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A BILL TO BE ENTITLED
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AN ACT
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relating to providing an oversight mechanism for the Bexar |
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Metropolitan Water District, including enforcement authority. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. LEGISLATIVE FINDINGS. The legislature finds |
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that: |
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(1) according to audits and evaluations of the Bexar |
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Metropolitan Water District performed by state agencies under H.B. |
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No. 1565, Acts of the 80th Legislature, Regular Session, 2007: |
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(A) certain officials of the district have |
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engaged in a pattern of unethical conduct and unprofessional |
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management practices; |
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(B) disagreements regarding jurisdiction within |
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the district and between the district and other entities and |
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distrust among key management personnel and members of the board |
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have hampered efforts by the district to improve services for |
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existing customers and to meet water supply needs of growing |
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populations within its service areas; |
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(C) there has been a history of noncompliance on |
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the part of the district; and |
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(D) the district has demonstrated weak |
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management, engaged in financial improprieties, and provided |
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unreliable service, which threatens to impair the quality of life |
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of its customers and diminish the prospects for economic growth |
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within the district; |
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(2) after 18 months of intense scrutiny by state |
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agencies and the Bexar Metropolitan Water District Oversight |
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Committee, which is composed of gubernatorial appointees, |
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legislators, and a local representative of Bexar County, it is |
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evident that further legislative action is necessary; and |
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(3) to ensure the reliability, sustainability, |
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quality, and affordability of water supply services to the |
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customers of the district, it is necessary to appoint a |
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conservator, who shall manage the district until the district has |
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achieved sufficient rehabilitation to serve its customers in a |
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professional, ethical, and reliable manner. |
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SECTION 2. CREATION OF CONSERVATORSHIP. Chapter 306, Acts |
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of the 49th Legislature, Regular Session, 1945, is amended by |
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adding Sections 33B, 33C, and 33D to read as follows: |
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Sec. 33B. CONSERVATOR. Not later than the 60th day after |
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the effective date of this Section, the Texas Commission on |
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Environmental Quality shall appoint as Conservator for the District |
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an individual who has demonstrated a high level of expertise in |
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water utility management. |
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Sec. 33C. POWERS AND DUTIES OF CONSERVATOR. (a) The Board |
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shall be subject to the authority of a conservator appointed under |
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this Act and shall work cooperatively with the Conservator in |
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rehabilitating the Board in its ability to manage and operate the |
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District in a professional manner. During the period of |
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conservatorship, the Conservator has all of the general authority |
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held by the Board immediately before the date conservatorship is |
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established. |
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(b) The Conservator shall: |
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(1) take possession and control of the books, records, |
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property, assets, and daily management of the District; |
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(2) take immediate action to ensure that the assets of |
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the District are protected and that the quality of service provided |
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to District customers is improved to the highest level reasonably |
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practicable under the circumstances; |
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(3) develop a comprehensive rehabilitation plan for |
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the District; and |
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(4) report monthly to the Texas Commission on |
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Environmental Quality and to any committee with direct oversight |
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authority over the District regarding: |
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(A) the financial, managerial, technical, and |
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operational status of the District under the conservatorship; |
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(B) the actions the Conservator has taken to |
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ensure that the District complies with the plan developed under |
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Subdivision (3) of this Subsection; and |
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(C) the progress the Conservator has made towards |
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completion of the plan developed under Subdivision (3) of this |
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Subsection. |
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(c) The comprehensive rehabilitation plan must: |
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(1) identify strategies for restoring the District's |
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financial integrity and for developing a system of sound financial |
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management; |
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(2) describe a standard of ethics, professionalism, |
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and openness expected of each member of the Board and employees of |
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the District and a mechanism for enforcing compliance with District |
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policies, including procurement policies; |
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(3) address ways to enhance the District's operational |
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efficiency; |
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(4) as an integral part of rehabilitating the |
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District, devise a program for: |
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(A) educating the Board of Directors and key |
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management personnel on improving management practices, on |
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complying with Board policy and applicable laws and regulations, |
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and on implementing needed reforms for the District; and |
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(B) developing greater technical expertise on |
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the part of District employees; |
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(5) identify District assets that, if sold, would |
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likely improve the District's ability to serve its remaining |
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customers; |
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(6) ensure that any assets identified in Subdivision |
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(5) of this Subsection that are sold are sold at fair market value; |
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(7) ensure that any entity that acquires a District |
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asset is responsible for all transaction costs related to the |
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acquisition, including the cost of defending the State against |
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legal challenges to the disposition of the asset; and |
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(8) inventory and evaluate the discrete water systems |
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that the District comprises and determine: |
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(A) the District's basis in or the intrinsic |
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value of the infrastructure associated with each water system; |
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(B) the District's bonded debt and commercial |
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paper reasonably associated with or allocable to the infrastructure |
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of each water system; |
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(C) the adequacy of the source of the water |
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supply, such as wells, located in each water system's service area |
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to supply the current and projected demands generated in that |
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service area; |
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(D) the adequacy of the water storage facilities |
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located in each water system's service area to supply the current |
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and projected demands generated in that service area; and |
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(E) the adequacy of the distribution system |
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located in each water system's service area to supply the current |
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and projected demands generated in that service area. |
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(d) The term of the Conservator continues until: |
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(1) the Conservator reports that the District has been |
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sufficiently rehabilitated to provide reliable, cost-effective, |
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quality service to its customers; and |
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(2) the Texas Commission on Environmental Quality, |
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after performing a confirmation review, concurs with the |
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Conservator's report that the District has been sufficiently |
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rehabilitated to ensure that it can serve its customers in a |
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professional manner and that conservatorship is no longer |
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necessary. |
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(e) When conservatorship is terminated under Subsection (d) |
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of this Section, the assets and management of the District return to |
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the control of the Board of Directors. |
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(f) Funding for the conservatorship shall be provided by the |
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District and approved by the Commission. |
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Sec. 33D. ADDITIONAL ENFORCEMENT AUTHORITY. (a) |
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Notwithstanding any other law, if the Texas Commission on |
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Environmental Quality determines that, after a reasonable period, |
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the District has not made satisfactory progress in rehabilitating |
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its management and related operations, the Commission may use the |
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auditing and enforcement authority provided to the Commission by |
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Chapters 36 and 49, Water Code, including dissolution, to address |
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deficiencies on the part of the District. |
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(b) If the Texas Commission on Environmental Quality |
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determines that, after a reasonable period, the Conservator has not |
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made satisfactory progress in implementing the comprehensive |
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rehabilitation plan and the Commission has not determined that the |
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District must be dissolved, the Commission shall appoint a new |
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Conservator. |
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(c) The Texas Commission on Environmental Quality shall |
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adopt rules providing for filling a vacancy in the position of |
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Conservator. |
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SECTION 3. CREATION OF SUBSEQUENT CONSERVATORSHIP. |
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Effective June 1, 2011, Chapter 306, Acts of the 49th Legislature, |
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Regular Session, 1945, is amended by adding Section 33E to read as |
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follows: |
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Sec. 33E. SUBSEQUENT CONSERVATOR. (a) The Texas |
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Commission on Environmental Quality shall appoint a subsequent |
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Conservator for the District if the Commission determines that |
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after the termination of an earlier conservatorship under Section |
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33C of this Act, the District has: |
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(1) obstructed the Commission's authority to supervise |
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the District; |
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(2) violated a final order of the Commission; |
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(3) caused a potential health hazard by failing to |
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provide appropriate water or wastewater treatment to District |
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customers; |
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(4) caused a potential health hazard, extended |
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outages, or repeated service interruptions by failing to adequately |
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maintain District facilities; |
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(5) displayed a pattern of hostility towards the |
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Commission or repeatedly failed to respond to the Commission or to |
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District customers; |
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(6) engaged in a pattern of: |
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(A) noncompliance with laws or regulations; or |
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(B) unethical conduct and unprofessional |
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management practices; |
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(7) abandoned the operation of its facilities; |
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(8) had a majority of its Board of directors resign; |
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(9) demonstrated weak management; |
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(10) engaged in financial improprieties; or |
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(11) provided unreliable service that impairs the |
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quality of life of its customers or diminishes the prospects for |
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economic growth within the district. |
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(b) An individual appointed Conservator under this Section |
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must have demonstrated a high level of expertise in water utility |
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management and shall have all the powers and duties assigned to a |
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Conservator under Section 33C of this Act. |
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(c) For a conservatorship created under this Section, the |
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Texas Commission on Environmental Quality has the additional |
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enforcement authority assigned to it under Section 33D of this Act. |
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SECTION 4. OVERSIGHT COMMITTEE: COMPOSITION; REPORT. |
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Section 33A, Chapter 306, Acts of the 49th Legislature, Regular |
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Session, 1945, is amended by amending Subsection (c) and adding |
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Subsection (g) to read as follows: |
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(c) The oversight committee is comprised of five [5] members |
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appointed as follows [to represent the following members]: |
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(1) a [the] Senator who represents a Senate district |
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that includes territory within the District, [sponsor of this Act,
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or, in the event this Senator cannot serve, a Senator] appointed by |
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the Lieutenant Governor; |
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(2) a Representative who represents a [the] House |
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district that includes territory within the District, [author of
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this Act, or, in the event this Representative cannot serve, a
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Representative] appointed by the Speaker of the Texas House of |
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Representatives; |
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(3) one member of the Senate Committee on Natural |
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Resources [with special expertise in the operation of public water
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utilities] appointed by the Lieutenant Governor; |
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(4) one member of the House Committee on Natural |
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Resources appointed by the Speaker of the Texas House of |
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Representatives; and |
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(5) one member appointed by the Governor to represent |
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the public[; and
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[(5)
a member of the Bexar County Commissioners Court
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who represents a precinct in which customers of the District
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reside]. |
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(g) On or before December 31, 2010, the oversight committee |
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shall provide a report under Subsection (e) of this Section to the |
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82nd Legislature. The committee is abolished and this Section |
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expires on January 1, 2011. |
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SECTION 5. NOTICE. (a) The legal notice of the intention |
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to introduce this Act, setting forth the general substance of this |
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Act, has been published as provided by law, and the notice and a |
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copy of this Act have been furnished to all persons, agencies, |
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officials, or entities to which they are required to be furnished |
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under Section 59, Article XVI, Texas Constitution, and Chapter 313, |
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Government Code. |
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(b) The governor, one of the required recipients, has |
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submitted the notice and Act to the Texas Commission on |
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Environmental Quality. |
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(c) The Texas Commission on Environmental Quality has filed |
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its recommendations relating to this Act with the governor, the |
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lieutenant governor, and the speaker of the house of |
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representatives within the required time. |
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(d) All requirements of the constitution and laws of this |
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state and the rules and procedures of the legislature with respect |
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to the notice, introduction, and passage of this Act are fulfilled |
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and accomplished. |
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SECTION 6. EFFECTIVE DATE. Except as otherwise provided by |
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this Act, this Act takes effect immediately if it receives a vote of |
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two-thirds of all the members elected to each house, as provided by |
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Section 39, Article III, Texas Constitution. If this Act does not |
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receive the vote necessary for immediate effect, this Act takes |
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effect September 1, 2009, except as otherwise provided by this Act. |