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By: Shapleigh S.B. No. 1811
(In the Senate - Filed March 22, 2005; March 30, 2005, read
first time and referred to Committee on Natural Resources;
May 2, 2005, reported favorably by the following vote: Yeas 9,
Nays 0; May 2, 2005, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the ability of certain water supply or sewer service
corporations to dissolve and transfer assets to a municipality.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 67.001 through 67.017, Chapter 67,
Water Code, are designated as Subchapter A, Chapter 67, Water Code,
and a subchapter heading is added to read as follows:
SUBCHAPTER A. GENERAL PROVISIONS
SECTION 2. Chapter 67, Water Code, is amended by adding
Subchapter B to read as follows:
SUBCHAPTER B. DISSOLUTION
Sec. 67.051. DEFINITION. In this subchapter, "executive
director" means the executive director of the Texas Commission on
Environmental Quality.
Sec. 67.052. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a corporation and municipality located in a county:
(1) with a population of 650,000 or more; and
(2) adjacent to an international border.
Sec. 67.053. TRANSFER OF ASSETS AND LIABILITIES; REQUEST
FOR DISSOLUTION ORDER. (a) A board may transfer to a municipality
the corporation's assets and liabilities in accordance with the
corporation's written request for the municipality to take over the
management of the corporation's water supply system.
(b) On favorable action of the municipality, the board shall
notify the executive director and request an order of dissolution.
(c) The board shall provide the executive director with any
information or documentation the executive director requests to
monitor the corporation's progress toward the complete transfer of
its assets and liabilities to the municipality.
Sec. 67.054. ORDER OF DISSOLUTION; TRANSFER OF ASSETS AND
LIABILITIES. (a) On receipt of the notice and request from the
corporation, the executive director shall investigate to verify
whether the parties have met all the necessary conditions for the
transfer.
(b) After investigation, the executive director shall issue
an order of dissolution if the executive director determines:
(1) the corporation is ready to be dissolved;
(2) all of the corporation's assets and liabilities
are ready to be transferred to the municipality for incorporation
into the municipality's water system;
(3) the municipality is prepared to accept the
transfer; and
(4) the governing body of the municipality has adopted
a resolution accepting the transfer.
(c) In issuing an order of dissolution under Subsection (b),
the executive director shall:
(1) direct the board to provide to the municipality
and the secretary of state all transfer documents, including all
deeds, easements, and bills of sale in the possession of the board,
and any other information necessary or appropriate to transfer all
corporation assets and liabilities to the municipality;
(2) order the corporation dissolved; and
(3) order that all assets and liabilities of the
corporation be transferred to the municipality for incorporation
into the municipality's water system.
(d) The consideration and adoption of an order of
dissolution under this section is not a contested case under
Chapter 2001, Government Code.
(e) The order of dissolution issued under this section is
wholly sufficient and effective to accomplish the dissolution of
the corporation and the transfer of its assets and liabilities to
the municipality.
(f) The executive director shall file with the secretary of
state and in the deed records of the county in which the corporation
and municipality are located a certified copy of the order of
dissolution issued under this section together with a certified
copy of the resolution of the governing body of the municipality
accepting the transfer.
Sec. 67.055. COLLECTION OF MONEY OWED THE CORPORATION. On
or after the date the dissolution order is issued under Section
67.054, the municipality may collect all money owed the corporation
on the date the order is issued including:
(1) taxes, fees, or charges imposed by the corporation
that were due and owing on the date of the dissolution order issued
under Section 67.054; and
(2) the corporation's accounts receivable.
Sec. 67.056. RATES FOR SERVICE. (a) The municipality may
charge county residents living in the service area formerly served
by the corporation water supply rates that exceed the rates paid by
water supply customers who are residents of the municipality if the
higher rates are necessary or appropriate to fully cover the cost of
service to the area, as determined by the municipality.
(b) The water supply rates the municipality charges county
residents living in the service area formerly served by the
corporation may include an amount necessary to recover:
(1) the costs of operation and maintenance of the
water supply or improvements serving the area; and
(2) debt service, including the cost of loans accepted
to improve the water supply system serving the area.
(c) Section 16.349 does not affect the amount of the fee
charged under this section.
SECTION 3. (a) This section applies only to a water supply
or sewer service corporation located in a county:
(1) with a population of 650,000 or more; and
(2) adjacent to an international border.
(b) All acts, resolutions, orders, instruments,
obligations, and proceedings of the body serving as the board of a
water supply or sewer service corporation before the effective date
of this Act are in all respects validated, ratified, approved, and
confirmed as of the date they were taken, adopted, authorized,
issued, entered into, or delivered and shall be treated as though
they had originally been authorized and accomplished in accordance
with law.
(c) An act, resolution, order, instrument, obligation, or
proceeding may be held invalid if the body serving as the board of a
water supply or sewer service corporation acted with knowledge that
the action was illegal.
(d) This section does not apply to any matter that on the
effective date of this Act:
(1) is involved in litigation if in the course of the
litigation the matter is 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 4. 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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