By: Hinojosa  S.B. No. 978
         (In the Senate - Filed February 25, 2011; March 8, 2011,
  read first time and referred to Committee on Intergovernmental
  Relations; March 28, 2011, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 4, Nays 0;
  March 28, 2011, sent to printer.)
  relating to procedures for the dissolution of the Hidalgo County
  Water Improvement District No. 3.
         SECTION 1.  DEFINITIONS. In this Act:
               (1)  "City" means a municipality described by Section 2
  of this Act.
               (2)  "City council" means the governing body of a city.
               (3)  "District" means the Hidalgo County Water
  Improvement District No. 3.
               (4)  "District board" means the district's board of
  APPLICABLE. This Act applies only to:
               (1)  the district; and
               (2)  a municipality that:
                     (A)  has a population greater than 100,000; and
                     (B)  contains within its corporate boundaries or
  extraterritorial jurisdiction more than half of the district's
  a regularly scheduled meeting of the city council, a city may
  propose an ordinance to dissolve the district if the city council
  finds that as of the date of the meeting:
               (1)  at least 80 percent of the raw water diverted by
  the district in the preceding 12 months was diverted for use by the
               (2)  the city is capable of assuming all rights and
  obligations of the district;
               (3)  the city is capable of assuming responsibility for
  operating the district's facilities to benefit the district's
  existing customers and performing the services and functions
  performed by the district;
               (4)  dissolution of the district will result in an
  overall cost savings to city residents; and
               (5)  dissolution of the district will result in a more
  stable water supply for residents of the city and surrounding
         SECTION 4.  HEARING REQUIRED. (a)  Before a city may
  propose an ordinance to dissolve the district, the city must
  conduct a public hearing on the issue.
         (b)  Notice of the public hearing must be:
               (1)  posted in accordance with the laws that apply to
  regular meetings of the city council; and
               (2)  provided in writing to each district board member.
         SECTION 5.  DISSOLUTION BY ORDINANCE. (a)  After a city
  council has made the findings required by Section 3 of this Act and
  has conducted a public hearing as required by Section 4 of this Act,
  the city council may dissolve the district by ordinance.
         (b)  The ordinance must contain provisions that:
               (1)  eliminate the required payment of any flat tax or
  assessments paid to the district by landowners in the district;
               (2)  ensure that all water rights are held in trust by
  the city for the uses previously adjudicated;
               (3)  ensure that all individual water users are
  entitled to continue to use or have access to the same amount of
  water they were entitled to before the dissolution of the district;
               (4)  ensure delivery of water to landowners at or below
  the lowest comparable delivery charge imposed by any other
  irrigation district in Hidalgo County.
         (c)  The ordinance takes effect only if two-thirds of the
  city council votes in favor of the ordinance.
  before the effective date of the dissolution ordinance, the
  district board shall provide the district's management and
  operational records to the city that passed the ordinance to ensure
  the orderly transfer of management and operational responsibility
  to the city.
         (b)  Without the consent of a majority of the members of a
  city council that publishes notice under Section 4(b) of this Act,
  the district may not:
               (1)  sell, transfer, or encumber any district asset;
               (2)  issue debt or acquire additional obligations; or
               (3)  default on or fail to honor financial, legal, or
  other obligations of the district.
         (c)  Unless a majority of the members of a city council that
  publishes notice under Section 4(b) of this Act agree otherwise,
  the district shall:
               (1)  maintain assets of the district in an appropriate
  condition reflective of good stewardship and proper repair; and
               (2)  preserve district records, including information
  maintained by the district in electronic format.
         (d)  Any action undertaken by the district that does not
  comply with Subsection (b) of this section is void.
         (e)  This section expires on the date a city that has
  published notice under Section 4(b) of this Act repeals the city's
  ordinance to dissolve the district.
  ORDINANCE; ELECTION. (a)   The voters of a city that enacts a
  dissolution ordinance under this Act may object to the ordinance by
  filing a petition with the secretary of the city. The petition must
  be signed by at least five percent of the city's registered voters.
  The petition must be filed not later than the 30th day after the
  date the city enacts the ordinance.
         (b)  The city secretary shall verify the signatures on the
  petition and shall present the verified petition to the city
  council at the council's next scheduled meeting.
         (c)  On receipt of the petition, the city council shall
  suspend the effectiveness of the ordinance, and the city may not
  take action under the ordinance unless the ordinance is approved by
  the voters under Subsection (d) of this section.
         (d)  The city council shall reconsider the suspended
  ordinance at the next scheduled meeting of the council. If the city
  council does not repeal the ordinance, the city council shall
  submit a proposition for or against enactment of the ordinance to
  the voters at the next municipal election. The dissolution
  ordinance takes effect if a majority of the voters voting in that
  election vote in favor of dissolution.
  ordinance under this Act takes effect on the date:
               (1)  the period for filing a voter petition expires
  under Section 7(a) of this Act, if a voter petition is not filed
  under that section; or
               (2)  the voters approve the dissolution ordinance under
  Section 7(d) of this Act.
         SECTION 9.  TRANSFER OF ASSETS. (a)  On or before the
  effective date of a dissolution ordinance under Section 8 of this
  Act, the district shall:
               (1)  transfer to the city the ownership of any water
  rights and certificates of adjudication;
               (2)  transfer the assets, debts, and contractual rights
  and obligations of the district to the city; and
               (3)  provide notice and make recordings of the
  transfers under this section as required by the Water Code and other
         (b)  On receipt of notice of the transfer of a district
  certificate of adjudication, the Texas Commission on Environmental
  Quality shall note in its records that the certificate of
  adjudication is owned and held by the city. The Texas Commission on
  Environmental Quality shall transfer the district's certificate to
  the city as a ministerial act without further application, notice,
  or hearing. A person or other legal entity does not have a right to
  object to or to request an administrative review of a transfer made
  in accordance with this Act.
         (c)  The transfer of the district's water rights and any
  certificate of adjudication to the city does not affect or impair
  the priority, extent, validity, or purpose of the water rights or
         SECTION 10.  EXPIRATION.  This Act expires January 1, 2016.
         SECTION 11.  EFFECTIVE DATE.  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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