85R7935 TSR-F
 
  By: Isaac H.B. No. 2540
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the conversion of the Hays Caldwell Public Utility
  Agency to the Alliance Regional Water Authority; providing
  authority to issue bonds; granting the power of eminent domain;
  providing authority to impose fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a) The Hays Caldwell Public Utility Agency is
  converted to a conservation and reclamation district to be known as
  the Alliance Regional Water Authority located in Bexar, Caldwell,
  Comal, Guadalupe, and Hays Counties.
         (b)  The Alliance Regional Water Authority is not required to
  hold an election to confirm the creation of the authority.
         SECTION 2.  Subtitle X, Title 6, Special District Local Laws
  Code, is amended by adding Chapter 11010 to read as follows:
  CHAPTER 11010. ALLIANCE REGIONAL WATER AUTHORITY
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 11010.001.  DEFINITIONS. In this chapter:
               (1)  "Authority" means the Alliance Regional Water
  Authority.
               (2)  "Board" means the board of directors of the
  authority.
               (3)  "Director" means a member of the board.
               (4)  "District" means any district or authority created
  under Section 52, Article III, or Section 59, Article XVI, Texas
  Constitution, regardless of the manner of creation.
               (5)  "Local government" means:
                     (A)  a municipality, county, district, or other
  political subdivision of this state;
                     (B)  a local government corporation;
                     (C)  a nonprofit corporation created to act on
  behalf of a local government; or
                     (D)  a combination of two or more of the entities
  described by this subdivision.
               (6)  "Private entity" includes an individual,
  corporation, organization, business trust, estate, trust,
  partnership, and association and any other legal entity that is not
  a governmental body or agency.
               (7)  "Sponsor" means:
                     (A)  the City of Kyle;
                     (B)  the City of San Marcos;
                     (C)  the City of Buda;
                     (D)  the Canyon Regional Water Authority; and
                     (E)  any other local government or private entity
  added to the authority as a sponsor under Section 11010.005.
               (8)  "Water" includes:
                     (A)  groundwater, percolating or otherwise,
  notwithstanding the quality of the groundwater;
                     (B)  any surface water, naturally or artificially
  impounded or in a navigable or nonnavigable watercourse; and
                     (C)  municipal wastewater or industrial
  wastewater, including municipal wastewater or industrial
  wastewater that has been treated to a quality suitable for reuse for
  a beneficial use.
         Sec. 11010.002.  NATURE OF AUTHORITY. The authority is a
  regional water authority in Bexar, Caldwell, Comal, Guadalupe, and
  Hays Counties created under and essential to accomplish the
  purposes of Section 59, Article XVI, Texas Constitution.
         Sec. 11010.003.  FINDINGS OF PUBLIC PURPOSE AND BENEFIT.
  (a) The authority is created to serve a public use and benefit.
         (b)  All land and other property included in the territory of
  the authority will benefit from the works and projects to be
  accomplished by the authority under powers conferred by Section 59,
  Article XVI, Texas Constitution, and powers granted under this
  chapter.
         Sec. 11010.004.  AUTHORITY TERRITORY. (a)  The authority is
  composed of the territory:
               (1)  of the sponsors, including territory within the
  municipal boundaries of a sponsor that is a municipality;
               (2)  located in the service areas of the sponsors as
  provided by the sponsors' respective certificates of convenience
  and necessity; and
               (3)  added to and not excluded from the authority in
  accordance with applicable law.
         (b)  Territory added to the authority may be in a county
  other than a county listed in Section 11010.002.
         Sec. 11010.005.  METHOD OF ADDING SPONSORS. (a) The
  governing body of a local government or a private entity, including
  a water supply corporation, may petition the board to add that local
  government or private entity as a sponsor.
         (b)  A petition under Subsection (a) must be submitted in the
  manner and form required by board rule.
         (c)  On receipt of a petition under Subsection (a), the board
  shall set a hearing on the petition and provide notice of the date,
  time, place, and purpose of the hearing to:
               (1)  the sponsors of the authority; and
               (2)  the petitioning local government or private
  entity.
         (d)  At the hearing, the board shall make a determination on
  whether:
               (1)  the local government or private entity will
  benefit from being added to the authority as a sponsor; and
               (2)  it is in the best interest of the authority to add
  the local government or private entity to the authority as a
  sponsor.
         (e)  If, after a hearing on the petition, the board decides
  that the local government or private entity should be added to the
  authority as a sponsor, the board shall issue an order:
               (1)  adding the local government or private entity to
  the authority;
               (2)  adding the local government's or private entity's
  territory or service area to the territory of the authority; and
               (3)  making the local government's or private entity's
  territory or service area subject to the privileges, duties,
  assets, and financial obligations of the authority to the same
  degree as other sponsors already included in the authority.
         (f)  After the addition of a sponsor to the authority, the
  board shall adopt rules that reapportion the directors of the
  authority among the sponsors in accordance with the rules adopted
  under Section 11010.051(c)(2) and may increase or decrease the
  number of directors on the board within the range provided by
  Section 11010.051(a).
         Sec. 11010.006.  LIBERAL CONSTRUCTION OF CHAPTER. This
  chapter shall be liberally construed to effect its purposes.
  SUBCHAPTER B. BOARD OF DIRECTORS
         Sec. 11010.051.  DIRECTORS. (a) The authority is governed
  by a board of directors consisting of at least 7 and not more than 17
  members.
         (b)  The board is responsible for the management, operation,
  and control of the authority.
         (c)  The board shall adopt rules that:
               (1)  establish the number of directors of the
  authority; and
               (2)  determine the apportionment of directors for each
  sponsor based on the amount of water contracted to be supplied to
  the sponsor under the terms of the authority's water supply
  contract with the sponsor.
         Sec. 11010.052.  ELIGIBILITY TO SERVE AS DIRECTOR. (a) To
  be eligible to serve as a director, a person must be:
               (1)  at least 18 years of age; and
               (2)  a resident of the territory located in the
  authority or an employee of a sponsor.
         (b)  A director who also serves on the governing body of a
  sponsor is not a dual officeholder and is not prohibited by the
  common law doctrine of incompatibility from serving on both the
  board and the governing body.
         (c)  Service on the board by a public officeholder is an
  additional duty of that person's office.
         Sec. 11010.053.  APPOINTMENT OF DIRECTORS. (a) Each
  sponsor is entitled to appoint at least one director.
         (b)  Each director must be appointed by the governing body of
  a sponsor in accordance with the rules adopted under Section
  11010.051 that govern the apportionment of directors among the
  sponsors.
         (c)  Directors must be appointed not earlier than April 1 and
  not later than April 30 of each year.
         Sec. 11010.054.  TERMS OF OFFICE. (a) Directors serve
  staggered three-year terms, with one-third or as near as possible
  to one-third of the members' terms expiring April 30 of each year.
         (b)  A director's term begins on May 1 of the year the
  director is appointed.
         (c)  A director may not serve more than five consecutive
  terms as a director.
         Sec. 11010.055.  REMOVAL OF DIRECTOR. A sponsor that
  appoints a director may remove the director from office at any time,
  with or without cause. 
         Sec. 11010.056.  BOARD VACANCY. If there is a vacancy on the
  board, the governing body of the sponsor that appointed the
  director who vacated the office shall appoint a director to serve
  the remainder of the term.
         Sec. 11010.057.  VOTING AUTHORITY. Each director is
  entitled to one vote on any issue before the board.
         Sec. 11010.058.  OFFICERS. At the first meeting of the board
  after May 1 of each year, the board shall elect officers for the
  authority, including a chair, vice chair, secretary, and treasurer.
         Sec. 11010.059.  MEETINGS AND ACTIONS OF BOARD; QUORUM. (a)
  The board may meet as many times each year as the board considers
  appropriate.
         (b)  A majority of the membership of the board constitutes a
  quorum at a meeting of the board.
         (c)  A concurrence of a majority of the directors present and
  voting is sufficient for transacting any business of the authority
  unless other applicable law, or the authority by rule, requires a
  concurrence of a greater number of directors for a specific type of
  decision.
         (d)  Directors of the authority are public officials and are
  entitled to governmental immunity for their actions in their
  capacity as directors and officers of the authority.
  SUBCHAPTER C. POWERS AND DUTIES
         Sec. 11010.101.  GENERAL POWERS AND DUTIES. (a) The
  authority may:
               (1)  acquire, purchase, own, hold, lease, construct,
  improve, and maintain a reservoir, groundwater well, or other
  source of water supply, including:
                     (A)  groundwater, surface water, and wastewater
  reused directly or indirectly; and
                     (B)  aquifer storage and recovery facilities;
               (2)  acquire, own, construct, operate, repair,
  improve, maintain, or extend, inside or outside the authority's
  boundaries, water and wastewater works, improvements, facilities,
  plants, pipelines, equipment, and appliances for:
                     (A)  the treatment and transportation of water and
  wastewater;
                     (B)  the direct or indirect reuse of wastewater;
                     (C)  aquifer storage and recovery projects; and
                     (D)  the provision of wholesale water and
  wastewater services to authority customers, municipalities,
  districts, water supply corporations, and other persons in this
  state;
               (3)  acquire, purchase, own, hold, lease, and maintain
  interests, including capacity rights and other contractual rights,
  in sources of water supply, reservoirs, groundwater wells, water
  and wastewater systems, treatment works, improvements, facilities,
  plants, equipment, appliances, aquifer storage and recovery
  projects, and the direct or indirect reuse of wastewater;
               (4)  finance any purchase or acquisition through a
  bond, note, or other obligation under Subchapter E, or through a
  lease-purchase agreement; and
               (5)  sell, lease, convey, or otherwise dispose of any
  right, interest, or property the authority considers to be
  unnecessary for the efficient operation or maintenance of the
  authority's facilities.
         (b)  In addition to the powers specifically provided by this
  chapter, the authority may exercise the powers provided by Section
  65.201, Water Code.
         Sec. 11010.102.  AUTHORITY POLICIES, RULES, AND BYLAWS. The
  authority may adopt and enforce policies, rules, and bylaws
  reasonably required to implement this chapter, including rules
  governing procedures before the board and rules regarding
  implementation, enforcement, and any other matters related to the
  exercise of the rights, powers, privileges, and functions conferred
  on the authority by this chapter for the provision of water and
  wastewater service.
         Sec. 11010.103.  EMINENT DOMAIN. (a) The authority may
  exercise the power of eminent domain to acquire a fee simple or
  other interest in property if the interest is necessary for the
  authority to exercise the rights or authority conferred by this
  chapter.
         (b)  The authority shall exercise the right of eminent domain
  in the manner provided by Chapter 21, Property Code. The authority
  is not required to give bond for appeal or bond for costs in a
  condemnation suit or other suit to which it is a party.
         (c)  The authority may not use the power of eminent domain
  for the condemnation of land for the purpose of acquiring rights to
  groundwater or for the purpose of acquiring water or water rights.
         Sec. 11010.104.  WATER CONSERVATION OR DROUGHT CONTINGENCY
  PLANS. The authority by rule may develop, prepare, revise, adopt,
  implement, enforce, and manage water conservation or drought
  contingency plans for the authority or any portion of the
  authority.
         Sec. 11010.105.  SERVICE OUTSIDE AUTHORITY. The authority
  may contract to provide the authority's services outside the
  boundaries of the authority.
         Sec. 11010.106.  SPONSOR CONVEYANCES AND ACQUISITIONS. (a)
  In this section, "utility system" has the meaning assigned by
  Section 1502.001, Government Code.
         (b)  A sponsor may convey a utility system facility or asset
  or the sponsor's interest in a utility system facility or asset to
  the authority without holding an election to approve the
  conveyance.
         (c)  A sponsor is exempt from the provisions of Chapter 1502,
  Government Code, regarding the conveyance, sale, or acquisition of
  a utility system, or any related works, improvements, facilities,
  plants, equipment, or appliances.
         Sec. 11010.107.  CONTRACTS. (a) The authority may contract
  with any person to carry out a power authorized by this chapter.
         (b)  A person who enters into a contract with the authority
  may pledge to the payment of the contract any source of revenue that
  may be available to the person, including ad valorem taxes, if the
  person has the authority to impose those taxes.
         (c)  Payments made under a contract with the authority
  constitute an operating expense of the person served under the
  contract, unless otherwise prohibited by a previously outstanding
  obligation of the person. To the extent a person pledges funds to
  the payment of the contract that are to be derived from the person's
  own water system, the payments constitute an operating expense of
  that system.
         Sec. 11010.108.  COOPERATIVE CONTRACTS. The authority may
  enter into an interlocal contract with a local government under
  Chapter 791, Government Code, to carry out a power of the authority.
         Sec. 11010.109.  RATES AND FEES. (a) The authority shall
  establish rates and fees to be assessed against sponsors and
  customers of the authority. The rates and fees may be established
  by classes of customers, by project, or by area of service.
         (b)  A sponsor, local government, water supply corporation,
  private entity, or other person that contracts with the authority
  shall establish, charge, and collect fees, rates, charges, rentals,
  and other amounts for any service or facility provided under or in
  connection with a contract with the authority and shall pledge
  sufficient amounts to make all payments required under the
  contract.
  SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS
         Sec. 11010.151.  AD VALOREM TAXES PROHIBITED. The authority
  may not impose an ad valorem tax.
         Sec. 11010.152.  GIFTS, GRANTS, LOANS, AND OTHER FUNDS. The
  authority may apply for, accept, receive, and administer gifts,
  grants, loans, and other funds available from any source.
  SUBCHAPTER E. BONDS, NOTES, AND OTHER OBLIGATIONS
         Sec. 11010.201.  REVENUE BONDS, NOTES, AND OTHER
  OBLIGATIONS. (a) In addition to bonds, notes, and other
  obligations that the authority is authorized to issue under other
  law, to accomplish the purposes of the authority, the authority may
  issue bonds, notes, or other obligations payable solely from and
  secured by all or part of any funds or any revenue from any source or
  sources, including:
               (1)  fees, rates, and other charges the authority
  imposes or collects;
               (2)  the sale of:
                     (A)  water;
                     (B)  water or wastewater services;
                     (C)  water rights or capacity;
                     (D)  water transmission rights, capacity, or
  services;
                     (E)  water pumping;
                     (F)  wastewater reused directly or indirectly;
                     (G)  aquifer storage and recovery services;
                     (H)  sewer services; or
                     (I)  any other service or product of the authority
  provided inside or outside the boundaries of the authority;
               (3)  grants or gifts;
               (4)  the ownership or operation of all or a designated
  part of the authority's works, improvements, facilities, plants, or
  equipment; and
               (5)  the proceeds of contracts.
         (b)  Bonds, notes, or other obligations issued by the
  authority may be first or subordinate lien obligations at the
  board's discretion.
         (c)  In connection with any bonds, notes, or other
  obligations of the authority, the authority may exercise any power
  of an issuer under Chapter 1371, Government Code.
         (d)  The authority may conduct a public, private, or
  negotiated sale of the bonds, notes, or other obligations.
         (e)  The authority may enter into one or more indentures of
  trust to further secure its bonds, notes, or other obligations.
         (f)  The authority may issue bonds, notes, or other
  obligations in more than one series as necessary to carry out the
  purposes of this chapter. In issuing bonds, notes, or other
  obligations secured by revenue of the authority, the authority may
  reserve the right to issue additional bonds, notes, or other
  obligations secured by the authority's revenue that are on parity
  with or are senior or subordinate to the bonds, notes, or other
  obligations issued earlier.
         (g)  A resolution of the board or a trust indenture securing
  the bonds, notes, or other obligations may specify additional
  provisions that constitute a contract between the authority and the
  authority's bondholders, noteholders, or other obligation holders.
         (h)  Bonds, notes, or other obligations may be additionally
  secured by deed of trust or mortgage on any or all of the
  authority's facilities.
         (i)  Bonds, notes, or other obligations issued by the
  authority are not subject to approval by the Texas Commission on
  Environmental Quality, and commission rules regarding bonds,
  notes, or other obligations do not apply to bonds, notes, or other
  obligations issued by the authority.
         (j)  The authority provided by this chapter for the
  authorization and issuance of bonds, notes, and other obligations
  is in addition to, and not in lieu of, the authority otherwise
  established under general law and may not be construed as a
  limitation on, or a modification of, general law providing for
  authorization and issuance of bonds, notes, and other forms of
  obligations. Nothing in this chapter may be construed as affecting
  any existing contract, bond, note, or other obligation of the
  authority or any indenture, covenant, mortgage, or other agreement
  relating to them.
         Sec. 11010.202.  ELECTION NOT REQUIRED. The authority is
  not required to hold an election to approve the issuance of revenue
  bonds or notes or of other obligations under this subchapter.
         Sec. 11010.203.  USE OF REVENUE AND GROWTH PROJECTIONS. For
  the purposes of attorney general review and approval and in lieu of
  any other manner of demonstrating the ability to pay debt service
  and satisfy any other pecuniary obligations relating to bonds,
  notes, or other obligations, the authority may demonstrate the
  authority's ability to satisfy the debt service and those
  obligations using accumulated funds of the authority and revenue
  and growth projections prepared by a professional utility rate
  consultant at the direction of the authority. If the resolution
  authorizing the issuance of the bonds, notes, or other obligations
  provides that the authority intends to increase rates to the extent
  necessary to pay debt service and satisfy any other pecuniary
  obligations arising under the bonds, notes, or other obligations,
  the revenue projections prepared by a professional utility rate
  consultant may include forecast rate increases and accumulated and
  available fund balances as determined by the authority.
         Sec. 11010.204.  REFUNDING BONDS. The authority may issue
  refunding bonds, notes, and other obligations to refund any of its
  bonds, notes, or other obligations in any manner provided by law,
  including Chapter 1207, Government Code.
         Sec. 11010.205.  BONDS, NOTES, AND OTHER OBLIGATIONS EXEMPT
  FROM TAXATION. A bond, note, or other obligation issued under this
  chapter, a transaction related to the bond, note, or other
  obligation, the interest on the bond, note, or other obligation,
  and the profit from the sale of the bond, note, or other obligation
  are exempt from taxation by this state or a political subdivision of
  this state.
         SECTION 3.  On the effective date of this Act:
               (1)  the Alliance Regional Water Authority shall assume
  all assets, liabilities, bonds, notes, and other obligations of the
  Hays Caldwell Public Utility Agency;
               (2)  all contracts and written agreements of the Hays
  Caldwell Public Utility Agency are assigned to and assumed by the
  Alliance Regional Water Authority; and
               (3)  the Alliance Regional Water Authority may refund
  all or a portion of the bonds, notes, or other obligations issued by
  the Hays Caldwell Public Utility Agency in any manner provided by
  law, including Chapter 1207, Government Code.
         SECTION 4.  (a)  The sponsors of the Alliance Regional Water
  Authority shall appoint the initial directors under Section
  11010.053, Special District Local Laws Code, as added by this Act,
  not earlier than April 1, 2018, and not later than April 30, 2018.  
  Directors of the Hays Caldwell Public Utility Agency serving on the
  effective date of this Act shall serve as the temporary directors of
  the Alliance Regional Water Authority until the initial directors
  take office on May 1, 2018.
         (b)  As soon as practicable after the initial directors have
  been appointed under Section 11010.053, Special District Local Laws
  Code, as added by this Act, the initial directors shall draw lots to
  determine which directors serve a one-year term expiring April 30,
  2019, which directors serve a two-year term expiring April 30,
  2020, and which directors serve a three-year term expiring April
  30, 2021. The lots must be split into thirds or as near to thirds as
  possible.
         (c)  This section expires January 1, 2022.
         SECTION 5.  (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 6.  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, 2017.