82R4379 SLB-F
By: Larson H.B. No. 1007
A BILL TO BE ENTITLED
AN ACT
relating to the appointment of a conservator for and authorizing
the dissolution of the Bexar Metropolitan Water District.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1, Chapter 306, Acts of the 49th
Legislature, Regular Session, 1945, is amended to read as follows:
Sec. 1. In obedience to the provisions of Article 16,
Section 59 of the Constitution of Texas, there is hereby created
Bexar Metropolitan Water District. [, hereinafter in this Act
sometimes called the "District."]
SECTION 2. Chapter 306, Acts of the 49th Legislature,
Regular Session, 1945, is amended by adding Sections 1A, 34, 35, 36,
37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 to read as follows:
Sec. 1A. In this Act:
(1) "Board" means the District's Board of Directors.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Director" means a Board member.
(4) "District" means the Bexar Metropolitan Water
District.
(5) "System" means a water utility owned by a
municipality with a population of more than one million that
includes portions of the Edwards and Trinity Aquifers.
Sec. 34. (a) The Commission shall appoint as conservator
for the District an individual who, at the time of the individual's
appointment:
(1) has demonstrated a high level of expertise in
water utility management;
(2) is not a Director; and
(3) has no financial interest in the District or any
entity that has a contract with the District or that is likely to
develop a contractual relationship with the District.
(b) The conservator's term expires on the earlier of:
(1) the date the conservatorship for which the
conservator is appointed dissolves under Section 39; or
(2) the date the Commission, in consultation with the
System, determines that the duties of the conservator under this
Act have been discharged.
Sec. 35. (a) A conservator appointed under Section 34 is
entitled to receive a salary for performing those duties.
(b) The District shall pay the compensation of the
conservator.
Sec. 36. (a) A conservator appointed under Section 34 is
entitled to reimbursement of the reasonable and necessary expenses
incurred by the conservator in the course of performing duties
under this Act.
(b) The District shall pay any reasonable and necessary
expenses incurred by the conservator.
Sec. 37. (a) The conservator shall advise the Board on
matters relating to the District's rehabilitation. The Board shall
work cooperatively with the conservator to improve the Board's
ability to manage and operate the District in a professional
manner.
(b) The conservator shall:
(1) complete an inventory of and evaluate each
distinct water system in the District to determine:
(A) the District's infrastructure associated
with that water system;
(B) the District's bonded debt and commercial
paper reasonably associated with or allocable to the infrastructure
in that water system; and
(C) the adequacy of the water supply sources,
water storage facilities, distribution systems, and related
infrastructure located in that water system's service area to
supply current and projected demands in that service area;
(2) identify any District assets whose sale or
transfer to another appropriate public water utility would be
likely to improve:
(A) service to the former District customers who
would be served by that utility; or
(B) the District's overall efficiency;
(3) compile a list and copies of existing contracts to
which the District is a party, including for each contract:
(A) effective and termination dates;
(B) general scope of the goods and services
involved;
(C) obligations of the District, including
financial obligations; and
(D) general benefit to the District; and
(4) develop a comprehensive rehabilitation plan for
the District that:
(A) identifies strategies for restoring the
District's financial integrity and developing a system of sound
financial management;
(B) describes a standard of ethics,
professionalism, and openness expected of each Director and
employee of the District;
(C) provides a mechanism to enforce compliance
with District policies, including procurement policies;
(D) identifies ways to enhance the District's
operational efficiency and improve the District's provision of
redundancy in water services; and
(E) provides for educating the Board and
management personnel on improving management practices and
complying with District policy and state and federal laws and
regulations.
Sec. 38. The conservator shall report to the Commission and
the Bexar Metropolitan Water District Oversight Committee
regularly on the progress the conservator has made in carrying out
the duties under Section 37.
Sec. 39. (a) If a majority of the votes in an election held
under Section 40 do not favor dissolution, and the conservator
reports to the Commission that the District has been sufficiently
rehabilitated to provide reliable, cost-effective, quality service
to its customers, the Commission shall evaluate the condition of
the District and determine whether:
(1) the District has been sufficiently rehabilitated
to enable the District to provide reliable, cost-effective, quality
service to its customers; and
(2) the conservatorship is no longer necessary.
(b) After an evaluation under Subsection (a), the
Commission may issue an order dissolving the conservatorship if the
Commission determines that the District has been sufficiently
rehabilitated and the conservatorship is no longer necessary.
(c) The Commission may not dissolve the conservatorship
before an election is held under Section 40.
Sec. 40. (a) On the next uniform election date following
the 60th day after the date of preclearance under Section 5 of the
federal Voting Rights Act of 1965 (42 U.S.C. Section 1973c) of all
provisions of the Act enacting this section that are subject to that
preclearance, the Commission shall hold an election in the District
on the question of dissolving the District and disposing of the
District's assets and obligations. If the Commission determines
that preclearance under Section 5 of the federal Voting Rights Act
of 1965 is not required, the Commission shall hold the election on
the next uniform election date that falls at least 60 days after the
date the Commission makes that determination.
(b) The order calling the election must state:
(1) the nature of the election, including the
proposition to appear on the ballot;
(2) the date of the election;
(3) the hours during which the polls will be open; and
(4) the location of the polling places.
(c) The Commission shall give notice of an election under
this section by publishing once a week for two consecutive weeks a
substantial copy of the election order in a newspaper with general
circulation in the District. The first publication of the notice
must appear not later than the 35th day before the date of the
election.
(d) The ballot for an election under this section must be
printed to permit voting for or against the proposition: "The
dissolution of the Bexar Metropolitan Water District and the
transfer of all the District's assets, liabilities, and duties to
the water utility of the municipality with the largest population
in the area formerly served by the District."
Sec. 41. (a) If a majority of the votes in the election held
under Section 40 favor dissolution, the term of each person who is
serving as a Director of the District on the date of the canvass of
the election expires on that date.
(b) Under the Commission's oversight, the conservator shall
transfer or assign to the System the:
(1) rights and duties of the District associated with
the provision of water services, including existing contracts,
assets, and liabilities of the District; and
(2) files and records of the District that pertain to
the control, management, and operation of the District.
(c) After the conservator has transferred the property,
assets, and liabilities as prescribed by this section, the
conservator shall file a written report with the Commission
summarizing the conservator's actions in dissolving the District.
(d) Not later than the 10th day after the date the
Commission receives the report and determines that the requirements
of this section have been fulfilled, the Commission shall enter an
order dissolving the District and releasing the conservator from
any further duty or obligation.
Sec. 42. If the majority of votes favor dissolution in an
election held under Section 40, this Act expires on the second
anniversary of the date the Commission enters an order dissolving
the District.
Sec. 43. (a) If a majority of the votes in an election held
under Section 40 do not favor dissolution, the conservator
appointed under Section 34 continues to serve until the
conservatorship is dissolved under Section 39.
(b) The Commission may order the District to implement any
part of the rehabilitation plan developed under Section 37.
Sec. 44. (a) The System may integrate the services and
infrastructure of the District into the System.
(b) The System may operate the former District as a special
project under the System's existing senior lien revenue bond
ordinances. All the obligations and liabilities of the former
District and new obligations of the System entered into for the
benefit of the former District ratepayers are payable from revenue
derived from the operation of the special project and not payable
from revenue of the System.
(c) Once the conservator has transferred the assets,
liabilities, and duties to the System, the System shall provide
affordable and reliable water services to the former ratepayers of
the District.
Sec. 45. (a) For a 24-month period following the transfer
of the employment of any employee of the former District, the System
may not terminate that employee, except for cause, if the employee:
(1) is vested in the retirement program of the
District on the effective date of the Act enacting this section; and
(2) earns an annual base salary of less than $50,000 on
the effective date of the Act enacting this section.
(b) An employee who qualifies under Subsection (a) and who
is terminated by the System has the same opportunity for appeal as a
person employed by the System who is not an employee of the former
District.
(c) The System is not required to employ an employee of the
District if that person was formerly terminated from, or resigned
in lieu of termination from the System.
Sec. 46. From the effective date of the Act enacting this
section until the date election results under Section 40 are
certified to the Secretary of State, the attorney general may not
approve any public security, as defined by Chapter 1201, Government
Code, of the District unless:
(1) the Commission consents in writing before
approval; or
(2) the District provides written evidence that
issuing the public security represents a refunding of outstanding
debt for the purpose of realizing debt service savings in each year
that outstanding obligations are refunded and that results in a
cumulative net present value savings of three percent compared to
refunded debt service.
Sec. 47. (a) From the effective date of the Act enacting
this section until the date election results under Section 40 are
certified to the Secretary of State, a contract to which the
District is a party must include a provision that the contract is
subject to:
(1) review by the System; and
(2) termination, including the termination of all
rights, duties, obligations, and liabilities of the District or the
System under the contract, if the contract is assumed by the System.
(b) A person is not entitled to compensation for loss or
other damages resulting from the termination of the contract under
Subsection (a)(2).
SECTION 3. Not later than the 60th day after the effective
date of this Act, the Texas Commission on Environmental Quality
shall appoint a conservator for the Bexar Metropolitan Water
District as required by Section 34, Chapter 306, Acts of the 49th
Legislature, Regular Session, 1945, as added by this Act.
SECTION 4. (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 5. 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, 2011.