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A BILL TO BE ENTITLED
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AN ACT
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relating to the dissolution of certain water districts located in |
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urban areas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 49.321, Water Code, is amended to read as |
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follows: |
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Sec. 49.321. DISSOLUTION AUTHORITY. After notice and |
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hearing, the commission may dissolve: |
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(1) any district that is inactive for a period of five |
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consecutive years and has no outstanding bonded indebtedness; or |
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(2) an urban area district: |
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(A) that is located entirely in a county having a |
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population of more than 400,000; |
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(B) that, without consideration of the exclusion |
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of land from inside the district, has 70 percent or more of the |
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district's area within the corporate limits or extraterritorial |
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jurisdiction of a municipality, as shown by the most recent tax |
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rolls of the central appraisal district of the county; |
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(C) in which the services furnished and functions |
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performed by the district can be furnished and performed by a |
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municipality in the district; |
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(D) that was created or organized under general |
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law before 1971 for the principal purpose of supplying raw, |
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untreated, or nonpotable water for irrigation or farming purposes |
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to agricultural lands within its boundaries; and |
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(E) that either: |
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(i) generates more than 70 percent of the |
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district's operating revenue from a municipality for the supply or |
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delivery of raw water used for municipal purposes, as shown by the |
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district's most recent annual financial audit report; or |
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(ii) generates less than 15 percent of the |
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district's operating revenue from raw, untreated, or nonpotable |
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water sales and the flat rate assessment collected from |
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nonmunicipal customers, as shown by the district's most recent |
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annual financial audit report. |
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SECTION 2. Subchapter K, Chapter 49, Water Code, is amended |
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by adding Section 49.3245 to read as follows: |
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Sec. 49.3245. DISSOLUTION OF CERTAIN URBAN AREA DISTRICTS. |
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(a) The commission shall give notice of the dissolution hearing as |
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required under Section 49.322 if the commission: |
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(1) determines that the proposed dissolution is for an |
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urban area district as described under Section 49.321(2); |
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(2) receives from a municipality a petition calling |
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for the dissolution of the urban area district, which must be signed |
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by 20 percent of qualified voters, as defined by Section 11.002, |
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Election Code, residing within the municipality and the district, |
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without consideration of any exclusion of land from inside the |
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district; and |
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(3) receives from a municipality an ordinance that |
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meets the requirements under Subsection (b). |
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(b) The commission may enter an order dissolving an urban |
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area district at the conclusion of the hearing if: |
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(1) the commission finds that the district is no |
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longer needed because the services and functions of the district |
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can be furnished and performed by a municipality within the |
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district; |
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(2) the governing body of the municipality, by a |
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two-thirds vote, adopts an ordinance stating that the municipality |
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will assume the assets, debts, contractual rights, and any other |
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obligation of the district upon dissolution of the district; and |
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(3) the governing body of the municipality prepares a |
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plan of succession as provided by Sections 43.075(c)-(l), Local |
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Government Code, for the uninterrupted provision of services. |
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(c) An ordinance adopted under Subsection (b)(2) must |
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contain provisions that: |
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(1) eliminate the required payment of any flat tax or |
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assessments paid to the district by landowners in the district; |
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(2) ensure that all water rights are held in trust by |
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the city for the uses previously adjudicated; |
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(3) ensure that all individual water users are |
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entitled to continue to use or have access to the same amount of |
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water they were entitled to before the dissolution of the district; |
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(4) require the city to perform all the functions of |
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the district, including the provision of services; and |
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(5) ensure delivery of water to landowners at or below |
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the lowest comparable delivery charge imposed by any other |
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irrigation district in the county in which the district is located. |
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SECTION 3. Section 49.326(b), Water Code, is amended to |
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read as follows: |
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(b) The trial on appeal shall be de novo and the substantial |
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evidence rule shall not apply. This subsection does not apply to a |
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district dissolved under Section 49.3245. |
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SECTION 4. Section 49.327, Water Code, is amended to read as |
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follows: |
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Sec. 49.327. ASSETS ESCHEAT TO STATE. Upon the dissolution |
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of a district by the commission, except as provided by Section |
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49.3245, all assets of the district shall escheat to the State of |
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Texas. The assets shall be administered by the comptroller and |
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shall be disposed of in the manner provided by Chapter 74, Property |
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Code. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |