Texas 2023 - 88th Regular

Texas Senate Bill SB1848 Compare Versions

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1	1	2023S0157-1 02/15/23
2	2	By: Hinojosa S.B. No. 1848
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the dissolution by election of certain urban area water
8	8	control and improvement districts.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 51, Water Code, is amended by adding
11	11	Subchapter S to read as follows:
12	12	SUBCHAPTER S. DISSOLUTION OF CERTAIN URBAN AREA DISTRICTS
13	13	Sec. 51.901. DEFINITION. In this subchapter, "primary
14	14	petitioner" means a person who submits a petition for the
15	15	dissolution of a district.
16	16	Sec. 51.902. DISSOLUTION BY ELECTION. (a) A board shall
17	17	order an election on the question of dissolving the district if:
18	18	(1) the board receives a petition for the dissolution
19	19	of the district in accordance with Section 51.830;
20	20	(2) the board receives an ordinance adopted by the
21	21	governing body of the municipality within the district's boundaries
22	22	supporting the petition and stating that the municipality is both
23	23	capable of performing and willing to perform the services and
24	24	functions of the district; and
25	25	(3) the district meets the following criteria of an
26	26	urban area district:
27	27	(A) the district is located entirely in a county
28	28	with a population of more than 400,000;
29	29	(B) the district has 70 percent or more of its
30	30	territory within the corporate limits or extraterritorial
31	31	jurisdiction of a municipality, as shown by the most recent tax
32	32	rolls of the central appraisal district of the county;
33	33	(C) the district performs services and functions
34	34	that a municipality within the district's boundaries is both
35	35	capable of performing and willing to perform;
36	36	(D) the district was created or organized before
37	37	1971 under general law enacted in 1904, 1913, 1917, 1918, or 1925
38	38	for the principal purpose of supplying or the delivery of raw,
39	39	untreated, or nonpotable water for irrigation or farming purposes;
40	40	and
41	41	(E) the district either:
42	42	(i) generates more than 70 percent of the
43	43	district's operating revenue from a municipality for supplying or
44	44	the delivery of raw water used for municipal purposes, as shown by
45	45	the district's most recent financial audit report; or
46	46	(ii) generates less than 15 percent of the
47	47	district's operating revenue from raw, untreated, or nonpotable
48	48	water sales and a flat rate assessment collected from nonmunicipal
49	49	customers, as shown by the district's most recent annual financial
50	50	audit report.
51	51	(b) After the board receives a petition that meets the
52	52	requirements of Section 51.903, the district may not:
53	53	(1) sell, transfer, or encumber a district asset;
54	54	(2) issue debt or acquire an additional obligation;
55	55	(3) default on or fail to honor a financial, legal, or
56	56	other obligation of the district;
57	57	(4) fail to keep an asset of the district in a
58	58	condition of good repair; or
59	59	(5) fail to preserve district records, including
60	60	information maintained by the district in an electronic format.
61	61	(c) A district action that is in violation of Subsection
62	62	(b)(1), (2), or (3) is void.
63	63	Sec. 51.903. REQUIREMENTS FOR PETITION TO DISSOLVE
64	64	DISTRICT. A petition for an election to dissolve a district under
65	65	Section 51.902(a)(1) must:
66	66	(1) be signed by:
67	67	(A) the owners of a majority of the assessed
68	68	value of the real property in the district, as shown by the most
69	69	recent certified county property tax rolls; or
70	70	(B) 20 percent of the qualified voters, as
71	71	defined by Section 11.002, Election Code, residing within the
72	72	district, without consideration of any exclusion of land from
73	73	inside the district;
74	74	(2) include with each signature:
75	75	(A) the date on which the person signed the
76	76	petition; and
77	77	(B) the person's place of residence;
78	78	(3) be filed with the county clerk of the county in
79	79	which the district is located; and
80	80	(4) be filed with the municipality within the
81	81	district's boundaries or, if the district is located in more than
82	82	one municipality, the municipality in which most of the district is
83	83	located.
84	84	Sec. 51.904. EXAMINATION OF PETITION TO DISSOLVE DISTRICT.
85	85	(a) The county clerk, in consultation with the district attorney
86	86	and the county tax assessor-collector, shall examine a petition
87	87	submitted under Section 51.902(a)(1).
88	88	(b) Not more than 30 days after the petition is submitted,
89	89	the county clerk shall determine whether the petition conforms to
90	90	the petition requirements under Section 51.903.
91	91	(c) If the petition meets the petition requirements under
92	92	Section 51.903, the county clerk shall certify the petition and
93	93	send it electronically to the district secretary and the primary
94	94	petitioner.
95	95	(d) If the petition does not meet the petition requirements
96	96	under Section 51.903, the county clerk shall notify the primary
97	97	petitioner of the reasons for the rejection of the petition. The
98	98	primary petitioner may amend the petition to correct the
99	99	deficiencies for which the petition was rejected and resubmit the
100	100	petition to the board and the county clerk.
101	101	Sec. 51.905. PROCEDURE FOR HOLDING ELECTION. (a) An
102	102	election to determine whether a district will be dissolved must be
103	103	held in accordance with this subchapter. The election must be held
104	104	within the shared boundaries of the territory of the district and
105	105	the municipality described in Section 51.902(a)(2) to determine if
106	106	the eligible voters within those boundaries support the district's
107	107	dissolution and the transfer of the district's assets, debts,
108	108	contractual rights, and other obligations to the municipality. The
109	109	boundaries shall not take into consideration any exclusion of land
110	110	from inside the district when determining the district's territory.
111	111	(b) To be eligible to vote in an election to dissolve the
112	112	district, a person must be a qualified voter, as defined by Section
113	113	11.002, Election Code, residing within the shared boundaries of
114	114	both the district and the municipality described in Section
115	115	51.902(a)(2).
116	116	(c) The ballots for the election shall be printed to provide
117	117	for voting for or against the proposition to dissolve the district
118	118	and to transfer all district assets, debts, contractual rights, and
119	119	other obligations to the municipality.
120	120	(d) Notwithstanding Section 41.001(d), Election Code, on
121	121	request of the primary petitioner, the board shall contract with
122	122	the county elections administrator as provided by Subchapter D,
123	123	Chapter 31, Election Code, to perform all duties and functions of
124	124	the district in relation to an election for the dissolution of the
125	125	district.
126	126	(e) If the primary petitioner requests that the board
127	127	contract with the county elections administrator, the primary
128	128	petitioner must deposit with the board an amount estimated to cover
129	129	expenses in accordance with a cost schedule agreed on by the board
130	130	and county elections administrator. The primary petitioner must
131	131	make the deposit not later than the 10th day after the date the
132	132	primary petitioner receives a copy of the executed contract from
133	133	the board.
134	134	Sec. 51.906. HEARING; FINDINGS OF FACT. (a) Not later than
135	135	the 10th day after the date the board receives a certified petition,
136	136	the board shall publish notice of the hearing in accordance with
137	137	Section 51.782. The notice must include notice to creditors of the
138	138	district to present claims owed by the district to the board before
139	139	the date set for the dissolution hearing.
140	140	(b) Not later than the 10th day after the date the board
141	141	receives a certified petition, the primary petitioner shall deposit
142	142	with the board an amount estimated to cover the actual cost of
143	143	giving notice and holding the hearing.
144	144	(c) Not later than the 40th day after the date the board
145	145	receives a certified petition, the board shall conduct a hearing
146	146	for the purpose of soliciting oral or written public comment in
147	147	accordance with Section 51.783.
148	148	(d) The board shall make findings of fact regarding the
149	149	dissolution of the district, including:
150	150	(1) a description of each parcel of real property
151	151	owned by the district and interest in real property owned by the
152	152	district and, if the property was acquired for delinquent taxes or
153	153	assessments, the amount of such taxes and assessments on each
154	154	parcel of property;
155	155	(2) the amount of each outstanding bond or other
156	156	indebtedness of the district and the contractual obligation of the
157	157	district, with the name of the holder and owner of each and a
158	158	general description of the bond, other indebtedness, or contractual
159	159	obligation;
160	160	(3) the amount of uncollected taxes, assessments, and
161	161	charges levied by the district and the amount levied on each lot or
162	162	tract of land;
163	163	(4) a description of the personal property and all
164	164	other assets of the district; and
165	165	(5) the estimated cost of dissolution.
166	166	(e) Not later than 30 days after the dissolution hearing,
167	167	the board shall file its findings of fact with the county clerk.
168	168	Not later than 48 hours after the filing, the county clerk shall
169	169	provide a copy to the governing body of the municipality described
170	170	by Section 51.903(4). The board shall make the findings of fact
171	171	available for inspection by the public.
172	172	Sec. 51.907. MUNICIPAL ORDINANCE REQUIRED. (a) The board
173	173	may not adopt an election order to dissolve the district unless, not
174	174	later than 60 days after receiving a copy of the filing described by
175	175	Section 51.906(e), the governing body of the municipality adopts an
176	176	ordinance by a two-thirds vote stating that the municipality will
177	177	assume the assets, debts, contractual rights, and any other
178	178	obligation of the district upon dissolution of the district. The
179	179	municipality must submit a copy of the adopted ordinance to the
180	180	district.
181	181	(b) The governing body of a municipality that adopts an
182	182	ordinance under Subsection (a) shall prepare a plan of succession
183	183	as provided by Sections 43.075(c)-(l), Local Government Code, for
184	184	the uninterrupted provision of services.
185	185	(c) An ordinance adopted under Subsection (a) must contain
186	186	provisions that:
187	187	(1) eliminate the required payment of any flat tax or
188	188	assessments paid to the district by landowners in the district;
189	189	(2) ensure that all water rights are held in trust by
190	190	the municipality for the uses previously adjudicated;
191	191	(3) ensure that all individual water users are
192	192	entitled to continue to use or have access to the same amount of
193	193	water they were entitled to before the dissolution of the district;
194	194	(4) require the municipality to perform all the
195	195	functions of the district, including the provision of services; and
196	196	(5) ensure delivery of water to landowners at or below
197	197	the lowest comparable delivery charge imposed by any irrigation
198	198	district in the county in which the district is located.
199	199	Sec. 51.908. MUNICIPAL APPROVAL; ELECTION ORDER. (a) Not
200	200	later than 10 days after the municipality sends a copy of the
201	201	ordinance adopted under Section 51.907(a) to the board, the board
202	202	shall order an election on the question of dissolving the district
203	203	and, if applicable, of transferring the district's assets and
204	204	obligations to the municipality in accordance with the ordinance.
205	205	(b) An order calling an election to be held under this
206	206	section must:
207	207	(1) state the nature of the election and include the
208	208	proposition that is to appear on the ballot;
209	209	(2) provide the date of the election;
210	210	(3) provide the hours during which the polls will be
211	211	open;
212	212	(4) provide the location of the polling places;
213	213	(5) provide a statement of the functions performed by
214	214	the district;
215	215	(6) provide a summary of the plan for dissolution;
216	216	(7) state the district's current water rate and the
217	217	date on which the district adopted the rate; and
218	218	(8) state the most recent district tax rate.
219	219	Sec. 51.909. NOTICE OF DISSOLUTION ELECTION. (a) The board
220	220	shall give notice of an election ordered under Section 51.908 by:
221	221	(1) publishing a substantial copy of the election
222	222	order in a newspaper with general circulation in the district once a
223	223	week for two consecutive weeks; and
224	224	(2) if the district maintains an Internet website,
225	225	posting a substantial copy of the election order on the district's
226	226	Internet website.
227	227	(b) The first publication under Subsection (a)(1) must
228	228	appear not later than the 30th day before the date set for the
229	229	election.
230	230	Sec. 51.910. ELECTION DATE. An election under this
231	231	subchapter shall be held on the next practicable uniform election
232	232	date prescribed by Section 41.001, Election Code, but in no event
233	233	later than the 365th day after the date on which the board adopted
234	234	the election order.
235	235	Sec. 51.911. ELECTION RESULTS. (a) The returns of the
236	236	election shall be canvassed and the result declared by the county
237	237	elections administrator contracted to administer the election held
238	238	under Section 51.905.
239	239	(b) If a majority of the votes in an election held under
240	240	Section 51.905 favor dissolution, the board shall order that the
241	241	district be dissolved and shall comply with Section 51.912. The
242	242	board shall enter an order in its minutes declaring the result of
243	243	the election.
244	244	(c) If a majority of the votes in an election held under this
245	245	subchapter do not favor dissolution, the board shall continue to
246	246	administer the district, and another election on the question of
247	247	dissolution may not be held before the first anniversary of the date
248	248	of the most recent election held on the question of dissolving the
249	249	district.
250	250	(d) The order under Subsection (b) shall be filed in the
251	251	office of the county clerk of the county in which the district is
252	252	situated and recorded in the deed records.
253	253	Sec. 51.912. TRANSFER OF ASSETS, OBLIGATIONS, AND PROVISION
254	254	OF SERVICES. (a) Following the issuance of an order under Section
255	255	51.911, the board shall:
256	256	(1) not later than the 10th day after the date the
257	257	order was issued, make arrangements for the uninterrupted provision
258	258	of services;
259	259	(2) not later than the 30th day after the date the
260	260	order was issued, notify the commission of the dissolution
261	261	election;
262	262	(3) not later than the 180th day after the date the
263	263	order was issued:
264	264	(A) transfer the ownership of any water rights
265	265	and certificates of adjudication to the municipality; and
266	266	(B) transfer the assets, debts, contractual
267	267	rights, and other obligations of the district to the municipality;
268	268	(4) provide the district's management and operational
269	269	records to the municipality; and
270	270	(5) provide notice and make recordings of transfers
271	271	under this subsection as required by law.
272	272	(b) The municipality shall notify the commission regarding
273	273	any transfer of a certificate of adjudication held by the district
274	274	to the municipality.
275	275	(c) Not later than the 45th day after the date the
276	276	commission receives the notification under Subsection (a)(2) and
277	277	determines that the requirements of this subchapter have been
278	278	fulfilled, the commission shall enter an order dissolving the
279	279	district.
280	280	(d) The transfer of a district's water rights and any
281	281	certificate of adjudication to a municipality does not affect the
282	282	priority, extent, validity, or purpose of a water right or
283	283	certificate.
284	284	Sec. 51.913. RECEIVER. (a) If the district fails to comply
285	285	with Section 51.912, the executive director shall request that the
286	286	attorney general bring suit for the appointment of a receiver.
287	287	(b) If the attorney general brings suit for the appointment
288	288	of a receiver under Subsection (a), a district court shall appoint a
289	289	receiver if the court finds the appointment is necessary for the
290	290	transfer of the assets and obligations of the district.
291	291	(c) The receiver shall execute a bond in the amount set by
292	292	the court to ensure the proper performance of the receiver's
293	293	duties.
294	294	(d) After execution of the bond, the receiver shall take
295	295	possession of the assets specified by the court.
296	296	(e) Until discharged by the court, the receiver shall
297	297	perform the duties as directed by the court to preserve the assets
298	298	and ensure that district assets and obligations are transferred.
299	299	SECTION 2. This Act takes effect September 1, 2023.