82R4379 SLB-F

By: Larson H.B. No. 1007

A BILL TO BE ENTITLED

AN ACT

relating to the appointment of a conservator for and authorizing the dissolution of the Bexar Metropolitan Water District.

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

SECTION 1. Section 1, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, is amended to read as follows:

Sec. 1. In obedience to the provisions of Article 16, Section 59 of the Constitution of Texas, there is hereby created Bexar Metropolitan Water District. [, hereinafter in this Act sometimes called the "District."]

SECTION 2. Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, is amended by adding Sections 1A, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 to read as follows:

Sec. 1A. In this Act:

(1) "Board" means the District's Board of Directors.

(2) "Commission" means the Texas Commission on Environmental Quality.

(3) "Director" means a Board member.

(4) "District" means the Bexar Metropolitan Water District.

(5) "System" means a water utility owned by a municipality with a population of more than one million that includes portions of the Edwards and Trinity Aquifers.

Sec. 34. (a) The Commission shall appoint as conservator for the District an individual who, at the time of the individual's appointment:

(1) has demonstrated a high level of expertise in water utility management;

(2) is not a Director; and

(3) has no financial interest in the District or any entity that has a contract with the District or that is likely to develop a contractual relationship with the District.

(b) The conservator's term expires on the earlier of:

(1) the date the conservatorship for which the conservator is appointed dissolves under Section 39; or

(2) the date the Commission, in consultation with the System, determines that the duties of the conservator under this Act have been discharged.

Sec. 35. (a) A conservator appointed under Section 34 is entitled to receive a salary for performing those duties.

(b) The District shall pay the compensation of the conservator.

Sec. 36. (a) A conservator appointed under Section 34 is entitled to reimbursement of the reasonable and necessary expenses incurred by the conservator in the course of performing duties under this Act.

(b) The District shall pay any reasonable and necessary expenses incurred by the conservator.

Sec. 37. (a) The conservator shall advise the Board on matters relating to the District's rehabilitation. The Board shall work cooperatively with the conservator to improve the Board's ability to manage and operate the District in a professional manner.

(b) The conservator shall:

(1) complete an inventory of and evaluate each distinct water system in the District to determine:

(A) the District's infrastructure associated with that water system;

(B) the District's bonded debt and commercial paper reasonably associated with or allocable to the infrastructure in that water system; and

(C) the adequacy of the water supply sources, water storage facilities, distribution systems, and related infrastructure located in that water system's service area to supply current and projected demands in that service area;

(2) identify any District assets whose sale or transfer to another appropriate public water utility would be likely to improve:

(A) service to the former District customers who would be served by that utility; or

(B) the District's overall efficiency;

(3) compile a list and copies of existing contracts to which the District is a party, including for each contract:

(A) effective and termination dates;

(B) general scope of the goods and services involved;

(C) obligations of the District, including financial obligations; and

(D) general benefit to the District; and

(4) develop a comprehensive rehabilitation plan for the District that:

(A) identifies strategies for restoring the District's financial integrity and developing a system of sound financial management;

(B) describes a standard of ethics, professionalism, and openness expected of each Director and employee of the District;

(C) provides a mechanism to enforce compliance with District policies, including procurement policies;

(D) identifies ways to enhance the District's operational efficiency and improve the District's provision of redundancy in water services; and

(E) provides for educating the Board and management personnel on improving management practices and complying with District policy and state and federal laws and regulations.

Sec. 38. The conservator shall report to the Commission and the Bexar Metropolitan Water District Oversight Committee regularly on the progress the conservator has made in carrying out the duties under Section 37.

Sec. 39. (a) If a majority of the votes in an election held under Section 40 do not favor dissolution, and the conservator reports to the Commission that the District has been sufficiently rehabilitated to provide reliable, cost-effective, quality service to its customers, the Commission shall evaluate the condition of the District and determine whether:

(1) the District has been sufficiently rehabilitated to enable the District to provide reliable, cost-effective, quality service to its customers; and

(2) the conservatorship is no longer necessary.

(b) After an evaluation under Subsection (a), the Commission may issue an order dissolving the conservatorship if the Commission determines that the District has been sufficiently rehabilitated and the conservatorship is no longer necessary.

(c) The Commission may not dissolve the conservatorship before an election is held under Section 40.

Sec. 40. (a) On the next uniform election date following the 60th day after the date of preclearance under Section 5 of the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973c) of all provisions of the Act enacting this section that are subject to that preclearance, the Commission shall hold an election in the District on the question of dissolving the District and disposing of the District's assets and obligations. If the Commission determines that preclearance under Section 5 of the federal Voting Rights Act of 1965 is not required, the Commission shall hold the election on the next uniform election date that falls at least 60 days after the date the Commission makes that determination.

(b) The order calling the election must state:

(1) the nature of the election, including the proposition to appear on the ballot;

(2) the date of the election;

(3) the hours during which the polls will be open; and

(4) the location of the polling places.

(c) The Commission shall give notice of an election under this section by publishing once a week for two consecutive weeks a substantial copy of the election order in a newspaper with general circulation in the District. The first publication of the notice must appear not later than the 35th day before the date of the election.

(d) The ballot for an election under this section must be printed to permit voting for or against the proposition: "The dissolution of the Bexar Metropolitan Water District and the transfer of all the District's assets, liabilities, and duties to the water utility of the municipality with the largest population in the area formerly served by the District."

Sec. 41. (a) If a majority of the votes in the election held under Section 40 favor dissolution, the term of each person who is serving as a Director of the District on the date of the canvass of the election expires on that date.

(b) Under the Commission's oversight, the conservator shall transfer or assign to the System the:

(1) rights and duties of the District associated with the provision of water services, including existing contracts, assets, and liabilities of the District; and

(2) files and records of the District that pertain to the control, management, and operation of the District.

(c) After the conservator has transferred the property, assets, and liabilities as prescribed by this section, the conservator shall file a written report with the Commission summarizing the conservator's actions in dissolving the District.

(d) Not later than the 10th day after the date the Commission receives the report and determines that the requirements of this section have been fulfilled, the Commission shall enter an order dissolving the District and releasing the conservator from any further duty or obligation.

Sec. 42. If the majority of votes favor dissolution in an election held under Section 40, this Act expires on the second anniversary of the date the Commission enters an order dissolving the District.

Sec. 43. (a) If a majority of the votes in an election held under Section 40 do not favor dissolution, the conservator appointed under Section 34 continues to serve until the conservatorship is dissolved under Section 39.

(b) The Commission may order the District to implement any part of the rehabilitation plan developed under Section 37.

Sec. 44. (a) The System may integrate the services and infrastructure of the District into the System.

(b) The System may operate the former District as a special project under the System's existing senior lien revenue bond ordinances. All the obligations and liabilities of the former District and new obligations of the System entered into for the benefit of the former District ratepayers are payable from revenue derived from the operation of the special project and not payable from revenue of the System.

(c) Once the conservator has transferred the assets, liabilities, and duties to the System, the System shall provide affordable and reliable water services to the former ratepayers of the District.

Sec. 45. (a) For a 24-month period following the transfer of the employment of any employee of the former District, the System may not terminate that employee, except for cause, if the employee:

(1) is vested in the retirement program of the District on the effective date of the Act enacting this section; and

(2) earns an annual base salary of less than $50,000 on the effective date of the Act enacting this section.

(b) An employee who qualifies under Subsection (a) and who is terminated by the System has the same opportunity for appeal as a person employed by the System who is not an employee of the former District.

(c) The System is not required to employ an employee of the District if that person was formerly terminated from, or resigned in lieu of termination from the System.

Sec. 46. From the effective date of the Act enacting this section until the date election results under Section 40 are certified to the Secretary of State, the attorney general may not approve any public security, as defined by Chapter 1201, Government Code, of the District unless:

(1) the Commission consents in writing before approval; or

(2) the District provides written evidence that issuing the public security represents a refunding of outstanding debt for the purpose of realizing debt service savings in each year that outstanding obligations are refunded and that results in a cumulative net present value savings of three percent compared to refunded debt service.

Sec. 47. (a) From the effective date of the Act enacting this section until the date election results under Section 40 are certified to the Secretary of State, a contract to which the District is a party must include a provision that the contract is subject to:

(1) review by the System; and

(2) termination, including the termination of all rights, duties, obligations, and liabilities of the District or the System under the contract, if the contract is assumed by the System.

(b) A person is not entitled to compensation for loss or other damages resulting from the termination of the contract under Subsection (a)(2).

SECTION 3. Not later than the 60th day after the effective date of this Act, the Texas Commission on Environmental Quality shall appoint a conservator for the Bexar Metropolitan Water District as required by Section 34, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, as added by this Act.

SECTION 4. (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, one of the required recipients, 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, the lieutenant governor, and the 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 5. 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, 2011.