HBA-SEP C.S.H.B. 3299 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3299 By: Walker Natural Resources 4/22/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Texas faces a difficult challenge in developing water policies that serve both state and regional interests. The Texas Constitution authorizes the creation of various types of districts to plan, develop, and regulate the use of water for the public health, safety, and welfare. Amendments to the Water Code may facilitate more efficient operation of those districts. C.S.H.B. 3299 amends provisions regarding general law districts, water control and improvement districts, municipal utility districts, fresh water supply districts, and levee improvement districts. 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. ANALYSIS C.S.H.B. 3299 amends the Water and Local Government codes relating to the general powers and authority of water districts. The bill amends the Water Code to increase, from $100 to $150, the amount to which a director of a general law district (district) is entitled to for daily performance of duties (Sec. 49.060). A district, at a confirmation and director election is authorized to submit to the qualified district voters the proposition of entering into and implementing a fire department operation plan (Sec. 49.102). A district's authorization to issue bonds remains in effect after the election unless the district is dissolved or annexed by another district (Sec. 49.106). Provisions regarding the submission of an appraisal roll to a governing body, effective and rollback tax rates, tax rate, and election to repeal a tax increase exceeding the rollback tax rate do not apply to a tax levied and collected for payment of the interest on and principal bonds issued by a district or made under certain contracts. Provisions which set forth that a district must obtain approval of the executive director of the Texas Natural Resource Conservation Commission before entering into an obligation to collect a tax for a debt that exceeds three years do not apply to contract taxes that are levied to pay for bonds issued by a municipality (Secs. 49.107 and 49.108). The bill specifies that the board of directors (board) of a district is authorized to allow, by resolution, wire transfers (Sec. 49.151). The bill removes the provision preventing the district from paying interest during construction out of available district funds three years after acceptance of the project (Sec. 49.155). In any proceeding concerning the validity of the creation of a district or the annexation of property by a district, a certificate of ownership as certified by the central appraisal district of the county or counties in which the property is located creates a presumption of ownership. On request by a district, the central appraisal district of the county or counties in which the district is located is required to furnish certificates of ownership and is authorized to charge reasonable recovery fees (Sec. 49.184). A charge or fee by a district concerning a tap or connection to district water, sanitary sewer, or drainage facilities that if made by a district for retail or wholesale service on land that at the time of platting was not being provided with water or wastewater service by the district is not an impact fee. A district is authorized to pledge the revenues of the district's utility system to pay the principal of or interest on bonds issued to construct the capital improvements for which a fee was imposed, and money received from the fees is required to be considered revenues of the district's utility system for purposes of the district's bond covenants. The bill sets forth exceptions to the applicability of provisions regarding governmental action affecting private property rights (Sec. 49.212). A district or water supply corporation is authorized to require a service applicant and a developer to grant a permanent recorded easement which is not subject to assessments, charges, fees, or dues imposed by a nonprofit organization. A district or water supply corporation is prohibited from requiring an applicant to provide an easement for a service line for the sole benefit of another applicant (Sec. 49.218). The bill authorizes the district to provide for a sanitary sewer system and to require property owners to connect to the sewer system. The bill prohibits a district from requiring a property owner who has installed an on-site wastewater holding or treatment facility before the creation of the district to connect to the district's sewer system except in specified situations (Sec. 49.234). The bill provides that the payment, performance, and bid bonding requirements do not apply to a contract for the purchase of equipment, materials, or machinery (equipment) not otherwise incorporated into a construction project (Sec. 49.271). If changes in plans or specifications are necessary after the performance of a construction or equipment contract is begun, the board is authorized to approve orders making the changes. The aggregate of the change orders is prohibited from increasing the original contract price by more than 10 percent. The bill provides that the board is not required to advertise or seek competitive bids for the repair of district facilities if the extent of the repair cannot be readily ascertained or does not lend itself to competitive bidding, rather than if the cost of repair is less than or equal to advertising requirements (Sec. 49.273). The bill sets forth provisions regarding the determination of a district's prevailing wage rate (Sec. 49.279). The bill authorizes a district to add or exclude land after a district is created and before a confirmation election is held (Sec. 49.315). The bill updates provisions relating to the authority of the district's operation and maintenance of fire departments regarding the issuance of bonds, the imposition of mandatory fees, the purchase of land, employment contracts, an operation plan, public hearings and posting, and voluntary contributions (Sec. 49.351). The bill authorizes a district to acquire recreational facilities and obtain funds to develop and maintain them and to charge fees directly to the users of recreational facilities and to water and wastewater customers of the district for such purposes. A district is prohibited from issuing bonds supported by ad valorem taxes to pay for the development and maintenance of recreational facilities (Secs. 49.461-49.464). The bill requires the board, by rule, to establish standards for the development and maintenance of recreational facilities and for the allocation of a district's funds for such (Sec. 49.465). The bill authorizes a water control and improvement district to adopt and enforce reasonable rules and regulations to further the water control and improvement district's purpose (Sec. 51.122). The bill provides that a person who violates a regulation adopted by a water control and improvement district commits a Class C misdemeanor (Sec. 51. 221). The bill removes the provision providing that the tax assessor and collector is elected with the supervisors of the fresh water supply district board (Sec. 53.021). The bill repeals provisions regarding the ballot for election relating to fresh water supply districts (Sec. 53.024). The bill specifies that a municipal utility district (MUD) is authorized to purchase and install street or security lighting within public utility easements or public rights-of-way within the MUD's boundaries. The bill removes the provision providing that such street or security lighting facilities must have been constructed by an owner or developer of property within such a MUD and must have been required by a city as a condition to the city granting its consent to the creation of the MUD. The bill also specifies that such a MUD is prohibited from issuing bonds supported by ad valorem taxes to pay for the purchase, installation, and maintenance of street security or lighting (Sec. 54.236). The bill adds landscaping, parkways, greenbelts, sidewalks, trails, public right-of-way beautification projects, and associated street and security lighting to the definition of "recreational facilities" in regard to MUDs (Sec. 54.772). The bill specifies that a MUD is prohibited from issuing bonds supported by ad valorem taxes to pay for the development and maintenance of recreational facilities (Sec. 54.774). The bill also specifies that a levee improvement district is authorized to adopt and enforce rules and regulations to further the district's purpose (Secs. 57.092 and 57.093). If a district contracts with a municipality to provide all or part of the water or wastewater services to the municipality, the municipality is authorized to issue bonds payable from the revenues of its water and wastewater system to provide funds to make payments owed by the municipality to the district under the contract (Sec. 402.0205, Local Government Code). A municipality, without an election, is authorized to sell to a water district, a water or sewer system owned by the municipality (Sec. 402.908, Local Government Code). The bill validates and confirms the creation of a district and acts by a district that are taken not more than two years before the effective date of this Act (SECTION 36). The bill repeals provisions regarding a ballot for election in fresh water supply districts and permission to make a survey and the authority to enter land in a levee improvement district (SECTION 37). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3299 modifies the original to specify that provisions regarding contract elections do not apply to contract taxes that are levied to pay for bonds issued by a municipality (Sec. 49.108). The substitute removes the provision that, if the wire transfer is to an account not in the name of the district, the wire transfer instructions must be signed by at least a majority of the directors. The substitute provides that a charge or fee by a district concerning a tap or connection to district water, sanitary sewer, or drainage facilities that if made by a district for retail or wholesale service on land that at the time of platting was not being provided with water or wastewater service by the district is not an impact fee. The substitute authorizes a district to pledge the revenues of the district's utility system to pay the principal of or interest on bonds issued to construct the capital improvements for which a fee was imposed, and money received from the fees is required to be considered revenues of the district's utility system for purposes of the district's bond covenants (Sec. 49.212). The substitute removes the provision authorizing a district or water supply corporation to issue bonds, notes, or other obligations to acquire an easement. The substitute prohibits a district or water supply corporation from requiring an applicant to provide an easement for a service line for the sole benefit of another applicant (Sec. 49.218). The substitute prohibits a district from requiring a property owner who has installed an on-site wastewater holding or treatment facility before the creation of the district to connect to the district's sewer system except in specified situations (Sec. 49.234). The substitute removes the provision that provisions regarding unclaimed property do not apply to any personal property held by a district that has not been dissolved by order of the Texas Natural Resource Conservation Commission. The substitute specifies two additional purposes for which a levee improvement district is authorized to adopt and enforce rules and regulations (Sec. 57.093). The substitute provides that if a district contracts with a municipality to provide all or part of the water or wastewater services to the municipality, the municipality is authorized to issue bonds payable from the revenues of its water and wastewater system to provide funds to make payments owed by the municipality to the district under the contract (Sec. 402.0205, Local Government Code). The substitute validates and confirms the creation of a district and acts by a district that are taken not more than two years before the effective date of this Act (SECTION 36). The substitute repeals provisions regarding permission to make a survey and the authority to enter land in a levee improvement district (SECTION 37).