81R11251 HLT-F

By: Eissler H.B. No. 4804

A BILL TO BE ENTITLED

AN ACT

relating to the powers and duties of the San Jacinto River Authority; providing authority to issue bonds; imposing an administrative penalty.

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

SECTION 1. Chapter 426, Acts of the 45th Legislature, Regular Session, 1937, is amended by adding Sections 10A, 11, 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q to read as follows:

Sec. 10A. (a) In this section:

(1) "Public security" has the meaning assigned by Section 1201.002, Government Code.

(2) "Credit agreement," "security agreement," and "security interest" have the meanings assigned by Section 1208.001, Government Code.

(b) The Authority may issue, sell, and deliver public securities in the manner provided by this section or other law, including Chapter 1371, Government Code, to finance or pay for any project, improvement, program, plan, or purpose of the Authority or to refund or refinance any public security.

(c) Except as provided by Subsection (d) of this section, public securities of the Authority may be sold by the Board or an officer or employee of the Authority, if authorized by the Board, at public or private sale in the form, at the price, on the terms, and at the interest rate or rates, whether fixed, variable, floating, adjustable, or otherwise, as the Board determines is appropriate.

(d) The net effective interest rate on public securities described by Subsection (c) of this section may not exceed the maximum rate allowed by law.

(e) Without the necessity for an election, public securities of the Authority may be made payable from any designated portion or combination of revenue, receipts, fees, user fees, rates, charges, special assessments, contract revenue, income, proceeds of refunding public securities, or funds from any source other than ad valorem taxes.

(f) Public securities of the Authority payable wholly or partly from ad valorem taxes may be issued only after approval by a majority of the voters of all or a defined area of the Authority voting at an election held for that purpose. The Board may hold an election in all or a defined area of the Authority for the purpose described by this subsection.

(g) Public securities of the Authority may be secured by a security agreement or credit agreement, or both, and with the security interest or interests, other than a mortgage interest on real property, and the parity or priority of pledge and lien as the Board determines is appropriate.

Sec. 11. In Sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q of this Act:

(1) "Authority" means the San Jacinto River Authority.

(2) "Board" means the board of directors of the Authority.

(3) "District" means any district or authority created under Section 52(b)(1) or (2), Article III, or Section 59, Article XVI, Texas Constitution, regardless of the manner of creation, other than:

(A) the Lone Star Groundwater Conservation District;

(B) a navigation district or a port authority; or

(C) a district that does not have the legal authority to provide retail water service.

(4) "Groundwater reduction plan" means a plan adopted or implemented by the Authority under Section 11A of this Act and any related water supply plan, water conservation plan, or drought contingency plan of the Authority.

(5) "Local government" means a municipality, county, district, or other political subdivision of this state or a combination of two or more of those entities.

(6) "Participant" means a regulated user participating in the groundwater reduction plan.

(7) "Person" means an individual, corporation, organization, government or governmental subdivision or agency, district, local government, business trust, estate, trust, partnership, association, or other legal entity.

(8) "Regulated user" means a person, other than a person that owns or operates a single groundwater well serving not more than one single-family residential dwelling or unit, who is subject to any rule, order, or requirement of the Lone Star Groundwater Conservation District imposing groundwater withdrawal reductions.

Sec. 11A. (a) Consistent with the purposes of Section 59, Article XVI, Texas Constitution, the Authority may provide for the conservation, preservation, protection, recharge, and prevention of waste of groundwater and for the reduction of groundwater withdrawals by developing, adopting, implementing, and enforcing a groundwater reduction plan as necessary in the discretion of the Authority to comply with the applicable rules, orders, or requirements of the Lone Star Groundwater Conservation District.

(b) The groundwater reduction plan described by Subsection (a) of this section may:

(1) specify measures to be taken by regulated users to reduce groundwater withdrawals;

(2) identify alternative sources of water, including water from the Authority, to be provided to regulated users;

(3) identify or estimate the rates and terms under which alternative sources of water will be provided, which may be changed as considered necessary by the Authority;

(4) specify the dates by which and the extent to which participants must reduce or cease usage of groundwater and accept water from alternative sources, including water from the Authority;

(5) exceed the minimum requirements imposed by the Lone Star Groundwater Conservation District, including any applicable groundwater reduction requirements;

(6) provide that the groundwater reduction plan is the exclusive groundwater reduction plan that is binding and mandatory on participants;

(7) limit, prohibit, or permit the export of groundwater from or the importation of water from any source to participants;

(8) include other terms and measures that are consistent with the powers and duties of the Authority; and

(9) be amended at the discretion of the Authority.

Sec. 11B. The Authority by rule may develop, adopt, implement, revise as necessary, and enforce a comprehensive water supply plan, a water conservation plan, or a drought contingency plan for participants.

Sec. 11C. For the purpose of implementing Section 11A of this Act, the Authority may take any actions necessary or convenient to:

(1) design, finance, construct, acquire by purchase, gift, lease, contract, or other means, operate, maintain, repair, improve, or extend a water treatment or water supply system, including taking any actions necessary or convenient for those purposes with regard to:

(A) any addition to such a system;

(B) all land, improvements, facilities, plants, equipment, and appliances needed in connection with such a system;

(C) any interests in property, water rights or contract rights for water supply, regional, regulatory or joint use participation rights, or other contract rights needed in connection with such a system; and

(D) administrative facilities needed in connection with such a system;

(2) notwithstanding any provision of law or of a municipal charter to the contrary, enter into contracts with persons inside or outside the Authority's boundaries on terms the Board considers desirable, fair, and advantageous for the exercise of the rights, powers, privileges, and functions provided by this Act;

(3) allocate water among participants;

(4) coordinate water services provided by or among participants;

(5) except as provided by Section 11E of this Act, provide wholesale and retail water services to any participant by order, rule, or policy or on open account, without executing a written contract with the participant;

(6) store, sell, or reuse water or any by-product from the operation of the Authority's water systems;

(7) adopt and enforce rules and administrative policies reasonably required to implement this section and Sections 11A, 11B, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q of this Act, including rules governing procedures before the Board and regarding the groundwater reduction plan; and

(8) otherwise administer and enforce the sections of this Act described by Subdivision (7) of this section.

Sec. 11D. To facilitate the implementation of a groundwater reduction plan, the Authority may:

(1) establish and maintain one or more separate operating divisions of the Authority with separate books of account;

(2) contract for, lease, or purchase by and for an operating division services, land, equipment, and facilities, including administrative and management services and facilities, and water and water by-products, from:

(A) the Authority;

(B) one or more other operating divisions of the Authority; or

(C) other persons; and

(3) allocate to an operating division a proportional share of the direct and indirect costs of the Authority's general and administrative, managerial, accounting, legal, fiscal, clerical, human resources, support, and technical services.

Sec. 11E. (a) For purposes of this section, the boundaries of a municipality include territory in the extraterritorial jurisdiction of the municipality.

(b) The Authority may not provide retail water service to a person located in the boundaries or certificated area of a district, municipality, or retail public utility participating in the Authority's groundwater reduction plan on the date the Authority awards a contract for the construction or executes a contract for the acquisition of water supply facilities to serve that retail user unless:

(1) the district, municipality, or retail public utility consents in writing to the Authority's provision of retail water service; or

(2) the retail water user is a regulated user, the Authority has provided the district, municipality, or retail public utility with written notice of the request for service from the retail water user, the Authority has provided the district, municipality, or retail public utility with reasonable opportunity to negotiate an agreement for the requested service with the retail water user, and the district, municipality, or retail public utility has not entered into an agreement for the requested service with the retail water user on or before the 120th day after the date the Authority provides the district, municipality, or retail public utility with written notice of the request for service from the retail water user.

(c) If a retail water user that does not own or operate a groundwater well is added to the boundaries or certificated area of a district, municipality, or retail public utility after the date the Authority awards a contract for the construction or executes a contract for the acquisition of water supply facilities to serve that retail water user and the district, municipality, or retail public utility is a participant, the Authority may provide retail water service to that retail water user without consent.

Sec. 11F. Except as otherwise provided by this Act, all regulated users located wholly or partly in Montgomery County on the effective date of this section are initially included in the groundwater reduction plan and the Authority has jurisdiction to enforce the rights, powers, privileges, and functions described by this section and Sections 11A, 11B, 11C, 11D, 11E, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q of this Act with respect to those regulated users.

Sec. 11G. (a) A regulated user that, on the effective date of this section, is included as a participant in the groundwater reduction plan may file with the Authority a duly authorized and executed petition requesting to be excluded from the groundwater reduction plan.

(b) Not later than the 120th day after the later of the dates described by Subdivisions (2)(A) and (B) of this subsection, the Board shall grant a petition filed under Subsection (a) of this section and order the regulated user excluded from the groundwater reduction plan if the petition:

(1) includes an accurate legal description of the boundaries of the regulated user's service area or a description or map that sufficiently identifies the area proposed to be excluded; and

(2) is filed with the Board not later than the 120th day after the later of:

(A) the effective date of this section; or

(B) the effective date of any final rule, order, or requirement of the Lone Star Groundwater Conservation District that is adopted and effective on or after the effective date of this Act and that imposes groundwater withdrawal reductions applicable to the regulated user.

(c) The Authority may impose but may not enforce the collection of fees, user fees, rates, charges, or special assessments on a regulated user while a petition for exclusion filed by the regulated user is pending with the Authority or after the petition is granted.

(d) If a regulated user is excluded from the groundwater reduction plan as provided by this section, the Authority may not include the regulated user in any groundwater reduction plan adopted or implemented by the Authority unless the regulated user is subsequently added to the Authority's groundwater reduction plan as provided by Section 11H of this Act.

(e) After the period for filing a petition for exclusion under this section has expired, the Authority may exclude a regulated user from the groundwater reduction plan, at its sole discretion and on terms the Board considers appropriate, if the regulated user files with the Board a duly authorized and executed petition requesting to be excluded.

(f) This section does not limit the power of the Authority to exclude a regulated user from the groundwater reduction plan, without the filing of a petition, as provided by Section 11M of this Act.

Sec. 11H. (a) A person that becomes a regulated user after the expiration of the period for filing a petition for exclusion under Section 11G of this Act becomes a participant without further action by the Authority or the person. The Authority and the Lone Star Groundwater Conservation District may enter into an agreement to provide information to the Authority reasonably necessary to identify and contact participants described by this section. The Authority by rule may require a participant to provide to the Authority any necessary documents pertaining to the participant's service area and the actual or projected water demands of the service area.

(b) A regulated user excluded from the Authority's groundwater reduction plan under Section 11G of this Act may subsequently file with the Board a duly authorized and executed petition requesting the addition of all or part of the regulated user's service area to the groundwater reduction plan. The petition must include an accurate legal description of the boundaries of the regulated user's service area or a description or map that sufficiently identifies the area proposed to be added. The Authority may grant a petition filed under this section in its sole discretion and on terms the Board considers appropriate.

(c) The Authority may require a regulated user whose service area is added to the groundwater reduction plan under Subsection (b) to pay to the Authority any fees, user fees, charges, and special assessments, with interest, as determined by the Authority, that the regulated user would have been obligated to pay to the Authority if the regulated user had not been excluded. If the Authority has outstanding or unissued bonds, notes, or other obligations to finance the costs of the Authority's provision of water supply facilities and services under the groundwater reduction plan, the petition is considered to constitute the election and agreement of the petitioner to assume its pro rata share of the principal of and interest on the outstanding or unissued bonds, notes, or other obligations.

(d) Subsections (b) and (c) of this section do not apply to an annexation to, or expansion of, a participant's boundaries, extraterritorial jurisdiction, or service area, notwithstanding that the annexation or expansion may include, wholly or partly, territory that is currently located in or was previously located in the boundaries or service area of a regulated user excluded from the groundwater reduction plan under Section 11G of this Act.

(e) The Authority by rule may require participants to provide to the Authority written notice of the effective date of an annexation to, or expansion of, the participant's boundaries or service area and copies of any necessary documents, descriptions, maps, and information regarding the projected or actual water demands of the annexed land or expanded boundaries or service area. Except to the extent otherwise provided by rule, order, or written agreement of the Authority, an annexation or expansion described by this subsection with regard to a participant does not affect:

(1) the Authority's power and authority inside or outside the expanded boundaries or service area of the participant;

(2) the groundwater reduction plan or contracts entered into by the Authority; or

(3) the Authority's authority to assess fees, user fees, rates, charges, or special assessments inside or outside the expanded boundaries or service area of the participant.

(f) The addition of territory to the groundwater reduction plan under this section does not affect the validity of the Authority's bonds, notes, or other obligations authorized, issued, or incurred before or after the addition.

Sec. 11I. (a) The Authority may establish fees, user fees, rates, and charges for a regulated user's participation in and benefit derived from the groundwater reduction plan that are sufficient to:

(1) achieve water conservation;

(2) prevent waste of water;

(3) serve as a disincentive to pumping groundwater;

(4) develop, implement, or enforce a groundwater reduction plan;

(5) accomplish the purposes described by this section and Sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q of this Act, including making available alternative water supplies;

(6) cover the Authority's administrative, operations, and maintenance expenses relating to the groundwater reduction plan;

(7) pay the principal of and interest on notes, bonds, and other obligations issued or incurred or to be issued or incurred in connection with the exercise of the Authority's rights, powers, privileges, and functions under the sections of this Act described by Subdivision (5) of this subsection;

(8) satisfy all rate covenants relating to the issuance of notes, bonds, and other obligations; and

(9) establish, accumulate, maintain, or replenish one or more operating, debt service, contingency, or emergency reserve funds, as considered necessary by the Authority.

(b) In addition to the authority provided by Subsection (a) of this section, the Authority may impose rates, fees, user fees, or charges for the importation of water by a participant.

(c) The Authority may establish fees, user fees, rates, and charges applicable to any participant and make reasonable classifications of participants for purposes of the fees, rates, and charges as considered necessary by the Authority to implement and enforce the plans, powers, and authority provided by this section and Sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11J, 11K, 11L, 11M, 11N, 11O, 11P, and 11Q of this Act.

(d) Among other criteria and classifications, the Authority may charge a participant a fee or user fee based on the amount of water withdrawn from the participant's groundwater well. If ownership of a groundwater well changes, the prior and subsequent owners are liable to the Authority as participants, jointly and severally, for all fees and user fees imposed by the Authority under this Act and any related penalties and interest for water withdrawn from the groundwater well before the change in ownership.

(e) The Board shall make a reasonable effort to notify each participant by publication or by written notice of the date, time, and location of the meeting at which the Board intends to adopt a proposed rate, fee, user fee, or charge under this section and of the amount of the proposed rate, fee, user fee, or charge. The Board's failure to provide actual notice to each participant does not invalidate a rate, fee, user fee, or charge adopted by the Board under this section.

Sec. 11J. (a) The Board shall exempt from any rate, fee, user fee, or charge under Section 11I of this Act persons or classes of groundwater wells that are not subject to any groundwater reduction requirement imposed by the Lone Star Groundwater Conservation District, but if the person or class of groundwater wells subsequently becomes subject to a groundwater reduction requirement imposed by the Lone Star Groundwater Conservation District, the Authority may impose a rate, fee, user fee, or charge on the person or class of groundwater wells at any time after that date. For purposes of this subsection, a person or a groundwater well is subject to a groundwater reduction requirement if the Lone Star Groundwater Conservation District adopts a requirement or rule that withdrawals from the groundwater well, or from the groundwater well and other groundwater wells collectively, be reduced, including a groundwater reduction requirement that does not need to be satisfied until a future date.

(b) Notwithstanding Subsection (a) of this section, any person that owns or operates a single groundwater well serving not more than one single-family residential dwelling or unit, or the class of groundwater wells that serves not more than one single-family residential dwelling or unit, is exempt from any rate, fee, user fee, or charge described by Section 11I of this Act.

(c) The Board by rule may exempt any other persons or classes of groundwater wells from any rate, fee, user fee, or charge under Section 11I of this Act.

Sec. 11K. (a) The Board may undertake improvement projects or services that confer a special benefit on all or a defined area of a service area of one or more participants.

(b) After notice and a hearing under Section 11L of this Act, the Board may impose a special assessment on property in a defined area that is in the service area of one or more participants, including property of a local government, to cover the cost of an improvement project or service under Subsection (a) of this section.

(c) The Board shall apportion the cost of an improvement project or service to be assessed against the property based on the special benefits that accrue to the property because of the improvement project or service. Among other classifications of benefits received, the Board may assess costs according to the number of gallons of groundwater pumped from groundwater wells located on the property or that serve the property and are subject to a groundwater reduction requirement imposed by the Lone Star Groundwater Conservation District.

(d) The Authority may finance with special assessments any improvement project or service authorized by this Act or other law.

Sec. 11L. (a) The Board may not impose a special assessment under Section 11K of this Act unless the Board holds a public hearing on the advisability of the proposed assessment and the improvement project or service to be financed by the assessment.

(b) The Board shall publish notice of a hearing under this section in a newspaper or newspapers with general circulation in Montgomery County not later than the 30th day before the date of the hearing.

(c) Notice under this section must include:

(1) the time and place of the hearing;

(2) the general nature of the proposed improvement project or service;

(3) the estimated cost of the improvement project or service, including projected interest and associated financing costs; and

(4) the proposed method of assessment.

(d) Not later than the 30th day before the date of the hearing, the Board shall send written notice containing the information required by Subsection (c) of this section by certified mail, return receipt requested, to each participant affected by the proposed assessment.

(e) At the conclusion of a hearing conducted by the Board on a proposed improvement project or service, the Board shall make written findings and conclusions relating to:

(1) the advisability of the improvement project or service;

(2) the nature of the improvement project or service;

(3) the estimated costs of the improvement project or service; and

(4) the area that will benefit from the improvement project or service.

(f) At the conclusion of a hearing conducted by a hearings examiner on a proposed improvement project or service, the hearings examiner shall file with the Board a written report of the examiner's findings and conclusions. The Board may act on the findings and conclusions at any meeting of the Board at which notice of the meeting is given as provided by Chapter 551, Government Code, without the necessity for further notice.

(g) On adjournment of a hearing on proposed assessments, or after consideration of a hearings examiner's findings and conclusions on proposed assessments, the Board shall hear and rule on any objections to each proposed assessment. After ruling on any objections to each proposed assessment, the Board by order:

(1) shall fix the amount of and impose the assessments as special assessments on any affected property;

(2) shall specify the method of payment of the assessments; and

(3) may require the assessments, including interest, to be paid in periodic installments or, if prepaid, be subject to prepayment charges.

(h) Periodic installment payments of assessments must be in an amount sufficient to meet all costs for the associated improvement projects or services and must continue in effect for the number of years required to fully and timely pay for the services to be rendered or any bonds, notes, or other obligations issued or incurred by the Authority to finance any associated improvement projects. The Board may impose interest charges or penalties for failure to make timely payment and may impose a charge in an amount sufficient to cover delinquencies and expenses of collection.

(i) A person that becomes a participant after the Authority has imposed assessments or a participant whose territory or service area is added to the groundwater reduction plan may:

(1) waive the right to notice and an assessment hearing; and

(2) agree to the imposition and payment of assessments at an agreed rate.

(j) The Board shall have prepared an assessment roll showing the assessments against each property and the Board's basis for the assessment. The assessment roll shall be:

(1) filed with the secretary of the Board or another officer who performs similar functions; and

(2) open for public inspection.

(k) After notice and a hearing in the manner required for an original assessment, the Board may make supplemental assessments to correct omissions or mistakes or account for changed circumstances relating to the total costs of the improvement project or service, or to cover delinquencies or costs of collection.

Sec. 11M. (a) The Board may require the payment of interest on any late or unpaid fees, user fees, rates, charges, and special assessments imposed by the Authority, but the interest rate may not exceed the interest rate described by Section 2251.025, Government Code.

(b) In addition to requiring the payment of interest under Subsection (a) of this section for the failure to make a complete or timely payment to the Authority, the Board may:

(1) impose penalties; and

(2) exclude a participant, or the service area or the territory or groundwater well owned or controlled by a participant, from the groundwater reduction plan.

(c) The Authority is entitled to reasonable attorney's fees incurred by the Authority in enforcing its rules or in collecting any delinquent fees, user fees, rates, charges, or special assessments, and any related penalties and interest.

(d) Fees, user fees, rates, charges, and special assessments imposed by the Authority under Section 11I or 11K of this Act, any related penalties and interest, and collection expenses and reasonable attorney's fees incurred by the Authority:

(1) are a first and prior lien against the groundwater well to which they apply;

(2) are superior to any other lien or claim, other than a lien or claim for ad valorem taxes imposed by a county, school district, or municipality; and

(3) are the personal liability of and a charge against the owner of the affected groundwater well.

(e) A lien under this section is effective from the date of the resolution or order of the Board imposing the fee, user fee, rate, charge, or special assessment until payment is received by the Authority. The Board may enforce the lien in the same manner that a municipal utility district operating under Chapters 49 and 54, Water Code, may enforce an ad valorem tax lien against real property.

Sec. 11N. (a) A person who violates a rule or order of the Authority adopted under Section 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11O, 11P, or 11Q of this Act is subject to an administrative penalty, payable to the Authority, of not more than $10,000, as determined by the Board, for each violation or each day of a continuing violation.

(b) The Authority may bring an action to recover the penalty in a district court in the county where the violation occurred.

(c) The Authority may bring an action for injunctive relief in a district court in the county where a violation of a rule or order of the Authority occurs or is threatened to occur. The court may grant to the Authority, without requiring a bond or other undertaking, a prohibitory or mandatory injunction as warranted by the facts, including a temporary restraining order, temporary injunction, or permanent injunction.

(d) The Authority may bring an action for an administrative penalty and injunctive relief in the same proceeding.

Sec. 11O. Immunity from suit, judgment, or liability of any local government participating in the groundwater reduction plan is waived to the extent necessary for the Authority to exercise and enforce against the local government the rights, powers, and privileges granted in Sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11P, and 11Q of this Act.

Sec. 11P. In addition to any other financial assistance program for which the Authority may be eligible, the rights, powers, privileges, and authority conferred under Sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H, 11I, 11J, 11K, 11L, 11M, 11N, 11O, and 11Q of this Act authorize the Authority to receive financial assistance from the groundwater district loan assistance fund under Subchapter L, Chapter 36, Water Code.

Sec. 11Q. The Board by rule may establish procedures for conducting public hearings and may determine whether a hearing will be conducted by the Board or a hearings examiner. Any public hearing may be adjourned from time to time to a date, time, and location specified on adjournment, without the necessity for further notice.

SECTION 2. (a) Sections 10, 10a, 10b, 10c, and 10d, Chapter 426, Acts of the 45th Legislature, Regular Session, 1937, are repealed.

(b) The repeal of laws under Subsection (a) of this section does not affect the validity, enforceability, security, priority of lien, or other terms of any bonds, notes, or obligations of the San Jacinto River Authority that were issued or incurred before the effective date of this Act.

SECTION 3. 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.

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, 2009.