(a) A district desiring to proceed under the Federal Bankruptcy
Code, Chapter 9 (11 United States Code, §§901 - 946) or any other
federal bankruptcy law shall submit an application requesting authorization
pursuant to Water Code, §49.456. The application shall consist of the
following:
(1) a certified copy of the resolution adopted by the board
of directors or other governing body requesting such authorization;
(2) an application fee of $100 plus the cost of required
notice;
(3) a district status report with all information current
and certified within 30 days prior to the date of submittal;
(4) a comparison of the projections or assumptions of
growth, taxes, revenues and expenses submitted to the commission in connection
with the approval of the bonds issued most recently by the district, or, if
commission approval was not required, the projections or assumptions used
by the district in connection with the bonds most recently issued by the district,
to the actual growth, taxes, revenues and expenses;
(5) a description of the reasons that, in the opinion
of the governing body of the district, the projections and assumptions used
in connection with the most recent issue of bonds were not realized and any
other factors which have caused the district financial difficulties;
(6) a complete analysis of the tax rate, user fees or
other charges or sources of revenues that the district may lawfully impose
that would be necessary in order for the district to meet its debts and obligations
as they become due and the impact of such taxes and fees upon taxpayers and
users within the district;
(7) a complete analysis of the reasons that the district
cannot, through the full exercise of its rights and powers under the laws
of this state, reasonably expect to meet its debts and other obligations as
they mature;
(8) a statement of whether the district has complied with
the commission order, approving the issuance of bonds, and this chapter;
(9) a list of the names and addresses of all creditors
of the district or a statement explaining the reasons for the inability to
obtain such a list and the efforts taken to identify such creditors;
(10) the plan of adjustment of the district's debt which
it proposes to file in the bankruptcy proceeding if the commission authorizes
the district to proceed; and
(11) such other information which the commission considers
material to a determination of whether authorization to proceed in bankruptcy
should be granted.
(b) The chief clerk shall mail written notice to all creditors
shown in the district's application, all developers and their lien-holders
and the top ten taxpayers shown in the district status report, the city in
whose corporate limits or extraterritorial jurisdiction the district is located,
if any, and the county in which the district is located. The chief clerk shall
publish notice of the application at least once a week for two consecutive
weeks in a newspaper of general circulation in the county in which the district
is located. The chief clerk shall also publish notice of the application once
in the Texas Bond Reporter of Austin, The Daily Bond Buyer, The Weekly Bond
Buyer, or The Wall Street Journal. Such notices shall be mailed or published
within 30 days of the date an administratively complete application is received
by the executive director. The commission shall not act on the application
before 30 days after such notices are given, mailed, or published.
(c) If, after consideration of all evidence, the commission
determines that the district cannot, through the full exercise of its rights
and powers under the law of this state, reasonably expect to meet its debts
and other obligations as they mature, the commission may authorize the district
to proceed in bankruptcy.
(d) If the commission determines that the district can, through
the full exercise of its rights and powers under the laws of this state, reasonably
expect to meet its debt and other obligations as they mature, the commission
shall deny the district's application and shall order the district to adopt
specific measures to generate sufficient revenues to meet its obligations.
The commission shall also require the district to submit periodic reports
on the implementation of the measures required by the commission and its current
financial condition.
(e) The commission may assess additional fees adequate to cover
its cost in administering this section.
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Source Note: The provisions of this §293.88 adopted to be effective August 5, 1988, 13 TexReg 3638; amended to be effective October 22, 1996, 21 TexReg 9905; amended to be effective September 14, 2000, 25 TexReg 8955 |