HB1407 - Relating to the provision of water or sewer service by public entities operating jointly or concurrently; providing authority to issue bonds; providing authority to impose assessments.

  89R21569 CXP-D     By: Guillen H.B. No. 1407     Substitute the following for H.B. No. 1407:     By:  Martinez C.S.H.B. No. 1407       A BILL TO BE ENTITLED   AN ACT   relating to the provision of water or sewer service by public   entities operating jointly or concurrently; providing authority to   issue bonds; providing authority to impose assessments.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 572.001(3), Local Government Code, is   amended to read as follows:                (3)  "Public entity" means a political entity or   corporate body of this state, including a county, municipality, or   district or authority created under Section 52, Article III, or   Section 59, Article XVI, Texas Constitution , or a water supply or   sewer service corporation .          SECTION 2.  Section 572.012(a), Local Government Code, is   amended to read as follows:          (a)  Each participating public entity may:                (1)  use the entity's money to plan, acquire,   construct, own, operate, and maintain its interest in a facility;                (2)  share in the facility;                (3)  issue bonds and other securities to raise money   for a purpose described by Subdivision (1) in the same manner and to   the same extent and subject to the same conditions as would be   applicable if the public entity had sole ownership of the facility;                (4)  acquire, for the use and benefit of each   participating public entity, land, easements, and property for a   facility by purchase or by exercising the power of eminent domain;   [ and ]                (5)  transfer or otherwise convey the land, property,   or property interest or otherwise have the land, property, or   property interest become vested in other participating public   entities to the extent and in the manner agreed between the   entities ;                 (6)     make an acquisition described by Subdivision (4)   through a purchase from a public or private entity; and                 (7)     for the use and benefit of each participating   public entity, acquire by purchase a public utility, as defined by   Section 13.002, Water Code, other than an affected county .          SECTION 3.  Sections 572.051(2) and (3), Local Government   Code, are amended to read as follows:                (2)  "Obligation" means a [ revenue ] bond or note   secured by a revenue, fee, charge, assessment, or other revenue of   an agency available for that purpose .                (3)  "Public utility agency" means an agency created   under this subchapter by two or more public entities to acquire,   plan, finance, construct, own, operate, or maintain facilities.          SECTION 4.  Sections 572.052(c) and (d), Local Government   Code, are amended to read as follows:          (c)  A public utility agency is a:                (1)  separate agency;                (2)  political subdivision of this state; [ and ]                (3)  political entity and corporate body ; and                 (4)     retail public utility for the purposes of Chapter   13, Water Code .          (d)  A public utility agency may not impose a tax but has all   the other powers and obligations  that are related to facilities and   that are provided by law to a municipality that owns a facility ,   except as provided by Section 572.061 .          SECTION 5.  Section 572.053, Local Government Code, is   amended to read as follows:          Sec. 572.053.  CHANGES IN PUBLIC ENTITIES PARTICIPATING IN   PUBLIC UTILITY AGENCY. (a) The public entities that participate in   a public utility agency may by concurrent ordinances add a public   entity to, or delete a public entity from, participation in the   public utility agency.           (b)     A participating public entity may withdraw from a public   utility agency by providing an ordinance or resolution of the   governing body of the participating public entity to the agency not   later than the 180th day before the proposed date of withdrawal.   A   participating public entity may not withdraw from a public utility   agency under this subsection if bonds, notes, or other obligations   of the agency are secured by the revenues of the participating   public entity, unless the agency adopts a resolution approving the   withdrawal.   Upon withdrawal, a participating public entity assumes   the outstanding debt attributable to that entity from the agency on   a prorated basis equal to that entity's benefit and has, without   compensation from the agency, no further rights, duties, or   obligations relating to the agency or ability to receive service   from the facilities of the agency.          SECTION 6.  Section 572.058, Local Government Code, is   amended by amending Subsection (b) and adding Subsection (c) to   read as follows:          (b)  A public utility agency may:                (1)  perform any act necessary to the full exercise of   the agency's powers , including acts necessary to acquire, finance,   own, operate, or manage a facility of the agency ;                (2)  enter into a contract, lease, or agreement ,   including an interlocal contract as authorized by Chapter 791,   Government Code, with or accept a grant or loan from any of the   following entities for the management and operation of an agency   facility or the acquisition, construction, financing, maintenance,   operation, provision, or receipt of a facility, service, or product   [ a ]:                      (A)   a department or agency of the United States;                      (B)   a department, agency, or municipality or   other political subdivision of this state; or                      (C)   a public or private corporation or person;                (3)  sell, lease, convey, or otherwise dispose of all   or a portion of any right, interest, or property the agency   considers to be unnecessary for the efficient operation or   maintenance of its facilities; and                (4)  adopt rules to govern the operation of the agency   and its employees, facilities, and service.           (c)     Except as limited by a concurrent ordinance under which   the public utility agency is created, an agency may exercise any   right or power granted by general law to a county or municipality or   a district or authority created under Section 59, Article XVI,   Texas Constitution, to accomplish the purposes of the agency,   including issuing bonds payable from special assessments in the   manner provided by Chapter 372. This subsection does not authorize   a public utility agency to impose a tax.          SECTION 7.  Subchapter C, Chapter 572, Local Government   Code, is amended by adding Section 572.0581 to read as follows:           Sec.   572.0581.     NO POWER OF EMINENT DOMAIN.   Except as   provided by Section 572.0585, a public utility agency does not have   the power of eminent domain.          SECTION 8.  Sections 572.061(d) and (e), Local Government   Code, are amended to read as follows:          (d)  Notwithstanding Subsection (a), the Public Utility   Commission of Texas has appellate jurisdiction over [ the state   reserves its power to regulate and control ] the rates and charges of     [ by ] a public utility agency in the manner provided by Section   13.043, Water Code .          (e)   This  [ Until obligations issued under this subchapter   have been paid and discharged, this ] state pledges to and agrees   with the purchasers and successive holders of [ the ] obligations   issued under this subchapter that in any appeal proceeding   regarding the public utility agency conducted under Section 13.043,   Water Code, the Public Utility Commission of Texas [ it ] will [ not   limit or alter the powers of the agency to ] establish [ and collect ]   rates and charges that will produce revenue sufficient to pay for   those items specified in Subsections (a) and (b) and any other   obligations of the agency in connection with those items.          SECTION 9.  Section 572.062, Local Government Code, is   amended by amending Subsections (a) and (b) and adding Subsections   (b-1) and (b-2) to read as follows:          (a)  A public utility agency may :                 (1)   issue obligations , including anticipation notes,   to accomplish the purposes of the agency ; and                   (2)     finance or refund the acquisition, construction,   expansion, and improvement of all or a portion of a facility   relating to an agency purpose .          (b)   Except as provided by Subsection (b-1), the [ The ] public   utility agency may pledge to the payment of the obligations :                 (1)   the revenue of all or part of its facilities,   including facilities acquired after the obligations are issued ;                 (2)     revenues received from a public entity by contract   as authorized by a concurrent ordinance;                 (3)  special assessments:                       (A)     imposed by the agency in the manner provided   by Chapter 372; or                       (B)     imposed by a public entity and provided by   contract to the agency; or                 (4)  any other funds of the agency .           (b-1)  Operation [ However, operation ] and maintenance   expenses, including salaries and labor, materials, and repairs of   facilities necessary to render efficient service, are a first lien   on and charge against the pledged revenue.           (b-2)     A public utility agency may not use a facility owned   by the agency to secure or collateralize a new facility without the   approval by resolution of each participating public entity   participating in the joint financing of the new facility. This   subsection does not apply to the use of revenue from a facility   owned by the agency to secure or collateralize a new facility.          SECTION 10.  Subchapter C, Chapter 572, Local Government   Code, is amended by adding Sections 572.065 and 572.066 to read as   follows:           Sec.   572.065.     LIABILITY. Liability for the facilities and   management of the public utility agency must be transferred to the   agency on ownership of the facilities by the agency.           Sec.   572.066.     INFRASTRUCTURE INVESTMENTS. A public utility   agency may create a funding mechanism to jointly invest in and   leverage funding for water infrastructure in Texas with the North   American Development Bank. &# [Text truncated for display. Full text available on Congress.gov.]