74(R) HB 2294 Senate Committee Report

BILL ANALYSIS

H.B. 2294
By: Yost (Armbrister)
Natural Resources
05-19-95
Senate Committee Report (Amended)
BACKGROUND

Title 2, Water Code (State Water Administration), contains several
chapters governing the administration of water in Texas. Chapter
52, Water Code, located in Title 4, Water Code, governs the
regulation of groundwater. Unlike surface water which is owned by
the state, groundwater is owned by the land owner; therefore,
groundwater is not subject to appropriation by the Texas Natural
Resource Conservation Commission (commission) under Title 2, Water
Code.

Some parts of the state have experienced localized problems with
their groundwater supply, usually caused by excessive groundwater
production. Subchapters B and C, Chapter 52, Water Code, require
the commission to study these areas and designate them either
groundwater management areas or critical areas. In many of these
areas, the state has created local water districts to regulate the
spacing of wells or the production of groundwater. These local
districts are the only method of regulating groundwater in Texas.
As local, regulatory agencies, these districts operate differently
than other water districts that primarily provide wholesale and
retail water supplies.

By separating Chapter 52 into two chapters located in the Water
Administration title of the Water Code -- one chapter governing
commission duties to study groundwater issues and the other to
govern the creation, administration, operation, and duties of
groundwater districts, confusion will be greatly reduced and will
allow groundwater districts to operate more efficiently.

PURPOSE

As proposed, H.B. 2294 consolidates the provisions of the Water
Code governing groundwater districts into a new Chapter 36, Water
Code. The bill also creates a new Chapter 35, Water Code,
governing the duties of state agencies regarding designation of
groundwater management areas and critical areas.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to the board of directors of certain districts or authorities
having the authority to regulate the spacing or water wells, the
production from water wells, or both, under SECTION 2 (Sections
36.068(c) and 36.117(b), Water Code), the districts or authorities
under SECTION 2 (Sections 36.101(a) and 36.107(c), Water Code) of
this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends the caption of Title 2, Water Code, as follows:

TITLE 2. WATER ADMINISTRATION

SECTION 2. Amends Title 2, Water Code, by adding Subtitle E, as
follows:

SUBTITLE E. GROUNDWATER MANAGEMENT

CHAPTER 35. GROUNDWATER STUDIES

Sec. 35.001. PURPOSE. Sets forth the purpose of this bill
relating to groundwater management.

Sec. 35.002. DEFINITIONS. Defines "district," "commission,"
"executive director," "executive administrator,"
"groundwater," "groundwater reservoir," "subdivision of a
groundwater reservoir," "subsidence," "board," "director,"
"management area," "critical area," and "political
subdivision."

Sec. 35.003. SURFACE WATER LAWS NOT APPLICABLE. Provides
that the laws and administrative rules relating to the use of
surface water do not apply to groundwater.

Sec. 35.004. DESIGNATION OF MANAGEMENT AREAS. (a) Authorizes
the Texas Natural Resource Conservation Commission
(commission) to designate groundwater management areas (GMAs)
with the objective of providing the most suitable area for the
management of the groundwater resources. Requires the GMA to
coincide, to the extent feasible, with the boundaries of a
groundwater reservoir or a subdivision of a groundwater
reservoir. Authorizes the commission to consider other
factors.

(b) Requires the executive director of the commission
(executive director) to prepare available evidence relating
to the configuration of a GMA on request. Requires the
commission, before making the designation, to consider the
evidence prepared by the executive director and other
evidence submitted at the hearing.

(c) Authorizes the commission to alter the boundaries of
designated GMAs as required by future conditions and as
justified by factual data. Provides that an alteration of
boundaries does not invalidate the previous creation of any
district under Section 52, Article III, or Section 59,
Article XVI, Texas Constitution, that has the authority to
regulate the spacing of water wells, the production from
water wells, or both (district).

(d) Requires the commission to designate GMAs using the
procedures applicable to rulemaking under the Administrative
Procedure Act, Chapter 2001B, Government Code.

Sec. 35.005. PETITION TO DESIGNATE A GROUNDWATER MANAGEMENT
AREA. Authorizes a petition to be submitted to the commission
for the sole purpose of requesting that the commission
designate a GMA for all or part of one or more counties. Sets
forth requirements for the petition.

Sec. 35.006. NOTICE FOR DESIGNATION OF MANAGEMENT AREA.
Requires the petitioners to have notice published by a certain
date in at least one newspaper with general circulation in the
county or counties in which the proposed GMA is to be located.
Sets forth the information required for the notice. Requires
the commission to give the same notice if the commission
designates a GMA on its own motion.

Sec. 35.007. IDENTIFYING, DESIGNATING, AND DELINEATING
CRITICAL AREAS. (a) Requires the executive director and
executive administrator to meet at least once a year to
identify those areas of the state that are experiencing or
expected to experience critical groundwater problems.

(b) Requires the executive director, if the executive
director concludes that an area of the state should be
considered for designation as a critical area, to prepare a
report to the commission.

(c) Requires the executive director to begin preparation of
a critical area report by requesting a study from the
executive administrator of the Texas Water Development Board
(executive administrator). Sets forth requirements for the
study.

(d) Requires the report to include certain information.

(e) Requires the executive director to complete and file the
report with the commission by a certain date, and to make
the report available for public inspection.

(f) Authorizes the executive director to make necessary
studies, hold hearings, solicit and collect information, and
use information already prepared by the executive director
or the executive administrator for other purposes.

Sec. 35.008. PROCEDURES FOR DESIGNATION OF CRITICAL AREAS.
(a) Requires the commission to designate critical areas using
the procedures applicable to rulemaking under Chapter 2001B,
Government Code. Provides that this chapter controls if
procedures required by this chapter are in conflict with that
Act.

(b) Prohibits the designation of a critical area from being
appealed or being challenged under Section 2001.038,
Government Code.

Sec. 35.009. NOTICE AND HEARING. Requires the commission to
have notice published by a certain date in at least one
newspaper with general circulation in the county or counties
in which the proposed critical area is to be located. Sets
forth the information required for the notice.

Sec. 35.010. CONSIDERATION OF CREATION OF DISTRICT OR
ADDITION OF LAND IN CRITICAL AREA TO EXISTING DISTRICT.
Authorizes the commission to call a hearing, following
designation of a critical area, to consider whether a district
should be created over all or part of a critical area, or
whether all or part of the land in the critical area should be
added to an existing district. Sets forth requirements for a
hearing.

Sec. 35.011. NOTICE OF HEARING TO CREATE DISTRICT OR ADD
CRITICAL AREA TO EXISTING DISTRICT. Requires the commission
to have notice of the hearing published by a certain date in
at least one newspaper with general circulation in the county
or counties in which the area being considered for district
creation or addition to an existing district is located. Sets
forth the information required for the notice. Requires the
commission to give written notice to the governing body of
each political subdivision located in the critical area.

Sec. 35.012. COMMISSION ORDER. (a) Requires the commission
to issue an order stating its findings and conclusions.

(b) Requires the commission to issue an order stating that
the creation of one or more districts is needed if the
commission finds that the land and other property in the
critical area would benefit from the creation of one or more
districts, that there is a public need for one or more
districts, and that the creation of one or more districts
would further the public welfare.

(c) Authorizes the landowners in the critical area, during
the period between the date of issuance of a commission
order under Subsection (b) and one year after the close of
the next regular session of the legislature following the
issuance of the order, to create one or more districts under
Chapter 36B, have the area annexed to a district that
adjoins the area, and create one or more districts through
the legislative process.

(d) Requires the commission to delineate proposed boundaries
of a district to include areas that have not, in the period
provided by Subsection (c), been incorporated into a
district, subject to the order of the commission. Requires
the commission, if it proposes the creation of one or more
districts, to begin the procedures for creation of a
district provided in Chapter 36B.

(e) Requires the commission to issue an order stating that
a district should not be created within the boundaries of
the critical area if the commission fails to find that the
district would be a benefit to the land and other property
within the area, that there is a public need for the
district, or that creation of the district will further the
public welfare.

(f) Prohibits an order of the commission issued under this
section from being repealed.

Sec. 35.013. ADDING CRITICAL AREA TO EXISTING DISTRICT. (a)
Authorizes the commission, if land in a critical area is
located adjacent to one or more existing districts, to issue
an order recommending that the critical area be added to the
existing district designated by the commission. Requires the
commission, in its order, to make certain findings regarding
the positive impact of the addition of land to the existing
district.

(b) Requires the commission, if the executive director
recommends that the critical area be added to an existing
district or if the commission considers it possible to add
the critical area to an adjacent existing district, to give
notice to the board of directors (board) of the existing
district recommended by the executive director or considered
by the commission to possibly serve the area and to any
other existing districts adjacent to the critical area.

(c) Requires the commission to submit a copy of the order to
the board of the district to which it is recommending the
critical area be added. Requires the board to vote on the
addition of the critical area and to advise the commission
of the outcome.

(d)-(e) Requires the board, if it votes to accept the
addition of the critical area, to call an election to
determine if the critical area will be added to the
district, and to give certain notice of the election and the
position to be voted on.

(f) Sets forth required language for the ballot.

(g) Requires the board to canvass the returns for the
elections and declare the results. Requires the board to
declare that the critical area is added to the district if
the majority of the voters vote in favor of the proposition,
or to declare that the critical area is not added, if a
majority of the voters vote against adding the critical area
to the district. Requires the board to file a copy of the
election results with the commission.

(h) Requires the board of the district to which the critical
area is added, if the voters approve addition, to provide
reasonable representation on that board compatible with the
district's existing scheme of representation.

(i) Prohibits another election on the issue, if the
proposition is defeated, from being called before the first
anniversary of the date on which the election in the
proposition was held.

Sec. 35.014. COSTS OF ELECTIONS. (a) Requires the costs of
an election to create a district at which a district is
authorized to be created to be paid by the district.

(b) Requires the costs of an election to add a critical area
to an existing district at which the voters approve of the
addition to be paid by the existing district.

(c) Requires the costs of an election to create a district
or add a critical area at which the proposition fails to be
paid by the commission.

Sec. 35.015. STATE ASSISTANCE. (a) Prohibits a political
subdivision located in or that has within its boundaries an
area or part of an area delineated as a critical area, and in
which the qualified voters fail to approve the creation of a
district or join an existing district, from receiving
financial assistance from the state under Chapter 15, 16, or
17 for use within that portion of the critical area not
covered by a district.

(b) Requires a political subdivision located in an area
delineated as a critical area, and in which qualified voters
approve the creation of a district or annexation into an
existing district, to be given consideration for state
assistance under Chapter 17.

Sec. 35.016. EXEMPTION FROM CHAPTER. (a) Declares that this
chapter does not apply to any active groundwater conservation
district or to land within an active groundwater conservation
district.

(b) Considers a district active if it meets the requirements
of Section 36.301(a)(2).

Sec. 35.017. STATE-OWNED LAND. Authorizes the state agency
that has management and control over state-owned land located
in a critical area to elect by written agreement with the
commission and the district to include the state-owned land in
the district. Requires the state agency, if the state does
not elect to enter into the agreement to include the state-owned land in the district, to establish a groundwater
management plan that will conserve, protect, and prevent the
waste of groundwater on that land.

CHAPTER 36. GROUNDWATER CONSERVATION DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 36.001. DEFINITIONS. Defines "district," "commission,"
"executive director," "executive administrator,"
"groundwater," "groundwater reservoir," "subdivision of a
groundwater reservoir," "waste," "use for a beneficial
purpose," "subsidence," "board," "director," "management
area," "critical area," and "political subdivision."

Sec. 36.002. OWNERSHIP OF GROUNDWATER. Declares that the
ownership and rights of the owners of the land and their
lessees and assigns in groundwater are hereby recognized, and
nothing in this code shall be construed as depriving or
diverting the owners or their lessees and assigns of the
ownership rights, subject to rules promulgated by a district.

SUBCHAPTER B. CREATION OF DISTRICT

Sec. 36.011. METHOD OF CREATING DISTRICT. Authorizes a
groundwater conservation district to be created under and
subject to the authority, conditions, and restrictions of
Section 59, Article XVI, Texas Constitution. Grants the
commission exclusive jurisdiction over the delineation of
management areas and the creation of districts.

Sec. 36.012. COMPOSITION OF DISTRICT. Sets forth the
authorized composition of a district.

Sec. 36.013. PETITION TO CREATE DISTRICT. Requires a
petition requesting creation of a district to be filed with
the executive director for review and submission to the
commission. Sets forth requirements for a petition.

Sec. 36.014. NOTICE AND HEARING ON DISTRICT CREATION. Sets
forth requirements for a notice of hearing on a petition.

Sec. 36.015. FINDINGS. (a) Requires the commission, if it
finds that a district is feasible and practicable, that the
district would be a benefit to the land in the district, and
that it would be a public benefit or utility, to issue an
order granting the petition.

(b) Requires the commission to deny the petition if it fails
to make the findings described under Subsection (a).

(c) Authorizes the commission to adjust the boundaries of
the proposed district to exclude any land that would not be
benefitted by inclusion in the district and are not
necessary to the district for proper regulation of the
groundwater reservoir.

(d) Requires the commission, if it grants the petition to
create the district, to direct in its order creating the
district that an election be called by the temporary
directors of the board of directors of a district
(directors) to confirm the creation of the district and to
elect permanent directors.

(e) Declares that the refusal to grant a petition to create
a district does not invalidate or affect the designation of
any GMA requested in the same petition.

(f) Requires the commission to act on the petition within a
reasonable amount of time.

Sec. 36.016. APPOINTMENT OF TEMPORARY DIRECTORS. Requires
the commission, if it grants a petition to create a district,
to appoint five temporary directors who shall serve a
specified term. Requires the directors, as soon as all
temporary directors have qualified, to meet, take the oath of
office, and elect a chairman and vice chairman from among
their membership.

Sec. 36.017. CONFIRMATION AND DIRECTORS' ELECTION. Requires
the temporary directors, by a certain date, to meet and order
an election to be held within the boundaries of the proposed
district to approve the creation of the district and to elect
permanent directors. Sets forth requirements for notice of
the election, the text of the ballot, and canvassing of
returns, and filing of results. Requires the temporary board
to declare the district created if a majority of the votes
cast at the election favor the creation of the district.
Requires the temporary board to declare the district defeated
if a majority of the votes cast are against the creation, and
declares that the district shall have no further authority,
except regarding debts.

Sec. 36.018. INCLUSION OF MUNICIPALITY. (a) Prohibits a
separate voting district, if part of the territory to be
included in a district is located in a municipality, from
being established in the municipality for the purpose of
determining whether the municipality as a separate area is to
be included in the district.

(b) Provides that, if for any other reason the territory in
a municipality is established as a separate voting district,
the failure by the voters in the municipal territory to
confirm the creation of the district or the annexation of
territory to the district does not prevent the territory
from being included in the district.

Sec. 36.019. CONFIRMATION ELECTION IN DISTRICT INCLUDING LAND
IN MORE THAN ONE COUNTY. Prohibits a district, the major
portion of which is located in one county, from being
organized to include land in another county unless the
election held in the other county to confirm and ratify the
creation of the district is approved by a majority of the
voters of the other county voting in an election called for
that purpose.

Sec. 36.020. BOND AND TAX PROPOSAL. (a) Authorizes the
temporary directors, at an election to create a district, to
include a proposition for the issuance of bonds or notes, the
levy of taxes to retire all or part of the bonds or notes, and
the levy of a maintenance tax. Prohibits the maintenance tax
rate from exceeding 50 cents of each $100 of assessed
valuation.

(b) Requires the board to include in any bond and tax
proposition the maximum amount of bonds or notes to be
issued and their maximum maturity date.

Sec. 36.021. NOTIFICATION OF COUNTY CLERK. Requires the
board, within 30 days following the creation of a district or
any amendment to the boundaries of a district, to file with
the county clerk of each county in which all or part of the
district is located a certified copy of the description of the
boundaries of the district. Requires each clerk to record the
certified copy in the property records of that county.

SUBCHAPTER C. ADMINISTRATION

Sec. 36.051. BOARD OF DIRECTORS. Declares that the governing
body of a district is the board. Sets forth the composition
of the board and terms of board members.

(b) Declares that a member of a governing body of another
political subdivision is ineligible for appointment or
election as a director. Declares that a director is
disqualified and creates the office of director if the
director is appointed or elected as a member of the
governing body of another political subdivision. Declares
that this subsection does not apply to any district with a
population less than 50,000.

Sec. 36.052. OTHER LAWS NOT APPLICABLE. Provides that other
laws governing the administration or operations of districts
created under Section 52, Article III, or Section 59, Article
XVI, Texas Constitution, shall not apply to any district
governed by this chapter. Provides that this chapter prevails
over any other law in conflict or inconsistent with this
chapter, except any special law governing a specific district
shall prevail over this chapter.

Sec. 36.053. QUORUM. Declares that a majority of the board
membership constitutes a quorum for any meeting, and that a
concurrence of a majority of the entire membership of the
board is sufficient for transacting any business of the
district.

Sec. 36.054. OFFICERS. (a) Requires the board, after a
district is created and the directors have qualified, to meet,
elect officers, and begin the discharge of its duties.

(b) Requires the board to meet and elect officers after each
directors' election.

(d) Authorizes the board to appoint another person as
assistant or deputy secretary to assist the secretary and to
certify as to the authenticity of any district record.

(e) Require a district to notify the executive director
after any election or appointment of a director.

Sec. 36.055. SWORN STATEMENT, BOND, AND OATH OF OFFICE.
Requires a director to make the sworn statement prescribed by
the constitution for public office, take the oath of office,
and execute a bond for $10,000 payable to the district and
conditioned on the faithful performance of that director's
duties. Requires the sworn statement, oath, and bond to be
filed with the district. Requires a duplicate original of the
sworn statement and oath to be filed with the secretary of
state by a certain date.

Sec. 36.056. GENERAL MANAGER. (a) Authorizes the board to
employ or contract with a person to perform such services as
general manager for the district as the board may specify.
Authorizes the board to delegate to the general manager
certain authority. Authorizes a director to be employed as
general manager except in a district composed of the territory
of more than one county. Requires the compensation of a
general manager who also serves as a director to be
established by the other directors.

Sec. 36.057. MANAGEMENT OF DISTRICT. (a) Requires the board
to be responsible for the management of all the affairs of the
district. Requires the district to employ or contract with
all entities deemed necessary by the board for the conduct of
the affairs of the district.

(b) Requires the board to set the compensation and terms for
consultants.

(c) Requires the district, in selecting certain professional
consultants, to follow the procedures provided in Chapter
2254A, Government Code.

(d)-(e) Require the board to require an officer, employee,
or consultant who collects, pays, or handles any funds of
the district to furnish good and sufficient bond, payable to
the district, in an amount determined by the board to be
sufficient to safeguard the district. Set forth
requirements for the bond.

(f) Authorizes the board to adopt bylaws to govern the
affairs of the district to perform its purposes, and, by
resolution, to authorize an employee to execute documents on
behalf of the district.

(g) Grants the board the right to purchase all materials,
supplies, equipment, vehicles, and machinery needed to
perform its purposes.

Sec. 36.058. CONFLICTS OF INTEREST. Subject a director of a
district to the provision of Chapter 171, Local Government
Code, relating to the regulation of conflicts of local
government officers.

Sec. 36.059. GENERAL ELECTIONS. Requires all elections to be
generally conducted in accordance with the Election Code
except as otherwise provided by this chapter. Sets forth
requirements for write-in candidacies. Requires directors of
the district to be elected according to the precinct method
defined by Chapter 12, page 1105, Special Laws, Acts of the
46th Legislature, Regular Session, 1939. Requires a person to
be a registered voter in the precinct that the person
represents in order to qualify to be elected as a director.
Sets forth provisions in the event that any part of a
municipal corporation is part of one precinct, and for a
multicolony district.

Sec. 36.060. FEES OF OFFICE; REIMBURSEMENT. (a) Entitles a
director to receive fees of office of not more than $100 a
day, and $6,000 a year, for each day the director annually
spends performing the duties of a director.

(b) Entitles each director to receive reimbursement of
actual expenses incurred while engaging in activities on
behalf of the district.

(c) Requires each director to file with the district a
verified statement showing the number of days actually spent
in service to the district and a general description of the
duties performed for each day of service, in order to
receive fees of office and reimbursement.

Sec. 36.061. POLICIES. Requires the board to adopt certain
policies in writing. Authorizes the state auditor to audit
the financial transactions of any district if the state
auditor determines that the audit is necessary.

Sec. 36.062. OFFICES AND MEETING PLACES. Requires the board
to designate and maintain one or more regular office for
conducting district business and maintain district records,
and to designate one or more places for conducting meetings of
the board.

Sec. 36.063. NOTICE OF MEETINGS. Requires notice of board
meetings to be given according to Chapter 551, Government
Code. Provides that neither failure to provide notice of a
regular meeting or an insubstantial defect in notice of any
meeting shall affect the validity of any action taken at the
meeting.

Sec. 63.064. MEETINGS. (a) Requires the board to hold
regular meetings at least quarterly.

(b) Requires meetings to be conducted in accordance with
Chapter 551, Government Code. Exempts a meeting of a
committee of the board, or a committee of representative of
more than one board where less than a quorum of any one
board is present, from being subject to the provisions of
Chapter 551, Government Code.

Sec. 36.065. RECORDS. Requires the board to keep a complete
account of all its meetings and proceedings, and to preserve
its records in a safe place. Declares that the records of
each district are the property of the district and are subject
to Chapter 552, Government Code. Subjects the preservation,
storage, destruction, or other disposition of the records to
the requirements of Chapter 201, Local Government Code.

Sec. 36.066. SUITS. (a) Authorizes a district to sue and be
sued in the courts of this state in the name of the district
by and through its board. Requires all courts to take
judicial notice of the creation of the district and of its
boundaries.

(b) Authorizes any state court rendering judgment for debt
against a district to order the board to levy, assess, and
collect taxes or assessments to pay the judgment.

(c) Requires the president or general manager of any
district to be the agent of the district on whom process,
notice, or demand required or permitted by law to be served
upon a district may be served.

(d) Prohibits a suit contesting certain items from being
instituted in any court of this state, except a provided in
Subsection (e).

(e) Authorizes the matters listed in Subsection (d) to be
judicially inquired into at any time and determined in any
suit brought by the State of Texas through the attorney
general. Requires the action to be brought on good cause
shown, with exception. Protects the validity of or security
for any bonds or other obligations issued by a district is
such bonds or other obligations have been approved by the
attorney general.

(f) Prohibits a district from being required to give bond
for appeal, injunction, or costs in any suit to which it is
a party, and from being required to deposit more than the
amount of any award in any eminent domain proceeding.

(g) Authorizes the district, if it prevails in any suit
other than a suit in which it voluntarily intervenes, to
recover reasonable fees for attorneys, expert witnesses, and
other costs incurred by the district before the court.
Requires the amount of the attorney's fees to be fixed by
the court.

Sec. 36.067. CONTRACTS. (a) Requires a district to contract,
and to be contracted with, in the name of the district.

(b) Authorizes a district to purchase property from any
other governmental entity by negotiated contract without the
necessity of securing appraisals or advertising for bids.

Sec. 36.068. EMPLOYEE BENEFITS. (a) Authorizes the board to
provide for and administer retirement, disability, and death
compensation funds for district employees.

(b) Authorizes the board to establish a public retirement
system and provide for a deferred compensation plan.

(c) Authorizes the board to include hospitalization and
medical benefits to its employees as part of the
compensation paid to the officers and employees, and to
adopt any plan, rule, or regulation in connection with it
and amend or change the plan, rule, or regulation as it may
determine.

SUBCHAPTER D. POWERS AND DUTIES

Sec. 36.101. RULEMAKING POWER. Authorizes a district to make
and enforce rules to provide for conserving, preserving,
protecting, and recharging of the groundwater or of a
groundwater reservoir or its subdivisions in order to control
subsidence or prevent waste of groundwater and to carry out
the powers and duties provided by this chapter.

(b) Requires the board, after notice and hearing, to adopt
and enforce rules to implement this chapter.

(c) Requires the board to compile its rules and make them
available for use and inspection at the district's principal
office.

Sec. 36.102. ENFORCEMENT OF RULES. (a) Authorizes a district
to enforce this chapter and its rules by injunction, mandatory
injunction, or other appropriate remedy in a court of
competent jurisdiction.

(b) Authorizes the board to set reasonable civil penalties
for breach of any rule of the district that shall not exceed
the jurisdiction of a justice court as provided by Section
27.031, Government Code.

(c) Provides that a penalty under this section is in
addition to any other penalty provided by the law of this
state, and may be enforced by complaints filed in the
appropriate court of jurisdiction in the county in which the
district's principal office or meeting is located.

(d) Authorizes the district, if it prevails in any suit to
enforce its rules, to recover reasonable fees for attorneys,
expert witnesses, and other costs incurred by the district
before the court. Requires the amount of the attorney's
fees to be fixed by the court.

Sec. 36.103. IMPROVEMENTS AND FACILITIES. Authorizes a
district to build, acquire, or obtain by any lawful means any
property necessary for the district to carry out its purpose
and the provisions of this chapter.

Sec. 36.104. PURCHASE, SALE, TRANSPORTATION, AND DISTRIBUTION
OF WATER. Authorizes a district to purchase, sell, transport,
and distribute surface water or groundwater for any purpose.

Sec. 36.105. EMINENT DOMAIN. (a) Authorizes a district to
exercise the power of eminent domain to acquire by
condemnation a fee simple or other interest in property if
that property interest is necessary to the exercise of the
authority conferred by this chapter.

(b) Prohibits the power of eminent domain authorized in this
section from being used for the condemnation of land for the
purpose of acquiring rights to groundwater, surface water,
or water rights.

(c) Requires the district to exercise the power of eminent
domain according to Chapter 21, Property Code, except
regarding the deposit of a bond.

(d) Declares that, in a condemnation proceeding brought by
a district, the district is not required to pay in advance
or give bond or other security for costs in the trial court,
to give bond for the issuance of a temporary restraining
order or injunction, or to give bond for costs or
supersedeas on an appeal or writ of error.

(e) Requires the district, in exercising the power of
eminent domain, to bear the actual cost of altering certain
construction.

Sec. 36.106. SURVEYS. Authorizes a district to make surveys
of the groundwater reservoir or subdivision and surveys of the
facilities for development, production, transportation,
distribution, and use of the water, in order to determine the
quantity of water available for production and use and to
determine the improvements, development, and recharging needed
by a reservoir or its subdivision.

Sec. 36.107. RESEARCH AND PLANNING. (a) Authorizes a
district to carry out any research projects deemed necessary
by the board.

(b) Requires the district, following notice and hearing, to
develop a comprehensive management plan for the most
efficient use of the groundwater, for controlling and
preventing waste of groundwater, and for controlling and
preventing subsidence. Authorizes the plan to be reviewed
annually, and requires the plan to be reviewed by the board
at least once every five years.

(c) Requires the plan to include certain information.
Requires the district to adopt rules necessary to implement
the plan, and to file a copy of the plan and rules with this
commission.

Sec. 36.108. JOINT PLANNING IN MANAGEMENT AREA. (a) Requires
each district, if two or more districts are located within the
boundaries of the same management area, to prepare a
comprehensive management plan covering that district's
respective territory. Requires each district to forward a
copy of the revised plan to the other districts in the area.

(b) Authorizes the board of each district in the GMA, by
resolution, to call a joint meeting with the board of other
districts in the management area to review the management
plans and accomplishments for the GMA. Requires the boards
to meet to consider the plans individually and compare them
to other management plans then in force in the GMA.
Requires the boards, in reviewing the plans, to make certain
considerations.

(c) Requires a joint meeting of the board to be held in
accordance with Chapter 551, Government Code, Requires
notice of the meeting to be given, and sets forth
requirements for the notice.

(d) Authorizes a district in the GMA to file a petition with
the commission requesting an inquiry under certain
conditions.

(e) Requires the commission to review the petition by a
certain date and dismiss the petition if it finds that the
evidence is not adequate to show that conditions alleged in
the petition exist, or select a review panel.

(f) Authorizes the commission to appoint a review panel, and
sets forth guidelines for composition of the panel.

(g) Requires the review panel to review the petition and
relevant evidence by a certain date, and, in a public
meeting, prepare a report to the commission. Authorizes the
commission to direct the review panel to conduct public
hearings at a location in the GMA to take evidence on the
petition. Authorizes the panel to attempt to negotiate a
settlement or resolve the dispute by any lawful means.

(h) Requires the review panel to include certain information
in its report.

Sec. 36.109. COLLECTION OF INFORMATION. Authorizes a
district to collect any information the board deems necessary.

Sec. 36.110. PUBLICATION OF PLANS AND INFORMATION.
Authorizes a district to publish its plans and the information
it develops, bring them to the attention of the groundwater
users in the district, and encourage the users to adopt and
use them.

Sec. 36.111. RECORDS AND REPORTS. Requires the district to
require that records be kept and reports be made for the
drilling, equipping, and completing of water wells and of the
production and use of groundwater.

Sec. 36.112. DRILLERS' LOGS. Requires a district to require
that drillers' logs be kept of water wells and that copies of
drillers' logs and electric logs be filed with the district.

Sec. 36.113. PERMITS FOR WELLS. Requires a district to
require permits for the drilling, equipping, or completing of
wells, or for substantially altering the size of wells or well
pumps. Sets forth guidelines for the issuance of permits.

Sec. 36.114. PERMIT: APPLICATION AND HEARING. Requires the
district to promptly consider and pass on each application for
a permit, and sets forth provisions in the event that the
commission fails to do so.

Sec. 36.115. DRILLING OR ALTERING WELL WITHOUT PERMIT.
Prohibits any person, firm, or corporation from drilling or
operating a well, or altering the size of a well or well pump
such that it would bring that well under the jurisdiction of
the district, without obtaining a permit from the district.
Provides that a violation occurs on the first day the
drilling, alteration, or operation begins, and continues each
day thereafter until the appropriate permits are approved.

Sec. 36.116. REGULATION OF SPACING AND PRODUCTION.
Authorizes a district, in order to minimize the drawdown of
the water table or the reduction of artesian pressure, to
control subsidence, or to prevent waste, to provide for the
spacing of water wells and regulate the production of wells.

Sec. 36.117. EXCEPTIONS; LIMITATIONS. (a) Prohibits a
district from requiring certain permits.

(b) Requires the board to adopt rules determining the
applicability of Subsection (a)(3) to facilities used
primarily for feeding livestock.

(c) Prohibits the district from denying the owner of a tract
of land, or a lessee, who has no well equipped to produce
more than 25,000 gallons a day on the tract, a permit to
drill a well on the owner's land or the privilege to produce
groundwater from the land, subject to district rules.

(d) Prohibits a district from restricting the production of
any well equipped to produce 25,000 gallons or less a day.

(e) Provides that nothing in this chapter applies to wells
drilled under permits issued by the Railroad Commission of
Texas (RRC). Prohibits a district from requiring a permit
to drill a well to supply water for drilling any of the
wells permitted by RRC. Subjects to district rules any well
that ceases to be used for these purposes and is then used
as an ordinary well.

(f) Requires water wells exempted under this section to be
equipped and maintained so as to conform to the district's
rules requiring installation of casing, pipe, and fittings
to prevent the escape of groundwater from a groundwater
reservoir to any reservoir not containing groundwater and to
prevent the pollution or harmful alteration of the character
of the water in any groundwater reservoir.

(g) Requires a district to require water wells exempted
under this section to be registered with the district.

Sec. 36.118. OPEN OR UNCOVERED WELLS. (a) Authorizes a
district to require the owner or lessee of land on which an
open or uncovered well is located to keep the well permanently
closed or capped with a certain covering, except when the well
is in actual use.

(b) Defines "open or uncovered well."

(c) Authorizes any entity employed by the district, if the
owner or lessee fails or refuses to close or cap the well,
to go on the land and close or cap the well safely and
securely.

(d) Declares that reasonable expenses incurred by the
district in closing or capping a well constitute a lien on
the land on which the well is located.

(e) Declares that the lien arises and attaches upon
recordation in the deed records of the county where the well
is located an affidavit stating certain information.

(f) Declares that nothing in this section affects the
enforcement of Chapter 756A, Health and Safety Code.

Sec. 36.119. ILLEGAL DRILLING AND OPERATION OF WELL; CITIZEN
SUIT. (a) Declares drilling a well without a required permit
or operating a well at a higher rate of production than the
rate approved for the well to be illegal, wasteful, and a
nuisance.

(b) Authorizes a person who has an estate in land adjacent
to the land on which the well is located, or a part that
lies within one-half mile of the well, to sue in a court of
competent jurisdiction to restrain or enjoin the illegal
drilling or operation, or both. Authorizes the suit to be
brought with or without the joinder of the district.

(c) Authorizes the aggrieved party to sue for damages for
injuries suffered by reason of the illegal operation and for
other relief to which they may be entitled. Declares that,
in a suit for damages, the existence or operation of a well
in violation of district rules is prima facie evidence of
illegal drainage.

(d) Authorizes the suit to be brought in the county where
the illegal well is located or in the county where all or
part of the affected land is located.

(e) Provides that the remedies provided by this section are
cumulative of other remedies available to the individual or
district.

(f) Requires a suit brought under this section to be
advanced for trial and determined as expeditiously as
possible. Prohibits the court from granting a postponement
or continuance, except for reasons considered imperative by
the court.

Sec. 36.120. INFORMATION. Requires the district, on request
of the executive director or executive administrator, to make
available information that the district acquired concerning
the groundwater resources within its jurisdiction, and to
provide information to the commission and the Texas Water
Development Board concerning its plans and activities in
conserving and protecting groundwater resources. Requires the
executive director and executive administrator, on district
request, to provide information concerning the groundwater
resources in the district's jurisdiction.

Sec. 36.121. LIMITATION ON RULEMAKING POWER OF DISTRICTS OVER
WELLS IN CERTAIN COUNTIES. Requires a district created under
this chapter on or after September 1, 1991, to exempt from
regulation under this chapter a well and the water provided by
a well located in certain counties.

SUBCHAPTER E. DISTRICT FINANCES

Sec. 36.151. EXPENDITURES. Authorizes a district's money to
be disbursed only by check, draft, order, or other instrument.
Requires disbursements to be signed by at least two directors,
with exception. Authorizes the board, by resolution, to allow
disbursements to be transferred by federal reserve wire system
to accounts in the name of the district.

Sec. 36.152. FISCAL YEAR. Requires the district to be
operated on the basis of a fiscal year established by the
board. Prohibits the fiscal year from being changed during a
certain period.

Sec. 36.153. ANNUAL AUDIT. Requires the board to have an
audit made annually of the financial condition of the
district. Requires the audit and other district records to be
open to inspection during regular business hours at the
district's principal office.

Sec. 36.154. ANNUAL BUDGET. Requires the board to prepare
and approve an annual budget containing a complete financial
statement. Authorizes the budget to be amended on the board's
approval.

Sec. 36.155. DEPOSITORY. Requires the board to name one or
more banks to serve as depository for district funds. Sets
forth requirements for deposit.

Sec. 36.156. INVESTMENTS. Authorizes district funds to be
invested and reinvested according to Chapter 2256, Government
Code. Authorizes the board, by resolution, to provide that an
authorized representative of the district may invest and
reinvest the funds of the district and provide for money to be
withdrawn from appropriate district accounts for investments
on terms the board considers advisable.

Sec. 36.157. PAYMENT OF ORGANIZATIONAL EXPENSES. Authorizes
a district to pay all costs and expenses necessarily incurred
in the creation and organization of a district, and to
reimburse any person for money advanced for those purposes.
Authorizes payments to be made from money obtained from the
sale of certain bonds or out of maintenance taxes or other
revenues of the district.

Sec. 36.158. GRANTS. Authorizes a district to make or accept
grants, gratuities, advances, or loans in any form to or from
any source approved by the board, and to enter into contracts,
agreements, and covenants in connection with grants,
gratuities, advances, or loans that the board considers
appropriate.

SUBCHAPTER F. BONDS AND NOTES

Sec. 36.171. ISSUANCE OF BONDS AND NOTES. (a) Authorizes the
board to issue and sell bonds and notes in the name of the
district for any lawful purpose of the district. Prohibits a
district from issuing bonds unless the commission determines
that the project to be financed by the bonds is feasible and
issues an order approving the issuance of the bonds. Declares
that this section does not apply to refunding bonds.

(b) Authorizes a district to submit to the commission a
written application for investigation of feasibility, and
requires an engineer's report to be submitted with the
application.

(c) Requires the executive director to examine the
application and the report, and to inspect the project area.
Requires the district, on request, to supply the executive
director with data and information necessary for an
investigation of the application, engineer's report, and
project.

(d) Requires the executive director to prepare a written
report on the project and include suggestions for changes or
improvements. Requires the executive director to retain a
copy of the report and send a copy of the report to both the
commission and district.

(e) Requires the commission to consider the application,
reports, and any other evidence allowed by commission rule
to be considered.

(f) Requires the commission to determine whether the project
to be financed by the bonds is feasible and issue an order
either approving or disapproving the issuance of the bonds.
Requires the commission to retain a copy of the order and
send a copy of the order to the district.

(g) Authorizes the commission to approve the issuance of
bonds of a district without the submission of plans and
specifications of the improvements to be financed with the
bonds. Authorizes the commission to condition the approval
in any terms or conditions considered appropriate by the
commission.
Sec. 36.172. MANNER OF REPAYMENT OF BONDS AND NOTES. Sets
forth the manner in which the board may provide for the
repayment of bonds and notes.

Sec. 36.173. ADDITIONAL SECURITY FOR BONDS AND NOTES.
Authorizes the bonds and notes to be additionally secured.
Authorizes the trust indenture to contain certain provisions.
Declares that a purchaser under a sale under the deed trust or
mortgage lien shall be absolute owner of the properties and
rights purchased, and may maintain and operate them.

Sec. 36.174. FORM OF BONDS OR NOTES. Authorizes a district
to issue bonds or notes in various series or issues. Sets
forth guidelines and requirements for issuance and maturity.

Sec. 36.175. PROVISIONS OF BONDS AND NOTES. (a) Authorizes
the board, in the orders or resolutions authorizing the
issuance of bonds or notes, to provide for the flow of funds
and the establishment and maintenance of other funds.
Authorizes the board to make certain additional covenants.

(b) Authorizes the board orders or resolutions authorizing
the issuance of bonds or notes to prohibit the further
issuance of bonds, notes, or other obligations payable from
the pledged revenue, or to reserve the right to issue
additional bonds or notes to be secured by a pledge of and
payable from the revenue on a parity with or subordinate to
the lien and pledge in support of the bonds or notes being
issued.

(c) Authorizes the orders or resolutions of the board
issuing bonds or notes to contain other provisions and
covenants as the board may determine.

(d) Authorizes the board to adopt and have executed any
other proceeding or instruments necessary and convenient in
the issuance of bonds or notes.
Sec. 36.176. REFUNDING BONDS. Authorizes a district to issue
bonds to refund all or part of its outstanding bonds or notes.
Sets forth guidelines and requirements for refunding bonds.

Sec. 36.177. BONDS AND NOTES AS INVESTMENTS. Declares that
district bonds and notes are legal and authorized investments
for certain entities.

Sec. 36.178. BONDS AND NOTES AS SECURITY FOR DEPOSITS.
Provides that district bonds and notes are eligible to secure
deposits of public funds of the state and cities, counties,
school districts, and other political subdivisions of the
state, and that the bonds and notes are lawful and sufficient
security for deposits to the extent of their value when
accompanied by all unmatured coupons.

Sec. 36.179. TAX STATUS OF BONDS AND NOTES. Provides that
bonds and notes issued by the district, any transaction
relating to the bonds and notes, and profits made in the sale
of bonds and notes, are free from taxation by the state or a
political subdivision of the state.

Sec. 36.180. ELECTION. Prohibits bonds or notes secured by
taxes from being issued by the district until authorized by a
majority vote of the qualified voters of the district at an
election called for that purpose. Sets forth requirements for
calling the election and the text of the ballots. Requires
the board to canvass the returns and declare the results.
Authorizes the bonds or notes to be issued if a majority of
the votes cast favor the issuance of the bonds or notes.

Sec. 36.181. APPROVAL BY ATTORNEY GENERAL; REGISTRATION BY
COMPTROLLER. Requires bonds and notes issued by a district to
be submitted to the attorney general for examination.
Requires the attorney general to approve bonds and notes
authorized in accordance with the law, and requires them to be
registered by the comptroller. Declares that, after approval
and registration, the bonds and notes are incontestable and
are valid and binding obligations in accordance with their
terms for all purposes.

SUBCHAPTER G. DISTRICT REVENUES

Sec. 36.201. LEVY OF TAXES. (a) Authorizes the board to levy
taxes annually to pay the district bonds that are payable in
whole or in part by taxes.

(b) Authorizes the board to levy taxes annually at a certain
rate to pay the maintenance and operating expenses of the
district.

(c) Prohibits the board from levying a tax to pay
maintenance and operating expenses until the tax is approved
by a majority of the electors. Sets forth guidelines for an
election under this subsection.

(d) Requires an order calling a separate election for
approval of a tax to be issued at least 15 days before the
date of the election. Sets forth requirements for the
election notice.
Sec. 36.202. BOARD AUTHORITY. Authorizes the board to levy
taxes for the entire year in which the district is created,
and, if territory is added to or annexed by the district, to
levy taxes in the new territory for the entire year in which
the territory is added or annexed. Requires the board to levy
taxes on all property in the district subject to district
taxation.

Sec. 36.203. TAX RATE. Requires the board, in setting the
tax rate, to take into consideration the income of the
district from sources other than taxation. Requires the
board, on determination of the amount of tax required to be
levied, to make the levy and certify it to the tax assessor-collector.

Sec. 36.204. TAX APPRAISAL, ASSESSMENT, AND COLLECTION.
Provides that the Tax Code governs the appraisal, assessment,
and collection of district taxes. Authorizes the board to
provide for the appointment of a tax assessor-collector for
the district, or to contract for the assessment and collection
of taxes as provided by the Tax Code.

Sec. 36.205. AUTHORITY TO SET FEES. Authorizes a district to
set fees for administrative acts of the district, and
prohibits such fees from exceeding a certain amount. Requires
the district to set and collect fees for all services provided
outside the boundaries of the district.

SUBCHAPTER H. JUDICIAL REVIEW

Sec. 36.251. SUIT AGAINST DISTRICT. Entitles any person,
firm, corporation, or association of persons affected by and
dissatisfied with any provision or rule or order made by a
district to file a suit against the district or its directors
to challenge the validity of the law, rule, or order.
Requires the suit to be filed in a court of competent
jurisdiction in any county in which the district is located.
Authorizes the suit to be filed only after all administrative
appeals to the district are final.

Sec. 36.252. SUIT TO BE EXPEDITED. Requires a suit brought
under this subchapter to be advanced for trial and determined
as expeditiously as possible. Provides that no postponement
or continuance shall be granted, except as the court considers
imperative.

Sec. 36.253. TRIAL OF SUIT. Places the burden of proof on
the petitioner. Considers the challenged law, rule, or order
prima facie valid. Provides that the review on appeal is
governed by the substantial evidence rule.

Sec. 36.254. SUBCHAPTER CUMULATIVE. Declares that the
provisions of this subchapter do not affect other legal or
equitable remedies that may be available.

SUBCHAPTER I. DISSOLUTION OF DISTRICT

Sec. 36.301. DISSOLUTION. Authorizes the committee to
dissolve a district that has been inactive for three
consecutive years and has no outstanding bonded indebtedness.
Authorizes a district composed of territory entirely within
one county to be dissolved regardless of outstanding
indebtedness that matures after the year in which the district
is dissolved, and sets forth requirements for the payment of
the taxes. Describes an active district.

Sec. 36.302. NOTICE OF HEARING. Requires the commission to
give notice of the dissolution hearing. Sets forth
requirements for the notice.

Sec. 36.303. INVESTIGATION. Requires the executive director
to investigate the facts and circumstances of the district to
be dissolved, and requires the result of the investigation to
be included in a written report.

Sec. 36.304. ORDER OF DISSOLUTION. Authorizes the commission
to enter an order dissolving the district if the commission
finds that the district has performed none of the functions
for which it was created for three consecutive years before
the day of the proceeding and that the district has no
outstanding bonded indebtedness.

Sec. 36.305. CERTIFIED COPY OF ORDER. Requires the
commission to file a certified copy of the order of
dissolution in the deed records of the county or counties in
which the district is located, and, if the district was
created by a special Act of the legislature, to file a
certified copy with the secretary of state.

Sec. 36.306. APPEALS. Requires appeals from a commission
order dissolving a district to be filed and heard in the
district court of any of the counties in which the land is
located. Requires the trial on appeal to be de novo and the
substantial evidence rule to not apply.

Sec. 36.307. ASSETS ESCHEAT TO STATE. Requires all district
assets, upon district dissolution, to escheat to the State of
Texas, to be administered by the state treasurer, and to be
disposed of as provided by Chapter 72, Property Code.

SUBCHAPTER J. ADDING TERRITORY TO DISTRICT

Sec. 36.321. ADDING LAND BY PETITION OF LANDOWNER.
Authorizes the owner of land contiguous to a district to file
with the board a notarized petition requesting that the
owner's land be included in the district. Requires the
petition to include certain information.

Sec. 36.322. ASSUMPTION OF BONDS. Requires the petitioner,
if the district has bonds, notes, or other obligations
outstanding or bonds payable from taxation that have been
noted but are unissued, to assume the petitioner's share of
the outstanding bonds, notes, or obligations and any voted but
unissued tax bonds of the district. Requires the property to
be assessed an ad valorem tax at a certain rate.

Sec. 36.323. HEARING AND DETERMINATION OF PETITION. (a)
Requires the board to hear and consider the petition, and to
add to the district the land described in the petition if
considered advantageous to the petitioner and existing
district.

(b) Authorizes the board, if the district has bonds payable
from taxation that are voted but unissued at the time of the
annexation, to issue the bonds despite the alteration of
district boundaries since the authorization of the bonds.

Sec. 36.324. RECORDING PETITION. Requires a petition that is
granted that adds land to the district to be recorded in the
office of the county clerk of the county or counties in which
the land is located and in which the existing district's
principal office is located.

Sec. 36.325. ADDING CERTAIN TERRITORY BY PETITION.
Authorizes landowners of a defined area of territory not
already in a district to file with any district a petition
requesting inclusion in that district. Requires the petition
to be signed by certain entities.

Sec. 36.326. HEARING ON PETITION. Requires the board, by
order, to set the time and place of separate hearings in the
petition under Section 36.325. Requires at least one hearing
to be held in the existing district and one on the territory
to be added.

Sec. 36.327. RESOLUTION TO ADD TERRITORY. Authorizes the
board, if it finds that the addition of the land would benefit
the district and territory to be added, to add the territory
by resolution. Declares that the board does not have to
include all the territory in the petition if it finds that a
modification or change is necessary or desirable.

Sec. 36.328. ELECTION TO RATIFY ANNEXATION OF LAND.
Provides that annexation of the territory is not final until
ratified by a majority vote of the voters in the territory to
be added. Sets forth required text for the ballot. Require
the amount of the tax included in the proposition to be the
maximum amount that the district is authorized to levy. Sets
forth requirements in the event that the district has
outstanding or authorized bonded indebtedness.

Sec. 36.329. NOTICE AND PROCEDURE OF ELECTION. Provides that
the notice of the election, the manner and time of giving the
notice, the manner of holding the election, and qualifications
of the voters, are governed by the Election Code.

Sec. 36.330. LIABILITY OF ADDED TERRITORY. Requires the
added territory to bear its pro rata share of indebtedness or
taxes owed, contracted, or authorized by the district to which
the territory is added.

Sec. 36.331. ANNEXATION OF NONCONTIGUOUS TERRITORY.
Prohibits land not contiguous to the existing boundaries of a
district from being added or annexed to a district unless the
land is located within the same GMA, critical area, or a
groundwater subdivision designated by the commission or its
predecessors.

SUBCHAPTER K. CONSOLIDATION OF DISTRICTS

Sec. 36.351. CONSOLIDATION OF DISTRICTS. Authorizes two or
more districts to consolidate into one district. Authorizes
agents to consolidate portions of either district if one
district relinquishes land within that district to the
jurisdiction of the other district.
Declares that a consolidation occurs if the board of each
involved district adopts a resolution containing the terms and
conditions of the consolidation.

Sec. 36.352. TERMS AND CONDITIONS OF CONSOLIDATION. Sets
forth the required and authorized terms and conditions for
consolidation.

Sec. 36.353. NOTICE AND HEARING ON CONSOLIDATION. Requires
each board to publish notice and hold a public hearing on the
terms and conditions for consolidation. Authorizes the board,
after the hearing and by resolution, to approve the terms and
conditions and enter an order consolidating the districts.

Sec. 36.354. ELECTIONS TO APPROVE CONSOLIDATION. Requires an
election to ratify consolidation except under certain
conditions. Sets forth requirements for ordering an election
and the text of the ballot. Authorizes a district to be
consolidated only if a majority of electors in each district
vote in favor of the consolidation. Prohibits failure of any
one district to ratify the consolidation from preventing the
consolidation of the other districts, if more than two
districts are consolidating.

Sec. 36.355. GOVERNING CONSOLIDATED DISTRICTS. (a) Provides
that, after two or more districts are consolidated, they
become one district and are so governed.

(b) Requires the officers of each district, during the
transition period, to continue to act jointly as officers of
the original districts to settle the affairs of their
respective districts.

(c) Requires the directors for the consolidated district, if
the consolidated district elects directors, to be elected in
the same manner and for the same terms as directors elected
at a confirmation election. Requires the directors'
election to be set for the next regular election.

Sec. 36.356. DEBTS OF ORIGINAL DISTRICTS. Sets forth
requirements for the payment of debts after two or more
districts are consolidated.

Sec. 36.357. ASSESSMENT AND COLLECTION OF TAXES. Requires
the consolidated district, if it has taxing authority to
assess and collect taxes on property in the district for
maintenance and operation of the district.

Sec. 36.358. VOTED BUT UNISSUED BONDS. Authorizes the
consolidated district, if either district has voted but
unissued bonds payable in whole or in part from taxation
assumed by the consolidated district, to issue the voted but
unissued bonds in the name of the consolidated district and
levy a uniform tax on all taxable property in the consolidated
district to pay for the bonds.

Sec. 36.359. FILING OF ORDER WITH COUNTY CLERK AND EXECUTIVE
DIRECTOR. Requires a consolidation order issued by the board
to be kept in the records of the consolidated district,
recorded in the office of the county clerk in each of the
counties in the consolidated district, and filed with the
executive director.

SECTION 3. Amends Section 151.003(b), Water Code, to make a
conforming change.

SECTION 4. Amends Section 151.005(a), Water Code, to make
conforming and nonsubstantive changes.

SECTION 5. Amends Section 151.005(c), Water Code, to make
conforming changes.

SECTION 6. Repealer: Chapter 52, Water Code (Underground Water
Conservation Districts).

SECTION 7. Provides that an election conducted by a district
formerly governed by Chapter 52, Water Code, on August 14, 1993, at
which voters in the district approved the levy of taxes for the
district's maintenance and operating expenses is validated in all
respects as of the date on which the election occurred. Prohibits
a district's levy and collection taxes, as approved by that
election, and a district's subsequent acts and proceedings from
being held invalid on the ground that the district was not
authorized to levy the taxes or conduct the election.

SECTION 8. Effective date: September 1, 1995.
Makes application of this Act prospective.

SECTION 9. Emergency clause.