BILL ANALYSIS
By: Flynn
Committee Report (Substituted)
BACKGROUND AND PURPOSE
The purpose of the bill is to create the Union Valley Ranch Municipal Utility District of Hunt County, and to enumerate its powers, duties and obligations.
In 1925, the Legislature enacted its first law to authorize the creation of water control and improvement districts. Article 16, Section 59, of the Texas Constitution authorized such entities to have unlimited taxing authority and to issue debt backed by such taxes in order to construct public infrastructure to control and use water beneficially. The Water Code now authorizes approximately 13 different types of water districts to deal with surface water usage.
Water districts can be created by three methods: by the county commissioners court, by the TCEQ or successor agencies, and by the Legislature.
C.S.H.B. 813 proposes the legislative creation of a municipal utility district (“MUD”) to be located entirely in Hunt County. The proposed legislation includes already existing authorized powers from several Texas laws, combining them into this water district that will be suited to the development needs of the times and locale.
C.S.H.B. 813 proposes to combine the traditional powers and duties of a MUD governed by Chapter 49 and 54, Water Code, with certain powers of road districts authorized under Article 3, Section 52, Texas Constitution, and the powers of divisibility in Chapter 53, Water Code.
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
This Act adds Chapter 8108 to the Special District Local Laws Code, which shall be titled the Union Valley Ranch Municipal Utility District of Hunt County.
SECTION 1. Subchapter A defines the GENERAL PROVISIONS that will apply to the new district. Definitions are provided. The nature of the district, being authorized by certain constitutional provisions, is set forth.
A requirement that a confirmation election is provided. If the district does not hold a confirmation election before September 1, 2007, under certain circumstances, the district may be dissolved.
The land to be included in the district is described in the bill itself, the field notes shall be deemed to form a closure, and a mistake in the field notes shall not affect the validity of the district.
Subchapter A1 sets forth temporary provisions that will authorize and regulate the activities of the district until the district is confirmed by the voters. In this subchapter, the temporary directors are named, and the qualifications for their service are provided. If at any time there are fewer than three qualified temporary directors, the TCEQ shall appoint members to fill those vacancies.
The organizational meeting of the board of directors is authorized and the location of the meeting place is provided for. A mechanism to determine which directors shall serve two year terms to create the staggering effect required for the four-year terms water district directors are to serve is provided.
Subchapter A1 expires September 1, 2010.
SUBCHAPTER B sets forth provisions relating to the BOARD OF DIRECTORS.
There shall be five directors who serve four-year terms and who shall stand for election on the May uniform election date of each even-numbered year.
SUBCHAPTER C sets forth the district’s POWERS AND DUTIES that are bestowed in addition to the powers and duties the district shall acquire by virtue of creation as a municipal utility district.
The district may construct, acquire, improve, maintain, or operate roads or turnpikes, or improvements in aid of such, inside or outside the district. Only the construction standards of the North Central Texas Council of Governments shall be applied to such projects of the district.
The district may pay all expenses related to obtaining a new certificate of convenience and necessity (“CCN”) or the rights to a CCN of another utility out of any available district revenues. The district may enter into a contract to allow a political subdivision to provide water or sewer service to the district. The contract may provide that the district will construct or acquire and convey to the political subdivision a water supply , treatment and distribution system, a sewer collection or treatment system, as necessary.
The district may use bond proceeds or other available district revenues to pay its obligations under such contract. If the contract referred to above requires the district to make payments from taxes other than O&M taxes, the contract is subject to Section 49.108, Water Code.
SUBCHAPTER D provides for GENERAL FINANCIAL PROVISIONS. The district may impose a tax for any district operation and maintenance purpose as provided in Section 49.107, Water Code. Section 49.107(f) does not apply to reimbursements for projects described in Section 8108.102. The district may impose a tax to pay debt service on bonds it issues under 8108.201.
The district is prohibited from imposing impact fees or assessments on utilities within the district.
SUBCHAPTER E sets forth provisions related to BONDS. The district is authorized to issue bonds or other obligations under Chapters 49 and 54, Water Code, and to finance road projects under Sections 8108.102, or the district’s contractual obligations set forth in Section 8108.105.
The district may not issue bonds or other obligations secured in whole or in part by ad valorem taxes to finance projects authorized by Section 8108.102 (road projects) unless the issuance is approved by a vote of a two-thirds majority of the voters in the district. Bonds for such purposes may not exceed one fourth of the assessed value of the property in the district due to a constitutional prohibition in Article 3, Section 52.
Sections 49.181 and 49.182, Water Code, do not apply to projects under Section 8108.102 or to bonds issued by the districts for such road projects.
SUBCHAPTER F provides for DIVISION INTO MULTIPLE DISTRICTS. The district is proposed to encompass over 653 acres, which is generally considered to be too large for one district to practically serve. Before the district issues debt secured by taxes or net revenues, the district may be divided into two or more new districts. Such new district must be at least 100 acres.
The division must be based on a petition from a landowner in the district or a motion of the board. If a decision to divide is made, the board shall set the terms of the division, including names for the new district or districts and a plan for the payment or performance of any outstanding district obligation and prepare a metes and bounds description for each new district.
After the board decides to divide, the board shall hold an election in the district to determine whether the district should be divided as proposed. The board shall give notice at least 35 days before the date of the election. If a majority of the votes are in favor of division, the district shall be divided and not later than the 30th day after the date of the election the district shall provide notice of the division to the TCEQ, the attorney general, the commissioners court of each county in which a new district is located and any municipality that has extraterritorial jurisdiction of any new district. Not later than the 90th day after the date of the division election, the board shall appoint itself as the board of one of the new districts to serve the same terms as they originally served before the division, and appoint five directors for each new district who shall serve until the uniform election date in May of the first even numbered year after the year in which the directors are appointed. They shall draw lots to establish staggered terms.
Each new district may incur and pay debts and has all the powers of the original district created by this chapter. If the district is divided, any bond authorizations remain in place. Debts shall be paid by revenues or by taxes or assessments imposed on real property in the district as if the district has not been divided or by contributions from each new district as stated in the terms set by the board. Any other obligation shall be divided pro rata among the new districts on an acreage basis or on other terms that are satisfactory to the new districts. The new districts may contract with each other for water and wastewater services, or any other matters the boards consider appropriate.
SECTION 2. SETS FORTH THE METES AND BOUNDS OF THE LAND INITIALLY TO BE WITHIN THE DISTRICT, ENCOMPASSING A 653 ACRE TRACT.
SECTION 3. PROVISIONS RELATING TO NOTICE REQUIRED BY THE CONSTITUTION FOR LOCAL LAWS; CONFIRMING ALL SUCH ACTS FULFILLED.
SECTION 4. SETS FORTH THE EFFECTIVE DATE.
EFFECTIVE DATE
Upon passage, if the required vote is obtained, or if not, September 1, 2005.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B 813 differs from the original in nine areas, all of which are found in Section 1 of the bill.
1. Section 8108.005, was deleted in the Committee Substitute. References to the Transportation Code have been deleted from the Substitute. The language in the original provision relating to the applicability of other laws to this district has been re-written and included in Section 8108.101 of the Committee Substitute.
2. Section 8108.006, a provision prohibiting the impairment of the district by a local government, has been eliminated from the Committee Substitute
3. Section 8108.101 has been re-written and now includes the language awarding certain road project powers. Subsections (b) and (d) of Section 8108.101 as filed, have been deleted.
4. Section 8108.102, a provision allowing joint road projects with a state agency, a political subdivision or a corporation, was deleted from the Committee Substitute.
5. In Section 8108.103, the reference to Chapter 257, Transportation Code, was deleted from the Committee Substitute.
6. Section 8108.106 was deleted from the Committee Substitute. This provision granted to the district the power to exercise eminent domain for any district project or purpose.
7. A new Section 8108.153 is added to the Committee Substitute to provide that the district shall not have authority to impose an impact fee or assessment on certain utilities within the district.
8. In Section 8108.201, references to pertinent sections of the Act have been corrected to reflect the numbering in the Committee Substitute.
9. Under Section 8108.252, subsection (b) which states that the board of directors shall give notice of the election not later that the 20th day before the date of the election is changed in the Committee Substitute to require notice before the 35th day before the election.