H.B. 1309 78(R)    BILL ANALYSIS


H.B. 1309
By: Pitts
Natural Resources
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

H.B. 1309 removes an unintended contradiction in the laws governing
non-profit water supply and sewer service corporations. These corporations
are created under the specific provisions of Chapter 67, Texas Water Code.
Section 67.004, Water Code, expressly provides that the provisions of the
Texas Non-Profit Corporation Act apply to these corporations unless there
is a conflict (in which case the provisions of Chapter 67 control).  The
Texas Non-Profit Corporation Act, however, provides that the Act does not
apply to any nonprofit corporation if any one or more of its purposes is
to provide water or sewer service. 

This apparent contradiction is unintended. In fact, the nonprofit water
supply and sewer service corporations in Texas rely upon the Non-Profit
Corporation Act for creation, amendments of articles and bylaws, and
dissolutions. A pivotal part of the ongoing business of these corporations
includes meetings and elections by its members; the sale of revenue bonds
to finance some construction projects; meetings and the conduct of
business by their governing boards of directors. Chapter 67, Texas Water
Code, has little or no provision for these activities; the corporations
rely on the NonProfit Corporations Act for their statutory authority and
constraints in these matters.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

H.B. 1309 resolves  any unintended contradiction in the law by deleting
the language in the Texas Non-Profit Corporation Act which states the Act
does not apply to nonprofit water supply and sewer service corporations.
With this language removed, the coordination of the two statutes will be
governed unambiguously by Section 67.004 of the Texas Water Code. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect on September 1, 2003.