HBA-SEP C.S.S.B. 1444 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 1444
By: Brown, J. E. "Buster"
Natural Resources
5/6/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Texas faces a difficult challenge in developing water policies that serve
both state and regional interests. The Texas Constitution authorizes the
creation of various types of districts to plan, develop, and regulate the
use of water for the public health, safety, and welfare.  Amendments to the
Water Code may facilitate more efficient operation of those districts.
C.S.S.B. 1444 amends provisions regarding general law districts, water
control and improvement districts, municipal utility districts, fresh water
supply districts, and levee improvement districts.   

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. 

ANALYSIS

C.S.S.B. 1444 amends the Water and Local Government codes relating to the
general powers and authority of water districts.  The bill amends the Water
Code to increase, from $100 to $150, the amount to which a director of a
general law district (district) is entitled to for daily performance of
duties (Sec. 49.060).  A district, at a confirmation and director election,
is authorized to submit to the qualified district voters the proposition of
entering into and implementing a fire department operation plan (Sec.
49.102). A district's authorization to issue bonds remains in effect after
the election unless the district is dissolved or annexed by another
district (Sec. 49.106).   

Provisions regarding the submission of an appraisal roll to a governing
body, effective and rollback tax rates, tax rate, and election to repeal a
tax increase exceeding the rollback tax rate do not apply to a tax levied
and collected for payment of the interest on and principal bonds issued by
a district or made under certain contracts.  Provisions which set forth
that a district must obtain approval of the executive director of the Texas
Natural Resource Conservation Commission (TNRCC) before entering into an
obligation to collect a tax for a debt that exceeds three years do not
apply to contract taxes that are levied to pay for bonds  issued by a
municipality (Secs. 49.107 and 49.108).  The bill specifies that the board
of directors (board) of a district is authorized to allow, by resolution,
wire transfers (Sec. 49.151).  The bill removes the provision preventing
the district from paying interest during construction out of available
district funds three years after acceptance of the project (Sec. 49.155).

In any proceeding concerning the validity of the creation of a district or
the annexation of property by a district, a certificate of ownership as
certified by the central appraisal district of the county or counties in
which the property is located creates a presumption of ownership.  On
request by a district, the central appraisal district of the county or
counties in which the district is located is required to furnish
certificates of ownership and is authorized to charge reasonable recovery
fees (Sec. 49.184).  A charge or fee by a district concerning a tap or
connection to district water, sanitary sewer, or drainage facilities that
if made by a district for retail or wholesale service on land that at the
time of platting was not being provided with water or wastewater service by
the district is not an impact fee.  A district is authorized to pledge the
revenues of the district's utility system to pay the principal of or
interest on bonds issued to construct the  capital improvements for which a
fee was imposed, and money received from the fees is required to be
considered revenues of the district's utility system for purposes of the
district's bond covenants.  The bill sets forth exceptions to the
applicability of provisions regarding governmental action affecting private
property rights (Sec. 49.212).  A district or water supply corporation is
authorized to require a service applicant and a developer to grant a
permanent recorded easement which is not subject to assessments, charges,
fees, or dues imposed by a nonprofit organization.  A district or water
supply corporation is prohibited from requiring an applicant to provide an
easement for a service line for the sole benefit of another applicant (Sec.
49.218).   

The bill authorizes a district or wastewater supply corporation that
operates a wastewater collection system (system), by rule, to prohibit the
installation of private on-site wastewater holding or treatment facilities
on land within the district that is not served by the system.  A district
or corporation that has not received assistance for water supply and sewer
service projects in economically distressed areas is prohibited from
requiring a property owner who has already installed an on-site wastewater
holding or treatment facility to connect to the system.  The bill requires
a district that prohibits an installation to reimburse the owner of a
particular tract for the costs of connecting the tract to the system under
certain circumstances (Sec. 49.234).  The bill provides that the payment,
performance, and bid bonding requirements do not apply to a contract for
the purchase of equipment, materials, or machinery (equipment) not
otherwise incorporated into a construction project (Sec. 49.271).  If
changes in plans or specifications are necessary after the performance of a
construction or equipment contract is begun, the board is authorized to
approve orders making the changes.  The aggregate of the change orders is
prohibited from increasing the original contract price by more than 10
percent.  The bill provides that the board is not required to advertise or
seek competitive bids for the repair of district facilities if the extent
of the repair cannot be readily ascertained or does not lend itself to
competitive bidding, rather than if the cost of repair is less than or
equal to advertising requirements (Sec. 49.273).   

The bill sets forth provisions regarding the determination of a district's
prevailing wage rate (Sec. 49.279). The bill authorizes a district to add
or exclude land after a district is created and before a confirmation
election is held (Sec. 49.315).  The bill updates provisions relating to
the authority of the district's operation and maintenance of fire
departments regarding the issuance of bonds, the imposition of mandatory
fees, the purchase of land, employment contracts, an operation plan, public
hearings and posting, and voluntary contributions (Sec. 49.351). 

The bill authorizes a district to acquire recreational facilities and
obtain funds to develop and maintain them and to charge fees directly to
the users of recreational facilities and to water and wastewater customers
of the district for such purposes.  A district is prohibited from issuing
bonds supported by ad valorem taxes to pay for the development and
maintenance of recreational facilities (Secs. 49.461-49.464).  The bill
requires the board, by rule, to establish standards for the development and
maintenance of recreational facilities and for the allocation of a
district's funds for such (Sec. 49.465).   

The bill authorizes a water control and improvement district to adopt and
enforce reasonable rules and regulations to further the water control and
improvement district's purpose (Sec. 51.122).  The bill provides that a
person who violates a regulation adopted by a water control and improvement
district commits a Class C misdemeanor (Sec. 51. 221).  The bill removes
the provision providing that the tax assessor and collector is elected with
the supervisors of the fresh water supply district board (Sec. 53.021).  

The bill specifies that a municipal utility district (MUD) is authorized to
purchase and install street or security lighting within public utility
easements or public rights-of-way within the MUD's boundaries.  The bill
removes the provision that such street or security lighting facilities must
have been constructed by an owner or developer of property within such a
MUD and must have been required by a city as a condition to the city
granting its consent to the creation of the MUD.  The bill also specifies
that such a MUD is prohibited from issuing bonds supported by ad valorem
taxes to pay for the purchase, installation, and maintenance of street
security or lighting (Sec. 54.236).  The bill adds landscaping, parkways,
greenbelts, sidewalks, trails, public right-of-way beautification projects,
and associated street and security lighting to the definition of
"recreational facilities" in regard to MUDs (Sec. 54.772).  The bill
specifies that a MUD is prohibited  from issuing bonds supported by ad
valorem taxes to pay for the development and maintenance of recreational
facilities (Sec. 54.774).   

The bill also specifies that a levee improvement district is authorized to
adopt and enforce rules and regulations to further the district's purpose
(Sec. 57.093).  If a district contracts with a municipality to provide all
or part of the water or wastewater services to the municipality, the
municipality is authorized to issue bonds payable from the revenues of its
water and wastewater system to provide funds to make payments owed by the
municipality to the district under the contract (Sec. 402.0205, Local
Government Code).  A municipality, without an election, is authorized to
sell to a water district, a water or sewer system owned by the municipality
(Sec. 402.908, Local Government Code).  The bill validates and confirms the
creation of a district and acts by a district that are taken not more than
two years before the effective date of this Act (SECTION 36). The bill
repeals provisions regarding the ballot for election in a fresh water
supply district and permission to make a survey and the authority to enter
land in a levee improvement district (SECTION 37).    

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 1444 modifies the original to specify that provisions regarding
contract elections do not apply to contract taxes that are levied to pay
for bonds issued by a municipality (Sec. 49.108).  The substitute provides
that a charge or fee by a district concerning a tap or connection to
district water, sanitary sewer, or drainage facilities that if made by a
district for retail or wholesale service on land that at the time of
platting was not being provided with water by the district is not an impact
fee.  The substitute authorizes a district to pledge the revenues of the
district's utility system to pay the principal of or interest on bonds
issued to construct the capital improvements for which a fee was imposed,
and money received from the fees is required to be considered revenues of
the district's utility system for purposes of the district's bond covenants
(Sec. 49.212).  The substitute prohibits a district or water supply
corporation from requiring an applicant to provide an easement for a
service a service line for the sole benefit of another applicant (Sec.
49.218).   

The substitute authorizes a district or wastewater supply corporation that
operates a wastewater collection system (system), by rule,  to prohibit the
installation of private on-site wastewater holding or treatment facilities
on land within the district that is not served by the system.  The
substitute prohibits a district or corporation that has not received
assistance for water supply and sewer service projects in economically
distressed areas from requiring a property owner who has already installed
an on-site wastewater holding or treatment facility to connect to the
system.  The substitute requires a district that prohibits an installation
to reimburse the owner of a particular tract for the costs of connecting
the tract to the system under certain circumstances.  The substitute
removes the provision prohibiting a district from requiring a property
owner who has installed an on-site wastewater holding or treatment facility
before the creation of the district to connect to the district's sewer
system except in specified situations (Sec. 49.234).  The substitute
removes the provision that provisions regarding unclaimed property do not
apply to any personal property held by a district that has not been
dissolved by order of the Texas natural Resource Conservation Commission.
The substitute provides that if a district contracts with a municipality to
provide all or part of the water or wastewater services to municipality,
the municipality is authorized to issue bonds payable from the revenues of
its water and wastewater system to provide funds to make payments owed by
the municipality to the district under the contract (Sec. 402.0205, Local
Government Code).  The substitute specifies that "district, " in regard to
provisions relating to the general powers of a water district has the
meaning assigned under these same provisions (SECTION 36).