74R10089 E
          By Yost                                               H.B. No. 1104
    1-1  Substitute the following for H.B. No. 1104:
    1-2  By Lewis of Orange                                C.S.H.B. No. 1104
    1-3                                AN ACT
    1-4  relating to certain laws governing water districts and nonprofit
    1-5  water or sewer service corporations; creating penalties; granting
    1-6  authority to issue bonds; granting the power of eminent domain.
    1-7        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-8        SECTION 1.  Section 1.002, Water Code, is amended to read as
    1-9  follows:
   1-10        Sec. 1.002.  Construction of Code.  (a)  The Code
   1-11  Construction Act (Chapter 311, Government Code) applies to the
   1-12  construction of each provision in this code, except as otherwise
   1-13  expressly provided by this code.
   1-14        (b)  In this code:
   1-15              (1)  a reference to a title, chapter, or section
   1-16  without further identification is a reference to a title, chapter,
   1-17  or section of this code; and
   1-18              (2)  a reference to a subtitle, subchapter, subsection,
   1-19  subdivision, paragraph, or other numbered or lettered unit without
   1-20  further identification is a reference to a unit of the next larger
   1-21  unit of this code in which the reference appears.
   1-22        (c)  A reference in a law to a statute or part of a statute
   1-23  revised by this code is considered to be a reference to the part of
    2-1  this code that revises that statute or part of the statute.
    2-2        SECTION 2.  Title 4, Water Code, is amended by adding Chapter
    2-3  49 to read as follows:
    2-4          CHAPTER 49.  PROVISIONS APPLICABLE TO ALL DISTRICTS
    2-5                   SUBCHAPTER A.  GENERAL PROVISIONS
    2-6        Sec. 49.001.  DEFINITIONS.  (a)  As used in this chapter:
    2-7              (1)  "District" means any district or authority created
    2-8  by authority of either Sections 52(b)(1) and (2), Article III, or
    2-9  Section 59, Article XVI, Texas Constitution, regardless of how
   2-10  created.  The term "district" shall not include any navigation
   2-11  district or port authority created under general or special law.
   2-12              (2)  "Commission" means the Texas Natural Resource
   2-13  Conservation Commission.
   2-14              (3)  "Board" means the governing body of a district.
   2-15              (4)  "Executive director" means the executive director
   2-16  of the commission.
   2-17              (5)  "Water supply corporation" means a nonprofit water
   2-18  supply or sewer service corporation created or operating under
   2-19  Chapter 76, Acts of the 43rd Legislature, 1st Called Session, 1933
   2-20  (Article 1434a, Vernon's Texas Civil Statutes).
   2-21              (6)  "Director" means either a supervisor or director
   2-22  appointed or elected to the board.
   2-23              (7)  "Municipal solid waste" has the same meaning
   2-24  assigned by Section 361.003, Health and Safety Code.
   2-25              (8)  "Special water authority" means a river authority
    3-1  as that term is defined in Section 30.003, or a district created by
    3-2  a special Act of the legislature that:
    3-3                    (A)  is a provider of water or wastewater service
    3-4  to two or more municipalities; and
    3-5                    (B)  is governed by a board of directors
    3-6  appointed or designated in whole or in part by the governor, the
    3-7  Texas Water Development Board, or municipalities within its service
    3-8  area.
    3-9              (9)  "Potable water" means water that has been treated
   3-10  for public drinking water supply purposes.
   3-11        (b)  These definitions are for use in this chapter only, and
   3-12  have no effect on any other statute or code unless specifically
   3-13  referenced by that statute or code.
   3-14        Sec. 49.002.  APPLICABILITY.  This chapter applies to all
   3-15  general and special law districts to the extent that the provisions
   3-16  of this chapter do not directly conflict with a provision in any
   3-17  other chapter of this code or any Act creating or affecting a
   3-18  special law district.  In the event of such conflict, the specific
   3-19  provisions in such other chapter or Act shall control.
   3-20        Sec. 49.003.  PENALTY.  A district that fails to comply with
   3-21  the filing provisions of this code may be subject to a civil
   3-22  penalty of up to $100 per day for each day the district wilfully
   3-23  continues to violate these provisions after receipt of written
   3-24  notice of violation from the executive director by certified mail,
   3-25  return receipt requested.  The state may sue to recover the
    4-1  penalty.
    4-2        Sec. 49.004.  PENALTY FOR VIOLATION OF DISTRICT RULES.  (a)
    4-3  The board may set reasonable civil penalties for the breach of any
    4-4  rule of the district that shall not exceed the jurisdiction of a
    4-5  justice court as provided by Section 27.031, Government Code.
    4-6        (b)  A penalty under this section is in addition to any other
    4-7  penalty provided by the law of this state and may be enforced by
    4-8  complaints filed in the appropriate court of jurisdiction in the
    4-9  county in which the district's principal office or meeting place is
   4-10  located.
   4-11        (c)  If the district prevails in any suit to enforce its
   4-12  rules, it may, in the same action, recover reasonable fees for
   4-13  attorneys, expert witnesses, and other costs incurred by the
   4-14  district before the court.  The amount of the attorney's fees shall
   4-15  be fixed by the court.
   4-16            (Sections 49.005-49.009 reserved for expansion
   4-17                        SUBCHAPTER B.  CREATION
   4-18        Sec. 49.010.  ORDER OR ACT CREATING DISTRICT.  Within 60 days
   4-19  after the date a district is created, the district shall file with
   4-20  the executive director a certified copy of the order or legislative
   4-21  Act creating the district or authorizing its creation, unless the
   4-22  district was created by order of the commission.
   4-23            (Sections 49.011-49.050 reserved for expansion
   4-24               SUBCHAPTER C.  ADMINISTRATIVE PROVISIONS
   4-25        Sec. 49.051.  BOARD OF DIRECTORS.  A district shall be
    5-1  governed by its board, the number of which is otherwise provided by
    5-2  law.
    5-3        Sec. 49.052.  DISQUALIFICATION OF DIRECTORS.  (a)  A person
    5-4  is disqualified from serving as a member of a board of a district
    5-5  that includes less than all the territory in at least one county
    5-6  and which, if located within the corporate area of a city or
    5-7  cities, includes within its boundaries less than 75 percent of the
    5-8  incorporated area of the city or cities, if that person:
    5-9              (1)  is related within the third degree of affinity or
   5-10  consanguinity to a developer of property in the district, any other
   5-11  member of the board, or the manager, engineer, attorney, or other
   5-12  person providing professional services to the district;
   5-13              (2)  is an employee of any developer of property in the
   5-14  district or any director, manager, engineer, attorney, or other
   5-15  person providing professional services to the district or a
   5-16  developer of property in the district in connection with the
   5-17  district or property located in the district;
   5-18              (3)  is a developer of property in the district;
   5-19              (4)  is serving as an attorney, consultant, engineer,
   5-20  manager, architect, or in some other professional capacity for the
   5-21  district or a developer of property in the district in connection
   5-22  with the district or property located in the district;
   5-23              (5)(A)  is a party to a contract with or along with the
   5-24  district except for the purchase of public services furnished by
   5-25  the district to the public generally; or
    6-1                    (B)  is a party to a contract with or along with
    6-2  a developer of property in the district relating to the district or
    6-3  to property within the district, other than a contract limited
    6-4  solely to the purpose of purchasing or conveying real property in
    6-5  the district for the purpose of either establishing a permanent
    6-6  residence, establishing a commercial business within the district,
    6-7  or qualifying as a director; or
    6-8              (6)  during the term of office, fails to maintain the
    6-9  qualifications required by law to serve as a director.
   6-10        (b)  Within 60 days after the board determines a relationship
   6-11  or employment exists which constitutes a disqualification under
   6-12  Subsection (a), it shall replace the person serving as a member of
   6-13  the board with a person who would not be disqualified.
   6-14        (c)  Any person who wilfully occupies an office as a member
   6-15  of a board and exercises the powers and duties of that office when
   6-16  disqualified under the provisions of Subsection (a) is guilty of a
   6-17  misdemeanor and, on conviction, shall be fined not less than $100
   6-18  nor more than $1,000.
   6-19        (d)  As used in this section, "developer of property in the
   6-20  district" means any person who owns land located within a district
   6-21  covered under this section and who has divided or proposes to
   6-22  divide the land into two or more parts for the purpose of laying
   6-23  out any subdivision or any tract of land or any addition to any
   6-24  town or city, or for laying out suburban lots or building lots, or
   6-25  any lots, streets, alleys, or parks or other portions intended for
    7-1  public use, or the use of purchasers or owners of lots fronting
    7-2  thereon or adjacent thereto.
    7-3        (e)  Any rights obtained by any third party through official
    7-4  action of a board covered by this section are not impaired or
    7-5  affected by the disqualification under this section of any member
    7-6  of the board to serve, provided that the third party had no
    7-7  knowledge at the time the rights were obtained of the fact that the
    7-8  member of the board was disqualified to serve.
    7-9        (f)  This section shall not apply to special water
   7-10  authorities, districts defined in Section 49.181(h)(4), or a
   7-11  district where the principal function of the district is to provide
   7-12  irrigation water to agricultural lands or to provide nonpotable
   7-13  water for any purpose.
   7-14        (g)  A board by unanimous vote of its remaining members may
   7-15  remove a board member only if that board member has missed one-half
   7-16  or more of the regular meetings scheduled during the prior 12
   7-17  months.  Any board member so removed may file a written appeal with
   7-18  the commission within 30 days after receiving written notice of the
   7-19  board action.  The commission may reinstate a removed director if
   7-20  the commission finds that the removal was unwarranted under the
   7-21  circumstances, including the reasons for absences, the time and
   7-22  place of the meetings missed, the business conducted at the
   7-23  meetings missed, and any other facts or circumstances the
   7-24  commission may deem relevant.
   7-25        Sec. 49.053.  QUORUM.  A majority of the membership of the
    8-1  board constitutes a quorum for any meeting, and a concurrence of a
    8-2  majority of the entire membership of the board is sufficient for
    8-3  transacting any business of the district.  This section does not
    8-4  apply to special water authorities.
    8-5        Sec. 49.054.  OFFICERS.  (a)  After a district is created and
    8-6  the directors have qualified, the board shall meet, elect a
    8-7  president, vice-president, secretary, and any other officers or
    8-8  assistant officers as the board may deem necessary, and begin the
    8-9  discharge of its duties.
   8-10        (b)  After each directors election, the board shall meet and
   8-11  elect officers.
   8-12        (c)  The president is the chief executive officer of the
   8-13  district, presides at all meetings of the board, and shall execute
   8-14  all documents on behalf of the district.  The vice-president shall
   8-15  act as president in case of the absence or disability of the
   8-16  president.  The secretary is responsible for seeing that all
   8-17  records and books of the district are properly kept and shall
   8-18  attest the president's signature on all documents.
   8-19        (d)  The board may appoint another director, the general
   8-20  manager, or any employee as assistant or deputy secretary to assist
   8-21  the secretary, and any such person shall be entitled to certify as
   8-22  to the authenticity of any record of the district, including but
   8-23  not limited to all proceedings relating to bonds, contracts, or
   8-24  indebtedness of the district.
   8-25        (e)  After any election or appointment of a director, a
    9-1  district shall notify the executive director within 30 days after
    9-2  the date of the election or appointment of the name and mailing
    9-3  address of the director chosen and the date that director's term of
    9-4  office expires.  The executive director shall provide forms to the
    9-5  district for such purpose.
    9-6        (f)  This section does not apply to special water
    9-7  authorities.
    9-8        Sec. 49.055.  SWORN STATEMENT, BOND, AND OATH OF OFFICE.  (a)
    9-9  As soon as practicable after a director is elected or appointed,
   9-10  that director shall make the sworn statement prescribed by the
   9-11  constitution for public office.
   9-12        (b)  As soon as practicable after a director has made the
   9-13  sworn statement, and before beginning to perform the duties of
   9-14  office, that director shall take the oath of office prescribed by
   9-15  the constitution for public officers.
   9-16        (c)  Before beginning to perform the duties of office, each
   9-17  director shall execute a bond for $10,000 payable to the district
   9-18  and conditioned on the faithful performance of that director's
   9-19  duties.  All bonds of the directors shall be approved by the board
   9-20  and paid for by the district.
   9-21        (d)  The sworn statement, bond, and oath shall be filed with
   9-22  the district and retained in its records.  A duplicate original of
   9-23  the sworn statement and the oath shall also be filed with the
   9-24  secretary of state within 10 days after their execution and need
   9-25  not be filed before the new director begins to perform the duties
   10-1  of office.
   10-2        (e)  This section does not apply to special water
   10-3  authorities.
   10-4        Sec. 49.056.  GENERAL MANAGER.  (a)  The board may employ or
   10-5  contract with a person to perform such services as general manager
   10-6  for the district as the board may from time to time specify.  The
   10-7  board may delegate to the general manager full authority to manage
   10-8  and operate the affairs of the district subject only to orders of
   10-9  the board.
  10-10        (b)  The board may delegate to the general manager the
  10-11  authority to employ all persons necessary for the proper handling
  10-12  of the business and operation of the district and to determine the
  10-13  compensation to be paid all employees other than the general
  10-14  manager.
  10-15        (c)  Except as provided by Section 49.052, a director may be
  10-16  employed as general manager of the district, but the compensation
  10-17  of a general manager who also serves as a director shall be
  10-18  established by the other directors.
  10-19        Sec. 49.057.  MANAGEMENT OF DISTRICT.  (a)  The board shall
  10-20  be responsible for the management of all the affairs of the
  10-21  district.  The district shall employ or contract with all persons,
  10-22  firms, partnerships, corporations, or other entities, public or
  10-23  private, deemed necessary by the board for the conduct of the
  10-24  affairs of the district, including, but not limited to, engineers,
  10-25  attorneys, financial advisors, operators, bookkeepers, tax
   11-1  assessors and collectors, auditors, and administrative staff.
   11-2        (b)  The board shall adopt an annual budget.  All district
   11-3  employees are employed at the will of the district unless the
   11-4  district and employee execute a written employment contract.
   11-5        (c)  The board shall set the compensation and terms for
   11-6  consultants.
   11-7        (d)  In selecting attorneys, engineers, auditors, financial
   11-8  advisors, or other professional consultants, the district shall
   11-9  follow the procedures provided in Subchapter A, Chapter 2254,
  11-10  Government Code (Professional Services Procurement Act).
  11-11        (e)  The board shall require an officer, employee, or
  11-12  consultant who collects, pays, or handles any funds of the district
  11-13  to furnish good and sufficient bond, payable to the district, in an
  11-14  amount determined by the board to be sufficient to safeguard the
  11-15  district.  The bond shall be conditioned on the faithful
  11-16  performance of that person's duties and on accounting for all funds
  11-17  and property of the district.  Such bond shall be signed or
  11-18  endorsed by a surety company authorized to do business in the
  11-19  state.
  11-20        (f)  The board may pay the premium on surety bonds required
  11-21  of officials, employees, or consultants of the district out of any
  11-22  available funds of the district, including proceeds from the sale
  11-23  of bonds.
  11-24        (g)  The board may adopt bylaws to govern the affairs of the
  11-25  district to perform its purposes.  The board may, by resolution,
   12-1  authorize its general manager or other employee to execute
   12-2  documents on behalf of the district.
   12-3        (h)  The board shall also have the right to purchase all
   12-4  materials, supplies, equipment, vehicles, and machinery needed by
   12-5  the district to perform its purposes.
   12-6        Sec. 49.058.  CONFLICTS OF INTEREST.  A director of a
   12-7  district is subject to the provisions of Chapter 171, Local
   12-8  Government Code, relating to the regulation of conflicts of
   12-9  interest of officers of local governments.
  12-10        Sec. 49.059.  DISQUALIFICATION OF TAX ASSESSOR AND COLLECTOR.
  12-11  (a)  No person may serve as tax assessor and collector of a
  12-12  district providing potable water or sewer utility services to
  12-13  household users if that person:
  12-14              (1)  is related within the third degree of affinity or
  12-15  consanguinity to any developer of property in the district, a
  12-16  member of the board, or the manager, engineer, or attorney for the
  12-17  district;
  12-18              (2)  is or was within two years immediately preceding
  12-19  the assumption of assessment and collection duties with the
  12-20  district an employee of any developer of property in the district
  12-21  or any director, manager, engineer, or attorney for the district;
  12-22              (3)  owns an interest in or is employed by any
  12-23  corporation organized for the purpose of tax assessment and
  12-24  collection services, a substantial portion of the stock of which is
  12-25  owned by a developer of property within the district or any
   13-1  director, manager, engineer, or attorney for the district; or
   13-2              (4)  is directly or through a corporation developing
   13-3  land in the district or is a director, engineer, or attorney for
   13-4  the district.
   13-5        (b)  Within 60 days after the board determines a relationship
   13-6  or employment exists which constitutes a disqualification under
   13-7  Subsection (a), it shall replace the person serving as tax assessor
   13-8  and collector with a person who would not be disqualified.
   13-9        (c)  Any person who wilfully violates the provisions of
  13-10  Subsection (a) is guilty of a misdemeanor and on conviction shall
  13-11  be fined not less than $100 nor more than $1,000.
  13-12        (d)  As used in this section, "developer of property in the
  13-13  district" has the same meaning as in Section 49.052(d).
  13-14        Sec. 49.060.  FEES OF OFFICE; REIMBURSEMENT.  (a)  A director
  13-15  is entitled to receive fees of office of not more than $100  a day
  13-16  for each day the director actually spends performing the duties of
  13-17  a director.  The fees of office may not exceed $6,000 per annum
  13-18  except for directors of a special water authority which is engaged
  13-19  in the distribution and sale of electric energy to the public.
  13-20        (b)  Each director is also entitled to receive reimbursement
  13-21  of actual expenses reasonably and necessarily incurred while
  13-22  engaging in activities on behalf of the district.
  13-23        (c)  In order to receive fees of office and to receive
  13-24  reimbursement for expenses, each director shall file with the
  13-25  district a verified statement showing the number of days actually
   14-1  spent in the service of the district and a general description of
   14-2  the duties performed for each day of service.
   14-3        (d)  Section 49.002 notwithstanding, in all areas of conflict
   14-4  the provisions of this section shall take precedence over all prior
   14-5  statutory enactments.  If the enactment of this section results in
   14-6  an increase in the fees of office for any district, that district's
   14-7  fees of office shall not increase unless the board adopts a
   14-8  resolution authorizing payment of the higher fees.
   14-9        Sec. 49.061.  SEAL.  The directors shall adopt a seal for the
  14-10  district.
  14-11        Sec. 49.062.  OFFICES AND MEETING PLACES.  (a)  The board
  14-12  shall designate from time to time and maintain one or more regular
  14-13  offices for conducting the business of the district and maintaining
  14-14  the records of the district.  Such offices may be located either
  14-15  inside or outside the district's boundaries as determined in the
  14-16  discretion of the board.
  14-17        (b)  The board shall designate one or more places inside or
  14-18  outside the district for conducting the meetings of the board.  The
  14-19  meeting place may be a private residence or office, provided that
  14-20  the board, in its order establishing the meeting place, declares
  14-21  the same to be a public place and invites the public to attend any
  14-22  meeting of the board.  If the board establishes a meeting place or
  14-23  places outside the district, it shall give notice of the location
  14-24  or locations by filing a true copy of the resolution establishing
  14-25  the location or locations of the meeting place or places with the
   15-1  commission and also by publishing notice of the location or
   15-2  locations in a newspaper of general circulation in the district.
   15-3  If the location of any of the meeting places outside the district
   15-4  is changed, notice of the change shall be given in the same manner.
   15-5        (c)  After at least 25 qualified electors are residing in a
   15-6  district, on written request of at least five of those electors,
   15-7  the board shall designate a meeting place and hold meetings within
   15-8  the district if it determines that the meeting place used by the
   15-9  district deprives the residents of a reasonable opportunity to
  15-10  attend district meetings.  On the failure to designate the location
  15-11  of the meeting place within the district, five electors may
  15-12  petition the commission to designate a location.  If it determines
  15-13  that the meeting place used by the district deprives the residents
  15-14  of a reasonable opportunity to attend district meetings, the
  15-15  commission may designate a meeting place inside or outside the
  15-16  district which is reasonably available to the public and require
  15-17  that the meetings be held at such place.  After the next election,
  15-18  the board may designate different meeting places, including one
  15-19  located outside the boundaries of the district.
  15-20        (d)  Two or more districts may designate and share offices
  15-21  and meeting places.  This section does not apply to special water
  15-22  authorities.
  15-23        Sec. 49.063.  NOTICE OF MEETINGS.  Notice of meetings of the
  15-24  board shall be given as set forth in the open meetings law, Chapter
  15-25  551, Government Code, except that if a district does not have a
   16-1  meeting place within the district, the district shall post notice
   16-2  of its meeting at a public place within the district specified by
   16-3  the board in a written resolution, rather than at its
   16-4  administrative office.  The board shall specify such public place
   16-5  to be a bulletin board or other place within the district which is
   16-6  reasonably available to the public.  Neither failure to provide
   16-7  notice of a regular meeting nor an insubstantial defect in notice
   16-8  of any meeting shall affect the validity of any action taken at the
   16-9  meeting.
  16-10        Sec. 49.064.  MEETINGS.  The board shall hold such regular
  16-11  and special meetings as may be necessary for the proper conduct of
  16-12  the district's business.  All meetings shall be conducted in
  16-13  accordance with the open meetings law, Chapter 551, Government
  16-14  Code.   A meeting of a committee of the board, or a committee
  16-15  composed of representatives of more than one board, where less than
  16-16  a quorum of any one board is present is not subject to the
  16-17  provisions of the open meetings law, Chapter 551, Government Code.
  16-18        Sec. 49.065.  RECORDS.  (a)  The board shall keep a complete
  16-19  account of all its meetings and proceedings and shall preserve its
  16-20  minutes, contracts, records, notices, accounts, receipts, and other
  16-21  records in a safe place.
  16-22        (b)  The records of each district are the property of the
  16-23  district and are subject to the open records law, Chapter 552,
  16-24  Government Code.
  16-25        (c)  The preservation, microfilming, destruction, or other
   17-1  disposition of the records of each district is subject to the
   17-2  requirements of Chapter 201, Local Government Code, and rules
   17-3  adopted thereunder.
   17-4        Sec. 49.066.  SUITS.  (a)  A district may sue and be sued in
   17-5  the courts of this state in the name of the district by and through
   17-6  its board.  All courts shall take judicial notice of the creation
   17-7  of the district and of its boundaries.
   17-8        (b)  Any court in the state rendering judgment for debt
   17-9  against a district may order the board to levy, assess, and collect
  17-10  taxes or assessments to pay the judgment.
  17-11        (c)  The president or the general manager of any district
  17-12  shall be the agent of the district on whom process, notice, or
  17-13  demand required or permitted by law to be served upon the district
  17-14  may be served.
  17-15        (d)  Except as provided in Subsection (e), no suit may be
  17-16  instituted in any court of this state contesting:
  17-17              (1)  the validity of the creation and boundaries of a
  17-18  district created under this code;
  17-19              (2)  any bonds or other obligations created under this
  17-20  code; or
  17-21              (3)  the validity or the authorization of a contract
  17-22  with the United States by the district.
  17-23        (e)  The matters listed in Subsection (d) may be judicially
  17-24  inquired into at any time and determined in any suit brought by the
  17-25  State of Texas through the attorney general.  The action shall be
   18-1  brought on good cause shown, except where otherwise provided by
   18-2  other provisions of this code or by the Texas Constitution.  It is
   18-3  specifically provided, however, that no such proceeding shall
   18-4  affect the validity of or security for any bonds or other
   18-5  obligations theretofore issued by a district if such bonds or other
   18-6  obligations have been approved by the attorney general as provided
   18-7  by Section 49.184.
   18-8        (f)  A district or water supply corporation shall not be
   18-9  required to give bond for appeal, injunction, or costs in any suit
  18-10  to which it is a party and shall not be required to deposit more
  18-11  than the amount of any award in any eminent domain proceeding.
  18-12        Sec. 49.067.  CONTRACTS.  A district shall contract, and be
  18-13  contracted with, in the name of the district.
  18-14        Sec. 49.068.  CONTRACTS WITH GOVERNMENTAL AGENCIES.  The
  18-15  provisions of this chapter pertaining to bids and the Local
  18-16  Government Code notwithstanding, a district may purchase property
  18-17  from any governmental entity by negotiated contract without the
  18-18  necessity of securing appraisals or advertising for bids.
  18-19        Sec. 49.069.  EMPLOYEE BENEFITS.  (a)  The board may provide
  18-20  for and administer retirement, disability, and death compensation
  18-21  funds for the employees of the district.
  18-22        (b)  The board may establish a public retirement system in
  18-23  accordance with the provisions of Chapter 810, Government Code.
  18-24  The board may also provide for a deferred compensation plan
  18-25  described by Section 457 of the Internal Revenue Code of 1986 (26
   19-1  U.S.C. Section 457).
   19-2        (c)  The board may include hospitalization and medical
   19-3  benefits to its employees as part of the compensation paid to the
   19-4  officers and employees and may adopt any plan, rule, or regulation
   19-5  in connection with it and amend or change the plan, rule, or
   19-6  regulation as it may determine.
   19-7        Sec. 49.070.  WORKERS' COMPENSATION.  The board may become a
   19-8  subscriber under Title 5, Labor Code (Texas Workers' Compensation
   19-9  Act), with any insurance company authorized to write the policies
  19-10  in the State of Texas.
  19-11        Sec. 49.071.  DISTRICT NAME CHANGE.  (a)  On petition by a
  19-12  district showing reasonable grounds for a name change, the
  19-13  commission by order may change the name of the district to the name
  19-14  requested by the district.  The new name must be generally
  19-15  descriptive of the location of the district followed by the type of
  19-16  district as provided by the title of the chapter of the Water Code
  19-17  governing the district.  If a district is located wholly within one
  19-18  county that contains more than one district of that type, the
  19-19  district may be differentiated, if necessary, by adding to the new
  19-20  name the proper consecutive number.  The new name may not be the
  19-21  same as the name of any other district in the county.
  19-22        (b)  A name change takes effect on the date of issuance of
  19-23  the commission order making the name change.
  19-24        (c)  Not later than the 30th day after the date of issuance
  19-25  of the commission order making the name change, the district shall
   20-1  publish notice of the name change in a newspaper or newspapers of
   20-2  general circulation in the county or counties in which the district
   20-3  is located.  Within that same period, the district shall also give
   20-4  notice of the name change by mail to utility customers or
   20-5  permittees, if any, and, to the extent practicable, to the holders
   20-6  of bonds, obligations, and other indebtedness of the district.
   20-7  Failure of the district to comply with this subsection does not
   20-8  affect the validity of the name change.
   20-9        (d)  A change in the name of a district does not affect
  20-10  bonds, obligations, or other indebtedness of the district existing
  20-11  before the name change occurred.
  20-12            (Sections 49.072-49.100 reserved for expansion
  20-13                  SUBCHAPTER D.  ELECTION PROVISIONS
  20-14        Sec. 49.101.  GENERAL.  All elections shall be generally
  20-15  conducted in accordance with the Election Code except as otherwise
  20-16  provided for by this code.  Write-in candidacies for any district
  20-17  office shall be governed by Subchapter C, Chapter 146, Election
  20-18  Code.
  20-19        Sec. 49.102.  CONFIRMATION AND DIRECTOR ELECTION.
  20-20  (a)  Before issuing any bonds or other obligations, an election
  20-21  shall be held within the boundaries of the proposed district to
  20-22  determine if the proposed district shall be established and, if the
  20-23  directors of the district are required by law to be elected, to
  20-24  elect permanent directors.
  20-25        (b)  Notice of a confirmation or director election shall
   21-1  state the day and place or places for holding the election, the
   21-2  propositions to be voted on, and the number of directors to be
   21-3  voted on.
   21-4        (c)  The ballots for a confirmation election shall be printed
   21-5  to provide for voting "For District" and "Against District."
   21-6  Ballots for a directors election shall provide the names of the
   21-7  persons appointed by the governing body who qualified and are
   21-8  serving as temporary directors at the time the election is called.
   21-9  The ballots shall also have blank places after the names of the
  21-10  temporary directors in which a voter may write the names of other
  21-11  persons for directors.
  21-12        (d)  Immediately after the confirmation and director
  21-13  election, the presiding judge shall take returns of the results to
  21-14  the temporary board.  The temporary board shall canvass the returns
  21-15  and declare the results at the earliest practicable time.
  21-16        (e)  If a majority of the votes cast in the election favor
  21-17  the creation of the district, then the temporary board shall
  21-18  declare that the district is created and enter the result in its
  21-19  minutes.  If a majority of the votes cast in the election are
  21-20  against the creation of the district, the temporary board shall
  21-21  declare that the district was defeated and enter the result in its
  21-22  minutes.  A copy of the order shall be filed with the commission.
  21-23        (f)  The order canvassing the results of the confirmation
  21-24  election shall contain a description of the district's boundaries
  21-25  and shall be filed with the executive director and in the deed
   22-1  records of the county or counties in which the district is located.
   22-2        (g)  The temporary board shall also declare the persons
   22-3  receiving the highest number of votes for directors to have been
   22-4  elected as permanent directors.
   22-5        (h)  Unless otherwise agreed, the directors shall decide the
   22-6  initial terms of office by lot, with a simple majority of directors
   22-7  serving until the second succeeding directors election and the
   22-8  remaining directors serving until the next directors election.
   22-9        (i)  The provisions of this section shall not be applicable
  22-10  to any district exercising the powers of Chapter 375, Local
  22-11  Government Code, or any district created by a special Act of the
  22-12  legislature that does not require a confirmation election.
  22-13        Sec. 49.103.  TERMS OF OFFICE OF DIRECTORS.  (a)  Except as
  22-14  provided by Section 49.102, the members of the board of a district
  22-15  shall serve for four-year terms.
  22-16        (b)  An election shall be held on the uniform election date,
  22-17  established by the Election Code, in either January or May of each
  22-18  even-numbered year to elect the appropriate number of directors.
  22-19        (c)  The permanent directors may assign a position number to
  22-20  each director's office, in which case directors shall thereafter be
  22-21  elected by position and not at large.
  22-22        (d)  A district may provide for the election of all
  22-23  directors, or a majority of directors, from single-member
  22-24  districts, which shall be geographically described within the
  22-25  boundaries of the district in a manner that is equitable for the
   23-1  electors within such districts and within the district generally.
   23-2        (e)  Section 49.002 notwithstanding, in all areas of conflict
   23-3  the provisions of Subsection (b) shall take precedence over all
   23-4  prior statutory enactments.
   23-5        (f)  This section does not apply to any special law district
   23-6  or authority that is not required by the law creating the district
   23-7  or authority to elect its directors by the public.
   23-8        Sec. 49.104.  ALTERNATIVE ELECTION PROCEDURES.  (a)
   23-9  Notwithstanding the provisions and requirements of the Election
  23-10  Code and general laws, any two or more districts situated in the
  23-11  same county and in which substantially all of the land is being or
  23-12  has been developed as part of a single community development plan
  23-13  and which are served by common water supply and waste disposal
  23-14  systems may by mutual agreement designate a common election office
  23-15  and common early and regular polling places within one or more of
  23-16  the districts, but outside the boundaries of one or more of the
  23-17  districts, for the conduct of director election proceedings and
  23-18  early and regular balloting in director elections.  This
  23-19  alternative election procedure may only be used if the common
  23-20  election office and polling places so designated:
  23-21              (1)  are within buildings open to the public;
  23-22              (2)  are within the boundaries of at least one of the
  23-23  districts;
  23-24              (3)  meet the requirements of the Election Code and
  23-25  general laws as polling places; and
   24-1              (4)  are located not more than five miles from any
   24-2  portion of the boundaries of any of the participating districts.
   24-3        (b)  Such districts may also agree upon and designate a
   24-4  common election officer and common early and regular voting
   24-5  officials for some or all of the director elections to be
   24-6  simultaneously conducted at a common location, any of whom may be
   24-7  nonelective employees of one or more of the districts, so long as
   24-8  the early and regular voting officials are qualified voters within
   24-9  at least one of the districts.
  24-10        Sec. 49.105.  VACANCIES.  (a)  Except as otherwise provided
  24-11  in this code, all vacancies on the board and in other offices shall
  24-12  be filled for the unexpired term by appointment of the board.
  24-13        (b)  If the number of directors is reduced to fewer than a
  24-14  majority, the vacancies shall be filled by appointment by the
  24-15  commission or the county commissioners court if the district was
  24-16  created by the county commissioners court.  An appointed director
  24-17  shall serve for the unexpired term of the director he or she is
  24-18  replacing.
  24-19        (c)  In the event of a failure to elect one or more members
  24-20  of the board of a district resulting from the absence of, or
  24-21  failure to vote by, the qualified voters in the district, the
  24-22  current members of the board holding the positions not filled at
  24-23  such election shall be deemed to have been reelected and shall
  24-24  serve an additional term of office.
  24-25        Sec. 49.106.  BOND ELECTIONS.  (a)  Before an election is
   25-1  held to authorize the issuance of bonds, other than refunding
   25-2  bonds, there shall be filed in the office of the district and open
   25-3  to inspection by the public an engineer's report covering the land,
   25-4  improvements, facilities, plants, equipment, and appliances to be
   25-5  purchased or constructed and their estimated cost, together with
   25-6  maps, plats, profiles, and data fully showing and explaining the
   25-7  report.
   25-8        (b)  Notice of a bond election shall contain the proposition
   25-9  or propositions to be voted upon, which includes the  estimate of
  25-10  the probable cost of design, construction, purchase, and
  25-11  acquisition of improvements and additions thereto, and incidental
  25-12  expenses connected with such improvements and the issuance of
  25-13  bonds.
  25-14        (c)  A bond election may be held on the same day as any other
  25-15  district election.  The bond election may be called by a separate
  25-16  election order or as a part of any other election order.  The board
  25-17  may submit multiple purposes in a single proposition at an
  25-18  election.
  25-19        Sec. 49.107.  OPERATION AND MAINTENANCE TAX.  (a)  A district
  25-20  may levy and collect a tax for operation and maintenance purposes,
  25-21  including funds for planning, constructing, acquiring, maintaining,
  25-22  repairing, and operating all necessary land, plants, works,
  25-23  facilities, improvements, appliances, and equipment of the district
  25-24  and for paying costs of proper services, engineering and legal
  25-25  fees, and organization and administrative expenses.
   26-1        (b)  An operation and maintenance tax may not be levied by a
   26-2  district until it is approved by a majority of the electors voting
   26-3  at an election held for that purpose.  After such a tax has been
   26-4  authorized by the district's voters, the board shall be authorized
   26-5  to levy the tax and have it assessed and collected as other
   26-6  district taxes.
   26-7        (c)  An operation and maintenance tax election may be held at
   26-8  the same time and in conjunction with any other district election.
   26-9  The election may be called by a separate election order or as part
  26-10  of any other election order.
  26-11        (d)  The proposition in an operation and maintenance tax
  26-12  election may be for a specific maximum rate or for an unlimited
  26-13  rate.
  26-14        (e)  If a district has any surplus operation and maintenance
  26-15  tax funds that are not needed for the purposes for which they were
  26-16  collected, the funds may be used for any lawful purpose.
  26-17        (f)  Before a district reimburses a developer of property in
  26-18  the district, as that term is defined in Section 49.052(d), or its
  26-19  assigns, from operation and maintenance tax funds, for planning,
  26-20  constructing, or acquiring facilities, the district shall obtain
  26-21  approval by the executive director.
  26-22        Sec. 49.108.  CONTRACT ELECTIONS.  (a)  A contract may
  26-23  provide that the district will make payment under the contract from
  26-24  proceeds from the sale of notes or bonds, from taxes, or from any
  26-25  other income of the district or any combination of these.
   27-1        (b)  A district may make payments under a contract from taxes
   27-2  other than operation and maintenance taxes after the provisions of
   27-3  the contract have been approved by a majority of the electors
   27-4  voting at an election held for that purpose.
   27-5        (c)  A contract election may be held at the same time and in
   27-6  conjunction with any other district election.  The election may be
   27-7  called by a separate election order or as part of any other
   27-8  election order.
   27-9        (d)  A contract approved by the voters will constitute an
  27-10  obligation against the taxing power of the district to the extent
  27-11  provided in the contract.
  27-12            (Sections 49.109-49.150 reserved for expansion
  27-13                   SUBCHAPTER E.  FISCAL PROVISIONS
  27-14        Sec. 49.151.  EXPENDITURES.  (a)  Except as hereinafter
  27-15  provided, a district's money may be disbursed only by check, draft,
  27-16  order, or other instrument that shall be signed by at least a
  27-17  majority of the directors.
  27-18        (b)  The board may by resolution allow the general manager,
  27-19  treasurer, bookkeeper, or other employee of the district to sign
  27-20  disbursements.
  27-21        (c)  The board may by resolution allow disbursements to be
  27-22  transferred by federal reserve wire system to accounts in the name
  27-23  of the district.
  27-24        Sec. 49.152.  PURPOSES FOR BORROWING MONEY.  The district may
  27-25  borrow money for any corporate purpose or combination of corporate
   28-1  purposes only in compliance with the methods and procedures
   28-2  specifically provided by this chapter or by general law.
   28-3        Sec. 49.153.  REVENUE NOTES.  (a)  The board, without the
   28-4  necessity of an election, may borrow money on negotiable notes of
   28-5  the district to be paid solely from the revenues derived from the
   28-6  ownership of all or any designated part of the district's works,
   28-7  plants, improvements, facilities, or equipment after deduction of
   28-8  the reasonable cost of maintaining and operating the facilities.
   28-9        (b)  The notes may be first or subordinate lien notes within
  28-10  the discretion of the board, but no obligation may ever be a charge
  28-11  on the property of the district or on taxes levied or collected by
  28-12  the district but shall be solely a charge on the revenues pledged
  28-13  for the payment of the obligation.  No part of the obligation may
  28-14  ever be paid from taxes levied or collected by the district.
  28-15        (c)  A district may not execute a note for a term longer than
  28-16  three years unless the commission issues an order approving the
  28-17  note.
  28-18        (d)  This section does not apply to special water
  28-19  authorities.
  28-20        Sec. 49.154.  BOND ANTICIPATION NOTES; TAX ANTICIPATION
  28-21  NOTES.  (a)  The board may declare an emergency in the matter of
  28-22  funds not being available to pay principal of and interest on any
  28-23  bonds of the district payable in whole or in part from taxes or to
  28-24  meet any other needs of the district and may issue negotiable tax
  28-25  anticipation notes or negotiable bond anticipation notes to borrow
   29-1  the money needed by the district without advertising or giving
   29-2  notice of the sale.  Bond anticipation notes and tax anticipation
   29-3  notes shall mature within one year of their date.
   29-4        (b)  Tax anticipation notes may be issued for any purpose for
   29-5  which the district is authorized to levy taxes, and tax
   29-6  anticipation notes shall be secured with the proceeds of taxes to
   29-7  be levied by the district in the succeeding 12-month period.  The
   29-8  board may covenant with the purchasers of the notes that the board
   29-9  will levy a sufficient tax to pay the principal of and interest on
  29-10  the notes and pay the costs of collecting the taxes.
  29-11        (c)  Bond anticipation notes may be issued for any purpose
  29-12  for which bonds of the district may have previously been voted or
  29-13  may be issued for the purpose of refunding previously issued bond
  29-14  anticipation notes.  A district may covenant with the purchasers of
  29-15  the bond anticipation notes that the district will use the proceeds
  29-16  of sale of any bonds in the process of issuance for the purpose of
  29-17  refunding the bond anticipation notes, in which case the board will
  29-18  be required to use the proceeds received from sale of the bonds in
  29-19  the process of issuance to pay principal, interest, or redemption
  29-20  price on the bond anticipation notes.
  29-21        (d)  Districts required to seek commission approval of bonds
  29-22  must have an application for such approval on file with the
  29-23  commission prior to the issuance of bond anticipation notes.
  29-24        Sec. 49.155.  REPAYMENT OF EXPENSES.  (a)  The district may
  29-25  pay all costs and expenses necessarily incurred in the organization
   30-1  and operation of a district during creation and construction
   30-2  periods including, but not limited to, the following:
   30-3              (1)  organizational, administrative, and operating
   30-4  expenses;
   30-5              (2)  the cost of investigation and making plans;
   30-6              (3)  the cost of the engineer's report;
   30-7              (4)  legal fees; and
   30-8              (5)  any other incidental expenses.
   30-9        (b)  For purposes of this section, construction periods shall
  30-10  mean any periods during which the district is constructing its
  30-11  facilities or there is construction by third parties of above
  30-12  ground improvements within the district, but in no event longer
  30-13  than five years.
  30-14        (c)  The district may reimburse any person for money advanced
  30-15  for the purposes in Subsection (a) and may be charged interest on
  30-16  such funds.
  30-17        (d)  These payments may be made from money obtained from the
  30-18  issuance of notes or the sale of bonds issued by the district or
  30-19  out of maintenance taxes or other revenues of the district.
  30-20        Sec. 49.156.  DEPOSITORY.  (a)  The board, by order or
  30-21  resolution, shall designate one or more banks or savings
  30-22  associations within the state to serve as the depository for the
  30-23  funds of the district.  The board shall not be required to
  30-24  advertise or solicit bids in selecting its depositories.
  30-25        (b)  To the extent that funds in the depository banks or
   31-1  savings associations are not insured by the Federal Deposit
   31-2  Insurance Corporation, they shall be secured in the manner provided
   31-3  by law for the security of funds by Chapter 2257, Government Code
   31-4  (Public Funds Collateral Act).
   31-5        (c)  The board may authorize a designated representative to
   31-6  supervise the substitution of securities pledged to secure the
   31-7  district's funds.
   31-8        Sec. 49.157.  INVESTMENTS.  (a)  All district deposits and
   31-9  investments shall be governed by Subchapter A, Chapter 2256,
  31-10  Government Code (Public Funds Investment Act).
  31-11        (b)  The board may provide that an authorized representative
  31-12  of the district may invest and reinvest the funds of the district
  31-13  and provide for money to be withdrawn from the appropriate accounts
  31-14  of the district for the investments on such terms as the board
  31-15  considers advisable.
  31-16        Sec. 49.158.  FISCAL YEAR.  Within 30 days after a district
  31-17  becomes financially active, the board shall adopt a fiscal year by
  31-18  a formal board resolution.  The district shall notify the executive
  31-19  director of the adopted fiscal year within 30 days after adoption.
  31-20  The district may change its fiscal year at any time; provided,
  31-21  however, it may not be changed more than once in any 24-month
  31-22  period.  After any change in the district's fiscal year, the
  31-23  district shall notify the executive director of the changed fiscal
  31-24  year within 30 days after adoption.
  31-25            (Sections 49.159-49.180 reserved for expansion
   32-1                   SUBCHAPTER F.  ISSUANCE OF BONDS
   32-2        Sec. 49.181.  AUTHORITY OF COMMISSION OVER ISSUANCE OF
   32-3  DISTRICT BONDS.  (a)  A district may not issue bonds unless the
   32-4  commission determines that the project to be financed by the bonds
   32-5  is feasible and issues an order approving the issuance of the
   32-6  bonds.  This section does not apply to refunding bonds or bonds
   32-7  issued to and approved by the Farmers Home Administration, the
   32-8  United States Department of Agriculture, or the Texas Water
   32-9  Development Board.
  32-10        (b)  A district may submit to the commission a written
  32-11  application for investigation of feasibility.  An engineer's report
  32-12  describing the project, including the data, profiles, maps, plans,
  32-13  and specifications prepared in connection with the report, must be
  32-14  submitted with the application.
  32-15        (c)  The executive director shall examine the application and
  32-16  the report and shall inspect the project area.  The district shall,
  32-17  on request, supply the executive director with additional data and
  32-18  information necessary for an investigation of the application, the
  32-19  engineer's report, and the project.
  32-20        (d)  The executive director shall prepare a written report on
  32-21  the project and include suggestions, if any, for changes or
  32-22  improvements in the project.  The executive director shall retain a
  32-23  copy of the report and send a copy of the report to both the
  32-24  commission and the district.
  32-25        (e)  The commission shall consider the application, the
   33-1  engineer's report, the executive director's report, and any other
   33-2  evidence allowed by commission rule to be considered in determining
   33-3  the feasibility of the project.
   33-4        (f)  The commission shall determine whether the project to be
   33-5  financed by the bonds is feasible and issue an order either
   33-6  approving or disapproving, as appropriate, the issuance of the
   33-7  bonds.  The commission shall retain a copy of the order and send a
   33-8  copy of the order to the district.
   33-9        (g)  Notwithstanding any provision of this code to the
  33-10  contrary, the commission may approve the issuance of bonds of a
  33-11  district without the submission of plans and specifications of the
  33-12  improvements to be financed with the bonds.  The commission may
  33-13  condition the approval on any terms or conditions considered
  33-14  appropriate by the commission.
  33-15        (h)  This section does not apply to a district if:
  33-16              (1)  the district's boundaries include one entire
  33-17  county;
  33-18              (2)  the district was created by a special Act of the
  33-19  legislature and:
  33-20                    (A)  the district is located entirely within one
  33-21  county;
  33-22                    (B)  entirely within one or more home-rule
  33-23  municipalities;
  33-24                    (C)  the total taxable value of the real property
  33-25  and improvements to the real property zoned by one or more
   34-1  home-rule municipalities for residential purposes and located
   34-2  within the district does not exceed 25 percent of the total taxable
   34-3  value of all taxable property in the district, as shown by the most
   34-4  recent certified appraisal tax roll prepared by the appraisal
   34-5  district for the county; and
   34-6                    (D)  the district was not required by law to
   34-7  obtain commission approval of its bonds before the effective date
   34-8  of this section;
   34-9              (3)  the district is a special water authority; or
  34-10              (4)  the district is governed by a board of directors
  34-11  appointed in whole or in part by the governor, a state agency, or
  34-12  the governing body or chief elected official of a municipality or
  34-13  county and does not provide water and sewer services to residential
  34-14  retail customers as its principal function.
  34-15        Sec. 49.182.  COMMISSION SUPERVISION OF PROJECTS AND
  34-16  IMPROVEMENTS.  (a)  During construction of projects and
  34-17  improvements approved by the commission under this subchapter, no
  34-18  substantial alterations may be made in the plans and specifications
  34-19  without the approval of the commission in accordance with
  34-20  commission rules.
  34-21        (b)  The executive director may inspect the improvements at
  34-22  any time during construction to determine if the project is being
  34-23  constructed in accordance with the plans and specifications
  34-24  approved by the commission.
  34-25        (c)  If the executive director finds that the project is not
   35-1  being constructed in accordance with the approved plans and
   35-2  specifications, the executive director shall give written notice
   35-3  immediately by certified mail to the district's manager and to each
   35-4  board member.
   35-5        (d)  If within 10 days after the notice is mailed the board
   35-6  does not take steps to ensure that the project is being constructed
   35-7  in accordance with the approved plans and specifications, the
   35-8  executive director shall give written notice of this fact to the
   35-9  attorney general.
  35-10        (e)  After receiving this notice, the attorney general may
  35-11  bring an action for injunctive relief or quo warranto proceedings
  35-12  against the directors.  Venue for either suit is exclusively in a
  35-13  district court in Travis County.
  35-14        Sec. 49.183.  BOND SALES.  (a)  Except for refunding bonds,
  35-15  or bonds sold to a state or federal agency, bonds issued by a
  35-16  district shall be sold after advertising for and receiving
  35-17  competitive sealed bids and shall be awarded to the bidder whose
  35-18  bid produces the lowest net effective interest rate to the
  35-19  district.
  35-20        (b)  Except for refunding bonds, or bonds sold to a state or
  35-21  federal agency, after any bonds are finally approved and before
  35-22  they are sold by a district, the board shall publish an appropriate
  35-23  notice of the sale:
  35-24              (1)  at least one time not less than 10 days before the
  35-25  date of sale in a newspaper of general circulation in the county or
   36-1  counties in which the district is located; and
   36-2              (2)  at least one time in one or more recognized
   36-3  financial publications of general circulation in the state as
   36-4  approved by the state attorney general.
   36-5        (c)  If the district is issuing bonds and refunding bonds as
   36-6  one issue and if the initial principal amount of refunding bonds is
   36-7  50 percent or more of the total initial principal amount of bonds
   36-8  being issued, for the purposes of this section, the issue shall be
   36-9  considered to be refunding bonds and competitive bids shall not be
  36-10  required.
  36-11        (d)  A district's bonds are negotiable instruments within the
  36-12  meaning and purposes of the Business & Commerce Code.  A district's
  36-13  bonds may be issued and bear interest in accordance with Chapter
  36-14  503, Acts of the 54th Legislature, Regular Session, 1955 (Article
  36-15  717k, Vernon's Texas Civil Statutes); Chapter 3, Acts of the 61st
  36-16  Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas
  36-17  Civil Statutes); the Bond Procedures Act of 1981 (Article 717k-6,
  36-18  Vernon's Texas Civil Statutes); and Chapter 656, Acts of the 68th
  36-19  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
  36-20  Civil Statutes).  Except for this subsection, this section does not
  36-21  apply to special water authorities or districts defined in Section
  36-22  49.181(h)(4).
  36-23        (e)  Subsections (a) and (b) do not apply to district bonds
  36-24  issued pursuant to Chapter 656, Acts of the 68th Legislature,
  36-25  Regular Session, 1983 (Article 717q, Vernon's Texas Civil
   37-1  Statutes).
   37-2        Sec. 49.184.  APPROVAL OF BONDS BY ATTORNEY GENERAL;
   37-3  REGISTRATION OF BONDS.  (a)  Before bonds issued by a district are
   37-4  delivered to the purchasers, a certified copy of all proceedings
   37-5  relating to organization of the district for first bond issues and
   37-6  issuance of the bonds and other relevant information shall be sent
   37-7  to the attorney general.
   37-8        (b)  The attorney general shall carefully examine the bonds,
   37-9  with regard to the record and the constitution and laws of this
  37-10  state governing the issuance of bonds, and the attorney general
  37-11  shall officially approve and certify the bonds if he or she finds
  37-12  that they conform to the record and the constitution and laws of
  37-13  this state and are valid and binding obligations of the district.
  37-14        (c)  After the attorney general approves and certifies the
  37-15  bonds, the comptroller shall register them in a book kept for that
  37-16  purpose and shall record the certificate of the attorney general.
  37-17        (d)  After the approval and registration of the bonds by the
  37-18  comptroller, they shall be incontestable in any court or other
  37-19  forum, for any reason, and shall be valid and binding obligations
  37-20  in accordance with their terms for all purposes.
  37-21        (e)  A contract or lease may be submitted to the attorney
  37-22  general along with the bond records, and, if submitted, the
  37-23  approval by the attorney general of the bonds shall constitute an
  37-24  approval of the contract or lease and the contract or lease shall
  37-25  be incontestable.
   38-1        Sec. 49.185.  EXEMPTIONS.  This subchapter shall not apply to
   38-2  districts engaged in the distribution and  sale of electric energy
   38-3  to the public.
   38-4            (Sections 49.186-49.190 reserved for expansion
   38-5                      SUBCHAPTER G.  AUDIT OF DISTRICTS
   38-6        Sec. 49.191.  DUTY TO AUDIT.  (a)  The board shall have the
   38-7  district's fiscal accounts and records audited annually at the
   38-8  expense of the district.
   38-9        (b)  In all areas of conflict, the provisions of this
  38-10  subchapter shall take precedence over all prior statutory
  38-11  enactments.
  38-12        (c)  The person who performs the audit shall be a certified
  38-13  public accountant or public accountant holding a permit from the
  38-14  Texas State Board of Public Accountancy.
  38-15        (d)  The audit required by this section shall be completed
  38-16  within 120 days after the close of the district's fiscal year.
  38-17        Sec. 49.192.  FORM OF AUDIT.  The executive director shall
  38-18  adopt accounting and auditing manuals and, except as otherwise
  38-19  provided by the manuals, the district audit shall be performed
  38-20  according to the generally accepted auditing standards adopted by
  38-21  the American Institute of Certified Public Accountants.  Financial
  38-22  statements shall be prepared in accordance with generally accepted
  38-23  accounting principles as adopted by the American Institute of
  38-24  Certified Public Accountants.
  38-25        Sec. 49.193.  FINANCIAL REPORTS.  The district's depository,
   39-1  the district's treasurer, and the district's bookkeeper, if any,
   39-2  who receives or has control over any district funds shall keep a
   39-3  full and itemized account of district funds in its, his, or her
   39-4  possession.  Such itemized accounts and records shall be available
   39-5  for audit.
   39-6        Sec. 49.194.  FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
   39-7  REPORTS.  (a)  After the board has approved the audit, it shall
   39-8  submit a copy of the report to the executive director for filing
   39-9  within 135 days after the close of the district's fiscal year.
  39-10        (b)  If the board refuses to approve the annual audit report,
  39-11  the board shall submit a copy of the report to the executive
  39-12  director for filing within 135 days after the close of the
  39-13  district's fiscal year, accompanied by a statement from the board
  39-14  explaining the reasons for its failure to approve the report.
  39-15        (c)  Copies of the audit, the annual financial dormancy
  39-16  affidavit, or annual financial report described in Sections 49.197
  39-17  and 49.198 of this subchapter shall be filed annually in the office
  39-18  of the district.
  39-19        (d)  Each district shall file with the executive director an
  39-20  annual filing affidavit in a format prescribed by the executive
  39-21  director, executed by a duly authorized representative of the
  39-22  board, stating that all copies of the annual audit report, annual
  39-23  financial dormancy affidavit, or annual financial report have been
  39-24  filed under this section.
  39-25        (e)  The annual filing affidavit shall be submitted with the
   40-1  applicable annual document when it is submitted to the executive
   40-2  director for filing as prescribed by this subchapter.
   40-3        (f)  The executive director shall file with the attorney
   40-4  general the names of any districts that do not comply with the
   40-5  provisions of this subchapter.
   40-6        Sec. 49.195.  REVIEW BY EXECUTIVE DIRECTOR.  (a)  The
   40-7  executive director may review the audit report of each district.
   40-8        (b)  The commission may request that the state auditor assist
   40-9  in the establishment of standards and procedures for review of
  40-10  district audits by the executive director.
  40-11        (c)  If the executive director has any objections or
  40-12  determines any violations of generally accepted auditing standards
  40-13  or accounting principles, statutes, or board rules, or if the
  40-14  executive director has any recommendations, he or she shall notify
  40-15  the board and the district's auditor.
  40-16        (d)  Before the audit report may be accepted by the executive
  40-17  director as being in compliance with the provisions of this
  40-18  subchapter, the board and the auditor shall remedy objections and
  40-19  correct violations of which they have been notified by the
  40-20  executive director.
  40-21        (e)  If the audit report indicates that any penal law has
  40-22  been violated, the executive director shall notify the appropriate
  40-23  county or district attorney and the attorney general.
  40-24        Sec. 49.196.  ACCESS TO AND MAINTENANCE OF DISTRICT RECORDS.
  40-25  (a)  The executive director shall have access to all vouchers,
   41-1  receipts, district fiscal and financial records, and other district
   41-2  records the executive director considers necessary.
   41-3        (b)  All district fiscal records shall be prepared on a
   41-4  timely basis and maintained in an orderly manner in accordance with
   41-5  generally accepted accounting principles.  The fiscal records shall
   41-6  be available for public inspection during regular business hours.
   41-7  A district's fiscal records may be removed from the district's
   41-8  office for the purposes of recording its fiscal affairs and
   41-9  preparing an audit, during which time the fiscal records are under
  41-10  the control of the district's auditor.
  41-11        Sec. 49.197.  FINANCIALLY DORMANT DISTRICTS.  (a)  A
  41-12  financially dormant district is a district that had:
  41-13              (1)  $500 or less of receipts from operations, tax
  41-14  assessments, loans, contributions, or any other sources during the
  41-15  calendar year;
  41-16              (2)  $500 or less of disbursements of funds during the
  41-17  calendar year;
  41-18              (3)  no bonds or other long-term (more than one year)
  41-19  liabilities outstanding during the calendar year; and
  41-20              (4)  no cash or investments that exceeded $5,000 at any
  41-21  time during the calendar year.
  41-22        (b)  A financially dormant district may elect to submit to
  41-23  the executive director a financial dormancy affidavit instead of
  41-24  complying with the audit requirements of Section 49.191.
  41-25        (c)  The annual financial dormancy affidavit shall be
   42-1  prepared in a format prescribed by the executive director and shall
   42-2  be submitted for filing by a duly authorized representative of the
   42-3  district.
   42-4        (d)  The affidavit must be filed annually on or before
   42-5  January 31 with the executive director until such time as the
   42-6  district becomes financially active and the board adopts a fiscal
   42-7  year; thereafter, the district shall file annual audit reports as
   42-8  prescribed by this subchapter.
   42-9        (e)  A district that becomes financially dormant after having
  42-10  been financially active shall be required to file annual financial
  42-11  dormancy affidavits on or before January 31, until the district is
  42-12  either dissolved or again becomes financially active.
  42-13        (f)  Districts governed by this section are subject to
  42-14  periodic audits by the executive director.
  42-15        Sec. 49.198.  AUDIT REPORT EXEMPTION.  (a)  A district that
  42-16  is not collecting taxes may elect to file annual financial reports
  42-17  with the executive director in lieu of the district's compliance
  42-18  with Section 49.191 provided:
  42-19              (1)  the district had no bonds or other long-term (more
  42-20  than one year) liabilities outstanding during the fiscal period;
  42-21              (2)  the district did not have gross receipts from
  42-22  operations, loans, or contributions in excess of $100,000 during
  42-23  the fiscal period; and
  42-24              (3)  the district's cash and temporary investments were
  42-25  not in excess of $100,000 at any time during the fiscal period.
   43-1        (b)  The annual financial report must be accompanied by an
   43-2  affidavit attesting to the accuracy and authenticity of the
   43-3  financial report signed by a duly authorized representative of the
   43-4  district.
   43-5        (c)  The annual financial report and affidavit in a format
   43-6  prescribed by the executive director must be on file with the
   43-7  executive director within 45 days after the close of the district's
   43-8  fiscal year.
   43-9        (d)  Districts governed by this section are subject to
  43-10  periodic audits by the executive director.
  43-11        Sec. 49.199.  POLICIES AND AUDITS OF DISTRICTS.  (a)  Subject
  43-12  to the law governing the district, the board shall adopt the
  43-13  following in writing:
  43-14              (1)  a code of ethics for district directors, officers,
  43-15  employees, and persons who are engaged in handling investments for
  43-16  the district;
  43-17              (2)  a policy relating to travel expenditures;
  43-18              (3)  a policy relating to district investments that
  43-19  ensures that:
  43-20                    (A)  purchases and sales of investments are
  43-21  initiated by authorized individuals, conform to investment
  43-22  objectives and regulations, and are properly documented and
  43-23  approved; and
  43-24                    (B)  periodic review is made of district
  43-25  investments to evaluate investment performance and security;
   44-1              (4)  policies and procedures for selection, monitoring,
   44-2  or review and evaluation of professional services;
   44-3              (5)  a uniform method of accounting and reporting for
   44-4  industrial development bonds and pollution control bonds that
   44-5  complies with requirements of the commission; and
   44-6              (6)  policies that ensure a better use of management
   44-7  information including:
   44-8                    (A)  budgets for use in planning and controlling
   44-9  cost;
  44-10                    (B)  an audit committee of the board; and
  44-11                    (C)  uniform reporting requirements that use
  44-12  "Audits of State and Local Governmental Units" as a guide on audit
  44-13  working papers and that use "Governmental Accounting and Financial
  44-14  Reporting Standards."
  44-15        (b)  The state auditor may audit the financial transactions
  44-16  of any district if the state auditor determines that the audit is
  44-17  necessary.
  44-18        Sec. 49.200.  REVIEW AND COMMENT ON BUDGET OF CERTAIN
  44-19  DISTRICTS.  A district that provides wholesale potable water and
  44-20  wastewater services shall adopt a program that provides such
  44-21  wholesale customers an opportunity to review and comment on the
  44-22  district's annual budget that applies to their services before that
  44-23  budget is adopted by the board.
  44-24            (Sections 49.201-49.210 reserved for expansion
  44-25                   SUBCHAPTER H.  POWERS AND DUTIES
   45-1        Sec. 49.211.  POWERS.  (a)  A district shall have the
   45-2  functions, powers, authority, rights, and duties that will permit
   45-3  accomplishment of the purposes for which it was created or the
   45-4  purposes authorized by the constitution, this code, or any other
   45-5  law.
   45-6        (b)  A district is authorized to purchase, construct,
   45-7  acquire, own, operate, maintain, repair, improve, or extend inside
   45-8  and outside its boundaries any and all land, works, improvements,
   45-9  facilities, plants, equipment, and appliances necessary to
  45-10  accomplish the purposes of its creation or the purposes authorized
  45-11  by this code or any other law.
  45-12        Sec. 49.212.  FEES AND CHARGES.  (a)  A district may adopt
  45-13  and enforce all necessary charges, fees, or rentals, in addition to
  45-14  taxes, for providing or making available any district facility or
  45-15  service.
  45-16        (b)  A district may require a deposit for any services or
  45-17  facilities furnished and the district may or may not provide that
  45-18  the deposit will bear interest.
  45-19        (c)  Subject to observance of the procedure appropriate to
  45-20  the circumstances, a district may discontinue any or all facilities
  45-21  or services to prevent an abuse or to enforce payment of an unpaid
  45-22  charge, fee, or rental due the district, including taxes that have
  45-23  been delinquent for not less than six months.
  45-24        (d)  Notwithstanding any provision of law to the contrary, a
  45-25  district that charges a fee that is an impact fee as described in
   46-1  Section 395.001(4), Local Government Code, must comply with Chapter
   46-2  395, Local Government Code.  A charge or fee by a district for
   46-3  construction, installation, or inspection of a tap or connection to
   46-4  district water, sanitary sewer, or drainage facilities, including
   46-5  all necessary service lines and meters, that (i) does not exceed
   46-6  three times the actual and reasonable costs to the district for
   46-7  such work or (ii) if made to a nontaxable entity, does not exceed
   46-8  the actual costs to the district for such work and for all
   46-9  facilities that are necessary to provide district services to such
  46-10  entity and that are financed or are to be financed in whole or in
  46-11  part by tax-supported bonds of the district, shall not be deemed or
  46-12  considered to be an impact fee under Chapter 395, Local Government
  46-13  Code.
  46-14        Sec. 49.213.  AUTHORITY TO ISSUE CONTRACTS.  (a)  A district
  46-15  may contract with a person or any public or private entity for the
  46-16  joint construction, financing, ownership, and operation of any
  46-17  works, improvements, facilities, plants, equipment, and appliances
  46-18  necessary to accomplish any purpose or function permitted by a
  46-19  district, or a district may purchase an interest in any project
  46-20  used for any purpose or function permitted by a district.
  46-21        (b)  A district may enter into contracts with any person or
  46-22  any public or private entity in the performance of any purpose or
  46-23  function permitted by a district.
  46-24        (c)  A district may enter into contracts, which may be of
  46-25  unlimited duration, with persons or any public or private entities
   47-1  on the terms and conditions the board may consider desirable, fair,
   47-2  and advantageous for:
   47-3              (1)  the purchase or sale of water;
   47-4              (2)  the collection, transportation, treatment, and
   47-5  disposal of its domestic, industrial, and communal wastes or the
   47-6  collection, transportation, treatment, and disposal of domestic,
   47-7  industrial, and communal wastes of other persons;
   47-8              (3)  the gathering, diverting, and control of local
   47-9  storm water, or other local harmful excesses of water;
  47-10              (4)  the continuing and orderly development of the land
  47-11  and property within the district through the purchase,
  47-12  construction, or installation of works, improvements, facilities,
  47-13  plants, equipment, and appliances that the district may otherwise
  47-14  be empowered and authorized to do or perform so that, to the
  47-15  greatest extent reasonably possible, considering sound engineering
  47-16  and economic practices, all of the land and property may be placed
  47-17  in a position to ultimately receive the services of the works,
  47-18  improvements, plants, facilities, equipment, and appliances;
  47-19              (5)  the maintenance and operation of any works,
  47-20  improvements, facilities, plants, equipment, and appliances of the
  47-21  district or of another person or public or private entity;
  47-22              (6)  the collection, treatment, and disposal of
  47-23  municipal solid wastes;
  47-24              (7)  the exercise of any other rights, powers, and
  47-25  duties granted to a district.
   48-1        Sec. 49.214.  CONFLICTS OF INTEREST IN CONTRACTS.  The
   48-2  provisions of Chapter 171, Local Government Code, shall apply to
   48-3  the award of district contracts.
   48-4        Sec. 49.215.  SERVICE TO AREAS OUTSIDE THE DISTRICT.  (a)  A
   48-5  district may purchase, construct, acquire, own, operate, repair,
   48-6  improve, or extend all works, improvements, facilities, plants,
   48-7  equipment, and appliances necessary to provide any services or
   48-8  facilities authorized to be provided by the district to areas
   48-9  contiguous to or in the vicinity of the district provided the
  48-10  district does not duplicate a service or facility of another public
  48-11  entity.  A district providing potable water and sewer utility
  48-12  services to household users shall not provide services or
  48-13  facilities to serve areas outside the district that are also within
  48-14  the corporate limits of a city without securing a resolution or
  48-15  ordinance of the city granting consent for the district to serve
  48-16  the area within the city.
  48-17        (b)  To secure money for this purpose, a district is
  48-18  authorized to issue and sell negotiable bonds and notes payable
  48-19  from the levy and collection of ad valorem taxes on all taxable
  48-20  property within the district or from all or any designated part of
  48-21  the revenues received from the operation of the district's works,
  48-22  improvements, facilities, plants, equipment, and appliances or from
  48-23  a combination of taxes and revenues.
  48-24        (c)  Any bonds and notes may be issued upon the terms and
  48-25  conditions set forth in this code.
   49-1        (d)  A district shall not be required to hold a certificate
   49-2  of convenience and necessity as a precondition for providing retail
   49-3  water or sewer service to any customer or service area,
   49-4  notwithstanding the fact that such customer or service area may be
   49-5  located either within or outside the boundaries of the district or
   49-6  has previously received water or sewer service from an entity
   49-7  required by law to hold a certificate of convenience and necessity
   49-8  as a precondition for such service.  This subsection does not
   49-9  authorize a district to provide services within an area for which a
  49-10  retail public utility holds a certificate of convenience and
  49-11  necessity or within the boundaries of another district without that
  49-12  district's consent, unless the district has a valid certificate of
  49-13  convenience and necessity to provide services to that area.
  49-14        (e)  A district is authorized to establish, maintain, revise,
  49-15  charge, and collect the rates, fees, rentals, tolls, or other
  49-16  charges for the use, services, and facilities that provide service
  49-17  to areas outside the district that are considered necessary and may
  49-18  be higher than those charged for comparable service to users within
  49-19  the district.
  49-20        (f)  The rates, fees, rentals, tolls, or other charges shall
  49-21  be at least sufficient to meet the expense of operating and
  49-22  maintaining the services and facilities for a water and sanitary
  49-23  sewer system serving areas outside the district and to pay the
  49-24  principal of and interest and redemption price on bonds issued to
  49-25  purchase, construct, acquire, own, operate, repair, improve, or
   50-1  extend the services or facilities.
   50-2        Sec. 49.216.  ENFORCEMENT BY PEACE OFFICERS.  (a)  A district
   50-3  may contract for or employ its own peace officers with power to
   50-4  make arrests when necessary to prevent or abate the commission of:
   50-5              (1)  any offense against the rules of the district when
   50-6  the offense or threatened offense occurs on any land, water, or
   50-7  easement owned or controlled by the district;
   50-8              (2)  any offense involving injury or detriment to any
   50-9  property owned or controlled by the district; and
  50-10              (3)  any offense against the laws of the state.
  50-11        (b)  A district may appoint reserve peace officers who may be
  50-12  called to serve as peace officers by the district during the actual
  50-13  discharge of their official duties.
  50-14        (c)  A reserve peace officer serves at the discretion of the
  50-15  district and may be called into service if the district considers
  50-16  it necessary to have additional officers to preserve the peace in
  50-17  or enforce the law of the district.
  50-18        (d)  A reserve peace officer on active duty and actively
  50-19  engaged in assigned duties has the same rights, privileges, and
  50-20  duties as any other peace officer of the district.
  50-21        (e)  Any peace officer, before beginning to perform any
  50-22  duties and at the time of appointment, must take an oath and
  50-23  execute a bond conditioned on faithful performance of such
  50-24  officer's duties in the amount of $1,000 payable to the district.
  50-25  The oath and the bond shall be filed in the district office.
   51-1        Sec. 49.217.  OPERATION OF CERTAIN MOTOR VEHICLES ON OR NEAR
   51-2  PUBLIC FACILITIES.  (a)  In this section, "motor vehicle" means a
   51-3  self-propelled device in, upon, or by which a person or property is
   51-4  or may be transported or drawn on a road or highway.
   51-5        (b)  Except as provided in Subsections (c) and (d), a person
   51-6  may not operate a motor vehicle on a levee, in a drainage ditch, or
   51-7  on land adjacent to a levee, canal, ditch, exposed conduit,
   51-8  pipeline, pumping plant, storm water facility, or other facility
   51-9  for the transmission, storage, treatment, or distribution of water,
  51-10  sewage, or storm water owned or controlled by a district.
  51-11        (c)  A district may authorize the use of motor vehicles on
  51-12  land that it owns or controls by posting signs on the property.
  51-13        (d)  This section does not prohibit a person from:
  51-14              (1)  driving on a public road or highway; or
  51-15              (2)  operating a motor vehicle used for repair or
  51-16  maintenance of public water, sewer, or storm water facilities.
  51-17        (e)  A person who operates a motor vehicle in violation of
  51-18  Subsection (b) commits an offense.  An offense under this section
  51-19  is a Class C misdemeanor, except that if a person has been
  51-20  convicted of an offense under this section, a subsequent offense is
  51-21  a Class B misdemeanor.
  51-22        Sec. 49.218.  Acquisition of Property.  (a)  A district or a
  51-23  water supply corporation may acquire land, materials, waste
  51-24  grounds, easements, rights-of-way, equipment, contract or permit
  51-25  rights or interests, and other property, real or personal,
   52-1  considered necessary for the purpose of accomplishing any one or
   52-2  more of the district's or water supply corporation's purposes
   52-3  provided in this code or in any other law.
   52-4        (b)  A district or water supply corporation shall have the
   52-5  right to acquire property by gift, grant, or purchase and the right
   52-6  to acquire property shall include property considered necessary for
   52-7  the construction, improvement, extension, enlargement, operation,
   52-8  or maintenance of the plants, works, improvements, facilities,
   52-9  equipment, or appliances of a district or a water supply
  52-10  corporation.
  52-11        (c)  A district or water supply corporation may acquire
  52-12  either the fee simple title to or an easement on all land, both
  52-13  public and private, either inside or outside its boundaries and may
  52-14  acquire the title to or an easement on property other than land
  52-15  held in fee.
  52-16        (d)  A district or water supply corporation may also lease
  52-17  property from others for its use on such terms and conditions as
  52-18  the board of the district or the board of directors of the water
  52-19  supply corporation may determine to be advantageous.
  52-20        Sec. 49.219.  ACQUISITION OF EXISTING FACILITIES.  Any
  52-21  district may acquire by agreement all or any part of existing
  52-22  water, sanitary sewer, or drainage systems of any water supply
  52-23  corporation, including works, improvements, facilities, plants,
  52-24  equipment, appliances, contract rights, and other assets and rights
  52-25  that are completed, partially completed, or under construction, and
   53-1  in connection therewith a district may assume all or any part of
   53-2  the contracts, indebtedness, or obligations of the corporation
   53-3  related to said systems, including any contracts, indebtedness, or
   53-4  obligations related to or payable from the revenues of said
   53-5  systems, and may perform all or any part of the obligations of said
   53-6  corporation in the same manner and to the same extent that any
   53-7  other purchaser or assignee could be bound on any such contracts,
   53-8  indebtedness, or obligations.  Before assuming any indebtedness or
   53-9  obligations of such corporation related to any such system, a
  53-10  district other than a special water authority shall obtain the
  53-11  approval of the commission of such assumption.
  53-12        Sec. 49.220.  Right to Use Existing RightS-of-Way.  All
  53-13  districts or water supply corporations are given rights-of-way
  53-14  within, along, under, and across all public, state, county, city,
  53-15  town, or village roads, highways, and rights-of-way and other
  53-16  public rights-of-way without the requirement for surety bond or
  53-17  security.
  53-18        Sec. 49.221.  Right to Enter Land.  (a)  The directors,
  53-19  engineers, attorneys, agents, operators, and employees of a
  53-20  district or water supply corporation may go on any land to inspect,
  53-21  make surveys, or perform tests to determine the condition, value,
  53-22  and usability of the property, with reference to the proposed
  53-23  location of works, improvements, plants, facilities, equipment, or
  53-24  appliances.  The cost of restoration shall be borne by the district
  53-25  or the water supply corporation.
   54-1        (b)  District employees and agents are entitled to enter any
   54-2  public or private property within the boundaries of the district or
   54-3  adjacent to any reservoir or other property owned by the district
   54-4  at any reasonable time for the purpose of inspecting and
   54-5  investigating conditions relating to the quality of water in the
   54-6  state or the compliance with any rule, regulation, permit, or other
   54-7  order of the district.  District employees or agents acting under
   54-8  this authority who enter private property shall observe the
   54-9  establishment's rules and regulations concerning safety, internal
  54-10  security, and fire protection and shall notify any occupant or
  54-11  management of their presence and shall exhibit proper credentials.
  54-12        Sec. 49.222.  Eminent Domain.  (a)  A district or water
  54-13  supply corporation may acquire by condemnation any land, easements,
  54-14  or other property inside or outside the district boundaries, or the
  54-15  boundaries of the certificated service area for a water supply
  54-16  corporation, necessary for water, sanitary sewer, storm drainage,
  54-17  or flood drainage or control purposes or for any other of its
  54-18  projects or purposes, and may elect to condemn either the fee
  54-19  simple title or a lesser property interest.
  54-20        (b)  The right of eminent domain shall be exercised in the
  54-21  manner provided in Chapter 21, Property Code, except that a
  54-22  district or a water supply corporation shall not be required to
  54-23  give bond for appeal or bond for costs in any condemnation suit or
  54-24  other suit to which it is a party and shall not be required to
  54-25  deposit more than the amount of any award in any suit.
   55-1        (c)  The power of eminent domain may not be used for the
   55-2  condemnation of land for the purpose of acquiring rights to
   55-3  underground water or of water or water rights.
   55-4        Sec. 49.223.  Costs of Relocation of Property.  (a)  In the
   55-5  event that the district or the water supply corporation, in the
   55-6  exercise of the power of eminent domain or power of relocation, or
   55-7  any other power, makes necessary the relocation, raising, lowering,
   55-8  rerouting, or change in grade of or alteration in construction of
   55-9  any road, bridge, highway, railroad, electric transmission line,
  55-10  telegraph, or telephone properties, facilities, or pipelines, all
  55-11  necessary relocations, raising, lowering, rerouting, or change in
  55-12  grade or alteration of construction shall be done at the sole
  55-13  expense of the district or the water supply corporation unless
  55-14  otherwise agreed to in writing.  Such relocation shall be
  55-15  accomplished in a timely manner so that the project of the district
  55-16  or the water supply corporation is not delayed.
  55-17        (b)  "Sole expense" means the actual cost of the relocation,
  55-18  raising, lowering, rerouting, or change in grade or alteration of
  55-19  construction and providing comparable replacement without enhancing
  55-20  the facilities after deducting from it the net salvage value
  55-21  derived from the old facility.
  55-22        Sec. 49.224.  POWER TO CONDEMN CEMETERIES.  (a)  The use of
  55-23  land for the construction of district dams and creation of lakes
  55-24  and reservoirs for the purpose of conservation and development of
  55-25  the natural resources of this state is hereby declared to be
   56-1  superior to all other uses; and for these purposes only a district
   56-2  has the power of eminent domain to acquire land, improvements, and
   56-3  other property owned and held for cemeteries or burial places
   56-4  necessary for the construction of a dam or that lies inside the
   56-5  area to be covered by the lake or reservoir or within 300 feet of
   56-6  the high water line of the lake or reservoir.
   56-7        (b)  Except as otherwise provided by this subchapter, the
   56-8  procedure in condemnation proceedings is governed by Chapter 21,
   56-9  Property Code.
  56-10        (c)  Notice shall be served on the title owner of the land on
  56-11  which the cemetery is situated as provided in Chapter 21, Property
  56-12  Code.  General notice to persons having relatives interred in the
  56-13  cemetery shall be given by publication for two consecutive weeks in
  56-14  a newspaper circulated in the county in which the cemetery is
  56-15  situated.
  56-16        (d)  The measure of damages in these eminent domain
  56-17  proceedings shall be assessed as in other condemnation cases.  An
  56-18  additional amount of damages shall be assessed to cover the cost of
  56-19  removing and reinterring the bodies interred in the cemetery or
  56-20  burial place and the cost of removing and resetting the monuments
  56-21  or markers erected at the graves.
  56-22        (e)  The additional assessment shall be deposited in the
  56-23  registry of the county court and disbursed only for the purpose of
  56-24  removing and reinterring the bodies in other cemeteries in Texas
  56-25  agreed on between the district and the relatives of the deceased
   57-1  persons.
   57-2        (f)  If in any case the district and the relatives of a
   57-3  deceased person cannot agree within 30 days on a cemetery for
   57-4  reinterment, or no relatives appear within that time, then the
   57-5  county judge shall designate the cemetery for reinterment.
   57-6        (g)  Instead of depositing the additional assessment in the
   57-7  registry of the court, the district may execute a bond sufficient
   57-8  to cover costs of removing and reinterring the bodies.  The bond
   57-9  shall be payable to and approved by the county judge and
  57-10  conditioned that the bodies will be removed and reinterred as
  57-11  provided by this section.
  57-12        Sec. 49.225.  Leases.  A district may lease any of its
  57-13  property, real or personal, to any person.  The lease may contain
  57-14  the terms and provisions that the board determines to be
  57-15  advantageous to the district.
  57-16        Sec. 49.226.  Sale or Exchange of Surplus Land or Personal
  57-17  Property.  (a)  Any land, interest in land, or personal property
  57-18  owned by the district which is found by the board to be surplus and
  57-19  is not needed by the district may be sold under order of the board
  57-20  either by public or private sale, or the land, interest in land, or
  57-21  personal property may be exchanged for other land, interest in
  57-22  land, or personal property needed by the district.  Except as
  57-23  provided in Subsection (b), land, interest in land, or personal
  57-24  property must be exchanged for like fair market value, which value
  57-25  may be determined by the district.
   58-1        (b)  Any property dedicated to or acquired by the district
   58-2  without expending district funds may be abandoned or released to
   58-3  the original grantor, the grantor's heirs, assigns, executors, or
   58-4  successors upon terms and conditions deemed necessary or
   58-5  advantageous to the district and without receiving compensation for
   58-6  such abandonment or release.  District property may also be
   58-7  abandoned, released, exchanged, or transferred to another district,
   58-8  municipality, county, countywide agency, or authority upon terms
   58-9  and conditions deemed necessary or advantageous to the district.
  58-10  Narrow strips of property resulting from boundary or surveying
  58-11  conflicts or similar causes, or from insubstantial encroachments by
  58-12  abutting property owners, may be abandoned, released, exchanged, or
  58-13  transferred to such abutting owners upon terms and conditions
  58-14  deemed necessary or advantageous to the district.  Chapter 272,
  58-15  Local Government Code, shall not apply to this subsection.
  58-16        (c)  Before either a public or a private sale of real
  58-17  property not required by the district, the district shall give
  58-18  notice of the intent to sell by publishing notice once a week for
  58-19  two consecutive weeks in one or more newspapers with general
  58-20  circulation in the district.
  58-21        (d)  If the district has outstanding bonds secured by a
  58-22  pledge of tax revenues, the proceeds of the sale of property not
  58-23  required by the district shall be applied to retire outstanding
  58-24  bonds of the district when required by the district's applicable
  58-25  bond resolutions.
   59-1        (e)  If the district does not have any outstanding bonds, the
   59-2  proceeds derived from the sale of the personal property or land not
   59-3  required by the district may be used for any lawful purpose.
   59-4        Sec. 49.227.  Authority to Act Jointly.  A district or water
   59-5  supply corporation may act jointly with any other person or entity,
   59-6  private or public, whether within the State of Texas or the United
   59-7  States, in the performance of any of the powers and duties
   59-8  permitted by this code or any other laws.
   59-9        Sec. 49.228.  Damage to Property.  A person who wilfully
  59-10  destroys, defaces, damages, or interferes with district or water
  59-11  supply corporation property is guilty of a Class B misdemeanor.
  59-12        Sec. 49.229.  Grants and Gifts.  A district may accept
  59-13  grants, gratuities, advances, and loans in any form from any source
  59-14  approved by the board, including any governmental entity, any
  59-15  private or public corporation, and any other person and may make
  59-16  and enter into contracts, agreements, and covenants the board
  59-17  considers appropriate in connection with acceptance of grants,
  59-18  gratuities, advances, and loans.
  59-19        Sec. 49.230.  Area-Wide Wastewater Treatment.  The powers and
  59-20  duties conferred on the district are granted subject to the policy
  59-21  of the state to encourage the development and use of integrated
  59-22  area-wide wastewater collection, treatment, and disposal systems to
  59-23  serve the wastewater disposal needs of the citizens of the state
  59-24  whenever economically feasible and competitive to do so, it being
  59-25  an objective of the policy to avoid the economic burden to the
   60-1  people and the impact on the quality of the water in the state that
   60-2  result from the construction and operation of numerous small
   60-3  wastewater collection, treatment, and disposal facilities to serve
   60-4  an area when an integrated area-wide wastewater collection,
   60-5  treatment, and disposal system for the area can be reasonably
   60-6  provided.
   60-7        Sec. 49.231.  STANDBY FEES.  (a)  In this section:
   60-8              (1)  "Standby fee" means a charge, other than a tax,
   60-9  imposed on undeveloped property for the availability of potable
  60-10  water, sanitary sewer, or drainage facilities and services.
  60-11              (2)  "Undeveloped property" means a tract, lot, or
  60-12  reserve in the district to which no potable water, sanitary sewer,
  60-13  or drainage connections have been made for which:
  60-14                    (A)  water, sanitary sewer, or drainage
  60-15  facilities and services are available;
  60-16                    (B)  water supply, wastewater treatment plant
  60-17  capacity, or drainage capacity sufficient to serve the property is
  60-18  available; or
  60-19                    (C)  major water supply lines, wastewater
  60-20  collection lines, or drainage facilities with capacity sufficient
  60-21  to serve the property are available.
  60-22        (b)  A district that proposes to provide or actually provides
  60-23  retail potable water or sewer utility services, or drainage
  60-24  services as the principal function of the district, may, with the
  60-25  approval of the commission, adopt and impose on the owners of
   61-1  undeveloped property in the district a standby fee in addition to
   61-2  taxes levied by the district.  A district may not impose a standby
   61-3  fee for debt service purposes on undeveloped property unless the
   61-4  facilities and services available to the property have been
   61-5  financed by the district; however, a district may impose a standby
   61-6  fee for operating and maintaining facilities that it has not
   61-7  financed.  The district may impose standby fees in different
   61-8  amounts to fairly reflect the level and type of services and
   61-9  facilities available to serve different property.  The intent of
  61-10  the standby fee is to distribute a fair portion of the cost burden
  61-11  for operating and maintaining the facilities and for financing
  61-12  capital costs of the facilities to owners of property who have not
  61-13  constructed improvements but have potable water, sewer, or drainage
  61-14  capacity available.  Any revenues collected from the standby fees
  61-15  shall be used to pay operation and maintenance expenses, to pay
  61-16  debt service on the bonds, or both.
  61-17        (c)  If a district described in Subsection (b) desires to
  61-18  adopt and impose a standby fee, the district shall submit to the
  61-19  commission an application for authority to adopt and impose the
  61-20  standby fee.  The application must describe the tracts of
  61-21  undeveloped property in the district and state the amount of the
  61-22  proposed fee.
  61-23        (d)  The executive director shall examine an application
  61-24  submitted under Subsection (c) and shall investigate the financial
  61-25  condition of the district, including the district's assets,
   62-1  liabilities, sources of revenue, level of utility service rates,
   62-2  and level of debt service and maintenance tax rates.  On the
   62-3  request of the executive director, the district shall submit any
   62-4  information the executive director considers relevant to the
   62-5  examination and investigation.  The executive director shall
   62-6  prepare a written report on the application and the district's
   62-7  financial condition, retain a copy of the report, and send a copy
   62-8  of the report to the commission and the district.
   62-9        (e)  The commission shall hold a hearing on an application
  62-10  submitted under Subsection (c).  Notice of the hearing shall be
  62-11  published in a newspaper of general circulation in the county or
  62-12  counties in which the district is located once a week for two
  62-13  consecutive weeks.  The first publication must occur not later than
  62-14  the 30th day before the date of the hearing.  The district shall
  62-15  send, not later than the 30th day before the date of the hearing,
  62-16  notice of the hearing by certified mail, return receipt requested,
  62-17  to each owner of undeveloped property in the district.  On the date
  62-18  the application is filed, the district's tax assessor and collector
  62-19  shall certify to the district the names of the persons owning
  62-20  undeveloped land in the district as reflected by the most recent
  62-21  certified tax roll of the district.  Notice of the hearing must be
  62-22  sent by certified mail, return receipt requested, to each mortgagee
  62-23  of record that has submitted a written request to be informed of
  62-24  any hearings.  To be effective, the written request must be
  62-25  received by the district not later than the 60th day before the
   63-1  date of the hearing.  The written request for notice must include
   63-2  the name and address of the mortgagee, the name of the property
   63-3  owner in the district, and a brief property description.
   63-4        (f)  The commission shall consider the application, the
   63-5  report of the executive director, and any other evidence allowed by
   63-6  commission rule.  The commission may approve the application only
   63-7  if the commission finds that the fee is necessary to maintain the
   63-8  financial integrity and stability of the district and fairly
   63-9  allocates the costs of district facilities and services among
  63-10  property owners of the district.
  63-11        (g)  After a hearing on an application under Subsection (e),
  63-12  the commission shall issue an order approving or disapproving the
  63-13  application.  The commission shall retain a copy of the order and
  63-14  send a copy of the order to the district.
  63-15        (h)  The commission may approve the adoption and imposition
  63-16  of the standby fee for a period of not more than three years.  The
  63-17  imposition of a standby fee may be renewed for additional periods
  63-18  of not more than three years each in the same manner provided in
  63-19  this section for initial approval of the standby fee.
  63-20        (i)  If approved by the commission, the board by resolution
  63-21  or order may impose an annual standby fee on undeveloped land in
  63-22  the district.
  63-23        (j)  The board may:
  63-24              (1)  charge interest, at the rate of one percent a
  63-25  month, on a standby fee not paid in a timely manner in accordance
   64-1  with the resolution or order imposing the standby fee; and
   64-2              (2)  refuse to provide potable water, sanitary sewer,
   64-3  or drainage service to the property for which the fee was assessed
   64-4  until all delinquent standby fees on the property and interest on
   64-5  those fees are fully paid.
   64-6        (k)  A standby fee imposed under this section is a personal
   64-7  obligation of the person owning the undeveloped property on January
   64-8  1 of the year for which the fee is assessed.  A person is not
   64-9  relieved of the obligation on transfer of title to the property.
  64-10  On January 1 of each year, a lien attaches to undeveloped property
  64-11  to secure payment of any standby fee imposed under this section and
  64-12  the interest, if any, on the fee.  The lien has the same priority
  64-13  as a lien for taxes of the district.
  64-14        (l)  If a standby fee imposed under this section is not paid
  64-15  in a timely manner, a district may file suit to foreclose the lien
  64-16  securing payment of the fee and interest or to enforce the personal
  64-17  obligation for the fee and interest, or both.  The district may
  64-18  recover, in addition to the fee and interest, reasonable costs,
  64-19  including attorney's fees, incurred by the district in enforcing
  64-20  the lien or obligation not to exceed 20 percent of the delinquent
  64-21  fee and interest.  A suit authorized by this subsection must be
  64-22  filed not later than the fourth anniversary of the date the fee
  64-23  became due.  A fee delinquent for more than four years and interest
  64-24  on the fee are considered paid unless a suit is filed before the
  64-25  expiration of the four-year period.
   65-1        (m)  Chapter 395, Local Government Code, does not apply to a
   65-2  standby fee imposed under this section.
   65-3        (n)  For purposes of title insurance policies issued under
   65-4  the authority of Chapter 9, Insurance Code, standby fees are
   65-5  considered taxes.
   65-6        Sec. 49.232.  LABORATORY SERVICES.  A district may contract
   65-7  with any person, within or without the boundaries of the district,
   65-8  to provide or receive laboratory services related to environmental,
   65-9  health, or drinking water testing.
  65-10            (Sections 49.233-49.270 reserved for expansion
  65-11                 SUBCHAPTER I.  CONSTRUCTION CONTRACTS
  65-12        Sec. 49.271.  CONTRACTS FOR CONSTRUCTION WORK.  (a)  Any
  65-13  contract made by the board for construction work shall conform to
  65-14  the provisions of this chapter.
  65-15        (b)  The contract shall contain, incorporate by reference, or
  65-16  have attached to it the specifications, plans, and details for work
  65-17  included in the contract.  All work shall be done in accordance
  65-18  with these plans and specifications and any authorized change
  65-19  orders under the supervision of the board or its designee.
  65-20        (c)  The district may adopt minimum criteria for the
  65-21  qualifications of bidders on its construction contracts and for
  65-22  sureties issuing payment and performance bonds.  For contracts over
  65-23  $25,000, the district shall require a person who bids to submit a
  65-24  certified or cashier's check on a responsible bank in the state
  65-25  equal to at least two percent of the total amount of the bid, or a
   66-1  bid bond of at least two percent of the total amount of the bid
   66-2  issued by a surety legally authorized to do business in this state,
   66-3  as a good faith deposit to ensure execution of the contract.  If
   66-4  the successful bidder fails or refuses to enter into a proper
   66-5  contract with the district, or fails or refuses to furnish the bond
   66-6  required by law, the bidder forfeits the deposit.
   66-7        (d)  The district may also require attendance by a principal
   66-8  of each prospective bidder at mandatory pre-bid conferences and may
   66-9  make any reasonable additional requirements regarding the taking of
  66-10  bids the district may deem appropriate in order to obtain
  66-11  competitive bids from responsible contractors and to minimize
  66-12  contract disputes.
  66-13        Sec. 49.272.  REPORTS FURNISHED TO PROSPECTIVE BIDDERS.  The
  66-14  board shall furnish to any person who desires to bid on
  66-15  construction work, and who makes a request in writing, a copy of
  66-16  the engineer's report or plans and specifications showing the
  66-17  details of the work to be done.  The board may charge for each copy
  66-18  of the engineer's report or plans and specifications an amount
  66-19  sufficient to cover the cost of making the copy.
  66-20        Sec. 49.273.  CONSTRUCTION CONTRACT AWARD.  (a)  The board
  66-21  shall contract for construction in accordance with this section.
  66-22  The bidding documents, plans, specifications, and other data needed
  66-23  to bid on the project must be available at the time of the first
  66-24  advertisement and the advertisement shall state the location at
  66-25  which these documents may be reviewed.
   67-1        (b)  A construction contract may cover all the work to be
   67-2  provided by the district or the various elements of the work may be
   67-3  segregated for the purpose of receiving bids and awarding
   67-4  contracts.  A contract may provide that the work will be
   67-5  constructed in stages over a period of years.
   67-6        (c)  A construction contract may provide for the payment of a
   67-7  total sum that is the completed cost of the work or may be based on
   67-8  bids to cover cost of units of the various elements entering into
   67-9  the work as estimated and approximately specified by the district's
  67-10  engineers, or a contract may be let and awarded in any other form
  67-11  or composite of forms and to any responsible person or persons
  67-12  that, in the board's judgment, will be most advantageous to the
  67-13  district and result in the best and most economical completion of
  67-14  the district's proposed plants, improvements, facilities, works,
  67-15  equipment, and appliances.
  67-16        (d)  For construction contracts for $25,000 or more, the
  67-17  board shall advertise the letting of the contract, including the
  67-18  general conditions, time, and place of opening of sealed bids.  The
  67-19  notice shall be published in one or more newspapers circulated in
  67-20  each county in which part of the district is located.  If one
  67-21  newspaper meets both of these requirements, publication in such
  67-22  newspaper is sufficient.  If there are more than four counties in
  67-23  the district, notice may be published in any newspaper with general
  67-24  circulation in the district.  The notice shall be published once a
  67-25  week for three consecutive weeks before the date that the bids are
   68-1  opened, and the first publication shall be not later than the 21st
   68-2  day before the date of the opening of the sealed bids.
   68-3        (e)  For construction contracts for $15,000 or more but less
   68-4  than $25,000, the board shall solicit written competitive bids on
   68-5  uniform written specifications from at least three bidders.
   68-6        (f)  For construction contracts of less than $15,000, the
   68-7  board is not required to advertise or seek competitive bids.
   68-8        (g)  The board may not subdivide work to avoid the
   68-9  advertising requirements specified in this section.
  68-10        (h)  The board may not accept bids that include substituted
  68-11  items unless the substituted items were included in the original
  68-12  bid proposal and all bidders had the opportunity to bid on the
  68-13  substituted items or unless notice is given to all bidders at a
  68-14  mandatory pre-bid conference.
  68-15        (i)  Change orders to contracts may be issued only as a
  68-16  result of unanticipated conditions encountered during construction
  68-17  or changes in regulatory criteria or to facilitate project
  68-18  coordination with other political entities.
  68-19        (j)  The provisions of this subchapter do not apply to
  68-20  contracts for personal or professional services or for a utility
  68-21  service operator or to contracts made by a district engaged in the
  68-22  distribution and sale of electric energy to the public.
  68-23        (k)  The provisions of this subchapter do not apply to high
  68-24  technology procurements.  The provisions of Sections 252.021(a) and
  68-25  252.042, Local Government Code, shall apply to high technology
   69-1  procurements.
   69-2        Sec. 49.274.  EMERGENCY APPROVAL OF DISTRICT PROJECTS.  If a
   69-3  district experiences an emergency condition that may create a
   69-4  serious health hazard or unreasonable economic loss to the district
   69-5  that requires immediate corrective action, the district may
   69-6  negotiate limited duration contracts to make the necessary repairs.
   69-7  The district shall submit to the executive director details
   69-8  describing the specific serious health hazard or unreasonable
   69-9  economic loss as soon as practicable following the issuance of the
  69-10  contracts.  Whenever possible, the district should obtain prior
  69-11  approval of the executive director before authorizing the contract,
  69-12  but failure to obtain prior approval shall not void the contract.
  69-13  This section does not apply to special water authorities.
  69-14        Sec. 49.275.  CONTRACTOR'S BOND.  Any person, firm,
  69-15  partnership, or corporation to whom a contract is let must give
  69-16  good and sufficient performance and payment bonds in accordance
  69-17  with Chapter 2253, Government Code, and any minimum criteria for
  69-18  sureties issuing such bonds adopted by a district in accordance
  69-19  with Section 49.271.
  69-20        Sec. 49.276.  PAYMENT FOR CONSTRUCTION WORK.  (a)  The
  69-21  district shall pay the contract price of construction contracts
  69-22  only as provided in this section.
  69-23        (b)  The district will make progress payments under
  69-24  construction contracts monthly as the work proceeds, or at more
  69-25  frequent intervals as determined by the board or its designee, on
   70-1  estimates approved by the board or its designee.
   70-2        (c)  If requested by the district or district engineer, the
   70-3  contractor shall furnish a breakdown of the total contract price
   70-4  showing the amount included for each principal category of the
   70-5  work, in such detail as requested, to provide a basis for
   70-6  determining progress payments.  In the preparation of estimates,
   70-7  the district engineer may authorize material delivered on the site
   70-8  and preparatory work done to be considered if the consideration is
   70-9  specifically authorized by the contract and if the contractor
  70-10  furnishes satisfactory evidence that he has acquired title to the
  70-11  material and that it will be utilized on the work covered by the
  70-12  contract.
  70-13        (d)  In making progress payments, 10 percent of the estimated
  70-14  amount shall be retained until final completion and acceptance of
  70-15  the contract work.  However, if the board at any time after 50
  70-16  percent of the work has been completed finds that satisfactory
  70-17  progress is being made, it may authorize any of the remaining
  70-18  progress payments to be made in full.  Also, if the work is
  70-19  substantially complete, the board, if it finds the amount retained
  70-20  to be in excess of the amount adequate for the protection of the
  70-21  district, at its discretion may release to the contractor all or a
  70-22  portion of the excess amount.  The district is not obligated to pay
  70-23  interest on amounts retained except as provided herein.  The
  70-24  district shall not be obligated to pay any interest on the 10
  70-25  percent retainage held on the first 50 percent of work completed.
   71-1  If the district holds any retainage on the remaining 50 percent of
   71-2  the work completed, the district shall pay interest on such
   71-3  retainage from the date the retainage is withheld to the date of
   71-4  payment to the contractor.  The interest rate to be paid on such
   71-5  retainage shall be the rate of interest paid by the district's
   71-6  depository bank on interest bearing accounts of similar amounts
   71-7  during the period of time interest accrues as provided herein.
   71-8        (e)  On completion and acceptance of each separate project,
   71-9  public work, or other division of the contract, on which the price
  71-10  is stated separately in the contract, payment may be made without
  71-11  retention of a percentage.
  71-12        Sec. 49.277.  INSPECTION OF AND REPORTS ON CONSTRUCTION WORK.
  71-13  (a)  The board shall have control of construction work being done
  71-14  for the district under contract to determine whether or not the
  71-15  contract is being fulfilled and shall have the construction work
  71-16  inspected by the district engineer or other designated person.
  71-17        (b)  During the progress of the construction work, the
  71-18  district engineer or other designated person shall submit to the
  71-19  board detailed written reports showing whether or not the
  71-20  contractor is complying with the contract, and when the work is
  71-21  completed the district engineer shall submit to the board a final
  71-22  detailed report including as-built plans of the facilities showing
  71-23  whether or not the contractor has fully complied with the contract.
  71-24            (Sections 49.278-49.300 reserved for expansion
  71-25            SUBCHAPTER J.  ANNEXATION OR EXCLUSION OF LAND
   72-1        Sec. 49.301.  ADDING LAND BY PETITION OF LANDOWNER.  (a)  In
   72-2  addition to any other provision provided by law, the owner or
   72-3  owners of land whether or not contiguous to the district or
   72-4  otherwise may file with the board a petition requesting that there
   72-5  be included in the district the land described in the petition by
   72-6  metes and bounds or by lot and block number if there is a recorded
   72-7  plat of the area to be included in the district.  The petition may
   72-8  request the district to condition the annexation on certain
   72-9  conditions, including the voter authorization of bonds to serve the
  72-10  area to be annexed.
  72-11        (b)  If the district has bonds, notes, or other obligations
  72-12  outstanding or bonds payable in whole or in part from taxes that
  72-13  have been voted but are unissued, the board may require the
  72-14  petitioner or petitioners to assume their share of the outstanding
  72-15  bonds, notes, or other obligations and the voted but unissued tax
  72-16  bonds of the district and authorize the board to levy a tax on
  72-17  their property in each year while any of the bonds, notes, or other
  72-18  obligations payable in whole or in part from taxation are
  72-19  outstanding to pay their share of the indebtedness.
  72-20        (c)  The petition of the landowner to add land to the
  72-21  district shall be signed and executed in the manner provided by law
  72-22  for the conveyance of real estate.
  72-23        (d)  The board shall hear and consider the petition and may
  72-24  add to the district the land described in the petition if it is
  72-25  feasible, practicable, and to the advantage of the district and if
   73-1  the district's system and other improvements of the district are
   73-2  sufficient or will be sufficient to supply the added land without
   73-3  injuring land already in the district.
   73-4        (e)  If the district has bonds payable in whole or in part
   73-5  from taxation that are voted but unissued at the time of an
   73-6  annexation and the petitioners assume the bonds and authorize the
   73-7  district to levy a tax on their property to pay the bonds, then the
   73-8  board may issue the voted but unissued bonds even though the
   73-9  boundaries of the district have been altered since the
  73-10  authorization of the bonds.
  73-11        (f)  Granted petitions shall be filed for record and shall be
  73-12  recorded in the office of the county clerk of the county or
  73-13  counties in which the added land is located.
  73-14        Sec. 49.302.  ADDING LAND BY PETITION OF LESS THAN ALL THE
  73-15  LANDOWNERS.  (a)  In addition to the method of adding land to a
  73-16  district described in Section 49.301 of this subchapter, defined
  73-17  areas of land, whether or not they are contiguous to the district,
  73-18  may be annexed to the district in the manner set forth in this
  73-19  section.
  73-20        (b)  A petition requesting the annexation of a defined area
  73-21  signed by a majority in value of the owners of land in the defined
  73-22  area, as shown by the tax rolls of the county or counties in which
  73-23  such area is located, or signed by 50 landowners if the number of
  73-24  landowners is more than 50, shall describe the land by metes and
  73-25  bounds or by lot and block number if there is a recorded plat of
   74-1  the area and shall be filed with the secretary of the board.
   74-2        (c)  It shall be the duty of the board to pass an order
   74-3  fixing a time and place at which the petition for annexation shall
   74-4  be heard that shall not be less than 30 days from the day of the
   74-5  order calling the hearing.
   74-6        (d)  The secretary of the board shall issue a notice setting
   74-7  forth the time and place of the hearing and describing the area
   74-8  proposed to be annexed.  Notice of the hearing shall be given by
   74-9  posting copies of the notice in three public places in the district
  74-10  and in one public place in the area proposed to be annexed for at
  74-11  least 14 days before the day of the hearing and by publishing a
  74-12  copy of the notice in a newspaper of general circulation in the
  74-13  county or counties in which the area proposed to be annexed is
  74-14  located one time at least 14 days before the day of the hearing.
  74-15        (e)  If upon the hearing of the petition it is found by the
  74-16  board that the proposed annexation of the area to the district is
  74-17  feasible, practicable, and to the advantage of the district and if
  74-18  the district's system and other improvements of the district are
  74-19  sufficient or will be sufficient to supply the added land without
  74-20  injuring land already in the district, then the board, by order
  74-21  entered in its minutes, may receive the proposed area as an
  74-22  addition to and to become a part of the district.  The order adding
  74-23  the proposed territory to the district need not include all of the
  74-24  land described in the petition if at the hearing a modification or
  74-25  change is found necessary or desirable by the board.
   75-1        (f)  A copy of the order annexing land to the district,
   75-2  signed by a majority of the members of the board and attested by
   75-3  the secretary of the board, shall be filed and recorded in the deed
   75-4  records of the county or counties in which the district is located
   75-5  if the land is finally annexed to the district.
   75-6        (g)  After the order is recorded the area shall be a
   75-7  component part of the district.
   75-8        (h)  The annexed area shall bear its pro rata share of all
   75-9  bonds, notes, or other obligations or taxes that may be owed,
  75-10  contracted, or authorized by the district to which it has been
  75-11  added.
  75-12        (i)  Before the added area shall be subject to all or any
  75-13  part of the bonds, notes, obligations, or taxes created before the
  75-14  annexation of the area to the district, the board shall order an
  75-15  election to be held in the district, as enlarged by reason of the
  75-16  annexation of the area, on the question of the assumption of the
  75-17  bonds, notes, obligations, and taxes by the annexed area.
  75-18        (j)  At the same election, the board may also submit a
  75-19  proposition on the question of whether the annexed area should
  75-20  assume its part of the bonds of the district payable in whole or in
  75-21  part from taxes that have been voted previously but not yet issued
  75-22  or sold and the levy of an ad valorem tax on all taxable property
  75-23  within the area annexed along with a tax on the rest of the
  75-24  district for the payment of the bonds.
  75-25        (k)  If the election results favorably, the district shall be
   76-1  authorized to issue its voted but unissued tax bonds even though
   76-2  the boundaries of the district have been changed since the original
   76-3  election approving the bonds.
   76-4        (l)  At the election called for the purpose of determining
   76-5  whether the annexed area shall assume the bonds, notes, or other
   76-6  obligations or taxes of the district, the board in a separate
   76-7  proposition may also submit the question of whether the board
   76-8  should be authorized to issue bonds payable in whole or in part
   76-9  from taxes to provide service to the area annexed.
  76-10        (m)  In the event that the district has bonds, notes, or
  76-11  obligations or taxes that may be owed, contracted, or authorized at
  76-12  the time an area is annexed or if the district has voted but
  76-13  unissued bonds payable in whole or in part from taxes at the time
  76-14  of an annexation, the board may provide in its order annexing an
  76-15  area to the district that the annexation will not be complete or
  76-16  final unless the indebtedness, tax or bond, note, or other
  76-17  obligation assumption election results favorably to the assumption
  76-18  of the district's outstanding bonds, notes, or other obligations
  76-19  and voted but unissued bonds.
  76-20        (n)  If the board elects to submit the question of whether
  76-21  the board should be authorized to issue bonds to provide service to
  76-22  the area annexed, the board may also provide in its order annexing
  76-23  an area to the district that the annexation will not be complete
  76-24  unless the election results favorably to the issuance of bonds to
  76-25  serve the annexed area.
   77-1        (o)  Whenever an election is ordered to be held in the
   77-2  district for the purpose of the assumption of bonds, notes, or
   77-3  other obligations or taxes or the assumption of voted but unissued
   77-4  bonds by reason of the annexation of any area, then the election
   77-5  shall be held and notice given as provided for bond elections held
   77-6  by the district.
   77-7        (p)  The district has the same right and duty to furnish
   77-8  service to the annexed land that it previously had to furnish
   77-9  service to other land in the district and the board shall endeavor
  77-10  to serve all land in the district without discrimination.
  77-11        Sec. 49.303.  EXCLUDING LAND FROM DISTRICT.  (a)  Before a
  77-12  district orders an election for the authorization of bonds payable
  77-13  in whole or in part from taxes, the board may, on its own motion,
  77-14  call a hearing on the question of the exclusion of land from the
  77-15  district under the provisions of this section and Sections
  77-16  49.304-49.307, if the exclusions are practicable, just, or
  77-17  desirable.
  77-18        (b)  The board must call a hearing on the exclusion of land
  77-19  or other property from the district on the written petition of any
  77-20  landowner or property owner in the district filed with the
  77-21  secretary of the board before the first election on the question of
  77-22  whether bonds should be issued payable in whole or in part from
  77-23  taxes is ordered.
  77-24        (c)  The board may hold a hearing on the exclusion of land or
  77-25  other property from the district if the district has not issued
   78-1  bonds payable in whole or in part from taxes, and if a landowner or
   78-2  property owner submits a signed petition to the secretary of the
   78-3  board evidencing the consent of the owners of a majority of the
   78-4  acreage proposed to be excluded and a majority of the taxable
   78-5  property in the district, as reflected by the most recent certified
   78-6  tax roll of the district.
   78-7        (d)  A district that has previously held an election at which
   78-8  approval was given for the issuance of bonds payable in whole or in
   78-9  part from taxes may not rely on that election for the issuance of
  78-10  the bonds if after the bond election, but before the bonds are
  78-11  issued, land is excluded from the district as provided by this
  78-12  subchapter.  The board must call and hold another bond election and
  78-13  receive voter approval as provided by this subchapter before
  78-14  issuing those bonds.
  78-15        Sec. 49.304.  HEARING TO ANNOUNCE PROPOSED EXCLUSIONS AND TO
  78-16  RECEIVE PETITIONS.  (a)  If the board determines that an exclusion
  78-17  hearing should be held or if a written petition requesting an
  78-18  exclusion hearing is filed with the secretary of the board as
  78-19  provided in Section 49.303, the board shall give notice of the time
  78-20  and place of a hearing to announce its own conclusions relating to
  78-21  land or other property to be excluded and to receive petitions for
  78-22  exclusion of land or other property.
  78-23        (b)  The board shall publish notice of the hearing once a
  78-24  week for two consecutive weeks in one or more newspapers with
  78-25  general circulation in the district.  The first publication shall
   79-1  appear at least 14 days before the day of the hearing.
   79-2        (c)  The notice shall advise all interested property owners
   79-3  of their right to present petitions for exclusions of land or other
   79-4  property and to offer evidence in support of the petitions and
   79-5  their right to contest any proposed exclusion based on either a
   79-6  petition or the board's own conclusions and to offer evidence in
   79-7  support of the contest.
   79-8        Sec. 49.305.  PETITION.  (a)  A petition for exclusion of
   79-9  land must accurately describe by metes and bounds or lot and block
  79-10  number the land to be excluded.  A petition for exclusion of other
  79-11  property must describe the property to be excluded.
  79-12        (b)  A petition for exclusion shall be filed with the
  79-13  district at least seven days before the hearing and shall state
  79-14  clearly the particular grounds on which the exclusion is sought.
  79-15  Only the stated grounds shall be considered.
  79-16        Sec. 49.306.  GROUNDS FOR EXCLUSION.  Exclusions from the
  79-17  district may be made on the grounds that:
  79-18              (1)  to retain certain land or other property within
  79-19  the district's taxing power would be arbitrary and unnecessary to
  79-20  conserve the public welfare, would impair or destroy the value of
  79-21  the property desired to be excluded, and would constitute the
  79-22  arbitrary imposition of a confiscatory burden;
  79-23              (2)  to retain any given land or other property in the
  79-24  district and to extend to it, either presently or in the future,
  79-25  the benefits, service, or protection of the district's facilities
   80-1  would create an undue and uneconomical burden on the remainder of
   80-2  the district; or
   80-3              (3)  the land desired to be excluded cannot be bettered
   80-4  as to conditions of living and health, provided with water or sewer
   80-5  service, protected from flood, drained, freed from interruption of
   80-6  traffic caused by excess of water on the roads, highways, or other
   80-7  means of transportation serving the land, or otherwise benefited by
   80-8  the district's proposed improvements.
   80-9        Sec. 49.307.  HEARING AND ORDER EXCLUDING LAND.  (a)  The
  80-10  board may adjourn the hearing from one day to another and until all
  80-11  persons desiring to be heard are heard.  The board immediately
  80-12  shall specifically describe all property it proposes to exclude on
  80-13  its own motion and shall hear first any protests and evidence
  80-14  against exclusions proposed on the board's own motion.
  80-15        (b)  After considering all engineering data and other
  80-16  evidence presented to it, the board shall determine whether the
  80-17  facts disclose the affirmative of the propositions stated in
  80-18  Subdivision (1) or (2) or, if appropriate, in Subdivision (3) of
  80-19  Section 49.306.  If the affirmative exists, the board shall enter
  80-20  an order excluding all land or other property falling within the
  80-21  conditions defined by the respective subdivisions and shall
  80-22  redefine in the order the boundaries of the district to embrace all
  80-23  land not excluded.  A copy of the order excluding land and
  80-24  redefining the boundaries of the district shall be filed in the
  80-25  deed records of the county or counties in which the district is
   81-1  situated.
   81-2        Sec. 49.308.  SUIT TO REVIEW EXCLUSION.  (a)  Any person
   81-3  owning an interest in land affected by the order may file a
   81-4  petition within 20 days after the effective date of the order to
   81-5  review, set aside, modify, or suspend the order.
   81-6        (b)  The venue in any action shall be in any district court
   81-7  that has jurisdiction in the county in which the district is
   81-8  located.  If the district includes land in more than one county,
   81-9  the venue shall be in the district court having jurisdiction in the
  81-10  county in which the major portion of the acreage of the land sought
  81-11  to be excluded from the district is located.
  81-12        (c)  A person may appeal from the judgment or order of a
  81-13  district court in a suit brought under the provisions of this
  81-14  section to the court of civil appeals and supreme court as in other
  81-15  civil cases in which the district court has original jurisdiction.
  81-16  The appeal is subject to the statutes and rules of practice and
  81-17  procedure in civil cases.
  81-18        Sec. 49.309.  EXCLUSION OF NONIRRIGATED PROPERTY.  For the
  81-19  purposes of this section and Sections 49.310-49.314, the following
  81-20  definitions shall apply:
  81-21              (1)  "Nonirrigated property" means land that:
  81-22                    (A)  is not irrigable;
  81-23                    (B)  the owners of a majority of the acreage of
  81-24  which no longer intend to irrigate; or
  81-25                    (C)  has been subdivided into:
   82-1                          (i)  town lots, or town lots and blocks, or
   82-2  small parcels of the same general nature as town lots; or
   82-3                          (ii)  town blocks and lots designed,
   82-4  intended, or suitable for residential, commercial, or other
   82-5  nonagricultural purposes, as distinguished from farm acreage
   82-6  whether subdivided into a subdivision or not; and
   82-7                          (iii)  including streets, alleys, parkways,
   82-8  parks, and railroad property and rights-of-way located in the
   82-9  subdivided land.
  82-10        The property described in Subdivision (1) shall be considered
  82-11  nonirrigated property regardless of whether the land is within or
  82-12  near a municipality and regardless of whether a plat or map of the
  82-13  subdivision has been duly filed for record and recorded in the
  82-14  office of the county clerk of the county in which the land or any
  82-15  part of the land is situated.
  82-16        The term does not include land that within the year preceding
  82-17  the date of the hearing under Section 49.310 was used for farming
  82-18  or agricultural purposes.
  82-19              (2)  "District" means a water control and improvement,
  82-20  water improvement, or irrigation district the principal purpose of
  82-21  which is furnishing water for the irrigation of agricultural lands
  82-22  or that is principally engaged in furnishing water for the
  82-23  irrigation of agricultural lands.
  82-24        Sec. 49.310.  AUTHORITY TO EXCLUDE LAND.  (a)  A petition for
  82-25  exclusion may be filed by the owner or owners, or their authorized
   83-1  agent, of a majority in acreage of nonirrigated property included
   83-2  within the boundaries of a district.
   83-3        (b)  Upon receipt of a petition for exclusion, or upon its
   83-4  own motion, a district shall issue an order excluding the property
   83-5  if, after notice and hearing, the board finds that:
   83-6              (1)  the described property is nonirrigated property;
   83-7              (2)  the applicable requirements of Section 49.311 have
   83-8  been satisfied;
   83-9              (3)  the owner or owners do not object to the exclusion
  83-10  of their nonirrigated property; and
  83-11              (4)  it is in the best interest of the district and of
  83-12  the described property to exclude that property from the district.
  83-13        (c)  The district shall follow the notice and hearing
  83-14  provisions and other procedural requirements for excluding
  83-15  territory applicable to that district as set out in Sections
  83-16  49.303-49.307.
  83-17        Sec. 49.311.  CONSENT FROM HOLDERS OF INDEBTEDNESS.  If the
  83-18  district has outstanding bonded indebtedness, or indebtedness under
  83-19  a loan from a governmental agency, a written consent from an
  83-20  authorized representative of the holder or holders of the
  83-21  indebtedness consenting to the exclusion shall be obtained and
  83-22  filed with the district before the hearing.
  83-23        Sec. 49.312.  RESULTS OF EXCLUSION.  (a)  Upon issuance of an
  83-24  order excluding property, that property is no longer a part of the
  83-25  district and is not entitled to water service from the district.
   84-1        (b)  Any taxes, assessments, or other charges owed to the
   84-2  district at the time of exclusion remain the obligation of the
   84-3  owner of the  excluded property and continue to be secured by
   84-4  statutory liens on the property, if any.
   84-5        (c)  Once excluded, the landowner has no further liability to
   84-6  the district for future taxes, assessments, or other charges of the
   84-7  district.
   84-8        (d)  A copy of the order excluding the property from the
   84-9  district certified and acknowledged by the secretary of the board
  84-10  shall be recorded by the district in the real property records of
  84-11  the county in which the excluded property is located as evidence of
  84-12  the exclusion.
  84-13        Sec. 49.313.  DISTRICT FACILITIES ON EXCLUDED PROPERTY.  If
  84-14  any canals, ditches, pipelines, pumps, or other facilities of the
  84-15  district are located on lands excluded by the resolution of the
  84-16  board, the exclusion does not affect or interfere with any rights
  84-17  that the district has to maintain and continue operation of the
  84-18  facilities as located for the purpose of servicing lands remaining
  84-19  in the district.
  84-20        Sec. 49.314.  WATER ALLOCATIONS.  (a)  After the district
  84-21  adopts an order excluding nonirrigated property, a city or other
  84-22  water supply corporation that serves the excluded land with a
  84-23  potable water supply may petition the district to apply to the
  84-24  commission to convert the proportionate irrigation water allocation
  84-25  of the land excluded as nonirrigated property, as determined by the
   85-1  district, from irrigation use to municipal use allocation.
   85-2        (b)  The district shall make such application to the
   85-3  commission within 30 days of the filing of a petition by the city
   85-4  or water supply corporation that serves the land with a potable
   85-5  water supply, provided the city or other water supply corporation
   85-6  pays the district the amount the district estimates will be its
   85-7  reasonable expenses and attorney's fees incurred in the commission
   85-8  conversion proceedings and enters into an agreement with the
   85-9  district setting forth the basis on which the water allocation
  85-10  shall be delivered, or made available, to the city or water supply
  85-11  corporation covering such terms as the entities may agree to, and
  85-12  in the event the parties cannot agree, such dispute shall not be
  85-13  subject to the jurisdiction of the commission, or its successors,
  85-14  under this code but subject to resolution through alternative
  85-15  dispute resolution.  In such commission proceeding, the city or
  85-16  water supply corporation shall provide evidence to the commission
  85-17  of the current or projected need within a five year period for the
  85-18  municipal-use water allocation after such conversion as a condition
  85-19  of such conversion of use of the district's water rights from
  85-20  irrigation use to municipal use.
  85-21            (Sections 49.315-49.320 reserved for expansion
  85-22                      SUBCHAPTER K.  DISSOLUTION
  85-23        Sec. 49.321.  DISSOLUTION AUTHORITY.  After notice and
  85-24  hearing, the commission may dissolve any district that is inactive
  85-25  for a period of five consecutive years and has no outstanding
   86-1  bonded indebtedness.
   86-2        Sec. 49.322.  NOTICE OF HEARING.  (a)  The commission shall
   86-3  give notice of the dissolution hearing that briefly describes the
   86-4  reasons for the proceeding.
   86-5        (b)  The notice shall be published once each week for two
   86-6  consecutive weeks before the day of hearing in a newspaper having
   86-7  general circulation in the county or counties in which the district
   86-8  is located.  The first publication shall be 30 days before the day
   86-9  of the hearing.
  86-10        (c)  The commission shall give notice of the hearing by first
  86-11  class mail addressed to the directors of the district according to
  86-12  the last record on file with the executive director.
  86-13        Sec. 49.323.  INVESTIGATION.  The executive director shall
  86-14  investigate the facts and circumstances of the district to be
  86-15  dissolved and the result of the investigation shall be included in
  86-16  a written report.
  86-17        Sec. 49.324.  ORDER OF DISSOLUTION.  The commission may enter
  86-18  an order dissolving the district at the conclusion of the hearing
  86-19  if it finds that the district has performed none of the functions
  86-20  for which it was created for a period of five consecutive years
  86-21  before the day of the proceeding and that the district has no
  86-22  outstanding bonded indebtedness.
  86-23        Sec. 49.325.  CERTIFIED COPY OF ORDER.  The commission shall
  86-24  file a certified copy of the order of dissolution of the district
  86-25  in the deed records of the county or counties in which the district
   87-1  is located.  If the particular district was created by a special
   87-2  Act of the legislature, the commission shall file a certified copy
   87-3  of the order of dissolution with the secretary of state.
   87-4        Sec. 49.326.  APPEALS.  (a)  Appeals from a commission order
   87-5  dissolving a district shall be filed and heard in the district
   87-6  court of any of the counties in which the land is located.
   87-7        (b)  The trial on appeal shall be de novo and the substantial
   87-8  evidence rule shall not apply.
   87-9        Sec. 49.327.  ASSETS ESCHEAT TO STATE.  Upon the dissolution
  87-10  of a district by the commission, all assets of the district shall
  87-11  escheat to the State of Texas.  The assets shall be administered by
  87-12  the state treasurer and shall be disposed of in the manner provided
  87-13  by Chapter 72, Property Code.
  87-14            (Sections 49.328-49.350 reserved for expansion
  87-15                    SUBCHAPTER L.  FIRE DEPARTMENTS
  87-16        Sec. 49.351.  FIRE DEPARTMENTS.  (a)  A district providing
  87-17  potable water or sewer service to household users may establish,
  87-18  operate, and maintain a fire department to perform all
  87-19  fire-fighting activities within the district as provided in this
  87-20  subchapter and may issue, with voter approval, bonds for financing
  87-21  the establishment of the fire department including the construction
  87-22  and purchase of necessary buildings, facilities, and equipment and
  87-23  the provision of an adequate water supply.
  87-24        (b)  After approval of the district electors of a plan to
  87-25  operate or jointly operate a fire department, the district or
   88-1  districts shall provide an adequate system and water supply for
   88-2  fire-fighting purposes, may construct and purchase necessary
   88-3  buildings, facilities, and equipment, and may employ all necessary
   88-4  personnel including supervisory personnel to operate the fire
   88-5  department.
   88-6        (c)  Bonds issued for establishment of the fire department
   88-7  shall be authorized and issued, and a district shall be authorized
   88-8  to levy a tax to pay the principal of and interest on such bonds,
   88-9  as provided by law for authorization and issuance of other bonds of
  88-10  the district.
  88-11        (d)  Two or more districts may contract to operate a joint
  88-12  fire department for their districts and shall include in the
  88-13  contract a system for joint administration and operation of the
  88-14  fire department, the extent of services to be provided, a method
  88-15  for funding the department from funds of each district, and any
  88-16  other terms and conditions the parties consider necessary.
  88-17        (e)  A district may contract with any other person to perform
  88-18  fire-fighting services within the district.
  88-19        (f)  Before a district establishes a fire department,
  88-20  contracts to operate a joint fire department, or contracts with
  88-21  another person to perform fire-fighting services within the
  88-22  district, the district must comply with the provisions of
  88-23  Subsections (g), (h), and (i).
  88-24        (g)  A district or districts proposing to act jointly shall
  88-25  develop a detailed plan for the establishment, operation, and
   89-1  maintenance of the proposed department, including a detailed
   89-2  presentation of all financial requirements.  If a district is
   89-3  entering into a contract under Subsection (e), the district shall
   89-4  develop a plan that describes in detail the facilities and
   89-5  equipment to be devoted to service to the district and all
   89-6  proposals for providing the service and that includes a
   89-7  presentation of the financial requirements under the contract.
   89-8  Before adoption of a plan and any contract by the district, the
   89-9  board shall hold a hearing at which any person residing in the
  89-10  district may present testimony for and against the proposed plan
  89-11  and any proposed contract.  Notice of the hearing and the place at
  89-12  which the plan and any contract may be examined shall be posted in
  89-13  two public places within the district at least 10 days before the
  89-14  date of the hearing.
  89-15        (h)  After adoption of the plan and any contract by the
  89-16  board, the plan and financial presentation, together with any
  89-17  contract and a written report in a form prescribed by the executive
  89-18  director describing existing fire departments and fire-fighting
  89-19  services available within 25 miles of the boundaries of the
  89-20  district, shall be submitted to the executive director for
  89-21  consideration by the commission under rules adopted by the
  89-22  commission.  Before approval or disapproval, the commission shall
  89-23  hold a hearing.  Notice of the hearing before the commission shall
  89-24  be posted by the board in at least two public places in the
  89-25  district at least five days before the hearing.  Before the
   90-1  commission approves the application, it must find that it is
   90-2  economically feasible for the district to implement the plan and
   90-3  meet the provisions of any contract and shall take into
   90-4  consideration in giving its approval the general financial
   90-5  condition of the district and the economic feasibility of the
   90-6  district carrying out the plan or meeting the obligations of the
   90-7  contract.
   90-8        (i)  After approval by the commission, the district shall
   90-9  submit to the electors of the district at the election to approve
  90-10  bonds for financing the plan, or if no bonds are to be approved, at
  90-11  an election called for approval of the plan, the proposition of
  90-12  whether or not the plan should be implemented or entered into by
  90-13  the district.  The ballots at the election shall be printed, as
  90-14  applicable, to provide for voting for or against the proposition:
  90-15  "The implementation of the plan for (operation/joint operation) of
  90-16  a fire department"; or "The plan and contract to provide
  90-17  fire-fighting services for the district."
  90-18        (j)  No funds of the district may be used to establish a fire
  90-19  department, to enter into joint operation of a fire department, or
  90-20  to contract for fire-fighting services without the approval of a
  90-21  plan by the electors as provided in this section.  However, the
  90-22  district may use available funds for preparation of a plan and any
  90-23  contract.  The operation of a fire department or provision of
  90-24  fire-fighting services is an essential public necessity, and a
  90-25  district may discontinue any and all services, including water and
   91-1  sewer service, to any person who fails to timely pay fire
   91-2  department service fees or any other assessment adopted by the
   91-3  district to support the fire department or the provision of
   91-4  fire-fighting services.
   91-5            (Sections 49.352-49.450 reserved for expansion
   91-6            SUBCHAPTER M.  NOTICES, REPORTS, AND BANKRUPTCY
   91-7        Sec. 49.451.  POSTING SIGNS IN THE DISTRICT.  (a)  A district
   91-8  subject to the notice requirements of Section 49.452 shall, within
   91-9  30 days after the effective date of this section or the creation of
  91-10  the district, post signs indicating the existence of the district
  91-11  at two principal entrances to the district.
  91-12        (b)  The size and exact location of the information contained
  91-13  on the signs shall be determined by the executive director.
  91-14        Sec. 49.452.  NOTICE TO PURCHASERS.  (a)(1)  Any person who
  91-15  proposes to sell or convey real property located in a district
  91-16  created under this title or by a special Act of the legislature
  91-17  that is providing or proposing to provide, as the district's
  91-18  principal function, water, sanitary sewer, drainage, and flood
  91-19  control or protection facilities or services, or any of these
  91-20  facilities or services that have been financed or are proposed to
  91-21  be financed with bonds of the district payable in whole or part
  91-22  from taxes of the district, or by imposition of a standby fee, if
  91-23  any, to household or commercial users, other than agricultural,
  91-24  irrigation, or industrial users, and which district includes less
  91-25  than all the territory in at least one county and which, if located
   92-1  within the corporate area of a city, includes less than 75 percent
   92-2  of the incorporated area of the city or which is located outside
   92-3  the corporate area of a city in whole or in substantial part, must
   92-4  first give to the purchaser the written notice provided in this
   92-5  section.
   92-6              (2)  The provisions of this section shall not be
   92-7  applicable to:
   92-8                    (A)  transfers of title under any type of lien
   92-9  foreclosure;
  92-10                    (B)  transfers of title by deed in cancellation
  92-11  of indebtedness secured by a lien upon the property conveyed; or
  92-12                    (C)  transfers of title by reason of a will or
  92-13  probate proceedings.
  92-14        (b)  The prescribed notice for all districts shall be
  92-15  executed by the seller and shall read as follows:
  92-16        "The real property, described below, that you are about to
  92-17  purchase is located in the ___________________ District.  The
  92-18  district has taxing authority separate from any other taxing
  92-19  authority and may, subject to voter approval, issue an unlimited
  92-20  amount of bonds and levy an unlimited rate of tax in payment of
  92-21  such bonds.  As of this date, the rate of taxes levied by the
  92-22  district on real property located in the district is $__________ on
  92-23  each $100 of assessed valuation.  If the district has not yet
  92-24  levied taxes, the most recent projected rate of debt service tax,
  92-25  as of this date, is $__________ on each $100 of assessed valuation.
   93-1  The total amount of bonds approved by the voters and which have
   93-2  been or may, at this date, be issued is $__________, and the
   93-3  aggregate initial principal amounts of all bonds issued for one or
   93-4  more of the specified facilities of the district and payable in
   93-5  whole or in part from property taxes is $__________.
   93-6        "The district has the authority to adopt and impose a standby
   93-7  fee on property in the district that has water, sanitary sewer, or
   93-8  drainage facilities and services available but not connected and
   93-9  which does not have a house, building, or other improvement located
  93-10  thereon and does not substantially utilize the utility capacity
  93-11  available to the property.  The district may exercise the authority
  93-12  without holding an election on the matter.  As of this date, the
  93-13  most recent amount of the standby fee is $__________.  An unpaid
  93-14  standby fee is a personal obligation of the person that owned the
  93-15  property at the time of imposition and is secured by a lien on the
  93-16  property.  Any person may request a certificate from the district
  93-17  stating the amount, if any, of unpaid standby fees on a tract of
  93-18  property in the district.
  93-19        "The purpose of this district is to provide water, sewer,
  93-20  drainage, or flood control facilities and services within the
  93-21  district through the issuance of bonds payable in whole or in part
  93-22  from property taxes.  The cost of these utility facilities is not
  93-23  included in the purchase price of your property, and these utility
  93-24  facilities are owned or to be owned by the district.  The legal
  93-25  description of the property you are acquiring is as follows:
   94-1  ___________________________________________________________________
   94-2                                        ______________________ (Date)
   94-3                                        _____________________________
   94-4                                             Signature of Seller
   94-5        PURCHASER IS ADVISED THAT THE INFORMATION SHOWN ON THIS FORM
   94-6  IS SUBJECT TO CHANGE BY THE DISTRICT AT ANY TIME.  THE DISTRICT
   94-7  ROUTINELY ESTABLISHES TAX RATES DURING THE MONTHS OF SEPTEMBER
   94-8  THROUGH DECEMBER OF EACH YEAR, EFFECTIVE FOR THE YEAR IN WHICH THE
   94-9  TAX RATES ARE APPROVED BY THE DISTRICT.  PURCHASER IS ADVISED TO
  94-10  CONTACT THE DISTRICT TO DETERMINE THE STATUS OF ANY CURRENT OR
  94-11  PROPOSED CHANGES TO THE INFORMATION SHOWN ON THIS FORM.
  94-12        "The undersigned purchaser hereby acknowledges receipt of the
  94-13  foregoing notice at or prior to execution of a binding contract for
  94-14  the purchase of the real property described in such notice or at
  94-15  closing of purchase of the real property.
  94-16                                        ______________________ (Date)
  94-17                                        _____________________________
  94-18                                         Signature of Purchaser
  94-19        "(Note:  Correct district name, tax rate, bond amounts, and
  94-20  legal description are to be placed in the appropriate space.)
  94-21  Except for notices included as an addendum or paragraph of a
  94-22  purchase contract, the notice shall be executed by the seller and
  94-23  purchaser, as indicated.  If the district does not propose to
  94-24  provide one or more of the specified facilities and services, the
  94-25  appropriate purpose may be eliminated.  If the district has not yet
   95-1  levied taxes, a statement of the district's most recent projected
   95-2  rate of debt service tax is to be placed in the appropriate space.
   95-3  If the district does not have approval from the commission to adopt
   95-4  and impose a standby fee, the second paragraph of the notice may be
   95-5  deleted.  For the purposes of the notice form required to be given
   95-6  to the prospective purchaser prior to execution of a binding
   95-7  contract of sale and purchase, a seller and any agent,
   95-8  representative, or person acting on the seller's behalf may modify
   95-9  the notice by substitution of the words 'January 1, ______' for the
  95-10  words 'this date' and place the correct calendar year in the
  95-11  appropriate space."
  95-12        (c)  The notice required by this section shall be given to
  95-13  the prospective purchaser prior to execution of a binding contract
  95-14  of sale and purchase either separately or as an addendum or
  95-15  paragraph of a purchase contract.  In the event a contract of
  95-16  purchase and sale is entered into without the seller providing the
  95-17  notice required by this subsection, the purchaser shall be entitled
  95-18  to terminate the contract.  If, however, the seller furnishes the
  95-19  required notice at or prior to closing the purchase and sale
  95-20  contract and the purchaser elects to close even though such notice
  95-21  was not timely furnished prior to execution of the contract, it
  95-22  shall be conclusively presumed that the purchaser has waived all
  95-23  rights to terminate the contract and recover damages or other
  95-24  remedies or rights under the provisions of this section.
  95-25  Notwithstanding any provision of this subchapter to the contrary,
   96-1  all sellers, title companies, and examining attorneys, and any
   96-2  agent, representative, or person acting on their behalf, shall not
   96-3  be liable for damages under the provisions of either Subsection (l)
   96-4  or (m) or liable for any other damages to any person for failure to
   96-5  provide the notice required by this section to a purchaser prior to
   96-6  execution of a binding contract of a purchase and sale when the
   96-7  district has not filed the information form and map or plat as
   96-8  required under Section 49.455.
   96-9        (d)  The purchaser shall sign the notice or purchase contract
  96-10  including such notice to evidence the receipt of notice.
  96-11        (e)  At the closing of purchase and sale, a separate copy of
  96-12  such notice with current information shall be executed by the
  96-13  seller and purchaser, acknowledged, and thereafter recorded in the
  96-14  deed records of the county in which the property is located.  For
  96-15  the purposes of this section, all sellers, title companies, and
  96-16  examining attorneys, and any agent, representative, or person
  96-17  acting on their behalf, shall be entitled to rely on the accuracy
  96-18  of the information form and map or plat as last filed by each
  96-19  district under Section 49.455 or the information contained in or
  96-20  shown on the notice form issued by the district under Section
  96-21  49.453 in completing the notice form to be executed by the seller
  96-22  and purchaser at the closing of purchase and sale.  Any information
  96-23  taken from the information form or map or plat as last filed by
  96-24  each district and the information contained in or shown on the
  96-25  notice form issued by the district under Section 49.453 shall be,
   97-1  for purposes of this section, conclusively presumed as a matter of
   97-2  law to be correct.  All subsequent sellers, purchasers, title
   97-3  insurance companies, examining attorneys, and lienholders shall be
   97-4  entitled to rely upon the information form and map or plat filed by
   97-5  the district or the notice form issued by the district under
   97-6  Section 49.453.
   97-7        (f)  For the purposes of this section, an executory contract
   97-8  of purchase and sale having a performance period of more than six
   97-9  months shall be considered a sale under Subsection (a).
  97-10        (g)  For the purposes of the notice form to be given to the
  97-11  prospective purchaser prior to execution of a binding contract of
  97-12  sale and purchase, a seller and any agent, representative, or
  97-13  person acting in the seller's behalf may modify the notice by
  97-14  substitution of the words "January 1, ____" for the words "this
  97-15  date" and place the correct calendar year in the appropriate space.
  97-16  All sellers, and all persons completing the prescribed notice in
  97-17  the sellers' behalf, shall be entitled to rely on the information
  97-18  contained in or shown on the information form and map or plat filed
  97-19  of record by the district under Section 49.455 in completing the
  97-20  prescribed form to be given to the prospective purchaser prior to
  97-21  execution of a binding contract of sale and purchase.  Except as
  97-22  otherwise provided in Subsection (e), any information taken from
  97-23  the information form or map or plat filed of record by the district
  97-24  in effect as of January 1 of each year shall be, for purposes of
  97-25  the notice to be given to the prospective purchaser prior to
   98-1  execution of a binding contract of sale and purchase, conclusively
   98-2  presumed as a matter of law to be correct for the period January 1
   98-3  through December 31 of such calendar year.  A seller and any
   98-4  persons completing the prescribed notice in the seller's behalf may
   98-5  provide more recent information, if available, than the information
   98-6  contained in or shown on the information form and map or plat filed
   98-7  of record by the district under Section 49.455 in effect as of
   98-8  January 1 of each year in completing the prescribed form to be
   98-9  given to the purchaser prior to execution of a binding contract of
  98-10  sale and purchase.  Nothing contained in the preceding sentence
  98-11  shall be construed to create an affirmative duty on the part of a
  98-12  seller or any persons completing the prescribed notice in the
  98-13  seller's behalf to provide more recent information than the
  98-14  information taken from the information form and map or plat filed
  98-15  of record by the district as of January 1 of each year in
  98-16  completing the prescribed notice to be given to the purchaser prior
  98-17  to execution of a binding contract of sale and purchase.  All
  98-18  subsequent sellers, purchasers, title insurance companies,
  98-19  examining attorneys, and lienholders shall be entitled to rely upon
  98-20  the information form and map or plat filed by the district.
  98-21        (h)  If such notice is given at closing as provided in
  98-22  Subsection (e), a purchaser, or the purchaser's heirs, successors,
  98-23  or assigns, shall not be entitled to maintain any action for
  98-24  damages or maintain any action against a seller, title insurance
  98-25  company, or lienholder, or any agent, representative, or person
   99-1  acting in their behalf, by reason of use by the seller of the
   99-2  information filed for record by the district or reliance by the
   99-3  seller on the filed plat and filed legal description of the
   99-4  district in determining whether the property to be sold and
   99-5  purchased is within the district.  No action may be maintained
   99-6  against any title company for failure to disclose the inclusion of
   99-7  the described real property within a district when the district has
   99-8  not filed for record the information form, map, or plat with the
   99-9  clerk of the county or counties in which the district is located.
  99-10        (i)  Any purchaser who purchases any real property in a
  99-11  district and who thereafter sells or conveys the same shall on
  99-12  closing of such subsequent sale be conclusively considered as
  99-13  having waived any prior right to damages under this section.
  99-14        (j)  It is the express intent of this section that all
  99-15  sellers, title insurance companies, examining attorneys, vendors of
  99-16  property and tax information, real estate brokers, and lienholders,
  99-17  and any agent, representative, or person acting on their behalf,
  99-18  shall be entitled to rely on the accuracy of the information form
  99-19  and map or plat as last filed by each district or the information
  99-20  contained in or shown on the notice form issued by the district
  99-21  under Section 49.453, or for the purposes of the notice to be given
  99-22  the purchaser prior to execution of a binding contract of sale and
  99-23  purchase the information contained in or shown on the information
  99-24  form and map or plat filed of record by the district in effect as
  99-25  of January 1 of each year for the period January 1 through December
  100-1  31 of such calendar year.
  100-2        (k)  Except as otherwise provided in Subsection (c), if any
  100-3  sale or conveyance of real property within a district is not made
  100-4  in compliance with the provisions of this section, the purchaser
  100-5  may institute a suit for damages under the provisions of either
  100-6  Subsection (l) or (m).
  100-7        (l)  A purchaser of real property covered by the provisions
  100-8  of this section, if the sale or conveyance of the property is not
  100-9  made in compliance with this section, may institute a suit for
 100-10  damages in the amount of all costs relative to the purchase of the
 100-11  property plus interest and reasonable attorney's fees.  The suit
 100-12  for damages may be instituted jointly or severally against the
 100-13  person, firm, corporation, partnership, organization, business
 100-14  trust, estate, trust, association, or other legal entity that sold
 100-15  or conveyed the property to the purchaser.  Following the recovery
 100-16  of damages under this subsection, the amount of the damages shall
 100-17  first be paid to satisfy all unpaid obligations on each outstanding
 100-18  lien or liens on the property and the remainder of the damage
 100-19  amount shall be paid to the purchaser.  On payment of all damages
 100-20  respectively to the lienholders and purchaser, the purchaser shall
 100-21  reconvey the property to the seller.
 100-22        (m)  A purchaser of real property covered by the provisions
 100-23  of this section, if the sale or conveyance of the property is not
 100-24  made in compliance with this section, may institute a suit for
 100-25  damages in an amount not to exceed $5,000, plus reasonable
  101-1  attorney's fees.
  101-2        (n)  A purchaser is not entitled to recover damages under
  101-3  both Subsections (l) and (m), and entry of a final decision
  101-4  awarding damages to the purchaser under either Subsection (l) or
  101-5  (m) shall preclude the purchaser from recovering damages under the
  101-6  other subsection.  Notwithstanding any part or provision of the
  101-7  general or special laws or the common law of the state to the
  101-8  contrary, the relief provided under Subsections (l) and (m) shall
  101-9  be the exclusive remedies for a purchaser aggrieved by the seller's
 101-10  failure to comply with the provisions of this section.  Any action
 101-11  for damages shall not, however, apply to, affect, alter, or impair
 101-12  the validity of any existing vendor's lien, mechanic's lien, or
 101-13  deed of trust lien on the property.
 101-14        (o)  A suit for damages under the provisions of this section
 101-15  must be brought within 90 days after the purchaser receives the
 101-16  first district tax notice or within four years after the property
 101-17  is sold or conveyed to the purchaser, whichever time occurs first,
 101-18  or the purchaser loses the right to seek damages under this
 101-19  section.
 101-20        (p)  Notwithstanding any provisions of this subchapter to the
 101-21  contrary, a purchaser may not recover damages of any kind under
 101-22  this section if that person:
 101-23              (1)  purchases an equity in real property and in
 101-24  conjunction with the purchase assumes any liens, whether purchase
 101-25  money or otherwise; and
  102-1              (2)  does not require proof of title by abstract, title
  102-2  policy, or any other proof of title.
  102-3        Sec. 49.453.  NOTICE FORM FROM DISTRICT.  (a)  A district
  102-4  covered by Section 49.452 shall also maintain in the district
  102-5  office the particular form of Notice to Purchasers required by
  102-6  Section 49.452 to be furnished by a seller to a purchaser of real
  102-7  property in that district and shall, upon written request of any
  102-8  person, issue the notice form completed by a district with all
  102-9  information required to be furnished by the district.  A notice
 102-10  form issued by a district under the provisions of this section
 102-11  shall include a written statement that the notice form is being
 102-12  issued by the district, the date of its issuance, and the
 102-13  district's telephone number.  A district shall not be required to
 102-14  orally provide the information.
 102-15        (b)  A district may charge a reasonable fee as determined by
 102-16  the district not to exceed $10 for the issuance of a notice form
 102-17  pursuant to Subsection (a).  The notice form shall be delivered by
 102-18  regular mail or made available at the district's office.  If a
 102-19  district is requested to deliver the notice form to a person by an
 102-20  alternative method, the district may impose a charge not to exceed
 102-21  the actual cost of such delivery.
 102-22        (c)  A district may delegate the responsibility for issuance
 102-23  of the particular form of Notice to Purchasers to an employee or
 102-24  agent of the district.  A district shall file with the commission
 102-25  the name, address, and telephone number of the employee or agent of
  103-1  the district responsible for issuance of the notice forms and shall
  103-2  notify the commission in writing within seven days after there is a
  103-3  change to the information required to be filed with the commission
  103-4  under the provisions of this subsection.
  103-5        (d)  Any notice issued by the district shall contain the
  103-6  information effective as of the date of its issuance.
  103-7        Sec. 49.454.  NOTICE OF UNPAID STANDBY FEES.  (a)  A district
  103-8  covered by Section 49.452 shall, on the written request of any
  103-9  person, issue a certificate stating the amount of any unpaid
 103-10  standby fees, including interest on the fees, that have been
 103-11  assessed against a tract of property in the district.  The district
 103-12  may charge a fee not to exceed $10 for each certificate.  A
 103-13  certificate issued through fraud or collusion is void.
 103-14        (b)  If the district issues a certificate containing an
 103-15  erroneous statement under Subsection (a) and the owner of the
 103-16  property transfers the property to a good faith purchaser for
 103-17  value, the lien on the property provided by Section 49.231(k) is
 103-18  extinguished to the extent of the error.
 103-19        (c)  This section does not affect the liability for any
 103-20  unpaid standby fees of the former owner of the undeveloped property
 103-21  under Section 49.231(k).
 103-22        Sec. 49.455.  FILING INFORMATION.  (a)  The board covered by
 103-23  the provisions of Section 49.452 of this subchapter shall file with
 103-24  the county clerk in each of the counties in which all or part of
 103-25  the district is located a duly affirmed and acknowledged
  104-1  information form that includes the information required in
  104-2  Subsection (b), and a complete and accurate map or plat showing the
  104-3  boundaries of the district.
  104-4        (b)  The information form filed by a district under this
  104-5  section shall include:
  104-6              (1)  the name of the district;
  104-7              (2)  the complete and accurate legal description of the
  104-8  boundaries of the district;
  104-9              (3)  the most recent rate of district taxes on property
 104-10  located in the district;
 104-11              (4)  the total amount of bonds that have been approved
 104-12  by the voters and which may be issued by the district (excluding
 104-13  refunding bonds and any bonds or portion of bonds payable solely
 104-14  from revenues received or expected to be received pursuant to a
 104-15  contract with a governmental entity);
 104-16              (5)  the aggregate initial principal amount of all
 104-17  bonds of the district payable in whole or part from taxes
 104-18  (excluding refunding bonds and any bonds or portion of bonds
 104-19  payable solely from revenues received or expected to be received
 104-20  pursuant to a contract with a governmental entity) that have been
 104-21  previously issued and remain outstanding;
 104-22              (6)  whether a standby fee is imposed by the district
 104-23  and, if so, the amount of the standby fee;
 104-24              (7)  the date on which the election to confirm the
 104-25  creation of the district was held if such was required;
  105-1              (8)  a statement of the functions performed or to be
  105-2  performed by the district; and
  105-3              (9)  the particular form of Notice to Purchasers
  105-4  required by Section 49.452 of this subchapter to be furnished by a
  105-5  seller to a purchaser of real property in that district completed
  105-6  by the district with all information required to be furnished by
  105-7  the district.
  105-8        If a district has not yet levied taxes, a statement to such
  105-9  effect together with the district's most recent projected rate of
 105-10  debt service tax shall be substituted for Subdivisions (3) and (4).
 105-11        (c)  The information form and map or plat required by this
 105-12  section shall be signed by a majority of the members of the board
 105-13  and by each such officer affirmed and acknowledged before it is
 105-14  filed with the county clerk, and each amendment made to an
 105-15  information form or map shall also be signed by the members of the
 105-16  board and by each such officer affirmed and acknowledged before it
 105-17  is filed with the county clerk.
 105-18        (d)  The information form required by this section shall be
 105-19  filed with the county clerk within 48 hours after the effective
 105-20  date of this section or within 48 hours after the district is
 105-21  officially created, whichever time comes first.  For purposes of
 105-22  this section, the words "officially created" mean the date and hour
 105-23  in which the results of the election to confirm the creation of the
 105-24  district are declared.
 105-25        (e)  Within seven days after there is a change in any of the
  106-1  information contained in the district information form, map, or
  106-2  plat, the district shall file an amendment to the information form,
  106-3  map, or plat setting forth the changes made.
  106-4        (f)  Any person who affirms the corrections and accuracy of
  106-5  and acknowledges an information form, map, or plat, or any
  106-6  amendment to an information form, map, or plat that includes
  106-7  information that is inaccurate or incorrect shall be guilty of a
  106-8  misdemeanor and shall be fined not less than $100 nor more than
  106-9  $1,000 for each violation.
 106-10        (g)  If a district fails to file the information required by
 106-11  this section in the time required, the executive director may
 106-12  request the state attorney general or the district or county
 106-13  attorney of the county in which the district is located to seek a
 106-14  writ of mandamus to force the board to prepare and file the
 106-15  necessary information.
 106-16        (h)  Any member of a governing board who wilfully fails or
 106-17  refuses to join in filing an information form, map, or plat or an
 106-18  amendment to an information form, map, or plat under this section
 106-19  shall be guilty of a misdemeanor and shall be fined not less than
 106-20  $100 nor more than $1,000 for each violation.  A member of a
 106-21  governing board is presumed to have wilfully failed or refused to
 106-22  join in the filing of an information form, map, or plat or an
 106-23  amendment to an information form, map, or plat if that member was
 106-24  present at the meeting at which the information included in the
 106-25  information form, map, or plat or amendment to the information
  107-1  form, map, or plat was adopted.
  107-2        (i)  If a district covered by this section is dissolved,
  107-3  annexed to another local government, or consolidated with another
  107-4  district, the members of the board shall file a statement of this
  107-5  fact together with the effective date of the dissolution,
  107-6  annexation, or consolidation with the information form.  After a
  107-7  district is dissolved and the statement is filed under this
  107-8  subsection, a person who sells or conveys property within the
  107-9  dissolved district is no longer required to give notice under
 107-10  Section 49.452 of this subchapter.
 107-11        (j)  A copy of all information forms, maps, or plats and
 107-12  amendments to these filed under this section shall also be filed
 107-13  with the executive director.
 107-14        Sec. 49.456.  BANKRUPTCY OF DISTRICTS; AUTHORITY OF
 107-15  COMMISSION.  (a)  Notwithstanding Section 140.001, Local Government
 107-16  Code, or any other law of this state, a district created under
 107-17  Sections 52(b)(1) and (2), Article III, or Section 59, Article XVI,
 107-18  Texas Constitution, that is subject to the continuing supervision
 107-19  of the commission may not proceed under Chapter 9 of the Federal
 107-20  Bankruptcy Code (11 U.S.C. Sections 901-946) or any other law
 107-21  enacted by the Congress of the United States under federal
 107-22  bankruptcy authority until the commission authorizes the district
 107-23  to proceed under those laws by written order.
 107-24        (b)  A district requesting the commission's authorization to
 107-25  proceed under Chapter 9 of the Federal Bankruptcy Code (11 U.S.C.
  108-1  Sections 901-946) or any other federal bankruptcy law shall file an
  108-2  application with the commission requesting authorization.
  108-3        (c)  The commission shall investigate the financial condition
  108-4  of a district submitting an application under Subsection (b),
  108-5  including its assets, liabilities, and sources of revenues and may
  108-6  require a district to submit any information that the commission
  108-7  considers material to a determination of whether authorization to
  108-8  proceed in bankruptcy should be granted.
  108-9        (d)  The commission may not authorize a district to proceed
 108-10  in bankruptcy unless the commission determines that the district
 108-11  cannot, through the full exercise of its rights and powers under
 108-12  the laws of this state, reasonably expect to meet its debts and
 108-13  other obligations as they mature.
 108-14        (e)  The commission shall adopt and assess reasonable and
 108-15  necessary fees adequate to recover the costs of the commission in
 108-16  administering this section.
 108-17        SECTION 3.  Title 4, Water Code, is amended by adding Chapter
 108-18  59 to read as follows:
 108-19                    CHAPTER 59.  REGIONAL DISTRICTS
 108-20                   SUBCHAPTER A.  DISTRICT CREATION
 108-21        Sec. 59.001.  PURPOSE AND APPLICATION.  (a)  The purpose of
 108-22  this chapter is to authorize creation and operation of regional
 108-23  districts for water, sanitary sewer, drainage, and municipal solid
 108-24  waste disposal under Section 59, Article XVI, Texas Constitution.
 108-25        (b)  This chapter applies only in counties with a population
  109-1  of at least 2.2 million, according to the most recent federal
  109-2  census, or bordering a county with a population of at least 2.2
  109-3  million, according to the most recent federal census.
  109-4        Sec. 59.002.  DEFINITIONS.  (a)  In this chapter:
  109-5              (1)  "District" means a district created or operating
  109-6  under this chapter.
  109-7              (2)  "Municipal district" means a district created
  109-8  under general law or a special Act operating under Chapter 51, 53,
  109-9  or 54.
 109-10              (3)  "Bond" means bonds, coupons, notes, or any other
 109-11  evidence of indebtedness.
 109-12        (b)  Other terms not defined by this chapter have the same
 109-13  meaning assigned to those terms by Section 49.001.
 109-14        Sec. 59.003.  CREATION OF DISTRICT.  (a)  A district may be
 109-15  created by:
 109-16              (1)  The boards of at least 20 percent of the total
 109-17  number of municipal districts to be included in the proposed
 109-18  district may jointly petition the commission for creation of a
 109-19  district.  The petition must describe the territory to be included
 109-20  in the district and must include resolutions endorsing creation of
 109-21  the district adopted by each municipal district to be included in
 109-22  the district.
 109-23              (2)  The owner or owners of 2,000 or more contiguous
 109-24  acres may petition the commission for creation of a district.
 109-25              (3)  The commissioners courts of one or more counties
  110-1  may petition the commission for creation of a district in any
  110-2  territory within the county.
  110-3              (4)  The governing body of any city may petition the
  110-4  commission for creation of a district in any territory within the
  110-5  city or its extraterritorial jurisdiction.
  110-6        (b)  Petitions for the creation of a district must:
  110-7              (1)  describe the boundaries of the proposed district
  110-8  by metes and bounds that adequately and completely circumscribe the
  110-9  property so that there is complete closure of the property or by
 110-10  lot and block numbers if there is a recorded map or plat or
 110-11  subdivision survey of the area;
 110-12              (2)  state the general nature of the work proposed to
 110-13  be done, the necessity of the work, and the cost of any projects of
 110-14  the district as estimated by those filing the petition;
 110-15              (3)  state the name of each petitioner; and
 110-16              (4)  include a name of the district generally
 110-17  descriptive of the locale of the district followed by the words
 110-18  "Regional District."
 110-19        (c)  A proposed district may not have the same name as any
 110-20  other district in the state.
 110-21        (d)  Section 54.013 applies to the composition of districts
 110-22  created under this chapter.
 110-23        Sec. 59.004.  PURPOSES OF DISTRICT.  A district shall be
 110-24  created:
 110-25              (1)  to purchase, own, hold, lease, and otherwise
  111-1  acquire sources of water supply;
  111-2              (2)  to build, operate, and maintain facilities for the
  111-3  transportation of water;
  111-4              (3)  to sell water to cities, to political subdivisions
  111-5  of this state, to water supply corporations, to private business
  111-6  entities, and to individuals;
  111-7              (4)  to purchase, own, hold, lease, and otherwise
  111-8  acquire equipment and mechanisms necessary for sanitary sewer and
  111-9  wastewater treatment;
 111-10              (5)  to build, operate, and maintain facilities for
 111-11  sanitary sewer and wastewater treatment;
 111-12              (6)  to transport and treat sanitary sewer and
 111-13  wastewater effluent of cities and political subdivisions of this
 111-14  state and for private business entities or individuals;
 111-15              (7)  to purchase, own, hold, lease, and otherwise
 111-16  acquire equipment and mechanisms for the drainage of storm water
 111-17  and floodwater; and
 111-18              (8)  for the purposes outlined in Section 54.012.
 111-19        Sec. 59.005.  MATCHING FUNDS GUARANTEES.  If the Texas Water
 111-20  Development Board requires that matching funds be provided as a
 111-21  condition for receiving a loan or grant from the Texas Water
 111-22  Development Board from research and planning funds, the matching
 111-23  funds may not be provided through a guarantee of matching funds by
 111-24  any individual who has a financial interest in the regional
 111-25  district or who will receive any direct financial benefit from a
  112-1  regional district project.
  112-2        Sec. 59.006.  CONSENT OF CITY.  (a)  Land in the corporate
  112-3  limits of a city or in the extraterritorial jurisdiction of a city
  112-4  may not be included in a district unless the city grants its
  112-5  written consent by resolution or ordinance to the inclusion of the
  112-6  land in the district.
  112-7        (b)  If the governing body of a city fails or refuses to
  112-8  grant permission for the inclusion of land in its extraterritorial
  112-9  jurisdiction in a district within 120 days after receipt of a
 112-10  written request, the person or entity desiring to create the
 112-11  district may petition the governing body of the city to make
 112-12  available the water, sewer, or drainage service contemplated to be
 112-13  provided by the district.
 112-14        (c)  Failure of the governing body of the city and the
 112-15  requesting district to execute a mutually agreeable contract
 112-16  providing for the service requested within six months after receipt
 112-17  of a request for consent constitutes authorization for the
 112-18  inclusion of land in the district under this section.
 112-19  Authorization for the inclusion of the land in the district under
 112-20  this section means only authorization to initiate proceedings to
 112-21  include the land in the district as otherwise provided by this
 112-22  chapter.
 112-23        (d)  Sections 54.016(e), (f), (g), and (h) apply under this
 112-24  chapter.
 112-25        Sec. 59.007.  GRANTING OR REFUSING PETITION; EXCLUSION OF
  113-1  TERRITORY.  (a)  If after the hearing of the petition the
  113-2  commission finds that the petition conforms to the requirements of
  113-3  this chapter and that the creation of the district would be of
  113-4  benefit to the territory to be included in the district, the
  113-5  commission shall issue an order granting the petition for creation.
  113-6  If the commission finds that part of the territory included in the
  113-7  proposed district will not benefit from the creation of the
  113-8  district, the commission shall exclude that territory from the
  113-9  proposed district and redefine the proposed district's boundaries
 113-10  accordingly.
 113-11        (b)  If the commission finds that the petition does not
 113-12  conform to the requirements of this chapter or that the proposed
 113-13  projects are not of benefit to the territory in the proposed
 113-14  district, the commission shall issue an order either denying the
 113-15  petition or requiring petitioners to amend their petition.
 113-16        (c)  A copy of the order of the commission granting or
 113-17  denying a petition shall be mailed to each city having
 113-18  extraterritorial jurisdiction in the county or counties in which
 113-19  the district is to be located that has requested notice of hearings
 113-20  as provided by Section 54.019.
 113-21            (Sections 59.008-59.020 reserved for expansion
 113-22               SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS
 113-23        Sec. 59.021.  DIRECTORS.  (a)  The commission shall appoint
 113-24  temporary directors who shall serve until permanent directors are
 113-25  elected.
  114-1        (b)  A petition requesting creation filed in accordance with
  114-2  Section 59.006 may provide that directors be elected by precinct as
  114-3  provided by Subsection (h).
  114-4        (c)  The board of directors is composed of five members
  114-5  unless the petition requesting creation of the district requests
  114-6  and the commission approves a board that consists of seven members.
  114-7        (d)  Permanent directors shall be elected in accordance with
  114-8  Chapter 49.
  114-9        (e)  If the petition for creation has requested the election
 114-10  of seven directors as provided by Subsection (c), unless otherwise
 114-11  agreed, the three directors elected who received the fewest number
 114-12  of votes, whether their election is by precinct or at large, shall
 114-13  serve until the next directors election following the confirmation
 114-14  election and the four who received the highest number of votes
 114-15  shall serve until the second directors election after the
 114-16  confirmation election.
 114-17        (f)  After the creation of the district, the persons or
 114-18  entities that petitioned for creation or 50 qualified voters of the
 114-19  district may file a petition with the commission requesting to
 114-20  expand the district's board to seven members.  If the commission
 114-21  grants the petition, the commission shall appoint two temporary
 114-22  directors.  One temporary director shall serve until the next
 114-23  directors election and one shall serve until the next succeeding
 114-24  directors election.  At each election one director shall be elected
 114-25  to serve for a four-year term.
  115-1        (g)  If the board of directors of the district is expanded to
  115-2  seven members, four directors shall constitute a quorum and a
  115-3  concurrence of four directors is necessary in all matters
  115-4  pertaining to the business of the district.
  115-5        (h)  A petition for the creation of a district may request
  115-6  that the board be elected to represent a geographic area.  If the
  115-7  petition requesting creation of the district is granted, the
  115-8  commission shall establish precincts from which the directors are
  115-9  to be elected.  In establishing the precincts the commission shall
 115-10  attempt to have directors represent geographic areas with equal
 115-11  numbers of people and shall comply with the federal Voting Rights
 115-12  Act of 1965 (42 U.S.C. Sections 1971, 1973 et seq.).  Thereafter,
 115-13  the board of directors of the district shall revise the precincts
 115-14  from time to time to cause them to comply with the provisions of
 115-15  this subsection.
 115-16        Sec. 59.022.  ABILITY TO SET RATES.  The district may charge
 115-17  rates to persons and entities located outside the district's
 115-18  boundaries on terms, rates, and charges the board of directors may
 115-19  determine to be advisable.  In setting rates for out-of-district
 115-20  customers, the board shall set rates sufficient to enable it to
 115-21  meet operation and maintenance expenses and to pay the principal of
 115-22  and interest on debt issued in connection with providing service
 115-23  and to provide a reasonable reserve for replacements to the
 115-24  district.  In setting rates, the district may take into
 115-25  consideration past operation and debt service expenses.
  116-1        Sec. 59.023.  ISSUANCE OF BONDS.  The district may issue
  116-2  bonds for the purpose of purchasing, constructing, acquiring,
  116-3  owning, operating, repairing, improving, or extending any district
  116-4  works, improvements, facilities, plants, equipment, and appliances
  116-5  needed to accomplish the purposes of the district, including works,
  116-6  improvements, facilities, plants, equipment, and appliances needed
  116-7  to provide a waterworks system, sanitary sewer system, storm sewer
  116-8  system, solid waste disposal system, and parks and recreational
  116-9  facilities.  Prior to issuing bonds or other obligations, a
 116-10  confirmation election must be held in accordance with Chapter 49,
 116-11  and a majority of voters must approve the establishment of the
 116-12  district.
 116-13        Sec. 59.024.  EXCLUSION OF CERTAIN MUNICIPAL DISTRICTS.  (a)
 116-14  A municipal district may be excluded from the district as provided
 116-15  by this section.
 116-16        (b)  To be excluded, the board of directors of the municipal
 116-17  district may adopt a resolution requesting exclusion by a majority
 116-18  vote of its board of directors and shall file the petition with the
 116-19  directors of the proposed district before the first confirmation
 116-20  election.
 116-21        (c)  At the time of the district's confirmation election, a
 116-22  separate voting precinct shall be used for the qualified voters in
 116-23  each municipal district that has filed a petition requesting
 116-24  exclusion.  The votes in each precinct shall be tallied separately
 116-25  to determine whether that municipal district will be excluded from
  117-1  the district boundaries.
  117-2        (d)  If a majority of the votes cast in a municipal district
  117-3  requesting exclusion vote against confirmation of the district, the
  117-4  votes cast in the confirmation election shall not be counted for
  117-5  the confirmation election, bond election, or maintenance tax
  117-6  election, and that municipal district must be excluded from the
  117-7  boundaries of the district by the board of directors of the
  117-8  district at the time the results of the election are canvassed.
  117-9        (e)  After a confirmation election at which the district is
 117-10  authorized to be created, the board of directors of the district
 117-11  shall adopt an order redefining the boundaries of the district to
 117-12  exclude those municipal districts petitioning for exclusion that
 117-13  have voted not to confirm creation of the district.
 117-14        (f)  Before the creation hearing, any municipal district
 117-15  located within the proposed district may petition the commission
 117-16  for a separate voting precinct to be used within the boundaries of
 117-17  the petitioning district at the time of the district's confirmation
 117-18  election.  If the commission grants the petition requesting a
 117-19  separate voting precinct, Subsections (c) through (e) apply.
 117-20        Sec. 59.025.  CONFIRMATION ELECTION.  (a)  Before a district
 117-21  may be created pursuant to a petition granted by the commission, a
 117-22  confirmation election must be held within the boundaries of the
 117-23  proposed district.
 117-24        (b)  The directors appointed by the commission shall call and
 117-25  hold the confirmation election in the manner provided for
  118-1  conducting elections under Chapter 49.  The provisions of those
  118-2  sections relating to a directors election do not apply to an
  118-3  election held under this section.
  118-4        (c)  If the creation of the district is defeated, subsequent
  118-5  confirmation elections may not be held to confirm the creation of
  118-6  the district.
  118-7        (d)  A bond election, maintenance tax election, and any other
  118-8  election may be held at the same time and in conjunction with a
  118-9  confirmation election.
 118-10            (Sections 59.026-59.050 reserved for expansion
 118-11       SUBCHAPTER C.  ADDING OR EXCLUDING TERRITORY; DISSOLUTION
 118-12        Sec. 59.051.  ADDING LAND BY PETITION OF LESS THAN ALL
 118-13  LANDOWNERS.  In addition to the method of adding land to a district
 118-14  described in Section 59.052, defined areas of land, regardless of
 118-15  whether they are contiguous to the district, may be annexed to the
 118-16  district in the manner provided in Chapter 49.
 118-17        Sec. 59.052.  FILING OF PETITION.  A petition requesting the
 118-18  annexation of a defined area that is signed by a majority in value
 118-19  of the owners of land in the defined area, as shown by the tax
 118-20  rolls of the county or counties in which that area is located, that
 118-21  is signed by 50 landowners if the number of landowners is more than
 118-22  50, that is signed by the single landowner of 2,000 or more acres
 118-23  of land in the area, or that is signed by a majority of the
 118-24  governing body of a municipal district, a county, or a city
 118-25  requesting annexation shall be filed with the secretary of the
  119-1  board.
  119-2        Sec. 59.053.  DISSOLUTION OF DISTRICT BEFORE ISSUANCE OF
  119-3  BONDS.  (a)  If the board considers it advisable before the
  119-4  issuance of any bonds, the board may dissolve the district and
  119-5  liquidate the affairs of the district as provided by Sections
  119-6  54.734 through 54.738.
  119-7        (b)  If a majority of the board finds at any time before the
  119-8  authorization of bonds that the proposed district and its proposed
  119-9  activities are for any reason impracticable or apparently cannot be
 119-10  successfully and beneficially accomplished, the board may issue
 119-11  notice of a hearing on a proposal to dissolve the district.
 119-12        Sec. 59.054.  JUDICIAL REVIEW OF BOARD'S ORDER.  The board's
 119-13  order to dissolve the district may be judicially reviewed as
 119-14  provided in Chapter 49.
 119-15            (Sections 59.055-59.070 reserved for expansion
 119-16                     SUBCHAPTER D.  MISCELLANEOUS
 119-17        Sec. 59.071.  ANNEXATION OR INCORPORATION BY CITY.  (a)  If a
 119-18  city annexes all or any part of the territory within a district, or
 119-19  incorporates all or any part of any territory within a district,
 119-20  the city shall succeed to the powers, duties, assets, and
 119-21  obligations of the district as provided by this chapter.
 119-22        (b)  On annexation of any part of the territory of a district
 119-23  by a city or incorporation by a city of any part of the territory
 119-24  of a district, the city shall assume a pro rata share of all debt
 119-25  of the district payable in whole or in part by ad valorem taxes
  120-1  incurred for water, sewer, or drainage purposes or any combination
  120-2  of the three purposes.  The percentage of the assumption shall be
  120-3  determined by multiplying the total debt of the district payable in
  120-4  whole or in part from taxes incurred for the stated purposes by a
  120-5  fraction, the numerator of which is the assessed value of the
  120-6  property to be annexed or incorporated based on the most recent
  120-7  certified county property tax rolls at the time of annexation or
  120-8  incorporation and the denominator of which is the total assessed
  120-9  value of the property of the district based on the most recent
 120-10  certified county property tax rolls at the time of annexation or
 120-11  incorporation.
 120-12        (c)  After annexation by a city of a portion of the territory
 120-13  of a district or incorporation over any part of the territory of a
 120-14  district, the district may not levy taxes on that territory, and
 120-15  the territory is no longer considered a part of the district for
 120-16  any purpose.
 120-17        (d)  If any district's debt payable in whole or in part from
 120-18  ad valorem taxes is assumed by a city, the governing body of the
 120-19  city shall levy and cause to be collected taxes on all taxable
 120-20  property within the city or provide other funds sufficient to pay
 120-21  the city's pro rata share of the principal of and interest on that
 120-22  debt as it becomes due and payable.
 120-23        (e)  If a city annexes or incorporates the entire territory
 120-24  of the district, the district shall be dissolved in accordance with
 120-25  Sections 43.074, 43.075, and 43.081, Local Government Code, if the
  121-1  district is located in one city or Sections 43.076-43.079, Local
  121-2  Government Code, if the district is located in more than one city.
  121-3        (f)  Section 43.071, Local Government Code, does not apply to
  121-4  the annexation of a district created pursuant to this chapter.
  121-5        Sec. 59.072.  OTHER LAWS.  (a)  This chapter prevails over
  121-6  any other law in conflict with or inconsistent with this chapter.
  121-7        (b)  Except as specifically provided by this chapter, Chapter
  121-8  49 and Sections 54.018, 54.019(a), (b), (c), and (d), 54.020,
  121-9  54.021, 54.023, 54.024, 54.201, 54.205, 54.207-54.208,
 121-10  54.502-54.505, 54.507(b) and (c), 54.510-54.512, 54.514, 54.515,
 121-11  54.518, 54.520, 54.521, 54.601-54.604, and 54.735-54.737 apply
 121-12  under this chapter.
 121-13        (c)  Section 54.019(e) does not apply to a district governed
 121-14  by this chapter.
 121-15        SECTION 4.  Section 51.0711(a), Water Code, is amended to
 121-16  read as follows:
 121-17        (a)  The governing body of a municipality that enters a
 121-18  contract or agreement with a district located in more than one
 121-19  county to jointly construct, acquire, operate, or maintain a
 121-20  regional wastewater system is entitled to appoint a special
 121-21  director to the board of the district.  Section 51.072 <of this
 121-22  code> does not apply to a special director.
 121-23        SECTION 5.  Section 51.072, Water Code, is amended to read as
 121-24  follows:
 121-25        Sec. 51.072.  QUALIFICATIONS FOR DIRECTOR.  To be qualified
  122-1  for election as a director, a person must be a resident of the
  122-2  state, own land subject to taxation in the district, and be at
  122-3  least 18 <21> years of age.  Section 49.052 does not apply to a
  122-4  district governed by this chapter whose principal purpose is
  122-5  providing water for irrigation.
  122-6        SECTION 6.  Section 51.076(a), Water Code, is amended to read
  122-7  as follows:
  122-8        (a)  In a district created after June 18, 1967, with
  122-9  boundaries coterminous with the boundaries of a county, the
 122-10  commissioners court may provide in the order granting the petition
 122-11  for creation that the directors are to be selected either as
 122-12  provided in Section 49.102 <51.073 of this code> or by the
 122-13  "commissioners precinct method," which provides for the election of
 122-14  two directors from each commissioners precinct in the county and
 122-15  the election of one director from the county at large.
 122-16        SECTION 7.  Section 51.750(d), Water Code, is amended to read
 122-17  as follows:
 122-18        (d)  The temporary directors of each of the resulting
 122-19  districts must qualify as directors of the district pursuant to
 122-20  Section <Sections> 51.072 <and 51.073 of this code> within the
 122-21  period of 90 days after the election approving the division of the
 122-22  original district and shall assume their offices at the expiration
 122-23  of the 90-day period.
 122-24        SECTION 8.  Section 52.005, Water Code, is amended by adding
 122-25  Subsection (c) to read as follows:
  123-1        (c)  Sections 49.052, 49.216, and 49.301-49.308 do not apply
  123-2  to districts governed by this chapter.
  123-3        SECTION 9.  Section 52.115, Water Code, is amended to read as
  123-4  follows:
  123-5        Sec. 52.115.  MEETINGS.  <(a)>  The board shall hold regular
  123-6  quarterly meetings.  It may hold meetings at other times as
  123-7  required for the business of the district.
  123-8        <(b)  Any person may attend a meeting of the board and may
  123-9  present in an orderly manner matters for the board's consideration.>
 123-10        <(c)  Meetings shall be conducted and notice of meetings
 123-11  shall be posted in accordance with the open meetings law, Chapter
 123-12  271, Acts of the 60th Legislature, Regular Session, 1967 (Article
 123-13  6252-17, Vernon's Texas Civil Statutes).>
 123-14        SECTION 10.  Sections 52.294(c), (d), and (e), Water Code,
 123-15  are amended to read as follows:
 123-16        (c)  <Notice of an election must be given as provided by
 123-17  Section 52.059(c) of this code for creation elections.>
 123-18        <(d)>  At an election to authorize bonds or notes payable
 123-19  wholly from ad valorem taxes, the ballots must be printed to
 123-20  provide for voting for or against the proposition:  "The issuance
 123-21  of (bonds or notes) and the levy of taxes for payment of the (bonds
 123-22  or notes)."  At any election to authorize bonds or notes payable
 123-23  from both ad valorem taxes and revenues, the ballots must be
 123-24  printed to provide for voting for or against:  "The issuance of
 123-25  (bonds or notes) and the pledge of net revenues and the levy of ad
  124-1  valorem taxes adequate to provide for the payment of the (bonds or
  124-2  notes)."
  124-3        (d) <(e)>  The board shall canvass the returns and declare
  124-4  the results of the election.  If a majority of the votes cast at
  124-5  the election favor the issuance of the bonds or notes, the bonds or
  124-6  notes may be issued by the board, but if a majority of the votes
  124-7  cast at the election do not favor issuance of the bonds or notes,
  124-8  the bonds or notes may not be issued.
  124-9        SECTION 11.  Section 53.040, Water Code, is amended to read
 124-10  as follows:
 124-11        Sec. 53.040.  Elected Supervisors Take Office.  If the
 124-12  election results in a division of the district, the five candidates
 124-13  receiving the most votes in each new district shall be declared
 124-14  elected.  They shall immediately qualify in accordance with Section
 124-15  49.055 <by taking the constitutional oath of office and shall file
 124-16  the oath with the county clerk>.
 124-17        SECTION 12.  Section 53.042, Water Code, is amended to read
 124-18  as follows:
 124-19        Sec. 53.042.  Newly Elected Supervisors--Term of Office.  The
 124-20  newly elected supervisors hold office until the new district's next
 124-21  supervisors election <first general election and then until their
 124-22  successors are elected and have qualified>.
 124-23        SECTION 13.  Section 53.062, Water Code, is amended to read
 124-24  as follows:
 124-25        Sec. 53.062.  Board of Supervisors.  A district created under
  125-1  this chapter is governed by a board of five elected supervisors.
  125-2  <Specific provisions for the election of supervisors are found in
  125-3  Section 53.021, Section 53.086, and Section 53.0861 of this code.>
  125-4        SECTION 14.  Section 53.088, Water Code, is amended to read
  125-5  as follows:
  125-6        Sec. 53.088.  Status of the District.  <(a)>  A district is:
  125-7              (1)  a governmental agency;
  125-8              (2)  a body politic and corporate; and
  125-9              (3)  a defined district within the meaning of Article
 125-10  XVI, Section 59, of the Texas Constitution.
 125-11        <(b)  A district may, through its board, sue and be sued in
 125-12  any court of this state in the name of the district.  All courts of
 125-13  this state shall take judicial notice of the creation of a
 125-14  district.  A district shall contract and be contracted with in the
 125-15  name of the district.>
 125-16        SECTION 15.  Section 53.172, Water Code, is amended to read
 125-17  as follows:
 125-18        Sec. 53.172.  Ordering Bond Election.  After the creation of
 125-19  a district and the qualification of the supervisors, the board may
 125-20  order an election in the district to authorize a bond issue.  <The
 125-21  board shall set the day for the election, which must be held during
 125-22  the period beginning on the 20th day and ending with the 30th day
 125-23  after the day of the order.>  At this election, the board shall
 125-24  submit only a proposition authorizing the issuance of bonds and the
 125-25  levy of a tax to pay the bonds.  The ballots shall be printed to
  126-1  allow for voting for or against the proposition:  "The issuance of
  126-2  bonds and the levy of taxes to pay the bonds."
  126-3        SECTION 16.  Section 54.025, Water Code, is amended to read
  126-4  as follows:
  126-5        Sec. 54.025.  Qualification of Temporary Directors.  After a
  126-6  district has been organized, each temporary director shall execute
  126-7  a <his> bond in accordance with the provisions of Section 49.055
  126-8  <54.116 of this code> and shall take the <his> oath of office, and
  126-9  the board shall meet and organize.
 126-10        SECTION 17.  Section 54.036, Water Code, is amended to read
 126-11  as follows:
 126-12        Sec. 54.036.  Directors to Continue Serving.  The existing
 126-13  board of a district converted to a municipal utility district under
 126-14  the provisions of this chapter shall continue to serve as the board
 126-15  of the converted district <until the first Saturday in April
 126-16  following conversion of the district, at which time five directors
 126-17  shall be elected to serve for such period of time and in the same
 126-18  manner as provided in Section 54.029 of this code for directors
 126-19  first elected for a district>.
 126-20        SECTION 18.  Section 54.203, Water Code, is amended to read
 126-21  as follows:
 126-22        Sec. 54.203.  MUNICIPAL Solid Waste.  A district is
 126-23  authorized to purchase, construct, acquire, own, operate, maintain,
 126-24  repair, improve, extend, or establish a municipal solid waste
 126-25  collection and disposal system, including recycling, inside and
  127-1  outside the district and make proper charges for it.  A district
  127-2  may require use of such services as a condition for receiving other
  127-3  district services.  A district may enter into an exclusive contract
  127-4  with a private entity to provide such services to all land and
  127-5  persons within its boundaries.
  127-6        SECTION 19.  Section 54.729(a), Water Code, is amended to
  127-7  read as follows:
  127-8        (a)  After the board of each district has agreed on the terms
  127-9  and conditions of consolidation, which may include the assumption
 127-10  by each district of the <other district's> bonds, notes, or other
 127-11  obligations and voted but unissued bonds of the other consolidating
 127-12  districts payable in whole or in part from taxation, the levy of
 127-13  taxes to pay for the bonds, and adoption of a name for the
 127-14  consolidated district, the board shall order an election in each
 127-15  district to determine whether the districts should be consolidated.
 127-16        SECTION 20.  Section 54.730(a), Water Code, is amended to
 127-17  read as follows:
 127-18        (a)  After two or more districts are consolidated, they
 127-19  become one district and are governed as one district, except for
 127-20  the payment of debts created before consolidation if the conditions
 127-21  of consolidation do not provide for the assumption by each district
 127-22  of the <other's> bonds, notes, or other obligations and voted but
 127-23  unissued bonds of the other consolidating districts.
 127-24        SECTION 21.  Section 54.732, Water Code, is amended to read
 127-25  as follows:
  128-1        Sec. 54.732.  ASSESSMENT AND COLLECTION OF TAXES.  After
  128-2  consolidation, the district shall assess and collect taxes on
  128-3  property in the original districts to pay debts created by the
  128-4  original districts unless each district has assumed the <other
  128-5  district's> bonds, notes, or other indebtedness payable in whole or
  128-6  in part from taxation of the other consolidating districts.
  128-7        SECTION 22.  Section 54.733, Water Code, is amended to read
  128-8  as follows:
  128-9        Sec. 54.733.  VOTED BUT UNISSUED BONDS.  In the event any
 128-10  consolidating <either> district has voted but unissued bonds
 128-11  payable in whole or in part from taxation and the consolidated
 128-12  district assumed the voted but unissued bonds and the consolidated
 128-13  district was authorized to levy taxes to pay for the bonds, then
 128-14  the consolidated district shall be authorized to issue the voted
 128-15  but unissued bonds in the name of the consolidated district and
 128-16  levy a uniform tax on all taxable property in the consolidated
 128-17  district to pay for the bonds.
 128-18        SECTION 23.  Chapter 54, Water Code, is amended by adding
 128-19  Sections 54.739-54.747 to read as follows:
 128-20        Sec. 54.739.  Substituting Land of Equal Acreage and Value.
 128-21  After the district is organized and acquires facilities with which
 128-22  to function for the purposes for which it was organized, and votes,
 128-23  issues and sells bonds for such purposes, land within the district
 128-24  boundaries subject to taxation that does not need or utilize the
 128-25  services of the district may be excluded and other land not within
  129-1  the boundaries of the district may be included within the
  129-2  boundaries of the district as provided by the provisions of this
  129-3  section and Sections 54.741-54.748 subject to commission approval.
  129-4        Sec. 54.740.  Requisites for Application for Exclusion.  An
  129-5  owner of land in the district not receiving services from the
  129-6  district may apply for its exclusion from the district boundaries
  129-7  if all taxes levied and assessed by the district on the land to be
  129-8  excluded have been fully paid.  The application shall set forth
  129-9  facts concerning the land proposed for exclusion, including
 129-10  evidence of the reasonable market value of the land, and state that
 129-11  the other requisites for the exclusion of the land and substitution
 129-12  of other land have been fulfilled or will be fulfilled at the
 129-13  hearing upon the application.  The application shall be verified
 129-14  and acknowledged in a recordable form as conveyances of real
 129-15  property.
 129-16        Sec. 54.741.  Inclusion of Substitute Land Required.  An
 129-17  application for exclusion can only be considered by the board if an
 129-18  application is filed by an owner of other land lying outside the
 129-19  boundaries of the district seeking inclusion of land that can be
 129-20  served in a practical manner by the district of at least equal
 129-21  value to the land proposed for exclusion.  Such land must be
 129-22  included within the district boundaries and taxing jurisdiction of
 129-23  the district simultaneously with the exclusion of the land proposed
 129-24  for exclusion.  Such included land must be of sufficient acreage to
 129-25  avoid an impairment of the security for payment of voted and issued
  130-1  bonds and any other contract obligations payable or secured, in
  130-2  whole or in part, from ad valorem taxes or revenues of the
  130-3  district.
  130-4        Sec. 54.742.  Application for Inclusion.  The application
  130-5  submitted by an owner of land proposed for inclusion shall set
  130-6  forth that the owner of the new land assumes the payment of all
  130-7  taxes, assessments and fees levied on the land and assessed by the
  130-8  district after the date the land is included in the district.  The
  130-9  application shall also set forth an agreement by the owner of the
 130-10  land proposed for inclusion that the land will be subject to future
 130-11  taxes for bond tax and other assessments and fees levied and
 130-12  assessed by the district and be subject to the same liens and
 130-13  provisions and statutes governing all other lands in the district
 130-14  as though the land had been incorporated originally in the
 130-15  district.  The application for inclusion shall be verified and
 130-16  acknowledged in a recordable form as conveyances of real property.
 130-17        Sec. 54.743.  Notice of Hearing and Hearing Procedures.  The
 130-18  board shall give notice of the hearing on the applications for
 130-19  exclusion and inclusion in conformity with the notice and hearing
 130-20  requirements otherwise applicable to exclusions or additions of
 130-21  land.  The board at such hearing shall hear all interested parties
 130-22  and all evidence in connection with the applications.
 130-23        Sec. 54.744.  Impairment of Security.  For purposes of the
 130-24  board's consideration of the applications, the lands proposed for
 130-25  inclusion shall be deemed to be sufficient to avoid an impairment
  131-1  of the security for payment of obligations of the district if:
  131-2              (1)  according to the county tax rolls, the taxable
  131-3  value of such included lands equals or exceeds the taxable value of
  131-4  the excluded lands;
  131-5              (2)  the estimated costs of providing district
  131-6  facilities and services to such included lands is equal to or less
  131-7  than the estimated costs of providing district facilities and
  131-8  services to the excluded lands; and
  131-9              (3)  the district's outstanding bonds or contract
 131-10  obligations are payable in whole or in part by a pledge of net
 131-11  revenues from the ownership or operation of the district's
 131-12  facilities, and the projected net revenues to be derived from the
 131-13  lands to be included during the succeeding 12-month period, as
 131-14  determined by the district's engineer, equals or exceeds the
 131-15  projected net revenues that would otherwise have been derived from
 131-16  the lands to be excluded during the same period.
 131-17        Sec. 54.745.  Board's Resolution to Substitute.  If the board
 131-18  finds that all the conditions provided for the exclusion of land
 131-19  and inclusion of other land in the district exist and that it is in
 131-20  the best interest of the district to grant such applications, it
 131-21  may adopt and enter in its minutes a resolution and order excluding
 131-22  all or part of the land proposed for exclusion and including all or
 131-23  part of the land proposed for inclusion.  Prior to the effective
 131-24  date of the exclusion and inclusion of lands, the district shall
 131-25  have received payment of all fees, charges, assessments, taxes,
  132-1  together with any associated penalties and interest due or overdue
  132-2  in respect to the lands excluded, and if no ad valorem taxes or
  132-3  fees have yet been established by the district for the current
  132-4  year, an amount determined by the district to equal the estimated
  132-5  ad valorem taxes and standby fees to be established by the district
  132-6  for the current year, prorated to the date of exclusion with
  132-7  respect to such excluded lands, shall also be paid.
  132-8        Sec. 54.746.  Liability of Excluded and Included Land.  The
  132-9  land excluded from the district is free from any lien or liability
 132-10  created on the excluded land by reason of its having been included
 132-11  in the district.  Land included in the district is subject to all
 132-12  laws, liens, and provisions governing the district and the land in
 132-13  the district.
 132-14        Sec. 54.747.  Service to Included Land.  The district has the
 132-15  same right and obligation to furnish services to the included land
 132-16  that it previously had to furnish to the excluded land.
 132-17        SECTION 24.  Section 55.101, Water Code, is amended to read
 132-18  as follows:
 132-19        Sec. 55.101.  Board of Directors.  The governing body of a
 132-20  district is a <the> board of five directors.
 132-21        SECTION 25.  Section 55.102, Water Code, is amended to read
 132-22  as follows:
 132-23        Sec. 55.102.  Qualifications of Directors.  To be qualified
 132-24  for election as a director, a person must be a resident of the
 132-25  state, own land subject to taxation in the district, and be at
  133-1  least 18 <more than 21> years of age at the time of the election.
  133-2  Section 49.052 does not apply to a district governed by this
  133-3  chapter whose principal purpose is providing water for irrigation.
  133-4        SECTION 26.  Section 55.721, Water Code, is amended to read
  133-5  as follows:
  133-6        Sec. 55.721.  Exclusion of Nonagricultural and Nonirrigable
  133-7  Land From District.  Land located in the district which is
  133-8  classified as nonagricultural and nonirrigable may be excluded from
  133-9  the district in the manner provided in Subchapter J, Chapter 49
 133-10  <Sections 51.702-51.713 of this code>.
 133-11        SECTION 27.  Section 56.064, Water Code, is amended to read
 133-12  as follows:
 133-13        Sec. 56.064.  Election of Directors.  (a)  On petition of a
 133-14  majority of the real property taxpayers of a district requesting an
 133-15  election of district directors, the commissioners court shall
 133-16  immediately order an election to be held at the earliest legal
 133-17  time.  The election shall be held as other elections under Chapter
 133-18  49 <this chapter>.
 133-19        (b)  <The commissioners court shall declare the three persons
 133-20  receiving the highest number of votes elected, and if two or more
 133-21  persons tie for the third highest vote, the commissioners court
 133-22  shall elect the third director from those tying for the place.>
 133-23        <(c)  On qualifying for office, directors elected under this
 133-24  section are the legal and rightful directors of the district within
 133-25  the full meaning and purpose of this law.>
  134-1        <(d)  The first elected directors of the district hold office
  134-2  until the next regular directors' election, and subsequent
  134-3  directors of the district are elected every four years except as
  134-4  provided by Subsection (e) of this section.>
  134-5        <(e)>  The first elected directors of the districts in
  134-6  Calhoun, Matagorda, and Victoria Counties hold office until May 15
  134-7  of the next succeeding odd-numbered year.  Subsequent directors of
  134-8  the district are elected every two years on the first Saturday in
  134-9  May in each odd-numbered year, for a term of two years beginning on
 134-10  May 15 following the election.
 134-11        SECTION 28.  Section 57.053, Water Code, is amended to read
 134-12  as follows:
 134-13        Sec. 57.053.  Term of Office, Removal, and Succession.  (a)
 134-14  <Each director shall hold office for a period of two years and
 134-15  until his successor is appointed and has qualified.>
 134-16        <(b)>  A vacancy on the board shall be filled by majority
 134-17  vote of the commissioners court <of jurisdiction>, and the court
 134-18  shall appoint directors so that the board will always have full
 134-19  membership.
 134-20        (b) <(c)>  The commissioners court <of jurisdiction>, by
 134-21  majority vote, may remove an appointed <a> member of the board.
 134-22        SECTION 29.  Section 57.060, Water Code, is amended to read
 134-23  as follows:
 134-24        Sec. 57.060.  Petition.  Before an election is held under
 134-25  Section 57.057 <of this code>, a petition, signed by at least 100
  135-1  <25> electors in the district <each county commissioners precinct>
  135-2  who are qualified to vote <at an election for directors if a
  135-3  countywide election, or by 50 electors if less than countywide>,
  135-4  shall be presented to the district <county judge> requesting that
  135-5  an election be held in the district to determine whether or not
  135-6  directors for the district should be elected and, if so, to elect
  135-7  directors to serve until the next regular director election <for
  135-8  state and county officers>.  The petition shall include the name of
  135-9  one or more nominees for each director's position.
 135-10        SECTION 30.  Section 57.061, Water Code, is amended to read
 135-11  as follows:
 135-12        Sec. 57.061.  Procedure for Election.  <(a)>  After the
 135-13  petition is presented under Section 57.060 <of this code>, the
 135-14  board <county judge> shall order an election <to determine the
 135-15  propositions presented in the petition.  The election shall be held
 135-16  not less than 30 days from the date of the order calling the
 135-17  election, or the propositions may be determined at a general
 135-18  election>.
 135-19        <(b)  The election order shall designate the polling places
 135-20  which shall be the same as the polling places used in the last
 135-21  general election in the county, if a countywide election is held.>
 135-22        <(c)  The county clerk shall issue notice of the election and
 135-23  shall have the notice published in a newspaper of general
 135-24  circulation in the county once a week for two consecutive weeks.
 135-25  The first publication must be not less than 14 days before the day
  136-1  of the election.>
  136-2        <(d)  The sheriff shall post a copy of the notice at least 20
  136-3  days before the day of the election at each polling place
  136-4  designated in the election order.>
  136-5        <(e)  The district shall pay all expenses incident to calling
  136-6  and holding the election.>
  136-7        SECTION 31.  Section 57.207, Water Code, is amended to read
  136-8  as follows:
  136-9        Sec. 57.207.  Declaring Result of Election.  <(a)
 136-10  Immediately after an election under this chapter, the officials
 136-11  holding the election shall return the result to the commissioners
 136-12  court of jurisdiction.>
 136-13        <(b)  The election officials shall return the ballot boxes to
 136-14  the clerk of the commissioners court of jurisdiction, who shall
 136-15  safely keep the boxes and deliver them with the returns of the
 136-16  election to the commissioners court of jurisdiction at its next
 136-17  regular or special session.>
 136-18        <(c)  The commissioners court of jurisdiction at its first
 136-19  session after the election shall canvass the vote and the returns.
 136-20  If the proposition submitted has been approved by a majority of the
 136-21  electors of the district voting at the election, the commissioners
 136-22  court of jurisdiction shall declare the result in favor of the
 136-23  proposition, but if the proposition is not approved by the electors
 136-24  of the district, the commissioners court of jurisdiction shall
 136-25  declare the result to be against the proposition.>
  137-1        <(d)>  The board <commissioners court of jurisdiction> shall
  137-2  enter an order declaring the election result in its minutes.
  137-3        SECTION 32.  Section 58.072, Water Code, is amended to read
  137-4  as follows:
  137-5        Sec. 58.072.  QUALIFICATIONS.  To be qualified for election
  137-6  as a director, a person must be a resident of the state, be the
  137-7  owner of record of fee simple title to land in the district, <and>
  137-8  be at least 18 years of age, and owe no delinquent taxes or
  137-9  assessments to the district.  Section 49.052 does not apply to a
 137-10  district governed by this chapter.
 137-11        SECTION 33.  Subchapter A, Chapter 60, Water Code, is amended
 137-12  by adding Section 60.002 to read as follows:
 137-13        Sec. 60.002.  AUDIT.  Subchapter G, Chapter 49, related to
 137-14  Audit of Districts, shall apply to districts governed by this
 137-15  chapter.
 137-16        SECTION 34.  Subchapter M, Chapter 60, Water Code, is amended
 137-17  by adding Section 60.350 to read as follows:
 137-18        Sec. 60.350.  BONDS.  Section 49.181, related to the
 137-19  Authority of Commission Over Issuance of District Bonds, and
 137-20  Section 49.183, related to Bond Sales, shall apply to bonds
 137-21  supported by taxes and issued by districts governed by this
 137-22  chapter.
 137-23        SECTION 35.  Section 65.103, Water Code, is amended to read
 137-24  as follows:
 137-25        Sec. 65.103.  Election of Directors; Terms of Office.  (a)
  138-1  The persons receiving the highest number of votes at each election
  138-2  shall serve as directors of the district.
  138-3        (b)  The terms of the directors may run concurrently, or may
  138-4  be staggered, but in any event, the term of office of a director
  138-5  may not exceed three years.
  138-6        (c)  The method for determining the initial terms for each of
  138-7  the directors constituting the initial board shall be determined by
  138-8  the temporary directors, and the terms must be clearly stated on
  138-9  the ballot for the confirmation and directors' election.  At
 138-10  subsequent elections in each following year in which there is an
 138-11  election, the election must be held on the same uniform election
 138-12  date as the confirmation and directors' election, and the terms of
 138-13  the directors being elected must be stated on the ballot.
 138-14        <(d)  The election of directors must be held in a district on
 138-15  one of the dates provided by Section 9b, Texas Election Code
 138-16  (Article 2.01b, Vernon's Texas Election Code).>
 138-17        <(e)  The permanent directors may assign a position number to
 138-18  each director's office, and each director subsequently shall be
 138-19  elected by position and not at large.>
 138-20        SECTION 36.  Chapter 65, Water Code, is amended by adding
 138-21  Section 65.235 to read as follows:
 138-22        Sec. 65.235.  Prohibition on Assessment or Collection of
 138-23  Taxes.  Section 49.107 does not apply to a district created under
 138-24  this chapter.
 138-25        SECTION  37.  Section 66.101, Water Code, is amended to read
  139-1  as follows:
  139-2        Sec. 66.101.  Board of Directors.  A district shall be
  139-3  governed by a board of directors composed of five members, who are
  139-4  elected as provided in Chapter 49 <by this chapter>.
  139-5        SECTION 38.  Section 66.310(b), Water Code, is amended to
  139-6  read as follows:
  139-7        (b)  Bonds issued by a district and projects and improvements
  139-8  of the district that are provided through the issuance of bonds are
  139-9  governed by Chapter 49 <Sections 54.516 and 54.517 of this code>.
 139-10        SECTION 39.  Chapter 50, Water Code, is repealed, except that
 139-11  Subchapter H is continued in effect for the sole purpose of the
 139-12  administration and operation of contracts created or issued under
 139-13  those laws.
 139-14        SECTION 40.  The following sections of Chapter 51, Water
 139-15  Code, are repealed:  Sections 51.033, 51.034, 51.073-51.074,
 139-16  51.077-51.084, 51.0851, 51.087-51.089, 51.091-51.101,
 139-17  51.122-51.124, 51.126, 51.131, 51.132, 51.136-51.138,
 139-18  51.140-51.146, 51.149, 51.183, 51.191-51.193, 51.221-51.224,
 139-19  51.231-51.279, 51.354-51.363, 51.371-51.374, 51.412, 51.416-51.418,
 139-20  51.421, 51.422, 51.4321, 51.4371, 51.691-51.701, 51.714-51.731, and
 139-21  51.737-51.747.
 139-22        SECTION 41.  The following sections of Chapter 52, Water
 139-23  Code, are repealed:  Sections 52.104, 52.107-52.114, 52.116-52.118,
 139-24  52.119-52.121, 52.157, 52.251-52.253, 52.259-52.262, and 52.297.
 139-25        SECTION 42.  The following sections of Chapter 53, Water
  140-1  Code, are repealed:  Sections 53.020, 53.022, 53.023,
  140-2  53.025-53.028, 53.035-53.039, 53.064, 53.065, 53.067-53.070,
  140-3  53.0721, 53.076, 53.077, 53.084-53.087, 53.089, 53.090, 53.105,
  140-4  53.106, 53.108-53.111, 53.114, 53.117-53.120, 53.123-53.125,
  140-5  53.141-53.144, 53.147, 53.148, 53.173-53.175, 53.1791, 53.197,
  140-6  53.198, and 53.231-53.273.
  140-7        SECTION 43.  The following sections of Chapter 54, Water
  140-8  Code, are repealed:  Sections 54.026-54.029, 54.103-54.126, 54.202,
  140-9  54.204, 54.209-54.233, 54.301-54.312, 54.506, 54.507(a), 54.509,
 140-10  54.5121, 54.513, 54.516, 54.517, 54.519, 54.701-54.727.
 140-11        SECTION 44.  The following sections of Chapter 55, Water
 140-12  Code, are repealed:  Sections 55.030, 55.033-55.036, 55.052,
 140-13  55.104-55.106, 55.109, 55.111-55.116, 55.118-55.128, 55.162,
 140-14  55.164, 55.168-55.184, 55.189-55.191, 55.199, 55.203, 55.252,
 140-15  55.291-55.304, 55.331, 55.423-55.430, 55.451, 55.453,
 140-16  55.492-55.496, 55.503, 55.506, 55.711-55.720, and 55.722-55.749.
 140-17        SECTION 45.  The following sections of Chapter 56, Water
 140-18  Code, are repealed:  Sections 56.027-56.031, 56.062, 56.063,
 140-19  56.065-56.068, 56.076-56.081, 56.083, 56.113, 56.114, 56.119,
 140-20  56.129-56.134, 56.136, 56.138, 56.139, 56.183, 56.184, 56.2045, and
 140-21  56.714-56.725.
 140-22        SECTION 46.  The following sections of Chapter 57, Water
 140-23  Code, are repealed:  Sections 57.052, 57.054-57.056, 57.062-57.070,
 140-24  57.095-57.099, 57.106, 57.107, 57.109, 57.110, 57.112-57.115,
 140-25  57.119, 57.120, 57.171-57.174, 57.178, 57.202-57.206, 57.2075,
  141-1  57.209-57.211, and 57.276-57.278.
  141-2        SECTION 47.  The following sections of Chapter 58, Water
  141-3  Code, are repealed:  Sections 58.033, 58.034, 58.073,
  141-4  58.074-58.083, 58.085-58.088, 58.090-58.100, 58.123, 58.124,
  141-5  58.131, 58.132, 58.135, 58.139-58.149, 58.151, 58.152, 58.169,
  141-6  58.179, 58.187-58.189, 58.221-58.224, 58.261, 58.317,
  141-7  58.354-58.362, 58.442, 58.451, 58.452, 58.601, 58.691-58.701, and
  141-8  58.714-58.725.
  141-9        SECTION 48.  The following sections of Chapter 65, Water
 141-10  Code, are repealed:  Sections 65.024-65.029, 65.104-65.122, 65.202,
 141-11  65.204, 65.209-65.234, 65.301, 65.401-65.409, 65.509, 65.512,
 141-12  65.514, and 65.701-65.722.
 141-13        SECTION 49.  The following sections of Chapter 66, Water
 141-14  Code, are repealed:  Sections 66.022-66.029, 66.103-66.117, 66.119,
 141-15  66.120, 66.203-66.205, 66.208-66.215, 66.301, 66.302,
 141-16  66.305-66.309, 66.312, and 66.323.
 141-17        SECTION 50.  (a)  This Act takes effect as provided by this
 141-18  section.
 141-19        (b)  Section 49.103(b), Water Code, shall govern all
 141-20  elections held after December 31, 1995.  Directors elected at any
 141-21  election held between January 1, 1992, and April 30, 1992, shall
 141-22  serve until the January 1996 election.  Directors elected at any
 141-23  election held between May 1, 1992, and December 31, 1992, shall
 141-24  serve until the May 1996 election.  Directors elected at any
 141-25  election held between January 1, 1993, and April 30, 1993, shall
  142-1  serve until the January 1996 election.  Directors elected at any
  142-2  election held between May 1, 1993, and July 31, 1993, shall serve
  142-3  until the May 1996 election.  Directors elected at any election
  142-4  held between August 1, 1993, and December 31, 1993, shall serve
  142-5  until the May 1998 election.  Directors elected at any election
  142-6  held between January 1, 1994, and April 30, 1994, shall serve until
  142-7  the January 1998 election.  Directors elected at any election held
  142-8  between May 1, 1994, and December 31, 1994, shall serve until the
  142-9  May 1998 election.  Directors elected at any election held between
 142-10  January 1, 1995, and April 30, 1995, shall serve until the January
 142-11  1998 election.  Directors elected at any election held between May
 142-12  1, 1995, and July 31, 1995, shall serve until the May 1998
 142-13  election.  Directors elected at any election held between August 1,
 142-14  1995, and December 31, 1995, shall serve until the May 1998
 142-15  election.  Directors whose terms expire prior to the election date
 142-16  set by this section shall continue to serve until their successors
 142-17  have been elected and qualified.
 142-18        (c)  All other provisions of this Act take effect September
 142-19  1, 1995.
 142-20        SECTION 51.  The importance of this legislation and the
 142-21  crowded condition of the calendars in both houses create an
 142-22  emergency and an imperative public necessity that the
 142-23  constitutional rule requiring bills to be read on three several
 142-24  days in each house be suspended, and this rule is hereby suspended,
 142-25  and that this Act take effect and be in force according to its
  143-1  terms, and it is so enacted.
  143-2  terms, and it is so enacted.