84R1995 JXC-F

By: Bell H.B. No. 669

A BILL TO BE ENTITLED

AN ACT

relating to the authority of a public utility agency to provide water and sewer service and enter into contracts.

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

SECTION 1. Section 572.001, Local Government Code, is amended by amending Subdivision (1) and adding Subdivision (4) to read as follows:

(1) "Facility" means a facility necessary or incidental to the provision of water or sewer service, [the collection, transportation, treatment, or disposal of sewage or to the conservation, storage, transportation, treatment, or distribution of water,] including a plant site, right-of-way, and property, equipment, or right of any kind useful in connection with providing water or sewer service [the collection, transportation, treatment, or disposal of sewage or with the conservation, storage, transportation, treatment, or distribution of water].

(4) "Water or sewer service" means the collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, supply, sale, transfer, or distribution of water.

SECTION 2. Section 572.011, Local Government Code, is amended to read as follows:

Sec. 572.011. AUTHORITY TO JOINTLY OWN FACILITIES. Two or more public entities that have the authority to provide water or sewer service [engage in the collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, or distribution of water] may join together as cotenants or co-owners to plan, finance, acquire, construct, own, operate, or maintain facilities to:

(1) achieve economies of scale in providing essential water and sewage systems to the public;

(2) promote the orderly economic development of this state; and

(3) provide environmentally sound protection of this state's future water and wastewater needs.

SECTION 3. Section 572.052(b), Local Government Code, is amended to read as follows:

(b) A public entity may join in the creation of a public utility agency under this subchapter only if, at the time the concurrent ordinance is adopted, the entity has the authority to provide water or sewer service [engage in the collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, or distribution of water]. This subsection does not prohibit a public entity from disposing of a facility after creation of the agency.

SECTION 4. Section 572.058, Local Government Code, is amended to read as follows:

Sec. 572.058. POWERS. (a) A public utility agency may not engage in any utility business other than providing water or sewer service [the collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, or distribution of water] for or to a [participating] public or private entity [that owns jointly with the agency a facility in this state].

(b) A public utility agency may:

(1) perform any act necessary to the full exercise of the agency's powers;

(2) provide water or sewer service for compensation and acquire, operate, maintain, or control facilities in this state to provide the service;

(3) enter into a contract, lease, or agreement with or accept a grant or loan from a:

(A) department or agency of the United States;

(B) department or [,] agency of this state;

(C) [, or municipality or other] political subdivision of this state; or

(D) [(C)] public or private corporation or person;

(4) [(3)] sell, lease, convey, or otherwise dispose of any right, interest, or property the agency considers to be unnecessary for the efficient operation or maintenance of its facilities; and

(5) [(4)] adopt rules to govern the operation of the agency and its employees, facilities, and service.

SECTION 5. Section 572.059, Local Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) A public utility agency may enter into [award] a public work contract using contracting and delivery procedures described by Chapter 2269, Government Code [for construction of an improvement that involves the expenditure of more than $20,000 only on the basis of competitive bids].

(c) If a public utility agency facility requires emergency repairs and the agency determines that the delay posed by the contracting methods provided for in this section would prevent or substantially impair the provision of water or sewer service, contracts for the repair of the facility may be made by methods other than those required by this section.

SECTION 6. Section 572.060, Local Government Code, is amended to read as follows:

Sec. 572.060. CONTRACTS FOR [SEWER OR] WATER OR SEWER SERVICES. A public utility agency may[:

[(1)] contract with a [the] public or private entity:

(1) [entities creating the agency] for the provision of water or sewer service; or [collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, or distribution of water; and]

(2) to operate, maintain, or control facilities in this state for the provision of water or sewer service [under terms the agency's board of directors considers appropriate, contract with private entities for services described by Subdivision (1)].

SECTION 7. Section 572.061(a), Local Government Code, is amended to read as follows:

(a) In contracting with a public or private entity for water or sewer service [wastewater collection, transmission, treatment, or disposal services or for water conservation, storage, transportation, treatment, or distribution,] a public utility agency must charge rates sufficient to produce revenue adequate to:

(1) pay all expenses of operation and maintenance;

(2) pay when due the principal of and interest on obligations issued under this subchapter;

(3) pay the principal of and interest on any legal debt of the agency;

(4) pay when due all sinking and reserve fund payments; and

(5) fulfill any agreements made with the holders of any obligations.

SECTION 8. The changes in law made by this Act apply only to a contract or construction project for which a public utility agency first advertises or otherwise requests bids, proposals, offers, or qualifications, or makes a similar solicitation, on or after the effective date of this Act. A contract or construction project for which a public utility agency first advertises or otherwise requests bids, proposals, offers, or qualifications, or makes a similar solicitation, before the effective date of this Act is governed by the law in effect on the date of the advertisement, request, or solicitation, and the former law is continued in effect for that purpose.

SECTION 9. 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, 2015.