes
15-5 substantially as follows:
15-6 "__________ and __________ others having petitioned for the
15-7 dissolution of ______________ County Drainage District No. ______;
15-8 an election having been held in the district on ______________; and
15-9 a two-thirds majority of the votes cast in the election having
15-10 favored dissolution of the district; now, therefore, the board of
15-11 directors [commissioners court] declares that ______________
15-12 Drainage District No. ______ is dissolved."
15-13 SECTION 17. Section 56.311, Water Code, is amended by adding
15-14 Subsection (d) to read as follows:
15-15 (d) Before entering an order discharging the trustee and
15-16 the surety on the trustee's bond and closing the trust estate, the
15-17 commissioners court shall order all transactions of the trustee
15-18 audited by an independent certified public accountant. A copy of
15-19 the audit shall be filed with the commissioners court and the Texas
15-20 Natural Resource Conservation Commission, and a copy shall be
15-21 provided to the trustee.
15-22 SECTION 18. Sections 56.137, 56.206, and 56.208, Water Code,
15-23 are repealed.
15-24 SECTION 19. (a) Section 56.128, Water Code, as amended by
15-25 this Act, applies only to an offense committed on or after the
15-26 effective date of this Act. For purposes of this section, an
15-27 offense is committed before the effective date of this Act if any
16-1 element of the offense occurs before that date.
16-2 (b) An offense committed before the effective date of this
16-3 Act is covered by the law in effect when the offense was committed,
16-4 and the former law is continued in effect for that purpose.
16-5 SECTION 20. The changes in law made by this Act apply only
16-6 to bonds issued on or after the effective date of this Act. A bond
16-7 issued before the effective date of this Act is governed by the law
16-8 as it existed immediately before the effective date of this Act,
16-9 and that law is continued in effect for that purpose.
16-10 SECTION 21. This Act takes effect September 1, 2001.