HBA-NMO H.B. 1602 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1602
By: Lewis, Ron
Natural Resources
3/8/1999
Introduced



BACKGROUND AND PURPOSE 

Current law does not provide a method to exclude land from the boundaries
of water districts (districts) with outstanding bonds, warrants, or other
certificates of indebtedness secured in part by land or other property.
There are situations within the state where some districts may not have
sufficient bonding capacity to construct necessary facilities to serve all
of the property within the district's boundaries and voter approval to
approve a new bond issue to serve the property is unlikely because the cost
of providing such service would cause an unacceptable increase in property
taxes. Granting a district the authority to exclude land from its
boundaries, contingent upon the landowner paying the landowner's pro rata
share of the bonds and debt service due on previously issued taxsupported
bonds, may provide a solution that is beneficial to both the district and
the property owner and may allow development of this land without harming
the remainder of the district.  H.B. 1602 authorizes a district to exclude
land from its boundaries, provided that the landowner pays the landowner's
pro rata share of the previously issued tax-supported bonds and debt
service payments.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter J, Chapter 49, Water Code, by adding Section
49.315, as follows: 

Sec. 49.315.  EXCLUSION OF LAND WITH OUTSTANDING BOND DEBT.  (a) Authorizes
a landowner or other property owner in a water district (district) with
outstanding bonds, warrants, or other certificates of indebtedness secured
in part by the land or other property to petition the district to exclude
the owner's land or other property.  Provides that the petition must be in
writing and filed with the secretary of the governing body of the district
(board); describe by metes and bounds or lot and block number any land to
be excluded; describe any property other than land to be excluded; and
state clearly the particular grounds under Subsection (b) on which
exclusion is sought. 

(b) Authorizes exclusion of land or other property under this section to be
made only on the grounds that the district has never provided utility
service to the land or other property; the district has discounted utility
service to the land or other property; the cost of providing service to the
land or other property makes any service offered by the district so
prohibitively expensive that it effectively constitutes denial of service;
or for a commercial development or a residential development with lot sizes
of less that two acres, the cost of obtaining service from the district
makes the development economically infeasible but not necessarily
prohibitively expensive. 

(c) Requires the board to consider all engineering data and other evidence
presented and determine if the facts support an affirmative finding on the
grounds alleged for exclusion. Requires the board, if it finds in the
affirmative, to enter an order excluding the land or other property and
redefining the boundaries of the district to reflect the exclusion.
Requires the board, not later than the 30th day after the date of the
board's order, to submit a copy of the exclusion order and a detailed
description of the land or other  property excluded to the executive
director of the Texas Natural Resource Conservation Commission, and to file
a copy of the exclusion order in the deed records of the county or counties
in which the district is situated. 

(d) Provides that the exclusion of land or other property under this
section does not impair the rights of the holders of any outstanding bonds,
warrants, or other certificates of indebtedness of the district. 

(e) Provides that excluded land or other property pledged as security for
any outstanding debt of the district remains pledged for its pro rata share
of that debt until final payment is made.  Requires the district to
continue to levy and collect taxes on the excluded property at the same
rate levied on property remaining in the district until the amount of taxes
collected from the excluded property equals the pro rata share of the
district's debt outstanding at the time the property was excluded
attributable to the excluded property. Requires that the taxes collected on
the excluded property be applied only to the payment of the excluded
property's pro rata share of that debt. 

(f) Authorizes the owner of any part of the excluded land or other property
at any time to pay in full the owner's share of the pro rata share of the
district's debt outstanding at the time the property is excluded. 

(g) Authorizes the district, after any land or other property is excluded
under this section, to issue any unissued additional debt approved by the
voters of the district before exclusion without holding a new election.
Prohibits additional debt issued after property is excluded from the
district from being payable from and creating a lien against the taxable
value of the excluded property. 

SECTION 2.Emergency clause.
  Effective date: upon passage.