1-1  By:  Yost, et al. (Senate Sponsor - Armbrister)       H.B. No. 1266
    1-2        (In the Senate - Received from the House May 14, 1993;
    1-3  May 18, 1993, read first time and referred to Committee on
    1-4  Intergovernmental Relations; May 26, 1993, reported favorably, as
    1-5  amended, by the following vote:  Yeas 6, Nays 1; May 26, 1993, sent
    1-6  to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Armbrister         x                               
   1-10        Leedom                                         x   
   1-11        Carriker                                       x   
   1-12        Henderson                                      x   
   1-13        Madla              x                               
   1-14        Moncrief           x                               
   1-15        Patterson          x                               
   1-16        Rosson                     x                       
   1-17        Shapiro            x                               
   1-18        Wentworth          x                               
   1-19        Whitmire                                       x   
   1-20  COMMITTEE AMENDMENT NO. 1                              By:  Shapiro
   1-21  Amend H.B. 1266 as follows:
   1-22        On page 1, line 62, insert the following after "law" and
   1-23  before the period:  "or any district created under special law the
   1-24  board of directors of which is appointed by the governing bodies of
   1-25  member municipalities, which municipalities have a combined
   1-26  population in excess of 500,000 people".
   1-27                         A BILL TO BE ENTITLED
   1-28                                AN ACT
   1-29  relating to certain laws governing water districts and nonprofit
   1-30  water or sewer service corporations; creating penalties.
   1-31        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-32        SECTION 1.  Section 1.002, Water Code, is amended to read as
   1-33  follows:
   1-34        Sec. 1.002.  Construction of Code.  (a)  The Code
   1-35  Construction Act (Chapter 311, Government Code) applies to the
   1-36  construction of each provision in this code, except as otherwise
   1-37  expressly provided by this code.
   1-38        (b)  In this code:
   1-39              (1)  a reference to a title, chapter, or section
   1-40  without further identification is a reference to a title, chapter,
   1-41  or section of this code; and
   1-42              (2)  a reference to a subtitle, subchapter, subsection,
   1-43  subdivision, paragraph, or other numbered or lettered unit without
   1-44  further identification is a reference to a unit of the next larger
   1-45  unit of this code in which the reference appears.
   1-46        (c)  A reference in a law to a statute or part of a statute
   1-47  revised by this code is considered to be a reference to the part of
   1-48  this code that revises that statute or part of the statute.
   1-49        SECTION 2.  Chapter 50, Water Code, is repealed, except that
   1-50  Subchapter H is continued in effect for the sole purpose of the
   1-51  administration and operation of contracts created or issued under
   1-52  those laws.
   1-53        SECTION 3.  Title 4, Water Code, is amended by adding Chapter
   1-54  49 to read as follows:
   1-55          CHAPTER 49.  PROVISIONS APPLICABLE TO ALL DISTRICTS
   1-56                   SUBCHAPTER A.  GENERAL PROVISIONS
   1-57        Sec. 49.001.  DEFINITIONS.  As used in this chapter:
   1-58              (1)  "District" means any district or authority created
   1-59  by authority of either Article III, Sections 52(b)(1) and (2), or
   1-60  Article XVI, Section 59, of the Texas Constitution, regardless of
   1-61  how created.  The term "district" shall not include any navigation
   1-62  district or port authority created under general or special law.
   1-63              (2)  "Commission" means the Texas Natural Resource
   1-64  Conservation Commission.
   1-65              (3)  "Board" means the governing body of a district.
   1-66              (4)  "Executive director" means the executive director
   1-67  of the commission.
   1-68              (5)  "Water supply corporation" means a nonprofit water
    2-1  supply or sewer service corporation that is created or operating
    2-2  under Chapter 76, Acts of the 43rd Legislature, 1st Called Session,
    2-3  1933 (Article 1434a, Vernon's Texas Civil Statutes).
    2-4              (6)  "Director" means either a supervisor or director
    2-5  appointed or elected to the board.
    2-6              (7)  "Municipal solid waste" has the same meaning
    2-7  assigned by Section 361.003, Health and Safety Code.
    2-8        Sec. 49.002.  APPLICABILITY.  This chapter applies to all
    2-9  general and special law districts to the extent that the provisions
   2-10  of this chapter do not directly conflict with a provision in any
   2-11  other chapter of this code or any Act creating or affecting a
   2-12  special law district.  In the event of such conflict, the specific
   2-13  provisions in such other chapter or Act shall control.
   2-14        Sec. 49.003.  PENALTY.  A district that fails to comply with
   2-15  the filing provisions of this code may be subject to a civil
   2-16  penalty of up to $100 per day for each day the district wilfully
   2-17  continues to violate these provisions after receipt of written
   2-18  notice of violation from the executive director by certified mail,
   2-19  return receipt requested.  The state may sue to recover the
   2-20  penalty.
   2-21        Sec. 49.004.  PENALTY FOR VIOLATION OF DISTRICT RULES.
   2-22  (a)  The board may set reasonable civil penalties for the breach of
   2-23  any rule of the district that shall not exceed the jurisdiction of
   2-24  a justice court as provided by Section 27.031, Government Code.
   2-25        (b)  A penalty under this section is in addition to any other
   2-26  penalty provided by the law of this state and may be enforced by
   2-27  complaints filed in the appropriate court of jurisdiction in the
   2-28  county in which the district's principal office or meeting place is
   2-29  located.
   2-30            (Sections 49.005-49.009 reserved for expansion
   2-31                        SUBCHAPTER B.  CREATION
   2-32        Sec. 49.010.  ORDER OR ACT CREATING DISTRICT.  Within 60 days
   2-33  after the date a district is created, the district shall file with
   2-34  the executive director a certified copy of the order or legislative
   2-35  act creating the district or authorizing its creation, unless the
   2-36  district was created by order of the commission.
   2-37            (Sections 49.011-49.050 reserved for expansion
   2-38               SUBCHAPTER C.  ADMINISTRATIVE PROVISIONS
   2-39        Sec. 49.051.  BOARD OF DIRECTORS.  A district shall be
   2-40  governed by its board, the number of which is otherwise provided by
   2-41  law.
   2-42        Sec. 49.052.  DISQUALIFICATION OF DIRECTORS.  (a)  A person
   2-43  is disqualified from serving as a member of a board of a district
   2-44  which includes less than all the territory in at least one county
   2-45  and which, if located within the corporate area of a city or
   2-46  cities, includes within its boundaries less than 75 percent of the
   2-47  incorporated area of the city or cities, if that person:
   2-48              (1)  is related within the third degree of affinity or
   2-49  consanguinity to a developer of property in the district, any other
   2-50  member of the board, or the manager, engineer, attorney, or other
   2-51  person providing professional services to the district;
   2-52              (2)  is an employee of any developer of property in the
   2-53  district or any director, manager, engineer, attorney, or other
   2-54  person providing professional services to the district or a
   2-55  developer of property in the district in connection with the
   2-56  district or property located in the district;
   2-57              (3)  is a developer of property in the district;
   2-58              (4)  is serving as an attorney, consultant, engineer,
   2-59  manager, architect, or in some other professional capacity for the
   2-60  district or a developer of property in the district in connection
   2-61  with the district or property located in the district;
   2-62              (5)(A)  is a party to a contract with or along with the
   2-63  district except for the purchase of public services furnished by
   2-64  the district to the public generally; or
   2-65                    (B)  is a party to a contract with or along with
   2-66  a developer of property in the district relating to the district or
   2-67  to property within the district, other than a contract limited
   2-68  solely to the purpose of purchasing or conveying real property in
   2-69  the district for the purpose of either establishing a permanent
   2-70  residence, establishing a commercial business within the district,
    3-1  or qualifying as a director; or
    3-2              (6)  during the term of office, fails to maintain the
    3-3  qualifications required by law to serve as a director.
    3-4        (b)  Within 60 days after the board determines a relationship
    3-5  or employment exists which constitutes a disqualification under
    3-6  Subsection (a) of this section, it shall replace the person serving
    3-7  as a member of the board with a person who would not be
    3-8  disqualified.
    3-9        (c)  Any person who wilfully occupies an office as a member
   3-10  of a board and exercises the powers and duties of that office when
   3-11  disqualified under the provisions of Subsection (a) of this section
   3-12  is guilty of a misdemeanor and, on conviction, shall be fined not
   3-13  less than $100 nor more than $1,000.
   3-14        (d)  As used in this section, "developer of property in the
   3-15  district" means any person who owns land located within a district
   3-16  covered under this section and who has divided or proposes to
   3-17  divide the land into two or more parts for the purpose of laying
   3-18  out any subdivision or any tract of land or any addition to any
   3-19  town or city, or for laying out suburban lots or building lots, or
   3-20  any lots, and streets, alleys, or parks or other portions intended
   3-21  for public use, or the use of purchasers or owners of lots fronting
   3-22  thereon or adjacent thereto.
   3-23        (e)  Any rights obtained by any third party through official
   3-24  action of a board covered by this section are not impaired or
   3-25  affected by the disqualification under this section of any member
   3-26  of the board to serve, provided that the third party had no
   3-27  knowledge at the time the rights were obtained of the fact that the
   3-28  member of the board was disqualified to serve.
   3-29        (f)  This section shall not apply to districts defined in
   3-30  Section 49.181(h)(3), (4), or (5) or a district where the principal
   3-31  function of the district is to provide irrigation water to
   3-32  agricultural lands or to provide nonpotable water for any purpose.
   3-33        (g)  A board by unanimous vote of its remaining members may
   3-34  remove a board member only if that board member has missed one-half
   3-35  or more of the regular meetings scheduled during the prior 12
   3-36  months.  Any board member so removed may file a written appeal with
   3-37  the commission within 30 days after receiving written notice of the
   3-38  board action.  The commission may reinstate a removed director if
   3-39  the commission finds that the removal was unwarranted under the
   3-40  circumstances, including the reasons for absences, the time and
   3-41  place of the meetings missed, the business conducted at the
   3-42  meetings missed and any other facts or circumstances the commission
   3-43  may deem relevant.
   3-44        Sec. 49.053.  QUORUM.  A majority of the membership of the
   3-45  board constitutes a quorum for any meeting, and a concurrence of a
   3-46  majority of the entire membership of the board is sufficient for
   3-47  transacting any business of the district.  This section does not
   3-48  apply to districts defined in Section 49.181(h)(3) or (4).
   3-49        Sec. 49.054.  OFFICERS.  (a)  After a district is created and
   3-50  the directors have qualified, the board shall meet, elect a
   3-51  president, vice-president, secretary, and any other officers or
   3-52  assistant officers as the board may deem necessary and begin the
   3-53  discharge of its duties.
   3-54        (b)  After each directors election, the board shall meet and
   3-55  elect officers.
   3-56        (c)  The president is the chief executive officer of the
   3-57  district, presides at all meetings of the board, and shall execute
   3-58  all documents on behalf of the district.  The vice-president shall
   3-59  act as president in case of the absence or disability of the
   3-60  president.  The secretary is responsible for seeing that all
   3-61  records and books of the district are properly kept and shall
   3-62  attest the president's signature on all documents.
   3-63        (d)  The board may appoint another director, the general
   3-64  manager, or any employee as assistant or deputy secretary to assist
   3-65  the secretary, and any such person shall be entitled to certify as
   3-66  to the authenticity of any record of the district, including but
   3-67  not limited to all proceedings relating to bonds, contracts, or
   3-68  indebtedness of the district.
   3-69        (e)  After any election or appointment of a director, a
   3-70  district shall notify the executive director within 30 days after
    4-1  the date of the election or appointment of the name and mailing
    4-2  address of the director chosen and the date that director's term of
    4-3  office expires.  The executive director shall provide forms to the
    4-4  district for such purpose.
    4-5        (f)  This section does not apply to any districts defined in
    4-6  Section 49.181(h)(3) or (4).
    4-7        Sec. 49.055.  SWORN STATEMENT, BOND AND OATH OF OFFICE.
    4-8  (a)  As soon as practicable after a director is elected or
    4-9  appointed, that director shall make the sworn statement prescribed
   4-10  by the constitution for public office.
   4-11        (b)  As soon as practicable after a director has made the
   4-12  sworn statement, and before beginning to perform the duties of
   4-13  office, that director shall take the oath of office prescribed by
   4-14  the constitution for public officers.
   4-15        (c)  Before beginning to perform the duties of office, each
   4-16  director shall execute a bond for $10,000 payable to the district
   4-17  and conditioned on the faithful performance of that director's
   4-18  duties.  All bonds of the directors shall be approved by the board
   4-19  and paid for by the district.
   4-20        (d)  The sworn statement, bond, and oath shall be filed with
   4-21  the district and retained in its records.  A duplicate original of
   4-22  the sworn statement and the oath shall also be filed with the
   4-23  secretary of state within 10 days after their execution and need
   4-24  not be filed before the new director begins to perform the duties
   4-25  of office.
   4-26        (e)  This section does not apply to any district defined in
   4-27  Section 49.181(h)(3) or (4).
   4-28        Sec. 49.056.  GENERAL MANAGER.  (a)  The board may employ or
   4-29  contract with a person to perform such services as general manager
   4-30  for the district as the board may from time to time specify.  The
   4-31  board may delegate to the general manager full authority to manage
   4-32  and operate the affairs of the district subject only to orders of
   4-33  the board.
   4-34        (b)  The board may delegate to the general manager the
   4-35  authority to employ all persons necessary for the proper handling
   4-36  of the business and operation of the district and to determine the
   4-37  compensation to be paid all employees other than the general
   4-38  manager.
   4-39        (c)  Except as provided by Section 49.052, a director may be
   4-40  employed as general manager of the district, but the compensation
   4-41  of a general manager who also serves as a director shall be
   4-42  established by the other directors.
   4-43        Sec. 49.057.  MANAGEMENT OF DISTRICT.  (a)  The board shall
   4-44  be responsible for the management of all the affairs of the
   4-45  district.  The district shall employ or contract with all persons,
   4-46  firms, partnerships, corporations, or other entities, public or
   4-47  private, deemed necessary by the board for the conduct of the
   4-48  affairs of the district, including, but not limited to, engineers,
   4-49  attorneys, financial advisors, operators, bookkeepers, tax
   4-50  assessors and collectors, auditors, and administrative staff.
   4-51        (b)  The board shall adopt an annual budget.  All district
   4-52  employees are employed at the will of the district unless the
   4-53  district and employee execute a written employment contract.
   4-54        (c)  The board shall set the compensation and terms for
   4-55  consultants.
   4-56        (d)  In selecting attorneys, engineers, auditors, financial
   4-57  advisors, or other professional consultants, the district shall
   4-58  follow the procedures provided in Section 3A of the Professional
   4-59  Services Procurement Act (Article 664-4, Vernon's Texas Civil
   4-60  Statutes) and shall comply with all the provisions of that Act.
   4-61        (e)  The board shall require an officer, employee, or
   4-62  consultant who collects, pays, or handles any funds of the district
   4-63  to furnish good and sufficient bond, payable to the district, in an
   4-64  amount determined by the board to be sufficient to safeguard the
   4-65  district.  The bond shall be conditioned on the faithful
   4-66  performance of that person's duties and on accounting for all funds
   4-67  and property of the district.  Such bond shall be signed or
   4-68  endorsed by a surety company authorized to do business in the
   4-69  state.
   4-70        (f)  The board may pay the premium on surety bonds required
    5-1  of officials, employees, or consultants of the district out of any
    5-2  available funds of the district, including proceeds from the sale
    5-3  of bonds.
    5-4        (g)  The board may adopt bylaws to govern the affairs of the
    5-5  district to perform its purposes.  The board may, by resolution,
    5-6  authorize its general manager or other employee to execute
    5-7  documents on behalf of the district.
    5-8        (h)  The board shall also have the right to purchase all
    5-9  materials, supplies, equipment, vehicles, and machinery needed by
   5-10  the district to perform its purposes.
   5-11        Sec. 49.058.  CONFLICTS OF INTEREST.  A director of a
   5-12  district is subject to the provisions of Chapter 171, Local
   5-13  Government Code, relating to the regulation of conflicts of
   5-14  officers of local governments.
   5-15        Sec. 49.059.  DISQUALIFICATION OF TAX ASSESSOR AND COLLECTOR.
   5-16  (a)  No person may serve as tax assessor and collector of a
   5-17  district providing potable water or sewer utility services to
   5-18  household users if that person:
   5-19              (1)  is related within the third degree of affinity or
   5-20  consanguinity to any developer of property in the district, a
   5-21  member of the board, or the manager, engineer, or attorney for the
   5-22  district;
   5-23              (2)  is or was within two years immediately preceding
   5-24  the assumption of their assessment and collection duties with the
   5-25  district an employee of any developer of property in the district,
   5-26  or any director, manager, engineer, or attorney for the district;
   5-27              (3)  owns an interest in or is employed by any
   5-28  corporation organized for the purpose of tax assessment and
   5-29  collection services, a substantial portion of the stock of which is
   5-30  owned by a developer of property within the district or any
   5-31  director, manager, engineer, or attorney for the district; or
   5-32              (4)  is directly or through a corporation developing
   5-33  land in the district or is a director, engineer, or attorney for
   5-34  the district.
   5-35        (b)  Within 60 days after the board determines a relationship
   5-36  or employment exists which constitutes a disqualification under
   5-37  Subsection (a), it shall replace the person serving as tax assessor
   5-38  and collector with a person who would not be disqualified.
   5-39        (c)  Any person who wilfully violates the provisions of
   5-40  Subsection (a) is guilty of a misdemeanor and on conviction shall
   5-41  be fined not less than $100 nor more than $1,000.
   5-42        (d)  As used in this section, "developer of property in the
   5-43  district" means any person who owns land located within a district
   5-44  covered under this section and who has divided or proposes to
   5-45  divide the land into two or more parts for the purpose of laying
   5-46  out any subdivision or any tract of land or any addition to any
   5-47  town or city, or for laying out suburban lots or building lots, or
   5-48  any lots, streets, alleys, or parks or other portions intended for
   5-49  public use, or the use of purchasers or owners of lots fronting
   5-50  thereon or adjacent thereto.
   5-51        Sec. 49.060.  FEES OF OFFICE; REIMBURSEMENT.  (a)  A director
   5-52  is entitled to receive fees of office of not more than $100  a day
   5-53  for each day the director actually spends performing the duties of
   5-54  a director.  The fees of office may not exceed $6,000 per annum
   5-55  except for directors of a river authority which is engaged in the
   5-56  distribution and sale of electric energy to the public.
   5-57        (b)  Each director is also entitled to receive reimbursement
   5-58  of actual expenses reasonably and necessarily incurred while
   5-59  engaging in activities on behalf of the district.
   5-60        (c)  In order to receive fees of office and to receive
   5-61  reimbursement for expenses, each director shall file with the
   5-62  district a verified statement showing the number of days actually
   5-63  spent in the service of the district and a general description of
   5-64  the duties performed for each day of service.
   5-65        (d)  Section 49.002 notwithstanding, in all areas of conflict
   5-66  the provisions of this section shall take precedence over all prior
   5-67  statutory enactments.  If the enactment of this section results in
   5-68  an increase in the fees of office for any district, that district's
   5-69  fees of office shall not increase unless the board adopts a
   5-70  resolution authorizing payment of the higher fees.
    6-1        Sec. 49.061.  SEAL.  The directors shall adopt a seal for the
    6-2  district.
    6-3        Sec. 49.062.  OFFICES AND MEETING PLACES.  (a)  The board
    6-4  shall designate from time to time and maintain one or more regular
    6-5  offices for conducting the business of the district and maintaining
    6-6  the records of the district.  Such offices may be located either
    6-7  inside or outside the district's boundaries as determined in the
    6-8  discretion of the board.
    6-9        (b)  The board shall designate one or more places inside or
   6-10  outside the district for conducting the meetings of the board.  The
   6-11  meeting place may be a private residence or office, provided that
   6-12  the board, in its order establishing the meeting place, declares
   6-13  the same to be a public place and invites the public to attend any
   6-14  meeting of the board.  If the board establishes a meeting place or
   6-15  places outside the district, it shall give notice of the location
   6-16  or locations by filing a true copy of the resolution establishing
   6-17  the location or locations of the meeting place or places with the
   6-18  commission and also by publishing notice of the location or
   6-19  locations in a newspaper of general circulation in the district.
   6-20  If the location of any of the meeting places outside the district
   6-21  is changed, notice of the change shall be given in the same manner.
   6-22        (c)  After at least 25 qualified electors are residing in a
   6-23  district, on written request of at least five of those electors,
   6-24  the board shall designate a meeting place and hold meetings within
   6-25  the district if it determines that the meeting place used by the
   6-26  district deprives the residents of a reasonable opportunity to
   6-27  attend district meetings.  On the failure to designate the location
   6-28  of the meeting place within the district, five electors may
   6-29  petition the commission to designate a location.  If it determines
   6-30  that the meeting place used by the district deprives the residents
   6-31  of a reasonable opportunity to attend district meetings, the
   6-32  commission may designate a meeting place inside or outside the
   6-33  district which is reasonably available for the public and require
   6-34  that the meetings be held at such place.  After the next election,
   6-35  the board may designate different meeting places, including one
   6-36  located outside the boundaries of the district.
   6-37        (d)  Two or more districts may designate and share offices
   6-38  and meeting places.  This section does not apply to districts
   6-39  defined in Section 49.181(h)(3) or (4).
   6-40        Sec. 49.063.  NOTICE OF MEETINGS.  Notice of meetings of the
   6-41  board shall be given as set forth in the open meetings act, Chapter
   6-42  271, Acts of the 60th Legislature, Regular Session, 1967 (Article
   6-43  6252-17, Vernon's Texas Civil Statutes), except that if a district
   6-44  does not have a meeting place within the district, the district
   6-45  shall post notice of its meeting at a public place within the
   6-46  district specified by the board in a written resolution, rather
   6-47  than at its administrative office.  The board shall specify such
   6-48  public place to be a bulletin board or other place within the
   6-49  district which is reasonably available to the public.  Neither
   6-50  failure to provide notice of a regular meeting nor an insubstantial
   6-51  defect in notice of any meeting shall affect the validity of any
   6-52  action taken at the meeting.
   6-53        Sec. 49.064.  MEETINGS.  The board shall hold such regular
   6-54  and special meetings as may be necessary for the proper conduct of
   6-55  the district's business.  All meetings shall be conducted in
   6-56  accordance with the open meetings act, Chapter 271, Acts of the
   6-57  60th Legislature, Regular Session, 1967 (Article 6252-17, Vernon's
   6-58  Texas Civil Statutes).  A meeting of a committee of the board, or a
   6-59  committee composed of representatives of more than one board, where
   6-60  less than a quorum of any board is present is not subject to the
   6-61  provisions of the open meetings act, Chapter 271, Acts of the 60th
   6-62  Legislature, Regular Session, 1967 (Article 6252-17, Vernon's Texas
   6-63  Civil Statutes).
   6-64        Sec. 49.065.  RECORDS.  (a)  The board shall keep a complete
   6-65  account of all its meetings and proceedings and shall preserve its
   6-66  minutes, contracts, records, notices, accounts, receipts, and other
   6-67  records in a safe place.
   6-68        (b)  The records of each district are the property of the
   6-69  district and are subject to the open records act, Chapter 424, Acts
   6-70  of the 63rd Legislature, Regular Session, 1973 (Article 6252-17a,
    7-1  Vernon's Texas Civil Statutes).
    7-2        (c)  The preservation, microfilming, destruction, or other
    7-3  disposition of the records of each district is subject to the
    7-4  requirements of Chapter 201, Local Government Code, and rules
    7-5  adopted thereunder.
    7-6        Sec. 49.066.  SUITS.  (a)  A district may sue and be sued in
    7-7  the courts of this state in the name of the district by and through
    7-8  its board.  All courts shall take judicial notice of the creation
    7-9  of the district and of its boundaries.
   7-10        (b)  Any court in the state rendering judgment for debt
   7-11  against a district may order the board to levy, assess, and collect
   7-12  taxes or assessments to pay the judgment.
   7-13        (c)  The president or the general manager of any district
   7-14  shall be the agent of the district on whom process, notice, or
   7-15  demand required or permitted by law to be served upon the district
   7-16  may be served.
   7-17        (d)  Except as provided in Subsection (e) of this section, no
   7-18  suit may be instituted in any court of this state contesting:
   7-19              (1)  the validity of the creation and boundaries of a
   7-20  district created under this code;
   7-21              (2)  any bonds or other obligations created under this
   7-22  code; or
   7-23              (3)  the validity or the authorization of a contract
   7-24  with the United States by the district.
   7-25        (e)  The matters listed in Subsection (d) of this section may
   7-26  be judicially inquired into at any time and determined in any suit
   7-27  brought by the State of Texas through the attorney general.  The
   7-28  action shall be brought on good cause shown, except where otherwise
   7-29  provided by other provisions of this code or by the Texas
   7-30  Constitution.  It is specifically provided, however, that no such
   7-31  proceeding shall affect the validity of or security for any bonds
   7-32  or other obligations theretofore issued by a district if such bonds
   7-33  or other obligations have been approved by the attorney general as
   7-34  provided by Section 49.184.
   7-35        (f)  A district or water supply corporation shall not be
   7-36  required to give bond for appeal, injunction, or costs in any suit
   7-37  to which it is a party and shall not be required to deposit more
   7-38  than the amount of any award in any eminent domain proceeding.
   7-39        Sec. 49.067.  CONTRACTS.  A district shall contract, and be
   7-40  contracted with, in the name of the district.
   7-41        Sec. 49.068.  CONTRACTS WITH GOVERNMENTAL AGENCIES.  The
   7-42  provisions of this chapter pertaining to bids and the Local
   7-43  Government Code notwithstanding, a district may purchase property
   7-44  from any governmental entity by negotiated contract without the
   7-45  necessity of securing appraisals or advertising for bids.
   7-46        Sec. 49.069.  EMPLOYEE BENEFITS.  (a)  The board may provide
   7-47  for and administer a retirement, disability, and death compensation
   7-48  fund for the employees of the district and may adopt a plan or
   7-49  plans to effectuate the purpose of this section, including the
   7-50  forms of insurance and annuities which are considered advisable by
   7-51  the board.  The board, after notice to the employees and a hearing,
   7-52  may change any plan, rule, or regulation.
   7-53        (b)  All money provided from the compensation of the
   7-54  employees participating in the fund and plan authorized by this
   7-55  section and by the district for the retirement, disability, and
   7-56  death compensation fund, after the money has been received by the
   7-57  district, shall be invested as the board from time to time
   7-58  considers advisable.  The money may be invested in the following
   7-59  manner:
   7-60              (1)  in bonds of the United States, the State of Texas,
   7-61  any county, city, or other political subdivision of this state, or
   7-62  in bonds issued by any agency of the United States, the payment of
   7-63  the principal of and interest on which is guaranteed by the United
   7-64  States; and
   7-65              (2)  in life insurance policies, endowment or annuity
   7-66  contracts, or interest-bearing certificates of legal reserve life
   7-67  insurance companies authorized to write the contracts in the State
   7-68  of Texas.
   7-69        (c)  A sufficient amount of the money shall be kept on hand
   7-70  to meet the immediate payment of amounts likely to become due each
    8-1  year out of the fund as determined by the board.
    8-2        (d)  The recipients or beneficiaries from the fund shall not
    8-3  be eligible for any other pension, retirement fund, or direct aid
    8-4  from the State of Texas, unless the fund created under this chapter
    8-5  is released to the State of Texas as a condition precedent to
    8-6  receiving the other pension, aid, or joining of any other system.
    8-7        (e)  The board may include hospitalization and medical
    8-8  benefits to its employees as part of the compensation currently
    8-9  paid to the officers and employees and may adopt any plan, rule, or
   8-10  regulation in connection with it and amend or change the plan,
   8-11  rule, or regulation as it may determine.
   8-12        (f)  This section shall not apply to any river authority as
   8-13  that term is defined in Section 30.003(4).
   8-14        Sec. 49.070.  WORKERS' COMPENSATION.  The board may become a
   8-15  subscriber under the Texas Workers' Compensation Act (Article
   8-16  8308-1.01 et seq., Vernon's Texas Civil Statutes) with any
   8-17  insurance company authorized to write the policies in the State of
   8-18  Texas.
   8-19        Sec. 49.071.  DISTRICT NAME CHANGE.  (a)  On petition by a
   8-20  district showing reasonable grounds for a name change, the
   8-21  commission by order may change the name of the district to the name
   8-22  requested by the district.  The new name must be generally
   8-23  descriptive of the location of the district followed by the type of
   8-24  district as provided by the title of the chapter of the Water Code
   8-25  governing the district.  If a district is located wholly within one
   8-26  county that contains more than one district of that type, the
   8-27  district may be differentiated, if necessary, by adding to the new
   8-28  name the proper consecutive number.  The new name may not be the
   8-29  same as the name of any other district in the county.
   8-30        (b)  A name change takes effect on the date of issuance of
   8-31  the commission order making the name change.
   8-32        (c)  Not later than the 30th day after the date of issuance
   8-33  of the commission order making the name change, the district shall
   8-34  publish notice of the name change in a newspaper or newspapers of
   8-35  general circulation in the county or counties in which the district
   8-36  is located.  Within that same period, the district shall also give
   8-37  notice of the name change by mail to utility customers or
   8-38  permittees, if any, and, to the extent practicable, to the holders
   8-39  of bonds, obligations, and other indebtedness of the district.
   8-40  Failure of the district to comply with this subsection does not
   8-41  affect the validity of the name change.
   8-42        (d)  A change in the name of a district does not affect
   8-43  bonds, obligations, or other indebtedness of the district existing
   8-44  before the name change occurred.
   8-45            (Sections 49.072-49.100 reserved for expansion
   8-46                  SUBCHAPTER D.  ELECTION PROVISIONS
   8-47        Sec. 49.101.  GENERAL.  All elections shall be generally
   8-48  conducted in accordance with the Election Code except as otherwise
   8-49  provided for by this code.  Write-in candidacies for any district
   8-50  office shall be governed by Subchapter C, Chapter 146, Election
   8-51  Code.
   8-52        Sec. 49.102.  CONFIRMATION AND DIRECTOR ELECTION.
   8-53  (a)  Before issuing any bonds or other obligations, an election
   8-54  shall be held within the boundaries of the proposed district to
   8-55  determine if the proposed district shall be established and, if the
   8-56  directors of the district are required by law to be elected, to
   8-57  elect permanent directors.
   8-58        (b)  Notice of a confirmation or director election shall
   8-59  state the day and place or places for holding the election, the
   8-60  propositions to be voted on, or the number of directors to be voted
   8-61  on.
   8-62        (c)  The ballots for a confirmation election shall be printed
   8-63  to provide for voting "For District" and "Against District."
   8-64  Ballots for a directors election shall provide the names of the
   8-65  persons appointed by the governing body who qualified and are
   8-66  serving as temporary directors at the time the election is called.
   8-67  The ballots shall also have blank places after the names of the
   8-68  temporary directors in which a voter may write the names of other
   8-69  persons for directors.
   8-70        (d)  Immediately after the confirmation and director
    9-1  election, the presiding judge shall take returns of the results to
    9-2  the temporary board.  The temporary board shall canvass the returns
    9-3  and declare the results at the earliest practicable time.
    9-4        (e)  If a majority of the votes cast in the election favor
    9-5  the creation of the district, then the temporary board shall
    9-6  declare that the district is created and enter the result in its
    9-7  minutes.  If a majority of the votes cast in the election are
    9-8  against the creation of the district, the temporary board shall
    9-9  declare that the district was defeated and enter the result in its
   9-10  minutes.  A copy of the order shall be filed with the commission.
   9-11        (f)  The order canvassing the results of the confirmation
   9-12  election shall contain a description of the district's boundaries
   9-13  and shall be filed with the executive director and in the deed
   9-14  records of the county or counties in which the district is located.
   9-15        (g)  The temporary board shall also declare the persons
   9-16  receiving the highest number of votes for directors to have been
   9-17  elected as permanent directors.
   9-18        (h)  Unless otherwise agreed, the directors shall decide the
   9-19  initial terms of office by lot, with a simple majority of directors
   9-20  serving until the second succeeding directors' election and the
   9-21  remaining directors serving until the next directors' election.
   9-22        (i)  The provisions of this section shall not be applicable
   9-23  to any district exercising the powers of Chapter 375, Local
   9-24  Government Code, or any district created by a special Act of the
   9-25  legislature which does not require a confirmation election.
   9-26        Sec. 49.103.  TERMS OF OFFICE OF DIRECTORS.  (a)  Except as
   9-27  provided by Section 49.102 of this chapter, the members of the
   9-28  board of a district shall serve for four-year terms.
   9-29        (b)  An election shall be held on the uniform election date,
   9-30  established by the Election Code, in either January or May of each
   9-31  even-numbered year to elect the appropriate number of directors.
   9-32        (c)  The permanent directors may assign a position number to
   9-33  each director's office, in which case directors shall thereafter be
   9-34  elected by position and not at large.
   9-35        (d)  A district may provide for the election of all
   9-36  directors, or a majority of directors, from single-member
   9-37  districts, which shall be geographically described within the
   9-38  boundaries of the district in a manner which is equitable for the
   9-39  electors within such districts and within the district generally.
   9-40        (e)  Section 49.002 notwithstanding, in all areas of conflict
   9-41  the provisions of Subsection (b) shall take precedence over all
   9-42  prior statutory enactments.
   9-43        Sec. 49.104.  ALTERNATIVE ELECTION PROCEDURES.
   9-44  (a)  Notwithstanding the provisions and requirements of the
   9-45  Election Code and general laws, any two or more districts situated
   9-46  in the same county and in which substantially all of the land is
   9-47  being or has been developed as part of a single community
   9-48  development plan and which are served by common water supply and
   9-49  waste disposal systems may by mutual agreement designate a common
   9-50  election office and common early and regular polling places within
   9-51  one or more of the districts, but outside the boundaries of one or
   9-52  more of the districts, for the conduct of director election
   9-53  proceedings and early and regular balloting in director elections.
   9-54  This alternative election procedure may only be used if the common
   9-55  election office and polling places so designated:
   9-56              (1)  are within buildings open to the public;
   9-57              (2)  are within the boundaries of at least one of the
   9-58  districts;
   9-59              (3)  meet the requirements of the Election Code and
   9-60  general laws as polling places; and
   9-61              (4)  are located not more than five miles from any
   9-62  portion of the boundaries of any of the participating districts.
   9-63        (b)  Such districts may also agree upon and designate a
   9-64  common election officer and common early and regular voting
   9-65  officials for some or all of the director elections to be
   9-66  simultaneously conducted at a common location, any of whom may be
   9-67  nonelective employees of one or more of the districts, so long as
   9-68  the early and regular voting officials are qualified voters within
   9-69  at least one of the districts.
   9-70        Sec. 49.105.  VACANCIES.  (a)  Except as otherwise provided
   10-1  in this code, all vacancies on the board and in other offices shall
   10-2  be filled for the unexpired term by appointment of the board.
   10-3        (b)  If the number of directors is reduced to fewer than a
   10-4  majority, the vacancies shall be filled by appointment by the
   10-5  commission or the county commissioners court if the district was
   10-6  created by the county commissioners court.  An appointed director
   10-7  shall serve for the unexpired term of the director he or she is
   10-8  replacing.
   10-9        (c)  In the event of a failure to elect one or more members
  10-10  of the board of a district resulting from the absence of, or
  10-11  failure to vote by, the qualified voters in the district, the
  10-12  current members of the board holding the positions not filled at
  10-13  such election shall be deemed to have been reelected and shall
  10-14  serve an additional term of office.
  10-15        Sec. 49.106.  BOND ELECTIONS.  (a)  Before an election is
  10-16  held to authorize the issuance of bonds, other than refunding
  10-17  bonds, there shall be filed in the office of the district and open
  10-18  to inspection by the public an engineer's report covering the land,
  10-19  improvements, facilities, plants, equipment, and appliances to be
  10-20  purchased or constructed and their estimated cost, together with
  10-21  maps, plats, profiles, and data fully showing and explaining the
  10-22  report.
  10-23        (b)  Notice of a bond election shall contain the proposition
  10-24  or propositions to be voted upon, which includes the  estimate of
  10-25  the probable cost of design, construction, purchase and acquisition
  10-26  of improvements and additions thereto, and incidental expenses
  10-27  connected with such improvements and the issuance of bonds.
  10-28        (c)  A bond election may be held on the same day as any other
  10-29  district election.  The bond election may be called by a separate
  10-30  election order or as a part of any other election order.  The board
  10-31  may submit multiple purposes in a single proposition at an
  10-32  election.
  10-33        Sec. 49.107.  OPERATION AND MAINTENANCE TAX.  (a)  A district
  10-34  may levy and collect a tax for operation and maintenance purposes,
  10-35  including funds for planning, constructing, acquiring, maintaining,
  10-36  repairing, and operating all necessary land, plants, works,
  10-37  facilities, improvements, appliances, and equipment of the district
  10-38  and for paying costs of proper services, engineering and legal
  10-39  fees, and organization and administrative expenses.
  10-40        (b)  An operation and maintenance tax may not be levied by a
  10-41  district until it is approved by a majority of the electors voting
  10-42  at an election held for that purpose.  After such a tax has been
  10-43  authorized by the district's voters, the board shall be authorized
  10-44  to levy the tax and have it assessed and collected as other
  10-45  district taxes.
  10-46        (c)  An operation and maintenance tax election may be held at
  10-47  the same time and in conjunction with any other district election.
  10-48  The election may be called by a separate election order or as part
  10-49  of any other election order.
  10-50        (d)  The proposition in an operation and maintenance tax
  10-51  election may be for a specific maximum rate or for an unlimited
  10-52  rate.
  10-53        (e)  If a district has any surplus operation and maintenance
  10-54  tax funds which are not needed for the purposes for which they were
  10-55  collected, the funds may be used for any lawful purpose.
  10-56        Sec. 49.108.  CONTRACT ELECTIONS.  (a)  A contract may
  10-57  provide that the district will make payment under the contract from
  10-58  proceeds from the sale of notes or bonds, from taxes, or from any
  10-59  other income of the district or any combination of these.
  10-60        (b)  A district may make payments under a contract from taxes
  10-61  other than operation and maintenance taxes after the provisions of
  10-62  the contract have been approved by a majority of the electors
  10-63  voting at an election held for that purpose.
  10-64        (c)  A contract election may be held at the same time and in
  10-65  conjunction with any other district election.  The election may be
  10-66  called by a separate election order or as part of any other
  10-67  election order.
  10-68        (d)  A contract approved by the voters will constitute an
  10-69  obligation against the taxing power of the district to the extent
  10-70  provided in the contract.
   11-1            (Sections 49.109-49.150 reserved for expansion
   11-2                   SUBCHAPTER E.  FISCAL PROVISIONS
   11-3        Sec. 49.151.  EXPENDITURES.  (a)  Except as hereinafter
   11-4  provided, a district's money may be disbursed only by check, draft,
   11-5  order, or other instrument which shall be signed by at least a
   11-6  majority of the directors.
   11-7        (b)  The board may by resolution allow the general manager,
   11-8  treasurer, bookkeeper, or other employee of the district to sign
   11-9  disbursements.
  11-10        (c)  The board may by resolution allow disbursements to be
  11-11  transferred by federal reserve wire system to accounts in the name
  11-12  of the district.
  11-13        Sec. 49.152.  PURPOSES FOR BORROWING MONEY.  The district may
  11-14  borrow money for any corporate purpose or combination of corporate
  11-15  purposes only in compliance with the methods and procedures
  11-16  specifically provided by this chapter or by general law.
  11-17        Sec. 49.153.  REVENUE NOTES.  (a)  The board, without the
  11-18  necessity of an election, may borrow money on negotiable notes of
  11-19  the district to be paid solely from the revenues derived from the
  11-20  ownership of all or any designated part of the district's works,
  11-21  plants, improvements, facilities, or equipment after deduction of
  11-22  the reasonable cost of maintaining and operating the facilities.
  11-23        (b)  The notes may be first or subordinate lien notes within
  11-24  the discretion of the board, but no obligation may ever be a charge
  11-25  on the property of the district or on taxes levied or collected by
  11-26  the district but shall be solely a charge on the revenues pledged
  11-27  for the payment of the obligation.  No part of the obligation may
  11-28  ever be paid from taxes levied or collected by the district.
  11-29        (c)  A district may not execute a note for a term longer than
  11-30  three years unless the commission issues an order approving the
  11-31  note.
  11-32        (d)  This section does not apply to a district defined in
  11-33  Section 49.181(h)(3) or (4).
  11-34        Sec. 49.154.  BOND ANTICIPATION NOTES; TAX ANTICIPATION
  11-35  NOTES.  (a)  The board may declare an emergency in the matter of
  11-36  funds not being available to pay principal of and interest on any
  11-37  bonds of the district payable in whole or in part from taxes or to
  11-38  meet any other needs of the district and may issue negotiable tax
  11-39  anticipation notes or negotiable bond anticipation notes to borrow
  11-40  the money needed by the district without advertising or giving
  11-41  notice of the sale.  Bond anticipation notes and tax anticipation
  11-42  notes shall mature within one year of their date.
  11-43        (b)  Tax anticipation notes may be issued for any purpose for
  11-44  which the district is authorized to levy taxes, and tax
  11-45  anticipation notes shall be secured with the proceeds of taxes to
  11-46  be levied by the district in the succeeding 12-month period.  The
  11-47  board may covenant with the purchasers of the notes that the board
  11-48  will levy a sufficient tax to pay the principal of and interest on
  11-49  the notes and pay the costs of collecting the taxes.
  11-50        (c)  Bond anticipation notes may be issued for any purpose
  11-51  for which bonds of the district may have previously been voted or
  11-52  may be issued for the purpose of refunding previously issued bond
  11-53  anticipation notes.  A district may covenant with the purchasers of
  11-54  the bond anticipation notes that the district will use the proceeds
  11-55  of sale of any bonds in the process of issuance for the purpose of
  11-56  refunding the bond anticipation notes, in which case the board will
  11-57  be required to use the proceeds received from sale of the bonds in
  11-58  the process of issuance to pay principal, interest, or redemption
  11-59  price on the bond anticipation notes.
  11-60        (d)  Districts required to seek commission approval of bonds
  11-61  must have an application for such approval on file with the
  11-62  commission prior to the issuance of bond anticipation notes.
  11-63        Sec. 49.155.  REPAYMENT OF EXPENSES.  (a)  The district may
  11-64  pay all costs and expenses necessarily incurred in the organization
  11-65  and operation of a district during creation and construction
  11-66  periods including, but not limited to, the following:
  11-67              (1)  organizational, administrative, and operating
  11-68  expenses;
  11-69              (2)  the cost of investigation and making plans;
  11-70              (3)  the cost of the engineer's report;
   12-1              (4)  legal fees; and
   12-2              (5)  any other incidental expenses.
   12-3        (b)  For purposes of this section, construction periods shall
   12-4  mean any periods during which the district is constructing its
   12-5  facilities or there is construction by third parties of above
   12-6  ground improvements within the district, but in no event longer
   12-7  than five years.
   12-8        (c)  The district may reimburse any person for money advanced
   12-9  for the purposes in Subsection (a) and may be charged interest on
  12-10  such funds.
  12-11        (d)  These payments may be made from money obtained from the
  12-12  issuance of notes or the sale of bonds issued by the district or
  12-13  out of maintenance taxes or other revenues of the district.
  12-14        Sec. 49.156.  DEPOSITORY.  (a)  The board, by order or
  12-15  resolution, shall designate one or more banks or savings
  12-16  associations within the state to serve as the depository for the
  12-17  funds of the district.  The board shall not be required to
  12-18  advertise or solicit bids in selecting its depositories.
  12-19        (b)  To the extent that funds in the depository banks or
  12-20  savings associations are not insured by the Federal Deposit
  12-21  Insurance Corporation, they shall be secured in the manner provided
  12-22  by law for the security of funds by the Public Funds Collateral
  12-23  Act, (Article 2529d, Vernon's Texas Civil Statutes).
  12-24        (c)  The board may authorize a designated representative to
  12-25  supervise the substitution of securities pledged to secure the
  12-26  district's funds.
  12-27        Sec. 49.157.  INVESTMENTS.  (a)  All district deposits and
  12-28  investments shall be governed by the Public Funds Investment Act of
  12-29  1987 (Article 842a-2, Vernon's Texas Civil Statutes).
  12-30        (b)  The board may provide that an authorized representative
  12-31  of the district may invest and reinvest the funds of the district
  12-32  and provide for money to be withdrawn from the appropriate accounts
  12-33  of the district for the investments on such terms as the board
  12-34  considers advisable.
  12-35        Sec. 49.158.  FISCAL YEAR.  Within 30 days after a district
  12-36  becomes financially active, the board shall adopt a fiscal year by
  12-37  a formal board resolution.  The district shall notify the executive
  12-38  director of the adopted fiscal year within 30 days after adoption.
  12-39  The district may change its fiscal year at any time; provided,
  12-40  however, it may not be changed more than once in any 24 month
  12-41  period.  After any change in the district's fiscal year, the
  12-42  district shall notify the executive director of the changed fiscal
  12-43  year within 30 days after adoption.
  12-44            (Sections 49.159-49.180 reserved for expansion
  12-45                   SUBCHAPTER F.  ISSUANCE OF BONDS
  12-46        Sec. 49.181.  AUTHORITY OF COMMISSION OVER ISSUANCE OF
  12-47  DISTRICT BONDS.  (a)  A district may not issue bonds unless the
  12-48  commission determines that the project to be financed by the bonds
  12-49  is feasible and issues an order approving the issuance of the
  12-50  bonds.  This section does not apply to refunding bonds.
  12-51        (b)  A district may submit to the commission a written
  12-52  application for investigation of feasibility.  An engineer's report
  12-53  describing the project, including the data, profiles, maps, plans,
  12-54  and specifications prepared in connection with the report, must be
  12-55  submitted with the application.
  12-56        (c)  The executive director shall examine the application and
  12-57  the report and shall inspect the project area.  The district shall,
  12-58  on request, supply the executive director with additional data and
  12-59  information necessary for an investigation of the application, the
  12-60  engineer's report, and the project.
  12-61        (d)  The executive director shall prepare a written report on
  12-62  the project and include suggestions, if any, for changes or
  12-63  improvements in the project.  The executive director shall retain a
  12-64  copy of the report and send a copy of the report to both the
  12-65  commission and the district.
  12-66        (e)  The commission shall consider the application, the
  12-67  engineer's report, the executive director's report, and any other
  12-68  evidence allowed by commission rule to be considered in determining
  12-69  the feasibility of the project.
  12-70        (f)  The commission shall determine whether the project to be
   13-1  financed by the bonds is feasible and issue an order either
   13-2  approving or disapproving, as appropriate, the issuance of the
   13-3  bonds.  The commission shall retain a copy of the order and send a
   13-4  copy of the order to the district.
   13-5        (g)  Notwithstanding any provision of this code to the
   13-6  contrary, the commission may approve the issuance of bonds of a
   13-7  district without the submission of plans and specifications of the
   13-8  improvements to be financed with the bonds.  The commission may
   13-9  condition the approval on any terms or conditions considered
  13-10  appropriate by the commission.
  13-11        (h)  This section does not apply to a district if:
  13-12              (1)  the district's boundaries include one entire
  13-13  county;
  13-14              (2)  the district was created by a special Act of the
  13-15  legislature and:
  13-16                    (i)  the district is located entirely within one
  13-17  county;
  13-18                    (ii)  entirely within one or more home-rule
  13-19  municipalities;
  13-20                    (iii)  the total taxable value of the real
  13-21  property and improvements to the real property zoned by the one or
  13-22  more home-rule municipalities for residential purposes and located
  13-23  within the district does not exceed 25 percent of the total taxable
  13-24  value of all taxable property in the district, as shown by the most
  13-25  recent certified appraisal tax roll prepared by the appraisal
  13-26  district for the county; and
  13-27                    (iv)  the district was not required by law to
  13-28  obtain commission approval of its bonds before the effective date
  13-29  of this section;
  13-30              (3)  the district is a river authority as defined in
  13-31  Section 30.003(4);
  13-32              (4)  the district was created by a special Act of the
  13-33  legislature and:
  13-34                    (i)  is a provider of service to two or more
  13-35  municipalities; and
  13-36                    (ii)  is governed by a board of directors
  13-37  appointed or designated in whole or in part by the governor, the
  13-38  Texas Water Development Board, or municipalities within its service
  13-39  area; or
  13-40              (5)  the district is governed by a board of directors
  13-41  appointed in whole or in part by the governor, a state agency, or
  13-42  the governing body or chief elected official of a municipality or
  13-43  county and does not provide water and sewer services to residential
  13-44  retail customers as its principal function.
  13-45        Sec. 49.182.  COMMISSION SUPERVISION OF PROJECTS AND
  13-46  IMPROVEMENTS.  (a)  During construction of projects and
  13-47  improvements approved by the commission under this subchapter, no
  13-48  substantial alterations may be made in the plans and specifications
  13-49  without the approval of the commission in accordance with
  13-50  commission rules.
  13-51        (b)  The executive director may inspect the improvements at
  13-52  any time during construction to determine if the project is being
  13-53  constructed in accordance with the plans and specifications
  13-54  approved by the commission.
  13-55        (c)  If the executive director finds that the project is not
  13-56  being constructed in accordance with the approved plans and
  13-57  specifications, the executive director shall give written notice
  13-58  immediately by certified mail to the district's manager and to each
  13-59  board member.
  13-60        (d)  If within 10 days after the notice is mailed the board
  13-61  does not take steps to ensure that the project is being constructed
  13-62  in accordance with the approved plans and specifications, the
  13-63  executive director shall give written notice of this fact to the
  13-64  attorney general.
  13-65        (e)  After receiving this notice, the attorney general may
  13-66  bring an action for injunctive relief or quo warranto proceedings
  13-67  against the directors.  Venue for either suit is exclusively in a
  13-68  district court in Travis County.
  13-69        Sec. 49.183.  BOND SALES.  (a)  Except for refunding bonds,
  13-70  or bonds sold to a state or federal agency, bonds issued by a
   14-1  district shall be sold after advertising for and receiving
   14-2  competitive sealed bids and shall be awarded to the bidder whose
   14-3  bid produces the lowest net effective interest rate to the
   14-4  district.
   14-5        (b)  Except for refunding bonds, bonds sold to a state or
   14-6  federal agency, after any bonds are finally approved and before
   14-7  they are sold by a district, the board shall publish an appropriate
   14-8  notice of the sale:
   14-9              (1)  at least one time not less than 10 days before the
  14-10  date of sale in a newspaper of general circulation in the county or
  14-11  counties in which the district is located; and
  14-12              (2)  at least one time in one or more recognized
  14-13  financial publications of general circulation in the state as
  14-14  approved by the state attorney general.
  14-15        (c)  If the district is issuing bonds and refunding bonds as
  14-16  one issue and if the initial principal amount of refunding bonds is
  14-17  50 percent or more of the total initial principal amount of bonds
  14-18  being issued, for the purposes of this section, the issue shall be
  14-19  considered to be refunding bonds and competitive bids shall not be
  14-20  required.
  14-21        (d)  A district's bonds are negotiable instruments within the
  14-22  meaning and purposes of the Business & Commerce Code.  A district's
  14-23  bonds may be issued and bear interest in accordance with Chapter
  14-24  503, Acts of the 54th Legislature, Regular Session, 1955 (Article
  14-25  717k, Vernon's Texas Civil Statutes); Chapter 3, Acts of the 61st
  14-26  Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas
  14-27  Civil Statutes); the Bond Procedures Act of 1981 (Article 717k-6,
  14-28  Vernon's Texas Civil Statutes); and Chapter 656, Acts of the 68th
  14-29  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
  14-30  Civil Statutes).  Except for this subsection, this section does not
  14-31  apply to districts that are defined in Section 49.181(h)(3), (4),
  14-32  or (5).
  14-33        (e)  Subsections (a) and (b) of this section do not apply to
  14-34  district bonds issued pursuant to Chapter 656, Acts of the 68th
  14-35  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
  14-36  Civil Statutes).
  14-37        Sec. 49.184.  APPROVAL OF BONDS BY ATTORNEY GENERAL;
  14-38  REGISTRATION OF BONDS.  (a)  Before bonds issued by a district are
  14-39  delivered to the purchasers, a certified copy of all proceedings
  14-40  relating to organization of the district for first bond issues and
  14-41  issuance of the bonds and other relevant information shall be sent
  14-42  to the attorney general.
  14-43        (b)  The attorney general shall carefully examine the bonds,
  14-44  with regard to the record and the constitution and laws of this
  14-45  state governing the issuance of bonds, and the attorney general
  14-46  shall officially approve and certify the bonds if he or she finds
  14-47  that they conform to the record and the constitution and laws of
  14-48  this state and are valid and binding obligations of the district.
  14-49        (c)  After the attorney general approves and certifies the
  14-50  bonds, the comptroller shall register them in a book kept for that
  14-51  purpose and shall record the certificate of the attorney general.
  14-52        (d)  After the approval and registration of the bonds by the
  14-53  comptroller, they shall be incontestable in any court or other
  14-54  forum, for any reason, and shall be valid and binding obligations
  14-55  in accordance with their terms for all purposes.
  14-56        (e)  A contract or lease may be submitted to the attorney
  14-57  general along with the bond records, and, if submitted, the
  14-58  approval by the attorney general of the bonds shall constitute an
  14-59  approval of the contract or lease and the contract or lease shall
  14-60  be incontestable.
  14-61        Sec. 49.185.  EXEMPTIONS.  This subchapter shall not apply to
  14-62  districts engaged in the distribution and  sale of electric energy
  14-63  to the public.
  14-64            (Sections 49.186-49.190 reserved for expansion
  14-65                      SUBCHAPTER G.  AUDIT OF DISTRICTS
  14-66        Sec. 49.191.  DUTY TO AUDIT.  (a)  The board shall have the
  14-67  district's fiscal accounts and records audited annually at the
  14-68  expense of the district.
  14-69        (b)  In all areas of conflict, the provisions of this
  14-70  subchapter shall take precedence over all prior statutory
   15-1  enactments.
   15-2        (c)  The person who performs the audit shall be a certified
   15-3  public accountant or public accountant holding a permit from the
   15-4  Texas State Board of Public Accountancy.
   15-5        (d)  The audit required by this section shall be completed
   15-6  within 120 days after the close of the district's fiscal year.
   15-7        Sec. 49.192.  FORM OF AUDIT.  The executive director shall
   15-8  adopt accounting and auditing manuals and, except as otherwise
   15-9  provided by the manuals, the district audit shall be performed
  15-10  according to the generally accepted auditing standards adopted by
  15-11  the American Institute of Certified Public Accountants.  Financial
  15-12  statements shall be prepared in accordance with generally accepted
  15-13  accounting principles as adopted by the American Institute of
  15-14  Certified Public Accountants.
  15-15        Sec. 49.193.  FINANCIAL REPORTS.  The district's depository,
  15-16  the district's treasurer, and the district's bookkeeper, if any,
  15-17  who receives or has control over any district funds shall keep a
  15-18  full and itemized account of district funds in its, his, or her
  15-19  possession.  Such itemized accounts and records shall be available
  15-20  for audit.
  15-21        Sec. 49.194.  FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
  15-22  REPORTS.  (a)  After the board has approved the audit, it shall
  15-23  submit a copy of the report to the executive director for filing
  15-24  within 135 days after the close of the district's fiscal year.
  15-25        (b)  If the board refuses to approve the annual audit report,
  15-26  the board shall submit a copy of the report to the executive
  15-27  director for filing within 135 days after the close of the
  15-28  district's fiscal year, accompanied by a statement from the board
  15-29  explaining the reasons for its failure to approve the report.
  15-30        (c)  Copies of the audit, the annual financial dormancy
  15-31  affidavit, or annual financial report described in Sections 49.197
  15-32  and 49.198 of this subchapter shall be filed annually in the office
  15-33  of the district.
  15-34        (d)  Each district shall file with the executive director an
  15-35  annual filing affidavit in a format prescribed by the executive
  15-36  director, executed by a duly authorized representative of the
  15-37  board, stating that all copies of the annual audit report, annual
  15-38  financial dormancy affidavit, or annual financial report have been
  15-39  filed under this section.
  15-40        (e)  The annual filing affidavit shall be submitted with the
  15-41  applicable annual document when it is submitted to the executive
  15-42  director for filing as prescribed by this subchapter.
  15-43        (f)  The executive director shall file with the attorney
  15-44  general the names of any districts that do not comply with the
  15-45  provisions of this subchapter.
  15-46        Sec. 49.195.  REVIEW BY EXECUTIVE DIRECTOR.  (a)  The
  15-47  executive director may review the audit report of each district.
  15-48        (b)  The commission may request that the state auditor assist
  15-49  in the establishment of standards and procedures for review of
  15-50  district audits by the executive director.
  15-51        (c)  If the executive director has any objections or
  15-52  determines any violations of generally accepted auditing standards
  15-53  or accounting principles, statutes, or board rules, or if the
  15-54  executive director has any recommendations, he or she shall notify
  15-55  the board and the district's auditor.
  15-56        (d)  Before the audit report may be accepted by the executive
  15-57  director as being in compliance with the provisions of this
  15-58  subchapter, the board and the auditor shall remedy objections and
  15-59  correct violations of which they have been notified by the
  15-60  executive director.
  15-61        (e)  If the audit report indicates that any penal law has
  15-62  been violated, the executive director shall notify the appropriate
  15-63  county or district attorney and the attorney general.
  15-64        Sec. 49.196.  ACCESS TO AND MAINTENANCE OF DISTRICT RECORDS.
  15-65  (a)  The executive director shall have access to all vouchers,
  15-66  receipts, district fiscal and financial records, and other district
  15-67  records which the executive director considers necessary.
  15-68        (b)  All district fiscal records shall be prepared on a
  15-69  timely basis and maintained in an orderly manner in accordance with
  15-70  generally accepted accounting principles.  The fiscal records shall
   16-1  be available for public inspection during regular business hours.
   16-2  A district's fiscal records may be removed from the district's
   16-3  office for the purposes of recording its fiscal affairs and
   16-4  preparing an audit, during which time the fiscal records are under
   16-5  the control of the district's auditor.
   16-6        Sec. 49.197.  FINANCIALLY DORMANT DISTRICTS.  (a)  A
   16-7  financially dormant district is a district that had:
   16-8              (1)  $500 or less of receipts from operations, tax
   16-9  assessments, loans, contributions, or any other sources during the
  16-10  calendar year;
  16-11              (2)  $500 or less of disbursements of funds during the
  16-12  calendar year;
  16-13              (3)  no bonds or other long-term (more than one year)
  16-14  liabilities outstanding during the calendar year; and
  16-15              (4)  no cash or investments that exceeded $5,000 at any
  16-16  time during the calendar year.
  16-17        (b)  A financially dormant district may elect to submit to
  16-18  the executive director a financial dormancy affidavit instead of
  16-19  complying with the audit requirements of Section 49.191 of this
  16-20  code.
  16-21        (c)  The annual financial dormancy affidavit shall be
  16-22  prepared in a format prescribed by the executive director and shall
  16-23  be submitted for filing by a duly authorized representative of the
  16-24  district.
  16-25        (d)  The affidavit must be filed annually on or before
  16-26  January 31 with the executive director until such time as the
  16-27  district becomes financially active and the board adopts a fiscal
  16-28  year; thereafter, the district shall file annual audit reports as
  16-29  prescribed by this subchapter.
  16-30        (e)  A district that becomes financially dormant after having
  16-31  been financially active shall be required to file annual financial
  16-32  dormancy affidavits on or before January 31, until such time the
  16-33  district is either dissolved or again becomes financially active.
  16-34        (f)  Districts governed by this section are subject to
  16-35  periodic audits by the executive director.
  16-36        Sec. 49.198.  AUDIT REPORT EXEMPTION.  (a)  A district that
  16-37  is not collecting taxes may elect to file annual financial reports
  16-38  with the executive director in lieu of the district's compliance
  16-39  with Section 49.191 provided:
  16-40              (1)  the district had no bonds or other long-term (more
  16-41  than one year) liabilities outstanding during the fiscal period;
  16-42              (2)  the district did not have gross receipts from
  16-43  operations, loans, or contributions in excess of $100,000 during
  16-44  the fiscal period; and
  16-45              (3)  the district's cash and temporary investments were
  16-46  not in excess of $100,000 at any time during the fiscal period.
  16-47        (b)  The annual financial report must be accompanied by an
  16-48  affidavit attesting to the accuracy and authenticity of the
  16-49  financial report signed by a duly authorized representative of the
  16-50  district.
  16-51        (c)  The annual financial report and affidavit in a format
  16-52  prescribed by the executive director must be on file with the
  16-53  executive director within 45 days after the close of the district's
  16-54  fiscal year.
  16-55        (d)  Districts governed by this section are subject to
  16-56  periodic audits by the executive director.
  16-57        Sec. 49.199.  POLICIES AND AUDITS OF DISTRICTS.  (a)  Subject
  16-58  to the law governing the district, the board shall adopt the
  16-59  following in writing:
  16-60              (1)  a code of ethics for district directors, officers,
  16-61  employees, and persons who are engaged in handling investments for
  16-62  the district;
  16-63              (2)  a policy relating to travel expenditures;
  16-64              (3)  a policy relating to district investments that
  16-65  ensures that:
  16-66                    (A)  purchases and sales of investments are
  16-67  initiated by authorized individuals, conform to investment
  16-68  objectives and regulations, and are properly documented and
  16-69  approved; and
  16-70                    (B)  periodic review is made of district
   17-1  investments to evaluate investment performance and security;
   17-2              (4)  policies and procedures for selection, monitoring,
   17-3  or review and evaluation of professional services;
   17-4              (5)  a uniform method of accounting and reporting for
   17-5  industrial development bonds and pollution control bonds that
   17-6  complies with requirements of the commission; and
   17-7              (6)  policies that ensure a better use of management
   17-8  information including:
   17-9                    (A)  budgets for use in planning and controlling
  17-10  cost;
  17-11                    (B)  an audit committee of the board; and
  17-12                    (C)  uniform reporting requirements that use
  17-13  "Audits of State and Local Governmental Units" as a guide on audit
  17-14  working papers and that uses "Governmental Accounting and Financial
  17-15  Reporting Standards."
  17-16        (b)  The state auditor may audit the financial transactions
  17-17  of any district if the state auditor determines that the audit is
  17-18  necessary.
  17-19        Sec. 49.200.  REVIEW AND COMMENT ON BUDGET OF CERTAIN
  17-20  DISTRICTS.  A district that provides wholesale potable water and
  17-21  wastewater services shall adopt a program that provides such
  17-22  wholesale customers an opportunity to review and comment on the
  17-23  district's annual budget that applies to their services before that
  17-24  budget is adopted by the board.
  17-25            (Sections 49.201-49.210 reserved for expansion
  17-26                   SUBCHAPTER H.  POWERS AND DUTIES
  17-27        Sec. 49.211.  POWERS.  (a)  A district shall have the
  17-28  functions, powers, authority, rights, and duties which will permit
  17-29  accomplishment of the purposes for which it was created or the
  17-30  purposes authorized by the constitution, this code, or any other
  17-31  law.
  17-32        (b)  A district is authorized to purchase, construct,
  17-33  acquire, own, operate, maintain, repair, improve, or extend inside
  17-34  and outside its boundaries any and all land, works, improvements,
  17-35  facilities, plants, equipment, and appliances necessary to
  17-36  accomplish the purposes of its creation or the purposes authorized
  17-37  by this code or any other law.
  17-38        Sec. 49.212.  FEES AND CHARGES.  (a)  A district may adopt
  17-39  and enforce all necessary charges, fees, or rentals, in addition to
  17-40  taxes, for providing or making available any district facility or
  17-41  service.
  17-42        (b)  A district may require a deposit for any services or
  17-43  facilities furnished and the district may or may not provide that
  17-44  the deposit will bear interest.
  17-45        (c)  Subject to observance of the procedure appropriate to
  17-46  the circumstances, a district may discontinue any or all facilities
  17-47  or services to prevent an abuse or to enforce payment of an unpaid
  17-48  charge, fee, or rental due the district, including taxes which have
  17-49  been delinquent for not less than six months.
  17-50        (d)  Notwithstanding any provision of law to the contrary, a
  17-51  district which charges a fee which is an impact fee as described in
  17-52  Section 395.001(4), Local Government Code, must comply with Chapter
  17-53  395, Local Government Code.  A charge or fee by a district for
  17-54  construction, installation, or inspection of a tap or connection to
  17-55  district water, sanitary sewer, or drainage facilities, including
  17-56  all necessary service lines and meters, which (i) does not exceed
  17-57  three (3) times the actual and reasonable costs to the district for
  17-58  such work or (ii), if made to a nontaxable entity, does not exceed
  17-59  the actual costs to the district for such work and for all
  17-60  facilities which are necessary to provide district services to such
  17-61  entity and that are financed or are to be financed in whole or in
  17-62  part by tax-supported bonds of the district, shall not be deemed or
  17-63  considered to be an impact fee under Chapter 395, Local Government
  17-64  Code.
  17-65        Sec. 49.213.  AUTHORITY TO ISSUE CONTRACTS.  (a)  A district
  17-66  may contract with a person or any public or private entity for the
  17-67  joint construction, financing, ownership, and operation of any
  17-68  works, improvements, facilities, plants, equipment, and appliances
  17-69  necessary to accomplish any purpose or function permitted by a
  17-70  district, or a district may purchase an interest in any project
   18-1  used for any purpose or function permitted by a district.
   18-2        (b)  A district may enter into contracts with any person or
   18-3  any public or private entity in the performance of any purpose or
   18-4  function permitted by a district.
   18-5        (c)  A district may enter into contracts, which may be of
   18-6  unlimited duration, with persons or any public or private entities
   18-7  on the terms and conditions the board may consider desirable, fair,
   18-8  and advantageous for:
   18-9              (1)  the purchase or sale of water;
  18-10              (2)  the collection, transportation, treatment, and
  18-11  disposal of its domestic, industrial, and communal wastes or the
  18-12  collection, transportation, treatment, and disposal of domestic,
  18-13  industrial, and communal wastes of other persons;
  18-14              (3)  the gathering, diverting, and control of local
  18-15  storm water, or other local harmful excesses of water;
  18-16              (4)  the continuing and orderly development of the land
  18-17  and property within the district through the purchase,
  18-18  construction, or installation of works, improvements, facilities,
  18-19  plants, equipment, and appliances which the district may otherwise
  18-20  be empowered and authorized to do or perform so that, to the
  18-21  greatest extent reasonably possible, considering sound engineering
  18-22  and economic practices, all of the land and property may be placed
  18-23  in a position to ultimately receive the services of the works,
  18-24  improvements, plants, facilities, equipment, and appliances;
  18-25              (5)  the maintenance and operation of any works,
  18-26  improvements, facilities, plants, equipment, and appliances of the
  18-27  district or of another person or public or private entity;
  18-28              (6)  the collection, treatment, and disposal of
  18-29  municipal solid wastes;
  18-30              (7)  the exercise of any other rights, powers, and
  18-31  duties granted to a district.
  18-32        Sec. 49.214.  CONFLICTS OF INTEREST IN CONTRACTS.  The
  18-33  provisions of Chapter 171, Local Government Code, shall apply to
  18-34  the award of district contracts.
  18-35        Sec. 49.215.  SERVICE TO AREAS OUTSIDE THE DISTRICT.  (a)  A
  18-36  district may purchase, construct, acquire, own, operate, repair,
  18-37  improve, or extend all works, improvements, facilities, plants,
  18-38  equipment, and appliances necessary to provide any services or
  18-39  facilities authorized to be provided by the district to areas
  18-40  contiguous to or in the vicinity of the district provided the
  18-41  district does not duplicate a service or facility of another public
  18-42  entity.  A district providing potable water and sewer utility
  18-43  services to household users shall not provide services or
  18-44  facilities to serve areas outside the district which are also
  18-45  within the corporate limits of a city without securing a resolution
  18-46  or ordinance of the city granting consent for the district to serve
  18-47  the area within the city.
  18-48        (b)  To secure money for this purpose, a district is
  18-49  authorized to issue and sell negotiable bonds and notes which are
  18-50  payable from the levy and collection of ad valorem taxes on all
  18-51  taxable property within the district or from all or any designated
  18-52  part of the revenues received from the operation of the district's
  18-53  works, improvements, facilities, plants, equipment, and appliances
  18-54  or from a combination of taxes and revenues.
  18-55        (c)  Any bonds and notes may be issued upon the terms and
  18-56  conditions set forth in this code.
  18-57        (d)  A district shall not be required to hold a certificate
  18-58  of convenience and necessity as a precondition for providing retail
  18-59  water or sewer service to any customer or service area,
  18-60  notwithstanding the fact that such customer or service area may be
  18-61  located either within or outside the boundaries of the district or
  18-62  has previously received water or sewer service from an entity
  18-63  required by law to hold a certificate of convenience and necessity
  18-64  as a precondition for such service.  This subsection does not
  18-65  authorize a district to provide services within an area for which a
  18-66  retail public utility holds a certificate of convenience and
  18-67  necessity or within the boundaries of another district without that
  18-68  district's consent, unless the district has a valid certificate of
  18-69  convenience and necessity to provide services to that area.
  18-70        (e)  A district is authorized to establish, maintain, revise,
   19-1  charge, and collect the rates, fees, rentals, tolls, or other
   19-2  charges for the use, services, and facilities which provide service
   19-3  to areas outside the district which are considered necessary and
   19-4  which may be higher than those charged for comparable service to
   19-5  users within the district.
   19-6        (f)  The rates, fees, rental, tolls, or other charges shall
   19-7  be at least sufficient to meet the expense of operating and
   19-8  maintaining the services and facilities for water and sanitary
   19-9  sewer system serving areas outside the district and to pay the
  19-10  principal of and interest and redemption price on bonds issued to
  19-11  purchase, construct, acquire, own, operate, repair, improve, or
  19-12  extend the services or facilities.
  19-13        Sec. 49.216.  ENFORCEMENT BY PEACE OFFICERS.  (a)  A district
  19-14  may contract for or employ its own peace officers with power to
  19-15  make arrests when necessary to prevent or abate the commission of:
  19-16              (1)  any offense against the rules of the district when
  19-17  the offense or threatened offense occurs on any land, water, or
  19-18  easement owned or controlled by the district;
  19-19              (2)  any offense involving injury or detriment to any
  19-20  property owned or controlled by the district; and
  19-21              (3)  any offense against the laws of the state.
  19-22        (b)  A district may appoint reserve peace officers who may be
  19-23  called to serve as peace officers by the district during the actual
  19-24  discharge of their official duties.
  19-25        (c)  A reserve peace officer serves at the discretion of the
  19-26  district and may be called into service if the district considers
  19-27  it necessary to have additional officers to preserve the peace in
  19-28  or enforce the law of the district.
  19-29        (d)  A reserve peace officer on active duty and actively
  19-30  engaged in assigned duties has the same rights, privileges, and
  19-31  duties as any other peace officer of the district.
  19-32        (e)  Any peace officer, before beginning to perform any
  19-33  duties and at the time of appointment, must take an oath and
  19-34  execute a bond conditioned on faithful performance of such
  19-35  officer's duties in the amount of $1,000 payable to the district.
  19-36  The oath and the bond shall be filed in the district office.
  19-37        Sec. 49.217.  Operation of Certain Motor Vehicles On or Near
  19-38  Public Facilities.  (a)  In this section, "motor vehicle" means a
  19-39  self-propelled device in, upon, or by which a person or property is
  19-40  or may be transported or drawn on a road or highway.
  19-41        (b)  Except as provided in Subsections (c) and (d) of this
  19-42  section, a person may not operate a motor vehicle on a levee, in a
  19-43  drainage ditch, or on land adjacent to a levee, canal, ditch,
  19-44  exposed conduit, pipeline, pumping plant, storm water facility, or
  19-45  other facility for the transmission, storage, treatment, or
  19-46  distribution of water, sewage, or storm water that is owned or
  19-47  controlled by a district.
  19-48        (c)  A district may authorize the use of motor vehicles on
  19-49  land that it owns or controls by posting signs on the property.
  19-50        (d)  This section does not prohibit a person from:
  19-51              (1)  driving on a public road or highway; or
  19-52              (2)  operating a motor vehicle that is being used for
  19-53  repair or maintenance of public water, sewer, or storm water
  19-54  facilities.
  19-55        (e)  A person who operates a motor vehicle in violation of
  19-56  Subsection (b) of this section commits an offense.  An offense
  19-57  under this section is a Class C misdemeanor, except that if a
  19-58  person has been convicted of an offense under this section, a
  19-59  subsequent offense is a Class B misdemeanor.
  19-60        Sec. 49.218.  Acquisition of Property.  (a)  A district or a
  19-61  water supply corporation may acquire land, materials, waste
  19-62  grounds, easements, rights-of-way, equipment, contract or permit
  19-63  rights or interests and other property, real or personal,
  19-64  considered necessary for the purpose of accomplishing any one or
  19-65  more of the district's or water supply corporation's purposes
  19-66  provided in this code or in any other law.
  19-67        (b)  A district or water supply corporation shall have the
  19-68  right to acquire property by gift, grant, or purchase and the right
  19-69  to acquire property shall include property considered necessary for
  19-70  the construction, improvement, extension, enlargement, operation,
   20-1  or maintenance of the plants, works, improvements, facilities,
   20-2  equipment, or appliances of a district or a water supply
   20-3  corporation.
   20-4        (c)  A district or water supply corporation may acquire
   20-5  either the fee simple title to or an easement on all land, both
   20-6  public and private, either inside or outside its boundaries and may
   20-7  acquire the title to or an easement on property other than land
   20-8  held in fee.
   20-9        (d)  A district or water supply corporation may also lease
  20-10  property from others for its use on such terms and conditions as
  20-11  the board of the district or the board of directors of the water
  20-12  supply corporation may determine to be advantageous.
  20-13        Sec. 49.219.  ACQUISITION OF EXISTING FACILITIES.  Any
  20-14  district may acquire by agreement all or any part of existing
  20-15  water, sanitary sewer, or drainage systems of any water supply
  20-16  corporation, including works, improvements, facilities, plants,
  20-17  equipment, appliances, contract rights, and other assets and rights
  20-18  that are completed, partially completed, or under construction, and
  20-19  in connection therewith a district may assume all or any part of
  20-20  the contracts, indebtedness, or obligations of the corporation
  20-21  related to said systems, including any contracts, indebtedness, or
  20-22  obligations related to or payable from the revenues of said
  20-23  systems, and may perform all or any part of the obligations of said
  20-24  corporation in the same manner and to the same extent that any
  20-25  other purchaser or assignee could be bound on any such contracts,
  20-26  indebtedness, or obligations.  Before assuming any indebtedness or
  20-27  obligations of such corporation related to any such system, a
  20-28  district other than a district defined in Section 49.181(h)(3) or
  20-29  (4) shall obtain the approval of the commission of such assumption.
  20-30        Sec. 49.220.  Right to Use Existing RightS-of-Way.  All
  20-31  districts or water supply corporations are given rights-of-way,
  20-32  within, along, under, and across all public, state, county, city,
  20-33  town, or village roads, highways, and rights-of-way and other
  20-34  public rights-of-way without the requirement for surety bond or
  20-35  security.
  20-36        Sec. 49.221.  Right to Enter Land.  (a)  The directors,
  20-37  engineers, attorneys, agents, operators, and employees of a
  20-38  district or water supply corporation may go on any land to inspect,
  20-39  make surveys, or perform tests to determine the condition, value,
  20-40  and usability of the property, with reference to the proposed
  20-41  location of works, improvements, plants, facilities, equipment, or
  20-42  appliances.  The cost of restoration shall be borne by the district
  20-43  or the water supply corporation.
  20-44        (b)  District employees and agents are entitled to enter any
  20-45  public or private property within the boundaries of the district or
  20-46  adjacent to any reservoir or other property owned by the district
  20-47  at any reasonable time for the purpose of inspecting and
  20-48  investigating conditions relating to the quality of water in the
  20-49  state or the compliance with any rule, regulation, permit, or other
  20-50  order of the district.  District employees or agents acting under
  20-51  this authority who enter private property shall observe the
  20-52  establishment's rules and regulations concerning safety, internal
  20-53  security, and fire protection and shall notify any occupant or
  20-54  management of their presence and shall exhibit proper credentials.
  20-55        Sec. 49.222.  Eminent Domain.  (a)  A district or water
  20-56  supply corporation may acquire by condemnation any land, easements,
  20-57  or other property inside or outside the district boundaries, or the
  20-58  boundaries of the certificated service area for a water supply
  20-59  corporation, necessary for water, sanitary sewer, storm drainage,
  20-60  or flood drainage or control purposes or for any other of its
  20-61  projects or purposes, and may elect to condemn either the fee
  20-62  simple title or a lesser property interest.
  20-63        (b)  The right of eminent domain shall be exercised in the
  20-64  manner provided in Chapter 21, Property Code, except that a
  20-65  district or a water supply corporation shall not be required to
  20-66  give bond for appeal or bond for costs in any condemnation suit or
  20-67  other suit to which it is a party and shall not be required to
  20-68  deposit more than the amount of any award in any suit.
  20-69        (c)  The power of eminent domain may not be used for the
  20-70  condemnation of land for the purpose of acquiring rights to
   21-1  underground water or of water or water rights.
   21-2        Sec. 49.223.  Costs of Relocation of Property.  (a)  In the
   21-3  event that the district or the water supply corporation, in the
   21-4  exercise of the power of eminent domain or power of relocation, or
   21-5  any other power, makes necessary the relocation, raising, lowering,
   21-6  rerouting, or change in grade of or alteration in construction of
   21-7  any road, bridge, highway, railroad, electric transmission line,
   21-8  telegraph, or telephone properties, facilities, or pipelines, all
   21-9  necessary relocations, raising, lowering, rerouting, or change in
  21-10  grade or alteration of construction shall be done at the sole
  21-11  expense of the district or the water supply corporation unless
  21-12  otherwise agreed to in writing.  Such relocation shall be
  21-13  accomplished in a timely manner so that the project of the district
  21-14  or the water supply corporation is not delayed.
  21-15        (b)  "Sole expense" means the actual cost of the relocation,
  21-16  raising, lowering, rerouting, or change in grade or alteration of
  21-17  construction and providing comparable replacement without enhancing
  21-18  the facilities after deducting from it the net salvage value
  21-19  derived from the old facility.
  21-20        Sec. 49.224.  POWER TO CONDEMN CEMETERIES.  (a)  The use of
  21-21  land for the construction of district dams and creation of lakes
  21-22  and reservoirs for the purpose of conservation and development of
  21-23  the natural resources of this state is hereby declared to be
  21-24  superior to all other uses; and for these purposes a district has
  21-25  the power of eminent domain to acquire land, improvements, and
  21-26  other property owned and held for cemeteries or burial places that
  21-27  is necessary for the construction of a dam or that lies inside the
  21-28  area to be covered by the lake or reservoir or within 300 feet of
  21-29  the high water line of the lake or reservoir.
  21-30        (b)  Except as otherwise provided by this subchapter, the
  21-31  procedure in condemnation proceedings is governed by Chapter 21,
  21-32  Property Code.
  21-33        (c)  Notice shall be served on the title owner of the land on
  21-34  which the cemetery is situated as provided in Chapter 21, Property
  21-35  Code.  General notice to persons having relatives interred in the
  21-36  cemetery shall be given by publication for two consecutive weeks in
  21-37  a newspaper circulated in the county in which the cemetery is
  21-38  situated.
  21-39        (d)  The measure of damages in these eminent domain
  21-40  proceedings shall be assessed as in other condemnation cases.  An
  21-41  additional amount of damages shall be assessed to cover the cost of
  21-42  removing and reinterring the bodies interred in the cemetery or
  21-43  burial place and the cost of removing and resetting the monuments
  21-44  or markers erected at the graves.
  21-45        (e)  The additional assessment shall be deposited in the
  21-46  registry of the county court and disbursed only for the purpose of
  21-47  removing and reinterring the bodies in other cemeteries in Texas
  21-48  agreed on between the district and the relatives of the deceased
  21-49  persons.
  21-50        (f)  If in any case the district and the relatives of a
  21-51  deceased person cannot agree within 30 days on a cemetery for
  21-52  reinterment, or no relatives appear within that time, then the
  21-53  county judge shall designate the cemetery for reinterment.
  21-54        (g)  Instead of depositing the additional assessment in the
  21-55  registry of the court, the district may execute a bond sufficient
  21-56  to cover costs of removing and reinterring the bodies.  The bond
  21-57  shall be payable to and approved by the county judge and
  21-58  conditioned that the bodies will be removed and reinterred as
  21-59  provided by this section.
  21-60        Sec. 49.225.  Leases.  A district may lease any of its
  21-61  property, real or personal, to any person.  The lease may contain
  21-62  the terms and provisions which the board determines to be
  21-63  advantageous to the district.
  21-64        Sec. 49.226.  Sale or Exchange of Surplus Land or Personal
  21-65  Property.  (a)  Any land, interest in land, or personal property
  21-66  owned by the district which is found by the board to be surplus and
  21-67  is not needed by the district may be sold under order of the board
  21-68  either by public or private sale, or the land, interest in land, or
  21-69  personal property may be exchanged for other land, interest in
  21-70  land, or personal property needed by the district.  Except as
   22-1  provided in Subsection (b), land, interest in land, or personal
   22-2  property must be exchanged for like fair market value, which value
   22-3  may be determined by the district.
   22-4        (b)  Any property dedicated to or acquired by the district
   22-5  without expending district funds may be abandoned or released to
   22-6  the original grantor, the grantor's heirs, assigns, executors, or
   22-7  successors upon terms and conditions deemed necessary or
   22-8  advantageous to the district and without receiving compensation for
   22-9  such abandonment or release.  District property may also be
  22-10  abandoned, released, exchanged or transferred to another district,
  22-11  municipality, county, countywide agency, or authority upon terms
  22-12  and conditions deemed necessary or advantageous to the district.
  22-13  Narrow strips of property resulting from boundary or surveying
  22-14  conflicts or similar causes, or from insubstantial encroachments by
  22-15  abutting property owners, may be abandoned, released, exchanged or
  22-16  transferred to such abutting owners upon terms and conditions
  22-17  deemed necessary or advantageous to the district.  Chapter 272,
  22-18  Local Government Code, shall not apply to this subsection.
  22-19        (c)  Before either a public or a private sale of real
  22-20  property not required by the district, the district shall give
  22-21  notice of the intent to sell by publishing notice once a week for
  22-22  two consecutive weeks in one or more newspapers with general
  22-23  circulation in the district.
  22-24        (d)  If the district has outstanding bonds secured by a
  22-25  pledge of tax revenues, the proceeds of the sale of property not
  22-26  required by the district shall be applied to retire outstanding
  22-27  bonds of the district when required by the district's applicable
  22-28  bond resolutions.
  22-29        (e)  If the district does not have any outstanding bonds, the
  22-30  proceeds derived from the sale of the personal property or land not
  22-31  required by the district may be used for any lawful purpose.
  22-32        Sec. 49.227.  Authority to Act Jointly.  A district or water
  22-33  supply corporation may act jointly with any other person or entity,
  22-34  private or public, whether within the State of Texas or the United
  22-35  States, in the performance of any of the powers and duties
  22-36  permitted by this code or any other laws.
  22-37        Sec. 49.228.  Damage to Property.  A person who wilfully
  22-38  destroys, defaces, damages or interferes with district or water
  22-39  supply corporation property is guilty of a Class B misdemeanor.
  22-40        Sec. 49.229.  Grants and Gifts.  A district may accept
  22-41  grants, gratuities, advances, and loans in any form from any source
  22-42  approved by the board, including any governmental entity, any
  22-43  private or public corporation, and any other person and may make
  22-44  and enter into contracts, agreements, and covenants which the board
  22-45  considers appropriate in connection with acceptance of grants,
  22-46  gratuities, advances, and loans.
  22-47        Sec. 49.230.  Area-Wide Wastewater Treatment.  The powers and
  22-48  duties conferred on the district are granted subject to the policy
  22-49  of the state to encourage the development and use of integrated
  22-50  area-wide wastewater collection, treatment, and disposal systems to
  22-51  serve the wastewater disposal needs of the citizens of the state
  22-52  whenever economically feasible and competitive to do so, it being
  22-53  an objective of the policy to avoid the economic burden to the
  22-54  people and the impact on the quality of the water in the state
  22-55  which result from the construction and operation of numerous small
  22-56  wastewater collection, treatment, and disposal facilities to serve
  22-57  an area when an integrated area-wide wastewater collection,
  22-58  treatment, and disposal system for the area can be reasonably
  22-59  provided.
  22-60        Sec. 49.231.  STANDBY FEES.  (a)  In this section:
  22-61              (1)  "Standby fee" means a charge, other than a tax,
  22-62  imposed on undeveloped property for the availability of potable
  22-63  water, sanitary sewer, or drainage facilities and services.
  22-64              (2)  "Undeveloped property" means a tract, lot, or
  22-65  reserve in the district to which no potable water, sanitary sewer,
  22-66  or drainage connections have been made for which:
  22-67                    (A)  water, sanitary sewer, or drainage
  22-68  facilities and services are available;
  22-69                    (B)  water supply, wastewater treatment plant
  22-70  capacity, or drainage capacity sufficient to serve the property is
   23-1  available; or
   23-2                    (C)  major water supply lines, wastewater
   23-3  collection lines, or drainage facilities with capacity sufficient
   23-4  to serve the property are available.
   23-5        (b)  A district that proposes to provide or actually provides
   23-6  retail potable water or sewer utility services, or drainage
   23-7  services as the principal function of the district, may, with the
   23-8  approval of the commission, adopt and impose on the owners of
   23-9  undeveloped property in the district a standby fee that is in
  23-10  addition to taxes levied by the district.  A district may not
  23-11  impose a standby fee for debt service purposes on undeveloped
  23-12  property unless the facilities and services available to the
  23-13  property have been financed by the district; however, a district
  23-14  may impose a standby fee for operating and maintaining facilities
  23-15  which it has not financed.  The district may impose standby fees in
  23-16  different amounts to fairly reflect the level and type of services
  23-17  and facilities available to serve different property.  The intent
  23-18  of the standby fee is to distribute a fair portion of the cost
  23-19  burden for operating and maintaining the facilities and for
  23-20  financing capital costs of the facilities to owners of property who
  23-21  have not constructed improvements but have potable water, sewer, or
  23-22  drainage capacity available.  Any revenues collected from the
  23-23  standby fees shall be used to pay operation and maintenance
  23-24  expenses, to pay debt service on the bonds, or both.
  23-25        (c)  If the board described in Subsection (b) of this section
  23-26  desires to adopt and impose a standby fee, the board shall submit
  23-27  to the commission an application for authority to adopt and impose
  23-28  the standby fee.  The application must describe the tracts of
  23-29  undeveloped property in the district and state the amount of the
  23-30  proposed fee.
  23-31        (d)  The executive director shall examine an application
  23-32  submitted under Subsection (c) of this section and shall
  23-33  investigate the financial condition of the district, including the
  23-34  district's assets, liabilities, sources of revenue, level of
  23-35  utility service rates, and level of debt service and maintenance
  23-36  tax rates.  On the request of the executive director, the district
  23-37  shall submit any information the executive director considers
  23-38  relevant to the examination and investigation.  The executive
  23-39  director shall prepare a written report on the application and the
  23-40  district's financial condition, retain a copy of the report, and
  23-41  send a copy of the report to the commission and the district.
  23-42        (e)  The commission shall hold a hearing on an application
  23-43  submitted under Subsection (c) of this section.  Notice of the
  23-44  hearing shall be published in a newspaper of general circulation in
  23-45  the county or counties in which the district is located once a week
  23-46  for two consecutive weeks.  The first publication must occur not
  23-47  later than the 30th day before the date of the hearing.  The
  23-48  district shall send, not later than the 30th day before the date of
  23-49  the hearing, notice of the hearing by certified mail, return
  23-50  receipt requested, to each owner of undeveloped property in the
  23-51  district.  On the date the application is filed, the district's tax
  23-52  assessor and collector shall certify to the district the names of
  23-53  the persons owning undeveloped land in the district as reflected by
  23-54  the most recent certified tax roll of the district.  Notice of the
  23-55  hearing must be sent by certified mail, return receipt requested,
  23-56  to each mortgagee of record that has submitted a written request to
  23-57  be informed of any hearings.  To be effective, the written request
  23-58  must be received by the district not later than the 60th day before
  23-59  the date of the hearing.  The written request for notice must
  23-60  include the name and address of the mortgagee, the name of the
  23-61  property owner in the district, and a brief property description.
  23-62        (f)  The commission shall consider the application, the
  23-63  report of the executive director, and any other evidence allowed by
  23-64  commission rule.  The commission may approve the application only
  23-65  if the commission finds that the fee is necessary to maintain the
  23-66  financial integrity and stability of the district and fairly
  23-67  allocates the costs of district facilities and services among
  23-68  property owners of the district.
  23-69        (g)  After a hearing on an application under Subsection (e)
  23-70  of this section, the commission shall issue an order approving or
   24-1  disapproving the application.  The commission shall retain a copy
   24-2  of the order and send a copy of the order to the district.
   24-3        (h)  The commission may approve the adoption and imposition
   24-4  of the standby fee for a period of not more than three years.  The
   24-5  imposition of a standby fee may be renewed for additional periods
   24-6  of not more than three years each in the same manner provided in
   24-7  this section for initial approval of the standby fee.
   24-8        (i)  If approved by the commission, the board by resolution
   24-9  or order may impose an annual standby fee on undeveloped land in
  24-10  the district.
  24-11        (j)  The board may:
  24-12              (1)  charge interest, at the rate of one percent a
  24-13  month, on a standby fee not paid in a timely manner in accordance
  24-14  with the resolution or order imposing the standby fee; and
  24-15              (2)  refuse to provide potable water, sanitary sewer,
  24-16  or drainage service to the property for which the fee was assessed
  24-17  until all delinquent standby fees on the property and interest on
  24-18  those fees are fully paid.
  24-19        (k)  A standby fee imposed under this section is a personal
  24-20  obligation of the person owning the undeveloped property on January
  24-21  1 of the year for which the fee is assessed.  A person is not
  24-22  relieved of the obligation on transfer of title to the property.
  24-23  On January 1 of each year, a lien attaches to undeveloped property
  24-24  to secure payment of any standby fee imposed under this section and
  24-25  the interest, if any, on the fee.  The lien has the same priority
  24-26  as a lien for taxes of the district.
  24-27        (l)  If a standby fee imposed under this section is not paid
  24-28  in a timely manner, a district may file suit to foreclose the lien
  24-29  securing payment of the fee and interest or to enforce the personal
  24-30  obligation for the fee and interest, or both.  The district may
  24-31  recover, in addition to the fee and interest, reasonable costs,
  24-32  including attorney's fees, incurred by the district in enforcing
  24-33  the lien or obligation not to exceed 20 percent of the delinquent
  24-34  fee and interest.  A suit authorized by this subsection must be
  24-35  filed not later than the fourth anniversary of the date the fee
  24-36  became due.  A fee delinquent for more than four years and interest
  24-37  on the fee are considered paid unless a suit is filed before the
  24-38  expiration of the four-year period.
  24-39        (m)  Chapter 395, Local Government Code, does not apply to a
  24-40  standby fee imposed under this section.
  24-41        (n)  For purposes of title insurance policies issued under
  24-42  the authority of Chapter 9, Insurance Code, standby fees are
  24-43  considered taxes.
  24-44            (Sections 49.232-49.270 reserved for expansion
  24-45                 SUBCHAPTER I.  CONSTRUCTION CONTRACTS
  24-46        Sec. 49.271.  CONTRACTS FOR CONSTRUCTION WORK.  (a)  Any
  24-47  contract made by the board for construction work shall conform to
  24-48  the provisions of this chapter.
  24-49        (b)  The contract shall contain, incorporate by reference, or
  24-50  have attached to it, the specifications, plans, and details for
  24-51  work included in the contract.  All work shall be done in
  24-52  accordance with these plans and specifications and any authorized
  24-53  change orders under the supervision of the board or its designee.
  24-54        (c)  The district may adopt minimum criteria for the
  24-55  qualifications of bidders on its construction contracts and for
  24-56  sureties issuing payment and performance bonds.  For contracts over
  24-57  $25,000, the district shall require a person who bids to submit a
  24-58  certified or cashier's check on a responsible bank in the state
  24-59  equal to at least two percent of the total amount of the bid as a
  24-60  good faith deposit to ensure execution of the contract.  The
  24-61  district may also require attendance by a principal of each
  24-62  prospective bidder at mandatory pre-bid conferences and may make
  24-63  any reasonable additional requirements regarding the taking of bids
  24-64  which the district may deem appropriate in order to obtain
  24-65  competitive bids from responsible contractors and to minimize
  24-66  contract disputes.
  24-67        Sec. 49.272.  REPORTS FURNISHED TO PROSPECTIVE BIDDERS.  The
  24-68  board shall furnish to any person who desires to bid on
  24-69  construction work, and who makes a request in writing, a copy of
  24-70  the engineer's report or plans and specifications showing the
   25-1  details of the work to be done.  The board may charge for each copy
   25-2  of the engineer's report or plans and specifications an amount
   25-3  sufficient to cover the cost of making the copy.
   25-4        Sec. 49.273.  CONSTRUCTION CONTRACT AWARD.  (a)  The board
   25-5  shall contract for construction in accordance with this section.
   25-6        (b)  A construction contract may cover all the work to be
   25-7  provided by the district or the various elements of the work may be
   25-8  segregated for the purpose of receiving bids and awarding
   25-9  contracts.  A contract may provide that the work will be
  25-10  constructed in stages over a period of years.
  25-11        (c)  A construction contract may provide for the payment of a
  25-12  total sum that is the completed cost of the work or may be based on
  25-13  bids to cover cost of units of the various elements entering into
  25-14  the work as estimated and approximately specified by the district's
  25-15  engineers, or a contract may be let and awarded in any other form
  25-16  or composite of forms and to any responsible person or persons
  25-17  that, in the board's judgment, will be most advantageous to the
  25-18  district and result in the best and most economical completion of
  25-19  the district's proposed plants, improvements, facilities, works,
  25-20  equipment, and appliances.
  25-21        (d)  For construction contracts for $25,000 or more, the
  25-22  board shall advertise the letting of the contract, including the
  25-23  general conditions, time, and place of opening of sealed bids.  The
  25-24  notice shall be published in one or more newspapers circulated in
  25-25  each county in which part of the district is located.  If one
  25-26  newspaper meets both of these requirements, publication in such
  25-27  newspaper is sufficient.  If there are more than four counties in
  25-28  the district, notice may be published in any newspaper with general
  25-29  circulation in the district.  The notice shall be published once a
  25-30  week for three consecutive weeks before the date that the bids are
  25-31  opened, and the first publication shall be not later than the 21st
  25-32  day before the date of the opening of the sealed bids.
  25-33        (e)  For construction contracts for $15,000 or more but less
  25-34  than $25,000, the board shall solicit written competitive bids on
  25-35  uniform written specifications from at least three bidders.
  25-36        (f)  For construction contracts of less than $15,000, the
  25-37  board is not required to advertise or seek competitive bids.
  25-38        (g)  The board may not subdivide work to avoid the
  25-39  advertising requirements specified in this section.
  25-40        (h)  The board may not accept bids that include substituted
  25-41  items unless the substituted items were included in the original
  25-42  bid proposal and all bidders had the opportunity to bid on the
  25-43  substituted items; or if notice is given to all bidders at a
  25-44  mandatory pre-bid conference.
  25-45        (i)  Change orders to contracts may be issued only as a
  25-46  result of unanticipated conditions encountered during construction
  25-47  or changes in regulatory criteria or to facilitate project
  25-48  coordination with other political entities.
  25-49        (j)  The provisions of this subchapter do not apply to
  25-50  contracts for personal or professional services or for a utility
  25-51  service operator or to contracts made by a district engaged in the
  25-52  distribution and sale of electric energy to the public.
  25-53        (k)  The provisions of this subchapter do not apply to high
  25-54  technology procurements.  The provisions of Sections 252.021(a) and
  25-55  252.042, Local Government Code, shall apply to high technology
  25-56  procurements.
  25-57        Sec. 49.274.  EMERGENCY APPROVAL OF DISTRICT PROJECTS.  If a
  25-58  district experiences an emergency condition that may create a
  25-59  serious health hazard or unreasonable economic loss to the district
  25-60  that requires immediate corrective action, the district may
  25-61  negotiate limited duration contracts to make the necessary repairs.
  25-62  The district shall submit to the executive director details
  25-63  describing the specific serious health hazard or unreasonable
  25-64  economic loss as soon as practicable following the issuance of the
  25-65  contracts.  Whenever possible, the district should obtain prior
  25-66  approval of the executive director before authorizing the contract,
  25-67  but failure to obtain prior approval shall not void the contract.
  25-68  This section does not apply to a district defined in Section
  25-69  49.181(h)(3) or (4).
  25-70        Sec. 49.275.  CONTRACTOR'S BOND.  Any person, firm,
   26-1  partnership, or corporation to whom a contract is let must give
   26-2  good and sufficient performance and payment bonds in accordance
   26-3  with Article 5160, Revised Statutes, and any minimum criteria for
   26-4  sureties issuing such bonds adopted by a district in accordance
   26-5  with Section 49.271.
   26-6        Sec. 49.276.  PAYMENT FOR CONSTRUCTION WORK.  (a)  The
   26-7  district shall pay the contract price of construction contracts
   26-8  only as provided in this section.
   26-9        (b)  The district will make progress payments under
  26-10  construction contracts monthly as the work proceeds, or at more
  26-11  frequent intervals as determined by the board or its designee, on
  26-12  estimates approved by the board or its designee.
  26-13        (c)  If requested by the district or district engineer, the
  26-14  contractor shall furnish a breakdown of the total contract price
  26-15  showing the amount included for each principal category of the
  26-16  work, in such detail as requested, to provide a basis for
  26-17  determining progress payments.  In the preparation of estimates,
  26-18  the district engineer may authorize material delivered on the site
  26-19  and preparatory work done to be considered if the consideration is
  26-20  specifically authorized by the contract and if the contractor
  26-21  furnishes satisfactory evidence that he has acquired title to the
  26-22  material and that it will be utilized on the work covered by the
  26-23  contract.
  26-24        (d)  In making progress payments, 10 percent of the estimated
  26-25  amount shall be retained until final completion and acceptance of
  26-26  the contract work.  However, if the board at any time after 50
  26-27  percent of the work has been completed finds that satisfactory
  26-28  progress is being made, it may authorize any of the remaining
  26-29  progress payments to be made in full.  Also, if the work is
  26-30  substantially complete, the board, if it finds the amount retained
  26-31  to be in excess of the amount adequate for the protection of the
  26-32  district, at its discretion may release to the contractor all or a
  26-33  portion of the excess amount.  The district is not obligated to pay
  26-34  interest on amounts retained except as provided herein.  The
  26-35  district shall not be obligated to pay any interest on the 10
  26-36  percent retainage held on the first 50 percent of work completed.
  26-37  If the district holds any retainage on the remaining 50 percent of
  26-38  the work completed, the district shall pay interest on such
  26-39  retainage from the date the retainage is withheld to the date of
  26-40  payment to the contractor.  The interest rate to be paid on such
  26-41  retainage shall be the rate of interest paid by the district's
  26-42  depository bank on interest bearing accounts of similar amounts
  26-43  during the period of time interest accrues as provided herein.
  26-44        (e)  On completion and acceptance of each separate project,
  26-45  public work, or other division of the contract, on which the price
  26-46  is stated separately in the contract, payment may be made without
  26-47  retention of a percentage.
  26-48        Sec. 49.277.  INSPECTION OF AND REPORTS ON CONSTRUCTION WORK.
  26-49  (a)  The board shall have control of construction work being done
  26-50  for the district under contract to determine whether or not the
  26-51  contract is being fulfilled and shall have the construction work
  26-52  inspected by the district engineer or other designated person.
  26-53        (b)  During the progress of the construction work, the
  26-54  district engineer or other designated person shall submit to the
  26-55  board detailed written reports showing whether or not the
  26-56  contractor is complying with the contract, and when the work is
  26-57  completed the district engineer shall submit to the board a final
  26-58  detailed report including as-built plans of the facilities showing
  26-59  whether or not the contractor has fully complied with the contract.
  26-60            (Sections 49.278-49.300 reserved for expansion
  26-61            SUBCHAPTER J.  ANNEXATION OR EXCLUSION OF LAND
  26-62        Sec. 49.301.  ADDING LAND BY PETITION OF LANDOWNER.  (a)  In
  26-63  addition to any other provision provided by law, the owner or
  26-64  owners of land whether or not contiguous to the district or
  26-65  otherwise may file with the board a petition requesting that there
  26-66  be included in the district the land described in the petition by
  26-67  metes and bounds or by lot and block number if there is a recorded
  26-68  plat of the area to be included in the district.  The petition may
  26-69  request the district to condition the annexation on certain
  26-70  conditions, including the voter authorization of bonds to serve the
   27-1  area to be annexed.
   27-2        (b)  If the district has bonds, notes, or other obligations
   27-3  outstanding or bonds payable in whole or in part from taxes which
   27-4  have been voted but are unissued, the board may require the
   27-5  petitioner or petitioners to assume their share of the outstanding
   27-6  bonds, notes, or other obligations and the voted but unissued tax
   27-7  bonds of the district and authorize the board to levy a tax on
   27-8  their property in each year while any of the bonds, notes, or other
   27-9  obligations payable in whole or in part from taxation are
  27-10  outstanding to pay their share of the indebtedness.
  27-11        (c)  The petition of the landowner to add land to the
  27-12  district shall be signed and executed in the manner provided by law
  27-13  for the conveyance of real estate.
  27-14        (d)  The board shall hear and consider the petition and may
  27-15  add to the district the land described in the petition if it is
  27-16  feasible, practicable, and to the advantage of the district and if
  27-17  the district's system and other improvements of the district are
  27-18  sufficient or will be sufficient to supply the added land without
  27-19  injuring land already in the district.
  27-20        (e)  If the district has bonds payable in whole or in part
  27-21  from taxation which are voted but unissued at the time of an
  27-22  annexation and the petitioners assume the bonds and authorize the
  27-23  district to levy a tax on their property to pay the bonds, then the
  27-24  board may issue the voted but unissued bonds even though the
  27-25  boundaries of the district have been altered since the
  27-26  authorization of the bonds.
  27-27        (f)  A petition which is granted adding land to the district
  27-28  shall be filed for record and shall be recorded in the office of
  27-29  the county clerk of the county or counties in which the land is
  27-30  located.
  27-31        Sec. 49.302.  ADDING LAND BY PETITION OF LESS THAN ALL THE
  27-32  LANDOWNERS.  (a)  In addition to the method of adding land to a
  27-33  district which is described in Section 49.301 of this subchapter,
  27-34  defined areas of land, whether or not they are contiguous to the
  27-35  district, may be annexed to the district in the manner set forth in
  27-36  this section.
  27-37        (b)  A petition requesting the annexation of a defined area
  27-38  signed by a majority in value of the owners of land in the defined
  27-39  area, as shown by the tax rolls of the county or counties in which
  27-40  such area is located, or signed by 50 landowners if the number of
  27-41  landowners is more than 50, shall describe the land by metes and
  27-42  bounds or by lot and block number if there is a recorded plat of
  27-43  the area and shall be filed with the secretary of the board.
  27-44        (c)  It shall be the duty of the board to pass an order
  27-45  fixing a time and place at which the petition for annexation shall
  27-46  be heard which shall not be less than 30 days from the day of the
  27-47  order calling the hearing.
  27-48        (d)  The secretary of the board shall issue a notice setting
  27-49  forth the time and place of the hearing and describing the area
  27-50  proposed to be annexed.  Notice of the hearing shall be given by
  27-51  posting copies of the notice in three public places in the district
  27-52  and in one public place in the area proposed to be annexed for at
  27-53  least 14 days before the day of the hearing and by publishing a
  27-54  copy of the notice in a newspaper of general circulation in the
  27-55  county or counties in which the area proposed to be annexed is
  27-56  located one time at least 14 days before the day of the hearing.
  27-57        (e)  If upon the hearing of the petition it is found by the
  27-58  board that the proposed annexation of the area to the district is
  27-59  feasible, practicable, and to the advantage of the district and if
  27-60  the district's system and other improvements of the district are
  27-61  sufficient or will be sufficient to supply the added land without
  27-62  injuring land already in the district, then the board, by order
  27-63  entered in its minutes, may receive the proposed area as an
  27-64  addition to and to become a part of the district.  The order adding
  27-65  the proposed territory to the district need not include all of the
  27-66  land described in the petition if at the hearing a modification or
  27-67  change is found necessary or desirable by the board.
  27-68        (f)  A copy of the order annexing land to the district,
  27-69  signed by a majority of the members of the board and attested by
  27-70  the secretary of the board, shall be filed and recorded in the deed
   28-1  records of the county or counties in which the district is located
   28-2  if the land is finally annexed to the district.
   28-3        (g)  After the order is recorded the area shall be a
   28-4  component part of the district.
   28-5        (h)  The annexed area shall bear its pro rata share of all
   28-6  bonds, notes, or other obligations or taxes which may be owed,
   28-7  contracted, or authorized by the district to which it has been
   28-8  added.
   28-9        (i)  Before the added area shall be subject to all or any
  28-10  part of the bonds, notes, obligations, or taxes, created before the
  28-11  annexation of the area to the district, the board shall order an
  28-12  election to be held in the district, as enlarged by reason of the
  28-13  annexation of the area, on the question of the assumption of the
  28-14  bonds, notes, obligations, and taxes by the annexed area.
  28-15        (j)  At the same election, the board may also submit a
  28-16  proposition on the question of whether the annexed area should
  28-17  assume its part of the bonds of the district payable in whole or in
  28-18  part from taxes which have been voted previously but not yet issued
  28-19  or sold and the levy of an ad valorem tax on all taxable property
  28-20  within the area annexed along with a tax on the rest of the
  28-21  district for the payment of the bonds.
  28-22        (k)  If the election results favorably, the district shall be
  28-23  authorized to issue its voted but unissued tax bonds even though
  28-24  the boundaries of the district have been changed since the original
  28-25  election approving the bonds.
  28-26        (l)  At the election called for the purpose of determining
  28-27  whether the annexed area shall assume the bonds, notes, or other
  28-28  obligations or taxes of the district, the board in a separate
  28-29  proposition may also submit the question of whether the board
  28-30  should be authorized to issue bonds payable in whole or in part
  28-31  from taxes to provide service to the area annexed.
  28-32        (m)  In the event that the district has bonds, notes, or
  28-33  obligations or taxes which may be owed, contracted, or authorized
  28-34  at the time an area is annexed or if the district has voted but
  28-35  unissued bonds payable in whole or in part from taxes at the time
  28-36  of an annexation, the board may provide in its order annexing an
  28-37  area to the district that the annexation will not be complete or
  28-38  final unless the indebtedness, tax or bond, note, or other
  28-39  obligation assumption elections result favorably to the assumption
  28-40  of the district's outstanding bonds, notes, or other obligations
  28-41  and voted but unissued bonds.
  28-42        (n)  If the board elects to submit the question of whether
  28-43  the board should be authorized to issue bonds to provide service to
  28-44  the area annexed, the board may also provide in its order annexing
  28-45  an area to the district that the annexation will not be complete
  28-46  unless the election results favorably to the issuance of bonds to
  28-47  serve the annexed area.
  28-48        (o)  Whenever an election is ordered to be held in the
  28-49  district for the purpose of the assumption of bonds, notes, or
  28-50  other obligations or taxes or the assumption of voted but unissued
  28-51  bonds by reason of the annexation of any area, then the election
  28-52  shall be held and notice given as provided for bond elections held
  28-53  by the district.
  28-54        (p)  The district has the same right and duty to furnish
  28-55  service to the annexed land that it previously had to furnish
  28-56  service to other land in the district and the board shall endeavor
  28-57  to serve all land in the district without discrimination.
  28-58        Sec. 49.303.  EXCLUDING LAND FROM DISTRICT.  (a)  Before a
  28-59  district orders an election for the authorization of bonds payable
  28-60  in whole or in part from taxes, the board may, on its own motion,
  28-61  call a hearing on the question of the exclusion of land from the
  28-62  district under the provisions of Sections 49.303-49.307 of this
  28-63  subchapter, if the exclusions are practicable, just, or desirable.
  28-64        (b)  The board must call a hearing on the exclusion of land
  28-65  or other property from the district on the written petition of any
  28-66  landowner or property owner in the district filed with the
  28-67  secretary of the board before the first election on the question of
  28-68  whether bonds should be issued payable in whole or in part from
  28-69  taxes is ordered.
  28-70        (c)  The board may hold a hearing on the exclusion of land or
   29-1  other property from the district if the district has not issued
   29-2  bonds payable in whole or in part from taxes, and if a landowner or
   29-3  property owner submits a signed petition to the secretary of the
   29-4  board evidencing the consent of the owners of a majority of the
   29-5  acreage proposed to be excluded and a majority of the taxable
   29-6  property in the district, as reflected by the most recent certified
   29-7  tax roll of the district.
   29-8        (d)  A district that has previously held an election at which
   29-9  approval was given for the issuance of bonds payable in whole or in
  29-10  part from taxes may not rely on that election for the issuance of
  29-11  the bonds if after the bond election, but before the bonds are
  29-12  issued, land is excluded from the district as provided by this
  29-13  subchapter.  The board must call and hold another bond election and
  29-14  receive voter approval as provided by this subchapter before
  29-15  issuing those bonds.
  29-16        Sec. 49.304.  HEARING TO ANNOUNCE PROPOSED EXCLUSIONS AND TO
  29-17  RECEIVE PETITIONS.  (a)  If the board determines that an exclusion
  29-18  hearing should be held or if a written petition requesting an
  29-19  exclusion hearing is filed with the secretary of the board as
  29-20  provided in Section 49.303 of this subchapter, the board shall give
  29-21  notice of a time and place of a hearing to announce its own
  29-22  conclusions relating to land or other property to be excluded and
  29-23  to receive petitions for exclusion of land or other property.
  29-24        (b)  The board shall publish notice of the hearing once a
  29-25  week for two consecutive weeks in one or more newspapers with
  29-26  general circulation in the district.  The first publication shall
  29-27  appear at least 14 days before the day of the hearing.
  29-28        (c)  The notice shall advise all interested property owners
  29-29  of their right to present petitions for exclusions of land or other
  29-30  property and to offer evidence in support of the petitions and
  29-31  their right to contest any proposed exclusion based on either a
  29-32  petition or the board's own conclusions and to offer evidence in
  29-33  support of the contest.
  29-34        Sec. 49.305.  PETITION.  (a)  A petition for exclusion of
  29-35  land must accurately describe by metes and bounds or lot and block
  29-36  number the land to be excluded.  A petition for exclusion of other
  29-37  property must describe the property to be excluded.
  29-38        (b)  A petition for exclusion shall be filed with the
  29-39  district at least seven days before the hearing and shall state
  29-40  clearly the particular grounds on which the exclusion is sought.
  29-41  Only the stated grounds shall be considered.
  29-42        Sec. 49.306.  GROUNDS FOR EXCLUSION.  Exclusions from the
  29-43  district may be made on the grounds that:
  29-44              (1)  to retain certain land or other property within
  29-45  the district's taxing power would be arbitrary and unnecessary to
  29-46  conserve the public welfare, would impair or destroy the value of
  29-47  the property desired to be excluded, and would constitute the
  29-48  arbitrary imposition of a confiscatory burden;
  29-49              (2)  to retain any given land or other property in the
  29-50  district and to extend to it, either presently or in the future,
  29-51  the benefits, service, or protection of the district's facilities
  29-52  would create an undue and uneconomical burden on the remainder of
  29-53  the district; or
  29-54              (3)  the land desired to be excluded cannot be bettered
  29-55  as to conditions of living and health, or provided with water or
  29-56  sewer service or protected from flood, or drained, or freed from
  29-57  interruption of traffic caused by excess of water on the roads,
  29-58  highways, or other means of transportation serving the land, or
  29-59  otherwise benefited by the district's proposed improvements.
  29-60        Sec. 49.307.  HEARING AND ORDER EXCLUDING LAND.  (a)  The
  29-61  board may adjourn the hearing from one day to another and until all
  29-62  persons desiring to be heard are heard.  The board immediately
  29-63  shall specifically describe all property which it proposes to
  29-64  exclude on its own motion and shall hear first any protests and
  29-65  evidence against exclusions proposed on the board's own motion.
  29-66        (b)  After considering all engineering data and other
  29-67  evidence presented to it, the board shall determine whether the
  29-68  facts disclose the affirmative of the propositions stated in
  29-69  Subdivision (1) or (2) or, if appropriate, in Subdivision (3) of
  29-70  Section 49.306 of this subchapter.  If the affirmative exists, the
   30-1  board shall enter an order excluding all land or other property
   30-2  falling within the conditions defined by the respective
   30-3  subdivisions and shall redefine in the order the boundaries of the
   30-4  district to embrace all land not excluded.  A copy of the order
   30-5  excluding land and redefining the boundaries of the district shall
   30-6  be filed in the deed records of the county or counties in which the
   30-7  district is situated.
   30-8        Sec. 49.308.  SUIT TO REVIEW EXCLUSION.  (a)  Any person
   30-9  owning an interest in land affected by the order may file a
  30-10  petition within 20 days after the effective date of the order to
  30-11  review, set aside, modify, or suspend the order.
  30-12        (b)  The venue in any action shall be in any district court
  30-13  which has jurisdiction in the county in which the district is
  30-14  located.  If the district includes land in more than one county,
  30-15  the venue shall be in the district court having jurisdiction in the
  30-16  county in which the major portion of the acreage of the land sought
  30-17  to be excluded from the district is located.
  30-18        (c)  A person may appeal from the judgment or order of a
  30-19  district court in a suit brought under the provisions of this
  30-20  section to the court of civil appeals and supreme court as in other
  30-21  civil cases in which the district court has original jurisdiction.
  30-22  The appeal is subject to the statutes and rules of practice and
  30-23  procedure in civil cases.
  30-24        Sec. 49.309.  EXCLUSION OF NONIRRIGATED PROPERTY.  For the
  30-25  purposes of Sections 49.309-49.314, the following definitions shall
  30-26  apply:
  30-27              (1)  "Nonirrigated property" means:
  30-28                    (A)  land that:
  30-29                          (i)  is not irrigable;
  30-30                          (ii)  the owners of a majority of the
  30-31  acreage of which no longer intend to irrigate; or
  30-32                          (iii)  has been subdivided into:
  30-33                                (a)  town lots, or town lots and
  30-34  blocks, or small parcels of the same general nature of town lots;
  30-35  or
  30-36                                (b)  town blocks and lots designed,
  30-37  intended, or suitable for residential, commercial, or other
  30-38  nonagricultural purposes, as distinguished from farm acreage
  30-39  whether subdivided into a subdivision or not; and
  30-40                                (c)  including streets, alleys,
  30-41  parkways, parks, and railroad property and rights-of-way located in
  30-42  the subdivided land.
  30-43        The property described in Subdivision (1) shall be considered
  30-44  nonirrigated property regardless of whether the land is within or
  30-45  near a municipality and regardless of whether a plat or map of the
  30-46  subdivision has been duly filed for record and recorded in the
  30-47  office of the county clerk of the county in which the land or any
  30-48  part of the land is situated.
  30-49        The term does not include land that within the year preceding
  30-50  the date of the hearing under Section 49.310 was used for farming
  30-51  or agricultural purposes.
  30-52              (2)  "District" means a water control and improvement,
  30-53  water improvement, or irrigation district, the principal purpose of
  30-54  which is furnishing water for the irrigation of agricultural lands
  30-55  or that is principally engaged in furnishing water for the
  30-56  irrigation of agricultural lands.
  30-57        Sec. 49.310.  AUTHORITY TO EXCLUDE LAND.  (a)  A petition for
  30-58  exclusion may be filed by the owner or owners, or their authorized
  30-59  agent, of a majority in acreage of nonirrigated property included
  30-60  within the boundaries of a district.
  30-61        (b)  Upon receipt of a petition for exclusion, or upon its
  30-62  own motion, a district shall issue an order excluding the property
  30-63  if, after notice and hearing, the board finds that:
  30-64              (1)  the described property is nonirrigated property;
  30-65              (2)  the applicable requirements of Section 49.311 have
  30-66  been satisfied;
  30-67              (3)  the owner or owners do not object to the exclusion
  30-68  of their nonirrigated property; and
  30-69              (4)  it is in the best interest of the district and of
  30-70  the described property to exclude that property from the district.
   31-1        (c)  The district shall follow the notice and hearing
   31-2  provisions and other procedural requirements for excluding
   31-3  territory which are applicable to that district as set out in
   31-4  Sections 49.303-49.307 of this code.
   31-5        Sec. 49.311.  CONSENT FROM HOLDERS OF INDEBTEDNESS.  If the
   31-6  district has outstanding bonded indebtedness, or indebtedness under
   31-7  a loan from a governmental agency, a written consent from an
   31-8  authorized representative of the holder or holders of the
   31-9  indebtedness consenting to the exclusion shall be obtained and
  31-10  filed with the district before the hearing.
  31-11        Sec. 49.312.  RESULTS OF EXCLUSION.  (a)  Upon issuance of an
  31-12  order excluding property, that property is no longer a part of the
  31-13  district and is not entitled to water service from the district.
  31-14        (b)  Any taxes, assessments, or other charges owed to the
  31-15  district at the time of exclusion remain the obligation of the
  31-16  owner of the  excluded property and continue to be secured by
  31-17  statutory liens on the property, if any.
  31-18        (c)  Once excluded, the landowner has no further liability to
  31-19  the district for future taxes, assessments, or other charges of the
  31-20  district.
  31-21        (d)  A copy of the order excluding the property from the
  31-22  district certified and acknowledged by the secretary of the board
  31-23  shall be recorded by the district in the real property records of
  31-24  the county in which the excluded property is located as evidence of
  31-25  the exclusion.
  31-26        Sec. 49.313.  DISTRICT FACILITIES ON EXCLUDED PROPERTY.  If
  31-27  any canals, ditches, pipelines, pumps, or other facilities of the
  31-28  district are located on lands excluded by the resolution of the
  31-29  board, the exclusion does not affect or interfere with any rights
  31-30  that the district has to maintain and continue operation of the
  31-31  facilities as located for the purpose of servicing lands remaining
  31-32  in the district.
  31-33        Sec. 49.314.  WATER ALLOCATIONS.  (a)  After the district
  31-34  adopts an order excluding nonirrigated property, a city or other
  31-35  water supply corporation that serves the excluded land with a
  31-36  potable water supply may petition the district to apply to the
  31-37  Texas Water Commission to convert the proportionate irrigation
  31-38  water allocation of the land excluded as nonirrigated property, as
  31-39  determined by the district, from irrigation use to municipal use
  31-40  allocation.
  31-41        (b)  The district shall make such application to the
  31-42  commission within thirty (30) days of the filing of a petition by
  31-43  the city or water supply corporation that serves the land with a
  31-44  potable water supply, provided the city or other water supply
  31-45  corporation pays the district the amount the district estimates
  31-46  will be its reasonable expenses and attorney's fees incurred in the
  31-47  commission conversion proceedings and enters into an agreement with
  31-48  the district setting forth the basis on which the water allocation
  31-49  shall be delivered, or made available, to the city or water supply
  31-50  corporation covering such terms as the entities may agree to, and
  31-51  in the event the parties cannot agree, such dispute shall not be
  31-52  subject to the jurisdiction of the Texas Water Commission, or its
  31-53  successors, under this code, but subject to resolution through
  31-54  alternative dispute resolution.  In such commission proceeding, the
  31-55  city or water supply corporation shall provide evidence to the
  31-56  commission of the current or projected need within a five (5) year
  31-57  period for the municipal-use water allocation after such conversion
  31-58  as a condition of such conversion of use of the district's water
  31-59  rights from irrigation use to municipal use.
  31-60            (Sections 49.315-49.320 reserved for expansion
  31-61                      SUBCHAPTER K.  DISSOLUTION
  31-62        Sec. 49.321.  DISSOLUTION AUTHORITY.  After notice and
  31-63  hearing, the commission may dissolve any district which is inactive
  31-64  for a period of five consecutive years and has no outstanding
  31-65  bonded indebtedness.
  31-66        Sec. 49.322.  NOTICE OF HEARING.  (a)  The commission shall
  31-67  give notice of the dissolution hearing which briefly describes the
  31-68  reasons for the proceeding.
  31-69        (b)  The notice shall be published once each week for two
  31-70  consecutive weeks before the day of hearing in some newspaper
   32-1  having general circulation in the county or counties in which the
   32-2  district is located.  The first publication shall be 30 days before
   32-3  the day of the hearing.
   32-4        (c)  The commission shall give notice of the hearing by first
   32-5  class mail addressed to the directors of the district according to
   32-6  the last record on file with the executive director.
   32-7        Sec. 49.323.  INVESTIGATION.  The executive director shall
   32-8  investigate the facts and circumstances of the district to be
   32-9  dissolved and the result of the investigation shall be included in
  32-10  a written report.
  32-11        Sec. 49.324.  ORDER OF DISSOLUTION.  The commission may enter
  32-12  an order dissolving the district at the conclusion of the hearing
  32-13  if it finds that the district has performed none of the functions
  32-14  for which it was created for a period of five consecutive years
  32-15  before the day of the proceeding and that the district has no
  32-16  outstanding bonded indebtedness.
  32-17        Sec. 49.325.  CERTIFIED COPY OF ORDER.  The commission shall
  32-18  file a certified copy of the order of dissolution of the district
  32-19  in the deed records of the county or counties in which the district
  32-20  is located.  If the particular district was created by a special
  32-21  Act of the legislature, the commission shall file a certified copy
  32-22  of the order of dissolution with the secretary of state.
  32-23        Sec. 49.326.  APPEALS.  (a)  Appeals from a commission order
  32-24  dissolving a district shall be filed and heard in the district
  32-25  court of any of the counties in which the land is located.
  32-26        (b)  The trial on appeal shall be de novo and the substantial
  32-27  evidence rule shall not apply.
  32-28        Sec. 49.327.  ASSETS ESCHEAT TO STATE.  Upon the dissolution
  32-29  of a district by the commission, all assets of the district shall
  32-30  escheat to the State of Texas.  The assets shall be administered by
  32-31  the state treasurer and shall be disposed of in the manner provided
  32-32  by Chapter 72, Property Code.
  32-33            (Sections 49.328-49.350 reserved for expansion
  32-34                    SUBCHAPTER L.  FIRE DEPARTMENTS
  32-35        Sec. 49.351.  FIRE DEPARTMENTS.  (a)  A district providing
  32-36  potable water or sewer service to household users may establish,
  32-37  operate, and maintain a fire department to perform all
  32-38  fire-fighting activities within the district as provided in this
  32-39  subchapter and may issue, with voter approval, bonds for financing
  32-40  the establishment of the fire department including the construction
  32-41  and purchase of necessary buildings, facilities, and equipment and
  32-42  the provision of an adequate water supply.
  32-43        (b)  After approval of the district electors of a plan to
  32-44  operate or jointly operate a fire department, the district or
  32-45  districts shall provide an adequate system and water supply for
  32-46  fire-fighting purposes and may construct and purchase necessary
  32-47  buildings, facilities, and equipment and may employ all necessary
  32-48  personnel including supervisory personnel to operate the fire
  32-49  department.
  32-50        (c)  Bonds issued for establishment of the fire department
  32-51  shall be authorized and issued, and a district shall be authorized
  32-52  to levy a tax to pay the principal of and interest on such bonds,
  32-53  as provided by law for authorization and issuance of other bonds of
  32-54  the district.
  32-55        (d)  Two or more districts may contract to operate a joint
  32-56  fire department for their districts and shall include in the
  32-57  contract a system for joint administration and operation of the
  32-58  fire department, the extent of services to be provided, a method
  32-59  for funding the department from funds of each district, and any
  32-60  other terms and conditions the parties consider necessary.
  32-61        (e)  A district may contract with any other person to perform
  32-62  fire-fighting services within the district.
  32-63        (f)  Before a district establishes a fire department,
  32-64  contracts to operate a joint fire department, or contracts with
  32-65  another person to perform fire-fighting services within the
  32-66  district, the district must comply with the provisions of
  32-67  Subsections (g), (h), and (i) of this section.
  32-68        (g)  A district or districts proposing to act jointly shall
  32-69  develop a detailed plan for the establishment, operation, and
  32-70  maintenance of the proposed department, including a detailed
   33-1  presentation of all financial requirements.  If a district is
   33-2  entering into a contract under Subsection (e) of this section, the
   33-3  district shall develop a plan that describes in detail the
   33-4  facilities and equipment to be devoted to service to the district
   33-5  and all proposals for providing the service and that includes a
   33-6  presentation of the financial requirements under the contract.
   33-7  Before adoption of a plan and any contract by the district, the
   33-8  board shall hold a hearing at which any person residing in the
   33-9  district may present testimony for and against the proposed plan
  33-10  and any proposed contract.  Notice of the hearing and the place at
  33-11  which the plan and any contract may be examined shall be posted in
  33-12  two public places within the district at least 10 days before the
  33-13  date of the hearing.
  33-14        (h)  After adoption of the plan and any contract by the
  33-15  board, the plan and financial presentation, together with any
  33-16  contract and a written report in a form prescribed by the executive
  33-17  director describing existing fire departments and fire-fighting
  33-18  services available within 25 miles of the boundaries of the
  33-19  district, shall be submitted to the executive director for
  33-20  consideration by the commission under rules adopted by the
  33-21  commission.  Before approval or disapproval, the commission shall
  33-22  hold a hearing.  Notice of the hearing before the commission shall
  33-23  be posted by the board in at least two public places in the
  33-24  district at least five days before the hearing.  Before the
  33-25  commission approves the application, it must find that it is
  33-26  economically feasible for the district to implement the plan and
  33-27  meet the provisions of any contract and shall take into
  33-28  consideration in giving its approval the general financial
  33-29  condition of the district and the economic feasibility of the
  33-30  district carrying out the plan or meeting the obligations of the
  33-31  contract.
  33-32        (i)  After approval by the commission, the district shall
  33-33  submit to the electors of the district at the election to approve
  33-34  bonds for financing the plan, or if no bonds are to be approved, at
  33-35  an election called for approval of the plan, the proposition of
  33-36  whether or not the plan should be implemented or entered into by
  33-37  the district.  The ballots at the election shall be printed, as
  33-38  applicable, to provide for voting for or against the proposition:
  33-39  "The implementation of the plan for (operation/joint operation) of
  33-40  a fire department"; or "The plan and contract to provide
  33-41  fire-fighting services for the district."
  33-42        (j)  No funds of the district may be used to establish a fire
  33-43  department, to enter into joint operation of a fire department, or
  33-44  to contract for fire-fighting services without the approval of a
  33-45  plan by the electors as provided in this section.  However, the
  33-46  district may use available funds for preparation of a plan and any
  33-47  contract.  The operation of a fire department or provision of
  33-48  fire-fighting services is an essential public necessity, and a
  33-49  district may discontinue any and all services, including water and
  33-50  sewer service, to any person who fails to timely pay fire
  33-51  department service fees or any other assessment adopted by the
  33-52  district to support the fire department or the provision of
  33-53  fire-fighting services.
  33-54            (Sections 49.352-49.450 reserved for expansion
  33-55            SUBCHAPTER M.  NOTICES, REPORTS, AND BANKRUPTCY
  33-56        Sec. 49.451.  POSTING SIGNS IN THE DISTRICT.  (a)  A district
  33-57  subject to the notice requirements of Section 49.452 shall, within
  33-58  30 days after the effective date of this section or the creation of
  33-59  the district, post signs indicating the existence of the district
  33-60  at two principal entrances to the district.
  33-61        (b)  The size and exact location of the information contained
  33-62  on the signs shall be determined by the executive director.
  33-63        Sec. 49.452.  NOTICE TO PURCHASERS.  (a)(1)  Any person who
  33-64  proposes to sell or convey real property located in a district
  33-65  which was created under this title or by a special Act of the
  33-66  legislature, which is providing or proposing to provide, as the
  33-67  district's principal function, water, sanitary sewer, drainage, and
  33-68  flood control or protection facilities or services, or any of these
  33-69  facilities or services that have been financed or are proposed to
  33-70  be financed with bonds of the district payable in whole or part
   34-1  from taxes of the district, or by imposition of a standby fee, if
   34-2  any, to household or commercial users, other than agricultural,
   34-3  irrigation, or industrial users, and which district includes less
   34-4  than all the territory in at least one county and which, if located
   34-5  within the corporate area of a city, includes less than 75 percent
   34-6  of the incorporated area of the city or which is located outside
   34-7  the corporate area of a city in whole or in substantial part, must
   34-8  first give to the purchaser the written notice provided in this
   34-9  section.
  34-10              (2)  The provisions of this section shall not be
  34-11  applicable to:
  34-12                    (A)  transfers of title under any type of lien
  34-13  foreclosure;
  34-14                    (B)  transfers of title by deed in cancellation
  34-15  of indebtedness secured by a lien upon the property conveyed; or
  34-16                    (C)  transfers of title by reason of a will or
  34-17  probate proceedings.
  34-18        (b)  The prescribed notice for all districts shall be
  34-19  executed by the seller and shall read as follows:
  34-20        "The real property, described below, which you are about to
  34-21  purchase is located in the ___________________ District.  The
  34-22  district has taxing authority separate from any other taxing
  34-23  authority, and may, subject to voter approval, issue an unlimited
  34-24  amount of bonds and levy an unlimited rate of tax in payment of
  34-25  such bonds.  As of this date, the rate of taxes levied by the
  34-26  district on real property located in the district is $__________ on
  34-27  each $100 of assessed valuation.  If the district has not yet
  34-28  levied taxes, the most recent projected rate of debt service tax,
  34-29  as of this date, is $__________ on each $100 of assessed valuation.
  34-30  The total amount of bonds which has been approved by the voters and
  34-31  which have been or may, at this date, be issued is $__________, and
  34-32  the aggregate initial principal amounts of all bonds issued for one
  34-33  or more of the specified facilities of the district and payable in
  34-34  whole or in part from property taxes is $__________.
  34-35        "The district has the authority to adopt and impose a standby
  34-36  fee on property in the district that has water, sanitary sewer, or
  34-37  drainage facilities and services available but not connected and
  34-38  which does not have a house, building, or other improvement located
  34-39  thereon and does not substantially utilize the utility capacity
  34-40  available to the property.  The district may exercise the authority
  34-41  without holding an election on the matter.  As of this date, the
  34-42  most recent amount of the standby fee is $__________.  An unpaid
  34-43  standby fee is a personal obligation of the person that owned the
  34-44  property at the time of imposition and is secured by a lien on the
  34-45  property.  Any person may request a certificate from the district
  34-46  stating the amount, if any, of unpaid standby fees on a tract of
  34-47  property in the district.
  34-48        "The purpose of this district is to provide water, sewer,
  34-49  drainage, or flood control facilities and services within the
  34-50  district through the issuance of bonds payable in whole or in part
  34-51  from property taxes.  The cost of these utility facilities is not
  34-52  included in the purchase price of your property, and these utility
  34-53  facilities are owned or to be owned by the district.  The legal
  34-54  description of the property which you are acquiring is as follows:
  34-55  ____________________________________________________________
  34-56            Date
  34-57                                            _________________________
  34-58                                               Signature of Seller
  34-59        PURCHASER IS ADVISED THAT THE INFORMATION SHOWN ON THIS FORM
  34-60  IS SUBJECT TO CHANGE BY THE DISTRICT AT ANY TIME.  THE DISTRICT
  34-61  ROUTINELY ESTABLISHES TAX RATES DURING THE MONTHS OF SEPTEMBER
  34-62  THROUGH DECEMBER OF EACH YEAR, EFFECTIVE FOR THE YEAR IN WHICH THE
  34-63  TAX RATES ARE APPROVED BY THE DISTRICT.  PURCHASER IS ADVISED TO
  34-64  CONTACT THE DISTRICT TO DETERMINE THE STATUS OF ANY CURRENT OR
  34-65  PROPOSED CHANGES TO THE INFORMATION SHOWN ON THIS FORM.
  34-66        "The undersigned purchaser hereby acknowledges receipt of the
  34-67  foregoing notice at or prior to execution of a binding contract for
  34-68  the purchase of the real property described in such notice or at
  34-69  closing of purchase of the real property.
  34-70  ____________________________________________________________
   35-1            Date
   35-2                                            _________________________
   35-3                                             Signature of Purchaser
   35-4        "(Note:  Correct district name, tax rate, bond amounts, and
   35-5  legal description are to be placed in the appropriate space.
   35-6  Except for notices included as an addendum or paragraph of a
   35-7  purchase contract, the notice shall be executed by the seller and
   35-8  purchaser, as indicated.  If the district does not propose to
   35-9  provide one or more of the specified facilities and services, the
  35-10  appropriate purpose may be eliminated.  If the district has not yet
  35-11  levied taxes, a statement of the district's most recent projected
  35-12  rate of debt service tax is to be placed in the appropriate space.
  35-13  If the district does not have approval from the commission to adopt
  35-14  and impose a standby fee, the second paragraph of the notice may be
  35-15  deleted.  For the purposes of the notice form required to be given
  35-16  to the prospective purchaser prior to execution of a binding
  35-17  contract of sale and purchase, a seller and any agent,
  35-18  representative, or person acting on the seller's behalf may modify
  35-19  the notice by substitution of the words 'January 1, ______' for the
  35-20  words 'this date' and place the correct calendar year in the
  35-21  appropriate space."
  35-22        (c)  The notice required by this section shall be given to
  35-23  the prospective purchaser prior to execution of a binding contract
  35-24  of sale and purchase either separately or as an addendum or
  35-25  paragraph of a purchase contract.  In the event a contract of
  35-26  purchase and sale is entered into without the seller providing the
  35-27  notice required by this subsection, the purchaser shall be entitled
  35-28  to terminate the contract.  If, however, the seller furnishes the
  35-29  required notice at or prior to closing the purchase and sale
  35-30  contract and the purchaser elects to close even though such notice
  35-31  was not timely furnished prior to execution of the contract, it
  35-32  shall be conclusively presumed that the purchaser has waived all
  35-33  rights to terminate the contract and recover damages or other
  35-34  remedies or rights under the provision of this section.
  35-35  Notwithstanding any provision of this subchapter to the contrary,
  35-36  all sellers, title companies, examining attorneys, and any agent,
  35-37  representative, or person acting on their behalf shall not be
  35-38  liable for damages under the provisions of either Subsection (l) or
  35-39  (m) of this section or liable for any other damages to any person
  35-40  for failure to provide the notice required by this section to a
  35-41  purchaser prior to execution of a binding contract of a purchase
  35-42  and sale when the district has not filed the information form and
  35-43  map or plat as required under Section 49.455 of this code.
  35-44        (d)  The purchaser shall sign the notice or purchase contract
  35-45  including such notice to evidence the receipt of notice.
  35-46        (e)  At the closing of purchase and sale, a separate copy of
  35-47  such notice with current information shall be executed by the
  35-48  seller and purchaser, acknowledged, and thereafter recorded in the
  35-49  deed records of the county in which the property is located.  For
  35-50  the purposes of this section, all sellers, title companies, and
  35-51  examining attorneys, and any agent, representative, or person
  35-52  acting on their behalf, shall be entitled to rely on the accuracy
  35-53  of the information form and map or plat as last filed by each
  35-54  district under Section 49.455 of this code or the information
  35-55  contained in or shown on the notice form issued by the district
  35-56  under Section 49.453 of this code in completing the notice form to
  35-57  be executed by the seller and purchaser at the closing of purchase
  35-58  and sale.  Any information taken from the information form or map
  35-59  or plat as last filed by each district and the information
  35-60  contained in or shown on the notice form issued by the district
  35-61  under Section 49.453 of this code shall be for purposes of this
  35-62  section conclusively presumed as a matter of law to be correct.
  35-63  All subsequent sellers, purchasers, title insurance companies,
  35-64  examining attorneys, and lienholders shall be entitled to rely upon
  35-65  the information form and map or plat filed by the district or the
  35-66  notice form issued by the district under Section 49.453 of this
  35-67  code.
  35-68        (f)  For the purposes of this section, an executory contract
  35-69  of purchase and sale having a performance period of more than six
  35-70  months shall be considered a sale under Subsection (a) of this
   36-1  section.
   36-2        (g)  For the purposes of the notice form to be given to the
   36-3  prospective purchaser prior to execution of a binding contract of
   36-4  sale and purchase, a seller and any agent, representative, or
   36-5  person acting in the seller's behalf may modify the notice by
   36-6  substitution of the words "January 1, ____" for the words "this
   36-7  date" and place the correct calendar year in the appropriate space.
   36-8  All sellers, and all persons completing the prescribed notice in
   36-9  the sellers' behalf, shall be entitled to rely on the information
  36-10  contained in or shown on the information form and map or plat filed
  36-11  of record by the district under Section 49.455 in completing the
  36-12  prescribed form to be given to the prospective purchaser prior to
  36-13  execution of a binding contract of sale and purchase.  Except as
  36-14  otherwise provided in Subsection (e) of this section, any
  36-15  information taken from the information form or map or plat filed of
  36-16  record by the district in effect as of January 1 of each year shall
  36-17  be, for purposes of the notice to be given to the prospective
  36-18  purchaser prior to execution of a binding contract of sale and
  36-19  purchase, conclusively presumed as a matter of law to be correct
  36-20  for the period January 1 through December 31 of such calendar year.
  36-21  A seller and any persons completing the prescribed notice in the
  36-22  seller's behalf may provide more recent information, if available,
  36-23  than the information contained in or shown on the information form
  36-24  and map or plat filed of record by the district under Section
  36-25  49.455 in effect as of January 1 of each year in completing the
  36-26  prescribed form to be given to the purchaser prior to execution of
  36-27  a binding contract of sale and purchase.  Nothing contained in the
  36-28  preceding sentence shall be construed to create an affirmative duty
  36-29  on the part of a seller or any persons completing the prescribed
  36-30  notice in the seller's behalf to provide more recent information
  36-31  than the information taken from the information form and map or
  36-32  plat filed of record by the district as of January 1 of each year
  36-33  in completing the prescribed notice to be given to the purchaser
  36-34  prior to execution of a binding contract of sale and purchase.  All
  36-35  subsequent sellers, purchasers, title insurance companies,
  36-36  examining attorneys, and lienholders shall be entitled to rely upon
  36-37  the information form and map or plat filed by the district.
  36-38        (h)  If such notice is given at closing as provided in
  36-39  Subsection (e) of this section, a purchaser, or the purchaser's
  36-40  heirs, successors, or assigns, shall not be entitled to maintain
  36-41  any action for damages or maintain any action against a seller,
  36-42  title insurance company, or lienholder, or any agent,
  36-43  representative, or person acting in their behalf, by reason of use
  36-44  by the seller of the information filed for record by the district
  36-45  or reliance by the seller on the filed plat and filed legal
  36-46  description of the district in determining whether the property to
  36-47  be sold and purchased is within the district.  No action may be
  36-48  maintained against any title company for failure to disclose the
  36-49  inclusion of the described real property within a district when the
  36-50  district has not filed for record the information form, map, or
  36-51  plat with the clerk of the county or counties in which the district
  36-52  is located.
  36-53        (i)  Any purchaser who purchases any real property in a
  36-54  district and who thereafter sells or conveys the same shall on
  36-55  closing of such subsequent sale be conclusively considered as
  36-56  having waived any prior right to damages under this section.
  36-57        (j)  It is the express intent of this section that all
  36-58  sellers, title insurance companies, examining attorneys, vendors of
  36-59  property and tax information, real estate brokers and lienholders,
  36-60  and any agent, representative, or person acting on their behalf,
  36-61  shall be entitled to rely on the accuracy of the information form
  36-62  and map or plat as last filed by each district or the information
  36-63  contained in or shown on the notice form issued by the district
  36-64  under Section 49.453 of this code, or for the purposes of the
  36-65  notice to be given the purchaser prior to execution of a binding
  36-66  contract of sale and purchase the information contained in or shown
  36-67  on the information form and map or plat filed of record by the
  36-68  district in effect as of January 1 of each year for the period
  36-69  January 1 through December 31 of such calendar year.
  36-70        (k)  Except as otherwise provided in Subsection (c) of this
   37-1  section, if any sale or conveyance of real property within a
   37-2  district is not made in compliance with the provisions of this
   37-3  section, the purchaser may institute a suit for damages under the
   37-4  provisions of either Subsection (l) or Subsection (m) of this
   37-5  section.
   37-6        (l)  A purchaser of real property covered by the provisions
   37-7  of this section, if the sale or conveyance of the property is not
   37-8  made in compliance with this section, may institute a suit for
   37-9  damages in the amount of all costs relative to the purchase of the
  37-10  property plus interest and reasonable attorney's fees.  The suit
  37-11  for damages may be instituted jointly or severally against the
  37-12  person, firm, corporation, partnership, organization, business
  37-13  trust, estate, trust, association, or other legal entity which sold
  37-14  or conveyed the property to the purchaser.  Following the recovery
  37-15  of damages under this subsection, the amount of the damages shall
  37-16  first be paid to satisfy all unpaid obligations on each outstanding
  37-17  lien or liens on the property and the remainder of the damage
  37-18  amount shall be paid to the purchaser.  On payment of all damages
  37-19  respectively to the lienholders and purchaser, the purchaser shall
  37-20  reconvey the property to the seller.
  37-21        (m)  A purchaser of real property covered by the provisions
  37-22  of this section, if the sale or conveyance of the property is not
  37-23  made in compliance with this section, may institute a suit for
  37-24  damages in an amount not to exceed $5,000, plus reasonable
  37-25  attorney's fees.
  37-26        (n)  A purchaser is not entitled to recover damages under
  37-27  both Subsections (l) and (m) of this section, and entry of a final
  37-28  decision awarding damages to the purchaser under either Subsection
  37-29  (l) or Subsection (m) of this section shall preclude the purchaser
  37-30  from recovering damages under the other subsection.
  37-31  Notwithstanding any part or provision of the general or special
  37-32  laws or the common law of the state to the contrary, the relief
  37-33  provided under Subsections (l) and (m) of this section shall be the
  37-34  exclusive remedies for a purchaser aggrieved by the seller's
  37-35  failure to comply with the provisions of this section.  Any action
  37-36  for damages shall not, however, apply to, affect, alter, or impair
  37-37  the validity of any existing vendor's lien, mechanic's lien, or
  37-38  deed of trust lien on the property.
  37-39        (o)  A suit for damages under the provisions of this section
  37-40  must be brought within 90 days after the purchaser receives the
  37-41  first district tax notice or within four years after the property
  37-42  is sold or conveyed to the purchaser, whichever time occurs first,
  37-43  or the purchaser loses the right to seek damages under this
  37-44  section.
  37-45        (p)  Notwithstanding any provisions of this subchapter to the
  37-46  contrary, a purchaser may not recover damages of any kind under
  37-47  this section if that person:
  37-48              (1)  purchases an equity in real property and in
  37-49  conjunction with the purchase assumes any liens, whether purchase
  37-50  money or otherwise; and
  37-51              (2)  does not require proof of title by abstract, title
  37-52  policy, or any other proof of title.
  37-53        Sec. 49.453.  NOTICE FORM FROM DISTRICT.  (a)  A district
  37-54  covered by Section 49.452 shall also maintain in the district
  37-55  office the particular form of Notice to Purchasers required by
  37-56  Section 49.452 to be furnished by a seller to a purchaser of real
  37-57  property in that district and shall, upon written request of any
  37-58  person, issue the notice form completed by a district with all
  37-59  information required to be furnished by the district.  A notice
  37-60  form issued by a district under the provisions of this section
  37-61  shall include a written statement that the notice form is being
  37-62  issued by the district, the date of its issuance, and the
  37-63  district's telephone number.  A district shall not be required to
  37-64  orally provide the information.
  37-65        (b)  A district may charge a reasonable fee as determined by
  37-66  the district not to exceed $10 for the issuance of a notice form
  37-67  pursuant to Subsection (a) of this section.  The notice form shall
  37-68  be delivered by regular mail or made available at the district's
  37-69  office.  If a district is requested to deliver the notice form to a
  37-70  person by an alternative method, the district may impose a charge
   38-1  not to exceed the actual cost of such delivery.
   38-2        (c)  A district may delegate the responsibility for issuance
   38-3  of the particular form of Notice to Purchasers to an employee or
   38-4  agent of the district.  A district shall file with the commission
   38-5  the name, address, and telephone number of the employee or agent of
   38-6  the district responsible for issuance of the notice forms and shall
   38-7  notify the commission in writing within seven days after there is a
   38-8  change to the information required to be filed with the commission
   38-9  under the provisions of this subsection.
  38-10        (d)  Any notice issued by the district shall contain the
  38-11  information effective as of the date of its issuance.
  38-12        Sec. 49.454.  NOTICE OF UNPAID STANDBY FEES.  (a)  A district
  38-13  covered by Section 49.452 shall, on the written request of any
  38-14  person, issue a certificate stating the amount of any unpaid
  38-15  standby fees, including interest on the fees, that have been
  38-16  assessed against a tract of property in the district.  The district
  38-17  may charge a fee not to exceed $10 for each certificate.  A
  38-18  certificate issued through fraud or collusion is void.
  38-19        (b)  If the district issues a certificate containing an
  38-20  erroneous statement under Subsection (a) of this section and the
  38-21  owner of the property transfers the property to a good faith
  38-22  purchaser for value, the lien on the property provided by Section
  38-23  49.231(k) of this chapter is extinguished to the extent of the
  38-24  error.
  38-25        (c)  This section does not affect the liability for any
  38-26  unpaid standby fees of the former owner of the undeveloped property
  38-27  under Section 49.231(k) of this chapter.
  38-28        Sec. 49.455.  FILING INFORMATION.  (a)  The board covered by
  38-29  the provisions of Section 49.452 of this subchapter shall file with
  38-30  the county clerk in each of the counties in which all or part of
  38-31  the district is located a duly affirmed and acknowledged
  38-32  information form which includes the information required in
  38-33  Subsection (b) of this section, and a complete and accurate map or
  38-34  plat showing the boundaries of the district.
  38-35        (b)  The information form filed by a district under this
  38-36  section shall include:
  38-37              (1)  the name of the district;
  38-38              (2)  the complete and accurate legal description of the
  38-39  boundaries of the district;
  38-40              (3)  the most recent rate of district taxes on property
  38-41  located in the district;
  38-42              (4)  the total amount of bonds which have been approved
  38-43  by the voters and which may be issued by the district (excluding
  38-44  refunding bonds and any bonds or portion of bonds payable solely
  38-45  from revenues received or expected to be received pursuant to a
  38-46  contract with a governmental entity);
  38-47              (5)  the aggregate initial principal amount of all
  38-48  bonds of the district payable in whole or part from taxes
  38-49  (excluding refunding bonds and any bonds or portion of bonds
  38-50  payable solely from revenues received or expected to be received
  38-51  pursuant to a contract with a governmental entity) which have been
  38-52  previously issued and remain outstanding;
  38-53              (6)  whether a standby fee is imposed by the district
  38-54  and, if so, the amount of the standby fee;
  38-55              (7)  the date on which the election to confirm the
  38-56  creation of the district was held if such was required;
  38-57              (8)  a statement of the functions performed or to be
  38-58  performed by the district; and
  38-59              (9)  the particular form of Notice to Purchasers
  38-60  required by Section 49.452 of this subchapter to be furnished by a
  38-61  seller to a purchaser of real property in that district completed
  38-62  by the district with all information required to be furnished by
  38-63  the district.
  38-64        If a district has not yet levied taxes, a statement to such
  38-65  effect together with the district's most recent projected rate of
  38-66  debt service tax shall be substituted for Subdivisions (3) and (4)
  38-67  of this subsection.
  38-68        (c)  The information form and map or plat required by this
  38-69  section shall be signed by a majority of the members of the board
  38-70  and by each such officer affirmed and acknowledged before it is
   39-1  filed with the county clerk, and each amendment made to an
   39-2  information form or map shall also be signed by the members of the
   39-3  board and by each such officer affirmed and acknowledged before it
   39-4  is filed with the county clerk.
   39-5        (d)  The information form required by this section shall be
   39-6  filed with the county clerk within 48 hours after the effective
   39-7  date of this section or within 48 hours after the district is
   39-8  officially created, whichever time comes first.  For purposes of
   39-9  this section, the words "officially created" mean the date and hour
  39-10  in which the results of the election to confirm the creation of the
  39-11  district are declared.
  39-12        (e)  Within seven days after there is a change in any of the
  39-13  information contained in the district information form or map or
  39-14  plat, the district shall file an amendment to the information form
  39-15  or map setting forth the changes made.
  39-16        (f)  Any person who affirms the corrections and accuracy of
  39-17  and acknowledges an information form, map, or plat, or any
  39-18  amendment to an information form or map or plat which includes
  39-19  information which is inaccurate or incorrect shall be guilty of a
  39-20  misdemeanor and shall be fined not less than $100 nor more than
  39-21  $1,000 for each violation.
  39-22        (g)  If a district fails to file the information required by
  39-23  this section in the time required, the executive director may
  39-24  request the state attorney general or the district or the county
  39-25  attorney of the county in which the district is located to seek a
  39-26  writ of mandamus to force the board to prepare and file the
  39-27  necessary information.
  39-28        (h)  Any member of a governing board who wilfully fails or
  39-29  refuses to join in filing an information form, map, plat, or
  39-30  amendment to an information form, map, or plat under this section
  39-31  shall be guilty of a misdemeanor and shall be fined not less than
  39-32  $100 nor more than $1,000 for each violation.  A member of a
  39-33  governing board is presumed to have wilfully failed or refused to
  39-34  join in the filing of an information form, map, plat, or amendment
  39-35  to an information form, map, or plat if that member was present at
  39-36  the meeting at which the information included in the information
  39-37  form, map, plat, or amendment to the information form, map, or plat
  39-38  was adopted.
  39-39        (i)  If a district covered by the provisions of this section
  39-40  is dissolved, annexed to another local government, or is
  39-41  consolidated with another district, the members of the board shall
  39-42  file a statement of this fact together with the effective date of
  39-43  the dissolution, annexation, or consolidation with the information
  39-44  form.  After a district is dissolved and the statement is filed
  39-45  under this subsection, a person who sells or conveys property
  39-46  within the dissolved district is no longer required to give notice
  39-47  under Section 49.452 of this subchapter.
  39-48        (j)  A copy of all information forms, maps, plats, and
  39-49  amendments to these filed under this section shall also be filed
  39-50  with the executive director.
  39-51        Sec. 49.456.  BANKRUPTCY OF DISTRICTS; AUTHORITY OF
  39-52  COMMISSION.  (a)  Notwithstanding Section 1, Chapter 207, General
  39-53  Laws, Acts of the 44th Legislature, Regular Session, 1935 (Article
  39-54  1024a, Vernon's Texas Civil Statutes), Section 1, Chapter 1, page
  39-55  70, General Laws, Acts of the 46th Legislature, Regular Session,
  39-56  1939 (Article 1024b, Vernon's Texas Civil Statutes); or any other
  39-57  law of this state, a district created under Article III, Sections
  39-58  52(b)(1) and (2), or Article XVI, Section 59, of the Texas
  39-59  Constitution, that is subject to the continuing supervision of the
  39-60  commission, may not proceed under Chapter 9 of the Federal
  39-61  Bankruptcy Code (11 U.S.C. Sections 901-946) or any other law
  39-62  enacted by the Congress of the United States under federal
  39-63  bankruptcy authority until the commission authorizes the district
  39-64  to proceed under those laws by written order.
  39-65        (b)  A district requesting the commission's authorization to
  39-66  proceed under Chapter 9 of the Federal Bankruptcy Code (11 U.S.C.
  39-67  Sections 901-946) or any other federal bankruptcy law shall file an
  39-68  application with the commission requesting authorization.
  39-69        (c)  The commission shall investigate the financial condition
  39-70  of a district submitting an application under Subsection (b) of
   40-1  this section, including its assets, liabilities, and sources of
   40-2  revenues and may require a district to submit any information that
   40-3  the commission considers material to a determination of whether
   40-4  authorization to proceed in bankruptcy should be granted.
   40-5        (d)  The commission may not authorize a district to proceed
   40-6  in bankruptcy unless the commission determines that the district
   40-7  cannot, through the full exercise of its rights and powers under
   40-8  the laws of this state, reasonably expect to meet its debts and
   40-9  other obligations as they mature.
  40-10        (e)  The commission shall adopt and assess reasonable and
  40-11  necessary fees adequate to recover the costs of the commission in
  40-12  administering this section.
  40-13        SECTION 4.  Title 4, Water Code, is amended by adding Chapter
  40-14  59 to read as follows:
  40-15                    CHAPTER 59.  REGIONAL DISTRICTS
  40-16                   SUBCHAPTER A.  DISTRICT CREATION
  40-17        Sec. 59.001.  PURPOSE AND APPLICATION.  (a)  The purpose of
  40-18  this chapter is to authorize creation and operation of regional
  40-19  districts for water, sanitary sewer, drainage, and municipal solid
  40-20  waste disposal under Article XVI, Section 59, of the Texas
  40-21  Constitution.
  40-22        (b)  This chapter applies only in a county with a population
  40-23  of at least 2.2 million, according to the most recent federal
  40-24  census, or which borders a county with a population of at least 2.2
  40-25  million, according to the most recent federal census.
  40-26        Sec. 59.002.  DEFINITIONS.  (a)  In this chapter:
  40-27              (1)  "District" means a district created or operating
  40-28  under this chapter.
  40-29              (2)  "Municipal district" means a district created
  40-30  under general law or a special Act operating under Chapter 51, 53,
  40-31  or 54.
  40-32              (3)  "Bond" means bonds, coupons, notes, or any other
  40-33  evidence of indebtedness.
  40-34        (b)  Other terms not defined by this chapter have the same
  40-35  meaning assigned to those terms by Section 49.001 of this code.
  40-36        Sec. 59.003.  CREATION OF DISTRICT.  (a)  A district may be
  40-37  created under procedures provided by this section.
  40-38        (b)  The boards of two or more municipal districts, or of at
  40-39  least 20 percent of the total number of municipal districts to be
  40-40  included in the proposed district, whichever is greater, may
  40-41  jointly petition the commission for creation of a district in the
  40-42  territory described in the petition.  The municipal districts must
  40-43  present to the commission with the petition a petition from each
  40-44  petitioning district adopted by a majority of the directors of the
  40-45  district.
  40-46        (c)  The owner or owners of 2,000 or more contiguous acres
  40-47  may petition the commission for creation of a district.
  40-48        (d)  The commissioners courts of one or more counties may
  40-49  petition the commission for creation of a district in any territory
  40-50  within the county.
  40-51        (e)  The governing body of any city may petition the
  40-52  commission for creation of a district in any territory within the
  40-53  city or its extraterritorial jurisdiction.
  40-54        (f)  Section 54.013 of this code applies to the composition
  40-55  of districts created under this chapter.
  40-56        Sec. 59.004.  PURPOSES OF DISTRICT.  A district shall be
  40-57  created:
  40-58              (1)  to purchase, own, hold, lease, and otherwise
  40-59  acquire sources of water supply;
  40-60              (2)  to build, operate, and maintain facilities for the
  40-61  transportation of water;
  40-62              (3)  to sell water to cities and political subdivisions
  40-63  of this state, to private business entities, and to individuals;
  40-64              (4)  to purchase, own, hold, lease, and otherwise
  40-65  acquire equipment and mechanisms necessary for sanitary sewer and
  40-66  wastewater treatment;
  40-67              (5)  to build, operate, and maintain facilities for
  40-68  sanitary sewer and wastewater treatment;
  40-69              (6)  to transport and treat sanitary sewer and
  40-70  wastewater effluent of cities and political subdivisions of this
   41-1  state, and for private business entities or individuals;
   41-2              (7)  to purchase, own, hold, lease, and otherwise
   41-3  acquire equipment and mechanisms for the drainage of storm water
   41-4  and floodwater; and
   41-5              (8)  for the purposes outlined in Section 54.012 of
   41-6  this code.
   41-7        Sec. 59.005.  MATCHING FUNDS GUARANTEES.  If the Texas Water
   41-8  Development Board requires that matching funds be provided as a
   41-9  condition for receiving a loan or grant from the Texas Water
  41-10  Development Board from research and planning funds, the matching
  41-11  funds may not be provided through a guarantee of matching funds by
  41-12  any individual who has a financial interest in the regional
  41-13  district or who will receive any direct financial benefit from a
  41-14  regional district project.
  41-15        Sec. 59.006.  PETITION.  (a)  To create a district, a
  41-16  petition of any of the persons or entities described in Section
  41-17  59.003 requesting creation must be filed with the commission.
  41-18        (b)  The petition must:
  41-19              (1)  describe the boundaries of the proposed district
  41-20  by metes and bounds that adequately and completely circumscribe the
  41-21  property so that there is complete closure of the property or by
  41-22  lot and block numbers if there is a recorded map or plat or
  41-23  subdivision survey of the area;
  41-24              (2)  state the general nature of the work proposed to
  41-25  be done, the necessity of the work, and the cost of any projects of
  41-26  the district as estimated by those filing the petition;
  41-27              (3)  state the name of each petitioner; and
  41-28              (4)  include a name of the district that is generally
  41-29  descriptive of the locale of the district followed by the words
  41-30  "Regional District."
  41-31        (c)  A proposed district may not have the same name as any
  41-32  other district located in the state.
  41-33        Sec. 59.007.  CONSENT OF CITY.  (a)  Land in the corporate
  41-34  limits of a city or in the extraterritorial jurisdiction of a city
  41-35  may not be included in a district unless the city grants its
  41-36  written consent by resolution or ordinance to the inclusion of the
  41-37  land in the district.
  41-38        (b)  If the governing body of a city fails or refuses to
  41-39  grant permission for the inclusion of land in its extraterritorial
  41-40  jurisdiction in a district within 120 days after receipt of a
  41-41  written request, the person or entity desiring to create the
  41-42  district may petition the governing body of the city requesting the
  41-43  city to make available the water, sewer, or drainage service
  41-44  contemplated to be provided by the district.
  41-45        (c)  Failure of the governing body of the city and the
  41-46  requesting district to execute a mutually agreeable contract
  41-47  providing for the service requested within six months after receipt
  41-48  of a request for consent constitutes authorization for the
  41-49  inclusion of land in the district under this section.
  41-50  Authorization for the inclusion of the land in the district under
  41-51  this section means only authorization to initiate proceedings to
  41-52  include the land in the district as otherwise provided by this
  41-53  chapter.
  41-54        (d)  Sections 54.016(e), (f), (g), and (h) of this code apply
  41-55  under this chapter.
  41-56        Sec. 59.008.  GRANTING OR REFUSING PETITION; EXCLUSION OF
  41-57  TERRITORY.  (a)  If after the hearing of the petition the
  41-58  commission finds that the petition conforms to the requirements of
  41-59  this chapter and that the creation of the district would be of
  41-60  benefit to the territory to be included in the district, the
  41-61  commission shall issue an order granting the petition for creation.
  41-62  If the commission finds that part of the territory included in the
  41-63  proposed district will not benefit from the creation of the
  41-64  district, the commission shall exclude that territory from the
  41-65  proposed district and redefine the proposed district's boundaries
  41-66  accordingly.
  41-67        (b)  If the commission finds that the petition does not
  41-68  conform to the requirements of this chapter or that the proposed
  41-69  projects are not of benefit to the territory in the proposed
  41-70  district, the commission shall issue an order denying the petition
   42-1  or allowing the petitioners to amend their petition and resubmit
   42-2  it.
   42-3        (c)  A copy of the order of the commission granting or
   42-4  denying a petition shall be mailed to each city having
   42-5  extraterritorial jurisdiction in the county or counties in which
   42-6  the district is to be located that has requested notice of hearings
   42-7  as provided by Section 54.019 of this code.
   42-8            (Sections 59.009-59.020 reserved for expansion
   42-9               SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS
  42-10        Sec. 59.021.  DIRECTORS.  (a)  The commission shall appoint
  42-11  temporary directors who shall serve until permanent directors are
  42-12  elected.
  42-13        (b)  A petition requesting creation filed in accordance with
  42-14  Section 59.006 may provide that directors be elected by precinct as
  42-15  provided by Subsection (h) of this section.
  42-16        (c)  The board of directors is composed of five members
  42-17  unless the petition requesting creation of the district requests
  42-18  and the commission approves a board that consists of seven members.
  42-19        (d)  Permanent directors shall be elected in accordance with
  42-20  Chapter 49 of this code.
  42-21        (e)  If the petition for creation has requested the election
  42-22  of seven directors as provided by Subsection (c) of this section,
  42-23  unless otherwise agreed, the three directors elected who received
  42-24  the fewest number of votes, whether their election is by precinct
  42-25  or at large, shall serve until the next directors' election
  42-26  following the confirmation election and the four who received the
  42-27  highest number of votes shall serve until the second directors'
  42-28  election after the confirmation election.
  42-29        (f)  After the creation of the district, the persons or
  42-30  entities that petitioned for creation or 50 qualified voters of the
  42-31  district may file a petition with the commission requesting to
  42-32  expand the district's board to seven members.  If the commission
  42-33  grants the petition, the commission shall appoint two temporary
  42-34  directors.  One temporary director shall serve until the next
  42-35  directors' election and one shall serve until the next succeeding
  42-36  directors' election.  At each election one director shall be
  42-37  elected to serve for a four-year term.
  42-38        (g)  If the board of directors of the district is expanded to
  42-39  seven members, four directors shall constitute a quorum and a
  42-40  concurrence of four directors is necessary in all matters
  42-41  pertaining to the business of the district.
  42-42        (h)  A petition for the creation of a district may request
  42-43  that the board be elected to represent a geographic area.  If the
  42-44  petition requesting creation of the district is granted, the
  42-45  commission shall establish precincts from which the directors are
  42-46  to be elected.  In establishing the precincts the commission shall
  42-47  attempt to have directors represent geographic areas with equal
  42-48  numbers of people and shall endeavor to the extent possible to
  42-49  cause the rights of minorities to be protected and to comply with
  42-50  the federal Voting Rights Act (42 U.S.C. Sections 1971, 1973 et
  42-51  seq.).  Thereafter, the board of directors of the district shall
  42-52  revise the precincts from time to time to cause them to comply with
  42-53  the provisions of this subsection.
  42-54        Sec. 59.022.  ABILITY TO SET RATES.  The district may charge
  42-55  rates to persons and entities located outside the district's
  42-56  boundaries on terms, rates, and charges the board of directors may
  42-57  determine to be advisable.  In setting rates for out-of-district
  42-58  customers, the board shall set rates sufficient to enable it to
  42-59  meet operation and maintenance expenses and to pay the principal of
  42-60  and interest on debt issued in connection with providing service
  42-61  and to provide a reasonable reserve for replacements to the
  42-62  district.  In setting rates, the district may take into
  42-63  consideration past operation and debt service expenses.
  42-64        Sec. 59.023.  ISSUANCE OF BONDS.  The district may issue
  42-65  bonds for the purpose of purchasing, constructing, acquiring,
  42-66  owning, operating, repairing, improving, or extending any district
  42-67  works, improvements, facilities, plants, equipment, and appliances
  42-68  needed to accomplish the purposes provided by Section 59.004 for
  42-69  which a district is created, including works, improvements,
  42-70  facilities, plants, equipment, and appliances needed to provide a
   43-1  waterworks system, sanitary sewer system, storm sewer system, solid
   43-2  waste disposal system, and parks and recreational facilities.
   43-3  Prior to issuing bonds or other obligations, a confirmation
   43-4  election must be held in accordance with Chapter 49 of this code,
   43-5  and a majority of voters must approve the establishment of the
   43-6  district.
   43-7        Sec. 59.024.  EXCLUSION OF CERTAIN MUNICIPAL DISTRICTS.
   43-8  (a)  A municipal district may be excluded from the district as
   43-9  provided by this section.
  43-10        (b)  To be excluded, the board of directors of the municipal
  43-11  district may adopt a resolution requesting exclusion by a majority
  43-12  vote of its board of directors and shall file the petition with the
  43-13  directors of the proposed district before the first confirmation
  43-14  election.
  43-15        (c)  At the time of the district's confirmation election, a
  43-16  separate voting precinct shall be used for the qualified voters in
  43-17  each municipal district that has filed a petition requesting
  43-18  exclusion.  The votes in each precinct shall be tallied separately
  43-19  to determine whether that municipal district will be excluded from
  43-20  the district boundaries.
  43-21        (d)  If a majority of the votes cast in a municipal district
  43-22  requesting exclusion vote against confirmation of the district, the
  43-23  votes cast in the confirmation election shall not be counted for
  43-24  the confirmation election, bond election, or maintenance tax
  43-25  election, and that municipal district must be excluded from the
  43-26  boundaries of the district by the board of directors of the
  43-27  district at the time the results of the election are canvassed.
  43-28        (e)  After a confirmation election at which the district is
  43-29  authorized to be created, the board of directors of the district
  43-30  shall adopt an order redefining the boundaries of the district to
  43-31  exclude those municipal districts petitioning for exclusion that
  43-32  have voted not to confirm creation of the district.
  43-33        (f)  Before the creation hearing, any municipal district
  43-34  located within the proposed district may petition the commission
  43-35  for a separate voting precinct to be used within the boundaries of
  43-36  the petitioning district at the time of the district's confirmation
  43-37  election.  If the commission grants the petition requesting a
  43-38  separate voting precinct, Subsections (c) through (e) of this
  43-39  section apply.
  43-40        Sec. 59.025.  CONFIRMATION ELECTION.  (a)  Before a district
  43-41  may be created pursuant to a petition granted by the commission, a
  43-42  confirmation election must be held within the boundaries of the
  43-43  proposed district.
  43-44        (b)  The directors appointed by the commission shall call and
  43-45  hold the confirmation election in the manner provided for
  43-46  conducting elections under Chapter 49 of this code.  The provisions
  43-47  of those sections relating to a director's election do not apply to
  43-48  an election held under this section.
  43-49        (c)  If the creation of the district is defeated, subsequent
  43-50  confirmation elections may not be held to confirm the creation of
  43-51  the district.
  43-52        (d)  A bond election, maintenance tax election, and any other
  43-53  election may be held at the same time and in conjunction with a
  43-54  confirmation election.
  43-55        (e)  In this section, "district" means:
  43-56              (1)  a district as defined by Section 59.002(a)(1) of
  43-57  this code; or
  43-58              (2)  a municipal district that proposes to provide
  43-59  wholesale regional water, sewer services, or drainage services in a
  43-60  county with a population of at least two million, according to the
  43-61  most recent federal census, or a county that borders a county with
  43-62  a population of at least two million, according to the most recent
  43-63  federal census.
  43-64            (Sections 59.026-59.050 reserved for expansion
  43-65       SUBCHAPTER C.  ADDING OR EXCLUDING TERRITORY; DISSOLUTION
  43-66        Sec. 59.051.  ADDING LAND BY PETITION OF LESS THAN ALL
  43-67  LANDOWNERS.  In addition to the method of adding land to a district
  43-68  described in Section 59.052, defined areas of land, regardless of
  43-69  whether they are contiguous to the district, may be annexed to the
  43-70  district in the manner provided in Chapter 49.
   44-1        Sec. 59.052.  FILING OF PETITION.  A petition requesting the
   44-2  annexation of a defined area signed by a majority in value of the
   44-3  owners of land in the defined area, as shown by the tax rolls of
   44-4  the county or counties in which that area is located, signed by 50
   44-5  landowners if the number of landowners is more than 50, signed by
   44-6  the single landowner of 2,000 or more acres of land in the area, or
   44-7  signed by a majority of the governing body of a municipal district,
   44-8  a county, or a city requesting annexation, shall be filed with the
   44-9  secretary of the board.
  44-10        Sec. 59.053.  DISSOLUTION OF DISTRICT BEFORE ISSUANCE OF
  44-11  BONDS.  (a)  If the board considers it advisable before the
  44-12  issuance of any bonds, the board may dissolve the district and
  44-13  liquidate the affairs of the district as provided by Sections
  44-14  54.734 through 54.738 of this code.
  44-15        (b)  If a majority of the board finds at any time before the
  44-16  authorization of bonds that the proposed district and its proposed
  44-17  activities are for any reason impracticable or apparently cannot be
  44-18  successfully and beneficially accomplished, the board may issue
  44-19  notice of a hearing on a proposal to dissolve the district.
  44-20        Sec. 59.054.  JUDICIAL REVIEW OF BOARD'S ORDER.  The board's
  44-21  order to dissolve the district may be judicially reviewed as
  44-22  provided in Chapter 49.
  44-23            (Sections 59.055-59.070 reserved for expansion
  44-24                     SUBCHAPTER D.  MISCELLANEOUS
  44-25        Sec. 59.071.  ANNEXATION OR INCORPORATION BY CITY.  (a)  In
  44-26  this section, "district" has the meaning assigned by Section
  44-27  59.002(a)(1) of this chapter.
  44-28        (b)  If a city annexes all or any part of the territory
  44-29  within a district, or incorporates all or any part of any territory
  44-30  within a district, the city shall succeed to the powers, duties,
  44-31  assets, and obligations of the district as provided by this
  44-32  chapter.
  44-33        (c)  On annexation of any part of the territory of a district
  44-34  by a city or incorporation by a city of any part of the territory
  44-35  of a district, the city shall assume a pro rata share of all debt
  44-36  of the district payable in whole or in part by ad valorem taxes
  44-37  incurred for water, sewer, or drainage purposes or any combination
  44-38  of the three purposes.  The percentage of the assumption shall be
  44-39  determined by multiplying the total debt of the district payable in
  44-40  whole or in part from taxes incurred for the stated purposes by a
  44-41  fraction, the numerator of which is the assessed value of the
  44-42  property to be annexed or incorporated based on the most recent
  44-43  certified county property tax rolls at the time of annexation or
  44-44  incorporation and the denominator of which is the total assessed
  44-45  value of the property of the district based on the most recent
  44-46  certified county property tax rolls at the time of annexation or
  44-47  incorporation.
  44-48        (d)  After annexation by a city of a portion of the territory
  44-49  of a district or incorporation over any part of the territory of a
  44-50  district, the district may not levy taxes on that territory, and
  44-51  the territory is no longer considered a part of the district for
  44-52  any purpose.
  44-53        (e)  If any district's debt payable in whole or in part from
  44-54  ad valorem taxes is assumed by a city, the governing body of the
  44-55  city shall levy and cause to be collected taxes on all taxable
  44-56  property within the city or provide other funds sufficient to pay
  44-57  the city's pro rata share of the principal of and interest on that
  44-58  debt as it becomes due and payable.
  44-59        (f)  If a city annexes or incorporates the entire territory
  44-60  of the district, the district shall be dissolved in accordance with
  44-61  Sections 43.074, 43.075, and 43.081, Local Government Code, if the
  44-62  district is located in one city or Sections 43.076-43.079, Local
  44-63  Government Code, if the district is located in more than one city.
  44-64        (g)  Section 43.071, Local Government Code, does not apply to
  44-65  the annexation of a district created pursuant to this chapter.
  44-66        Sec. 59.072.  OTHER LAWS.  (a)  Except as specifically
  44-67  provided by this chapter, Sections 54.018, 54.019(a), (b), (c), and
  44-68  (d), 54.020, 54.021, 54.023, 54.024, 54.201, 54.205, 54.207 through
  44-69  54.209, 54.502 through 54.506, 54.507(b) and (c), 54.509 through
  44-70  54.512, 54.514, 54.515, 54.517, 54.518, 54.520, 54.521, 54.601
   45-1  through 54.604, and 54.735 through 54.737 of this code apply under
   45-2  this chapter.
   45-3        (b)  Section 54.019(e) of this code does not apply to a
   45-4  district governed by this chapter.
   45-5        SECTION 5.  Section 51.0711(a), Water Code, is amended to
   45-6  read as follows:
   45-7        (a)  The governing body of a municipality that enters a
   45-8  contract or agreement with a district located in more than one
   45-9  county to jointly construct, acquire, operate, or maintain a
  45-10  regional wastewater system is entitled to appoint a special
  45-11  director to the board of the district.  Section 51.072 <of this
  45-12  code> does not apply to a special director.
  45-13        SECTION 6.  Section 51.072, Water Code, is amended to read as
  45-14  follows:
  45-15        Sec. 51.072.  QUALIFICATIONS FOR DIRECTOR.  To be qualified
  45-16  for election as a director, a person must be a resident of the
  45-17  state, own land subject to taxation in the district, and be at
  45-18  least 18 <21> years of age.  Section 49.052 does not apply to a
  45-19  district governed by this chapter whose principal purpose is
  45-20  providing water for irrigation.
  45-21        SECTION 7.  Section 51.076(a), Water Code, is amended to read
  45-22  as follows:
  45-23        (a)  In a district created after June 18, 1967, with
  45-24  boundaries coterminous with the boundaries of a county, the
  45-25  commissioners court may provide in the order granting the petition
  45-26  for creation that the directors are to be selected either as
  45-27  provided in Section 49.102 <51.073 of this code> or by the
  45-28  "commissioners precinct method," which provides for the election of
  45-29  two directors from each commissioners precinct in the county and
  45-30  the election of one director from the county at large.
  45-31        SECTION 8.  Section 51.750(d), Water Code, is amended to read
  45-32  as follows:
  45-33        (d)  The temporary directors of each of the resulting
  45-34  districts must qualify as directors of the district pursuant to
  45-35  Section <Sections> 51.072 <and 51.073 of this code> within the
  45-36  period of 90 days after the election approving the division of the
  45-37  original district and shall assume their offices at the expiration
  45-38  of the 90-day period.
  45-39        SECTION 9.  Section 52.005, Water Code, is amended by adding
  45-40  Subsection (c) to read as follows:
  45-41        (c)  Section 49.052, Section 49.216, and Sections
  45-42  49.301-49.308 do not apply to districts governed by this chapter.
  45-43        SECTION 10.  Section 52.104(a), Water Code, is amended to
  45-44  read as follows:
  45-45        (a)  Except in a district that is composed of the territory
  45-46  of more than one county, is located in a county with a population
  45-47  of more than 100,000, or has a population of more than 100,000, the
  45-48  board may employ a director as general manager.
  45-49        SECTION 11.  Section 52.106, Water Code, is amended by
  45-50  amending Subsection (b) and adding Subsection (c) to read as
  45-51  follows:
  45-52        (b)  A person is ineligible for election as a director if
  45-53  that person is:
  45-54              (1)  disqualified under the provisions of Section
  45-55  49.052;
  45-56              (2)  a member of the governing body of another
  45-57  political subdivision;
  45-58              (3)  an appointed officer of another political
  45-59  subdivision; or
  45-60              (4)  a manager, director, officer, owner, or designated
  45-61  official of  an investor-owned utility, a water supply corporation,
  45-62  another district, or any other public water supply system regulated
  45-63  or permitted by the district <is ineligible for appointment or
  45-64  election as a director>.
  45-65        (c)  A director is disqualified and vacates the office of
  45-66  director if the director meets any of the criteria provided by
  45-67  Subsection (b) <is appointed or elected as a member of the
  45-68  governing body of another political subdivision>.
  45-69        SECTION 12.  Section 52.115, Water Code, is amended to read
  45-70  as follows:
   46-1        Sec. 52.115.  MEETINGS.  <(a)>  The board shall hold regular
   46-2  quarterly meetings.  It may hold meetings at other times as
   46-3  required for the business of the district.
   46-4        <(b)  Any person may attend a meeting of the board and may
   46-5  present in an orderly manner matters for the board's consideration.>
   46-6        <(c)  Meetings shall be conducted and notice of meetings
   46-7  shall be posted in accordance with the open meetings law, Chapter
   46-8  271, Acts of the 60th Legislature, Regular Session, 1967 (Article
   46-9  6252-17, Vernon's Texas Civil Statutes).>
  46-10        SECTION 13.  Sections 52.294(c), (d), and (e), Water Code,
  46-11  are amended to read as follows:
  46-12        (c)  <Notice of an election must be given as provided by
  46-13  Section 52.059(c) of this code for creation elections.>
  46-14        <(d)>  At an election to authorize bonds or notes payable
  46-15  wholly from ad valorem taxes, the ballots must be printed to
  46-16  provide for voting for or against the proposition:  "The issuance
  46-17  of (bonds or notes) and the levy of taxes for payment of the (bonds
  46-18  or notes)."  At any election to authorize bonds or notes payable
  46-19  from both ad valorem taxes and revenues, the ballots must be
  46-20  printed to provide for voting for or against:  "The issuance of
  46-21  (bonds or notes) and the pledge of net revenues and the levy of ad
  46-22  valorem taxes adequate to provide for the payment of the (bonds or
  46-23  notes)."
  46-24        (d) <(e)>  The board shall canvass the returns and declare
  46-25  the results of the election.  If a majority of the votes cast at
  46-26  the election favor the issuance of the bonds or notes, the bonds or
  46-27  notes may be issued by the board, but if a majority of the votes
  46-28  cast at the election do not favor issuance of the bonds or notes,
  46-29  the bonds or notes may not be issued.
  46-30        SECTION 14.  Section 53.040, Water Code, is amended to read
  46-31  as follows:
  46-32        Sec. 53.040.  Elected Supervisors Take Office.  If the
  46-33  election results in a division of the district, the five candidates
  46-34  receiving the most votes in each new district shall be declared
  46-35  elected.  They shall immediately qualify in accordance with Section
  46-36  49.055 of this code <by taking the constitutional oath of office
  46-37  and shall file the oath with the county clerk>.
  46-38        SECTION 15.  Section 53.042, Water Code, is amended to read
  46-39  as follows:
  46-40        Sec. 53.042.  Newly Elected Supervisors--Term of Office.  The
  46-41  newly elected supervisors hold office until the new district's next
  46-42  supervisors election <first general election and then until their
  46-43  successors are elected and have qualified>.
  46-44        SECTION 16.  Section 53.062, Water Code, is amended to read
  46-45  as follows:
  46-46        Sec. 53.062.  Board of Supervisors.  A district created under
  46-47  this chapter is governed by a board of five elected supervisors.
  46-48  <Specific provisions for the election of supervisors are found in
  46-49  Section 53.021, Section 53.086, and Section 53.0861 of this code.>
  46-50        SECTION 17.  Section 53.088, Water Code, is amended to read
  46-51  as follows:
  46-52        Sec. 53.088.  Status of the District.  <(a)>  A district is:
  46-53              (1)  a governmental agency;
  46-54              (2)  a body politic and corporate; and
  46-55              (3)  a defined district within the meaning of Article
  46-56  XVI, Section 59, of the Texas Constitution.
  46-57        <(b)  A district may, through its board, sue and be sued in
  46-58  any court of this state in the name of the district.  All courts of
  46-59  this state shall take judicial notice of the creation of a
  46-60  district.  A district shall contract and be contracted within the
  46-61  name of the district.>
  46-62        SECTION 18.  Section 53.172, Water Code, is amended to read
  46-63  as follows:
  46-64        Sec. 53.172.  Ordering Bond Election.  After the creation of
  46-65  a district and the qualification of the supervisors, the board may
  46-66  order an election in the district to authorize a bond issue.  <The
  46-67  board shall set the day for the election, which must be held during
  46-68  the period beginning on the 20th day and ending with the 30th day
  46-69  after the day of the order.>  At this election, the board shall
  46-70  submit only a proposition authorizing the issuance of bonds and the
   47-1  levy of a tax to pay the bonds.  The ballots shall be printed to
   47-2  allow for voting for or against the proposition:  "The issuance of
   47-3  bonds and the levy of taxes to pay the bonds."
   47-4        SECTION 19.  Subchapter H, Chapter 54, Water Code, is amended
   47-5  by adding Section 54.739 to read as follows:
   47-6        Sec. 54.739.  ANNEXATION OF CERTAIN DISTRICTS.  (a)  Before a
   47-7  municipality may institute proceedings to annex a district, the
   47-8  municipality shall give the district not less than 48 nor more than
   47-9  60 months' advance written notice of its intention to do so.  After
  47-10  such written notice is given, the district may not issue any
  47-11  additional bonded indebtedness, extend any of its services to
  47-12  additional areas outside its boundaries, or institute any new type
  47-13  of service without the prior written approval of the governing body
  47-14  of the municipality, which approval may not be unreasonably
  47-15  withheld or delayed.
  47-16        (b)  The board of directors of the district may, by
  47-17  resolution, waive the giving of notice required under this section
  47-18  or agree to a shorter notice period.
  47-19        (c)  In this section, "district" means a municipal utility
  47-20  district created under this chapter that has been in existence at
  47-21  least 10 years, has a population of 10,000, provides water and
  47-22  wastewater services, provides parks and recreational facilities,
  47-23  provides or contracts for the provision of fire-fighting services,
  47-24  has an outstanding bonded indebtedness, and lies partly within the
  47-25  corporate limits and partly within the extraterritorial
  47-26  jurisdiction of a single home-rule municipality.
  47-27        SECTION 20.  Section 54.025, Water Code, is amended to read
  47-28  as follows:
  47-29        Sec. 54.025.  Qualification of Temporary Directors.  After a
  47-30  district has been organized, each temporary director shall execute
  47-31  a <his> bond in accordance with the provisions of Section 49.055
  47-32  <54.116 of this code> and shall take the <his> oath of office, and
  47-33  the board shall meet and organize.
  47-34        SECTION 21.  Section 54.036, Water Code, is amended to read
  47-35  as follows:
  47-36        Sec. 54.036.  Directors to Continue Serving.  The existing
  47-37  board of a district converted to a municipal utility district under
  47-38  the provisions of this chapter shall continue to serve as the board
  47-39  of the converted district <until the first Saturday in April
  47-40  following conversion of the district, at which time five directors
  47-41  shall be elected to serve for such period of time and in the same
  47-42  manner as provided in Section 54.029 of this code for directors
  47-43  first elected for a district>.
  47-44        SECTION 22.  Section 54.203, Water Code, as amended by H.B.
  47-45  No. 2876, Acts of the 72nd Legislature, Regular Session, 1991, is
  47-46  amended to read as follows:
  47-47        Sec. 54.203.  MUNICIPAL Solid Waste.  A district is
  47-48  authorized to purchase, construct, acquire, own, operate, maintain,
  47-49  repair, improve, extend, or establish a municipal solid waste
  47-50  collection and disposal system, including recycling, inside and
  47-51  outside the district and make proper charges for it.  A district
  47-52  may require use of such services as a condition for receiving other
  47-53  district services.  A district may enter into an exclusive contract
  47-54  with a private entity to provide such services to all land and
  47-55  persons within its boundaries.
  47-56        SECTION 23.  Section 54.729(a), Water Code, is amended to
  47-57  read as follows:
  47-58        (a)  After the board of each district has agreed on the terms
  47-59  and conditions of consolidation, which may include the assumption
  47-60  by each district of the <other district's> bonds, notes, or other
  47-61  obligations and voted but unissued bonds of the other consolidating
  47-62  districts payable in whole or in part from taxation, the levy of
  47-63  taxes to pay for the bonds, and adoption of a name for the
  47-64  consolidated district, the board shall order an election in each
  47-65  district to determine whether the districts should be consolidated.
  47-66        SECTION 24.  Section 54.730(a), Water Code, is amended to
  47-67  read as follows:
  47-68        (a)  After two or more districts are consolidated, they
  47-69  become one district and are governed as one district, except for
  47-70  the payment of debts created before consolidation if the conditions
   48-1  of consolidation do not provide for the assumption by each district
   48-2  of the <other's> bonds, notes, or other obligations and voted but
   48-3  unissued bonds of the other consolidating districts.
   48-4        SECTION 25.  Section 54.732, Water Code, is amended to read
   48-5  as follows:
   48-6        Sec. 54.732.  ASSESSMENT AND COLLECTION OF TAXES.  After
   48-7  consolidation, the district shall assess and collect taxes on
   48-8  property in the original districts to pay debts created by the
   48-9  original districts unless each district has assumed the <other
  48-10  district's> bonds, notes, or other indebtedness payable in whole or
  48-11  in part from taxation of the other consolidating districts.
  48-12        SECTION 26.  Section 54.733, Water Code, is amended to read
  48-13  as follows:
  48-14        Sec. 54.733.  VOTED BUT UNISSUED BONDS.  In the event any
  48-15  consolidating <either> district has voted but unissued bonds
  48-16  payable in whole or in part from taxation and the consolidated
  48-17  district assumed the voted but unissued bonds and the consolidated
  48-18  district was authorized to levy taxes to pay for the bonds, then
  48-19  the consolidated district shall be authorized to issue the voted
  48-20  but unissued bonds in the name of the consolidated district and
  48-21  levy a uniform tax on all taxable property in the consolidated
  48-22  district to pay for the bonds.
  48-23        SECTION 27.  Chapter 54, Water Code, is amended by adding
  48-24  Sections 54.740-54.748 to read as follows:
  48-25        Sec. 54.740.  Substituting Land of Equal Acreage and Value.
  48-26  After the district is organized and acquires facilities with which
  48-27  to function for the purposes for which it was organized, and votes,
  48-28  issues and sells bonds for such purposes, land within the district
  48-29  boundaries subject to taxation which does not need or utilize the
  48-30  services of the district, may be excluded and other land not within
  48-31  the boundaries of the district, may be included within the
  48-32  boundaries of the district as provided by the provisions of this
  48-33  section and Sections 54.741-54.748 subject to commission approval.
  48-34        Sec. 54.741.  Requisites for Application for Exclusion.  The
  48-35  owner(s) of land in the district not receiving services from the
  48-36  district may apply for its exclusion from the district boundaries
  48-37  if all taxes levied and assessed by the district on the land to be
  48-38  excluded, have been fully paid.  The application shall set forth
  48-39  facts concerning the land proposed for exclusion, including
  48-40  evidence of the reasonable market value of the land, and state that
  48-41  the other requisites for the exclusion of the land and substitution
  48-42  of other land have been fulfilled or will be fulfilled at the
  48-43  hearing upon the application.  The application shall be verified
  48-44  and acknowledged in a recordable form as conveyances of real
  48-45  property.
  48-46        Sec. 54.742.  Inclusion of Substitute Land Required.  An
  48-47  application for exclusion can only be considered by the board if an
  48-48  application is filed by the owner(s) of other land lying outside
  48-49  the boundaries of the district seeking inclusion of land which can
  48-50  be served in a practical manner by the district of at least equal
  48-51  value to the land proposed for exclusion, and such land must be
  48-52  included within the district boundaries and taxing jurisdiction of
  48-53  the district simultaneously with the exclusion of the land proposed
  48-54  for exclusion, and such included land must be of sufficient acreage
  48-55  to avoid an impairment of the security for payment of voted and
  48-56  issued bonds and any other contract obligations payable or secured,
  48-57  in whole or in part, from ad valorem taxes or revenues of the
  48-58  district.
  48-59        Sec. 54.743.  Application for Inclusion.  The application
  48-60  submitted by owner(s) of land proposed for inclusion, shall set
  48-61  forth that the owner(s) of the new land assumes the payment of all
  48-62  taxes, assessments and fees levied on the land and assessed by the
  48-63  district after the date the land is included in the district.  The
  48-64  application shall also set forth an agreement by the owner(s) of
  48-65  the land proposed for inclusion that the land will be subject to
  48-66  future taxes for bond tax and other assessments and fees levied and
  48-67  assessed by the district and be subject to the same liens and
  48-68  provisions and statutes governing all other lands in the district
  48-69  as though the land had been incorporated originally in the
  48-70  district.  The application for inclusion shall be verified and
   49-1  acknowledged in a recordable form as conveyances of real property.
   49-2        Sec. 54.744.  Notice of Hearing and Hearing Procedures.  The
   49-3  board shall give notice of the hearing on the applications for
   49-4  exclusion and inclusion in conformity with the notice and hearing
   49-5  requirements otherwise applicable to exclusions or additions of
   49-6  land.  The board at such hearing shall hear all interested parties
   49-7  and all evidence in connection with the applications.
   49-8        Sec. 54.745.  Impairment of Security.  For purposes of the
   49-9  board's consideration of the applications, the lands proposed for
  49-10  inclusion shall be deemed to be sufficient to avoid an impairment
  49-11  of the security for payment of obligations of the district if:
  49-12              (1)  according to the county tax rolls, the taxable
  49-13  value of such included lands equals or exceeds the taxable value of
  49-14  the excluded lands;
  49-15              (2)  the estimated costs of providing district
  49-16  facilities and services to such included lands is equal to or less
  49-17  than the estimated costs of providing district facilities and
  49-18  services to the excluded lands; and
  49-19              (3)  the district's outstanding bonds or contract
  49-20  obligations are payable in whole or in part by a pledge of net
  49-21  revenues from the ownership or operation of the district's
  49-22  facilities, the projected net revenues to be derived from the lands
  49-23  to be included during the succeeding 12-month period, as determined
  49-24  by the district's engineer, equals or exceeds the projected net
  49-25  revenues which would otherwise have been derived from the lands to
  49-26  be excluded during the same period.
  49-27        Sec. 54.746.  Board's Resolution to Substitute.  If the board
  49-28  finds that all the conditions provided for the exclusion of land
  49-29  and inclusion of other land in the district exist and that it is in
  49-30  the best interest of the district to grant such applications, it
  49-31  may adopt and enter in its minutes a resolution and order excluding
  49-32  all or part of the land proposed for exclusion and including all or
  49-33  part of the land proposed for inclusion.  Prior to the effective
  49-34  date of the exclusion and inclusion of lands, the district shall
  49-35  have received payment of all fees, charges, assessments, taxes,
  49-36  together with any associated penalties and interest due or overdue
  49-37  in the respect to the lands excluded and if no ad valorem taxes or
  49-38  fees have yet been established by the district for the current
  49-39  year, an amount determined by the district to equal the estimated
  49-40  ad valorem taxes and standby fees to be established by the district
  49-41  for the current year, prorated to the date of exclusion with
  49-42  respect to such excluded lands, shall also be paid.
  49-43        Sec. 54.747.  Liability of Excluded and Included Land.  The
  49-44  land excluded from the district is free from any lien or liability
  49-45  created on the excluded land by reason of its having been included
  49-46  in the district.  Land included in the district is subject to all
  49-47  laws, liens, and provisions governing the district and the land in
  49-48  the district.
  49-49        Sec. 54.748.  Service to Included Land.  The district has the
  49-50  same right and obligation to furnish services to the included land
  49-51  that it previously had to furnish to the excluded land.
  49-52        SECTION 28.  Section 55.101, Water Code, is amended to read
  49-53  as follows:
  49-54        Sec. 55.101.  Board of Directors.  The governing body of a
  49-55  district is a <the> board of five directors.
  49-56        SECTION 29.  Section 55.102, Water Code, is amended to read
  49-57  as follows:
  49-58        Sec. 55.102.  Qualifications of Directors.  To be qualified
  49-59  for election as a director, a person must be a resident of the
  49-60  state, own land subject to taxation in the district, and be at
  49-61  least 18 <more than 21> years of age at the time of the election.
  49-62  Section 49.052 does not apply to a district governed by this
  49-63  chapter whose principal purpose is providing water for irrigation.
  49-64        SECTION 30.  Section 55.721, Water Code, is amended to read
  49-65  as follows:
  49-66        Sec. 55.721.  Exclusion of Nonagricultural and Nonirrigable
  49-67  Land From District.  Land located in the district which is
  49-68  classified as nonagricultural and nonirrigable may be excluded from
  49-69  the district in the manner provided in Subchapter J, Chapter 49
  49-70  <Sections 51.702-51.713 of this code>.
   50-1        SECTION 31.  Section 56.064, Water Code, is amended to read
   50-2  as follows:
   50-3        Sec. 56.064.  Election of Directors.  (a)  On petition of a
   50-4  majority of the real property taxpayers of a district requesting an
   50-5  election of district directors, the commissioners court shall
   50-6  immediately order an election to be held at the earliest legal
   50-7  time.  The election shall be held as other elections under Chapter
   50-8  49 <this chapter>.
   50-9        (b)  <The commissioners court shall declare the three persons
  50-10  receiving the highest number of votes elected, and if two or more
  50-11  persons tie for the third highest vote, the commissioners court
  50-12  shall elect the third director from those tying for the place.>
  50-13        <(c)  On qualifying for office, directors elected under this
  50-14  section are the legal and rightful directors of the district within
  50-15  the full meaning and purpose of this law.>
  50-16        <(d)  The first elected directors of the district hold office
  50-17  until the next regular directors' election, and subsequent
  50-18  directors of the district are elected every four years except as
  50-19  provided by Subsection (e) of this section.>
  50-20        <(e)>  The first elected directors of the districts in
  50-21  Calhoun, Matagorda, and Victoria Counties hold office until May 15
  50-22  of the next succeeding odd-numbered year.  Subsequent directors of
  50-23  the district are elected every two years on the first Saturday in
  50-24  May in each odd-numbered year, for a term of two years beginning on
  50-25  May 15 following the election.
  50-26        SECTION 32.  Section 57.053, Water Code, is amended to read
  50-27  as follows:
  50-28        Sec. 57.053.  Term of Office, Removal, and Succession.
  50-29  (a)  <Each director shall hold office for a period of two years and
  50-30  until his successor is appointed and has qualified.>
  50-31        <(b)>  A vacancy on the board shall be filled by majority
  50-32  vote of the commissioners court <of jurisdiction>, and the court
  50-33  shall appoint directors so that the board will always have full
  50-34  membership.
  50-35        (b) <(c)>  The commissioners court <of jurisdiction>, by
  50-36  majority vote, may remove an appointed <a> member of the board.
  50-37        SECTION 33.  Section 57.060, Water Code, is amended to read
  50-38  as follows:
  50-39        Sec. 57.060.  Petition.  Before an election is held under
  50-40  Section 57.057 of this code, a petition, signed by at least 100
  50-41  <25> electors in the district <each county commissioners precinct>
  50-42  who are qualified to vote <at an election for directors if a
  50-43  countywide election, or by 50 electors if less than countywide>,
  50-44  shall be presented to the district <county judge> requesting that
  50-45  an election be held in the district to determine whether or not
  50-46  directors for the district should be elected and, if so, to elect
  50-47  directors to serve until the next regular director election <for
  50-48  state and county officers>.  The petition shall include the name of
  50-49  one or more nominees for each director's position.
  50-50        SECTION 34.  Section 57.061, Water Code, is amended to read
  50-51  as follows:
  50-52        Sec. 57.061.  Procedure for Election.  <(a)>  After the
  50-53  petition is presented under Section 57.060 of this code, the board
  50-54  <county judge> shall order an election <to determine the
  50-55  propositions presented in the position.  The election shall be held
  50-56  not less than 30 days from the date of the order calling the
  50-57  election, or the propositions may be determined at a general
  50-58  election>.
  50-59        <(b)  The election order shall designate the polling places
  50-60  which shall be the same as the polling places used in the last
  50-61  general election in the county, if a countywide election is held.>
  50-62        <(c)  The county clerk shall issue notice of the election and
  50-63  shall have the notice published in a newspaper of general
  50-64  circulation in the county once a week for two consecutive weeks.
  50-65  The first publication must not be less than 14 days before the day
  50-66  of the election.>
  50-67        <(d)  The sheriff shall post a copy of the notice at least 20
  50-68  days before the day of the election at each polling place
  50-69  designated in the election order.>
  50-70        <(e)  The district shall pay all expenses incident to calling
   51-1  and holding the election.>
   51-2        SECTION 35.  Section 57.207, Water Code, is amended to read
   51-3  as follows:
   51-4        Sec. 57.207.  Declaring Result of Election.
   51-5  <(a)  Immediately after an election under this chapter, the
   51-6  officials holding the election shall return the result to the
   51-7  commissioners court of jurisdiction.>
   51-8        <(b)  The election officials shall return the ballot boxes to
   51-9  the clerk of the commissioners court of jurisdiction, who shall
  51-10  safely keep the boxes and deliver them with the returns of the
  51-11  election to the commissioners court of jurisdiction at its next
  51-12  regular or special session.>
  51-13        <(c)  The commissioners court of jurisdiction at its first
  51-14  session after the election shall canvass the vote and the returns.
  51-15  If the proposition submitted has been approved by a majority of the
  51-16  electors of the district voting at the election, the commissioners
  51-17  court of jurisdiction shall declare the result to be in favor of
  51-18  the proposition, but if the proposition is not approved by the
  51-19  electors of the district, the commissioners court of jurisdiction
  51-20  shall declare the result to be against the proposition.>
  51-21        <(d)>  The board <commissioners court of jurisdiction> shall
  51-22  enter an order declaring the election result in its minutes.
  51-23        SECTION 36.  Section 58.072, Water Code, is amended to read
  51-24  as follows:
  51-25        Sec. 58.072.  QUALIFICATIONS.  To be qualified for election
  51-26  as a director, a person must be a resident of the state, be the
  51-27  owner of record of fee simple title to land in the district, <and>
  51-28  be at least 18 years of age, and owe no delinquent taxes or
  51-29  assessments to the district.  Section 49.052 does not apply to a
  51-30  district governed by this chapter.
  51-31        SECTION 37.  Section 65.103, Water Code, is amended to read
  51-32  as follows:
  51-33        Sec. 65.103.  Election of Directors; Terms of Office.
  51-34  (a)  The persons receiving the highest number of votes at each
  51-35  election shall serve as directors of the district.
  51-36        (b)  The terms of the directors may run concurrently, or may
  51-37  be staggered, but in any event, the term of office of a director
  51-38  may not exceed three years.
  51-39        (c)  The method for determining the initial terms for each of
  51-40  the directors constituting the initial board shall be determined by
  51-41  the temporary directors, and the terms must be clearly stated on
  51-42  the ballot for the confirmation and director's election.  At
  51-43  subsequent elections in each following year in which there is an
  51-44  election, the election must be held on the same uniform election
  51-45  date as the confirmation and directors' election, and the terms of
  51-46  the directors being elected must be stated on the ballot.
  51-47        <(d)  The election of directors must be held in a district on
  51-48  one of the dates provided by Section 9b, Texas Election Code
  51-49  (Article 2.01b, Vernon's Texas Election Code).>
  51-50        <(e)  The permanent directors may assign a position number to
  51-51  each director's office, and each director subsequently shall be
  51-52  elected by position and not at large.>
  51-53        SECTION 38.  Chapter 65, Water Code, is amended by adding
  51-54  Section 65.235 to read as follows:
  51-55        Sec. 65.235.  Prohibition on Assessment or Collection of
  51-56  Taxes.  Section 49.107 does not apply to a district created under
  51-57  this chapter.
  51-58        SECTION 39.  Subchapter A, Chapter 60, Water Code, is amended
  51-59  by adding Section 60.002 to read as follows:
  51-60        Sec. 60.002.  AUDIT.  Subchapter G, Chapter 49, related to
  51-61  Audit of Districts, shall apply to districts governed by this
  51-62  chapter.
  51-63        SECTION 40.  Subchapter M, Chapter 60, Water Code, is amended
  51-64  by adding Section 60.350 to read as follows:
  51-65        Sec. 60.350.  BONDS.  Section 49.181, related to the
  51-66  Authority of Commission Over Issuance of District Bonds, and
  51-67  Section 49.183, related to Bond Sales, shall apply to bonds
  51-68  supported by taxes and issued by districts governed by this
  51-69  chapter.
  51-70        SECTION  41.  Section 66.101, Water Code, is amended to read
   52-1  as follows:
   52-2        Sec. 66.101.  Board of Directors.  A district shall be
   52-3  governed by a board of directors composed of five members, who are
   52-4  elected as provided in Chapter 49 <by this chapter>.
   52-5        SECTION 42.  Section 66.310(b), Water Code, is amended to
   52-6  read as follows:
   52-7        (b)  Bonds issued by a district and projects and improvements
   52-8  of the district that are provided through the issuance of bonds are
   52-9  governed by Chapter 49 <Sections 54.516 and 54.517 of this code>.
  52-10        SECTION 43.  The following sections of Chapter 51, Water
  52-11  Code, are repealed:  Sections 51.033, 51.034, 51.073 through
  52-12  51.074, 51.077 through 51.084, 51.0851, 51.087 through 51.089,
  52-13  51.091 through 51.101, 51.122 through 51.124, 51.126, 51.131,
  52-14  51.132, 51.136 through 51.138, 51.140 through 51.146, 51.149
  52-15  through 51.155, 51.183, 51.191 through 51.193, 51.221 through
  52-16  51.224, 51.231 through 51.279, 51.354 through 51.363, 51.371
  52-17  through 51.375, 51.412, 51.416 through 51.418, 51.421, 51.422,
  52-18  51.4321, 51.4371, 51.601, 51.691 through 51.701, 51.714 through
  52-19  51.731, and 51.737 through 51.747.
  52-20        SECTION 44.  The following sections of Chapter 52, Water
  52-21  Code, are repealed:  Sections 52.104, 52.107 through 52.114, 52.116
  52-22  through 52.118, 52.119 through 52.121, 52.157, 52.251 through
  52-23  52.253, 52.259 through 52.262, and 52.297.
  52-24        SECTION 45.  The following sections of Chapter 53, Water
  52-25  Code, are repealed:  Sections 53.020, 53.022, 53.023, 53.025
  52-26  through 53.028, 53.035 through 53.039, 53.064, 53.065, 53.067
  52-27  through 53.070, 53.0721, 53.076, 53.077, 53.084 through 53.087,
  52-28  53.089, 53.090, 53.105, 53.106, 53.108 through 53.111, 53.114,
  52-29  53.117 through 53.120, 53.123 through 53.125, 53.141 through
  52-30  53.144, 53.147, 53.148, 53.173 through 53.175, 53.1791, 53.197,
  52-31  53.198, and 53.231 through 53.273.
  52-32        SECTION 46.  The following sections of Chapter 54, Water
  52-33  Code, are repealed:  Sections 54.026 through 54.029, 54.103 through
  52-34  54.126, 54.202, 54.204, 54.209 through 54.233, 54.301 through
  52-35  54.312, 54.506, 54.507(a), 54.509, 54.5121, 54.513, 54.516, 54.517,
  52-36  54.519, 54.701 through 54.727.
  52-37        SECTION 47.  The following sections of Chapter 55, Water
  52-38  Code, are repealed:  Sections 55.030, 55.033 through 55.036,
  52-39  55.052, 55.104 through 55.106, 55.109, 55.111 through 55.116,
  52-40  55.118 through 55.128, 55.162, 55.164, 55.168 through 55.184,
  52-41  55.189 through 55.191, 55.199, 55.203, 55.252, 55.291 through
  52-42  55.304, 55.331, 55.423 through 55.430, 55.451, 55.453, 55.492
  52-43  through 55.496, 55.503, 55.506, 55.711 through 55.720, and 55.722
  52-44  through 55.749.
  52-45        SECTION 48.  The following sections of Chapter 56, Water
  52-46  Code, are repealed:  Sections 56.027 through 56.031, 56.062,
  52-47  56.063, 56.065 through 56.068, 56.076 through 56.081, 56.083,
  52-48  56.113, 56.114, 56.119, 56.129 through 56.134, 56.136, 56.138,
  52-49  56.139, 56.183, 56.184, 56.2045, and 56.714 through 56.725.
  52-50        SECTION 49.  The following sections of Chapter 57, Water
  52-51  Code, are repealed:  Sections 57.052, 57.054 through 57.056, 57.062
  52-52  through 57.070, 57.095 through 57.099, 57.106, 57.107, 57.109,
  52-53  57.110, 57.112 through 57.115, 57.119, 57.120, 57.171 through
  52-54  57.174, 57.178, 57.202 through 57.206, 57.2075, 57.209 through
  52-55  57.211, and 57.276 through 57.278.
  52-56        SECTION 50.  The following sections of Chapter 58, Water
  52-57  Code, are repealed:  Sections 58.033, 58.034, 58.073, 58.074
  52-58  through 58.083, 58.085 through 58.088, 58.090 through 58.100,
  52-59  58.123, 58.124, 58.131, 58.132, 58.135, 58.139 through 58.149,
  52-60  58.151, 58.152, 58.169, 58.179, 58.187 through 58.189, 58.221
  52-61  through 58.224, 58.261, 58.317, 58.354 through 58.362, 58.442,
  52-62  58.451, 58.452, 58.601, 58.691 through 58.701, and 58.714 through
  52-63  58.725.
  52-64        SECTION 51.  The following sections of Chapter 65, Water
  52-65  Code, are repealed:  Sections 65.024 through 65.029, 65.104 through
  52-66  65.122, 65.202, 65.204, 65.209 through 65.234, 65.301, 65.401
  52-67  through 65.409, 65.509, 65.512, and 65.514, and 65.701 through
  52-68  65.722.
  52-69        SECTION 52.  The following sections of Chapter 66, Water
  52-70  Code, are repealed:  Sections 66.022 through 66.029, 66.103 through
   53-1  66.117, 66.119, 66.120, 66.203 through 66.205, 66.208 through
   53-2  66.215, 66.301, 66.302, 66.305 through 66.309, 66.312, and 66.323.
   53-3        SECTION 53.  (a)  This Act takes effect as provided by this
   53-4  section.
   53-5        (b)  Section 49.103(b), Water Code, shall govern all
   53-6  elections held after December 31, 1993.  Directors elected at any
   53-7  election held between January 1, 1990, and April 30, 1990, shall
   53-8  serve until the January 1994 election.  Directors elected at any
   53-9  election held between May 1, 1990, and December 31, 1990, shall
  53-10  serve until the May 1994 election.  Directors elected at any
  53-11  election held between January 1, 1991, and April 30, 1991, shall
  53-12  serve until the January 1994 election.  Directors elected at any
  53-13  election held between May 1, 1991, and July 31, 1991, shall serve
  53-14  until the May 1994 election.  Directors elected at any election
  53-15  held between August 1, 1991, and December 31, 1991, shall serve
  53-16  until the May 1996 election.  Directors elected at any election
  53-17  held between January 1, 1992, and April 30, 1992, shall serve until
  53-18  the January 1996 election.  Directors elected at any election held
  53-19  between May 1, 1992, and December 31, 1992, shall serve until the
  53-20  May 1996 election.  Directors elected at any election held between
  53-21  January 1, 1993, and April 30, 1993, shall serve until the January
  53-22  1996 election.  Directors elected at any election held between May
  53-23  1, 1993, and July 31, 1993, shall serve until the May 1994
  53-24  election.  Directors elected at any election held between August 1,
  53-25  1993, and December 31, 1993, shall serve until the May 1996
  53-26  election.  Directors whose terms expire prior to the election date
  53-27  set by this section shall continue to serve until their successors
  53-28  have been elected and qualified.
  53-29        (c)  All other provisions of this Act take effect September
  53-30  1, 1993.
  53-31        SECTION 54.  The importance of this legislation and the
  53-32  crowded condition of the calendars in both houses create an
  53-33  emergency and an imperative public necessity that the
  53-34  constitutional rule requiring bills to be read on three several
  53-35  days in each house be suspended, and this rule is hereby suspended,
  53-36  and that this Act take effect and be in force according to its
  53-37  terms, and it is so enacted.
  53-38                               * * * * *
  53-39                                                         Austin,
  53-40  Texas
  53-41                                                         May 26, 1993
  53-42  Hon. Bob Bullock
  53-43  President of the Senate
  53-44  Sir:
  53-45  We, your Committee on Intergovernmental Relations to which was
  53-46  referred H.B. No. 1266, have had the same under consideration, and
  53-47  I am instructed to report it back to the Senate with the
  53-48  recommendation that it do pass, as amended, and be printed.
  53-49                                                         Armbrister,
  53-50  Chairman
  53-51                               * * * * *
  53-52                               WITNESSES
  53-53                                                  FOR   AGAINST  ON
  53-54  ___________________________________________________________________
  53-55  Name:  Ralph Roming                              x
  53-56  Representing:  Tx. Irrigation Council
  53-57  City:  Round Rock
  53-58  -------------------------------------------------------------------
  53-59  Name:  Joe B. Allen                              x
  53-60  Representing:  Assoc. of Water Bd. Directors
  53-61  City:
  53-62  -------------------------------------------------------------------
  53-63  Name:  Greg Ellis                                x             x
  53-64  Representing:
  53-65  City:  Friendswood
  53-66  -------------------------------------------------------------------
  53-67  Name:  Tommy Duck                                x
  53-68  Representing:  Texas Rural Water Assoc.
  53-69  City:  Austin
  53-70  -------------------------------------------------------------------