HBA-RBT H.B. 3804 76(R) BILL ANALYSIS
Office of House Bill AnalysisH.B. 3804
By: Crownover
Natural Resources
4/10/1999
Introduced
BACKGROUND AND PURPOSE
The Lake Cities Municipal Utilities Authority (LCMUA) provides the Lake
Dallas area with water and wastewater services. It was originally created
in the 58th legislative session in 1963. Due to changes in the law, some
of LCMUA's are now in conflict with current law. H.B. 3804 is a
comprehensive consolidation, clarification, and update of LCMUA's prior
statutes and amendments. This bill updates LCMUA's territorial boundaries,
annexation, disannexation and eminent domain provisions as well as sections
regarding the issuance and payment of bonds and matters which relate to the
Texas Natural Resource Conservation Commission.
RULEMAKING AUTHORITY
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 BY SECTION ANALYSIS
SECTION 1. Creates a conservation and reclamation district known as Lake
Cities Municipal Utility Authority (LCMUA), which is a governmental agency,
an agency of the State of Texas, a municipal corporation, and a body
politic and corporate, under the authority of Article XVI, Section 59 of
the Texas Constitution. Provides that the principal offices of LCMUA are
and shall be located in Denton County, Texas.
SECTION 2. Establishes that the specific territorial boundary of LCMUA is
and shall be definitively described in the official records of LCMUA.
SECTION 3. Requires all management of LCMUA to be vested in and exercised
by a five person Board of Directors (board). Sets forth the method of
electing the board, the length of term of members, qualifications of
members, and establishes election procedures. Provides that no
compensation shall be paid to any board member.
SECTION 4. Requires the board to elect from its number a president and
vice president of LCMUA and such other officers as in the judgment of the
board are necessary or appropriate. Sets forth the duties of the
president, the vice president, the secretary, the treasurer, and the
general manager.
SECTION 5. Establishes the manner in which additional territory may be
annexed to the boundaries of LCMUA.
SECTION 6. Establishes the manner in which area may be added to the
territory of LCMUA upon voluntary petition of all owners of such territory.
SECTION 7. Sets forth the powers and authority of LCMUA to develop surface
or underground water storage and supply facilities and to construct or
cause to be constructed a diversion works, pumps, pumping stations,
pipelines, intermediate and terminal storage reservoirs, water treatment
plants, distribution systems and all other related facilities which will
facilitate or implement the duty of LCMUA to deliver and distribute water
within its territory and any other territory for which it holds a
certificate of convenience and necessity and to purchase, improve, modify,
or extend any existing water system or systems within the certificated
territory or outside the certificated territory if reasonably necessary or
appropriate for the support of services within the certificated territory.
Provides that LCMUA is authorized to make contracts for the purchase of
water or water supplies, purchase treated water, purchase waste water
treatment facilities and to make contracts for the purchase or sale of
treated or untreated water or waste water.
SECTION 8. Provides that LCMUA is also empowered and has authority to
obtain any and all permits, licenses, consents, and permissions as may be
appropriate from the Texas Natural Resource Conservation Commission or any
other appropriate regulatory body in order to conduct any of its
operations.
SECTION 9. Provides that LCMUA is further authorized to purchase and sell
all works, machinery, plants, and other facilities and equipment and land,
rights-of-way, and easements necessary or appropriate for the purpose of
exercising its rights and performing its duties under this Act.
SECTION 10. Establishes that LCMUA shall have full power of eminent domain
as a municipality and a public utility.
SECTION 11. Requires any construction contract to be procured in
accordance with Section. 39.271 et seq., Water Code.
SECTION 12. Sets forth the manner and procedures in which LCMUA is
authorized to issue general obligation and revenue bonds.
SECTION 13. Sets forth the manner in which LCMUA is authorized to issue
refunding bonds for the purpose of refunding any outstanding bonds
authorized by this Act or other authority and any interest thereon.
SECTION 14. Provides that any bonds (including refunding bonds) authorized
by law, not payable wholly from ad valorem taxes, may be additionally
secured by a trust indenture under which the trustee may be a bank, having
trust powers, situated either within or outside the State of Texas. Sets
forth additional powers of the board with respect to such bonds.
SECTION 15. Prohibits bonds payable wholly or partially from ad valorem
taxes (except refunding bonds) from being issued unless authorized by an
election at which only the qualified voters residing in the LCMUA's voting
territory shall be allowed to vote and unless a majority of the votes cast
is in favor of the issuance of the bonds. Authorizes bonds not payable
wholly or partially from ad valorem taxes to be issued without an election.
Sets forth the procedures for an election.
SECTION 16. Requires any bonds (including refund bonds) that are
authorized by LCMUA, and the record relating to their issuance to be
submitted to the attorney general for the attorney general's examination as
to their validity. Sets forth the obligations of the attorney general in
relation to the bonds. Provides that bonds that are approved must be
registered by the state comptroller of public accounts and that the bonds
and the contracts shall be valid and binding.
SECTION 17. Requires the board to designate one or more banks to serve as
depository for the funds of LCMUA. Requires all funds of LCMUA to be
deposited in such depository bank or banks except that funds pledged to pay
bonds may be deposited with the trustee bank named in the trust agreement
or other escrow, and except that funds shall be remitted to the bank or
banks of payment for the payment of principal of and interest on bonds.
Provides that if funds in the depository bank and the trustee bank are not
insured by the Federal Deposit Insurance Corporation they shall be secured
in the manner provided by law for the security of municipal funds.
Provides that banks selected by the board need not go through any bid
process or process regarding invitation of the banks to become designated
depositories.
SECTION 18. Requires all bonds of LCMUA to be and are hereby declared to
be legal and authorized investments for banks, savings banks, trust
companies, building and loan associations, savings and loan associations,
insurance companies, fiduciaries, trustees, guardians, and for the sinking
funds of municipalities, and other political corporations or subdivisions
of the State of Texas. Requires the bonds to be eligible to secure the
deposit of any and all public funds of the State of Texas, and any and all
public funds of municipal corporations and other political corporations or
subdivisions of the State of Texas; and such bonds shall be lawful and
sufficient security for said deposits to the extent of their value, when
accompanied by all attached unmatured coupons.
SECTION 19. Provides that LCMUA may be abolished by a majority vote of the
qualified voters residing within the voting territory of LCMUA at an
election held for the purpose of determining whether or not such Authority
shall be abolished. Establishes the procedure for such elections.
SECTION 20. States that the accomplishment of the purposes stated in this
Act are for the benefit of the people of this state and for the improvement
of their properties and industries, and LCMUA, in carrying out the purposes
of this Act, will be performing an essential public function under the
constitution. Prohibits LCMUA from being required to pay any tax or
assessment on any project, operations, equipment, personal or real property
or any part thereof, and the bonds issued hereunder and their transfer and
the income therefrom, including the profits made on the sale thereof, shall
at all times be free from taxation within this State.
SECTION 21. Authorizes the Denton County tax assessor and collector to be
used as a tax assessor and collector and Denton Central Appraisal District
to be designated as a board of equalization and cause taxes to be assessed,
valuations to be equalized, and tax rolls to be prepared. Provides for
procedures in the event that Denton County and Denton Central Appraisal
District does not cooperate.
SECTION 22. Prohibits this Act from being interpreted as amending or
repealing the statutes regarding the priorities of the use of water or any
legislation governing water control.
SECTION 23. Severance clause.
SECTION 24. Provides that all notice and formal bill introductions have
been followed in the passage of this Act.
SECTION 25. Emergency clause.
Effective date: upon passage.