Office of House Bill AnalysisH.B. 3738
By: Eiland
Natural Resources


The Texas Constitution provides for the creation of certain conservation
and reclamation districts. H.B. 3738 provides for the creation of coastal
county conservation districts (districts) in counties that border the Gulf
of Mexico and that have a beach parks board; sets forth petition, hearing,
and notice procedures for the creation of a district; and provides for the
apportionment of costs for improvement projects or services based on
benefits accrued to specific property.     


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. 


SECTION 1.  SHORT TITLE.  Authorizes that this Act be cited as the Coastal
County Conservation District act (Act). 

findings and purposes of the Act. 

SECTION 3.  CONSTRUCTION OF ACT.  Sets forth construction of the Act.

SECTION 4.  DEFINITIONS.  Defines "board" as the board of directors of a
district.  Defines "bond."  Defines "commission" as the Texas Natural
Resource Conservation Commission (TNRCC). Defines "county" as the governing
body of an eligible coastal county.  Defines "district" as a conservation
management district created under this Act.  Defines "eligible coastal
county" as a county that borders the Gulf of Mexico and has a beach parks

SECTION 5. GOVERNMENTAL AGENCY; TORT CLAIMS.  Provides that a district is a
governmental agency, a body politic and corporate, and a political
subdivision of the state. Provides that a district is a unit of government
for purposes of Chapter 101 (Texas Tort Claims Act), Civil Practice and
Remedies Code, and operations of a district are considered to be essential
governmental functions and not proprietary functions for all purposes,
including the application of the Texas Tort Claims Act.  

creation of a district only in an eligible coastal county.  

SECTION 7. PETITION.  Authorizes the creation of a district only after the
county receives a petition requesting one.  Sets forth the requirements of
the petition. 
SECTION 8. COUNTY HEARING; NOTICE.  Requires the county or a person
authorized by the county to set a date, time, and place for a hearing to
consider each petition received.  Requires  the county or authorized person
to issue a notice of the date, time, and place of hearing.  
SECTION 9. PUBLICATION OF NOTICE. (a)  Requires the county or authorized
person to publish notice of the hearing in a newspaper of general
circulation in the county in which the proposed  district is located.
Provides that the publication must occur not later than the 31st day before
the date on which the hearing will be held.  Requires the petitioner, not
later than the 30th day before the date of the hearing, to send the notice
of the hearing by certified mail to each person who owns real property in
the proposed district, according to the most recent certified county
property tax rolls, other than a property owner who signed the petition for
creation.  Requires the tax assessor and collector to certify from the tax
rolls ownership of property on the date the petition is filed with the
SECTION 10. HEARING.   Requires the county, at a hearing set under this
Act, to examine the petition to determine its sufficiency.  Authorizes any
interested person to appear before the county and offer testimony.
Provides that the county has jurisdiction to determine each issue relating
to the creation of the district.  Requires the county, if after the hearing
it finds that the district is feasible and necessary and would be a benefit
to all or any part of the land proposed to be included in the district and
the public, to grant the petition.  Authorizes the county to create the
district over only a portion of the area described in the petition.  
SECTION 11. ORDER; INITIAL DIRECTORS. Requires the county, if it grants the
petition, in the order creating the district to appoint the initial
SECTION 12. BOUNDARIES. Provides that the boundaries of a district are as
prescribed by the county order creating the district.  Authorizes the
county to issue a subsequent order changing the boundaries of the district.
SECTION 13. ANNEXATION.  Authorizes a  district to annex land as provided
by Chapter 49 (Provisions Applicable to All Districts), Water Code, subject
to the approval of the county.  
SECTION 14. EXCLUDING TERRITORY.  Authorizes the board on its own motion,
at any time during which a district does not have outstanding bonds, to
call a hearing on the question of the exclusion of land from the district
in the manner provided by Chapter 49, Water Code, if the exclusions are
practicable, just, or desirable.  Requires the board to call a hearing on
the exclusion of land or other property from the district if a landowner or
property owner in the district files with the secretary of the board a
written petition requesting the hearing before the issuance of bonds.  
SECTION 15. NUMBER OF DIRECTORS; TERMS. Provides that a district is
governed by a board of seven directors who serve staggered four-year terms.
SECTION 16. TERMS OF INITIAL DIRECTORS. Requires that the initial directors
be divided into one group of four directors and one group of three
directors; the group of four directors serves fouryear terms, and the group
of three directors serves two-year terms. Requires that the grouping of
initial directors and terms for the directors in each group be determined
by the county.  
SECTION 17. QUALIFICATIONS OF DIRECTOR. Provides that a person, to be
qualified to serve as a director, must be at least 18 years old and a
resident of the district or an owner of property in the district. 
SECTION 18. APPOINTMENT OF DIRECTORS. Requires that the initial and each
succeeding members of the board of directors be appointed by the county.
Authorizes board members to serve successive terms.  
SECTION 19. REMOVAL OF DIRECTOR. Authorizes the county, after notice and
hearing, to remove a director for misconduct or failure to carry out the
director's duties on petition by a majority of the remaining directors.  
SECTION 20. BOARD VACANCY. Requires that a vacancy in the office of
director be filled by the remaining members of the board for the unexpired
SECTION 21. DIRECTOR'S BOND AND OATH. (a)  Requires a director,  as soon as
practicable after the director is appointed, to execute a $10,000 bond
payable to the district and conditioned on the faithful performance of the
director's duties. Provides that each director's bond must be approved  by
the board, and requires each director to take the oath of office prescribed
by the constitution for public officers.  Requires that the bond and oath
be filed with the district and retained in its records.  
SECTION 22. OFFICERS. Requires the directors, after they are appointed and
have qualified by executing a bond and taking the oath, to organize by
electing a president, a vice-president, a secretary, and any other officers
the board considers necessary.  
a director, in accordance with Section 49.060 (Fees of Office;
Reimbursement), Water Code,  to compensation for service on the board and
reimbursement for necessary expenses incurred in carrying out the duties
and responsibilities of a director.  
SECTION 24. QUORUM. Provides that one-half of the directors constitutes a
quorum, and provides that a concurrence of a majority of a quorum of
directors is required for any official action of the district.  
SECTION 25. GENERAL POWERS OF DISTRICT.  Provides that a district has the
rights, powers, privileges, authority, and functions conferred by the
general law of this state applicable to conservation and reclamation
districts created under Article XVI, Section 59, of the Texas Constitution
(Conservation and Development of Natural Resources; Conservation and
Reclamation Districts), including those conferred by Chapter 54 (Municipal
Utility Districts), Water Code, with respect to the purposes for which it
is created. The district may contract and manage its affairs and funds for
any corporate purpose in accordance with Chapter 54, Water Code.  
SECTION 26. SPECIFIC POWERS. (a)  Provides that a district has the powers
necessary or convenient to carry out and effect the purposes and provisions
of this Act, including the powers granted in this section.  Sets forth
specific powers.  
district to construct all improvements and facilities necessary to
accomplish the purposes for which it was created on lands, whether publicly
or privately owned.  Provides that a district, before constructing an
improvement or facility on lands owned by the county, the state, a
municipality, or another political subdivision, must obtain approval from
the relevant government entity of the plans and specifications of such
improvement or facility. Provides that a district, if it requires certain
modifications to certain facilities or property, must cover all cost and
expense of such modifications. Requires the district to bear damages that
are suffered by the owners of the facilities or property.  
SECTION 28. NO EMINENT DOMAIN POWER.  Prohibits a district from exercising
the power of eminent domain. Authorizes the county to exercise its power of
eminent domain to implement a district facility or improvement.  
SECTION 29. MANAGEMENT BY BOARD OF DIRECTORS. Vests the responsibility for
the management, operation, and control of the property belonging to a
district in the board.  
employ necessary persons, dismiss employees, adopt a seal for the district,
invest funds, establish a fiscal year, establish a system of accounts
required to be open for public inspection, and designate depository banks.
Requires that funds of a district be deposited in the depository bank or
banks unless otherwise required by orders or resolutions authorizing the
issuance of the district's bonds or notes.   Provides that funds in the
depository bank or banks, to the extent that they are not insured by the
Federal Deposit Insurance Corporation,  must be secured in the manner
provided by law for the security of funds of counties.  Authorizes the
board by resolution to authorize a designated representative to supervise
the substitution of securities pledged to secure the district's fund.
Authorizes the board to adopt and enforce reasonable rules and regulations
governing the administration of the district and its programs and projects.
Authorizes the board, by resolution, to establish or change the name of the
board to appoint a hearings examiner to conduct any hearing called by the
board, including a  hearing required by Chapter 395 (Financing Capital
Improvements Required by New Development in Municipalities, Counties, and
Certain Other Local Governments), Local Government Code. Authorizes that
the hearings examiner be an employee of the district or a member of the
district's board.  Requires that the hearing be conducted in accordance
with Chapter 2001 (Administrative Procedure), Government Code.  
board to levy and collect an assessment for any purpose authorized by this
Act.  Authorizes the board of a district to undertake improvement projects
and services that confer a special benefit on all or a definable part of
the district.  Authorizes the board to levy and collect special assessments
on property in that area, based on the benefit conferred by the improvement
project or services, to pay all or part of the cost of the project and
services.  Authorizes the district to provide improvements and services to
an area outside the boundaries of the district, if the board determines
that there is a benefit to the district.  
an improvement project or services provided by the district include the
construction, acquisition, improvement, relocation, operation, maintenance,
or provision of certain improvements, projects, or services; and expenses
incurred in the establishment, administration, maintenance, and operation
of the district or any of its improvements, projects, or services.  
SECTION 34. PROPOSED ASSESSMENTS. Authorizes that services or improvement
projects be financed under this Act after a hearing notice given as
required by this Act and a public hearing by the board on the advisability
of the improvements and services and the proposed assessments.  
SECTION 35. PETITION REQUIRED. Prohibits the board from financing services
and improvement projects under this Act unless a written petition has been
filed with the board requesting those improvements or services signed by at
least 25 persons who own real property in the district if, according to the
most recent certified property tax rolls, more than 25 persons own real
property in the district.  
SECTION 36. ASSESSMENT ELECTION.  Prohibits assessments from  being levied
unless approved by a majority of the qualified voters in the district
voting at an election held for that purpose unless a written petition has
been filed with the board requesting the improvements or services which is
signed by the owners of 50 percent or more of the assessed value of the
property in the district to be assessed as determined from the most recent
certified county property tax rolls.  
Requires that elections required by this section  be conducted in
accordance with Chapter 376 (Specific Municipal Management Districts),
Local Government Code.  
SECTION 37. NOTICE OF HEARING.  Requires that notice of the hearing be
given in a newspaper with general circulation in the county in which the
district is located.  Provides that the final publication must be made not
later than the 30th day before the date of the hearing.   Sets forth the
composition of the notice.   Requires that the written notice be sent by
certified mail not later than the 30th day before the date of the hearing.
Requires that the notice be mailed to each property owner in the district
who will be subject to assessment at the current address of the property to
be assessed as reflected on the tax rolls.  
SECTION 38. CONCLUSION OF HEARING; FINDINGS. Authorizes that a hearing on
the services or improvement project, whether conducted by the board or a
hearings examiner, be adjourned from time to time.  Requires the board, at
the conclusion of the hearing to make findings by resolution or order
relating to the advisability of the improvement project or services, the
nature of the improvement project or services, the estimated cost, the area
benefitted, the method of assessment, and the method and time for payment
of the assessment.  Requires the hearings examiner, if a hearings examiner
is appointed to conduct the hearing, to file with the board a report
stating the examiner's findings and conclusions after conclusion of the
SECTION 39. AREA TO BE ASSESSED. (a)  Authorizes that the area of the
district to be assessed according to the findings of the board be the
entire district or any part of the district and be less than the area
proposed in the notice of the hearing.  
(b)  Prohibits the area to be assessed, except as provided by Subsection
(c), from including property that is not within the district boundaries at
the time of the hearing unless there is an additional hearing, preceded by
the required notice.  
(c)  Authorizes the owner of improvements constructed or land annexed to
the district after the district has imposed assessments to waive the right
to notice and an assessment hearing and to agree to the imposition and
payment of assessments at an agreed rate for improvements constructed or
land annexed to the district.  
SECTION 40. OBJECTIONS; LEVY OF ASSESSMENT. (a) Requires the board, at a
hearing on proposed assessments, at any adjournment of the hearing, or
after consideration of the hearings examiner's report, to hear and rule on
all objections to each proposed assessment.  
(b)  Authorizes the board to amend proposed assessments for any parcel. 
(c)   Requires the board, by order or resolution, after all objections have
been heard and action has been taken with regard to those objections, to
levy the assessments as special assessments on the property and to specify
the method of payment of the assessments. Authorizes the board to provide
that those assessments be paid in periodic installments, including

(d)  Provides that periodic installments must be in amounts sufficient to
meet annual costs for services and improvements as provided by this Act and
continue for the number of years required to retire indebtedness or pay for
the services to be rendered.  Authorizes the board to provide interest
charges or penalties for failure to make timely payment and also to levy an
amount to cover delinquencies and expenses of collection.  
(e) Authorizes the board, if assessments are levied for more than one
service or improvement project, to authorize that assessments collected for
one service or improvement project be borrowed to be used for another
service or improvement project.  
(f)  Requires the board to establish a procedure for the distribution or
use of any assessments in excess of those necessary to finance the services
or improvement project for which those assessments were collected.  
SECTION 41. APPORTIONMENT OF COST.  Requires that the portion of the cost
of an improvement project or services be assessed against the property in
the district be apportioned by the board based on the special benefits
accruing to the property because of the improvement project or services.
Authorizes that the cost be assessed equally by front foot or by square
foot of land area against all property in the district; against property
according to the value of the property as determined by the board, with or
without regard to structures or other improvements on the property; or on
any other reasonable assessment plan that results in imposing fair and
equitable shares of the cost on property similarly benefitted.  
SECTION 42. ASSESSMENT ROLL.  Requires the board, if the total cost of an
improvement project or services is determined, to levy the assessments
against each parcel of land against which an assessment may be levied in
the district.  Authorizes the board, with regard to an assessment for
services, to levy an annual assessment that may be lower but not higher
than the initial assessment. Requires the board to have an assessment roll
prepared showing the assessments against each property and the board's
basis for the assessment.  Requires that the assessment roll be filed with
the secretary of the board or other officer who performs the function of
secretary and be open for public inspection.  
SECTION 43. INTEREST ON ASSESSMENTS; LIEN. (a)  at Prohibits the rate
specified by the board at which assessments bear interest from exceeding
the interest rate permitted by Chapter 3, Acts of the 61st Legislature,
Regular Session, 1969 (Article 717k-2, V.T.C.S.).  
(b)  Requires that interest on an assessment between the effective date of
the order or  resolution levying the assessment and the date the first
installment and any related penalty is  payable be added to the first
installment.  Requires that the interest or penalties on all unpaid
installments be added to each subsequent installment until paid.  
(c)  Provides that assessments, reassessments or assessments resulting from
an addition to or correction of the assessment roll by the district,
penalties and interest on an assessment or reassessment, expenses of
collection, and reasonable attorneys' fees incurred by the district are a
first and prior lien against the property assessed; are superior to any
other lien or claim other than a lien or claim for county, school district,
or municipal ad valorem taxes; and are the personal liability of and charge
against the owners of the property even if the owners are not named in the
assessment proceedings.  
(d)  Provides that the lien is effective from the date of the resolution of
the board levying the assessment until the assessment is paid.  Authorizes
the board to enforce the lien in the same manner that the board is
authorized to enforce an ad valorem tax lien against real property.  
(e)  Authorizes the owner of any property assessed to pay at any time the
entire assessment against any lot or parcel with accrued interest to the
date of the payment.  
SECTION 44. SUPPLEMENTAL ASSESSMENTS. Authorizes the board, after notice
and hearing in the manner required for original assessments, to make
supplemental assessments to correct omissions or mistakes in the assessment
relating to the total cost of the improvement project or services; or
covering delinquencies or costs of collection.  
SECTION 45. APPEAL. (a)  Authorizes a property owner, after determination
of an assessment, to appeal the assessment to the board.  Sets forth the
appeal process. 
SECTION 46. APPEAL OF ORDER. Authorizes a person against whom an assessment
is made by board order, if notice has been given as required by this Act,
to appeal the assessment to a district court in the county in which the
district is located in the manner provided for the appeal of contested
cases under Chapter 2001, Government Code. Provides that review by the
district court is by trial de novo.  
SECTION 47. PUBLIC UTILITIES. Prohibits the district from imposing an
assessment on the property, equipment, or facilities of a public utility,
as defined by Section 2.0011 or 3.007, Article 144C-O, V.T.C.S. (Public
Utility Regulatory Act of 1995).  
assessments by municipalities, counties, other political subdivisions, and
organizations exempt from federal income tax under Section 501(c)(3),
Internal Revenue Code of 1986,  be established by contract. Authorizes
municipalities, counties, and other political subdivisions to contract with
the district under terms and conditions those entities consider advisable
to provide for the payment of assessments.  
Authorizes that the cost of any improvement project or services, including
interest during construction and costs of issuance of bonds, be paid from
general or available funds, assessments, or the proceeds of bonds payable
from revenues, assessments, grants, gifts, contracts, leases, or any
combination of those funds.  Authorizes the board,  during the progress of
an improvement project or services,  to issue temporary notes to pay the
costs of the improvement project or services and issue bonds on completion.
Authorizes that the costs of more than one improvement project or service
be paid from a single issue and sale of bonds without other consolidation
proceedings before the bond issue.  
SECTION 50. BONDS. (a)  Authorizes the board, for the payment of all or
part of the costs of an improvement project or services, to issue bonds in
one or more series payable from and secured by assessments, revenues,
grants, gifts, contracts, leases, or any combination of those funds.
Authorizes that  bonds be liens on all or part of the revenue derived from
improvements authorized under this  Act, including installment payments of
special assessments or from any other source pledged to their payment.
Requires that the district have the power to issue bonds and they and
requires that the bonds be approved in the manner set forth in Subchapter
J, Chapter 375, Local Government Code, relating to bonds issued by
municipal management districts.  Requires that bonds be issued and approved
by the board of directors of the district without the consent of the
county, any municipality, or the TNRCC.  
that contracts of the district are subject to the competitive bidding
requirements of Chapter 49, Water Code.  
SECTION 52. SUPERSEDES OTHER LAW. Provides that this Act states the
required procedures necessary for the district to award contracts and
supersedes any law or other requirement with respect to award of contracts.
by assessments from being issued unless approved by a majority of the
qualified voters in the district voting at an election held for that
purpose; or the district received a petition requesting the assessment and
the issuance of bonds which is signed by the owners of 50 percent or more
of the assessed value of the property in the district to be assessed as
determined from the most recent certified county property tax rolls.
Provides that bonds not secured by assessments are not subject to the
requirement of an election and authorizes their issuance without an
election.  Requires that an election required by this section be conducted
in accordance with Chapter 376, Local Government Code.  
SECTION 54. DISSOLUTION BY BOARD VOTE. Authorizes the board of a district
by majority vote to dissolve the district at any time, except as limited by
this Act.  
SECTION 55. DISSOLUTION BY  COUNTY ORDER. (a)  Authorizes the county in
which a district is located, by a vote of not less than two-thirds, to
adopt a resolution dissolving the district, except as limited by this Act.  
SECTION 56. LIMITATION. Prohibits the dissolution of a district by its
board or by a county if the district has any outstanding bonded
indebtedness until that bonded indebtedness has been repaid or defeased in
accordance with the order or resolution authorizing the issuance of the
SECTION 57. CONTRACTS WITH DISTRICT. (a)  Authorizes a municipality,
county, or any other political subdivision of the state to contract with
the district to implement a project of the district or aid and assist the
district in providing the services authorized under this Act.  Authorizes
that a contract under this section be for a period on which the parties
agree; include terms on which the parties agree;  be payable from
assessments or any other sources of revenue that may be available for such
purpose; and provide that assessments or other revenue collected at a
district project or from a person using or purchasing a commodity or
service at a district project may be paid or rebated to the district under
the terms of the contract. (Section 57 does not present a Subsection (b).)  

(c) Authorizes the district to enter into a contract, lease, or agreement
with or make or accept grants and loans to or from the United States,
including federal departments and agencies; the state or a state agency; a
county, municipality, or other political subdivision of the state; a public
or private corporation; and any other person.  
(d)  Authorizes the district to perform all acts necessary for the full
exercise of the powers vested in the district on terms and conditions and
for the term the board is authorized to determine as advisable.  
SECTION 58.Emergency clause.
  Effective date: upon passage.