By: Kefler (Senate Sponsor - Birdwell) H.B. No. 1901
         (In the Senate - Received from the House April 18, 2011;
  April 20, 2011, read first time and referred to Committee on
  Natural Resources; May 4, 2011, reported favorably by the
  following vote:  Yeas 9, Nays 0; May 4, 2011, sent to printer.)
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the applicability of provisions concerning bond
  approval by the Texas Commission on Environmental Quality to
  certain water entities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 49.181(a) and (h), Water Code, are
  amended to read as follows:
         (a)  A district may not issue bonds unless the commission
  determines that the project to be financed by the bonds is feasible
  and issues an order approving the issuance of the bonds.  This
  section does not apply to:
               (1)  refunding bonds if the commission issued an order
  approving the issuance of the bonds or notes that originally
  financed the project;
               (2)  refunding bonds that are issued by a district
  under an agreement between the district and a municipality allowing
  the issuance of the district's bonds to refund bonds issued by the
  municipality to pay the cost of financing facilities;
               (3)  bonds issued to and approved by the Farmers Home
  Administration, the United States Department of Agriculture, the
  North American Development Bank, or the Texas Water Development
  Board; [or]
               (4)  refunding bonds issued to refund bonds described
  by Subdivision (3); or
               (5)  bonds issued by a public utility agency created
  under Chapter 572, Local Government Code, any of the public
  entities participating in which are districts if at least one of
  those districts is a district described by Subsection (h)(1)(E).
         (h)  This section does not apply to:
               (1)  a district if:
                     (A) [(1)]  the district's boundaries include one
  entire county;
                     (B) [(2)]  the district was created by a special
  Act of the legislature and:
                           (i) [(A)]  the district is located entirely
  within one county;
                           (ii) [(B)]  the district is located entirely
  within one or more home-rule municipalities;
                           (iii) [(C)]  the total taxable value of the
  real property and improvements to the real property zoned by one or
  more home-rule municipalities for residential purposes and located
  within the district does not exceed 25 percent of the total taxable
  value of all taxable property in the district, as shown by the most
  recent certified appraisal tax roll prepared by the appraisal
  district for the county; and
                           (iv) [(D)]  the district was not required by
  law to obtain commission approval of its bonds before the effective
  date of this section;
                     (C) [(3)]  the district is a special water
  authority;
                     (D) [(4)]  the district is governed by a board of
  directors appointed in whole or in part by the governor, a state
  agency, or the governing body or chief elected official of a
  municipality or county and does not provide, or propose to provide,
  water, sewer, drainage, reclamation, or flood control services to
  residential retail or commercial customers as its principal
  function; or
                     (E) [(5)]  the district on September 1, 2003:
                           (i) [(A)]  is a municipal utility district
  that includes territory in only two counties;
                           (ii) [(B)]  has outstanding long-term
  indebtedness that is rated BBB or better by a nationally recognized
  rating agency for municipal securities; and
                           (iii) [(C)]  has at least 5,000 active water
  connections; or
               (2)  a public utility agency created under Chapter 572,
  Local Government Code, any of the public entities participating in
  which are districts if at least one of those districts is a district
  described by Subdivision (1)(E).
         SECTION 2.  Section 49.052(f), Water Code, is amended to
  read as follows:
         (f)  This section shall not apply to special water
  authorities, districts described in Section 49.181(h)(1)(D)
  [49.181(h)(4)], or a district where the principal function of the
  district is to provide irrigation water to agricultural lands or to
  provide nonpotable water for any purpose.
         SECTION 3.  Section 49.183(d), Water Code, is amended to
  read as follows:
         (d)  A district's bonds are negotiable instruments within
  the meaning and purposes of the Business & Commerce Code. A
  district's bonds may be issued and bear interest in accordance with
  Chapters 1201, 1204, and 1371, Government Code, and Subchapters
  A-C, Chapter 1207, Government Code. Except for this subsection,
  this section does not apply to special water authorities or
  districts described in Section 49.181(h)(1)(D) [49.181(h)(4)].
         SECTION 4.  The change in law made by this Act does not apply
  to bonds for which an application and report were submitted to the
  Texas Commission on Environmental Quality under Section 49.181(b),
  Water Code, before the effective date of this Act. Those bonds are
  governed by the law as it existed immediately before the effective
  date of this Act, and that law is continued in effect for that
  purpose.
         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.
 
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