By: Lindsay S.B. No. 901
(In the Senate - Filed March 3, 2005; March 14, 2005, read
first time and referred to Committee on Natural Resources;
May 4, 2005, reported favorably by the following vote: Yeas 9,
Nays 0; May 4, 2005, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the authority of a water control and improvement
district or a municipal utility district to enter into a contract to
convey property to another water district or water supply
corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 51, Water Code, is amended
by adding Section 51.150 to read as follows:
Sec. 51.150. CONTRACTS WITH OTHER DISTRICTS OR WATER SUPPLY
CORPORATIONS. (a) In this section, "authorized water district"
means a district created under Section 52(b)(1) or (2), Article
III, or Section 59, Article XVI, Texas Constitution.
(b) A district may enter into a contract with an authorized
water district or a water supply corporation that authorizes the
district to acquire and convey to the authorized water district or
water supply corporation all or part of a water supply, treatment,
or distribution system, a sanitary sewage collection or treatment
system, or works or improvements necessary for drainage of land in
the district. The contract may permit the district to
rehabilitate, repair, maintain, improve, enlarge, or extend any
existing facilities to be conveyed to the authorized water district
or water supply corporation.
(c) The contract entered into under Subsection (b) may
authorize the authorized water district or water supply corporation
to purchase the water, sewer, or drainage system from the district
through periodic payments to the district in amounts that, combined
with the net income of the district, are sufficient for the district
to pay the principal of and interest on any bonds of the district.
The contract may provide that the payments due under this
subsection:
(1) are payable from and secured by a pledge of all or
part of the revenues of the water, sewer, or drainage system;
(2) are payable from taxes to be imposed by the
authorized water district; or
(3) are payable from a combination of the revenues and
taxes described by Subdivisions (1) and (2).
(d) The contract may authorize the authorized water
district or water supply corporation to operate the water, sewer,
or drainage system conveyed by the district under Subsection (b).
(e) The contract may require the district to make available
to the authorized water district or water supply corporation all or
part of the raw or treated water to be used for the provision of
services within the district.
(f) If the contract provides for the water, sewer, or
drainage system to be conveyed to the authorized water district or
water supply corporation on or after the completion of
construction, the authorized water district or water supply
corporation may pay the district to provide water, sewer, or
drainage services to residents of the authorized water district or
customers of the water supply corporation.
(g) The contract may authorize the district to convey to the
authorized water district or water supply corporation at no cost a
water, sewer, or drainage system and require the authorized water
district or water supply corporation to use all or part of those
systems to provide retail service to customers within the district
in accordance with the laws of this state and any certificate of
convenience and necessity of the authorized water district or water
supply corporation.
(h) A contract under this section must be approved by a
majority vote of the governing bodies of the district and the
authorized water district or water supply corporation. If Section
52, Article III, or Section 59, Article XVI, Texas Constitution,
requires that qualified voters of the district approve the
imposition of a tax by the district or the authorized water
district, the district or the authorized water district shall call
an election for that purpose.
SECTION 2. Section 51.402, Water Code, is amended to read as
follows:
Sec. 51.402. AUTHORITY TO ISSUE BONDS OF DISTRICTS
OPERATING UNDER ARTICLE XVI, SECTION 59, OF THE TEXAS CONSTITUTION.
A district operating under Article XVI, Section 59, of the Texas
Constitution, may incur debt evidenced by the issuance of bonds for
any purpose authorized by this chapter, Chapter 49, or other
applicable laws, including debt which is necessary to provide
improvements and maintenance of improvements to achieve the
purposes for which the district was created.
SECTION 3. Subchapter D, Chapter 54, Water Code, is amended
by adding Section 54.2351 to read as follows:
Sec. 54.2351. CONTRACTS WITH OTHER DISTRICTS OR WATER
SUPPLY CORPORATIONS. (a) In this section, "authorized water
district" means a district created under Section 52(b)(1) or (2),
Article III, or Section 59, Article XVI, Texas Constitution.
(b) A district may enter into a contract with an authorized
water district or a water supply corporation that authorizes the
district to acquire and convey to the authorized water district or
water supply corporation all or part of a water supply, treatment,
or distribution system, a sanitary sewage collection or treatment
system, or works or improvements necessary for drainage of land in
the district. The contract may permit the district to
rehabilitate, repair, maintain, improve, enlarge, or extend any
existing facilities to be conveyed to the authorized water district
or water supply corporation.
(c) The contract entered into under Subsection (b) may
authorize the authorized water district or water supply corporation
to purchase the water, sewer, or drainage system from the district
through periodic payments to the district in amounts that, combined
with the net income of the district, are sufficient for the district
to pay the principal of and interest on any bonds of the district.
The contract may provide that the payments due under this
subsection:
(1) are payable from and secured by a pledge of all or
part of the revenues of the water, sewer, or drainage system;
(2) are payable from taxes to be imposed by the
authorized water district; or
(3) are payable from a combination of the revenues and
taxes described by Subdivisions (1) and (2).
(d) The contract may authorize the authorized water
district or water supply corporation to operate the water, sewer,
or drainage system conveyed by the district under Subsection (b).
(e) The contract may require the district to make available
to the authorized water district or water supply corporation all or
part of the raw or treated water to be used for the provision of
services within the district.
(f) If the contract provides for the water, sewer, or
drainage system to be conveyed to the authorized water district or
water supply corporation on or after the completion of
construction, the authorized water district or water supply
corporation may pay the district to provide water, sewer, or
drainage services to residents of the authorized water district or
customers of the water supply corporation.
(g) The contract may authorize the district to convey to the
authorized water district or water supply corporation at no cost a
water, sewer, or drainage system and require the authorized water
district or water supply corporation to use all or part of those
systems to provide retail service to customers within the district
in accordance with the laws of this state and any certificate of
convenience and necessity of the authorized water district or water
supply corporation.
(h) A contract under this section must be approved by a
majority vote of the governing bodies of the district and the
authorized water district or water supply corporation. If Section
52, Article III, or Section 59, Article XVI, Texas Constitution,
requires that qualified voters of the district approve the
imposition of a tax by the district or the authorized water
district, the district or the authorized water district shall call
an election for that purpose.
SECTION 4. Section 54.501, Water Code, is amended to read as
follows:
Sec. 54.501. ISSUANCE OF BONDS. The district may issue its
bonds for any purpose authorized by this chapter, Chapter 49, or
other applicable laws, including the purpose of purchasing,
constructing, acquiring, owning, operating, repairing, improving,
or extending any district works, improvements, facilities, plants,
equipment, and appliances needed to accomplish the purposes set
forth in Section 54.012 of this code for which a district shall be
created, including works, improvements, facilities, plants,
equipment, and appliances needed to provide a waterworks system,
sanitary sewer system, storm sewer system, and solid waste disposal
system.
SECTION 5. The change in law made by this Act applies only
to a contract between a water control and improvement district or a
municipal utility district and another water district or water
supply corporation entered into on or after the effective date of
this Act. A contract entered into before the effective date of this
Act is covered by the law in effect on the date the contract was
entered into, and the former law is continued in effect for that
purpose.
SECTION 6. (a) Any contract entered into by a municipal
utility district or a water control and improvement district before
the effective date of this Act that provides that the district will
acquire and convey all or part of a water supply, treatment, or
distribution system, a sanitary sewage collection or treatment
system, or works or improvements necessary for drainage of land in
the district, to a district created under Subdivision (1) or (2),
Subsection (b), Section 52, Article III, or Section 59, Article
XVI, Texas Constitution, or a water supply corporation, is
validated in all respects as if the contract were entered into as
authorized by law.
(b) This section does not apply to any contract that on the
effective date of this Act:
(1) is involved in litigation if the litigation
ultimately results in the contract being held invalid by a final
judgment of a court of competent jurisdiction; or
(2) has been held invalid by a final judgment of a
court of competent jurisdiction.
SECTION 7. 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, 2005.
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