By Lewis of Orange                                    H.B. No. 2817
         77R12293 E                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain laws governing water districts and nonprofit
 1-3     water or sewer service corporations; creating a criminal offense.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 49.068, Water Code, is amended to read as
 1-6     follows:
 1-7           Sec. 49.068.  CONTRACTS WITH GOVERNMENTAL AGENCIES. (a) The
 1-8     provisions of this chapter pertaining to bids and the Local
 1-9     Government Code notwithstanding, a district may purchase property
1-10     from any governmental entity by negotiated contract without the
1-11     necessity of securing appraisals or advertising for bids.
1-12           (b)  A municipality may sell all or a portion of a water or
1-13     sewer system owned by the municipality to a district without the
1-14     approval required by Section 1502.055(a), Government Code, or by
1-15     Section 402.016, Local Government Code, if the district purchasing
1-16     the system is operating under the authority of Section 59, Article
1-17     XVI, Texas Constitution.
1-18           SECTION 2. Section 49.102, Water Code, is amended by
1-19     relettering Subsection (i) as Subsection (j) and by adding a new
1-20     Subsection (i) to read as follows:
1-21           (i)  A district, at an election required under Subsection
1-22     (a), may submit to the voters of the district the proposition of
1-23     whether the district should implement a plan authorized by Section
1-24     49.351 for a fire department.
 2-1           (j)  The provisions of this section shall not be applicable
 2-2     to any district exercising the powers of Chapter 375, Local
 2-3     Government Code, or any district created by a special Act of the
 2-4     legislature that does not require a confirmation election.
 2-5           SECTION 3. Section 49.108(e), Water Code, is amended to read
 2-6     as follows:
 2-7           (e)  A district that is required under Section 49.181 to
 2-8     obtain approval by the commission of the district's issuance of
 2-9     bonds must obtain approval by the executive director before the
2-10     district enters into an obligation under this section to collect
2-11     tax for debt that exceeds three years. This subsection does not
2-12     apply to contract taxes that are levied to pay for a district's
2-13     share of bonds that have been issued by another district and
2-14     approved by the commission or bonds that have been issued by a
2-15     municipality.
2-16           SECTION 4. Section 49.211, Water Code, is amended by adding
2-17     Subsection (e) to read as follows:
2-18           (e)  A district that is authorized by law to engage in
2-19     drainage or flood control activities may include among the
2-20     district's land, works, improvements, facilities, plants,
2-21     equipment, and appliances the following areas and projects
2-22     associated with drainage or flood control projects of the district:
2-23                 (1)  stormwater retention or detention lands and
2-24     projects;
2-25                 (2)  sedimentation basins or other stormwater quality
2-26     control facilities or structures;
2-27                 (3)  floodplain and wetlands mitigation lands and
 3-1     projects;
 3-2                 (4)  habitat reconstruction or restoration lands and
 3-3     projects; and
 3-4                 (5)  any temporary, permanent, or constant- or
 3-5     variable-level impoundments of water related to projects described
 3-6     by this subsection.
 3-7           SECTION 5. Section 49.212(d), Water Code, is amended to read
 3-8     as follows:
 3-9           (d)  Notwithstanding any provision of law to the contrary, a
3-10     district that charges a fee that is an impact fee as described in
3-11     Section 395.001(4), Local Government Code, must comply with Chapter
3-12     395, Local Government Code.  A charge or fee by a district for
3-13     construction, installation, or inspection of a tap or connection to
3-14     district water, sanitary sewer, or drainage facilities, including
3-15     all necessary service lines and meters, or for wholesale facilities
3-16     that serve such water, sanitary sewer, or drainage facilities that
3-17     (i) does not exceed three times the actual and reasonable costs to
3-18     the district for such tap or connection, [or] (ii) if made to a
3-19     nontaxable entity for retail or wholesale service, does not exceed
3-20     the actual costs to the district for such work and for all
3-21     facilities that are necessary to provide district services to such
3-22     entity and that are financed or are to be financed in whole or in
3-23     part by tax-supported or revenue bonds of the district, or (iii) if
3-24     made by a district for retail or wholesale service on land that, at
3-25     the time of platting, was not being provided with water or
3-26     wastewater service by the district, shall not be deemed to be an
3-27     impact fee under Chapter 395, Local Government Code.  A district
 4-1     may pledge revenue of its utility system to pay the principal of or
 4-2     interest on bonds issued to construct the capital improvements for
 4-3     which the fee was imposed under this subsection, and the revenue
 4-4     from the fees is considered to be revenue of the district's utility
 4-5     system for purposes of the district's bond covenants.
 4-6           SECTION 6. Section 49.215, Water Code, is amended by adding
 4-7     Subsection (g) to read as follows:
 4-8           (g)  If a district contracts with a municipality to provide
 4-9     all or part of the water or wastewater services to the
4-10     municipality, the municipality may issue bonds payable from the
4-11     revenue of its water and wastewater system to provide money to make
4-12     payments owed by the municipality to the district under the
4-13     contract.
4-14           SECTION 7. Section 49.218, Water Code, is amended by adding
4-15     Subsection (e) to read as follows:
4-16           (e)  A district or water supply corporation may issue bonds,
4-17     notes, or other obligations to acquire property as authorized by
4-18     this section.
4-19           SECTION 8. The heading to Section 49.226, Water Code, is
4-20     amended to read as follows:
4-21           Sec. 49.226.  SALE OR EXCHANGE OF REAL [SURPLUS LAND] OR
4-22     PERSONAL PROPERTY.
4-23           SECTION 9. Sections 49.226(b)-(e), Water Code, are amended to
4-24     read as follows:
4-25           (b)  Any property dedicated to or acquired by the district
4-26     without expending district funds may be abandoned or released to
4-27     the original grantor, the grantor's heirs, assigns, executors, or
 5-1     successors upon terms and conditions deemed necessary or
 5-2     advantageous to the district and without receiving compensation for
 5-3     such abandonment or release.  District property may also be
 5-4     abandoned, released, exchanged, or transferred to another district,
 5-5     municipality, county, countywide agency, or authority upon terms
 5-6     and conditions deemed necessary or advantageous to the district.
 5-7     Narrow strips of property resulting from boundary or surveying
 5-8     conflicts or similar causes, or from insubstantial encroachments by
 5-9     abutting property owners, or property of larger configuration that
5-10     has been subject to encroachments by abutting property owners for
5-11     more than 25 years may be abandoned, released, exchanged, or
5-12     transferred to such abutting owners upon terms and conditions
5-13     deemed necessary or advantageous to the district.  Chapter 272,
5-14     Local Government Code, shall not apply to this section
5-15     [subsection].
5-16           (c)  Before either a public or a private sale of real
5-17     property [not required by the district], the district shall give
5-18     notice of the intent to sell by publishing notice once a week for
5-19     two consecutive weeks in one or more newspapers with general
5-20     circulation in the district.
5-21           (d)  If the district has outstanding bonds secured by a
5-22     pledge of tax revenues, the proceeds of the sale of property [not
5-23     required by the district] shall be applied to retire outstanding
5-24     bonds of the district [when required by the district's applicable
5-25     bond resolutions].
5-26           (e)  If the district does not have any outstanding bonds, the
5-27     proceeds derived from the sale of real or [the] personal property
 6-1     [or land not required by the district] may be used for any lawful
 6-2     purpose.
 6-3           SECTION 10. Subchapter H, Chapter 49, Water Code, is amended
 6-4     by adding Section 49.234 to read as follows:
 6-5           Sec. 49.234.  PROHIBITION OF CERTAIN PRIVATE ON-SITE
 6-6     FACILITIES. (a)  A district or water supply corporation that
 6-7     operates a wastewater collection system to serve land within its
 6-8     boundaries by rule may prohibit the installation of private on-site
 6-9     wastewater holding or treatment facilities on land within the
6-10     district that is not served by the district's or corporation's
6-11     wastewater collection system.  A district or corporation that has
6-12     not received funding from Subchapter K, Chapter 17, Water Code, may
6-13     not require a property owner who has already installed an on-site
6-14     wastewater holding or treatment facility to connect to the
6-15     district's or corporation's wastewater collection system.
6-16           (b)  A district or water supply corporation that prohibits an
6-17     installation described by Subsection (a) shall agree to pay the
6-18     owner of a particular tract the costs of connecting the tract to
6-19     the district's or corporation's wastewater collection system if the
6-20     distance along a public right-of-way or utility easement from the
6-21     nearest point of the district's or corporation's wastewater
6-22     collection system to the boundary line of the tract requiring
6-23     wastewater collection services is 300 feet or more, subject to
6-24     commission rules regarding reimbursement of those costs.
6-25           SECTION 11. Section 49.271(c), Water Code, is amended to read
6-26     as follows:
6-27           (c)  The district may adopt minimum criteria for the
 7-1     qualifications of bidders on its construction contracts and for
 7-2     sureties issuing payment and performance bonds.  For contracts over
 7-3     $25,000, the district shall require a person who bids to submit a
 7-4     certified or cashier's check on a responsible bank in the state
 7-5     equal to at least two percent of the total amount of the bid, or a
 7-6     bid bond of at least two percent of the total amount of the bid
 7-7     issued by a surety legally authorized to do business in this state,
 7-8     as a good faith deposit to ensure execution of the contract.  If
 7-9     the successful bidder fails or refuses to enter into a proper
7-10     contract with the district, or fails or refuses to furnish the bond
7-11     required by law, the bidder forfeits the deposit.  The payment,
7-12     performance, and bid bonding requirements of this subsection do not
7-13     apply to contracts for the purchase of equipment, materials, and
7-14     machinery not otherwise incorporated into a construction project.
7-15           SECTION 12. Sections 49.273(i) and (j), Water Code, are
7-16     amended to read as follows:
7-17           (i)  If changes in plans or specifications are necessary
7-18     after the performance of the contract is begun or if it is
7-19     necessary to decrease or increase the quantity of the work to be
7-20     performed or of the materials, equipment, or supplies to be
7-21     furnished, the board may approve change orders making the changes.
7-22     The original contract price may not be increased by more than 10
7-23     percent of the aggregate of those change orders.  Additional change
7-24     [Change] orders [to contracts] may be issued only as a result of
7-25     unanticipated conditions encountered during construction, repair,
7-26     or renovation or changes in regulatory criteria or to facilitate
7-27     project coordination with other political entities.
 8-1           (j)  The board is not required to advertise or seek
 8-2     competitive bids for the repair of district facilities if the scope
 8-3     or extent of the repair work cannot be readily ascertained or if
 8-4     the nature of the repair work does not readily lend itself to
 8-5     competitive bidding [by the district's operator if the cost of the
 8-6     repair is less than or equal to the advertising requirements of
 8-7     this section].
 8-8           SECTION 13. Subchapter I, Chapter 49, Water Code, is amended
 8-9     by adding Sections 49.279 and 49.280 to read as follows:
8-10           Sec. 49.279.  PREVAILING WAGE RATES. In addition to the
8-11     alternative procedures provided by Section 2258.022, Government
8-12     Code:
8-13                 (1)  a district located wholly or partially within one
8-14     or more municipalities or within the extraterritorial jurisdiction
8-15     of one or more municipalities may establish its prevailing wage
8-16     rate for public works by adopting the prevailing wage rate of:
8-17                       (A)  one of the municipalities; or
8-18                       (B)  the county in which the district is located;
8-19     and
8-20                 (2)  a district not located wholly or partially within
8-21     the extraterritorial jurisdiction of any municipality may establish
8-22     the district's prevailing wage rate by adopting the wage rate of
8-23     the county in which the district is located.
8-24           Sec. 49.280.  COMPLIANCE WITH MUNICIPAL REQUIREMENTS. A
8-25     district construction project must comply with any applicable
8-26     municipal platting or zoning requirements within the municipality's
8-27     corporate limits and extraterritorial jurisdiction and with
 9-1     applicable requirements of a consent agreement or other agreement
 9-2     between the district and the municipality.  A district construction
 9-3     project is not otherwise subject to any requirements of a
 9-4     municipality if the project is located outside the municipality's
 9-5     corporate limits.
 9-6           SECTION 14. Section 49.304(a), Water Code, is amended to read
 9-7     as follows:
 9-8           (a)  If the board determines that an exclusion hearing should
 9-9     be held as provided in Section 49.303(a) or (c) or if a written
9-10     petition requesting an exclusion hearing is filed with the
9-11     secretary of the board as provided in Section 49.303(b) [49.303],
9-12     the board shall give notice of the time and place of a hearing to
9-13     announce its own conclusions relating to land or other property to
9-14     be excluded and to receive petitions for exclusion of land or other
9-15     property.
9-16           SECTION 15. Subchapter J, Chapter 49, Water Code, is amended
9-17     by adding Section 49.315 to read as follows:
9-18           Sec. 49.315.  ADDING AND EXCLUDING LAND BEFORE CONFIRMATION.
9-19     (a)  A district may add or exclude land in accordance with this
9-20     subchapter:
9-21                 (1)  after a district is created by order of the
9-22     commission or another governmental entity or by special Act of the
9-23     legislature; and
9-24                 (2)  before an election is held as required by Section
9-25     49.102.
9-26           (b)  If land is added or excluded as provided by this
9-27     section, the election to confirm the district required by Section
 10-1    49.102 shall be to confirm the district as modified.
 10-2          SECTION 16. Subchapter D, Chapter 51, Water Code, is amended
 10-3    by adding Section 51.131 to read as follows:
 10-4          Sec. 51.131.  PENALTY FOR VIOLATION OF REGULATION. A person
 10-5    commits an offense if the person violates a regulation adopted by a
 10-6    district under this chapter or other law.  An offense under this
 10-7    section is a Class C misdemeanor.
 10-8          SECTION 17. Section 51.149, Water Code, is amended by adding
 10-9    Subsection (g) to read as follows:
10-10          (g)  A district has the right to conduct contract elections
10-11    in the manner set forth in Sections 49.108(a) through (d), without
10-12    the approval required by Section 49.108(e).
10-13          SECTION 18. Section 54.772(1), Water Code, is amended to read
10-14    as follows:
10-15                (1)  "Recreational facilities" means parks and
10-16    recreational equipment and facilities, including landscaping,
10-17    parkways, greenbelts, sidewalks, trails, and public rights-of-way
10-18    beautification projects.
10-19          SECTION 19. This Act takes effect September 1, 2001.