By: Hinojosa S.B. No. 1890

A BILL TO BE ENTITLED

AN ACT

relating to procedures for the dissolution of the Hidalgo County Water Improvement District No. 3.

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

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 directors.

SECTION 2. DISTRICT AND MUNICIPALITY TO WHICH ACT IS APPLICABLE. This Act applies only to:

(1) the district; and

(2) a municipality that:

(A) has a population greater than 100,000; and

(B) contained on April 1, 2013, within its corporate boundaries or extraterritorial jurisdiction more than half of the district's territory.

SECTION 3. DISSOLUTION OF DISTRICT; FINDINGS PREREQUISITE TO MOTION TO TRANSFER. (a) The district is dissolved on the date a transfer ordinance adopted pursuant to Section 6 of this Act takes effect under Section 8 of this Act.

(b) At a regularly scheduled meeting of the city council, a city may propose an ordinance to allow the city to accept a transfer of the obligations, liabilities, and assets of 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 city or at least 80 percent of the revenue received by the district from diverting raw water during the preceding 12 months was received from the city;

(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 communities.

SECTION 4. HEARING REQUIRED. (a) Before a city may hold an election under Section 5 of this Act or propose an ordinance described by Section 6 of this Act, 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) mailed to each district board member.

SECTION 5. ELECTION REQUIRED. (a) Before a city may propose an ordinance described by Section 6 of this Act, the city must hold an election within the boundaries of the territory of the district to determine if the registered voters within those boundaries support the district's dissolution. For purposes of this section, the territory of the district includes all district territory as of January 1, 2005, and any annexations of territory after that date and before the last date for voter registration for the election. Notwithstanding any other law, all registered voters who reside within the boundaries of the territory of the district are eligible to vote in the election called under this section.

(b) The city shall adopt an election order providing for an election to be held in the territory of the district on the next uniform election date after the hearing conducted under Section 4 of this Act. The election ballot must allow voting for or against the proposition to dissolve the district and to transfer all district obligations, liabilities, and assets to the city. The city shall contract with the county elections administrator as provided by Subchapter D, Chapter 31, Election Code, to conduct the election.

(c) The district may not be dissolved and its obligations, liabilities, and assets may not be transferred to the city unless a majority of the voters voting at the election held under this section vote in favor of the proposition described by Subsection (b) of this section.

SECTION 6. TRANSFER ORDINANCE. (a) After a city council has made the findings required by Subsection (b), Section 3 of this Act, has conducted a public hearing as required by Section 4 of this Act, and has held an election under Section 5 of this Act at which the district's dissolution was approved by the registered voters within the district, the city council may adopt an ordinance allowing the city to accept a transfer of the district's obligations, liabilities, and assets.

(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) require the city to perform all the functions of the district, including the provision of services; and

(5) 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.

SECTION 7. CITY CONSENT; DISTRICT DUTIES. (a) On or before the effective date of the ordinance described by Section 6 of this Act, 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 Subsection (b), Section 4 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 Subsection (b), Section 4 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 Subsection (b), Section 4 of this Act, repeals the city's ordinance described by Section 6 of this Act.

SECTION 8. EFFECTIVE DATE OF TRANSFER. A transfer ordinance under this Act takes effect on the date the city council approves the ordinance under Subsection (c), Section 6 of this Act.

SECTION 9. TRANSFER OF ASSETS. (a) On or before the effective date of a transfer 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;

(3) provide notice of the dissolution of the district to the Texas Commission on Environmental Quality; and

(4) provide notice and make recordings of the transfers under this section as required by the Water Code and other law.

(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 certificate.

SECTION 10. EXPIRATION. This Act expires January 1, 2018.

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, 2013.