74(R) SB 626 House Committee Report

BILL ANALYSIS

C.S.S.B. 626
By: Armbrister (Yost)
5-3-95
Committee Report (Substituted)

BACKGROUND
The House Subcommittee on Districts, a subcommittee of the Natural
Resources Committee, determined that there is a lack of procedural
uniformity between the different types of local water districts.
Each special law and general law district is governed by a variety
of procedural requirements. These inconsistencies lead to
confusion among citizens, district board members, and state agency
personnel.

PURPOSE
As proposed, C.S.S.B. 626 creates special law districts to govern
water and nonprofit water or sewer service corporations; and
creates a board of directors for each district and provides the
powers and duties of these boards. C.S.S.B. 626 also authorizes
the issuance of obligations and levying of taxes to fund district
projects, and creates penalties for violations of district rules.

RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Texas Natural Resource Conservation Commission under SECTION
2 (Sections 49.181(e), 49.182(a), 49.231(f), and 49.351(h), Chapter
49, Water Code) of this bill.

SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.002, Water Code, as follows:

Sec. 1.002. CONSTRUCTION OF CODE. (a) Created from existing
text.

(b) Provides that in this code a reference to a title,
chapter, or section (heading) without further
identification is a reference to a heading of this code.
Provides that a reference to a subtitle, subchapter,
subsection, subdivision, paragraph, or other numbered or
lettered unit without further identification is a reference
to a unit of the next larger unit of this code in which the
reference appears.

(c) Provides that a reference in a law to a statute or part
of a statute revised by this code is considered to be
reference to the part of this code that revises that statute
or part of the statute.

SECTION 2. Amends Title 4, Water Code, by adding Chapter 49, as
follows:

CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 49.001. DEFINITIONS. (a) Defines "district,"
"commission," "board," "executive director," "water supply
corporation," "director," "municipal solid waste," and "river
authority."

(b) Provides that these definitions are for use in this
chapter only, and have no effect on any other statute or
code unless specifically referenced by that statute or code.
Sec. 49.002. APPLICABILITY. Makes this chapter apply to all
general and special law districts to the extent that the
provisions do not conflict with the provisions of another
chapter of this code or any Act creating or affecting a
special law district. Requires the specific provision in such
other chapter or Act to control.

Sec. 49.003. PENALTY. Authorizes a district that fails to
comply with the filing provisions of this code to be subject
to a civil penalty of up to $100 per day the district violates
these provisions after a written notice of violation from the
executive director of the Texas Natural Resource Conservation
Commission (executive director) by certified mail, return
receipt requested. Authorizes the state to sue to recover the
penalty.

Sec. 49.004. PENALTY FOR VIOLATION OF DISTRICT RULES. (a)
Authorizes the governing body of the district (board) to set
civil penalties for the breach of any rule of the district
that shall not exceed the jurisdiction of a court.

(b) Provides that a penalty under this section is in
addition to a penalty provided by state law. Authorizes the
penalty to be enforced by complaints filed in the
appropriate court of jurisdiction in the county in which the
district's principal office is located.

(c) Authorizes the district, in the same action, to recover
attorney and witness fees and other court costs incurred by
the district if it wins a suit to enforce its rules.
Requires the attorney's fees to be fixed by the court.

SUBCHAPTER B. CREATION

Sec. 49.010. ORDER OR ACT CREATING DISTRICT. Requires the
district to file with the executive director a certified copy
of the order or legislative act creating the district within
60 days of the date of creation, unless the district was
created by order of the commission.

SUBCHAPTER C. ADMINISTRATIVE PROVISIONS

Sec. 49.051. BOARD OF DIRECTORS. Requires a district to be
governed by its board, the number of which is otherwise
provided by law.

Sec. 49.052. DISQUALIFICATION OF DIRECTORS. (a) Provides
that a person is disqualified from serving as a board member
of a district that includes less than one complete county and
which, if located in the corporate area of a city or cities,
includes in its boundaries less than 75 percent of the
incorporated area of the city or cities under certain
conditions of relationship or employment.

(b) Requires the board to replace, within 60 days, the
person serving as a board member and having a disqualifying
relationship or employment with a person who would not be
disqualified.

(c) Provides that a disqualified board member who continues
to exercise the powers and duties of the office is guilty of
a misdemeanor and on conviction shall be fined between $100
and $1,000.

(d) Defines "developer of property in the district."

(e) Provides that any rights obtained by a third party
through official action of the board are not affected by the
disqualification of a board member provided that the third
party had no knowledge at the time that the board member was
disqualified to serve.

(f) Prohibits this section from applying to river
authorities, districts defined in Section 49.181(h)(4), or
a district with a principal function of providing irrigation
water to agricultural lands or to provide nonpotable water
to any surface.

(g) Authorizes a board to remove a board member by unanimous
vote if that board member has missed at least half of the
regular meetings scheduled during the prior 12 months.
Authorizes a removed board member to file a written appeal
with the Texas Natural Resource Conservation Commission
(commission) within 30 days of receiving the written notice
of board action. Authorizes the commission to reinstate a
removed director if the commission finds that the removal
was unwarranted.

Sec. 49.053. QUORUM. Provides that a majority of the board
members constitutes a quorum at a meeting, and a concurrence
of a majority of the board members is sufficient for
transacting any business of the district. Makes a conforming
change.

Sec. 49.054. OFFICERS. (a) Requires the board to meet after
a district is created and the directors have qualified to
elect a president, vice-president, secretary, and any other
officers or assistant officers the board may deem necessary
and begin discharge of its duties.

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

(c) Provides that the president is the chief executive
officer of the district and presides at all board meetings.
Requires the president to execute all documents on behalf of
the district. Requires the vice-president to act as
president in the absence or disability of the president.
Provides that the secretary is responsible for seeing that
all district records and books are properly kept. Requires
the secretary to attest the president's signature on all
documents.

(d) Authorizes the board to appoint another director, the
general manager, or an employee as an assistant or deputy to
the secretary. Requires the person to be entitled to
certify the authenticity of any district record, including
proceedings related to bonds, contracts, and indebtedness.

(e) Requires the district to notify the executive director
within 30 days after the date of an election or appointment
of the name and address of the director chosen and the date
that the director's term in office expires. Requires the
executive director to provide forms for this purpose.

(f) Makes a conforming change.

Sec. 49.055. SWORN STATEMENT, BOND AND OATH OF OFFICE. (a)
Requires the director to make the sworn statement prescribed
by the constitution for public office after taking office.

(b) Requires the director to take the oath of office
prescribed by the constitution for public officers after
making the sworn statement and before beginning to perform
duties.

(c) Requires each director, before beginning to perform the
duties of the office, to execute a bond for $10,000 payable
to the district and conditioned on the director's
performance of duties.

(d) Requires the sworn statement, bond, and oath to be filed
with the district and retained in its records. Requires a
duplicate original of the sworn statement and the oath to be
filed with the secretary of state within 10 days after their
execution and need not be filed before the new director
begins to perform the duties of office.

(e) Makes a conforming change.

Sec. 49.056. GENERAL MANAGER. (a) Authorizes the board to
employ or contract with a person to perform general manager
services for the board occasionally. Authorizes the board to
delegate full authority to the general manager to manage and
operate the affairs of the district subject only to board
orders.

(b) Authorizes the board to delegate full authority to the
general manager to employ all persons necessary for the
handling of business of the district and to determine the
compensation to be paid to all employees other than the
general manager.

(c) Authorizes a director to be employed as general manager,
except as provided by Section 49.052. Requires the
compensation of a general manager who also serves as a
director to be established by other directors.

Sec. 49.057. MANAGEMENT OF DISTRICT. (a) Requires the board
to be responsible for the management of all affairs of the
district. Requires the district to employ or contract with
all persons, firms, partnerships, corporations, or other
entities, public or private, deemed necessary to conduct the
affairs of the district.
(b) Requires the board to adopt an annual budget. Provides
that all district employees are employed at the will of the
district unless the district and the employee execute a
written employment contract.

(d) Requires the district to follow the procedures provided
in Chapter 2254A, Government Code, in selecting attorneys,
engineers, auditors, financial advisors, or other
professional consultants (consultants).

(e) Requires the board to require an officer, employee, or
consultant who collects, pays, or handles any funds of the
district to furnish a good and sufficient bond, payable to
the district, in an amount determined by the board to be
sufficient to safeguard the district. Requires the bond to
be conditioned on the performance of that person's duties
and on accounting for all funds and property of the
district. Requires the bond to be endorsed by a surety
company authorized to do business in the state.

(f) Authorizes the board to pay the premium on surety bonds
required of officials, employees, or consultants of the
district out of any available funds of the district,
including proceeds from the sale of bonds.

(g) Authorizes the board to adopt bylaws to govern the
affairs of the district. Authorizes the board, by
resolution, to authorize its general manager or other
employee to execute documents on behalf of the district.

(h) Requires the board to have the right to purchase all
materials, supplies, equipment, vehicles, and machinery
needed by the district.

Sec. 49.058. CONFLICTS OF INTEREST. Subjects the director
of the district to provisions of Chapter 171, Local Government
Code.

Sec. 49.059. DISQUALIFICATION OF TAX ASSESSOR AND COLLECTOR.
(a) Prohibits a person from serving as tax assessor and
collector of a district providing potable water or sewer
utility services to household users if that person has certain
relationships or employment history.

(b) Requires the board to replace the person serving as tax
assessor and collector with a person who would not be
disqualified within 60 days after the board determines a
relationship or employment exists which constitutes a
disqualification.

(c) Provides that any person who violates the provisions of
Subsection (a) is guilty of a misdemeanor and on conviction
shall be fined between $100 and $1,000.

(d) Makes a conforming change.

Sec. 49.060. FEES OF OFFICE; REIMBURSEMENT. (a) Entitles a
director to receive fees of office of not more than $100 for
each day the director spends performing the duties of officer.
Prohibits the fees of office from exceeding $6,000 per annum
except for directors of a river authority which is engaged in
the distribution and sale of electric energy to the public.

(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 spent in the
service of the district and a general description of the
duties performed for each day of service in order to receive
fees of the office and to receive reimbursement for
expenses.

(d) Requires the provisions of this section to take
precedence over all prior statutory enactments, Section
49.002 notwithstanding. Prohibits the fees of office from
increasing unless the board adopts a resolution authorizing
payment of higher fees if enactment of this section results
in an increase in the fees.

Sec. 49.061. SEAL. Requires the directors to adopt the seal
for the district.

Sec. 49.062. OFFICES AND MEETING PLACES. (a) Requires the
board to occasionally designate and maintain at least one
office for conducting the business of the district and
maintaining records. Authorizes the offices to be located
inside or outside of the district's boundaries.

(b) Requires the board to designate one or more places
inside or outside the district for conducting meetings of
the board. Authorizes the meeting place to be a private
residence or office, provided that the board declares the
same to be a public place and invites the public to attend
board meetings. Requires the board to give notice of the
location or locations of a meeting place or places
established outside the district by filing a true copy of
the resolution establishing the location or locations of the
meeting place or places with the commission and by
publishing notice of the location or locations in a
newspaper of general circulation in the district. Requires
notice of a change of location outside the district to be
given in the same manner.

(c) Requires the board to designate a meeting place and hold
meetings within the district if it determines that the
meeting place used by the district deprives residents of the
opportunity to attend a district meeting after at least five
of at least 25 qualified voters are residing in a district
provide a written request. Authorizes five electors to
petition the commission to designate a location upon failure
of the board to designate the location of a meeting place.

(d) Authorizes two or more districts to designate and share
offices and meeting places. Makes a conforming change.

Sec. 49.063. NOTICE OF MEETINGS. Requires notice of
meetings of the board to be given according to the open
meetings law, Chapter 551, Government Code; requires the
district to post notice of its meeting place at a public place
within the district specified by the board in a written
resolution, rather than its administrative office if the
meeting place is not within the district. Requires the board
to specify the public place to be a bulletin board or other
public place within the district which is available to the
public. Prohibits a failure to provide notice of a regular
meeting or an insubstantial defect in the notice of any
meeting from affecting the validity of any action taken at the
meeting.

Sec. 49.064. MEETINGS. Requires the board to hold regular
and special meetings as necessary for the district's business.
Requires all meetings to be conducted according to the open
meetings law, Chapter 551, Government Code. Provides that a
meeting of a committee of the board or a committee composed of
representatives of more than one board, where less than a
quorum of the board is present is not subject to these
provisions.

Sec. 49.065. RECORDS. (a) Requires the board to keep a
complete account of all its meetings and proceedings.
Requires the board to preserve its minutes, contracts,
records, notices, accounts, receipts, and other records in a
safe place.

(b) Provides that the records of each district are property
of the district and subject to the open records law, Chapter
552, Government Code.

(c) Subjects the preservation, microfilming, destruction, or
other disposition of the records of each district to
requirements of Chapter 201, Local Government Code.

Sec. 49.066. SUITS. (a) Authorizes a district to sue and be
sued in the state courts in the name of the district by and
through its board. Requires the courts to take judicial
notice of the creation of the district and its boundaries.

(b) Authorizes any court in the state 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 the district may be served.

(d) Prohibits certain suits from being instituted in any
court of this state.

(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 through the attorney general.
Requires the action to be brought on good cause shown,
except where provided by other provisions of this code or
the Texas Constitution. Prohibits a proceeding from
affecting the validity or security of any bonds or other
obligations issued by a district if these obligations have
been approved by the attorney general.

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

Sec. 49.067. CONTRACTS. Requires a district to contract and
be contracted with in the name of the district.

Sec. 49.068. CONTRACTS WITH GOVERNMENTAL AGENCIES.
Authorizes a district to purchase property from any
governmental entity by negotiated contract without securing
appraisals or advertising bids, provisions of this chapter and
the Local Government Code notwithstanding.

Sec. 49.069. EMPLOYEE BENEFITS. (a) Authorizes the board to
provide and administer district employee retirement,
disability, and death compensation funds.

(b) Authorizes the board to establish a public retirement
system in accordance with the provisions of Chapter 810,
Government Code. Authorizes the board to provide a deferred
compensation plan.

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

Sec. 49.070. WORKERS' COMPENSATION. Authorizes the board to
become a subscriber under Title 5, Labor Code (Texas Workers'
Compensation Act), with any insurance company authorized to
write policies in the state.

Sec. 49.071. DISTRICT NAME CHANGE. (a) Authorizes the
commission, by order, to change the name of the district to
the name requested on a petition showing grounds for the
change. Requires the new name to generally describe the
district's location followed by the type of district.
Authorizes the district to be differentiated by adding to the
new name the proper consecutive number if it lies wholly in a
county that contains more than one district of that type.
Prohibits the new name from being the same as any other in the
county.

(b) Provides that a name change is effective on the date of
issuance of the commission order making the change.

(c) Requires the district to publish notice of the name
change in a newspaper or newspapers of general circulation
in the county or counties in which the district is located
by the 30th day after the date of issuance of the commission
order making the name change. Requires the district to also
give notice of the name change by mail to utility customers
or permittees and holders of bonds, obligations, and other
indebtedness of the district within the same time period.
Provides that failure of the district to comply with this
subsection does not affect the validity of the name change.

(d) Provides that a name change does not affect bonds,
obligations, or other indebtedness of the district existing
before the name change.

SUBCHAPTER D. ELECTION PROVISIONS

Sec. 49.101. GENERAL. Requires all elections to be
generally conducted in accordance with the Election Code
except as otherwise provided for in this code. Requires
write-in candidacies for any district office to be governed by
Chapter 146C, Election Code.

Sec. 49.102. CONFIRMATION AND DIRECTOR ELECTION. (a)
Requires an election to be held within the boundaries of the
proposed district to determine if the proposed district will
be established, and if the directors of the district are
required to be elected, to elect permanent directors, before
issuing any bonds or other obligations.

(b) Requires the notice of a confirmation or director
election to state the day and place or places for holding
the election, propositions on which to be voted, or the
number of directors on which to vote.

(d) Requires the presiding judge to take the returns of the
results to the temporary board after the confirmation and
director election. Requires the temporary board to canvas
the returns and declare the results at the earliest
practicable time.

(e) Requires the temporary board to declare the creation of
the district and enter the result in the minutes if a
majority of the votes cast in the election favor the
creation of the district. Requires the temporary board to
declare the district was defeated and enter it into the
minutes if a majority of the votes cast are against the
district's creation. Requires a copy of the order to be
filed with the district.

(f) Requires the order canvassing the results of the
confirmation election to contain a description of the
district's boundaries. Requires the order to be filed with
the executive director and in the deed records of the county
or counties in which the district is located.

(g) Requires the temporary board to declare the persons
receiving the highest number of votes for directors to have
been elected as permanent directors.

(h) Requires the directors to decide the initial terms of
office by lot unless otherwise agreed.

(i) Prohibits the provisions of this section from being
applicable to any district exercising the powers of Chapter
375, Local Government Code, or any district created by a
special Act of the legislature that does not require a
confirmation election.

Sec. 49.103. TERMS OF OFFICE OF DIRECTORS. (a) Requires the
district board members to serve four-year terms.

(b) Requires an election to be held on a uniform election
date at a certain time of the year to elect the appropriate
number of directors.

(c) Authorizes the permanent directors to assign a position
number to each director's office, in which each director
shall be elected by position rather than at large.

(d) Authorizes a district to provide for the election of all
directors or a majority of the directors from single member
precincts, which shall be geographically described within
the boundaries of the district in an equitable manner for
the electors within such precincts and the district
generally.

(e) Requires the provisions in Subsection (b) to take
precedence over all prior statutory enactment,
notwithstanding Section 49.002.

Sec. 49.104. ALTERNATIVE ELECTION PROCEDURES. (a)
Authorizes two or more districts situated in the same county
and in which a substantial amount of the land is being or has
been developed as part of a single community development plan
and which are served by common water supply and waste disposal
systems to designate a common election office and common
polling places within one or more of the districts, but
outside the boundaries of one or more of the districts for
early and regular balloting in director elections. Authorizes
this election procedure to be used only if the common election
office and polling places are designated in certain polling
places.

(b) Authorizes such districts to designate a common election
officer and voting officials for some or all of the director
elections to be simultaneously conducted at a common
location, any of whom may be nonelective employees of one or
more of the districts, as long as the voting officials are
qualified within at least one district.

Sec. 49.105. VACANCIES. (a) Requires all vacancies of the
board and other offices to be filled for the unexpired term by
board appointment.

(b) Requires the vacancies to be filled by appointment of
the commission or the county commissioners court if the
number of directors is reduced to fewer than a majority.
Requires an appointed director to serve for the unexpired
term of the replaced director.

(c) Requires the current board members holding the positions
not filled by the election to be deemed reelected and to
serve an additional term if there is a failure to elect one
or more board members due to an absence of or failure to
vote by the qualified voters.

Sec. 49.106. BOND ELECTIONS. (a) Requires an engineer's
report to be filed in the district office and open to the
public showing the cost and plans of the proposed project
before an election is held to authorize the issuance of bonds,
other than refunding bonds.

(b) Requires notice of a bond election to contain the
proposition or propositions which to be voted upon.

(c) Authorizes a bond election to be held on the same day as
any other district election. Authorizes the bond election
to be called by a separate election order or as part of
another election order. Authorizes the board to submit
multiple purposes in a single proposition.

Sec. 49.107. OPERATION AND MAINTENANCE TAX. (a) Authorizes
a district to levy and collect a tax for operation and
maintenance purposes.

(b) Prohibits an operation and maintenance tax from being
levied until approved by a majority of the electors.
Requires the board to be authorized to levy, assess, and
collect the tax after it has been authorized by the voters.

(c) Authorizes an operation and maintenance tax election to
be held at the same time and in conjunction with other
district elections. Authorizes the election to be called by
a separate election order or as part of any other election
order.

(d) Authorizes the proposition in an operation and
maintenance tax to be for a specific maximum or an unlimited
rate.

(e) Authorizes the surplus funds from an operation and
maintenance tax to be used for a lawful purpose.

(f) Requires the district to obtain approval from the
executive director to reimburse a property developer or
assign funds from the operation and maintenance tax funds
for planning construction or acquisition of facilities.

Sec. 49.108. CONTRACT ELECTIONS. (a) Authorizes a contract
to provide that the district will make payment under the
contract from the proceeds from the sale of notes or bonds,
taxes, other district income, or a combination of any of
these.

(b) Authorizes a district to make payments from taxes other
than operation and maintenance taxes after the contact
provisions have been approved by a majority of the electors.

(c) Authorizes a contract election to be held in conjunction
with any other district election. Makes a conforming
change.

(d) Provides that a contract approved by the voters will
constitute an obligation against the taxing power of the
district to the extent provided in the contract.

SUBCHAPTER E. FISCAL PROVISIONS

Sec. 49.151. EXPENDITURES. (a) Authorizes the district
money to be disbursed only by check, draft, order, or other
instrument that shall be signed by at least a majority of the
directors.

(b) Authorizes the board, by resolution, to allow the
general manager, treasurer, bookkeeper, or other employee to
sign disbursements.

(c) Authorizes the board, by resolution, to allow
disbursements to be transferred by federal reserve wire
system to accounts in the district's name.

Sec. 49.152. PURPOSES FOR BORROWING MONEY. Authorizes the
district to borrow money for corporate purposes only in
compliance with certain methods and procedures.

Sec. 49.153. REVENUE NOTES. (a) Authorizes the board to
borrow money on negotiable notes of the district to paid from
the revenues made from the ownership of all or any designated
part of the districts works, plants, facilities, or equipment
after deduction of the reasonable cost of maintaining and
operating the facilities.

(b) Authorizes the notes to be first or subordinate lien
notes within the discretion of the board. Prohibits an
obligation from ever being charged on the property of the
district or on taxes it levies or collects, but shall be
solely a charge on the revenues pledged for the payment of
the obligation. Prohibits any part of the obligation from
ever being paid from taxes levied or collected by the
district.

(c) Prohibits a district from executing a note for a term
longer than three years unless the commission approves the
note.

(d) Makes a conforming change.

Sec. 49.154. BOND ANTICIPATION NOTES; TAX ANTICIPATION
NOTES. (a) Authorizes the board to declare an emergency if
funds are not available to pay principal of and interest on
any bonds of the district payable in whole or part from taxes
or to meet other district needs. Authorizes the board to
issue negotiable tax or bond anticipation notes to borrow the
needed money without advertising or giving notice of the sale.
Requires the bond and tax anticipation notes to mature within
one year of their date.

(b) Requires tax anticipation notes to be issued for any
purpose for which the district is authorized to levy taxes.
Requires tax anticipation notes to be secured with the
proceeds of taxes to be levied by the district in the
succeeding 12-month period. Authorizes the board to
covenant with the note purchasers that the board will levy
a sufficient tax to pay the principal and interest on the
notes and pay the tax collecting costs.

(c) Authorizes bond anticipation notes to be issued for any
purpose for which district bonds have been previously voted
or to be issued to refund previously issued bond
anticipation notes. Authorizes a district to covenant with
the purchasers of the bond anticipation notes that the
district will use the sale proceeds of any bonds in the
issuance process to refund the bond anticipation notes.

(d) Requires districts required to seek commission approval
of bonds to have an application for such approval on file
with the commission prior to bond anticipation notes
issuance.

Sec. 49.155. REPAYMENT OF EXPENSES. (a) Authorizes the
district to pay all costs and expenses incurred in the
organization operation of a district during the creation and
construction periods including certain fees and expenses.

(b) Defines "construction periods."

(d) Authorizes these payments to be made from money obtained
from note issuances, bond sales issued by the district,
maintenance taxes, or other district revenues.

Sec. 49.156. DEPOSITORY. (a) Requires the board, by order
or resolution, to designate at least one bank or savings
association within the state to serve as the depository for
district funds. Prohibits the board from being required to
advertise or solicit bids in selecting its depositories.

(b) Requires funds in the depository banks or savings
associations to be secured in a manner provided by Chapter
2257, Government Code, to the extent that the funds are not
insured by the FDIC.

(c) Authorizes the board to authorize a designated
representative to supervise the securities securing the
district's funds.

Sec. 49.157. INVESTMENTS. (a) Requires all district
deposits and investments to be governed by Chapter 2256A,
Government Code.

(b) Authorizes the board to provide that an authorized
representative of the district may invest and reinvest the
district's funds and provide money to be withdrawn from the
appropriate accounts of the district for the investments.

Sec. 49.158. FISCAL YEAR. Requires the board to adopt a
fiscal year within 30 days after the board becomes financially
active. Authorizes the district to change its fiscal year at
any time. Prohibits it from being changed more than once in
a two-year span. Requires the district to notify the
executive director within 30 days after changing the fiscal
year.

SUBCHAPTER F. ISSUANCE OF BONDS

Sec. 49.181. AUTHORITY OF COMMISSION OVER ISSUANCE OF
DISTRICT BONDS. (a) Prohibits the district from issuing bonds
unless the commission finds the project is feasible and issues
an order allowing bonds to be issued. Prohibits this section
from applying to refunding bonds or bonds issued and approved
by the Farmers Home Administration, U.S. Department of
Agriculture, and the Texas Water Development Board.

(b) Authorizes the district to submit a written application
to investigate feasibility to the commission. Requires an
engineer's report showing plans to be submitted with the
application.

(c) Requires the executive director to examine the
application and report and inspect the project area.
Requires the district on request to supply the executive
director with more information for the examination and
inspection.

(d) Requires the executive director to write a report and
supply suggestions for changes and improvements, if
necessary.

(e) Requires the commission to consider the application,
engineer's report, executive director's report, and any
other evidence allowed by commission rule to help determine
project feasibility.

(f) Requires the commission to determine feasibility of the
project to be funded by bonds and issue an order approving
or disapproving the bond issuance. Requires the commission
to retain a copy of the order and send a copy to the
district.

(g) Authorizes the commission to approve issuance of a
district bonds with submission of plans and improvement
specifications financed by the bonds. Authorizes the
commission to condition approval on terms considered
appropriate by the commission.

(h) Prohibits this section from applying to certain
districts.

Sec. 49.182. COMMISSION SUPERVISION OF PROJECTS AND
IMPROVEMENTS. (a) Prohibits substantial alterations from
being made in plans and specifications without commission
approval in accordance with commission rules.

(b) Authorizes the improvements to be inspected by the
executive director during construction to determine if the
project is following the plans approved by the commission.

(c) Requires the executive director to give written notice
by certified mail to the district manager and each board
member if the executive director finds that the project is
not being constructed according to plan.

(d) Requires the executive director to give written notice
to the attorney general if the board does not take steps to
ensure that the project is being constructed according to
plan within 10 days after it is notified.

(e) Authorizes the attorney general to bring an action for
injunctive relief or quo warranto proceedings against the
directors. Provides that venue for the suit is exclusively
in Travis County.

Sec. 49.183. BOND SALES. (a) Requires bonds issued by a
district, except refunding bonds and or ones sold by state and
federal agencies, to be sold after advertising for and
receiving competitive bids. Requires these bonds to be
awarded to the bidder with the lowest net effective interest
rate of the district.

(b) Requires the board to publish an appropriate notice of
sale in certain publications between the time the bonds are
approved and sold by a district.

(c) Requires the issue to be considered refunding bonds with
no competitive bid needed if the district is issuing bonds
and refunding bonds as one and the principal amount of the
refunding bond is 50 percent or more of the total initial
principal amount of the bonds being issued.

(d) Provides that a district's bonds are negotiable
instruments within the meaning of the Business and Commerce
Code. Authorizes district bonds to be issued and bear
interest. Makes a conforming change.

(e) Provides that Subsections (a) and (b) do not apply to
district bonds issued pursuant to Article 717q, V.T.C.S.

Sec. 49.184. APPROVAL OF BONDS BY ATTORNEY GENERAL;
REGISTRATION OF BONDS. (a) Requires a certified copy of all
proceedings of the organization of the district for first bond
issues, bond issuance, and other information to be sent to the
attorney general before the bonds issued by the district can
be delivered to purchasers.

(b) Requires the attorney general to examine the bonds with
regard to state laws and to approve and certify the bonds if
they conform to state laws and are valid and binding
obligations of the district.

(d) Requires the bonds to be incontestable in any court and
valid and binding obligations in accordance with their terms
after approval and registration by the comptroller.

(e) Authorizes a contract or lease to be submitted along
with bond records to the attorney general. Requires
approval of the bonds by the attorney general to constitute
approval of the contract or lease.

Sec. 49.185. EXEMPTIONS. Makes a conforming change.

SUBCHAPTER G. AUDIT OF DISTRICTS

Sec. 49.191. DUTY TO AUDIT. (a) Requires the board to have
the district's fiscal accounts audited annually at the
district's expense.

(b) Makes a conforming change.

(d) Requires the audit to be completed within 120 days after
the end of the fiscal year.

Sec. 49.192. FORM OF AUDIT. Requires the executive director
to adopt accounting and audit manuals. Requires the district
audit to be performed according to auditing standards set by
the American Institute of Certified Public Accountants
(AICPA). Requires financial statement to be prepared
according to the accepted principles of AICPA.

Sec. 49.193. FINANCIAL REPORTS. Requires the district's
depository, treasurer, bookkeepers, and any others who have
control over district funds to keep an itemized account of
district funds in his possession. Requires these accounts to
be available for audit.

Sec. 49.194. FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
REPORTS. (a) Requires the board to submit a copy of the
approved audit to the executive director for filing within 135
days after the end of the fiscal year.

(b) Requires the board to submit a copy of an unapproved
report to the executive director for filing within 135 days
after the close of the fiscal year accompanied by a
statement explaining the reason for it failure to approve
the report.

(c) Requires copies of the audit, annual financial dormancy
affidavit, or annual financial report (financial reports) to
be filed in the district office.

(d) Requires each district to file an annual filing
affidavit with the executive director in a certain format,
executed by a duly authorized representative of the board
stating that all financial reports have been filed.

(e) Requires the annual filing affidavit to be submitted
with the applicable annual document when submitted to the
executive director for filing.

(f) Requires the executive director to file with the
attorney general the names of any districts that do not
comply with this subchapter.

Sec. 49.195. REVIEW BY EXECUTIVE DIRECTOR. (a) Authorizes
the executive director to review the audit of each district.

(b) Authorizes the commission to request that the state
auditor help establish the standards for review of district
audits by the executive director.

(c) Requires the executive director to notify the board and
the district auditor of any objections to or recommendations
for the generally accepted auditing standards or accounting
principles, statutes or board rules.

(d) Requires the board and the auditor to remedy objections
and correct violations notified by the executive director
before the audit report may be accepted by the executive
director.

(e) Requires the executive director to notify the proper
county or district attorney and the attorney general if the
audit indicates that a penal law has been violated.

Sec. 49.196. ACCESS TO AND MAINTENANCE OF DISTRICT RECORDS.
(a) Requires the executive director to have access to all
vouchers, receipts, district fiscal and financial records, and
other district records.

(b) Requires all district fiscal records to be prepared on
a timely basis and in a manner in accordance with generally
accepted accounting principles. Requires district fiscal
records to be open to public inspection during regular
business hours. Authorizes district fiscal records to be
removed from the district office to record its fiscal
affairs and prepare an audit, during which time the records
are under the district auditor's control.

Sec. 49.197. FINANCIALLY DORMANT DISTRICTS. (a) Sets forth
the composition of a financially dormant district.

(b) Authorizes a financially dormant district to elect to
submit to the executive director a financial dormancy
affidavit (affidavit) instead of complying with the audit
requirements.

(c) Requires the annual affidavit to be prepared in a
certain format and be submitted for filing by a duly
authorized representative.

(d) Requires the affidavit to be filed annually by January
31 with the executive director until the district is
financially active and the board adopts a fiscal year;
thereafter, requires the district to file the audit reports
as prescribed by this subchapter.

(e) Requires a district that becomes financially dormant
after being active to be required to file annual affidavits
by January 31, until the district is dissolved or becomes
financially active again.

(f) Subjects districts governed by this section to periodic
audits by the executive director.

Sec. 49.198. AUDIT REPORT EXEMPTION. (a) Authorizes a
district not collecting taxes to file annual financial reports
with the executive director in lieu of the district's
compliance with Section 49.191 provided that the district
meets certain requirements.

(b) Requires the annual financial report to be accompanied
by an affidavit attesting to the authenticity of the report
signed by a duly authorized representative of the district.

(c) Requires the annual financial report and affidavit to be
in a certain format and filed with the executive director
within 45 days after the end of the district's fiscal year.

(d) Makes a conforming change.

Sec. 49.199. POLICIES AND AUDITS OF DISTRICTS. (a) Requires
the board to adopt certain policies and codes, subject to the
law governing the district.

(b) Authorizes the state auditor to audit the financial
transactions of any district.

Sec. 49.200. REVIEW AND COMMENT ON BUDGET OF CERTAIN
DISTRICTS. Requires a district that provides wholesale
potable water and wastewater services to adopt a program that
provides wholesale customers an opportunity to review and
comment on the district's annual budget that applies to their
services before that budget is adopted by the board.

SUBCHAPTER H. POWERS AND DUTIES

Sec. 49.211. POWERS. (a) Requires a district to have the
functions, powers, authority, rights, duties that allow it
accomplish the purpose for which it was created.

(b) Authorizes a district to improve inside and outside its
boundaries any and all facilities necessary to accomplish
the purpose of its creation.

Sec. 49.212. FEES AND CHARGES. (a) Authorizes a district to
adopt and enforce all necessary charges, fees, or rentals, in
addition to taxes, for providing a district facility or
service.

(b) Authorizes a district to require a deposit for any
services or facilities furnished. Prohibits the district
from providing that a deposit will bear interest.

(c) Authorizes a district to discontinue any or all
facilities or services to prevent an abuse or to enforce
payment of an unpaid charge, fee, or rental due to the
district, including taxes that have been delinquent for at
least six months.

(d) Requires a district that charges an impact fee to comply
with Chapter 395, Local Government Code. Prohibits a
district fee or charge for construction, installation, or
inspection of a tap or connection to district water,
sanitary sewer, or drainage facilities which does not exceed
three times the cost to the district for the work or the
actual costs to the district for the work and all facilities
that are needed to provide district services to a nontaxable
entity and that are to be at least partly financed by tax-supported district bonds from being considered to be an
impact fee.

Sec. 49.213. AUTHORITY TO ISSUE CONTRACTS. (a) Authorizes
a district to contract with a person or a public or private
entity (entity) for the joint construction, financing,
ownership, and operation of any works, improvements,
facilities, plants, equipment, and appliances (works) needed
to accomplish any purpose permitted by a district. Authorizes
a district to purchase an interest in any project used for any
purpose permitted by a district.

(b) Authorizes a district to enter into a contract with any
person or entity in the performance of a purpose permitted
by the district.

(c) Authorizes the district to enter into contracts, which
may be for an unlimited duration, with persons or entities
on terms and conditions the board may consider fair for the
performance of certain services.

Sec. 49.214. CONFLICTS OF INTEREST IN CONTRACTS. Requires
the provisions of Chapter 171, Local Government Code, to apply
to the award of district contracts.

Sec. 49.215. SERVICE TO AREAS OUTSIDE THE DISTRICT. (a)
Authorizes a district to purchase, construct, acquire, own,
operate, repair, improve, or extend (improve) all works
authorized to be provided by the district to areas contiguous
to or in the vicinity of the district provided the district
does not duplicate a service or facility of another entity.
Prohibits a district providing potable water and sewer utility
services to household users from providing services or
facilities to serve areas outside the district that are also
within the corporate limits of a city without securing a
resolution or ordinance of the city granting consent for the
district to serve the area within the city.

(b) Authorizes a district to issue and sell negotiable bonds
and notes payable from the collection of ad valorem taxes on
all taxable property in the district or from all or any
designated part of the revenues received from the operation
of the district's works or from a combination of taxes and
revenues.

(d) Prohibits a district from being required to hold a
certificate of convenience and necessity (certificate) as a
provision of providing retail water or sewer service to any
customer or service area notwithstanding the fact that such
customer or service area may be located within or outside
the boundaries of the district or has previously received
water or sewer service from an entity required by law to
hold a certificate as a precondition for such service.
Provides that this subsection does not authorize a district
to provide services within an area for which a retail public
utility holds a certificate or within the boundaries of
another district without that district's consent, unless the
district has a valid certificate to provide service to that
area.

(e) Authorizes a district to establish, maintain, revise,
charge, and collect the rates, fees, rentals, tolls, or
other charges for the uses, services, and facilities that
provide service to areas outside the district that are
considered necessary and may be higher than those charged
for comparable service to users in the district.

(f) Requires the rates, fees, rental, tolls, or other
charges to be at least sufficient to meet the expenses of
operating and maintaining the services and facilities for a
water and sanitary sewer system serving areas outside the
district and to pay the principal of and interest and
redemption price on bonds issued to improve the services or
facilities.

Sec. 49.216. ENFORCEMENT BY PEACE OFFICERS. (a) Authorizes
a district to contract for or employ peace officers with the
power to make arrests to prevent or abate the commission of
certain offenses.

(b) Authorizes a district to appoint reserve peace officers
to be called by the district to serve during the discharge
of their duties.

(c) Provides that a reserve peace officer serves at the
discretion of the district. Authorizes reserve peace
officers to be called into duty when the district considers
necessary.

(d) Provides that a reserve peace officer on active duty has
the same rights, privileges as any other peace officer of
the district.

(e) Requires any peace officer, before beginning to perform
any duties, and at the time of appointment, to take an oath
and execute a $1,000 bond conditioned on performance of the
officer's duties payable to the district. Requires the oath
and the bond to be filed in the district office.

Sec. 49.217. OPERATION OF CERTAIN MOTOR VEHICLES ON OR NEAR
PUBLIC FACILITIES. (a) Defines "motor vehicle."

(b) Prohibits a person from operating a motor vehicle on a
levee, in a drainage ditch, or land adjacent to a levee,
canal, ditch, exposed conduit, pipeline pumping plant, storm
water facility, or other facility for the transmission,
storage, treatment, or distribution of water, sewage, or
storm water owned or controlled by a district.

(c) Authorizes a district to authorize the use of motor
vehicles on land that it owns or controls by posting signs
on the property.

(d) Provides that this section does not prohibit a person
from driving on a public road or operating a motor vehicle
used for repair or maintenance on a public water, sewage, or
storm water facility.

(e) Provides that a person who operates a motor vehicle in
violation of Subsection (b) commits a Class C misdemeanor,
except that if the person has previously been convicted of
an offense under this section, then the violation is a Class
B misdemeanor.

Sec. 49.218. ACQUISITION OF PROPERTY. (a) Authorizes a
district or water supply corporation (water supply
corporation) to acquire land, materials, waste grounds,
easements, rights-of-way, equipment, contract or permit rights
or interest in other property, real or personal, considered
necessary to accomplish one or more of the water entity's
purposes.

(b) Requires a water supply corporation to have the right to
acquire property by gift, grant or purchase. Requires the
right to acquire property to include property considered
necessary for the construction, improvement, extension,
enlargement, operation, or maintenance of works of a water
supply corporation.

(c) Authorizes a water supply corporation to acquire either
the fee simple title to or an easement on all land, both
public and private, either inside or outside its boundaries
and to acquire the title to or an easement on property other
than land held in fee.

(d) Authorizes a water supply corporation to lease property
from others for its use on terms considered advantageous to
the board of directors of the water supply corporation.

Sec. 49.219. ACQUISITION OF EXISTING FACILITIES. Authorizes
any district to acquire by agreement all or any part of the
existing water, sanitary sewer, or drainage systems of a water
supply corporation, including works and other assets and
rights that are completed, partially completed, or under
construction, and in connection therewith to assume all or any
part of the contracts, indebtedness, or obligations of the
corporation related to said systems, and to perform all or any
part of the obligations of the corporation in the same manner
and to the same extent that any other purchaser or assignee
could be bound on obligations. Requires a district, other
than a river authority, to obtain the approval of the
commission before assuming any indebtedness or obligations of
the corporation related to the system.

Sec. 49.220. RIGHT TO USE EXISTING RIGHTS-OF-WAY. Provides
that all water supply corporations are given rights-of-way for
public rights-of-way without the requirement of surety bond or
security; however, provides that the entity having
jurisdiction over such roads, highways, and rights-of-way may
require indemnification; provides that a district or water
supply corporation shall not proceed with any action to
change, alter, or damage a portion of the state highway system
without having first obtained the written consent of the Texas
DOT; and provides that the placement of any facility of a
district or water supply corporation within state highway
rights-of-way shall be subject to department regulation.

Sec. 49.221. RIGHT TO ENTER LAND. (a) Authorizes the
directors, engineers, attorneys, agents, operators, and
employees of a district or water supply corporation to go on
any land to inspect, make surveys, or perform tests to
determine the condition, value, and usability of the property,
with reference to the proposed location works. Requires the
cost of restoration to be borne by the district or water
supply corporation.

(b) Entitles district employees or agents to enter any
public or private property within the boundaries of the
district or adjacent to any reservoir or other property
owned by the district at any reasonable time for the purpose
of inspecting and investigating conditions relating to the
quality of water in the state or the compliance with any
rule, regulation, permit or other order of the district.
Requires district employees or agents who enter private
property to observe the establishment's rules and
regulations concerning safety, internal security, and fire
protection and to notify any occupant or management of their
presence and to exhibit proper credentials.

Sec. 49.222. EMINENT DOMAIN. (a) Authorizes a district or
water supply corporation to acquire by condemnation any land,
easements, or other property inside or outside the district
boundaries, or the boundaries of the certified service area
for a water supply corporation, necessary for water, sanitary
sewer, storm drainage, or flood drainage, control, or other
purposes and to elect to condemn either the fee simple title
or a lesser property interest.

(b) Requires the right of eminent domain to be exercised in
accordance with Chapter 21, Property Code, with an
exception.

(c) Prohibits the power of eminent domain from being used
for the condemnation of land for the purpose of acquiring
rights to underground water or water rights.

Sec. 49.223. COSTS OF RELOCATION OF PROPERTY. (a) Requires
all necessary relocations, raising, lowering, rerouting, or
change in grade or alteration of construction to be done at
the sole expense of the district or water supply corporation
unless otherwise agreed to in writing if the exercise of
eminent domain makes relocation or other change in
construction necessary. Requires such relocation to be
accomplished in a timely manner so that the project of the
district or water supply corporation is not delayed.

(b) Defines "sole expense."

Sec. 49.224. POWER TO CONDEMN CEMETERIES. (a) Declares the
use of land for the construction of district dams and creation
of lakes and reservoirs for the purpose of conservation and
development of the natural resources of the state to be
superior to all other uses. Provides that only a district has
the power of eminent domain to acquire land, improvements, and
other property owned and held for cemeteries or burial places
necessary for the construction of a dam or that lies inside
the area to be covered by the lake or reservoir within 300
feet of the high water line of the lake or reservoir.

(b) Provides that the procedure in condemnation proceedings
is governed by Chapter 21, Property Code, except as
otherwise provided by this subchapter.

(c) Requires notice to be served on the title owner of the
land on which the cemetery is situated. Requires a general
notice to be given to persons having relatives interred in
the cemetery by publication for two consecutive weeks in a
newspaper circulated in the county in which the cemetery is
situated.

(d) Requires the measure of damages in eminent domain
proceedings to be assessed as in other condemnation cases.
Requires an additional amount of damages to be assessed to
cover the cost of removing and reinterring the interred
bodies and the cost of moving and resetting the monuments or
markers erected at the grave.

(e) Requires additional assessment to be deposited in the
registry of the county court and disbursed only for the
purpose of removing and reinterring the bodies in other
cemeteries in Texas agreed on between the district and the
relatives of the deceased.

(f) Requires the county judge to designate the cemetery for
reinterment if the district and the relatives of the
deceased cannot agree within 30 days on a cemetery for
reinterment, or no relatives appear.

(g) Authorizes the district to execute a bond to cover the
cost of removing and reinterring the bodies. Requires the
bond to be payable to and approved by the county judge and
conditioned that the bodies that the bodies will be removed
and reinterred.

Sec. 49.225. LEASES. Authorizes the district to lease any
of its real or personal property to any person. Authorizes
the lease to contain the terms and provisions considered
advantageous to the district by board.

Sec. 49.226. SALE OR EXCHANGE OF SURPLUS LAND OR PERSONAL
PROPERTY. (a) Authorizes any land, interest in land, or
personal property owned by the district which is found by the
board to be surplus and not needed by the district to be sold
under the order of the board either by public or private sale.
Authorizes the land, interest in land, or personal property to
be exchanged for other land, interest in land or personal
property needed by the district. Requires land, interest in
land, or personal property to be exchanged for like fair
market value, which may be determined by the district, except
as provided by Subsection (b).

(b) Authorizes any property dedicated to or acquired by the
district without expending district funds to be abandoned or
released to the original grantor, grantor's heirs, assigns,
executors, or successors upon terms and conditions deemed
advantageous to the district and without receiving
compensation for such abandonment or release. Authorizes
district property to be abandoned, released, exchanged, or
transferred to another district, municipality, county,
county wide agency, or authority upon terms deemed
advantageous to the district. Authorizes narrow strips of
property resulting from boundary or surveying conflicts or
similar causes, or from insubstantial encroachments by
abutting property owners to be released, exchanged, or
transferred to such abutting owners upon terms and
conditions deemed advantageous to the district. Prohibits
Chapter 272, Government Code from applying to this
subsection.

(c) Requires the district to give notice of the intent to
publicly or privately sell real property by publishing
notice once a week for two consecutive weeks in at least one
newspaper with general circulation in the district.

(d) Requires the proceeds of a property sale not required by
the district to be applied to retire outstanding district
bonds when required by the district's applicable bond
resolutions if the district has outstanding bonds secured by
a pledge of tax revenues.

(e) Authorizes the proceeds of a personal property or land
sale not required by the district to be used for lawful
purposes if the district has no outstanding bonds.

Sec. 49.227. AUTHORITY TO ACT JOINTLY. Authorizes a
district or water supply corporation to act jointly with any
other person or entity, private or public, in the state or the
U.S., in performance of any powers or duties.

Sec. 49.228. DAMAGE TO PROPERTY. Provides that a person who
willfully destroys, defaces, damages, or interferes with
district or water supply corporation property is guilty of a
Class B misdemeanor.

Sec. 49.229. GRANTS AND GIFTS. Authorizes a district to
accept grants, gratuities, advances, and loans in any form
from any source approved by the board. Authorizes the
district to make and enter into contracts and other agreements
the board considers appropriate in connection with the grants
and gifts.

Sec. 49.230. AREA-WIDE WASTEWATER TREATMENT. Grants powers
and duties conferred on the district subject to the policy of
the state to encourage the development and use of integrated
area-wide wastewater collection, treatment, and disposal
systems to serve the water disposal needs of citizens of the
state whenever economically feasible and competitive to do so.
Provides that it is a policy objective to avoid the economic
burden of the people and the impact on the water quality in
the state that results from the construction and operation of
numerous small wastewater collection, treatment, and disposal
facilities to serve an area when an integrated area-wide
wastewater collection, treatment, and disposal system for the
area can be reasonably provided.

Sec. 49.231. STANDBY FEES. (a) Defines "standby fee" and
"undeveloped property."

(b) Authorizes a district that proposes to provide retail
potable water or sewer utility services, or drainage
services as the principal function of the district with the
approval of the commission to adopt and impose on the owners
of undeveloped property in the district a standby fee in
addition to taxes levied by the district. Prohibits a
district from imposing a standby fee for debt service
purposes on undeveloped property unless the facilities and
services available to the property have been financed by the
district. Authorizes a district to impose a standby fee for
operating and maintaining facilities that it has not
financed. Authorizes the district to impose standby fees in
different amounts to reflect the type of services and
facilities available to serve different property. Sets fort
the intent of the standby fees. Requires any revenue
collected from the standby fees to be used to pay operation
and maintenance expenses, or debt service on bonds, or both.

(c) Requires the board to submit to the commission an
application for authority to adopt and impose the standby
fee. Requires the application to describe the tracts of
undeveloped property in the district and state the amount of
the proposed fee.

(d) Requires the executive director to examine the
application and investigate the financial condition of the
district. Requires the district to submit any other
relevant information the executive director considers
relevant to the examination and investigation. Requires the
executive director to prepare a written report on the
application and the district's fiscal condition, retain a
copy of the report, and send a copy of the report to the
commission and the district.

(e) Requires the commission to hold a hearing on an
application submitted under Subsection (c). Requires the
district tax assessor and collector to certify to the
district the names of the persons owning undeveloped land in
the district as shown by the most recent tax roll of the
district on the date the application is filed. Requires the
notice of hearing to be sent to each mortgagee of record
that has submitted a written request to be informed of any
hearings. Sets forth requirements for the notice.

(f) Requires the commission to consider the application, the
report of the executive director, and any other evidence
allowed by commission rule. Authorizes the commission to
approve the application only if it finds that the fee is
necessary to maintain the financial integrity and stability
of the district facilities and services among property
owners of the district.

(g) Requires the commission to issue an order approving or
disapproving the application after a hearing on an
application. Requires the commission to retain a copy of
the order and send a copy to the district.

(h) Authorizes the commission to approve the imposition of
the standby fee for a period of no more than three years.
Authorizes the imposition to be renewed for more periods of
no more than three years each in the same manner provided
for the initial approval of the fee.

(i) Authorizes the board, by order or resolution, to impose
an annual standby fee on undeveloped land in the district.

(j) Authorizes the board to perform certain actions.

(k) Provides that a standby fee is a personal obligation of
the person owning the undeveloped property on January 1 of
the year the fee is assessed. Provides that a person is not
relieved of the obligation on transfer of title to the
property. Provides that a lien attaches to undeveloped
property to secure a payment of the fee imposed and the
interest, if any on the fee, on January 1 of each year.
Provides that the lien has the same authority as a lien for
the taxes of the district.

(l) Authorizes the district to file suit to foreclose the
lien securing payment of the fee and interest or to enforce
the personal obligation for the fee and interest, or both,
if the fee is delinquent. Authorizes the district to also
recover costs incurred by the district in enforcing the lien
or obligation not to exceed 20 percent of the delinquent fee
or interest. Authorizes a suit authorized by this
subsection to be filed not later than the fourth anniversary
of the date the fee became due. Provides that a fee
delinquent for more than four years and its interest are
considered paid unless a suit is filed before the expiration
of the four-year period.

(m) Provides that Chapter 395, Local Government Code, does
not apply to the standby fee imposed under this section.

(n) Provides that standby fees are considered taxes for
purposes of title insurance policies issued under Chapter 9,
Insurance Code.

SUBCHAPTER I. CONSTRUCTION CONTRACTS

Sec. 49.271. CONTRACTS FOR CONSTRUCTION WORK. (a) Requires
contracts for construction work made by the board to conform
to certain provisions.

(b) Requires the contract to contain, incorporate by
reference, have attached the specifications, plans, and
details for work in the contract. Requires all work to be
done according to these plans and any authorized change
orders under supervision of the board or its designee.

(c) Authorizes the board to adopt minimum criteria for
qualifications of the bidders on its construction contracts
and sureties issuing payment and performance bonds.
Requires the district to require a person who bids for
contracts of $25,000 or more to submit a certified or
cashier's check on a bank in the state equal to at least two
percent of the bid, or a bid bond of at least two percent of
the total amount of the bid issued by a surety legally
authorized to business in this state to ensure execution of
the contact. Provides that if a successful bidder fails or
refuses to enter into a contract with the district, or fails
or refuses to furnish the bond, the bidder forfeits the
deposit.

(d) Authorizes the district to require attendance by a
principal of each prospective bidder at mandatory pre-bid
conferences along with any other bid taking requirements to
reduce the possibility of contract disputes.

Sec. 49.272. REPORTS FURNISHED TO PROSPECTIVE BIDDERS.
Requires the board to furnish a copy of the engineer's plans
showing the details of the work to be done to any person
desiring to bid on construction work. Authorizes the board to
charge for each copy of the engineer's report or plans a
sufficient amount to cover the cost of making the copy.

Sec. 49.273. CONSTRUCTION CONTRACT AWARD. (a) Requires the
board to contract for construction in accordance with this
section. Requires the bidding documents and plans needed to
bid to be available at the first time of advertisement.
Requires the advertisement to state the location at which
these documents can be reviewed.

(b) Authorizes a construction contract to cover all or part
of the work to be provided by the district. Authorizes a
contract to provide that the work will be constructed in
stages over a period of years.

(c) Authorizes a construction contract to provide for the
payment of a total sum, based on bids to cover the cost of
units of various elements, or let and awarded in any other
form to responsible persons that will be the most
advantageous for the district and the most economical for
completing its project.

(d) Requires the board to advertise the letting of a
contract for $25,000 or more, including the general
conditions, time, and place of opening of sealed bids.
Requires the first notice to be published at least 21 days
before the date of the opening of the sealed bids. Makes
conforming changes.

(e) Requires the board to solicit written competitive bids
on uniform written specifications from at least three
bidders for contracts between $15,000 and $25,000.

(f) Provides that the board is not required to seek
competitive bids for contracts of less than $15,000.

(g) Prohibits the board from subdividing work to avoid the
advertising requirements.

(h) Prohibits the board from accepting bids with substituted
items unless these items are in the original bid proposal
and all bidders had the opportunity to bid on the items, or
unless notice is given to all bidders at a mandatory pre-bid
conference.

(i) Authorizes change orders in contracts only as a result
of unanticipated conditions during construction, changes in
regulatory criteria, or to facilitate the project.

(j) Provides that these provisions do not apply to certain
contracts.

(k) Provides that these provisions do not apply to high
technology procurements. Requires the provisions of
Sections 252.021(a) and 252.042, Local Government Code, to
apply to high technology procurements.

Sec. 49.274. EMERGENCY APPROVAL OF DISTRICT PROJECTS.
Authorizes the district to negotiate limited duration
contracts to make repairs if the district experiences an
emergency condition that may create a serious health hazard or
unreasonable economic loss (emergency condition) that requires
immediate corrective action. Requires the district to submit
details of the emergency condition to the executive director
after issuing the contracts. Provides that the district
should obtain prior approval from the executive director
before issuing the contract if possible, but failure to do so
does not void the contract. Makes a conforming change.

Sec. 49.275. CONTRACTOR'S BOND. Requires any person, firm,
partnership, or corporation to whom a contract is let to give
good and sufficient performance and payment bonds in
accordance with Chapter 2253, Government Code.

Sec. 49.276. PAYMENT FOR CONSTRUCTION WORK. (a) Requires
the district to pay the contract price of construction
contracts as provided in this section.

(b) Requires the district to make progress payments
(payments) under construction contracts monthly as work
proceeds, or at more frequent intervals as determined by the
board or its designee.

(c) Requires the contractor to furnish a breakdown of the
total contract price showing the amount included for each
principal category of work to provide a basis for
determining payments if requested by the district or its
engineer. Authorizes the district engineer, in the
preparation of estimates, to authorize the material
delivered on site and any preparatory work done to be
considered if the consideration is authorized by the
contract and the contractor provides evidence of acquiring
the title to the material and that it will be utilized on
the work covered by the contract.

(d) Requires 10 percent of the estimated amounts to be
retained until final completion and acceptance of the
contract work in making payments. Authorizes the board to
make the remaining payments in full after it finds that
after 50 percent of the work has been completed that
satisfactory progress is being made. Authorizes the board
to release to the contractor all or a portion of the excess
amount, if the board finds the amount retained at the time
a substantial amount of the work is finished to be in excess
of the adequate protection amount of the district. Provides
that the board is not obligated to pay interest on retained
amounts. Requires the board to pay interest on retainage
from the date the retainage is withheld to the date of
payment to the contractor if the district holds any
retainage on the remaining 50 percent of the work to be
completed. Requires the interest rate paid on the retainage
to be the rate paid by the district's depository institution
on interest bearing accounts of similar amounts during the
period of time in which the interest accrues.

(e) Authorizes a payment to be made without retention of a
percentage upon completion and acceptance of each separate
project, public work, or other contract division.

Sec. 49.277. INSPECTION OF AND REPORTS ON CONSTRUCTION WORK.
(a) Requires the board to have control over contracted
construction work of the district to determine contract
fulfillment. Requires the board to have the work inspected by
the district engineer or other designated person.

(b) Requires the district engineer to submit written reports
during the progress of the construction work showing
contractor compliance with the contract, and to submit a
final report when the project is done including certain
information.

SUBCHAPTER J. ANNEXATION OR EXCLUSION OF LAND

Sec. 49.301. ADDING LAND BY PETITION OF LANDOWNER. (a)
Authorizes the owner or owners of land, whether or not
contiguous to the district, to file a petition with the board
requesting that the owner or owners of land be included in the
district as described in the petition. Authorizes the
petition to condition the annexation on certain conditions.

(b) Authorizes the board to require the petitioner or
petitioners to assume their share of the outstanding or
unissued bonds, notes, or other obligations (obligations) of
the district and authorize the board to levy a tax on their
property in each year while any of the obligations payable
in whole or part from taxation are outstanding to pay their
share of indebtedness.

(c) Requires the landowner's petition to be signed and
executed in the manner provided by law for real estate
conveyance.

(d) Requires the board to hear the petition. Authorizes the
board to add the land in the petition to the district if it
is feasible and advantageous to the district and if the
district's system will be sufficient to supply the added
land without injuring any current district land.

(e) Authorizes the board to issue the unissued bonds even
though the district boundaries have been altered since the
authorizing of the bonds if the petitioners assume the bonds
and authorize the district to levy a tax on their property
to pay the bonds.

(f) Requires granted petitions to be filed for record in the
office of the county clerk of the county or counties in
which the added land is located.

Sec. 49.302. ADDING LAND BY PETITION OF LESS THAN ALL THE
LANDOWNERS. (a) Authorizes defined areas of land, whether or
not contiguous to the district, to be annexed to the district.

(b) Requires a petition requesting annexation of a defined
area signed by the majority in value of the owners of land
in the defined area, as shown by the tax rolls of the
county or counties in which the land is located, or signed
by at least 50 of the landowners if the landowners number
more than 50, to describe the land in a certain way.
Requires the petition to be filed with the secretary of the
board.

(c) Provides that it is a duty of the board to pass an order
declaring the time and place of the annex petition hearing.
Requires the order to be made at least 30 days before the
hearing.

(d) Requires the secretary of the board to issue a notice
setting forth the time and place of the hearing and
describing the proposed annex. Requires the notice to be
given by posting copies of the notice in three public places
in the district and in one public place in the proposed
annexed area for at least 14 days before the hearing day and
by publishing a copy of the notice at least 14 days prior to
the hearing in a generally circulated newspaper in the
county or counties in which the proposed annex area is
located.

(e) Provides that the order adding the proposed territory to
the district need not include all of the land described in
the petition if at the hearing, a modification or change is
made by the board. Makes conforming changes.

(f) Requires a copy of the order annexing land to the
district, signed by a majority of the board members, and
attested by the secretary, to be filed and recorded in the
deed records of the county or counties in which the district
land is located.

(g) Requires the area to be a part of the district after the
order is recorded.

(h) Requires the annexed area to bear its share of all
obligations or taxes that may be owed, contracted, or
authorized by the district.

(i) Requires the board to order an election to be held in
the district, as enlarged by the annexed portion, on the
question of the assumption of the obligations and taxes by
the annexed area before the annexed area is subject to the
obligations created before the district annexed the area.

(j) Authorizes the board to submit a proposition on the
question of whether the annexed area should assume its part
of the district bonds payable in whole or part from taxes
that have not yet been issued and the levy of an ad valorem
tax on all taxable property within the annexed area along
with a tax on the rest of the district for the payment of
bonds.

(k) Makes conforming changes.

(l) Authorizes the board in a separate proposition for the
election called for the purpose of determining whether the
annexed area will assume the bonds, to submit the question
of whether the board should be authorized to issue bonds
payable from taxes to provide service to the annexed area.

(m) Authorizes the board to provide in its order annexing an
area to the district that the annexation will not be
complete or final unless the obligation assumption elections
result favorably to the assumption of the district's
outstanding obligations in the event that district
obligations or taxes that may be owed, contracted, or
authorized at the time an area is annexed or if the district
has unissued bonds at the time of annexation.

(n) Provides that the board may provide in its annexing
order that the annexation will not be complete unless the
election results favorably to the issuance of the bonds to
serve the annexed area, if the board elects to submit the
question of whether the board should be authorized to issue
bonds to provide service to the annexed area.

(o) Makes a conforming change.

(p) Requires the district and board to serve all land in the
district without discrimination.

Sec. 49.303. EXCLUDING LAND FROM DISTRICT. (a) Authorizes
the board to call a hearing on the question of the exclusion
of land from the district if the exclusions are just before a
district orders an election for the authorization of bonds
payable from taxes.

(b) Requires the board to call a hearing on the exclusion of
land or other property from the district on a written
petition of any landowner in the district filed with the
secretary before the first election deciding whether bonds
should be payable from taxes is ordered.

(c) Authorizes the board to hold the land exclusion hearing
if the district has not issued bonds payable from taxes, and
if a landowner submits a signed petition to the secretary of
the board evidencing the consent of the owners of a majority
of the posted acreage proposed to be excluded and a majority
of the taxable property in the district.

d) Prohibits a district that has previously held an election
at which approval was given to issue bonds payable from
taxes from relying on that election for the issuance of the
bonds if between the election and when the bonds are issued,
land is excluded from the district. Requires the board to
call and hold another bond election and receive voter
approval before issuing those bonds.

Sec. 49.304. HEARING TO ANNOUNCE PROPOSED EXCLUSIONS AND TO
RECEIVE PETITIONS. (a) Requires the board to give notice of
a time and place of a hearing to announce its conclusions
relating to land or other property to be excluded and to
receive petitions for exclusion of land or other property if
the board determines that an exclusion hearing should be held
or if a written petition requesting an exclusion hearing is
filed with the secretary.

(b) Makes a conforming change.

(c) Requires the notice to advise all interested property
owners of their right to present petitions for land
exclusions and to offer evidence in support of the petitions
and their right to contest any proposed exclusion based on
either a petition or the board's conclusions and to offer
evidence in support of the contest.

Sec. 49.305. PETITION. (a) Requires a petition for land
exclusion to accurately describe the land in certain
measurements. Requires a petition for exclusion of other
property to describe property to be excluded.

(b) Requires a petition for exclusion to be filed with the
district at least seven days before the hearing and to
clearly state the particular grounds on which the exclusion
is sought. Requires only stated grounds to be considered.

Sec. 49.306. GROUNDS FOR EXCLUSION. Sets forth grounds for
which the territory is authorized to be excluded from the
district.

Sec. 49.307. HEARING AND ORDER EXCLUDING LAND. (a)
Authorizes the board to adjourn the hearing from one day to
another and until all persons desiring to be heard are heard.
Requires the board to immediately describe all property it
proposes to exclude on its own motion and to hear first any
protests and evidence against the proposed exclusions.

(b) Requires the board to determine if the facts disclose
the affirmative of the propositions stated in Subdivisions
(1) and (2) or in Section 49.306(3) after considering all
engineering data and other evidence presented to it.
Requires the board to enter an order excluding all land or
other property falling within the conditions defined by the
respective subdivisions and to redefine in the order the
boundaries of the district to embrace all land not excluded.
Requires a copy of the order excluding land and redefining
the boundaries of the district to be filed in the deed
records of the county or counties in which the district is
situated.

Sec. 49.308. SUIT TO REVIEW EXCLUSION. (a) Authorizes any
person owning an interest in land affected by the order to
file a petition within 20 days after the effective date of the
order to review, set aside, modify, or suspend the order.

(b) Requires the venue in any action to be in any district
court that has jurisdiction in the county in which the
district is located or a major portion of the acreage of the
land sought to be excluded from the district is located if
the district includes land in more than one county.

(c) Authorizes a person to appeal from the judgment or order
of a district court in a suit brought to the court of civil
appeals and supreme court as in other civil cases in which
the district court has original jurisdiction. Subjects the
appeal to statutes and rules of practice and procedure in
civil cases.

Sec. 49.309. EXCLUSION OF NONIRRIGATED PROPERTY. Defines
"nonirrigated property" and "district."

Sec. 49.310. AUTHORITY TO EXCLUDE LAND. (a) Authorizes a
petition for exclusion to be filed by the owner or owners, or
their authorized agent, of a majority of nonirrigated property
included within the district.

(b) Requires a district, upon receipt of an exclusion
petition, to issue an order excluding property if after
notice and hearing the board finds the property meets
certain requirements.

(c) Requires the district to follow the notice and hearing
provisions and other procedural requirements for excluding
territory.

Sec. 49.311. CONSENT FROM HOLDERS OF INDEBTEDNESS. Requires
a written consent from an authorized representative of the
holder or holders of the indebtedness consenting to the
exclusion to be obtained and filed with the district before
the hearing if the district has outstanding bonded
indebtedness or indebtedness under a government loan.

Sec. 49.312. RESULTS OF EXCLUSION. (a) Provides that upon
issuance of an order excluding property, the property is no
longer a part of the district and is not entitled to water
service from the district.

(b) Provides that any taxes, assessments, or other charges
owed to the district at the time of exclusion remain the
obligation of the owner of the excluded property and
continue to be secured by statutory liens on the property,
if any.

(c) Provides that once excluded, the owner has no further
liability to the district for future taxes, assessments or
other charges of the district.

(d) Requires a copy of the order excluding the property from
the district to be certified by the secretary and to be
recorded by the district in the real property records of the
county in which the excluded property is located as evidence
of exclusion.

Sec. 49.313. DISTRICT FACILITIES ON EXCLUDED PROPERTY.
Provides that if any facilities of the district are located on
the excluded property, the exclusion does not affect or
interfere with any rights the district has to maintain and
continue operation of the facilities for servicing lands in
the district.

Sec. 49.314. WATER ALLOCATIONS. (a) Authorizes a city or
other water supply corporation that serves the excluded land
with a potable water supply to petition the district to apply
to the commission to convert the proportionate irrigation
water allocation of the land excluded as nonirrigated property
to municipal use allocation after the district excludes the
nonirrigated property.

(b) Requires the district to take the application to the
commission within 30 days after the filing of the petition
by the city or water supply corporation, provided that the
city or water supply corporation pays the district the
estimated amount of attorney's fees for the commission
conversion proceedings and enters into an agreement with the
district establishing a basis for which the water allocation
will be delivered or made available to the city or water
supply corporation under terms to which the entities will
agree. Prohibits a dispute arising due to a disagreement
between the entities from being subject to the jurisdiction
of the commission, but subject to resolution through
alternative dispute resolution. Requires the city or water
supply corporation to provide evidence to the commission of
the current or five-year projected need for the municipal-use water allocation after such conversion as a condition of
such conversion of use of the district's water rights from
irrigation to municipal use.

SUBCHAPTER K. DISSOLUTION

Sec. 49.321. DISSOLUTION AUTHORITY. Authorizes the
commission, after notice and hearing, to dissolve any district
that is inactive for at least five consecutive years and has
no outstanding bonded indebtedness.

Sec. 49.322. NOTICE OF HEARING. (a) Requires the commission
to give notice of the dissolution hearing and reasons for the
proceeding.

(b) Makes conforming changes.

Sec. 49.323. INVESTIGATION. Requires the executive director
to investigate the facts and circumstances of the district to
be dissolved and write a report which includes the result of
the investigation.

Sec. 49.324. ORDER OF DISSOLUTION. Authorizes the
commission to enter an order dissolving the district at the
end of the hearing if it finds that the district has performed
none of the functions for which it was created for a five year
period and the district has no outstanding indebtedness.

Sec. 49.325. CERTIFIED COPY OF ORDER. Requires the
commission to file a certified copy of the dissolution order
with the secretary of state if the dissolved district was
created by an act of the legislature. Makes conforming
changes.

Sec. 49.326. APPEALS. (a) Requires appeals of the
commission's district dissolving order to be filed and heard
in the district court of the county or counties in which the
land is located.

(b) Requires the appeal trial to be de novo and prohibits
the substantial evidence rule from applying.

Sec. 49.327. ASSETS ESCHEAT TO STATE. Requires all assets
of a district, upon the district's dissolution, to escheat to
the state. Requires all assets to be administered by the
state treasurer and to be disposed of in a certain manner.

SUBCHAPTER L. FIRE DEPARTMENTS

Sec. 49.351. FIRE DEPARTMENTS. (a) Authorizes a district
providing potable water or sewer service to household users to
establish, operate and maintain a fire department (department)
to perform all fire-fighting activities within the district
and may issue, with voter approval, bonds to finance the
establishment of the fire department including certain
provisions.

(b) Requires the district or districts to provide an
adequate system and water supply for fire fighting purposes.
Authorizes the district or districts to construct and
purchase necessary buildings, facilities, and equipment and
to employ all necessary personnel to operate the department
after approval by the voters to operate or jointly operate
a department.

(c) Requires the bonds issued for the establishment of the
department to be authorized and issued. Requires the
district to levy a tax to pay the principal and interest on
the bonds.

(d) Authorizes two or more districts to operate a joint
department for their districts. Requires the districts to
include in the contract specific provisions.

(e) Authorizes a district to contract with any person to
perform fire-fighting services.

(f) Requires the district to comply with the provisions of
Subsections (g)-(i).

(g) Requires the district or districts acting jointly to
develop a detailed plan for the establishment, operation and
maintenance of the proposed department. Requires a district
entering into a contract under Subsection (e) to develop a
plan that describes the equipment and facilities devoted to
the service of the district and all proposals for providing
the service, including the financial requirements of the
contract. Requires the board to hold a hearing at which any
person residing in the district may testify for or against
the proposed plan or contact, before the district adopts a
plan or contract. Makes a conforming change.

(h) Requires the adopted plan or contract to be submitted to
the executive director for consideration by the commission
under rules adopted by the commission. Requires the
commission to hold a hearing before approval or disapproval.
Requires the commission to find that the plan is
economically feasible for the district to implement and meet
the provisions of any contract before the commission
approves the application. Requires the commission to
consider the general financial condition of the district.
Makes a conforming change.

(i) Requires the district, after approval by the commission,
to submit to the voters of the district at the election to
approve bonds for financing the plan, or at an election
called for the approval of the plan, the proposition of
whether the plan should be entered into by the district.
Requires the ballots at the election to be printed to
provide voting for or against the proposition.

(j) Prohibits funds of the district from being used to
establish a department, enter into a joint contract for a
department, or to contract for fire-fighting services
without approval of the plan by the electors. Authorizes
the district to use available funds for the preparation of
a plan and any contract. Provides that the operation of a
department or establishment of a fire-fighting service is an
essential public necessity and authorizes a district to
discontinue any and all services to any person who fails to
timely pay department service fees or any other assessment
adopted by the district to support the department or
provision of the fire-fighting services.

SUBCHAPTER M. NOTICES, REPORTS, AND BANKRUPTCY

Sec. 49.451. POSTING SIGNS IN THE DISTRICT. (a) Requires a
district subject to the notice requirements in Section 49.452
to post signs indicating the existence of the district at two
principal entrances to the district within 30 days of the
effective date of this Act.

(b) Requires the size and exact location of the information
on the signs to be determined by the executive director.

Sec. 49.452. NOTICE TO PURCHASERS. (a) Requires any person
who proposes to sell or convey real property located in the
district to first give the purchaser the written notice
provided in this section. Prohibits the provisions in this
section from being applicable to certain transfers of title.

(b) Sets forth the prescribed notice for all districts.
Requires the notice to be executed by the seller.

(c) Requires the required notice to be given to the
prospective purchaser prior to execution of a sale and
purchase contract either separately or as an addendum
paragraph of a purchase contract. Entitles the purchaser to
terminate the contract if the seller did not provide the
notice. Provides that it shall be presumed that if the
seller does not timely furnish the notice prior to execution
of the contract and the purchaser elects to close the sale,
the purchaser has waived all rights to terminate the
contract and recover damages. Prohibits all sellers, title
companies, examining attorneys, and any agent,
representative, or person (agent) acting on their behalf
from being liable for any damages to any person for failure
to provide the notice to a purchaser prior to execution of
a sale and purchase contract when the district has not filed
the information form and map or plat.

(d) Requires the purchaser to sign the notice or purchase
contract including the notice.

(e) Requires, at the time of closing the purchase and sale,
a separate copy of the notice with current information to be
executed by the seller and purchaser and recorded in the
deed records of the county or counties in which the property
is located. Entitles all sellers, title companies, and
examining attorneys, and any agent acting on their behalf to
rely on the information form and map or plat as last filed
by each district or the information on the notice form
issued by the district. Requires any of this information to
be presumed as a matter of law to be correct.

(f) Requires an executory contract of purchase and sale
having a performance period of more than six months to be
considered a sale.

(g) Sets forth requirements of the notice form.

(h) Prohibits a purchaser, heirs, successors, or assigns
from being entitled to maintain any action for damages or
maintain any action against a seller, title insurance
company, lienholder or agent by reason of use by the seller
of the information filed for record by the district on
reliance by the seller on the filed plat and filed legal
description of the district in determining whether the
property to be sold and purchased is within the district.
Prohibits an action from being maintained against any title
company for failure to disclose the inclusion of the
described real property within a district when the district
has not filed for record the form and map or plat with the
clerk of the county or counties in the which the district is
located.

(i) Requires any purchaser who purchases any real property
in a district and who then sells or conveys the same to, on
closing of a subsequent sale, be considered as having waived
any prior right to damages.

(j) Requires all sellers, title insurance companies,
examining attorneys, vendors of property and tax
information, real estate brokers and lienholders, and agents
to be entitled to rely on the accuracy of the information
form and map or plat as last filed by the district.

(k) Authorizes the purchaser to bring a suit for damages if
any sale of real property within a district is not made in
compliance with this section.

(l) Authorizes a purchaser of real property to bring a suit
for damages in an amount of all costs relative to the
purchase of property plus interest and attorney fees.
Authorizes the suit for damages to be instituted jointly or
severally against the person or other legal entity that sold
or conveyed the property to the purchaser. Requires the
amount of damages to first be paid to satisfy all unpaid
obligations on each outstanding lien or liens on the
property. Requires the rest of the damages to be paid to
the purchaser. Requires the purchaser to reconvey the
property to the purchaser on payment of damages to the
lienholders and purchaser.

(m) Authorizes a purchaser of real property, if the sale or
conveyance of the property is not made in compliance with
this section, to institute a suit for damages in an amount
not to exceed $5,000, plus reasonable attorney's fees.

(n) Provides that a purchaser is not entitled to recover
damages and entry of a final decision awarding damages to a
purchaser and to preclude the purchaser from recovering
damages. Requires the relief to be the exclusive remedies
for a purchaser aggrieved by a seller's failure to comply
with the provisions of this section. Prohibits any action
for damages from applying to, affecting, altering, or
impairing the validity of any existing vendor's lien,
mechanic's lien, or deed of trust lien on the property.

(o) Requires a suit for damages to be brought within 90 days
after the purchaser receives the first district tax notice
or within four years after the property is sold or conveyed
to the purchaser, whichever time occurs first, or the
purchaser loses the right to seek damages.

(p) Sets forth certain circumstances when a person is
prohibited from recovering damages.

Sec. 49.453. NOTICE FORM FROM DISTRICT. (a) Requires a
district to also maintain in the district office the
particular form of Notice to Purchasers (notice form) to be
furnished by a seller to a purchaser of real property and,
upon request of any person, issue the notice form completed by
a district with all information required to be furnished by
the district. Requires a notice form issued by the district
to include a written statement containing certain information.
Prohibits a district from being required to orally provide the
information.

(b) Authorizes a district to charge a fee not to exceed $10
for the issuance of the notice form. Requires the notice to
be delivered by regular mail or made available at the
district office. Authorizes the district to impose a charge
not to exceed the actual cost of a delivery if the district
is requested to deliver the notice by an alternative method.

(c) Authorizes the district to delegate the responsibility
for issuance of a notice form to an employee or agent of the
district. Requires the district to file with the commission
the name, address, and telephone number if the employee or
agent of the district responsible for issuance of the notice
forma and to notify the commission in writing within seven
days after there is a change to the required information to
be filed.

(d) Requires any notice issued by a district to contain the
information effective as of the date of its issuance.

Sec. 49.454. NOTICE OF UNPAID STANDBY FEES. (a) Requires a
district, on the written request of any person, to issue a
certificate stating the amount of any unpaid standby fees that
have been assessed against a tract of property in the
district. Authorizes the district to charge a fee not to
exceed $10 for each certificate. Provides that a certificate
issued through fraud or collusion is void.

(b) Provides that if the district issues a certificate
containing an erroneous statement and the owner of the
property transfers the property to a good faith purchaser
for value, the lien on the property is extinguished to the
extent of the error.

(c) Provides that this section does not affect the liability
for any unpaid standby fees of the former owner of the
undeveloped property.

Sec. 49.455. FILING INFORMATION. (a) Requires the board to
file with the county clerk in each of the counties in which
the district is located information form that includes the
information required under Subsection (b) and the map or plat
showing district boundaries.

(b) Requires the information form filed by a district to
include specific information.

(c) Requires the information form and map or plat required
by this section to be signed by a majority of the members of
the board and by each officer affirmed and acknowledged
before it is filed with the county clerk. Requires each
amendment to an information form or map to be signed by the
members of the board and each officer before it is filed
with the county clerk.

(d) Requires the information form required by this section
to be filed with the county clerk within a certain time.
Defines "officially created."

(e) Requires the district to file an amendment to the
information form, map, or plat within seven days after a
change is made.

(f) Requires any person who affirms the corrections and
accuracy of an information form, map, plat, or proceeding
amendments which include incorrect information to be guilty
of a misdemeanor and to be fined between $100 and $1,000 for
each violation.

(g) Authorizes the executive director to request the state
attorney general or the district or the county attorney of
the county in which the district is located to seek a writ
of mandamus to force the board to prepare and file the
necessary information if the district has already failed to
file the information in the time required.

(h) Requires a member of the governing board who willfully
fails and refuses to join in filing an information form,
map, plat, or proceeding and amendment to be guilty of a
misdemeanor and to be fined between $100 and $1,000 for each
violation. Provides that a member of a governing board is
presumed to have willfully refused or failed to join in the
filing of an information form, map, plat, or an amendment if
the member was present at the meeting at which the
information was included in the form, map, plat, or
amendment was adopted.

(i) Requires the members of the board of a district that was
dissolved, annexed to a local government, or consolidated to
another district to file a statement of this fact together
with the effective date of the dissolution, annexation, or
consolidation with the information form. Provides that
after the district is dissolved and the statement is filed,
a person who sells or conveys property within the dissolved
district is not required to give notice.

(j) Requires a copy of all information forms, maps, plats,
and amendments filed under this section to also be filed
with the executive director.

Sec. 49.456. BANKRUPTCY OF DISTRICTS; AUTHORITY OF
COMMISSION. (a) Prohibits a district created under Articles
III and XVI, Texas Constitution, that is subject to the
commission's supervision from proceeding under Chapter 9 of
the Federal Bankruptcy Code or any other law enacted by
Congress under federal bankruptcy authority until the
commission authorizes the district to proceed under those laws
by a written order, notwithstanding certain state law.

(b) Requires a district requesting the commission's
authorization to proceed under Chapter 9 of the Federal
Bankruptcy Code or any other federal bankruptcy law to file
an application with the commission requesting authorization.

(c) Requires the commission to investigate the financial
condition of a district. Authorizes the commission to
require a district to submit any information that the
commission considers material to a determination of whether
authorization to proceed in bankruptcy should be granted.

(d) Prohibits the commission from authorizing a district to
proceed in bankruptcy unless the commission determines that
the district cannot expect to meet its debts and other
obligations as they mature.

(e) Requires the commission to adopt and assess necessary
fees to recover the commission costs for administering this
section.

SECTION 3. Amends Title 4, Water Code, by adding Chapter 59, as
follows:

CHAPTER 59. REGIONAL DISTRICTS

SUBCHAPTER A. DISTRICT CREATION

Sec. 59.001. PURPOSE AND APPLICATION. (a) Sets forth the
purpose of this chapter.

(b) Applies this chapter to counties with a population of at
least 2.2 million according to the most recent federal
census, or bordering a county with a population of at least
2.2 million.

Sec. 59.002. DEFINITIONS. (a) Defines "district,"
"municipal district," and "bond."

(b) Provides that others terms not defined by this chapter
have the same meaning assigned to those terms by Section
49.001.

Sec. 59.003. CREATION OF DISTRICT. (a) Sets forth methods
by which a district may be created.

(b) Requires petitions for the creation of the district to
contain certain information.

(d) Makes Section 54.013 applicable to the composition of
districts created under this chapter.

Sec. 59.004. PURPOSES OF DISTRICT. Sets forth the purposes
of the district.

Sec. 59.005. MATCHING FUNDS GUARANTEES. Prohibits funds set
aside as a condition for matching funds of the Texas Water
Development Board (TWDB) to receive a loan from the TWDB from
being provided through a guarantee of matching funds by any
individual who has a financial interest in the regional
district or who will receive any direct financial benefit from
a regional district project.

Sec. 59.006. CONSENT OF A CITY. (a) Prohibits land in the
corporate limits or extraterritorial jurisdiction of a city
from being included in a district unless the city grants its
written consent by resolution or ordinance to the inclusion of
the land in the district.

(b) Authorizes the person or entity desiring to create the
district to petition the city's governing body to make
available the water, sewer, or drainage service contemplated
to be provided by the district if the city's governing body
fails or refuses to grant permission for the inclusion of
land in its extraterritorial jurisdiction in a district
within 120 days of receiving the written request.

(c) Provides that failure of the city's governing body and
the requesting district to execute an agreeable contract
providing for the service requested within six months after
receipt of a consent request constitutes authorization for
land inclusion into the district. Provides that
authorization for the land inclusion into the district means
only authorization to initiate proceedings to include the
land in the district.

(d) Prohibits Sections 54.016(e)-(h) from applying under
this chapter.

Sec. 59.007. GRANTING OR REFUSING PETITION; EXCLUSION OF
TERRITORY. (a) Requires the commission to issue an order
granting a petition for creation if after the petition hearing
the commission finds that the petition conforms to the
requirements of this chapter and that the creation of the
district would benefit the territory to be included in the
district. Requires the commission to exclude the territory
from the proposed district and redefine the boundaries of the
proposed district if the territory will not benefit from
inclusion in the district.

(b) Requires the commission to issue an order denying the
petition or requiring the petitioners to amend their
petition if the commission finds that the petition does not
conform to the requirements.

(c) Requires a copy of the order of the commission granting
or denying a petition to be mailed to each city having
extraterritorial jurisdiction in the county or counties in
which the district is to be located that has requested
notice of hearings.

SUBCHAPTER B. ADMINISTRATIVE PROVISIONS

Sec. 59.021. DIRECTORS. (a) Requires the commission to
appoint temporary directors to serve until permanent directors
are elected.

(b) Authorizes a petition requesting creation to provide
that the directors be elected by precinct.

(c) Provides that the board of directors is composed of five
members unless the petition requests and the commission
approves a seven-member board.

(d) Requires directors to be elected in accordance with
Chapter 49.

(e) Sets forth the election requirements for directors if
the creation petition has requested the election of seven
directors.

(f) Authorizes the persons or entities that petitioned for
the creation or 50 qualified voters of the district to file
a petition with the commission requesting the board to
expand to seven members. Requires the commission to appoint
two temporary directors if the commission grants the
petition. Sets forth the terms of the temporary directors.

(g) Requires four of seven directors to constitute a quorum
and a concurrence of four directors is necessary in all
matters pertaining to the district's business.

(h) Authorizes a petition for creation of a district to
request that the board be elected to represent a geographic
area. Requires the commission to establish precincts from
which the directors are to be elected if the creation
petition is granted. Requires the commission to attempt to
have directors to represent a geographic area with equal
numbers of people and to comply with the Federal Voting
Rights Act when establishing the precincts. Requires the
board of directors to revise the precincts from time to
time.

Sec. 59.022. ABILITY TO SET RATES. Authorizes the district
to charge rates to persons and entities outside the district's
boundaries on terms, rates, and charges determined by the
board of directors. Requires the board to set rates for out-of district customers to enable it to meet operation and
maintenance expenses and to pay the principal and interest on
debt issued in connection with providing service and to
provide a reasonable reserve for replacements to the district.
Authorizes the district to take into account past operation
and debt service expenses in setting rates.

Sec. 59.023. ISSUANCE OF BONDS. Authorizes the district to
issue bonds for purchasing, maintaining, and operating any
district works and facilities needed to accomplish the purpose
of the district. Requires a confirmation election to be held
and a majority of voters to approve the establishment of the
district before issuing bonds.

Sec. 59.024. EXCLUSION OF CERTAIN MUNICIPAL DISTRICTS. (a)
Authorizes a municipal district to be excluded from the
district.

(b) Requires the board of directors of the municipal
district to adopt a resolution requesting the exclusion by
a majority vote of its board and to file the petition with
the directors of the proposed district before the first
confirmation election to be excluded.

(c) Requires, at the time of the confirmation election, a
separate voting precinct to be used for the qualified voters
of each municipal district that has filed a petition
requesting exclusion. Requires votes in each precinct to be
tallied separately to determine whether the municipal
district will be excluded.

(d) Prohibits the votes cast in the conformation election
from being counted for the confirmation election, bond
election, or maintenance tax election and that municipal
district must be excluded from the boundaries of the
district by the board of directors at the time the results
of the election are canvassed, if a majority of the votes
cast in a municipal district request an exclusion vote.

(e) Requires the district board of directors, after the
confirmation election at which the district is authorized to
be created, to adopt an order redefining the district
boundaries to exclude those municipal districts petitioning
for exclusion that have voted against the district's
confirmation.

(f) Authorizes any municipal district located within the
proposed district, before the creation hearing, to petition
the commission for a separate voting precinct to be used
within the petitioning district's boundaries at the time of
the district's confirmation election. Makes Subsections
(c)-(e) applicable if the commission grants the petition
requesting a separate voting precinct.

Sec. 59.025. CONFIRMATION ELECTION. (a) Requires a
confirmation election to be held within the proposed
district's boundaries before a district can be created
pursuant to a petition granted by the commission.

(b) Requires the commission-appointed directors to call and
hold the confirmation election in accordance with Chapter
49. Provides that the provisions of those sections relating
to director's elections do not apply to an election under
this section.

(c) Prohibits subsequent confirmation elections from being
held after the district creation was defeated in the first
election.

(d) Authorizes a bond election, maintenance tax election,
and any other election to be held in conjunction with a
confirmation election.

SUBCHAPTER C. ADDING OR EXCLUDING TERRITORY; DISSOLUTION

Sec. 59.051. ADDING LAND BY PETITION OF LESS THAN ALL
LANDOWNERS. Authorizes defined areas of land to be annexed to
the district according to Chapter 49 or Section 59.052.

Sec. 59.052. FILING OF PETITION. Requires a petition
requesting annexation of a defined area that is signed by a
majority in value of the owners of the land, that is signed by
50 of the landowners if the number of landowners is more than
50, that is signed by the single land owner of 2,000 or more
acres in the area, or that is signed by a majority of the
governing body of a municipal district, county, or a city
requesting annexation to be filed with the board secretary.

Sec. 59.053. DISSOLUTION OF DISTRICT BEFORE ISSUANCE OF
BONDS. (a) Authorizes the board to dissolve the district and
liquidate the affairs of the district if the board considers
it advisable before issuing bonds.

(b) Authorizes the board to issue notice of hearing on a
proposal to dissolve the district if a majority of the board
finds at any time before the authorization of bonds that the
proposed district and its activities are impracticable.

Sec. 59.054. JUDICIAL REVIEW OF BOARD'S ORDER. Authorizes
the board's order to dissolve the district to be judicially
reviewed.

SUBCHAPTER D. MISCELLANEOUS

Sec. 59.071. ANNEXATION OR INCORPORATION BY CITY. (a)
Requires the city to succeed to the powers, duties, assets,
and obligations of the district if the city annexes or
incorporates all or any part of a territory within a district.

(b) Requires the city to assume a pro rata share of ad
valorem taxes incurred for water, sewer, or drainage
purposes or any combination of the three upon annexation or
incorporation of any part of the territory of the district
by a city. Sets forth the formula for determining the
percentage of assumption.
(c) Prohibits a district from levying taxes on territory
annexed or incorporated by a city, and provides that the
territory is no longer considered to be a part of the
district.
(d) Requires the governing body of the city to levy and
collect taxes on all taxable property in the city or provide
other funds to pay the city's pro rata share of the
principal and interest on the debt if any is assumed.
(e) Requires the district to be dissolved if a city annexes
or incorporates an entire district.
(f) Provides that Section 43.071, Local Government Code,
does not apply to the annexation of a district created
pursuant to this chapter.
Sec. 59.072. OTHER LAWS. (a) Provides that this chapter
prevails over any other law in conflict with or inconsistent
with this chapter.

(b) Sets forth sections of the Water Code that apply under
this chapter.
(c) Provides that Section 54.019(e), Water Code, does not
apply to a district governed by this chapter.

SECTION 4. Amends Section 51.0711, Water Code, to make a
nonsubstantive change.

SECTION 5. Amends Section 51.072, Water Code, to require a person
to be at least 18 years old, among other qualifications, to be
eligible for election as a director of the board of a water control
and improvement district. Provides that Section 49.052 does not
apply to a district governed by this chapter whose purpose is
providing water for irrigation.

SECTION 6. Amends Section 51.076(a), Water Code, to make a
conforming change.

SECTION 7. Amends Section 51.750(d), Water Code, to make a
conforming change.

SECTION 8. Amends Section 52.005, Water Code, by adding Subsection
(c), to provide that Sections 49.052, 49.216, and 49.301-49.308 do
not apply to underground water conservation districts governed
under this section.

SECTION 9. Amends Section 52.115, Water Code, to delete existing
Subdivisions (b) and (c) relating to the attendance and
notifications of meetings of the board of directors of an
underground water conservation district. Makes a conforming
change.

SECTION 10. Amends Sections 52.294(c)-(e), Water Code, as
follows:

(c) Deletes existing Subsection (c) concerning the notice of
elections. Redesignates existing Subsection (d). Makes a
nonsubstantive change.

(d) Redesignates existing Subsection (e).

SECTION 11. Amends Section 53.040, Water Code, to make
conforming changes.

SECTION 12. Amends Section 53.042, Water Code, to provide that
newly elected supervisors hold office until the next supervisor's
election, rather than the first general election.

SECTION 13. Amends Section 53.062, Water Code, to make
conforming changes.

SECTION 14. Amends Section 53.088, Water Code, to delete
existing Subsection (b) to authorize the fresh water supply
district to sue and be sued and require the courts to recognize the
district. Makes a conforming change.

SECTION 15. Amends Section 53.172, Water Code, to delete
language requiring the board of supervisors of a fresh water supply
district to set the bond election at a certain time.

SECTION 16. Amends Section 54.025, Water Code, to make a
conforming change.

SECTION 17. Amends Section 54.036, Water Code, to delete
language providing for the replacement of the municipal utility
district board members with municipal utility board members.

SECTION 18. Amends Section 54.203, Water Code, as follows:

Sec. 54.203. New heading: MUNICIPAL SOLID WASTE. Authorizes
a municipal utility district to purchase, construct, acquire,
own, operate, maintain, repair, improve, extend, or a
establish a municipal solid waste and collection and disposal
system.

SECTION 19. Amends Section 54.729(a), Water Code, to make a
nonsubstantive change.

SECTION 20. Amends Section 54.730(a), Water Code, to make a
nonsubstantive change.

SECTION 21. Amends Section 54.732, Water Code, to make a
nonsubstantive change.

SECTION 22. Amends Section 54.733, Water Code, to make a
nonsubstantive change.

SECTION 23. Amends Chapter 54, Water Code, by adding Sections
54.739-54.747, as follows:

Sec. 54.739. SUBSTITUTING LAND OF EQUAL ACREAGE AND VALUE.
Authorizes land within the district subject to taxation that
does not need or utilize the services of the district to be
excluded from the district and other land not in the
boundaries of the district to be included in the district
after the district is organized, and votes, issues and sells
bonds.

Sec. 54.740. REQUISITES FOR APPLICATION OF EXCLUSION.
Authorizes an owner of land in the district not receiving
services from the district to apply for exclusion from the
district if all district taxes on the land have been paid.
Requires the application to contain certain information about
the land proposed for exclusion. Requires the application to
be verified in a recordable form as conveyance of real
property.

Sec. 54.741. INCLUSION OF SUBSTITUTE LAND REQUIRED.
Provides that an application for exclusion of land can only be
considered by the board if there is an application for
inclusion of land that can be reasonably served by the
district, is of at least equal value to the land proposed for
exclusion. Requires such land to be included at the same time
as the proposed exclusion will occur. Requires such land to
be of sufficient acreage to avoid an impairment of the
security for payment of voted and issued bonds and any other
contract obligations payable or secured by ad valorem taxes or
district revenues.

Sec. 54.742. APPLICATION FOR INCLUSION. Requires the
application for land proposed for inclusion to provide that an
owner of the new land assumes the payment of all taxes,
assessments, and fees levied by the district after the date of
inclusion. Requires the application to also provide an
agreement by the owner of the land proposed for inclusion that
the land will be subject to future taxes for bond tax and
other future assessments and fees levied by the district and
be subject to the same liens, provisions, and statutes
governing all other lands in the district as though the land
was incorporated originally in the district. Makes a
conforming change.

Sec. 54.743. NOTICE OF HEARING AND HEARING PROCEDURES.
Requires the board to give notice to hearings on applications
for exclusion and inclusion in conformity with notice and
hearing requirements applicable to exclusions or additions of
land. Requires the board at the hearings to hear all
interested parties and evidence connected to the applications.

Sec. 54.744. IMPAIRMENT OF SECURITY. Requires the lands
proposed for inclusion to be deemed to be sufficient to avoid
an impairment of the security for payment of obligations, for
purposes of the board's consideration of applications for
inclusion, if the tax value and costs of the land meet certain
requirements.

Sec. 54.745. BOARD'S RESOLUTION TO SUBSTITUTE. Authorizes
the board to adopt and enter into its minutes a resolution and
order excluding all or part of the land proposed for exclusion
and including all or part of the land proposed for inclusion
if the board finds that all of the conditions provided for
land inclusion and exclusion exist, and it is in the
district's best interest to grant the applications. Requires
the district to have received all payments with any associated
penalties and interest due in respect to the excluded land and
if no ad valorem taxes or fees have been established by the
district, an estimated amount determined by the district to
equal the estimated tax and standby for the current year,
prorated to the date of exclusion shall also be paid prior to
the effective date of exclusion and inclusion.

Sec. 54.746. LIABILITY OF EXCLUDED AND INCLUDED LAND.
Provides that the land excluded from the district is free from
any lien or liability created on the excluded land because it
has been in the district.

Sec. 54.747. SERVICE TO INCLUDED LAND. Provides that the
district has the same right and obligation to furnish service
to the included land that it previously had to furnish to the
excluded land.

SECTION 24. Amends Section 55.101, Water Code, to make a
nonsubstantive change.

SECTION 25. Amends Section 55.102, Water Code, to make a
conforming change.

SECTION 26. Amends Section 55.721, Water Code, to make a
conforming change.

SECTION 27. Amends Section 56.064, Water Code, to delete
existing Subsections (b)-(d) relating to the procedures for
electing directors to the board of a drainage district. Makes a
conforming change.

SECTION 28. Amends Section 57.053, Water Code, to delete
existing Subsection (a) requiring each director to hold office for
a two-year term. Redesignates existing Subsections (b) and (c).
Makes nonsubstantive changes.

SECTION 29. Amends Section 57.060, Water Code, to require a
petition signed by at least 100, rather than 25, electors in the
levee improvement district, rather than each county commissioners
precinct, who are qualified to vote to be presented to the district
requesting an election to determine whether directors, rather than
the county judge, should be elected, and if so, to elect directors
to serve until the next regular director election, rather than an
election for state and county officers.

SECTION 30. Amends Section 57.061, Water Code, to require the
board of directors of the levee improvement district, rather than
the county judge, to order an election after the petition is
presented under Section 57.060. Deletes existing Subsections (b)-(e) relating to election guidelines.

SECTION 31. Amends Section 57.207, Water Code, to require the
board of directors of a levee improvement district, rather than the
commissioners court of jurisdiction to enter an order declaring
election results in the minutes. Deletes existing Subsections (a)-(c) relating to vote return requirements.

SECTION 32. Amends Section 58.072, Water Code, to prohibit a
person wishing to qualify for the board of directors of an
irrigation district election from owing delinquent taxes or
assessments to the district, among other requirements. Provides
that Section 49.052 does not apply to an irrigation district
governed by this chapter.

SECTION 33. Amends Chapter 60A, Water Code, by adding Section
60.002, as follows:

Sec. 60.002. AUDIT. Requires Chapter 49G, to apply to
navigation districts governed by this chapter.

SECTION 34. Amends Chapter 60M, Water Code, by adding Section
60.350, as follows:

Sec. 60.350. BONDS. Requires Sections 49.181 and 49.183 to
apply to bonds supported by taxes and issued by navigation
districts governed by this chapter.

SECTION 35. Amends Section 65.103, Water Code, to delete
existing Subsections (d) and (e) relating to election requirements
for the board of directors of a utility district.

SECTION 36. Amends Chapter 65, Water Code, by adding Section
65.235, as follows:

Sec. 65.235. PROHIBITION ON ASSESSMENT OR COLLECTION OF
TAXES. Provides that Section 49.107 does not apply to a
utility district created under this chapter.

SECTION 37. Amends Section 66.101, Water Code, to make a
conforming change.

SECTION 38. Amends Section 66.310(b), Water Code, to make a
conforming change.

SECTION 39. Repealer: Chapter 50, Water Code (Provisions
Generally Applicable to Districts), except that Chapter H is
continued for the purpose of administration and operation of
contracts created or issued under those laws.

SECTION 40. Repealer: Sections 51.033, 51.034, 51.073-51.074,
51.077-51.084, 51.0851, 51.087-51.089, 51.091-51.101, 51.122-51.124, 51.126, 51.131, 51.132, 51.136-51.138, 51.140-51.146,
51.149, 51.183, 51.191-51.193, 51.221-51.224, 51.231-51.279,
51.354-51.363, 51.371-51.374, 51.412, 51.416-51.418, 51.421,
51.422, 51.4321, 51.4371, 51.601, 51.691-51.701, 51.714-51.731, and
51.737-51.747, Chapter 51, Water Code (Water Control and
Improvement Districts, relating to the creation of a water control
and improvement district, creation of its board of directors, and
the boards powers and duties, including bond issuance and tax
assessment).

SECTION 41. Repealer: Sections 52.104, 52.107-51.114, 52.116-52.118, 52.119-52.121, 52.157, 52.251-52.253, 52.259-52.262, and
52.297, Chapter 52, Water Code (Underground Water Conservation
Districts, relating to powers and duties of the board of directors
of an underground water conservation district).

SECTION 42. Repealer: Sections 53.020, 53.022, 53.023, 53.025-53.028, 53.035-53.039, 53.064, 53.065, 53.067-53.070, 53.0721,
53.076, 53.077, 53.084-53.087, 53.089, 53.090, 53.105, 53.106,
53.108-53.111, 53.114, 53.117-53.120, 53.123-53.125, 53.141-53.144,
53.147, 53.148, 53.173-53.175, 53.1791, 53.197, 53.198, and 53.231-53.273, Chapter 53, Water Code (Fresh Water Supply Districts,
relating to the creation of a fresh water supply district, its
board of directors, the board's powers and duties, and the
inclusion and exclusion of territory).

SECTION 43. Repealer: Sections 54.026-54.029, 54.103-54.126,
54.202, 54.204, 54.209-54.233, 54.301-312, 54.506, 54.507(a),
54.509, 54.5121, 54.513, 54.516, 54.517, 54.519, and 54.701-54.727,
Chapter 54, Water Code (Municipal Utility Districts, relating to
the creation of a municipal utility district, its board of
directors, the board's powers and duties, inclusion and exclusion
of territory).

SECTION 44. Repealer: Sections 55.030, 55.033-55.036, 55.052,
55.104-55.106, 55.109, 55.111-55.116, 55.118-55.128, 55.162,
55.164, 55.168-55.184, 55.189-55.191, 55.199, 55.203, 55.252,
55.291-55.304, 55.331, 55.423-55.430, 55.451, 55.453, 55.492-55.496, 55.503, 55.506, 55.711-55.720, and 55.722-55.749, Chapter
55, Water Code (Water Improvement Districts, relating to the
creation of a water improvement district, its board, the board's
powers and duties, eminent domain, fiscal affairs, and inclusion
and exclusion of land).

SECTION 45. Repealer: Sections 56.027-56.031, 56.062, 56.063,
56.065-56.068, 56.076-56.081, 56.083, 56.113, 56.114, 56.119,
56.129-56.134, 56.136, 56.138, 56.139, 56.183, 56.184, 56.2045, and
56.714-56.725, Chapter 56, Water Code (Drainage Districts, relating
to creation of a drainage district, its board of directors, the
board's powers and duties, and inclusion and exclusion of
territory).

SECTION 46. Repealer: Sections 57.052, 57.054-57.056, 57.062-57.070, 57.095-57.099, 57.106, 57.107, 57.109, 57.110, 57.112-57.115, 57.119, 57.120, 57.171-57.174, 57.178, 57.202-57.206,
57.2075, 57.209-57.211, and 57.276-57.278, Chapter 57, Water Code
(Levee Improvement Districts, relating to administrative provisions
of the board of directors of a levee improvement district and its
powers and duties including bond issuance and tax assessment).

SECTION 47. Repealer: Sections 58.033, 58.034, 58.073-58.083,
58.085-58.088, 58.090-58.100, 58.123, 58.124, 58.131, 58.132,
58.135, 58.139-58.149, 58.151, 58.152, 58.169, 58.179, 58.187-58.189, 58.221-58.224, 58.261, 58.317, 58.354-58.362, 58.442,
58.451, 58.452, 58.601, 58.691-58.701, and 58.714-58.725, Chapter
58, Water Code (Irrigation Districts, relating to the creation of
an irrigation district, the board of directors for the district,
and the board's powers and duties including bond issuance and tax
assessment).

SECTION 48. Repealer: Sections 65.024-65.029, 65.104-65.122,
65.202, 65.204, 65.209-65.234, 65.301, 65.401-65.409, 65.509,
65.512-65.514, and 65.701-65.722, Chapter 65, Water Code (Special
Utility Districts, relating to the creation of a special utility
district, its board of directors, the board's administrative
powers, powers and duties of fire departments, and exclusion and
inclusion of territory).

SECTION 49. Repealer: Sections 66.022-66.029, 66.103-66.117,
66.119, 66.120, 66.203-66.205, 66.208-66.215, 66.301, 66.302,
66.305-66.309, 66.312, and 66.323, Chapter 66, Water Code
(Stormwater Control Districts, relating to creation of a stormwater
control district, its board of directors, and the board's powers
and duties).

SECTION 50. (a) Provides that this Act takes effect as provided
by this section.

(b) Requires Section 49.103(b), Water Code, to govern all
elections held after December 31, 1995. Sets forth the
election dates for directors elected at specified times.

SECTION 51. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE
(1) In Section 2 of the bill, proposed Chapter 49.220, Water Code,
was amended by adding language regarding (1) indemnification, (2)
obtaining written consent from the Texas Department of
Transportation before proceeding with certain actions, and (3)
subjecting districts or water supply corporations to Tx DOT
regulation if facilities are placed within state highway rights-of-way.

(2) In Section 23 of the bill, the Original included language
amending Chapter 54, Water Code, regarding the annexation of
certain districts by municipalities, providing that municipalities
give notice before annexation, and restricting permissible actions
such districts may take once notice has been given. This language
was deleted in its entirety in the Substitute, and the remaining
sections of Chapter 54, Water Code, were renumbered accordingly.

SUMMARY OF COMMITTEE ACTION
S.B.626 was considered by the committee in a formal meeting on May
3, 1995.
No testimony was recieved.
The committee considered a complete substitute for the bill. One
amendment was offered to the substitute. The amendment was adopted
without objection. The Chair directed the committee staff to
incorporate the adopted amendment into the substitute.
The bill was reported favorably as substituted, with the
recommendation that it do pass and be printed, by a record vote of
8 ayes, 0 nays, 0 pnv, 1 absent.