By Lewis of Orange                                    H.B. No. 2817
         77R7466 SGA-F                           
                                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 49.102, Water Code, is amended by
 1-6     relettering Subsection (i) as Subsection (j) and by adding a new
 1-7     Subsection (i) to read as follows:
 1-8           (i)  A district, at an election required under Subsection
 1-9     (a), may submit to the voters of the district the proposition of
1-10     whether the district should implement a plan authorized by Section
1-11     49.351 for a fire department.
1-12           (j)  The provisions of this section shall not be applicable
1-13     to any district exercising the powers of Chapter 375, Local
1-14     Government Code, or any district created by a special Act of the
1-15     legislature that does not require a confirmation election.
1-16           SECTION 2. Section 49.211, Water Code, is amended by adding
1-17     Subsection (e) to read as follows:
1-18           (e)  A district that is authorized by law to engage in
1-19     drainage or flood control activities may include among the
1-20     district's land, works, improvements, facilities, plants,
1-21     equipment, and appliances the following areas and projects
1-22     associated with drainage or flood control projects of the district:
1-23                 (1)  stormwater retention or detention lands and
1-24     projects;
 2-1                 (2)  sedimentation basins or other stormwater quality
 2-2     control facilities or structures;
 2-3                 (3)  floodplain and wetlands mitigation lands and
 2-4     projects;
 2-5                 (4)  habitat reconstruction or restoration lands and
 2-6     projects; and
 2-7                 (5)  any temporary, permanent, or constant- or
 2-8     variable-level impoundments of water related to projects in this
 2-9     subsection.
2-10           SECTION 3. The heading to Section 49.215, Water Code, is
2-11     amended to read as follows:
2-12           Sec. 49.215.  SERVICE TO AREAS OUTSIDE A [THE] DISTRICT OR
2-13     WATER SUPPLY CORPORATION.
2-14           SECTION 4. Section 49.215, Water Code, is amended by amending
2-15     Subsections (a), (e), and (f) and by adding Subsection (g) to read
2-16     as follows:
2-17           (a)  A district or water supply corporation may purchase,
2-18     construct, acquire, own, operate, repair, improve, or extend all
2-19     works, improvements, facilities, plants, equipment, and appliances
2-20     necessary to provide any services or facilities authorized to be
2-21     provided by the district or corporation to areas contiguous to or
2-22     in the vicinity of the district or corporation provided the
2-23     district or corporation does not duplicate a service or facility of
2-24     another public entity.  A district or corporation providing potable
2-25     water and sewer utility services to household users shall not
2-26     provide services or facilities to serve areas outside the district
2-27     or corporation that are also within the corporate limits of a city
 3-1     without securing a resolution or ordinance of the city granting
 3-2     consent for the district or corporation to serve the area within
 3-3     the city.
 3-4           (e)  A district or corporation is authorized to establish,
 3-5     maintain, revise, charge, and collect the rates, fees, rentals,
 3-6     tolls, or other charges for the use, services, and facilities that
 3-7     provide service to areas outside the district or corporation that
 3-8     are considered necessary and may be higher than those charged for
 3-9     comparable service to users within the district or corporation.
3-10           (f)  The rates, fees, rentals, tolls, or other charges shall
3-11     be at least sufficient to meet the expense of operating and
3-12     maintaining the services and facilities for a water and sanitary
3-13     sewer system serving areas outside the district or corporation and
3-14     to pay the principal of and interest and redemption price on bonds
3-15     issued to purchase, construct, acquire, own, operate, repair,
3-16     improve, or extend the services or facilities.
3-17           (g)  Notwithstanding any term of a water supply contract
3-18     between a water supply corporation and a political subdivision to
3-19     the contrary, the corporation may, on approval by the commission of
3-20     a service area amendment to serve an area, use the water sold by
3-21     the political subdivision under a contract to provide service to
3-22     the service area of the corporation provided the service does not
3-23     affect a term of the contract relating to the amount of water to be
3-24     supplied.  A term of the contract that purports to authorize a
3-25     political subdivision to cancel a contract if the water sold to the
3-26     corporation is used outside the area agreed to by the political
3-27     subdivision is not effective to the extent that the water is used
 4-1     by the corporation within an area lawfully served by the
 4-2     corporation under Chapter 13.
 4-3           SECTION 5. Section 49.218, Water Code, is amended by adding
 4-4     Subsection (e) to read as follows:
 4-5           (e)  A district or water supply corporation may issue bonds,
 4-6     notes, or other obligations to acquire property as authorized by
 4-7     this section.
 4-8           SECTION 6. The heading to Section 49.226, Water Code, is
 4-9     amended to read as follows:
4-10           Sec. 49.226.  SALE OR EXCHANGE OF REAL [SURPLUS LAND] OR
4-11     PERSONAL PROPERTY.
4-12           SECTION 7. Sections 49.226(b)-(e), Water Code, are amended to
4-13     read as follows:
4-14           (b)  Any property dedicated to or acquired by the district
4-15     without expending district funds may be abandoned or released to
4-16     the original grantor, the grantor's heirs, assigns, executors, or
4-17     successors upon terms and conditions deemed necessary or
4-18     advantageous to the district and without receiving compensation for
4-19     such abandonment or release.  District property may also be
4-20     abandoned, released, exchanged, or transferred to another district,
4-21     municipality, county, countywide agency, or authority upon terms
4-22     and conditions deemed necessary or advantageous to the district.
4-23     Narrow strips of property resulting from boundary or surveying
4-24     conflicts or similar causes, or from insubstantial encroachments by
4-25     abutting property owners, or property of larger configuration that
4-26     has been subject to encroachments by abutting property owners for
4-27     more than 25 years may be abandoned, released, exchanged, or
 5-1     transferred to such abutting owners upon terms and conditions
 5-2     deemed necessary or advantageous to the district.  Chapter 272,
 5-3     Local Government Code, shall not apply to this section
 5-4     [subsection].
 5-5           (c)  Before either a public or a private sale of real
 5-6     property [not required by the district], the district shall give
 5-7     notice of the intent to sell by publishing notice once a week for
 5-8     two consecutive weeks in one or more newspapers with general
 5-9     circulation in the district.
5-10           (d)  If the district has outstanding bonds secured by a
5-11     pledge of tax revenues, the proceeds of the sale of property [not
5-12     required by the district] shall be applied to retire outstanding
5-13     bonds of the district [when required by the district's applicable
5-14     bond resolutions].
5-15           (e)  If the district does not have any outstanding bonds, the
5-16     proceeds derived from the sale of real or [the] personal property
5-17     [or land not required by the district] may be used for any lawful
5-18     purpose.
5-19           SECTION 8. Subchapter H, Chapter 49, Water Code, is amended
5-20     by adding Section 49.234 to read as follows:
5-21           Sec. 49.234.  PROHIBITION OF CERTAIN PRIVATE ON-SITE
5-22     FACILITIES. (a)  A district that operates a wastewater collection
5-23     system to serve land within its boundaries by rule may prohibit the
5-24     installation of private on-site wastewater holding or treatment
5-25     facilities on land within the district that is not served by the
5-26     district's wastewater collection system.  A district may not
5-27     require a property owner who has already installed an on-site
 6-1     wastewater holding or treatment facility to connect to the
 6-2     district's wastewater collection system.
 6-3           (b)  A district that prohibits an installation described by
 6-4     Subsection (a) shall agree to pay the owner of a particular tract
 6-5     the costs of connecting the tract to the district's wastewater
 6-6     collection system if the distance along a public right-of-way or
 6-7     utility easement from the nearest point of the district's
 6-8     wastewater collection system to the boundary line of the tract
 6-9     requiring wastewater collection services is 300 feet or more,
6-10     subject to commission rules regarding reimbursement of those costs.
6-11           SECTION 9. Section 49.271(c), Water Code, is amended to read
6-12     as follows:
6-13           (c)  The district may adopt minimum criteria for the
6-14     qualifications of bidders on its construction contracts and for
6-15     sureties issuing payment and performance bonds.  For contracts over
6-16     $25,000, the district shall require a person who bids to submit a
6-17     certified or cashier's check on a responsible bank in the state
6-18     equal to at least two percent of the total amount of the bid, or a
6-19     bid bond of at least two percent of the total amount of the bid
6-20     issued by a surety legally authorized to do business in this state,
6-21     as a good faith deposit to ensure execution of the contract.  If
6-22     the successful bidder fails or refuses to enter into a proper
6-23     contract with the district, or fails or refuses to furnish the bond
6-24     required by law, the bidder forfeits the deposit.  The payment,
6-25     performance, and bid bonding requirements of this subsection do not
6-26     apply to contracts for the purchase of equipment, materials, and
6-27     machinery not otherwise incorporated into a construction project.
 7-1           SECTION 10. Sections 49.273(i) and (j), Water Code, are
 7-2     amended to read as follows:
 7-3           (i)  If changes in plans or specifications are necessary
 7-4     after the performance of the contract is begun or if it is
 7-5     necessary to decrease or increase the quantity of the work to be
 7-6     performed or of the materials, equipment, or supplies to be
 7-7     furnished, the board may approve change orders making the changes.
 7-8     The original contract price may not be increased by more than 10
 7-9     percent of the aggregate of those change orders.  Additional change
7-10     [Change] orders [to contracts] may be issued only as a result of
7-11     unanticipated conditions encountered during construction, repair,
7-12     or renovation or changes in regulatory criteria or to facilitate
7-13     project coordination with other political entities.
7-14           (j)  The board is not required to advertise or seek
7-15     competitive bids for the repair of district facilities if the scope
7-16     or extent of the repair work cannot be readily ascertained or if
7-17     the nature of the repair work does not readily lend itself to
7-18     competitive bidding [by the district's operator if the cost of the
7-19     repair is less than or equal to the advertising requirements of
7-20     this section].
7-21           SECTION 11. Subchapter I, Chapter 49, Water Code, is amended
7-22     by adding Section 49.279 to read as follows:
7-23           Sec. 49.279.  PREVAILING WAGE RATES. In addition to the
7-24     alternative procedures provided by Section 2258.022, Government
7-25     Code:
7-26                 (1)  a district located wholly or partially within one
7-27     or more municipalities or within the extraterritorial jurisdiction
 8-1     of one or more municipalities may establish its prevailing wage
 8-2     rate for public works by adopting the prevailing wage rate of:
 8-3                       (A)  one of the municipalities; or
 8-4                       (B)  the county in which the district is located;
 8-5     and
 8-6                 (2)  a district not located wholly or partially within
 8-7     the extraterritorial jurisdiction of any municipality may establish
 8-8     the district's prevailing wage rate by adopting the wage rate of
 8-9     the county in which the district is located.
8-10           SECTION 12. Section 49.304(a), Water Code, is amended to read
8-11     as follows:
8-12           (a)  If the board determines that an exclusion hearing should
8-13     be held as provided in Section 49.303(a) or (c) or if a written
8-14     petition requesting an exclusion hearing is filed with the
8-15     secretary of the board as provided in Section 49.303(b) [49.303],
8-16     the board shall give notice of the time and place of a hearing to
8-17     announce its own conclusions relating to land or other property to
8-18     be excluded and to receive petitions for exclusion of land or other
8-19     property.
8-20           SECTION 13. Subchapter J, Chapter 49, Water Code, is amended
8-21     by adding Section 49.315 to read as follows:
8-22           Sec. 49.315.  ADDING AND EXCLUDING LAND BEFORE CONFIRMATION.
8-23     (a)  A district may add or exclude land in accordance with this
8-24     subchapter:
8-25                 (1)  after a district is created by order of the
8-26     commission or another governmental entity or by special Act of the
8-27     legislature; and
 9-1                 (2)  before an election is held as required by Section
 9-2     49.102.
 9-3           (b)  If land is added or excluded as provided by this
 9-4     section, the election to confirm the district required by Section
 9-5     49.102 shall be to confirm the district as modified.
 9-6           SECTION 14. Section 49.327, Water Code, is amended to read as
 9-7     follows:
 9-8           Sec. 49.327.  ASSETS ESCHEAT TO STATE. (a)  Upon the
 9-9     dissolution of a district by the commission, all assets of the
9-10     district shall escheat to the State of Texas.  The assets shall be
9-11     administered by the comptroller and shall be disposed of in the
9-12     manner provided by Chapter 74, Property Code.
9-13           (b)  Title 6, Property Code, does not apply to any personal
9-14     property held by a district that has not been dissolved by order of
9-15     the commission.
9-16           SECTION 15. Section 51.149, Water Code, is amended by adding
9-17     Subsections (a), (b), (c), and (g) to read as follows:
9-18           (a)  If approved by a majority of the members of the board, a
9-19     district may enter into a contract with any person for the joint
9-20     construction, ownership, or operation of any property, works,
9-21     improvements, facilities, plants, equipment, or appliances used to
9-22     accomplish any purpose or function of the district and may purchase
9-23     an interest in any project used for any purpose or function of the
9-24     district.
9-25           (b)  If approved by a majority of the members of the board, a
9-26     district may enter into a contract with any person for the
9-27     performance of any purpose or function of the district.
 10-1          (c)  A joint contract entered into by a district under this
 10-2    section and amendments to that contract must be in writing and
 10-3    signed by each party or by an authorized representative of each
 10-4    party.
 10-5          (g)  A district has the right to conduct contract elections
 10-6    in the manner provided by Sections 49.108(a)-(d), without the
 10-7    approval required by Section 49.108(e), if:
 10-8                (1)  all land that would be subject to the contract
 10-9    election was in the boundaries of a district covered by this
10-10    section that was a party to an agreement with a municipality before
10-11    September 1, 1997, calling for the issuance of district bonds for
10-12    road or bridge improvements; and
10-13                (2)  the contract is approved by the municipality that
10-14    is a party to the agreement.
10-15          SECTION 16. Subchapter D, Chapter 51, Water Code, is amended
10-16    by adding Section 51.131 to read as follows:
10-17          Sec. 51.131.  PENALTY FOR VIOLATION OF REGULATION. A person
10-18    commits an offense if the person violates a regulation adopted by a
10-19    district under this chapter or other law.  An offense under this
10-20    section is a Class C misdemeanor.
10-21          SECTION 17. This Act takes effect September 1, 2001.