81R8875 NC-D
By: Watson S.B. No. 2023
A BILL TO BE ENTITLED
AN ACT
relating to the dissolution of certain municipal utility districts
that are located in more than one municipality.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 43, Local Government Code,
is amended by adding Section 43.0741 to read as follows:
Sec. 43.0741. ABOLITION AND ASSUMPTION OF FUNCTIONS OF
MUNICIPAL UTILITY DISTRICT LOCATED IN MORE THAN ONE MUNICIPALITY.
(a) This section applies only to a home-rule municipality with a
population of less than 20,000:
(1) in which is located part of a municipal utility
district organized for the primary purpose of providing municipal
functions such as supplying fresh water for domestic or commercial
uses or furnishing sanitary sewer service; and
(2) the governing body of which adopts, by a majority
vote of its entire membership, an ordinance under Subsection (e).
(b) This section applies only if:
(1) the municipal utility district described by
Subsection (a)(1) has territory located in more than one
municipality;
(2) at least 80 percent of the territory of the
municipal utility district is located in the corporate limits and
extraterritorial jurisdiction of a municipality described by
Subsection (a); and
(3) no more than 100 retail customers of the municipal
utility district are located outside the corporate limits of the
municipality described by Subsection (a).
(c) The governing body of a municipality may not adopt an
ordinance described by Subsection (e) until the municipality:
(1) prepares a report estimating the cost to provide
water and wastewater service to the municipal utility district's
customers, including an analysis of:
(A) the effect the elimination of the municipal
utility district tax would have on the revenues required to operate
and maintain the water and wastewater system and services;
(B) the manner in which the municipal utility
district's tax revenue would be replaced;
(C) whether tax revenue is required for the
provision of service; and
(D) the effect the elimination of the municipal
utility district tax would have on the fees and charges paid by the
water and sewer customers of the district;
(2) on completion of the report described by
Subdivision (1), posts the report on the municipality's Internet
website; and
(3) on or before the 15th day before the date the
governing body considers an ordinance described by Subsection (e),
holds a public hearing regarding the report described by
Subdivision (1) at which any member of the public is allowed to
appear to present evidence or comments regarding the report.
(d) On or before the 10th day before the date of the public
hearing under Subsection (c)(3), the governing body of the
municipality must publish notice of the hearing, including the
date, time, and location of the hearing, in a newspaper of general
circulation in the municipality and mail notice of the hearing to
the president or general manager of the municipal utility district.
(e) The governing body of a municipality may adopt an
ordinance that provides a date on which the municipality will:
(1) take over all the property and other assets of the
municipal utility district described by Subsection (a)(1);
(2) assume all the debts, liabilities, and obligations
of the municipal utility district described by Subsection (a)(1);
and
(3) perform all the functions of the municipal utility
district described by Subsection (a)(1), including the provision of
services.
(f) After the adoption of an ordinance described by
Subsection (e) and on the date provided in the ordinance, the
municipal utility district is abolished and the municipality
succeeds to the powers, duties, assets, and obligations of the
municipal utility district as provided by this section.
(g) Nothing in this section requires a municipality to annex
any territory of the municipal utility district that is located
outside the corporate limits of the municipality for the
municipality to assume the responsibilities, obligations, and
assets of the municipal utility district as provided by this
section. If the municipality proposes to annex any of the municipal
utility district territory outside the corporate limits of the
municipality:
(1) the annexation provisions of Subchapter C apply;
and
(2) the municipality shall provide notice in the
manner provided by Section 43.052(f) to each affected customer that
includes a cost-of-service analysis and discloses any potential
rate and tax implications that would result from the annexation.
(h) For the areas in the municipal utility district that are
located outside the corporate limits or extraterritorial
jurisdiction of a municipality and in which the district has
facilities or customers, the municipality, on the date it assumes
the functions of the municipal utility district, shall continue to
provide services to those customers at the same level of service
provided to the customers located inside the corporate limits of
the municipality. The municipality may enter into an interlocal
agreement with another political subdivision for the other
political subdivision to provide services to customers and to
maintain facilities not located inside the corporate limits or
extraterritorial jurisdiction of the municipality.
(i) If the municipal utility district has outstanding
bonds, warrants, or other obligations, the municipality shall
assume those liabilities in accordance with this subsection. The
governing body of the municipality may issue refunding bonds or
warrants in its own name to refund the municipal utility district's
outstanding bonds, warrants, or other obligations, including
unpaid earned interest on the obligation, that are assumed by the
municipality. The municipality may pledge the net revenues or
property of the utility system or municipal property taxes to the
payment of the outstanding bonds, warrants, or other obligations
and refunding bonds or warrants as the governing body considers
proper.
SECTION 2. 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, 2009.