“Legislation from the 85th Legislative Session Affecting Water Districts and Open Government Statutes”

by Stefanie Albright

Legislation Affecting Water Districts

Districts governed by the Texas Water Code (“TWC”), including, but not limited to, municipal utility districts and water control and improvement districts, may be affected by legislation passed during the 85th Legislative Session. Below is a brief overview of some of the legislation passed this session that may have an impact on water districts.

• House Bill (“HB”) 999 (Israel). HB 999 amends TWC Chapter 49 to allow a district to hold a director’s election on a general election date authorized by other statute. This law allows certain water districts to utilize changes to the Texas Elections Code in 2011 that would allow for director elections to be held in November.
• HB 1701 (Parker). HB 1701 addresses the requirement that a written copy of the investment policy of a governmental entity be provided to any “business organization” offering to engage in an investment transaction by excepting transactions of the entity that are not made through accounts or other contractual arrangements over which the business organization has accepted discretionary investment authority.
• Senate Bill (“SB”) 554 (Kolkhorst). SB 554 requires that all TWC Chapter 49 water districts that do not have a meeting place within the district’s boundaries to, on the first meeting agenda of each year, include a notice statement of the Chapter 49 petition process to establish a meeting place in the district.
• SB 622 (Burton). This legislation amends the Texas Local Government Code to require political subdivisions to include in a proposed budget a line item indicating planned expenditures for notices required by law to be published in a newspaper. This line item must allow a clear comparison between a proposed budget and actual expenditures in the prior budget year.
• SB 625 (Kolkhorst). SB 625 creates the “Special Purpose District Public Information Database” to make available certain information on special purpose districts and to be created and maintained by the Comptroller. The database will include various information on each district, including: (1) the names of board members; (2) contact information; (3) information relating to bonds authorized and issued; and (4) tax information. Noncompliant districts may be subject to up to two $1,000 fines that may be enforced by the Attorney General.
• SB 1987 (Lucio). SB 1987 amends the Texas Government Code and several sections of the TWC pertaining to the notice and procedural requirements for the creation of or annexation of land to certain special purpose districts with provisions mostly applicable to municipal management districts. However, provisions in TWC Chapters 49 and 54 (Chapter 49 being applicable to all districts and Chapter 54 specifically to municipal utility districts) are amended to remove the requirement that a proposal for creation or annexation of certain territory into a special purpose district must be signed by 50 holders of title to land in the territory at issue.
• SB 2014 (Creighton). SB 2014 addresses provisions relating to the administration of water districts, including TCEQ oversight over bond issuances by water districts in certain circumstances and over construction contracts.

This new law requires that if the TCEQ determines that an application for the approval of bonds complies with the requirements for financial feasibility, and the district submitting the application is not required to comply with rules regarding project completion, the TCEQ may not disapprove the issuance of bonds or require that the funding be escrowed solely on the basis that the construction of the project is not complete at the time of the TCEQ’s determination. The legislation also exempts from TCEQ rules expenses regarding continuous construction periods or the length of time for the payment of expenses during construction periods.

Additionally, this bill requires TCEQ to approve an application to issue bonds to finance the following costs:

payment of creation and organization expenses. The bill establishes that expenses are creation and organization expenses if the expenses were incurred through the date of the canvassing of the confirmation election;

• for levee improvement districts, spreading and compacting fill to remove property from the 100-year floodplain if the application otherwise meets all applicable requirements for bond applications; and
• for municipal utility districts and districts with the powers of a municipal utility district, spreading and compacting fill to provide drainage if the costs are less than the cost of constructing or improving drainage facilities.
• If a district is approved for the issuance of bonds by TCEQ to use a certain return flow of wastewater, the approval applies to subsequent bond authorizations unless the district seeks approval to use a different return flow of wastewater.

SB 2014 allows a governmental body to approve change orders for applicable contracts to include certain changes the governing body determines are “beneficial to the district” and certain changes in the scope of work. Finally, this legislation amends TWC § 49.273 to allow change orders increasing the original contract price by more than 25 percent in certain circumstances and exempts change orders from certain advertising and competitive bid soliciting requirements.

Legislation Relating to Open Government

In the 85th Legislative Session, several bills relating to open government were approved that will have an impact on governmental entities and public officials. Below is a brief overview of legislation passed this session relating to the Texas Open Meetings Act (“TOMA”) and the Texas Public Information Act (“TPIA”).

• HB 3047 (Dale). HB 3047 amends the TOMA to require a member of a governmental body who participates in a meeting by videoconference to be considered absent from any portion of the meeting during which audio or video communications with the member is lost or disconnected. In such situations, the governmental body may continue the meeting only if a quorum of the body remains present at the meeting location or if the presiding member is physically present at a location open to the public during the meeting and a quorum is available via video conference.
• HB 3107 (Ashby). HB 3107 amends the TPIA to establish that a public information request is considered withdrawn if: (1) the requestor fails to inspect or duplicate the information in the offices of the governmental body on or before the 60th day after the information is made available; or (2) the requestor fails to pay charges before the 60th day after the date the requestor is informed of charges. This new law also allows a governmental body to treat as one request (for cost estimate purposes) all requests for public information received in one day from an individual, and provides a process to establish monthly and yearly limits on time spent responding to TPIA requests for a particular requestor. HB 3107 also provides that until any unpaid invoices for previous requests are paid by a requestor, the governmental entity is not required to produce the responsive documents.
• SB 532 (Nelson). SB 532 makes confidential under the TPIA “information directly arising from a governmental body’s routine efforts to prevent, detect, investigate, or mitigate a computer security incident, including information contained in or derived from an information security log.” This legislation also creates the “Information Technology Infrastructure Report” and requires reporting regarding information technology infrastructure and security from state agencies.
• SB 564 (Campbell). SB 564 amends the TOMA to allow governmental bodies to meet in closed session to deliberate: (1) security assessments or deployments relating to information resources technology; (2) network security information; or (3) the deployment, or specific occasions for implementation, of security personnel, critical infrastructure, or security devices.
• SB 1440 (Campbell). SB 1440 amends the TOMA to state that attendance by a quorum of a governmental body at a candidate forum, appearance, or debate to inform the electorate is excepted from the definition of a “meeting.” This exception is applicable only if no formal action is taken and discussion of public business is incidental to the event.

Stefanie Albright is a Principal in the Firm’s Districts and Water Practice Groups. If you would like additional information on this legislation or other matters, please contact Stefanie at 512.322.5814 or salbright@lglawfirm.com.