HBA-RBT C.S.H.B. 3804 76(R)BILL ANALYSIS
Office of House Bill AnalysisC.S.H.B. 3804
By: Crownover
Natural Resources
4/16/1999
Committee Report (Substituted)
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 statutes are now in conflict with current law. C.S.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. VALIDATION AND CREATION. Validates and reconfirms the creation
of the conservation and reclamation district known as Lake Cities Municipal
Utility Authority (LCMUA), which is a governmental agency and a body
politic and corporate, under the authority of Section 59, Article XVI,
Texas Constitution. Requires the principal offices of LCMUA to be located
in Denton County, Texas.
SECTION 2. DEFINITIONS. Defines "board" and "LCMUA."
SECTION 3. BOUNDARIES. Provide that LCMUA consists of the territory
contained in the boundaries of the City of Lake Dallas and that part of the
City of Shady Shores specifically described in the official records of
LCMUA. Requires the specific territorial boundary of LCMUA and any changes
to it to be definitively described in the official records of LCMUA.
SECTION 4. FINDING OF BENEFIT. Provides finding of benefit.
SECTION 5. GENERAL POWERS. Sets forth the general powers of LCMUA.
SECTION 6. BOARD OF DIRECTORS. Provides that LCMUA is governed 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 7. OFFICERS. 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.
SECTION 8. EMPLOYMENT AUTHORITY; GENERAL MANAGER. Authorizes the board to
employ professional persons including engineers, attorneys, accountants,
consultants, and other employees. Requires the board to hire a general
manager to conduct the day-to-day business of LCMUA. Authorizes the board
to authorize the general manager to perform certain acts. Sets forth
prohibited acts of the general manager.
SECTION 9. SEAL. Authorizes the board to adopt a seal for LCMUA.
SECTION 10. ANNEXATION BY PETITION OF QUALIFIED VOTERS. Authorizes
additional territory to be annexed to LCMUA under certain circumstances.
Sets forth the required contents of the petition. Requires the board to
adopt a resolution stating the conditions of annexation and setting a time
and place for a hearing on the annexation if the board makes certain
findings. Sets forth the contents of the resolution. Sets forth
publication requirements. Sets forth requirements for an election to annex
the property. Prohibits the annexation of railroad right-of-way unless the
right-ofway is within the limits of an incorporated municipality or other
governmental body.
SECTION 11. DISANNEXATION. Authorizes an election for disannexation.
Provides that a disannexation election shall be held in the same manner as
an annexation election. Prohibits a disannexation from reducing the tax
base necessary to support outstanding bonds by levy and assessment of ad
valorem taxes.
SECTION 12. ANNEXATION AND DISANNEXATION BY LANDOWNER PETITION. Sets
forth the procedures for annexing and disannexing through landowner
petitions.
SECTION 13. POWERS. 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.
(b) Authorizes LCMUA to construct, maintain service, and operate a complete
wastewater system. Authorizes LCMUA to use public streets, alleys, ways,
and places for the laying of its water and wastewater lines and facilities.
(c)Authorizes LCMUA to make contracts for the purchase of water or water
supplies, purchase treated water, purchase wastewater treatment facilities
and to make contracts for the purchase or sale of treated or untreated
water or waste water.
(d) 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.
(e) 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 14. EMINENT DOMAIN. Establishes that LCMUA has full power of
eminent domain.
SECTION 15. CONSTRUCTION CONTRACT. Requires any construction contract to
be procured in accordance with Subchapter I (Construction, Equipment,
Materials, and Machinery Contracts), Chapter 49, Water Code.
SECTION 16. AUTHORITY TO ISSUE BONDS. Sets forth the manner and
procedures in which LCMUA is authorized to issue general obligation and
revenue bonds.
SECTION 17. 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 18. ADDITIONAL SECURITY. Authorizes any bonds (including
refunding bonds) authorized by law, not payable wholly from ad valorem
taxes, to 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 and the rights of a purchaser under a sale under a
deed of trust lien.
SECTION 19. ELECTION REQUIRED FOR TAX-SUPPORTED BONDS. 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 are 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 20. DEPOSITORY. 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 are
required to 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 21. ABOLITION OF LCMUA. Authorizes LCMUA to be abolished by a
majority vote of the qualified voters residing within the voting territory
of LCMUA at an election held for the purpose. Establishes the procedure
for such elections.
SECTION 22. PUBLIC PURPOSE. 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 23. TAX ASSESSOR-COLLECTOR. 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 do not cooperate.
SECTION 24. STATUTORY INTERPRETATION. 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 25. Provides that all notice and formal bill introductions have
been followed in the passage of this Act.
SECTION 26. TRANSITION: ELECTION OF DIRECTORS. Sets forth the method of
determining which directors serve four-year terms initially and provides
that the director who is serving on the effective date of this Act will
remain director until a successor is elected at the directors election in
2000.
SECTION 27. Emergency clause.
Effective date: upon passage.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute modifies the original by replacing SECTIONS 1-25 of the
original with SECTIONS 1-27 of the substitute.
The substitute modifies the original in SECTION 1 by amending and replacing
the original SECTION 1 relating to the creation of the district with a
SECTION 1 relating to the creation of the district.
The substitute modifies the original in SECTION 2 by adding a new SECTION 2
defining terms.
The substitute modifies the original in SECTION 3 by amending and replacing
the original SECTION 2 relating to the territory of the district with a
SECTION 3 relating to the boundary of the district.
The substitute modifies the original in SECTION 4 by adding a new section
relating to providing a benefit.
The substitute modifies the original in SECTION 5 by adding a new section
relating to the general powers of LCMUA.
The substitute modifies the original in SECTION 6 by amending and replacing
the original SECTION 3 relating to the board of directors with a SECTION 6
relating to the board of directors.
The substitute modifies the original in SECTION 7 by amending and replacing
the original SECTION 4 relating to the officers with a SECTION 7 relating
to the officers of the district.
The substitute modifies the original in SECTION 8 by adding a new section
relating to the general manager of LCMUA.
The substitute modifies the original in SECTION 9 by adding a new section
relating to the seal for LCMUA.
The substitute modifies the original in SECTIONS 10 and 11 by amending and
replacing the original SECTION 5 relating to the annexation and
disannexation with a SECTION 10 relating to annexation and SECTION 11
relating to disannexation.
The substitute modifies the original in SECTION 12 by amending and
replacing the original SECTION 6 relating to the powers of the district
regarding annexation and disannexation by landowner petition with a SECTION
12 relating to the powers of the district regarding annexation and
disannexation by landowner petition.
The substitute modifies the original in SECTION 13 by amending and
replacing the original SECTIONS 7, 8, and 9 relating to the powers and
authority of LCMUA with a SECTION 13 relating to the powers and authority
of LCMUA.
The substitute modifies the original in SECTION 14 by amending and
replacing the original SECTION 10 relating to eminent domain with a SECTION
14 relating to eminent domain.
The substitute modifies the original in SECTION 15 by amending and
replacing the original SECTION 11 relating to construction contracts with a
SECTION 15 relating to construction contracts.
The substitute modifies the original in SECTION 16 by amending and
replacing the original SECTION 12 relating to authority to issue bonds with
a SECTION 16 relating to authority to issue bonds.
The substitute modifies the original in SECTION 17 by amending and
replacing the original SECTION 13 relating to refunding bonds with a
SECTION 17 relating to refunding bonds.
The substitute modifies the original in SECTION 18 by amending and
replacing the original SECTION 14 relating to additional bond security with
a SECTION 18 relating to additional bond security.
The substitute modifies the original in SECTION 19 by amending and
replacing the original SECTION 15 relating to elections for certain bonds
with a SECTION 19 relating to elections for certain bonds.
The substitute modifies the original in SECTION 20 by amending and
replacing the original SECTION 17 relating to a bank depository with a
SECTION 20 relating to a bank depository.
The substitute modifies the original in SECTION 21 by amending and
replacing the original SECTION 19 relating to the abolition of LCMUA with a
SECTION 21 relating to the abolition of LCMUA.
The substitute modifies the original in SECTION 22 by amending and
replacing the original SECTION 20 relating to public purpose with a SECTION
22 relating to public purpose.
The substitute modifies the original in SECTION 23 by amending and
replacing the original SECTION 21 relating to the tax assessor-collector
with a SECTION 23 relating to the tax assessorcollector.
The substitute modifies the original in SECTION 24 by amending and
replacing the original SECTION 22 relating to statutory interpretation with
a SECTION 24 relating to statutory interpretation.
The substitute modifies the original in SECTION 25 by amending and
replacing the original SECTION 24 relating to formal procedures with a
SECTION 25 relating to formal procedures.
The substitute modifies the original in SECTION 26 by adding a new section
relating to a transition period for the initial board of directors.
The substitute modifies the original in SECTION 27 by redesignating the
emergency clause from SECTION 25 of the original.