By: Flores (Senate Sponsor - Hinojosa) H.B. No. 479

(In the Senate - Received from the House March 26, 2007; April 3, 2007, read first time and referred to Committee on Natural Resources; May 10, 2007, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; May 10, 2007, sent to printer.)

COMMITTEE SUBSTITUTE FOR H.B. No. 479 By: Hinojosa

A BILL TO BE ENTITLED

AN ACT

relating to the succession of the La Joya Water Supply Corporation by the Tabasco Special Utility District.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 7201, Special District Local Laws Code, is amended to read as follows:

CHAPTER 7201. TABASCO [LA JOYA] SPECIAL UTILITY DISTRICT

SECTION 2. Section 7201.001, Special District Local Laws Code, is amended by amending Subdivision (3) and adding Subdivision (4) to read as follows:

(3) "Director" means a member of the board.

(4) "District" means the Tabasco [La Joya] Special Utility District.

SECTION 3. Section 7201.002(c), Special District Local Laws Code, is amended to read as follows:

(c) The [On the effective date of the Act enacting this chapter, the] corporation shall be dissolved and succeeded without interruption by the district as provided by Subchapter A1.

SECTION 4. Section 7201.005, Special District Local Laws Code, is amended by amending Subsections (a) and (b) and adding Subsection (d) to read as follows:

(a) The [boundaries of the corporation and initial boundaries of the] district is composed of the territory described by Section 12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this subsection [are coextensive with the service areas covered by Certificates of Convenience and Necessity Nos. 10559 and 20785, as recorded on the Texas Commission on Environmental Quality maps associated with those certificates. Those maps are incorporated in this section by reference].

(b) The boundaries and field notes contained in Section 12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this subsection form a closure. A mistake made in the field notes or in copying the field notes in the legislative process [preparation, copying, or filing of the maps described by Subsection (a) and on file with the Texas Commission on Environmental Quality] does not affect:

(1) the organization, existence, or validity of the district;

(2) the right of the district to issue bonds; or

(3) the legality or operation of the district.

(d) The territory of the district does not include and the district does not have jurisdiction over land that has never been in the service area of the corporation regardless of any erroneous inclusion of that land in the boundaries and field notes in Section 12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this section.

SECTION 5. Section 7201.021, Special District Local Laws Code, is amended by amending Subsections (a), (b), and (d) and adding Subsection (f) to read as follows:

(a) Except as provided by this subsection, after the appointment of initial directors under Section 7201.051, the receiver for the corporation [On the effective date of the Act enacting this chapter, the corporation] shall transfer the assets, debts, and contractual rights and obligations of the corporation, including all legal claims against the corporation in effect on the date of the transfer, to the district and provide notices and make recordings of the transfer required by the Water Code and general law. If the transfer of any debt requires the permission of the lender, the receiver shall initiate proceedings to obtain that permission.

(b) In accordance with the orders of the receivership court and not [Not] later than the 30th day after the date of the transfer under Subsection (a), the receiver for [board of directors of] the corporation shall commence dissolution proceedings of the corporation.

(d) The receiver for [board of directors of] the corporation shall notify the Texas Commission on Environmental Quality of the dissolution of the corporation and its succession in interest by [the creation of] the district in order [to replace it] to effect the transfer of Certificates of Convenience and Necessity Nos. 10559 and 20785 to the district.

(f) After the Texas Commission on Environmental Quality takes the action required by Subsection (e), the court shall terminate the receivership.

SECTION 6. Section 7201.022, Special District Local Laws Code, is amended to read as follows:

Sec. 7201.022. EXPIRATION OF SUBCHAPTER. This subchapter expires September 1, 2012 [2008].

SECTION 7. Section 7201.051, Special District Local Laws Code, is amended to read as follows:

Sec. 7201.051. APPOINTMENT OF INITIAL [TEMPORARY] DIRECTORS. (a) As soon as practicable after the effective date of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this section, seven initial directors shall be appointed as provided by this section [The directors of the corporation who hold office on the effective date of the Act enacting this chapter shall serve as the temporary directors of the district until successor directors are elected and qualify for office].

(b) To be eligible to be appointed as an initial director, an individual must meet the same requirements as a candidate for an elected position as director under Section 7201.052. The initial directors shall be appointed as follows:

(1) one director to represent the residents of the district in the city of Mission appointed by the governing body of that city;

(2) one director to represent the residents of the district in the city of Palmview appointed by the governing body of that city;

(3) one director to represent the residents of the district in the city of Penitas appointed by the governing body of that city;

(4) one director to represent the residents of the district in the city of Sullivan City appointed by the governing body of that city; and

(5) three directors to represent the residents of the district outside the municipalities listed in Subdivisions (1)-(4) appointed by the Hidalgo County Commissioners Court [The temporary directors of the district are assigned position numbers as follows:

[(1) Position 1, Jose Luis Trigo;

[(2) Position 2, Jose Guadalupe Reyna;

[(3) Position 3, George Barreiro;

[(4) Position 4, Frolian Ramirez;

[(5) Position 5, Russell Wicker;

[(6) Position 6, Benito Salinas;

[(7) Position 7, Manuel Ricardo Garcia;

[(8) Position 8, Valente Alaniz, Jr.; and

[(9) Position 9, Juan Lino Garza].

(c) An initial director serves a term that expires on June 1 of the year in which the director's successor is elected under Section 7201.052 [If there is a vacancy on the temporary board of directors of the district, the temporary board shall appoint a person to fill the vacancy for the remainder of the term for the vacated position until the applicable election under Section 7201.052].

SECTION 8. Subchapter B, Chapter 7201, Special District Local Laws Code, is amended by adding Sections 7201.0512 and 7201.0513 to read as follows:

Sec. 7201.0512. INITIAL BOARD TRAINING. (a) Not later than the 60th day after the first date on which all of the initial directors have been appointed, each initial director shall complete at least 12 hours of training on district management and compliance with laws applicable to the district as determined by the receiver for the corporation.

(b) The district shall reimburse an initial director for the reasonable expenses incurred by the director in attending the training.

Sec. 7201.0513. EDUCATION PROGRAM. (a) Before the first election of directors under Section 7201.052, the initial board shall establish a program of education for directors that includes information on:

(1) the history of the district;

(2) the district's enabling legislation;

(3) Chapters 49 and 65, Water Code, and other laws that apply to the district, including the requirements of the:

(A) open meetings law, Chapter 551, Government Code; and

(B) public information law, Chapter 552, Government Code;

(4) relevant legal developments related to water district governance;

(5) the duties and responsibilities of the board;

(6) the requirements of conflict of interest laws and other laws relating to public officials; and

(7) any applicable ethics policies adopted by the Texas Commission on Environmental Quality or the Texas Ethics Commission.

(b) The district shall pay any costs associated with the development of the education program from district revenue.

(c) The education program may include training provided by an organization offering courses that have been approved by the Texas Commission on Environmental Quality.

(d) The board may adopt bylaws modifying the education program as necessary to meet district needs.

SECTION 9. Section 7201.052, Special District Local Laws Code, is amended to read as follows:

Sec. 7201.052. BOARD OF DIRECTORS. (a) Except as provided by Subsection (l), the [The] district shall be governed by a board of seven [not fewer than nine and not more than 11] directors, elected as follows:

(1) one director elected by the voters of the part of the city of Mission inside the district to represent that part of the city;

(2) one director elected by the voters of the city of Palmview to represent that city;

(3) one director elected by the voters of the city of Penitas to represent that city;

(4) one director elected by the voters of the city of Sullivan City to represent that city; and

(5) three directors elected at-large to numbered positions on the board by the district voters who do not reside in any of the municipalities listed in Subdivisions (1)-(4) to represent the part of the district that is not included in those municipalities, unless the number of at-large directors is increased under Subsection (l) [in accordance with Section 49.103, Water Code, notwithstanding Subsection (f)(2) of that section].

(b) A [Except for a temporary director under Section 7201.051, a] candidate for one of the numbered [a position as] director positions:

(1) [is elected at large to represent the entire service area of the district;

[(2)] must reside in the part of the service area of the district that is not included in any of the municipalities listed in Subsections (a)(1)-(4); and

(2) [(3)] must be eligible to hold office under Section 141.001, Election Code.

(c) A candidate for one of the director positions representing a municipality listed in Subsection (a)(1), (2), (3), or (4):

(1) must reside in the municipality the candidate seeks to represent; and

(2) must be eligible to hold office under Section 141.001, Election Code.

(d) It is the policy of the district that the directors shall represent and reside in as broad a cross-section of the geographic area of the district as possible.

(e) [(d)] The district shall fill a vacancy on the board in accordance with Section 49.105, Water Code.

(f) [(e)] Except for the initial [temporary] directors appointed [listed] under Section 7201.051 or elected at the first election under Subsection (g), directors serve staggered terms of four [three] years.

(g) [(f)] On the uniform election date in May 2008, or in May 2010, if the election is postponed under Subsection (h), the district shall hold an election to elect seven directors. On the [2006, and on that] uniform election date in May of each even-numbered [every third] year after that date, the district shall hold an election to elect the appropriate number of [three] directors [to serve in positions 1, 4, and 7].

(h) The initial board by order may postpone until the uniform election date in May 2010 the first election for directors under Subsection (g) if the initial board determines that there is not sufficient time to comply with the requirements of law and to order the election of directors to be held on the first uniform election date specified by that subsection.

(i) The directors elected at the first election under Subsection (g) shall cast lots to determine which three directors shall serve terms expiring June 1 of the first even-numbered year after the year in which the directors are elected and which four directors shall serve terms expiring June 1 of the second even-numbered year after the year in which the directors are elected.

(j) A director may not serve consecutive terms.

(k) A person who has served as a member of the board of directors of the corporation is not eligible to serve as a district director.

(l) If, before the expiration of the term of a director elected to represent a municipality under Subsection (a)(1), (2), (3), or (4), the district determines that all of the incorporated territory of the municipality is outside the boundaries of the district, the position immediately becomes an at-large numbered position to be filled at the next general election of the district in accordance with Subsections (a)(5) and (b) [(g) On the uniform election date in May 2007, and on that uniform election date every third year after that date, the district shall hold an election to elect three directors to serve in positions 2, 3, and 5.

[(h) On the uniform election date in May 2008, and on that uniform election date every third year after that date, the district shall hold an election to elect three directors to serve in positions 6, 8, and 9].

SECTION 10. Subchapter B, Chapter 7201, Special District Local Laws Code, is amended by adding Sections 7201.053 and 7201.054 to read as follows:

Sec. 7201.053. DISTRICT TREASURER. (a) The board shall elect from among its members one director to serve as district treasurer.

(b) The district treasurer shall comply with the training requirements provided by Section 49.1571, Water Code, for an investment officer of a district.

Sec. 7201.054. EDUCATION FOR DIRECTORS. (a) Except for an initial director whose term expires in 2008, each director shall complete the education program established under Section 7201.0513 before the first anniversary of the date on which the director was appointed or elected.

(b) The district shall reimburse a director for the reasonable expenses incurred by the director in attending the education program.

(c) A director who is elected to serve a subsequent term shall fulfill the education requirements specified by district bylaws.

SECTION 11. Section 7201.206, Special District Local Laws Code, is amended to read as follows:

Sec. 7201.206. RATES AND FEES FOR SERVICES. (a) The district, in connection with water or sewer retail public utility services, shall establish lifeline, senior citizen, or minimum consumption level rates for services. The rate impact of such services shall be allocated on the basis of costs of services to achieve conservation principles, while securing necessary reserves for the payment of operating expenses, sinking funds, principal, interest, and debt coverage factors, and any other objective established by the district's annual budget.

(b) Chapter 395, Local Government Code, does not apply to any fee, charge, or assessment that, before the corporation's dissolution and conversion to a district, is adopted by the receiver for the purpose of generating revenue to fund or recoup the costs of capital improvements or facility expansions necessitated by and attributable to new developments.

(c) Notwithstanding Subsection (b), beginning on December 31, 2009, the district may not impose any fee, charge, or assessment that, before the corporation's dissolution and conversion to a district, is adopted by the receiver for the purpose of generating revenue to fund or recoup the costs of capital improvements or facility expansions necessitated by and attributable to new developments unless the district readopts the fee, charge, or assessment or adopts a new fee, charge, or assessment in accordance with Chapter 395, Local Government Code. This subsection does not apply to a retail water or sewer rate adopted by the receiver or the district.

SECTION 12. (a) Except for the areas excluded under Subsection (b) of this section, the boundaries of the Tabasco Special Utility District are as follows:

Beginning at a point in the centerline of FM 495 (Mile 1 Road) a distance of approximately .18 miles west of the intersection of FM 495 and Inspiration Road.

Thence due north approximately 1.0 miles to a point approximately 166 feet south of the centerline of Mile 2 Road and approximately .18 miles west of the intersection of Mile 2 Road and Inspiration Road

Thence follow west along a straight westerly line approximately 180 feet south of Mile 2 Road approximately .51 miles to a point in the centerline of Schubach Road.

Following westerly in a straight line approximately .78 miles to the centerline of Bentsen Palm Drive.

From the point at the centerline of Bentsen Palm Road continue westerly approximately .78 miles to a point at 26 15 00 latitude and -98 22 10 longitude.

Turn right and due north and follow approximately 7.0 miles in a northerly direction .10 miles west and parallel to Bentsen Palm Drive to a point at 226 21 04 latitude and -98 21 06 longitude.

Turn left and follow westerly along a straight line a distance of approximately 1.66 miles to the intersection of Abram Road and 9 Mile Road.

Follow along the centerline of 9 Mile Road westerly approximately 1.65 miles to its intersection with Iowa Avenue. (Latitude: 26 21 31, Longitude: -98 24 16)

Continue westerly along a straight line from latitude 26 21 31, longitude -98 24 16 approximately 3.79 miles to the center line of FM 2221 ( Jara Chinas Road)

Thence due south along FM 2221 ( Jara Chinas Road) approximate distance of 8.02 Miles to a point approximately .75 miles north of the Intersection of Expressway 83 and FM 2221( Jara Chinas Road)

Thence at a distance of approximately .75 miles north of the centerline of Expressway 83 due west to northwest approximately 4 miles following along the same contour as Expressway 83 to the centerline of El Faro Road from a point .62 miles east of the intersection of El Faro Road and Expressway 83.

Turn right and follow due north down the centerline of El Faro Road until its end and continue northerly for a total of approximately 2.79 miles to a point at latitude 26 19 13 and longitude -98 32 40.

Turn left and follow northwesterly in a straight line along the east side of 16 Mile Road (Starr County) approximately 1.87 miles to a point located at 26 19 30 latitude and -98 34 27 longitude.

Turn right and follow northeasterly in a straight line approximately 1.02 miles to a point located at 26 20 22 latitude and -98 34 17 longitude.

Turn right and follow southeasterly in a straight line approximately 1.26 miles to a point located at 26 20 22 latitude and -98 33 05 longitude.

Turn right and follow northeasterly in a straight line along the west side of County Line Road (Starr County) approximately .61 miles to a point located at 26 20 43 latitude and -98 32 60 longitude.

Turn left and follow northwesterly in a straight line approximately 1.26 miles to a point located at 26 20 53 latitude and -98 34 12 longitude.

Turn right and follow northeasterly in a straight line along the east side of 16 Mile Road (Starr County) approximately 1.32 miles to a point located at 26 22 02 latitude and -98 33 59 longitude.

Turn left and follow northwesterly in a straight line approximately .55 miles to a point located at 26 22 07 latitude and -98 34 30 longitude.

Turn left and follow southwesterly in a straight line approximately 6.17 miles to a point located at 26 16 48 latitude and -98 35 29 longitude.

Turn left and follow southeasterly in a straight line approximately .91 miles to a point located at 26 16 30 latitude and -98 34 40 longitude, near the Hidalgo-Starr County line.

Turn right and follow southwesterly along the Hidalgo-Starr County line approximately 1.28 miles to its intersection with the Rio Grande River (U.S. side).

Thence due south approximately 7.77 miles to the northern winding banks (U.S. side) of the Rio Grande River

Thence east along the northern winding banks ( US side ) of the Rio Grande River approximately 22 miles to a point approximately 1.16 miles south of Greene Road

Thence from that center line on Bentsen Park Road approximately .82 miles east northeast to the centerline of Breyfogle/Shuerbach Road

Turn left and follow westerly in a straight line approximately .56 miles to a point located 26 11 20 latitude and -98 22 30 longitude.

Turn left and follow southerly in a straight line approximately .50 miles to the centerline of Miltary Road.

Turn right and follow northerly and then northwesterly along the north side of Military Road approximately .36 miles to its intersection with Farm-to-Market Road 2062.

Turn left and follow southerly along Farm-to-Market Road 2062 approximately .16 miles to a point located at 26 11 02 latitude and -98 22 46 longitude.

Turn right and follow northerly, westerly, southerly, southwesterly, northerly, westerly and then southwesterly for approximately 1.27 miles to a point located at 26 11 11 latitude and -98 23 38 longitude running just north of Park Road 43.

Turn right and follow northeasterly along a straight line for approximately .71 miles to the north side of Military Road.

Turn left and follow along westerly approximately .44 miles along the north side of Military Road to its intersection with Goodwin Road.

Turn right and follow northerly along the centerline of Goodwin Road approximately .33 miles to a point located at 26 12 07 latitude and -98 23 53 longitude.

Turn right and follow easterly, northerly, easterly and then southeasterly approximately .78 miles to the intersection with Green Road.

Turn left and follow northerly along the centerline of Green Road approximately .32 miles.

Turn right and follow easterly and then southwesterly approximately 1.16 miles to the north side of Military Road at points 26 11 42 latitude and -98 23 16 longitude.

Turn left and follow southeasterly along the north side of Military Road approximately 0.07 miles to a point located at 26 11 40 latitude and -98 23 13 longitude.

Turn left and follow northeasterly, northerly, northeasterly, northerly, northeasterly, easterly, southerly and then easterly approximately 2.04 miles to the centerline of Shuebach Road/Airfield Road

Turn left and follow northeasterly along the centerline of Airfield Road approximately 1.48 miles to its intersection with U.S. Highway 83 Business.

Turn right and follow easterly along the centerline of U.S. Highway 83 Business approximately .27 miles to its intersection with Moorefield Road.

Turn left and follow northerly along the centerline of Moorefield Road approximately .32 miles to a point located at 26 13 23 latitude and -98 21 21 longitude.

Make a slight right and follow northeasterly and then northerly along the west banks of the Edinburg Main Canal approximately .66 miles to that point on the centerline of FM 495 the beginning (Mile 1 Road) a distance of approximately .18 miles west of the intersection of FM 495 and Inspiration Road to Close.

(b) The territory of the Tabasco Special Utility District does not include the area within the city limits of La Joya, Texas, as it existed on January 1, 1991; the area within the Certificate of Convenience and Necessity of Hidalgo County Municipal Utility District No. 1 as reflected on the records of the Texas Commission on Environmental Quality as of January 1, 2007; and the area within the following boundary lines, which lie wholly within the district:

Beginning at a point located at 26 14 57 Latitude and -98 25 55 Longitude follow in a northwesterly direction along an unnamed creek approximately .23 Miles to a point located at 26 15 03 Latitude and -98 26 05 Longitude.

From the point located at 26 15 03 Latitude and -98 26 05 Longitude follow in a westerly direction along an unnamed creek approximately .24 Miles to a point located at 26 15 04 Latitude and -98 26 19 Longitude.

From the point located at 26 15 04 Latitude and -98 26 19 Longitude turn right and follow in a straight line northeasterly approximately .97 Miles to a point located at 26 15 54 Latitude and -98 26 09 Longitude.

From the point located at 26 15 54 Latitude and -98 26 09 Longitude turn right and follow in a straight line easterly-southeasterly approximately .43 Miles to a point located at 26 15 50 Latitude and -98 25 45 Longitude.

From a point located at 26 15 50 Latitude and -98 25 45 Longitude turn right and follow in a straight line southwesterly approximately 1.03 Miles to a point located at 26 14 57 Latitude and -98 25 55 Longitude and Place of Beginning.

SECTION 13. Initial directors of the board of the Tabasco Special Utility District shall be appointed in accordance with Section 7201.051, Special District Local Laws Code, as amended by this Act, as soon as practicable after the effective date of this Act.

SECTION 14. Except as otherwise provided by Chapter 7201, Special District Local Laws Code, as amended by this Act, the Tabasco Special Utility District is subject to:

(1) any judicial or administrative order imposing an injunction against the La Joya Water Supply Corporation that is in effect on the date of the transfer under Section 7201.021, Special District Local Laws Code, as amended by this Act; or

(2) any judicial or administrative order imposing liability for monetary damages or a civil or administrative penalty against the La Joya Water Supply Corporation that:

(A) results from a legal proceeding that is pending on the date of the transfer under Section 7201.021, Special District Local Laws Code, as amended by this Act; or

(B) is unsatisfied on the date of the transfer under Section 7201.021, Special District Local Laws Code, as amended by this Act.

SECTION 15. (a) The legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished under Section 59, Article XVI, Texas Constitution, and Chapter 313, Government Code.

(b) The governor has submitted the notice and Act to the Texas Commission on Environmental Quality.

(c) The Texas Commission on Environmental Quality has filed its recommendations relating to this Act with the governor, lieutenant governor, and speaker of the house of representatives within the required time.

(d) All requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished.

SECTION 16. 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, 2007.

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