2023S0103-1 02/07/23
By: Hinojosa S.B. No. 1830
A BILL TO BE ENTITLED
AN ACT
relating to the dissolution of certain water districts located in
urban areas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 49.321, Water Code, is amended to read as
follows:
Sec. 49.321. DISSOLUTION AUTHORITY. After notice and
hearing, the commission may dissolve:
(1) any district that is inactive for a period of five
consecutive years and has no outstanding bonded indebtedness; or
(2) an urban area district:
(A) that is located entirely in a county having a
population of more than 400,000;
(B) that, without consideration of the exclusion
of land from inside the district, has 70 percent or more of the
district's area within the corporate limits or extraterritorial
jurisdiction of a municipality, as shown by the most recent tax
rolls of the central appraisal district of the county;
(C) in which the services furnished and functions
performed by the district can be furnished and performed by a
municipality in the district;
(D) that was created or organized under general
law before 1971 for the principal purpose of supplying raw,
untreated, or nonpotable water for irrigation or farming purposes
to agricultural lands within its boundaries; and
(E) that either:
(i) generates more than 70 percent of the
district's operating revenue from a municipality for the supply or
delivery of raw water used for municipal purposes, as shown by the
district's most recent annual financial audit report; or
(ii) generates less than 15 percent of the
district's operating revenue from raw, untreated, or nonpotable
water sales and the flat rate assessment collected from
nonmunicipal customers, as shown by the district's most recent
annual financial audit report.
SECTION 2. Subchapter K, Chapter 49, Water Code, is amended
by adding Section 49.3245 to read as follows:
Sec. 49.3245. DISSOLUTION OF CERTAIN URBAN AREA DISTRICTS.
(a) The commission shall give notice of the dissolution hearing as
required under Section 49.322 if the commission:
(1) determines that the proposed dissolution is for an
urban area district as described under Section 49.321(2);
(2) receives from a municipality a petition calling
for the dissolution of the urban area district, which must be signed
by 20 percent of qualified voters, as defined by Section 11.002,
Election Code, residing within the municipality and the district,
without consideration of any exclusion of land from inside the
district; and
(3) receives from a municipality an ordinance that
meets the requirements under Subsection (b).
(b) The commission may enter an order dissolving an urban
area district at the conclusion of the hearing if:
(1) the commission finds that the district is no
longer needed because the services and functions of the district
can be furnished and performed by a municipality within the
district;
(2) the governing body of the municipality, by a
two-thirds vote, adopts an ordinance stating that the municipality
will assume the assets, debts, contractual rights, and any other
obligation of the district upon dissolution of the district; and
(3) the governing body of the municipality prepares a
plan of succession as provided by Sections 43.075(c)-(l), Local
Government Code, for the uninterrupted provision of services.
(c) An ordinance adopted under Subsection (b)(2) must
contain provisions that:
(1) eliminate the required payment of any flat tax or
assessments paid to the district by landowners in the district;
(2) ensure that all water rights are held in trust by
the city for the uses previously adjudicated;
(3) ensure that all individual water users are
entitled to continue to use or have access to the same amount of
water they were entitled to before the dissolution of the district;
(4) require the city to perform all the functions of
the district, including the provision of services; and
(5) ensure delivery of water to landowners at or below
the lowest comparable delivery charge imposed by any other
irrigation district in the county in which the district is located.
SECTION 3. Section 49.326(b), Water Code, is amended to
read as follows:
(b) The trial on appeal shall be de novo and the substantial
evidence rule shall not apply. This subsection does not apply to a
district dissolved under Section 49.3245.
SECTION 4. Section 49.327, Water Code, is amended to read as
follows:
Sec. 49.327. ASSETS ESCHEAT TO STATE. Upon the dissolution
of a district by the commission, except as provided by Section
49.3245, all assets of the district shall escheat to the State of
Texas. The assets shall be administered by the comptroller and
shall be disposed of in the manner provided by Chapter 74, Property
Code.
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, 2023.