By: Callegari (Senate Sponsor - Lindsay) H.B. No. 1541
(In the Senate - Received from the House May 12, 2003;
May 13, 2003, read first time and referred to Committee on Natural
Resources; May 23, 2003, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 10, Nays 0;
May 23, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 1541 By: Lindsay
A BILL TO BE ENTITLED
AN ACT
relating to the general powers and authority of water districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 388.005(a), Health and Safety Code, is
amended to read as follows:
(a) In this section, "political subdivision" means:
(1) an affected county; or
(2) any political subdivision in a nonattainment area
or in an affected county other than:
(A) a school district; or
(B) a district as defined by Section 36.001 or
49.001, Water Code, that had a total annual electricity expense of
less than $200,000 in the previous fiscal year of the district [in a
nonattainment area or in an affected county].
SECTION 2. Section 43.0751(a)(3), Local Government Code, is
amended to read as follows:
(3) "Strategic partnership agreement" means a written
agreement described by this section between a municipality and a
district [that provides terms and conditions under which services
will be provided and funded by the parties to the agreement and
under which the district will continue to exist for an extended
period of time if the land within the district is annexed for
limited or full purposes by the municipality].
SECTION 3. Sections 43.0751(d), (f), and (i), Local
Government Code, are amended to read as follows:
(d) Before the governing body of a municipality or a
district adopts a strategic partnership agreement, it shall conduct
two public hearings at which members of the public who wish to
present testimony or evidence regarding the proposed agreement
shall be given the opportunity to do so. Notice of public hearings
conducted by the governing body of a municipality under this
subsection shall be published in a newspaper of general circulation
in the municipality and in the district. The notice must be in the
format prescribed by Section 43.123(b) and must be published at
least once on or after the 20th day before each date. Notice of
public hearings conducted by the governing body of a district under
this subsection shall be given in accordance with the district's
notification procedures for other matters of public importance.
Any notice of a public hearing conducted under this subsection
shall contain a statement of the purpose of the hearing, the date,
time, and place of the hearing, and the location where copies of the
proposed agreement may be obtained prior to the hearing. The
governing bodies of a municipality and a district may conduct joint
public hearings under this subsection, provided that at least one
public hearing is conducted within the district. [A municipality
may combine the public hearings and notices required by this
subsection with the public hearings and notices required by Section
43.124.]
(f) A strategic partnership agreement may provide for the
following:
(1) limited-purpose annexation of the district on
terms acceptable to the municipality and the district [under the
provisions of Subchapter F] provided that:
(A) the district shall continue in existence
during the period of limited-purpose annexation; and
(B) Subchapter F does not apply to the
limited-purpose annexation under the agreement;
(2) limited-purpose annexation of a district located
in a county with a population of more than 3.3 million:
(A) only if the municipality does not require
services, permits, or inspections or impose fees for services,
permits, or inspections within the district; and
(B) provided that this subsection does not
prevent the municipality from providing services within the
district if the provision of services:
(i) is specified and agreed to in [such
amendments to the timing requirements of Sections 43.123(d)(2) and
43.127(b) as may be necessary or convenient to effectuate the
purposes of] the agreement;
(ii) is not solely the result of a
regulatory plan adopted by the municipality in connection with the
limited-purpose annexation of the district; and
(iii) is approved by the county in which the
district is located;
(3) payments by the municipality to the district for
services provided by the district;
(4) annexation of any commercial property in a
district for full purposes by the municipality, notwithstanding any
other provision of this code or the Water Code, except for the
obligation of the municipality to provide, directly or through
agreement with other units of government, full provision of
municipal services to annexed territory, in lieu of any annexation
of residential property or payment of any fee on residential
property in lieu of annexation of residential property in the
district authorized by this subsection;
(5) a full-purpose annexation provision on terms
acceptable to the municipality and the district [that specifies one
of the following:
[(A) the date on which the land included within
the district's boundaries shall be converted from the
municipality's limited-purpose jurisdiction to its full-purpose
jurisdiction, provided that such date shall not be later than 10
years after the effective date of the strategic partnership
agreement; or
[(B)(i) terms for payment of an annual fee to the
municipality by the district in lieu of full-purpose annexation,
the form in which each such payment must be tendered, a method of
calculating the fee, and the date by which each such payment must be
made; failure by a district to timely make an annual payment in lieu
of full-purpose annexation in the amount and form required by a
strategic partnership agreement shall be the only ground for
termination of the agreement with respect to annexation at the
option of the municipality;
[(ii) to determine a reasonable fee to be
derived from residential property in a district, the municipality
or the district may request a cost-of-service study by an
independent third party agreeable to both parties if
cost-of-service data prepared by the municipality is not
acceptable. Both parties shall be equally responsible for the cost
of the study, which shall include an evaluation of the estimated
annual cost of providing municipal services to the residential
portion of the district over the next 10 years and the estimated
annual amount of ad valorem taxes from residential property the
municipality would receive on full-purpose annexation of the
district over the next 10 years. The fee shall not exceed the
estimated annual amount of residential ad valorem taxes that would
be derived by full-purpose annexation of the district, less the
estimated annual amount required to provide municipal services to
the residential property in the district if annexed for full
purposes. A fee determined through this methodology is subject to
renegotiation every 10 years at the request of either party to the
agreement following the same procedure used to set the fee in the
original agreement. This methodology does not apply to fees from
commercial property];
(6) conversion of the district to a limited district
including some or all of the land included within the boundaries of
the district, which conversion shall be effective on the
full-purpose annexation conversion date established under
Subdivision (5) [(5)(A)];
(7) agreements existing between districts and
governmental bodies and private providers of municipal services in
existence on the date a municipality evidences its intention by
adopting a resolution to negotiate for a strategic partnership
agreement with the district shall be continued and provision made
for modifications to such existing agreements; and
(8) such other lawful terms that the parties consider
appropriate.
(i) A [district that is negotiating for or that has adopted
a] strategic partnership agreement may provide that the district
shall not incur additional debt, liabilities, or obligations, to
construct additional utility facilities, or sell or otherwise
transfer property without prior approval of the municipality[,
which approval shall not be unreasonably withheld or delayed. An
action taken in violation of this subsection is void].
SECTION 4. Section 43.123, Local Government Code, is
amended by adding Subsection (e) to read as follows:
(e) The deadline imposed by Subsection (d)(2) does not apply
to an area that:
(1) is owned by the United States, this state, or a
political subdivision of this state;
(2) is located outside the boundaries of a water
control and improvement district or a municipal utility district;
and
(3) is annexed for limited purposes in connection with
a strategic partnership agreement under Section 43.0751.
SECTION 5. Section 43.127(a), Local Government Code, is
amended to read as follows:
(a) Except as provided by Section 43.123(e), on [On] or
before the date prescribed by the regulatory plan under Section
43.123(d)(2), the municipality must annex the area for full
purposes. This requirement may be waived and the date for
full-purpose annexation postponed by written agreement between the
municipality and a majority of the affected landowners. A written
agreement to waive the municipality's obligation to annex the area
for full purposes binds all future owners of land annexed for
limited purposes pursuant to that waiver.
SECTION 6. Section 49.052, Water Code, is amended by adding
Subsections (h) and (i) to read as follows:
(h) This subsection applies only to a district that is
located wholly within the boundaries of a municipality with a
population of more than 1.5 million, that is governed by Chapter
375, Local Government Code, and that is governed by an appointed
board consisting of nine or more members. Notwithstanding
Subsection (f) or (g), a person is considered to have resigned from
serving as a member of the board if the person fails to attend three
consecutive meetings of the board. The remaining board members by
majority vote may waive the resignation under this subsection if
fairness requires that the absences be excused on the basis of
illness or other good cause.
(i) Notwithstanding any other law, a director is eligible to
serve on the board of a district governed by Chapter 375, Local
Government Code, regardless of the municipality in which the
director resides, if:
(1) the district is located within the boundaries of a
municipality with a population of more than 1.8 million; and
(2) all or a part of the district is located more than
five miles from the downtown city hall of that municipality.
SECTION 7. Section 49.067, Water Code, is amended to read as
follows:
Sec. 49.067. CONTRACTS. (a) A district shall contract, and
be contracted with, in the name of the district.
(b) Notwithstanding any other law, a contract for
technical, scientific, legal, fiscal, or other professional
services must be approved by the board, and the terms and conditions
of such a contract, including the terms for payment, are subject to
the sole discretion of the board.
SECTION 8. Section 49.068, Water Code, is amended to read as
follows:
Sec. 49.068. CONTRACTS WITH GOVERNMENTAL AGENCIES. (a)
The provisions of this chapter pertaining to bids and the Local
Government Code notwithstanding, a district may purchase property
from any governmental entity by negotiated contract without the
necessity of securing appraisals or advertising for bids.
(b) The provisions of other law or a home-rule municipal
charter notwithstanding, a municipality may contract with a
district. The term of a contract under this subsection may be of
unlimited duration.
SECTION 9. Section 49.103, Water Code, is amended by adding
Subsection (h) to read as follows:
(h) If authorized by the board in the proceedings calling a
director election, the secretary of the board or the secretary's
designee, on receipt of the certification required by Section
2.052(b), Election Code, shall post notice that the election is not
to be held. The notice must be posted, on or before the
commencement of early voting, at each polling place that would have
been used in the election. If the notice is timely posted:
(1) the board or the board's designee is not required
to:
(A) post or publish notice of the election;
(B) prepare or print ballots and election
materials; or
(C) hold early and regular voting; and
(2) the board shall meet at the earliest practicable
time to declare each unopposed candidate elected to office.
SECTION 10. Section 49.106(a), Water Code, is amended to
read as follows:
(a) Before an election is held to authorize the issuance of
bonds, other than refunding bonds, there shall be filed in the
office of the district and open to inspection by the public an
engineer's report covering the land, improvements, facilities,
plants, equipment, and appliances to be purchased or constructed
and their estimated cost, together with maps, plats, profiles, and
data fully showing and explaining the report. The engineer's
report is not:
(1) part of the proposition or propositions to be
voted on; or
(2) a contract with the voters.
SECTION 11. Sections 49.153(a) and (e), Water Code, are
amended to read as follows:
(a) The board, without the necessity of an election, may
borrow money on negotiable or nonnegotiable notes of the district
to be paid solely from the revenues derived from the ownership of
all or any designated part of the district's works, plants,
improvements, facilities, or equipment after deduction of the
reasonable cost of maintaining and operating the facilities.
(e) Subsection (c) does not apply to:
(1) a note issued to and approved by the:
(A) Farmers Home Administration;
(B) United States Department of Agriculture;
[or]
(C) Texas Water Development Board; or
(D) North American Development Bank; or
(2) a district described by Section 49.181(h).
SECTION 12. Section 49.181(a), Water Code, is amended to
read as follows:
(a) A district may not issue bonds unless the commission
determines that the project to be financed by the bonds is feasible
and issues an order approving the issuance of the bonds. This
section does not apply to:
(1) refunding bonds if the commission issued an order
approving the issuance of the bonds or notes that originally
financed the project;
(2) refunding bonds that are issued by a district
under an agreement between the district and a municipality allowing
the issuance of the district's bonds to refund bonds issued by the
municipality to pay the cost of financing facilities; or
(3) bonds issued to and approved by the Farmers Home
Administration, the United States Department of Agriculture, the
North American Development Bank, or the Texas Water Development
Board.
SECTION 13. Sections 49.183(a) and (b), Water Code, are
amended to read as follows:
(a) Except for refunding bonds, or bonds sold to a state or
federal agency or to the North American Development Bank, bonds
issued by a district shall be sold after advertising for and
receiving competitive sealed bids and shall be awarded to the
bidder whose bid produces the lowest net effective interest rate to
the district.
(b) Except for refunding bonds, or bonds sold to a state or
federal agency or to the North American Development Bank, before
any bonds are sold by a district, the board shall publish an
appropriate notice of the sale:
(1) at least one time not less than 10 days before the
date of sale in a newspaper of general circulation in the county or
counties in which the district is located; and
(2) at least one time in one or more recognized
financial publications of general circulation in the state as
approved by the state attorney general.
SECTION 14. Section 49.194, Water Code, is amended by
adding Subsection (g) to read as follows:
(g) A submission to the executive director required by this
section may be made electronically.
SECTION 15. Subchapter H, Chapter 49, Water Code, is
amended by adding Section 49.2125 to read as follows:
Sec. 49.2125. FEES AND OTHER CHARGES OF CERTAIN REGIONAL
WATER AUTHORITIES AFTER ANNEXATION. (a) This section applies to a
regional water authority that:
(1) was established after January 1, 1999;
(2) is located entirely within a county with a
population greater than 3.4 million according to the 2000 federal
decennial census; and
(3) has a population greater than 375,000 according to
the 2000 federal decennial census.
(b) Notwithstanding any other law, except to the extent an
authority to which this section applies agrees in writing, a
municipality's annexation of territory within the authority has no
effect on the authority's ability to assess and collect inside the
territory annexed by the municipality the types of fees, rates,
charges, or special assessments that the authority was assessing
and collecting at the time the municipality initiated the
annexation; provided, however, that the authority's ability to
assess and collect such fees, rates, charges, or special
assessments shall terminate on the later to occur of (i) the date of
final payment or defeasance of any bonds or other indebtedness,
including any refunding bonds, that are secured by such fees,
rates, charges, or special assessments or (ii) the date that the
authority no longer provides services inside the annexed territory.
An authority to which this section applies shall continue to
provide services to the annexed territory in accordance with
contracts in effect at the time of the annexation unless a written
agreement between the governing body of the authority and the
governing body of the municipality provides otherwise.
SECTION 16. Sections 49.226(a), (c), and (d), Water Code,
are amended to read as follows:
(a) Any personal property valued at more than $300 or any
land or interest in land owned by the district which is found by the
board to be surplus and is not needed by the district may be sold
under order of the board either by public or private sale, or the
land, interest in land, or personal property may be exchanged for
other land, interest in land, or personal property needed by the
district. Except as provided in Subsection (b), land, interest in
land, or personal property must be exchanged for like fair market
value, which value may be determined by the district. In connection
with the sale of surplus land, the board, at its discretion, may
impose restrictions on the development and use of the land.
(c) Before [either] a public [or a private] sale of real
property, the district shall give notice of the intent to sell by
publishing notice once a week for two consecutive weeks in one or
more newspapers with general circulation in the district.
(d) If the district has outstanding bonds secured by a
pledge of tax revenues, the proceeds of the sale of property
originally acquired with bond proceeds shall be:
(1) applied to retire outstanding bonds of the
district; or
(2) held and treated as surplus bond proceeds and
spent only as provided by the rules of the commission relating to
surplus bond proceeds.
SECTION 17. Section 49.234(a), Water Code, as added by
Section 15, Chapter 1423, Acts of the 77th Legislature, Regular
Session, 2001, is amended to read as follows:
(a) A district or water supply corporation that operates a
wastewater collection system to serve land within its boundaries by
rule may prohibit the installation of private on-site wastewater
holding or treatment facilities on land within the district that is
not served by the district's or corporation's wastewater collection
system. A district or corporation that has not received funding
under Subchapter K, Chapter 17, may not require a property owner who
has [already] installed an on-site wastewater holding or treatment
facility before the adoption of the rule to connect to the
district's or corporation's wastewater collection system.
SECTION 18. Subchapter H, Chapter 49, Water Code, is
amended by adding Section 49.236 to read as follows:
Sec. 49.236. NOTICE OF TAX HEARING. (a) Before the board
adopts an ad valorem tax rate for the district for debt service,
operation and maintenance purposes, or contract purposes, the board
shall give notice of each meeting of the board at which the adoption
of a tax rate will be considered. The notice must:
(1) contain a statement in substantially the following
form:
"NOTICE OF PUBLIC HEARING ON TAX RATE
"The (name of the district) will hold a public hearing on a
proposed tax rate for the tax year (year of tax levy) on (date and
time) at (meeting place). Your individual taxes may increase or
decrease, depending on the change in the taxable value of your
property in relation to the change in taxable value of all other
property and the tax rate that is adopted."; and
(2) contain the following information:
(A) the district's total adopted tax rate for the
preceding year and the proposed tax rate, expressed as an amount per
$100;
(B) the difference, expressed as an amount per
$100 and as a percent increase or decrease, as applicable, in the
proposed tax rate compared to the adopted tax rate for the preceding
year;
(C) the average appraised value of a residence
homestead in the district in the preceding year and in the current
year; the district's total homestead exemption, other than an
exemption available only to disabled persons or persons 65 years of
age or older, applicable to that appraised value in each of those
years; and the average taxable value of a residence homestead in the
district in each of those years, disregarding any homestead
exemption available only to disabled persons or persons 65 years of
age or older;
(D) the amount of tax that would have been
imposed by the district in the preceding year on a residence
homestead appraised at the average appraised value of a residence
homestead in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older;
(E) the amount of tax that would be imposed by the
district in the current year on a residence homestead appraised at
the average appraised value of a residence homestead in that year,
disregarding any homestead exemption available only to disabled
persons or persons 65 years of age or older, if the proposed tax
rate is adopted; and
(F) the difference between the amounts of tax
calculated under Paragraphs (D) and (E), expressed in dollars and
cents and described as the annual increase or decrease, as
applicable, in the tax to be imposed by the district on the average
residence homestead in the district in the current year if the
proposed tax rate is adopted.
(b) Notice of the hearing shall be:
(1) published at least once in a newspaper having
general circulation in the district at least seven days before the
date of the hearing; or
(2) mailed to each owner of taxable property in the
district, at the address for notice shown on the most recently
certified tax roll of the district, at least 10 days before the date
of the hearing.
SECTION 19. Section 49.271, Water Code, is amended by
adding Subsection (e) to read as follows:
(e) A district contract for construction work may include
economic incentives for early completion of the work or economic
disincentives for late completion of the work.
SECTION 20. Section 49.273, Water Code, is amended by
adding Subsection (l) to read as follows:
(l) The board is not required to advertise or seek
competitive bids for security or surveillance systems or components
of or additions to district facilities relating to security or
surveillance, including systems used for the prevention of
terrorist or criminal acts and incidents or acts of war, if the
board finds that doing so would compromise the safety and security
of district facilities or residents.
SECTION 21. Section 49.278(a), Water Code, is amended to
read as follows:
(a) This subchapter does not apply to:
(1) equipment, materials, or machinery purchased by
the district at an auction that is open to the public;
(2) contracts for personal or professional services or
for a utility service operator;
(3) contracts made by a district engaged in the
distribution and sale of electric energy to the public;
(4) contracts for services or property for which there
is only one source or for which it is otherwise impracticable to
obtain competition; [or]
(5) high technology procurements; or
(6) contracts for the purchase of electricity for use
by the district.
SECTION 22. Section 49.303, Water Code, is amended to read
as follows:
Sec. 49.303. EXCLUDING LAND OR OTHER PROPERTY FROM
DISTRICT. (a) A district may exclude land or other property from
the district under this subchapter if the district has no
outstanding bonds payable in whole or in part from taxes.
(b) If a district has no outstanding [Before a district
orders an election for the authorization of] bonds payable in whole
or in part from taxes, the board may, on its own motion, call a
hearing on the question of the exclusion of land or other property
from the district under the provisions of this subchapter [section
and Sections 49.304 through 49.307], if the exclusions are
practicable, just, or desirable.
[(b) The board must call a hearing on the exclusion of land
or other property from the district on the written petition of any
landowner or property owner in the district filed with the
secretary of the board before the first election on the question of
whether bonds should be issued payable in whole or in part from
taxes is ordered.]
(c) If a district has no outstanding bonds payable in whole
or in part from taxes, the [The] board may hold a hearing on the
exclusion of land or other property from the district [if the
district has not issued bonds payable in whole or in part from
taxes, and] if a landowner or property owner submits a signed
petition to the secretary of the board evidencing the consent of the
owners of a majority of the acreage proposed to be excluded and a
majority of the taxable property in the district, as reflected by
the most recent certified tax roll of the district.
(d) A district that has previously held an election at which
approval was given for the issuance of bonds payable in whole or in
part from taxes may not rely on that election for the issuance of
the bonds if after the bond election, but before the bonds are
issued, land or other property is excluded from the district as
provided by this subchapter. The board must call and hold another
bond election and receive voter approval [as provided by this
subchapter] before issuing those bonds.
(e) A district may not exclude land or other property from
the district under this section if the district has issued bonds
payable in whole or in part from taxes and those bonds are
outstanding.
SECTION 23. Section 49.304(a), Water Code, is amended to
read as follows:
(a) If the board determines that an exclusion hearing should
be held as provided by Section 49.303[(a) or (c), or if a written
petition requesting an exclusion hearing is filed with the
secretary of the board as provided by Section 49.303(b)], the board
shall give notice of the time and place of a hearing to announce its
own conclusions relating to land or other property to be excluded
and to receive petitions for exclusion of land or other property.
SECTION 24. Sections 49.351(a), (k), and (l), Water Code,
are amended to read as follows:
(a) A district providing potable water or sewer service to
household users may establish, operate, and maintain a fire
department to perform all fire-fighting services [activities]
within the district as provided in this subchapter and may issue
bonds or impose a mandatory fee, with voter approval, for financing
a plan approved in accordance with this section, including the
construction and purchase of necessary buildings, facilities,
land, and equipment and the provision of an adequate water supply.
(k) In this section, "fire-fighting services [activities]"
means all of the customary and usual services [activities] of a fire
department, including fire suppression, fire prevention, training,
safety education, maintenance, communications, medical emergency
services, photography, and administration.
(l) Notwithstanding the requirements of Subsections
(a)-(j), a district providing potable water or sewer service to
household users may as part of its billing process collect from its
customers a voluntary contribution on behalf of organizations
providing fire-fighting services [activities] to the district. A
district that chooses to collect a voluntary contribution under
this subsection must give reasonable notice to its customers that
the contribution is voluntary. Water and sewer service may not be
terminated as a result of failure to pay the voluntary
contribution.
SECTION 25. Section 49.455(d), Water Code, is amended to
read as follows:
(d) The information form required by this section shall be
filed with the county clerk [within 48 hours after the effective
date of this section or] within 48 hours after the district is
officially created[, whichever time comes first]. For purposes of
this section, the words "officially created" mean the date and hour
in which the results of the election to confirm the creation of the
district are declared.
SECTION 26. Section 54.201(b), Water Code, is amended to
read as follows:
(b) A district is authorized to purchase, construct,
acquire, own, operate, maintain, repair, improve, or extend inside
and outside its boundaries any and all works, improvements,
facilities, plants, equipment, and appliances necessary to
accomplish the purposes of the district authorized by the
constitution, this code, or other law [its creation], including all
works, improvements, facilities, plants, equipment, and appliances
incident, helpful, or necessary to:
(1) supply water for municipal uses, domestic uses,
power, and commercial purposes and all other beneficial uses or
controls;
(2) collect, transport, process, dispose of, and
control all domestic, industrial, or communal wastes whether in
fluid, solid, or composite state;
(3) gather, conduct, divert, and control local storm
water or other local harmful excesses of water in a district;
(4) irrigate the land in a district;
(5) alter land elevation in a district where it is
needed;
(6) navigate coastal and inland waters of the
district; and
(7) provide parks and recreational facilities for the
inhabitants in the district, subject to the provisions of Chapter
49 [Subchapter I of this chapter].
SECTION 27. Subchapter D, Chapter 54, Water Code, is
amended by adding Section 54.2052 to read as follows:
Sec. 54.2052. PLUMBING CODE. Notwithstanding any other
law, a district is not required to adopt a plumbing code. A
district may adopt and enforce one or more plumbing codes meeting
the standards and requirements of the rules and laws of this state
and may amend any code adopted to conform to local concerns if the
amendment does not substantially vary from rules or laws of this
state.
SECTION 28. Section 54.234, Water Code, is amended to read
as follows:
Sec. 54.234. ACQUIRING ROAD UTILITY DISTRICT POWERS. Any
district, which has the power to levy taxes, may[, with the approval
of the commission,] petition the commission [Texas Transportation
Commission] to acquire the powers granted to road utility districts
operating pursuant to Chapter 441, Transportation Code, under the
authority of Article III, Section 52, Texas Constitution. As soon
as practicable after such petition has been filed with the
commission [Texas Transportation Commission], the commission
[Texas Transportation Commission shall conduct a hearing in
accordance with Chapter 441, Transportation Code, and] shall issue
an order [in accordance with Chapter 441, Transportation Code,]
either approving or denying such petition. [Any district so
petitioning the Texas Transportation Commission shall conform to
the rules applicable to the creation and administration of such
districts as provided by Chapter 441, Transportation Code.] In the
event of any conflict between the provisions of the Water Code and
the general laws of this state applicable to the district and the
provisions of Chapter 441, Transportation Code, the provisions of
the Water Code and the general laws of this state applicable to the
district shall prevail.
SECTION 29. Section 54.503, Water Code, is amended to read
as follows:
Sec. 54.503. MANNER OF REPAYMENT OF BONDS. The board may
provide for the payment of principal of and interest and redemption
price on the bonds in any one of the following manners:
(1) from the levy and collection of ad valorem taxes on
all taxable property within the district;
(2) by pledging all or any part of the designated
revenues to result from the ownership or operation of the
district's works, improvements, facilities, plants, equipment, and
appliances or under specific contracts for the period of time the
board determines;
(3) by pledging all or part of any funds or revenues
available to the district; or
(4) a combination of the sources set forth in
Subdivisions (1), [and] (2), and (3) of this section.
SECTION 30. Section 54.505, Water Code, is amended to read
as follows:
Sec. 54.505. ELECTION ON TAX BONDS. Bonds payable solely
from revenues may be issued by resolution or order of the board
without an election, but no bonds, except refunding bonds, payable
wholly or partially from ad valorem taxes shall be issued until
authorized by a majority vote of the resident electors of the
district voting in an election called and held for that purpose. An
election is not required to pledge revenues to the payment of bonds.
SECTION 31. Sections 54.739 and 54.744, Water Code, are
amended to read as follows:
Sec. 54.739. SUBSTITUTING LAND OF EQUAL [ACREAGE AND]
VALUE. After the district is organized and acquires facilities
with which to function for the purposes for which it was organized,
and votes, issues and sells bonds for such purposes, land within the
district boundaries subject to taxation that does not need or
utilize the services of the district may be excluded and other land
not within the boundaries of the district may be included within the
boundaries of the district without impairment of the security for
payment of the bonds or invalidation of any prior bond election, as
provided by [the provisions of] this section and Sections 54.740
[54.741] through 54.747 [54.748 subject to commission approval].
Sec. 54.744. IMPAIRMENT OF SECURITY. For purposes of the
board's consideration of the applications, the lands proposed for
inclusion shall be deemed to be sufficient to avoid an impairment of
the security for payment of obligations of the district if:
(1) according to the most recent [county] tax roll of
the district or the most recently certified estimates of taxable
value from the chief appraiser of the appropriate appraisal
district [rolls], the taxable value of such included lands equals
or exceeds the taxable value of the excluded lands;
(2) either the estimated costs of providing district
facilities and services to such included lands is equal to or less
than the estimated costs of providing district facilities and
services to the excluded lands or any increased estimated costs of
providing district facilities and services to the included land, as
determined by the district's engineer, can be amortized at
prevailing bond interest rates and maturity schedules and the
prevailing debt service tax rate of the district, as determined by
the district's professional financial advisor, when applied to the
increase in taxable value of the included land over the taxable
value of the excluded land; and
(3) the district's outstanding bonds or contract
obligations are payable in whole or in part by a pledge of net
revenues from the ownership or operation of the district's
facilities, and the projected net revenues to be derived from the
lands to be included during the succeeding 12-month period, as
determined by the district's engineer, equals or exceeds the
projected net revenues that would otherwise have been derived from
the lands to be excluded during the same period.
SECTION 32. Subchapter H, Chapter 54, Water Code, is
amended by adding Sections 54.748 and 54.749 to read as follows:
Sec. 54.748. EXCLUSION OF LAND FOR FAILURE TO PROVIDE
SUFFICIENT SERVICES; BONDS OUTSTANDING. (a) This section applies
only to a district that has a total area of more than 5,000 acres.
(b) The board shall call a hearing on the exclusion of land
from the district on a written petition filed with the secretary of
the board by a landowner whose land has been included in and taxable
by the district for more than 28 years if any bonds issued by the
district payable in whole or in part from taxes of the district are
outstanding and the petition:
(1) includes a signed petition evidencing the consent
of the owners of a majority of the acreage proposed to be excluded,
as reflected by the most recent certified tax roll of the district;
(2) includes a claim that the district has not
provided the land with utility services;
(3) describes the property to be excluded;
(4) provides, at the petitioner's expense, facts
necessary for the board to make the findings required by Subsection
(c); and
(5) is filed before August 31, 2005.
(c) The board may exclude land under this section only on
finding that:
(1) the district has never provided utility services
to the land described by the petition;
(2) the district has imposed a tax on the land for more
than 28 years;
(3) all taxes the district has levied and assessed
against the land and all fees and assessments the district has
imposed against the land or the owner that are due and payable on or
before the date of the petition are fully paid; and
(4) the executive director has reviewed the economic
impact of the proposed exclusion of land and does not oppose the
exclusion.
(d) If evidence presented at the hearing conclusively
demonstrates that the requirements and grounds for exclusion
described by Subsections (b) and (c) have been met, the board may
enter an order excluding the land from the district. If the board
enters an order excluding the land, the board shall redefine in the
order the boundaries of the district to embrace all land not
excluded.
(e) A copy of an order excluding land and redefining the
boundaries of the district shall be filed in the deed records of the
county in which the district is located.
(f) The exclusion of land under this section does not impair
the rights of holders of any outstanding bonds, warrants, or other
certificates of indebtedness of the district.
(g) After any land is excluded under this section, the
district may issue any unissued additional debt approved by the
voters of the district before exclusion of the land under this
section without holding a new election. Additional debt issued
after land is excluded from the district may not be payable from and
does not create a lien against the taxable value of the excluded
land.
(h) For purposes of this section and Section 54.749, "land"
includes any improvements to the land, and when used in the context
of property taxes, "land" has the meaning assigned to "real
property" by Section 1.04, Tax Code.
Sec. 54.749. TAX LIABILITY OF EXCLUDED LAND; BONDS
OUTSTANDING. (a) Land excluded from the district under Section
54.748 that is pledged as security for any outstanding debt of the
district remains pledged for its pro rata share of the debt until
final payment is made. The district shall continue to levy and
collect taxes on the excluded land at the same rate levied on land
remaining in the district until the amount of taxes collected from
the excluded land equals the land's pro rata share of the district's
debt outstanding at the time the land was excluded from the
district.
(b) The district shall apply the taxes collected on the
excluded land only to the payment of the excluded land's pro rata
share of the debt.
SECTION 33. Section 57.015(b), Water Code, is amended to
read as follows:
(b) The notice shall be posted at the courthouse door and at
a place [four different places] inside the proposed district. If
the district is located in more than one county, the person posting
the notice shall post a copy at the courthouse door in each county
in which any portion of the proposed district is located and at a
place [four separate places] inside the boundaries of that portion
of the district located in each county. The notice shall be posted
for at least 10 days before the date of the hearing.
SECTION 34. Section 57.092(a), Water Code, is amended to
read as follows:
(a) The district may enter into all necessary and proper
contracts and employ all persons and means necessary to purchase,
acquire, build, construct, complete, carry out, maintain, protect,
and, in case of necessity, add to and rebuild all works and
improvements necessary or proper to fully accomplish the purposes
of the district, including the reclamation of land within the
district [a reclamation plan lawfully adopted for the district].
SECTION 35. Section 57.104, Water Code, is amended to read
as follows:
Sec. 57.104. CONSTRUCTION OF [DUTY TO CONSTRUCT APPROVED]
IMPROVEMENTS. The district may [shall] construct all improvements
necessary or convenient to accomplish the purposes of the district
[included in the plan of reclamation approved by the commission].
SECTION 36. Section 57.108(b), Water Code, is amended to
read as follows:
(b) Contracts may be awarded or entered in sections for the
purpose of the purchase, acquisition, construction, and
improvement of pumping equipment, reservoirs, culverts, bridges,
and drainage improvements as these may become necessary[, but as
funds are available, the district shall comply with Section
57.104].
SECTION 37. The heading to Section 57.116, Water Code, is
amended to read as follows:
Sec. 57.116. ENGINEER'S CONSTRUCTION REPORT.
SECTION 38. Section 57.116(a), Water Code, is amended to
read as follows:
(a) As [the] work [on the plan of reclamation] progresses on
the district's improvements, the engineer shall make a report to
the board, showing in detail whether or not the contract is being
fulfilled.
SECTION 39. Section 57.117(b), Water Code, is amended to
read as follows:
(b) If the executive director finds that the work has not
been done in strict accordance with the contract, he shall
officially certify this fact, and in the certificate he shall state
where the contractor has failed to comply with the contract
[approved plan of reclamation].
SECTION 40. Section 57.118, Water Code, is amended to read
as follows:
Sec. 57.118. COMPLIANCE WITH CONTRACT. After the board
receives a report that the contractor has failed to comply with the
contract, it shall demand that the contractor comply with the
requirements of the contract [approved plan of reclamation] at his
own expense, and no further accounts, claims, or vouchers submitted
by the contractor shall be approved or paid until the contractor
complies with the requirements of the executive director by
constructing the improvement in accordance with the contract [plan
of reclamation].
SECTION 41. The heading to Subchapter E, Chapter 57, Water
Code, is amended to read as follows:
SUBCHAPTER E. ENGINEER'S REPORT [PLAN OF RECLAMATION]
SECTION 42. Sections 57.177(a) and (c), Water Code, are
amended to read as follows:
(a) If the district wants to carry out its purposes [plan of
reclamation] without issuing bonds, the board may arrange for
contributions from landowners or other sources to provide the funds
required to complete the improvements.
(c) If the district creates an indebtedness under this
section, the indebtedness may not be more than:
(1) the cost of construction of the improvements
included in the engineer's report [plan of reclamation];
(2) the cost [as approved by the commission] of
maintaining the improvements for two years; and
(3) an additional amount equal to 10 percent to meet
emergencies, modifications, and changes lawfully made, plus
damages awarded against the district.
SECTION 43. Section 57.208(b), Water Code, is amended to
read as follows:
(b) The bonds shall be known as "Levee Improvement Bonds"
[and shall state on their face the purpose for which they are
issued].
SECTION 44. Section 57.216, Water Code, is amended to read
as follows:
Sec. 57.216. PROVIDING FOR ADDITIONAL FUNDS. (a) If the
improvements in the engineer's report [plan of reclamation adopted
for the district] are insufficient to reclaim all of the land and
other property inside the district, extensive repairs or additions
to the improvements are necessary, or additional funds are needed
to complete improvements, the board may provide additional funds
for the district by following the provisions of this chapter for
raising funds [for the original plan of reclamation].
(b) If the board creates additional indebtedness or issues
additional bonds, the indebtedness or bonds are subject to the
provisions of this chapter relating to the issuance of bonds. [The
new or amended plan of reclamation must be approved by the
commission.]
SECTION 45. Section 57.260(a), Water Code, is amended to
read as follows:
(a) If a district levies taxes on the benefit basis, the
commissioners court of each county in which any portion of that
district is located shall levy and have assessed and collected
taxes on all taxable property inside the district, based on the net
benefits which the commissioners of appraisement find will accrue
to each piece of property from the improvements described in the
engineer's report [completion of the plan of reclamation] or other
authorized improvements [improvement].
SECTION 46. Section 57.261, Water Code, is amended to read
as follows:
Sec. 57.261. APPOINTMENT OF COMMISSIONERS OF APPRAISEMENT.
The [After the plan of reclamation is approved and adopted, the]
commissioners court of the county of jurisdiction in a district
levying taxes on the benefit basis shall appoint three
disinterested commissioners, known as "commissioners of
appraisement."
SECTION 47. Sections 57.265(c) and (d), Water Code, are
amended to read as follows:
(c) The commissioners of appraisement shall view:
(1) the land inside the district;
(2) other land which will be affected by the engineer's
report [plan of reclamation] if carried out;
(3) all public roads, railroads, rights-of-way, and
other property or improvements located on the land; and
(4) land inside or outside the district which may be
acquired under the provisions of this chapter for any purpose
connected with or incident to carrying out the engineer's report
[plan of reclamation].
(d) The commissioners of appraisement shall assess the
amounts of benefits and all damages that will accrue to any tract of
land inside the district or any land outside the district which may
be affected by the engineer's report [plan of reclamation], or any
public highway, railroad, right-of-way, roadway, or other
property.
SECTION 48. Section 57.266(a), Water Code, is amended to
read as follows:
(a) The commissioners of appraisement shall prepare a
report of their findings. The report shall include:
(1) the name of the owner of each piece of property
examined and assessed;
(2) a description which will identify each piece of
property; and
(3) the value of all property to be taken or acquired
for rights-of-way or any other purposes connected with carrying out
the engineer's report [plan of reclamation as finally approved by
the commission].
SECTION 49. Sections 57.267(b), (c), and (d), Water Code,
are amended to read as follows:
(b) The notice shall be published in a newspaper published
in each county in which any part of the district is located, or in
which any land lies that will be in any way affected by the proposed
engineer's report [plan of reclamation]. The notice shall be
published once a week for two consecutive weeks before the date of
the hearing.
(c) The notice shall be in substantially the following form:
To the owners and all other persons having any interest in
land lying in ______ County, take notice, that a copy of the
engineer's report [plan of reclamation] of the ______ Levee
Improvement District has been filed in the district's office [with
the county clerk of this county] and that the commissioners of
appraisement have been appointed to assess benefits and damages
accruing to land or other property inside or outside the levee
improvement district which will be benefited, taken, damaged, or
affected in some way by the carrying out of the engineer's report
[plan of reclamation]. The report of the commissioners of
appraisement has been filed in my office at ______, and all
interested persons may examine the report and make an objection to
all or any part of the report. A person who claims damage to his
land and to whose land no damages have been assessed in the report
must file a claim for damage in my office on or before ______,
[19]___. A person who fails to make an objection or to file a claim
for damages is deemed to have waived his right to object or claim
damages. The commissioners of appraisement will meet on ______,
[19]___, to hear and act on objections to their report and claims
for damages.
_____________________________
Secretary, Board of Directors
______________ Levee Improvement District
(d) The secretary shall mail written notice to each person
whose property is listed in the report of the commissioners of
appraisement, if the office address is known. This notice shall
state in substance:
(1) that the report of the commissioners of
appraisement assessing benefits and damages accruing to land and
other property because of the engineer's report [plan of
reclamation] for the district has been filed in the district's
[secretary's] office;
(2) that all persons interested may examine the report
and make objections to it in whole or in part; and
(3) that the commissioners of appraisement will meet
on the day and at the place named to hear and act on objections to
the report.
SECTION 50. Sections 57.269(a) and (b), Water Code, are
amended to read as follows:
(a) An owner of land or other property affected by the
report of the commissioners of appraisement or by the engineer's
report [plan of reclamation] may file an objection to any or all
parts of the report of the commissioners of appraisement at or
before the hearing on the report.
(b) A person on whose land no damages have been assessed and
who believes that his land will be damaged by prosecution of the
engineer's report [plan of reclamation] may file with the secretary
of the board a claim for damages.
SECTION 51. Sections 57.270(e), (j), and (k), Water Code,
are amended to read as follows:
(e) The secretary in not less than five days after the
appeal is filed shall send to the district clerk:
(1) the engineer's report [plan of reclamation] or a
certified copy of it;
(2) a transcript of that part of the commissioners of
appraisement's report affecting the lands concerned in the appeal;
(3) a transcript of the claim for damages; and
(4) a transcript of the action of the commissioners of
appraisement on the claim.
(j) No appeal may delay carrying out the engineer's report
[plan of reclamation], and if the board pays to the district clerk
the amount of damages awarded by the commissioners of appraisement
to a claimant who is appealing their decree, and if the board makes
bond to pay to the claimant any additional amount that he may be
awarded on his appeal, title to the condemned property that is the
subject of the appeal vests in the district, and the district is
entitled to immediate possession.
(k) No person may claim damages against the district, its
board, officers, or agents because of the prosecution of the
engineer's report [plan of reclamation] if he owns or has an
interest in land in a county in which [a copy of the plan of
reclamation has been filed and in which] notice has been published
of the hearing before the commissioners of appraisement, and he has
failed to file a claim for damages or an objection to the damages
assessed by the commissioners of appraisement against his land, or
if he has filed a claim or objection but has failed to appeal from an
adverse ruling on his claim or objection.
SECTION 52. Section 57.273(b), Water Code, is amended to
read as follows:
(b) If the engineer's report [plan of reclamation] is
changed or modified, or if extensive repairs or additions to the
engineer's report [plan of reclamation] are desired, the board
shall file a petition with the commissioners court describing the
changes, modifications, repairs, or additions.
SECTION 53. Section 57.274(b), Water Code, is amended to
read as follows:
(b) The commissioners court shall order a reassessment of
benefits if it finds that the aggregate amount of assessed benefits
as shown by the previous final judgment and decree is insufficient
to carry out the original engineer's report [plan of reclamation]
or changes, repairs, or additions to the report [plan] or there has
been a material change in the relative value of the benefits
conferred on the property in the district, or for some reason the
assessment of benefits is inadequate or inequitable.
SECTION 54. Section 57.275(d), Water Code, is amended to
read as follows:
(d) If the engineer's report [plan of reclamation] is
modified, or if extensive repairs or additions are made, the
provisions of this section apply to districts that levy taxes on the
ad valorem basis, but the commissioners of appraisement shall
assess only the damages which will accrue to the property inside or
outside the district as a result of the changes in the report
[plan].
SECTION 55. Section 67.010(d), Water Code, is amended to
read as follows:
(d) A political subdivision may contract with a corporation
under Section 402.014, Local Government Code, to carry out this
chapter. If a corporation issues bonds secured by a contract
entered into under Section 402.014, Local Government Code, the
corporation is considered to be acting for or on behalf of that
political subdivision for the purposes of Section 1201.002(1),
Government Code. A political subdivision is authorized to approve
by ordinance, resolution, or order the articles of incorporation
and the bylaws of a corporation that is created for the purpose of
constructing facilities under a contract as provided by Section
402.014, Local Government Code.
SECTION 56. The following provisions are repealed:
(1) Sections 54.0163(e), 54.508, 57.094, 57.108(a),
57.154(b), and 57.156, Water Code;
(2) Section 402.908, Local Government Code; and
(3) Subchapter C, Chapter 441, Transportation Code.
SECTION 57. (a) A provision of a strategic partnership
agreement entered into before the effective date of this Act that
does not comply with Section 43.0751(f)(2), Local Government Code,
as amended by this Act, is not enforceable after the effective date
of this Act to the extent of the noncompliance.
(b) Section 43.127(a), Local Government Code, as amended by
this Act, applies to an area described by Section 43.123(e), Local
Government Code, as added by this Act, that is annexed for limited
purposes in connection with a strategic partnership agreement
before, on, or after September 1, 2003.
(c) The change in law made by Subsection (d), Section 4.10,
Chapter 1029, Acts of the 76th Legislature, Regular Session, 1999,
as added by this Act, applies only to a contract between the North
Harris County Regional Water Authority and a municipality that was
entered into after January 1, 2002.
(d) For the 2003 tax year, the change in law made by Section
49.236, Water Code, applies only to a conservation and reclamation
district created under Section 52, Article III, or Section 59,
Article XVI, Texas Constitution, and governed by Chapter 49, Water
Code, that adopts its tax rate on or after September 1, 2003. For
the 2003 tax year, a district that adopts its tax rate before
September 1, 2003, is governed by the law as it existed prior to the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 58. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2003.
* * * * *