1-1  By:  Rosson                                           S.B. No. 1663
    1-2        (In the Senate - Filed April 20, 1995; April 20, 1995, read
    1-3  first time and referred to Committee on Intergovernmental
    1-4  Relations; April 27, 1995, reported adversely, with favorable
    1-5  Committee Substitute by the following vote:  Yeas 11, Nays 0;
    1-6  April 27, 1995, sent to printer.)
    1-7  COMMITTEE SUBSTITUTE FOR S.B. No. 1663                  By:  Rosson
    1-8                         A BILL TO BE ENTITLED
    1-9                                AN ACT
   1-10  relating to the creation, administration, powers, duties,
   1-11  functions, operation, and financing of the Paseo del Este Municipal
   1-12  Utility District; providing for the authorization of bonds and the
   1-13  levy of taxes; providing civil penalties.
   1-14        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-15                    ARTICLE I.  GENERAL PROVISIONS
   1-16        SECTION 1.01.  CREATION.  (a)  By virtue of Section 59,
   1-17  Article XVI, Texas Constitution, a conservation and reclamation
   1-18  district is hereby created to be known as Paseo del Este Municipal
   1-19  Utility District (hereinafter the "district"), which shall be a
   1-20  governmental agency and a body politic and corporate.  The
   1-21  requirements in Chapters 50 and 54, Water Code, for confirmation
   1-22  and initial director elections shall not apply to the district.
   1-23        (b)  The district is created under and is essential to
   1-24  accomplish the purposes of Section 59, Article XVI, Texas
   1-25  Constitution.  The district shall have all of the powers of
   1-26  municipal utility districts established under Chapter 54, Water
   1-27  Code, and the district shall conduct its affairs subject to
   1-28  Chapters 50 and 54, Water Code, unless otherwise provided in this
   1-29  Act.
   1-30        SECTION 1.02.  TERRITORY.  (a)  The district shall comprise
   1-31  all of the following territory:  Section 315 1/2, C. D. Stewart
   1-32  Survey, El Paso County, Texas; Parcels A, B-1 and C-1, Section 317,
   1-33  C. D. Stewart Survey, El Paso County, Texas, as described in deed
   1-34  from EP Covington Capital Corp. to the State of Texas, recorded in
   1-35  Volume 2249, Page 1815, Real Property Records of El Paso County,
   1-36  Texas; Section 318, C. D. Stewart Survey, El Paso County, Texas;
   1-37  Section 319, C. D. Stewart Survey, El Paso County, Texas;  Parcels
   1-38  B-2 and C-2, Section 316, O. A. Danielson Survey, El Paso County,
   1-39  Texas, as described in deed from EP Covington Capital Corp. to the
   1-40  State of Texas, recorded in Volume 2249, Page 1815, Real Property
   1-41  Records of El Paso County, Texas; all of the south one-half of
   1-42  Section 18, Texas and Pacific Railroad Company Survey, Block 79,
   1-43  Township 3, El Paso County, Texas; all of the northeast one-fourth
   1-44  of Section 18, Texas and Pacific Railroad Company Survey, Block 79,
   1-45  Township 3, El Paso County, Texas; all of the southwest one-fourth
   1-46  of Section 21, Texas and Pacific Railroad Company Survey, Block 79,
   1-47  Township 3, El Paso County, Texas; Tracts 1, 2 and 3, Section 21,
   1-48  Texas and Pacific Railroad Company Survey, Block 79, Township 3, El
   1-49  Paso County, Texas, as described in deed from MBJR Trust and Barry
   1-50  Lang to the State of Texas, recorded in Volume 2595, Page 1517,
   1-51  Real Property Records of El Paso County, Texas; part of Section 21,
   1-52  Texas and Pacific Railroad Company Survey, Block 79, Township 3, El
   1-53  Paso County, Texas, as described in deed from Socorro Independent
   1-54  School District to the State of Texas, recorded in Volume 2361,
   1-55  Page 831, Real Property Records of El Paso County, Texas; all of
   1-56  Section 22, Texas and Pacific Railroad Company Survey, Block 79,
   1-57  Township 3, El Paso County, Texas, SAVE AND EXCEPT:  (1) 7.889
   1-58  acres, being the remainder of a 38.18 acre tract, as described in
   1-59  deed from Texas Pacific Land Trust to Socorro Independent School
   1-60  District, recorded in Volume 1302, Page 769, Real Property Records
   1-61  of El Paso County, Texas, (2) Tracts 2 and 3, as described in deed
   1-62  from the State of Texas to 375/10 Texas Land L.P., recorded in
   1-63  Volume 2595, Page 1504, Real Property Records of El Paso County,
   1-64  Texas, and (3) Tracts 2 and 3, as described in deed from the State
   1-65  of Texas to MBJR Trust and Barry Lang, recorded in Volume 2595,
   1-66  Page 1517, Real Property Records of El Paso County, Texas.
   1-67        (b)  The legislature finds that the boundaries, patents, or
   1-68  field notes of the district form a closure.  A mistake in the
    2-1  patents or field notes, or in copying the patents or field notes in
    2-2  the legislative process, does not affect the organization,
    2-3  existence, or validity of the district, the rights of the district
    2-4  to issue bonds or refunding bonds, or to pay the principal of or
    2-5  interest on the bonds, the right of the district to levy and
    2-6  collect taxes, or the legality or operation of the district or its
    2-7  board.
    2-8        (c)  Land included within the boundaries of a special utility
    2-9  district created under Section 59, Article XVI, Texas Constitution,
   2-10  which is subject to a district's outstanding indebtedness secured
   2-11  by taxes or net revenues on the effective date of this Act shall
   2-12  not be included within the district.  If the property described in
   2-13  Subsection (a) of this section includes any land subject to a tax
   2-14  or net revenue pledged by a district, it shall be excluded, and the
   2-15  remainder of this Act shall not be affected thereby.
   2-16                ARTICLE II.  ADMINISTRATIVE PROVISIONS
   2-17        SECTION 2.01.  BOARD.  The district shall be governed by and
   2-18  all powers of the district shall be exercised by a board of five
   2-19  directors.
   2-20        SECTION 2.02.  DIRECTOR ELIGIBILITY.  Other than initial
   2-21  directors, to be eligible for appointment as a director, a person
   2-22  must be an owner of land in the district.  To be eligible for
   2-23  appointment as an initial director, a person must be a member of
   2-24  the School Land Board or a resident of El Paso County or Travis
   2-25  County.
   2-26        SECTION 2.03.  TERMS OF DIRECTORS AND APPOINTMENT PROCEDURES.
   2-27  (a)  Other than initial directors, directors serve staggered terms
   2-28  of four years, with terms expiring September 1 of each odd-numbered
   2-29  year.
   2-30        (b)  Appointment of initial directors shall be made promptly
   2-31  by the School Land Board after this Act takes effect.  The School
   2-32  Land Board shall appoint two initial directors to serve terms
   2-33  expiring September 1, 1997, and three initial directors to serve
   2-34  terms expiring September 1, 1999.  If an initial director dies,
   2-35  resigns, or is otherwise removed, the School Land Board shall
   2-36  appoint a successor to serve the unexpired term.  When a director's
   2-37  term expires, his successor shall be elected as provided in Section
   2-38  2.04 of this Act.
   2-39        SECTION 2.04.  ELECTION OF PERMANENT DIRECTORS.  (a)  Each
   2-40  director shall serve his term of office as herein provided, and
   2-41  thereafter until his successor shall be appointed or elected and
   2-42  qualified.  Elections for the appropriate number of permanent
   2-43  directors are to be held on the first Saturday in May of each
   2-44  odd-numbered year.  The directors serve until September 1 of the
   2-45  second odd-numbered year after the date of the election.
   2-46        (b)  Notice of elections shall be given by the board of
   2-47  directors by publishing a copy thereof once a week for two
   2-48  consecutive weeks in a newspaper of general circulation in the
   2-49  district, the first publication being at least 14 days prior to the
   2-50  election.
   2-51        SECTION 2.05.  QUALIFICATION OF DIRECTOR.  Except for initial
   2-52  directors, no person shall be qualified to serve as a director
   2-53  unless he resides in and owns taxable property in the district.
   2-54  Initial directors shall be over 18 years of age and residents of
   2-55  either El Paso County or Travis County.  No employee of the
   2-56  district shall serve as director.  Directors shall subscribe the
   2-57  constitutional oath of office.  Except for the initial directors,
   2-58  each director shall give bond for the faithful performance of his
   2-59  duties as is required by Section 54.116, Water Code, the cost of
   2-60  which shall be paid by the district.
   2-61        SECTION 2.06.  MEETINGS AND ACTIONS OF BOARD.  (a)  The board
   2-62  may establish regular meetings to conduct district business and may
   2-63  hold special meetings at other times as the business of the
   2-64  district requires.  The board shall hold its meetings within the
   2-65  district unless the board, by a majority vote at a public meeting,
   2-66  votes to hold a meeting or meetings outside the district.
   2-67        (b)  A majority of the directors shall constitute a quorum of
   2-68  the board.  A vote of a majority of the quorum present shall be
   2-69  necessary to pass on any question before the board.  The board may
   2-70  adopt bylaws to govern its affairs.  The board may adopt a seal for
    3-1  the district.  The board may provide in the bylaws that, except for
    3-2  the initial directors, each director shall receive a fee of $20 for
    3-3  attending each meeting of the board, provided that not more than
    3-4  $40 shall be paid to any director for meetings held in any one
    3-5  calendar month.
    3-6        SECTION 2.07.  ORGANIZATION OF BOARD.  The board of directors
    3-7  shall elect from its members a president and a vice president of
    3-8  the district and such other officers as in the judgment of the
    3-9  board are necessary.  The president shall be the chief executive
   3-10  officer of the district and the presiding officer of the board and
   3-11  shall have the same right to vote as any other director.  The vice
   3-12  president shall perform all duties and exercise all powers
   3-13  conferred by this Act on the president when the president is absent
   3-14  or fails or declines to act.  The board shall also appoint a
   3-15  secretary and a treasurer who may or may not be members of the
   3-16  board, and it may combine such offices.  Except for the initial
   3-17  treasurer, the treasurer shall give bond in the amount required by
   3-18  the board of directors, but in no event less than $100,000.  The
   3-19  condition of the bond shall be that the treasurer will faithfully
   3-20  account for all money which comes into the treasurer's custody.
   3-21  Until the district authorizes the issuance of bonds, the amount of
   3-22  the official bond of the treasurer may be fixed by the board of
   3-23  directors in an amount not less than $5,000.
   3-24        SECTION 2.08.  INTEREST IN CONTRACT.  A director who is
   3-25  financially interested in a contract proposed to be executed by the
   3-26  district for the purchase of property or services or for the
   3-27  construction of facilities shall disclose the interest to the board
   3-28  and may not vote on the acceptance of the contract.
   3-29        SECTION 2.09.  DISTRICT EMPLOYEES.  The board shall have
   3-30  authority to employ a general manager and all consulting engineers,
   3-31  financial consultants, attorneys, and auditors.  The general
   3-32  manager shall be responsible for:
   3-33              (1)  administering the board's directives;
   3-34              (2)  keeping the district's records, including minutes
   3-35  of board meetings;
   3-36              (3)  coordinating with federal, state, and local
   3-37  agencies;
   3-38              (4)  developing plans and programs for the board's
   3-39  approval;
   3-40              (5)  hiring, supervising, training, and discharging the
   3-41  district's employees;
   3-42              (6)  obtaining technical, scientific, legal, fiscal,
   3-43  and other professional services; and
   3-44              (7)  performing any other duties the board assigns.
   3-45        SECTION 2.10.  EMPLOYEE BONDS.  (a)  The general manager and
   3-46  each employee of the district who is charged with the collection,
   3-47  custody, or payment of any money of the district shall execute a
   3-48  fidelity bond in an amount determined by the board and in a form
   3-49  and with a surety approved by the board.
   3-50        (b)  The district shall pay the premium on each employee bond
   3-51  under this section.
   3-52        SECTION 2.11.  PRINCIPAL OFFICE.  Until such time as it
   3-53  issues bonds, the district may maintain its principal office in
   3-54  either El Paso County or Travis County, provided that, if the
   3-55  district maintains its principal office in Travis County, it shall
   3-56  maintain duplicate records in El Paso County, and the duplicate
   3-57  records shall be available for inspection during regular business
   3-58  hours.  After it issues bonds, the district shall maintain its
   3-59  office in El Paso County.
   3-60        SECTION 2.12.  RECORDS.  (a)  The district shall keep at its
   3-61  principal office:
   3-62              (1)  complete and accurate accounts of its business
   3-63  transactions in accordance with generally accepted methods of
   3-64  accounting;
   3-65              (2)  complete and accurate minutes of its meetings; and
   3-66              (3)  its contracts, documents, and other records.
   3-67        (b)  The district shall permit reasonable public inspection
   3-68  of its records during regular business hours.
   3-69        SECTION 2.13.  SUIT.  The district may sue and be sued in its
   3-70  corporate name.
    4-1                     ARTICLE 3.  POWERS AND DUTIES
    4-2        SECTION 3.01.  POWERS AND DUTIES.  (a)  The district shall:
    4-3              (1)  administer and enforce the terms of this Act;
    4-4              (2)  use its facilities and powers to accomplish the
    4-5  purposes of this Act;
    4-6              (3)  coordinate the provision of water, wastewater, and
    4-7  drainage services; and
    4-8              (4)  control and abate water pollution within the
    4-9  district.
   4-10        (b)  In designing utility infrastructure and related systems,
   4-11  the district shall submit for review to any municipal corporation
   4-12  with a population in excess of 300,000 according to the most recent
   4-13  federal census, provided the corporate boundary of such municipal
   4-14  corporation is contiguous to the district, its design plans and
   4-15  specifications for the utility infrastructure and related systems.
   4-16  In connection with the submission, the district shall pay to the
   4-17  municipal corporation the fee for review, if any, which has been
   4-18  established by municipal ordinance and has general application for
   4-19  reviews of this type, and the municipal corporation shall complete
   4-20  its review of the design plans and specifications within 60 days
   4-21  after their delivery.
   4-22        (c)  Subject only to the authority of the Texas Natural
   4-23  Resource Conservation Commission, the district has the authority to
   4-24  control and abate water pollution within the district.  Such
   4-25  authority of the district will neither reduce nor eliminate the
   4-26  authority of a municipal corporation to control and abate water
   4-27  pollution within the district under applicable state or federal
   4-28  law.
   4-29        (d)  Except as expressly limited by this Act, the district
   4-30  shall have all of the powers, rights, and privileges necessary and
   4-31  convenient for accomplishing the purposes of this Act conferred by
   4-32  general law on any municipal utility district or water control and
   4-33  improvement district created under Section 59, Article XVI, Texas
   4-34  Constitution.
   4-35        (e)  The powers granted to the district in this Act are
   4-36  cumulative of all powers granted by other law.
   4-37        SECTION 3.02.  DISTRICT RULES.  (a)  The district may adopt
   4-38  and enforce rules reasonably required to implement this Act,
   4-39  including rules governing procedure and practice before the board.
   4-40        (b)  The district shall print its rules and furnish copies of
   4-41  the rules to any person on written request.
   4-42        SECTION 3.03.  INSPECTIONS AND INVESTIGATIONS.  The district
   4-43  may enter public or private property in the district for the
   4-44  purpose of inspecting and investigating conditions relating to its
   4-45  authorized purposes under the same provisions and restrictions
   4-46  applicable to the Texas Natural Resource Conservation Commission.
   4-47        SECTION 3.04.  HEARINGS AND ORDERS.  (a)  The board may:
   4-48              (1)  hold hearings, receive evidence from any party in
   4-49  interest who appears before the board, compel the attendance of
   4-50  witnesses, and make findings of fact and determinations with
   4-51  respect to administering this Act or any order or rule of the
   4-52  district; and
   4-53              (2)  delegate to one or more of its members or
   4-54  employees the authority to take testimony and administer oaths in
   4-55  any hearing held or authorized to be held by the district.
   4-56        (b)  An order of the board must be:
   4-57              (1)  in the district's name; and
   4-58              (2)  attested by proper members of the board under the
   4-59  district's rules.
   4-60        SECTION 3.05.  CIVIL PENALTY; INJUNCTION.  (a)  A person who
   4-61  violates a rule, permit, or order of the district is subject to a
   4-62  civil penalty of not less than $50 and not more than $1,000 for
   4-63  each violation or each day of a continuing violation.
   4-64        (b)  The district may sue to enjoin a threatened or present
   4-65  activity or to recover the penalty in a district court in the
   4-66  county where the violation occurred.  The penalty shall be paid to
   4-67  the district.
   4-68        SECTION 3.06.  PERMITS; CONTRACTS; COOPERATIVE AGREEMENTS.
   4-69  (a)  The district is authorized to acquire water appropriation
   4-70  permits, construction permits, and other water and wastewater
    5-1  discharge permits directly from the Texas Natural Resource
    5-2  Conservation Commission or from owners of permits.  The district is
    5-3  also authorized to acquire water or a water supply from any person,
    5-4  firm, corporation, municipal corporation, public agency, the State
    5-5  of Texas, or the United States government or any of its agencies.
    5-6  The district may, within the discretion of its board, contract with
    5-7  one or more substantial users of water to acquire such water supply
    5-8  under an agreed allocation of storage space between the district
    5-9  and the user or may contract independently for the district's water
   5-10  supply.  The district is authorized to collect, transport, process,
   5-11  dispose of, and control all domestic, industrial, or communal
   5-12  wastes, whether in fluid, solid, or composite state.  The district
   5-13  is authorized to contract with any person, firm, corporation,
   5-14  municipal corporation, public agency, the State of Texas, or the
   5-15  United States government or any of its agencies for the collection,
   5-16  transportation, processing, disposition, and control of all
   5-17  domestic, industrial, or communal wastes.  Such contracting
   5-18  authority includes the authority to enter into coordinated
   5-19  infrastructure plans or regional utility plans.
   5-20        (b)  The district is authorized to enter into contracts with
   5-21  the State of Texas, cities and districts organized pursuant to
   5-22  Section 59, Article XVI, Texas Constitution, and others for
   5-23  supplying water or providing services pertaining to domestic,
   5-24  industrial, or commercial wastes.  The district is also authorized
   5-25  to contract with any city, district, or other person for the rental
   5-26  or leasing of or for the operation of the water production, water
   5-27  supply, water filtration or purification, and water supply
   5-28  facilities and facilities for providing services pertaining to the
   5-29  wastes of the city, the district, or other person for such
   5-30  consideration as the district and the city, the district, or other
   5-31  person may agree on.  Any such contract may be on such terms and
   5-32  for such time as the parties may agree, and it may provide that it
   5-33  shall continue in effect until bonds or notes specified therein and
   5-34  refunding bonds issued in lieu of such bonds or notes are paid.
   5-35  All such cities and districts are authorized to enter into such
   5-36  contracts with the district to fix, charge, and collect fees,
   5-37  rates, charges, rentals, and other amounts for any service or
   5-38  facilities provided pursuant to or in connection with any contract
   5-39  with this district and to pledge such amounts sufficient to make
   5-40  all payments required under the contract.
   5-41        (c)  With regard to land use planning, the district shall
   5-42  encourage owners and developers of land within the district to use
   5-43  and develop their land and buildings in a manner consistent with
   5-44  building codes, housing codes, fire codes, subdivision regulations,
   5-45  zoning regulations, thoroughfare plans, water conservation plans,
   5-46  land use plans, and other land development and safety regulations
   5-47  of each adjacent municipal corporation with a population in excess
   5-48  of 300,000 according to the most recent federal census.
   5-49        SECTION 3.07.  FACILITIES.  The district is authorized to
   5-50  purchase, construct, acquire, own, lease, operate, maintain,
   5-51  repair, improve, and extend, at any location inside or outside its
   5-52  boundaries, in the sole discretion of the district, land and any
   5-53  interest in land, any and all works, improvements, facilities,
   5-54  plants, equipment, and appliances incident, helpful, or necessary
   5-55  to provide for:  (1) the control, storage, preservation,
   5-56  transmission, treatment, and distribution and use of storm water
   5-57  and floodwater, the water of rivers and streams, and underground
   5-58  water, for municipal, domestic, industrial, and other beneficial
   5-59  uses; and (2) the collection, transportation, processing,
   5-60  disposition, and control of domestic, industrial, or commercial
   5-61  wastes.  The district shall have the authority to enter into any
   5-62  contract with any person, firm, corporation, city, district,
   5-63  municipal corporation, public agency, or other political
   5-64  subdivision and to perform any other act consistent with the powers
   5-65  herein granted to carry out any such power.
   5-66        SECTION 3.08.  ACQUISITION AND DISPOSITION OF PROPERTY.  The
   5-67  district is authorized to use any public roadway, street, alley, or
   5-68  easement in El Paso County to accomplish its purposes, without the
   5-69  necessity of securing a franchise or other governmental agreement,
   5-70  provided that, with regard to the use of roadways, streets, alleys,
    6-1  or easements which belong to an adjacent municipal corporation with
    6-2  a population in excess of 300,000 according to the most recent
    6-3  federal census, the district shall obtain the written consent of
    6-4  the municipal corporation prior to use thereof within the corporate
    6-5  limits of the municipal corporation.
    6-6        SECTION 3.09.  RELOCATION OF FACILITIES.  In the event that
    6-7  the district in the exercise of its powers makes necessary the
    6-8  relocation, raising, rerouting, or changing the grade of or
    6-9  altering the construction of any highway, railroad, electric
   6-10  transmission line, pipeline, canal, or drainage ditch, all such
   6-11  necessary relocation, raising, rerouting, changing of grade, or
   6-12  alteration of construction shall be accomplished at the sole
   6-13  expense of the district unless otherwise agreed on in writing by
   6-14  interested parties; however, in the case of replacement, the cost
   6-15  of such action shall be limited to the comparable replacement of
   6-16  any replaced facility, less the replaced facility's net salvage
   6-17  value.
   6-18        SECTION 3.10.  CONSTRUCTION CONTRACTS.  Any construction
   6-19  contract requiring an expenditure of more than $50,000 shall be
   6-20  made after publication of a notice to bidders once each week for a
   6-21  minimum of two weeks before awarding the contract.  The notice
   6-22  shall be sufficient if it states the time and place when and where
   6-23  the bids will be opened, the general nature of the work to be done,
   6-24  or the material, equipment, or supplies to be purchased and states
   6-25  where and the terms on which copies of the plans and specifications
   6-26  may be obtained.  The publication shall be in a newspaper of
   6-27  general circulation published in the district and designated by the
   6-28  board of directors.  It shall not be necessary to advertise work to
   6-29  be performed in an emergency situation.
   6-30                 ARTICLE 4.  GENERAL FISCAL PROVISIONS
   6-31        SECTION 4.01.  DISBURSEMENT OF MONEY.  The district may
   6-32  disburse money only by check, draft, order, or other instrument
   6-33  signed by the person or persons authorized in the board's bylaws or
   6-34  by board resolution.
   6-35        SECTION 4.02.  FEES AND CHARGES.  The district may establish
   6-36  fees and charges not to exceed the amounts necessary to enable the
   6-37  district to fulfill the obligations imposed on it by this Act.
   6-38        SECTION 4.03.  LOANS AND GRANTS.  The district may apply for
   6-39  and receive loans and grants from the federal or the state
   6-40  government or any agencies thereof, or from a private source, for
   6-41  the purpose of carrying out one or more of its powers.  The
   6-42  district may enter into any agreement in connection with a loan or
   6-43  grant that does not conflict with federal or state law.
   6-44        SECTION 4.04.  FISCAL YEAR.  The board shall establish the
   6-45  district's fiscal year.
   6-46        SECTION 4.05.  INDEPENDENT AUDIT AND REPORT.  (a)  The board
   6-47  shall have an audit of the district's affairs for each fiscal year
   6-48  prepared by an independent certified public accountant of
   6-49  recognized integrity and ability.
   6-50        (b)  The district shall keep at least one copy of the most
   6-51  recent audit at the district's office.
   6-52        (c)  The district shall make a copy of the most recent audit
   6-53  available for inspection by any interested person during regular
   6-54  business hours.
   6-55        SECTION 4.06.  DEPOSITORY BANKS.  (a)  The board shall
   6-56  designate one or more banks to serve as depository or depositories
   6-57  for the funds of the district.  All funds of the district shall be
   6-58  deposited in the depository bank or banks, except that funds
   6-59  pledged to pay bonds or notes may be deposited with trustee banks
   6-60  named in the trust agreement or bond or note resolution, and except
   6-61  that funds shall be remitted to the bank of payment for the payment
   6-62  of principal of and interest on bonds and notes.  To the extent
   6-63  that funds in the depository banks and a trustee bank are not
   6-64  insured by the Federal Deposit Insurance Corporation, they shall be
   6-65  secured in the manner provided by law for the security of state
   6-66  funds.
   6-67        (b)  Before designating a depository bank, the board shall
   6-68  publish notice at least once in a newspaper of general circulation
   6-69  in the district requesting applications from banks interested in
   6-70  serving as a depository.  The notice shall include the time and
    7-1  location of the board meeting at which the board proposes to
    7-2  designate a depository bank.  The board shall prescribe the term of
    7-3  service of a depository bank.
    7-4        (c)  At the time stated in the notice required by Subsection
    7-5  (b) of this section, the board shall consider the applications
    7-6  received and the management and condition of each bank that files
    7-7  an application.  The board may designate as a depository the bank
    7-8  or banks that offer the most favorable terms and conditions for the
    7-9  handling of the district's money and that have proper management
   7-10  and the ability to handle the district's money properly.
   7-11  Membership of an officer or director of a bank on the board of the
   7-12  district does not disqualify the bank from being designated as a
   7-13  depository.
   7-14        (d)  If no application is received by the time stated in the
   7-15  notice, the board may designate a bank or banks on such terms and
   7-16  conditions as the board considers prudent.
   7-17                  ARTICLE 5.  BOND AND TAX PROVISIONS
   7-18        SECTION 5.01.  TAX; REVENUE BONDS.  (a)  For the purpose of
   7-19  carrying out any power or authority conferred by this Act, the
   7-20  district may issue its bonds or other obligations in three general
   7-21  classes:
   7-22              (1) secured by ad valorem taxes;
   7-23              (2) secured by a pledge of all or part of the revenues
   7-24  accruing to the district, including without limitation those
   7-25  received from sale of water or other products, rendition of
   7-26  service, tolls, charges, and all other sources other than ad
   7-27  valorem taxes; and
   7-28              (3) secured by a combination pledge of all or part of
   7-29  the revenues described in Subdivision (2) of this subsection and
   7-30  taxes.
   7-31        (b)  The obligations shall be authorized by resolution of the
   7-32  board and shall be issued in the name of the district, shall be
   7-33  signed by the president or any vice president, shall be attested to
   7-34  by the secretary, and shall bear the seal of the district.  If
   7-35  authorized by the board, the signatures of the president or any
   7-36  vice president and of the secretary, or of both, may be printed or
   7-37  lithographed on the obligations, and the seal of the district may
   7-38  be impressed on the obligations or may be printed or lithographed
   7-39  on the obligations.  The obligations shall be in the form
   7-40  prescribed by the board, shall be in any denomination or
   7-41  denominations, shall mature serially or otherwise in not to exceed
   7-42  50 years from their date, shall bear any interest, may be sold at a
   7-43  price and under terms determined by the board to be the most
   7-44  advantageous reasonably obtainable, may be made callable prior to
   7-45  maturity, at the discretion of the board, at the times and prices
   7-46  prescribed in the obligations, and may be made registrable as to
   7-47  principal or as to both principal and interest.  The obligations
   7-48  may be further secured by an indenture of trust with a corporate
   7-49  trustee.
   7-50        (c)  Obligations may be issued in more than one series and
   7-51  from time to time, as required for carrying out the purposes of
   7-52  this Act.  Any pledge of revenue may reserve the right, under
   7-53  conditions therein specified, to issue additional obligations which
   7-54  will be on a parity with or subordinate to the obligations then
   7-55  being issued.
   7-56        (d)  The district is an "issuer" for the purpose of
   7-57  definitions in Chapter 656, Acts of the 68th Legislature, Regular
   7-58  Session, 1983 (Article 717q, Vernon's Texas Civil Statutes).
   7-59        (e)  The resolution authorizing the obligations or the trust
   7-60  indenture further securing the obligations may specify additional
   7-61  provisions which shall constitute a contract between the district
   7-62  and the owners of the obligations.  The board shall have full
   7-63  discretion in providing for the additional provisions, including
   7-64  the authority to provide for a corporate trustee or receiver to
   7-65  take possession of facilities of the district in the event of
   7-66  default on the part of the district in fulfilling the covenants
   7-67  therein made.
   7-68        (f)  The district shall not issue bonds secured by or
   7-69  otherwise encumber permanent school fund land contained within the
   7-70  boundaries of the district.
    8-1        SECTION 5.02.  BOND ANTICIPATION NOTES.  The district may
    8-2  issue bond anticipation notes from time to time for the purpose of
    8-3  carrying out any one or more of its powers.  Such bond anticipation
    8-4  notes may or may not be secured by a pledge of all or part of the
    8-5  revenues of the district.  The district may from time to time
    8-6  authorize the issuance of bonds for the purpose of providing
    8-7  proceeds to pay the principal of and interest on bond anticipation
    8-8  notes.  Such bonds shall be secured by a pledge of all or part of
    8-9  the revenues of the district and may be issued on a parity with or
   8-10  subordinate to outstanding bonds of the issuer.  If the resolution
   8-11  or trust agreement authorizing the issuance of bond anticipation
   8-12  notes contains a covenant to the effect that such notes shall be
   8-13  payable from the proceeds of the subsequently issued bonds, it
   8-14  shall not be necessary to demonstrate for the purposes of receiving
   8-15  the approval of the attorney general or registration by the
   8-16  comptroller that the revenues that may be pledged to such notes
   8-17  will be sufficient to pay the principal of and interest on the
   8-18  notes.
   8-19        SECTION 5.03.  REFUNDING BONDS.  (a)  The district may issue
   8-20  refunding bonds to refund outstanding bonds and interest authorized
   8-21  by this Act.
   8-22        (b)  Refunding bonds may:
   8-23              (1)  be issued to refund one or more series of
   8-24  outstanding bonds;
   8-25              (2)  combine the pledges for the outstanding bonds for
   8-26  the security of the refunding bonds; or
   8-27              (3)  be secured by other or additional revenues.
   8-28        (c)  The refunding bonds may be issued without having been
   8-29  authorized at an election.  The provisions of this Act applicable
   8-30  to the district's issuance of other bonds, their security, their
   8-31  approval by the attorney general, and the remedies of the holders
   8-32  are applicable to refunding bonds.
   8-33        (d)  Refunding bonds shall be registered by the comptroller
   8-34  on surrender and cancellation of the bonds to be refunded.
   8-35  Alternatively, the resolution authorizing the issuance of refunding
   8-36  bonds may provide that the bonds shall be sold and the resulting
   8-37  proceeds deposited in the bank where the bonds to be refunded are
   8-38  payable, in which case the refunding bonds may be issued in an
   8-39  amount sufficient to pay the principal and interest of the bonds to
   8-40  be refunded to their option or maturity date.  The comptroller
   8-41  shall register the refunding bonds without concurrent surrender and
   8-42  cancellation of the bonds to be refunded.
   8-43        SECTION 5.04.  APPROVAL AND REGISTRATION OF BONDS.  District
   8-44  bond review and approval shall be governed by the provisions of
   8-45  Subchapter F, Chapter 54, Water Code.
   8-46        SECTION 5.05.  TAXATION.  (a)  Except for land owned by the
   8-47  permanent school fund, the board may levy and collect ad valorem
   8-48  taxes for the maintenance of the district and its improvements or
   8-49  for administrative expenses of the district, or for both purposes,
   8-50  in such amounts as are voted in accordance with this Act.
   8-51        (b)  The maintenance tax and administration tax shall not
   8-52  exceed the maximum rate voted, and the authorized rate shall remain
   8-53  in effect unless changed by subsequent vote.
   8-54        SECTION 5.06.  BONDS ARE AUTHORIZED INVESTMENTS.  All bonds
   8-55  and notes of the district shall be and are hereby declared to be
   8-56  legal and authorized investments for banks, savings banks, trust
   8-57  companies, savings and loan associations, insurance companies,
   8-58  fiduciaries, trustees, and guardians and for the sinking funds of
   8-59  cities, towns, villages, counties, school districts, or other
   8-60  political corporations or subdivisions of the State of Texas.  Such
   8-61  bonds and notes shall be eligible to secure the deposit of any and
   8-62  all public funds of the State of Texas and any and all public funds
   8-63  of cities, towns, villages, counties, school districts, or other
   8-64  political corporations or subdivisions of the State of Texas; and
   8-65  such bonds shall be lawful and sufficient security for the deposits
   8-66  to the extent of their value.
   8-67        SECTION 5.07.  TAX ELECTION.  No ad valorem tax for any
   8-68  purpose authorized in this Act may be levied or collected and no
   8-69  obligations payable wholly or partially from ad valorem taxes,
   8-70  except refunding bonds, may be issued unless an election is held in
    9-1  the district and the taxes or obligations are duly and favorably
    9-2  voted by a majority of the resident electors of the district voting
    9-3  at the election.  Each election shall be called by resolution of
    9-4  the board.  The election resolution shall set forth the date of the
    9-5  election, the proposition to be submitted and voted on, the polling
    9-6  places, and any other matters considered advisable by the board.
    9-7  There shall be at least two polling places in each county which
    9-8  lies wholly inside the district, one of which shall be at the
    9-9  county seat.  There shall be at least one polling place in that
   9-10  part of each county which lies partly inside the district.  Notice
   9-11  of the election shall be given by publishing a substantial copy of
   9-12  the resolution calling the election in a newspaper or newspapers of
   9-13  general circulation in the district, not less than twice in each
   9-14  newspaper, with the interval between the publications to be at
   9-15  least one week and with the first of each of the publications to be
   9-16  at least 14 days prior to the date set for the election.  To the
   9-17  extent not inconsistent with the provisions hereof, the elections
   9-18  herein provided for shall be held in accordance with the provisions
   9-19  of the Election Code.
   9-20        SECTION 5.08.  PROPERTY:  RENDITION; VALUATION; LEVY.
   9-21  (a)  The rendition and assessment of property for taxation, the
   9-22  equalization of values, and the collection of taxes for the benefit
   9-23  of the district shall be in accordance with the law applicable to
   9-24  counties, insofar as such law can be made applicable, and except as
   9-25  hereinafter specifically provided.
   9-26        (b)  The tax assessor-collector of each county shall act as
   9-27  the tax assessor-collector for the district for property in the
   9-28  district located in such county.  It shall be the duty of the tax
   9-29  assessor-collector in each county to cause to be placed on the
   9-30  county tax rolls the additional column or columns needed to show
   9-31  the taxes levied by the district and the amount thereof, based on
   9-32  the value of the property as approved and equalized.  The fee of
   9-33  each county tax assessor-collector for assessing and collecting
   9-34  taxes shall be one percent of the taxes collected, to be paid over
   9-35  and disbursed in each county as are other fees of office.
   9-36        (c)  All the legal means available for the enforcement of
   9-37  state and county taxes shall be available to the district.  The
   9-38  district shall have the right to cause the officers of each county
   9-39  to enforce and collect the taxes due to the district in that county
   9-40  as provided in the law for the enforcement of state and county
   9-41  taxes.
   9-42        (d)  Taxes assessed and levied for the benefit of the
   9-43  district shall be payable and shall become delinquent at the same
   9-44  time, in the same manner, and subject to the same discount for
   9-45  advance payment as taxes levied by and for the benefit of the
   9-46  county in which the property is taxable.  The fee for collecting
   9-47  delinquent taxes through prosecution of suit shall be 15 percent of
   9-48  the taxes collected by the suit, to be paid over and disbursed in
   9-49  each county as are other fees of office.
   9-50        (e)  Concurrently with the levy of county taxes by the
   9-51  commissioners courts, the board shall levy the tax on all taxable
   9-52  property in the district which is subject to such taxation and
   9-53  shall immediately certify the tax rate to the tax
   9-54  assessor-collector of each county which lies inside the district.
   9-55               ARTICLE 6.  ADDITION OF LAND TO DISTRICT
   9-56        SECTION 6.01.  ANNEXATION.  Other territory may be included
   9-57  in the district as provided in Sections 6.02, 6.03, and 6.04 of
   9-58  this Act.
   9-59        SECTION 6.02.  PETITION.  (a)  The owner or owners of land
   9-60  contiguous to the district or otherwise may file with the board a
   9-61  petition requesting that there be included in the district the land
   9-62  described in the petition by metes and bounds or by lot and block
   9-63  number if there is a recorded plat of the area to be included in
   9-64  the district.
   9-65        (b)  The petition of the landowner or landowners to add land
   9-66  to the district shall be signed and executed in the manner provided
   9-67  by law for the conveyance of real estate.
   9-68        (c)  The board shall hear and consider the petition and may
   9-69  add to the district the land described in the petition if it is
   9-70  considered to be to the advantage of the district and if the water
   10-1  system and other improvements of the district are sufficient or
   10-2  will be sufficient to supply the added land without injuring land
   10-3  already in the district.
   10-4        SECTION 6.03.  NOTICE AND HEARING.  (a)  A petition
   10-5  requesting the annexation of a defined area shall be filed with the
   10-6  secretary of the board and shall be signed by a majority in value
   10-7  of the owners of land in the defined area, as shown by the tax
   10-8  rolls of the county or counties in which such area is located, or
   10-9  signed by 50 landowners, if the number of landowners in the defined
  10-10  area is more than 50.
  10-11        (b)  It shall be the duty of the board to pass an order
  10-12  fixing a time and place at which the petition for annexation shall
  10-13  be heard, which shall not be less than 15 days from the day of the
  10-14  order calling the hearing.
  10-15        (c)  The secretary shall issue a notice setting forth the
  10-16  time and place of the hearing and describing the area proposed to
  10-17  be annexed.  Notice of the hearing shall be given by posting copies
  10-18  of the notice in three public places in the district and in one
  10-19  public place in the area proposed to be annexed for at least seven
  10-20  days before the day of the hearing and by publishing a copy of the
  10-21  notice in a newspaper of general circulation in the county or
  10-22  counties in which the area proposed to be annexed is located one
  10-23  time at least seven days before the day of the hearing.
  10-24        (d)  If on the hearing of the petition it is found by the
  10-25  board that the proposed annexation of the area to the district is
  10-26  feasible and practicable and would be of benefit both to the area
  10-27  and to the district, the board, by order entered in its minutes
  10-28  describing the area to be annexed, may receive the proposed area as
  10-29  an addition to and part of the district.  The order adding the
  10-30  proposed territory to the district need not include all of the land
  10-31  described in the petition, if on the hearing a modification or
  10-32  change is found necessary or desirable by the board.
  10-33        SECTION 6.04.  ANNEXATION ORDER.  (a)  A copy of the order
  10-34  adding or annexing land to the district, signed by a majority of
  10-35  the members of the board and attested to by the secretary of the
  10-36  board, shall be filed and recorded in the deed records of the
  10-37  county or counties in which the district is located if the land is
  10-38  finally annexed to the district.
  10-39        (b)  After the order is recorded, the area shall be a part of
  10-40  the district.
  10-41              ARTICLE 7.  EXCLUSION OF LAND FROM DISTRICT
  10-42        SECTION 7.01.  PETITION.  (a)  The district, provided it does
  10-43  not have any outstanding indebtedness secured by taxes or net
  10-44  revenues of the district, may exclude land from the district by
  10-45  petition of a landowner or on motion of the board of directors.
  10-46        (b)  A petition for exclusion of land must accurately
  10-47  describe the land to be excluded by metes and bounds or by
  10-48  reference to a plat recorded in the plat records of the county or
  10-49  counties in which the land is located.  The petition must be signed
  10-50  by the owner or owners of the land to be excluded, by at least 10
  10-51  percent of the owners of land to be excluded, or by five or more of
  10-52  the owners of land to be excluded if the number of owners is more
  10-53  than 50, must be filed with the district at least 15 days before
  10-54  the hearing on the petition for exclusion, and shall clearly state
  10-55  the particular grounds on which exclusion is sought.  Only the
  10-56  ground stated in the petition shall be considered.
  10-57        SECTION 7.02.  NOTICE AND HEARING.  (a)  Notice of the
  10-58  hearing shall be published by the board once a week for two
  10-59  consecutive weeks in one or more newspapers of general circulation
  10-60  in the district.  The first publication shall appear at least 15
  10-61  days and not more than 40 days before the date of the hearing.
  10-62        (b)  Before determining to exclude any land, the board shall
  10-63  find that the district has no obligations that will be impaired by
  10-64  the exclusion of the land, that the district will incur no
  10-65  obligations because of the exclusion, and that the exclusion is in
  10-66  the best interests of the district.
  10-67        (c)  After considering all engineering data and other
  10-68  evidence presented to it, if the board makes the findings set forth
  10-69  in Subsection (b) of this section, the board shall enter an order
  10-70  excluding all land meeting the conditions and shall redefine the
   11-1  boundaries of the district in order to embrace all land not
   11-2  excluded.  If the land to be excluded contains water or wastewater
   11-3  customers of the district, such customers shall remain customers of
   11-4  the district, and owners of lots to which water and wastewater
   11-5  facilities have already been extended shall also be allowed to
   11-6  connect to the district's system and shall be customers of the
   11-7  district.
   11-8        SECTION 7.03.  EFFECTIVE DATE OF ORDER EXCLUDING LAND.
   11-9  (a)  Except as provided by Subsection (c) of this section, an order
  11-10  excluding land pursuant to a petition signed by the owner or owners
  11-11  of the land to be excluded takes effect on the date the board
  11-12  enters the order.
  11-13        (b)  Except as provided by Subsection (c) of this section, an
  11-14  order excluding land pursuant to a petition signed by less than all
  11-15  of the owners to be excluded takes effect:
  11-16              (1)  on the day following the deadline for submission
  11-17  of a petition if the district does not receive a timely petition
  11-18  under Subsection (b) of Section 7.04 of this Act; or
  11-19              (2)  on the day following the day the election returns
  11-20  are canvassed if the district receives a timely petition under
  11-21  Subsection (b) of  Section 7.04 of this Act and the exclusion is
  11-22  ratified at an election held for that purpose.
  11-23        (c)  Before an order excluding land under this section
  11-24  becomes effective, all taxes levied and assessed by the district on
  11-25  the land to be excluded shall be fully paid.
  11-26        SECTION 7.04.  PETITION FOR RATIFICATION ELECTION.  (a)  If
  11-27  the board issues an order excluding land pursuant to a petition
  11-28  signed by less than all of the owners of the land to be excluded,
  11-29  the board shall publish notice describing the excluded land and
  11-30  stating that the exclusion becomes final if the district does not
  11-31  receive, not later than the 25th day after the date of the board's
  11-32  order, a petition requesting a ratification election that is signed
  11-33  by at least 10 percent of the qualified voters that reside in the
  11-34  area to be excluded.
  11-35        (b)  Notice of the exclusion shall be published once a week
  11-36  for two consecutive weeks in a newspaper of general circulation in
  11-37  the district, and the first notice must be published not later than
  11-38  the fifth day after the date of the board's order.  If the district
  11-39  receives, not later than the 25th day after the date of the board's
  11-40  order, a petition requesting a ratification election that is signed
  11-41  by at least 10 percent of the qualified voters that reside in the
  11-42  land area to be excluded, the order does not take effect unless
  11-43  approved by a majority vote of the residents of the district at a
  11-44  ratification election held for that purpose.
  11-45        (c)  The notice of the election, the manner and time of
  11-46  giving the notice, the manner of holding the election, and
  11-47  qualifications of the voters shall be governed by Subchapter E,
  11-48  Chapter 51, Water Code.
  11-49                   ARTICLE 8.  DIVISION OF DISTRICT
  11-50        SECTION 8.01.  CONDITIONS OF DIVISION.  (a)  The district may
  11-51  from time to time, provided it does not have any outstanding
  11-52  indebtedness secured by taxes or net revenues, divide into two or
  11-53  more districts; however, no division shall occur that would result
  11-54  in the creation of a district of less than 100 acres in size.  On
  11-55  petition of any landowner or on the board's own motion, the board
  11-56  of directors may consider a proposal to divide the original
  11-57  district or any district subsequently created by division.
  11-58        (b)  With regard to the foregoing authority to divide the
  11-59  district into one or more districts, it is not the intent of this
  11-60  Act to encourage or promote the proliferation of numerous utility
  11-61  providers within the subject territory.  Rather, this Act is
  11-62  intended to encourage and promote orderly development within the
  11-63  subject territory and to facilitate the provision of dependable,
  11-64  efficient utility services at affordable rates to customers of the
  11-65  district.
  11-66        SECTION 8.02.  ELECTION; AUTHORITY OF NEW DISTRICTS.  (a)
  11-67  After the board of the original district has agreed on the terms
  11-68  and conditions of division, which shall include a plan for the
  11-69  payment of any outstanding current obligations and performance of
  11-70  any outstanding obligations of the original district, and has
   12-1  prepared a metes and bounds description of the proposed districts,
   12-2  it shall order an election to be held in the district to determine
   12-3  whether the original district should be divided as proposed.
   12-4        (b)  The board of the original district shall be divided if a
   12-5  majority of the qualified voters in the original district vote in
   12-6  favor of the division.  The resulting districts shall be designated
   12-7  by consecutive letters following the number of the original
   12-8  district.  For example, Paseo del Este No. 1, if divided into two
   12-9  districts, shall become Paseo del Este No. 1A and Paseo del Este
  12-10  No. 1B.  No other confirmation election shall be necessary;
  12-11  however, each resulting district, in order to issue bonds payable
  12-12  wholly or partially from ad valorem taxes, shall be required to
  12-13  obtain authorization for the issuance of the bonds by a majority
  12-14  vote of the resident electors of the district voting in an election
  12-15  called and held for that purpose.  Notice of the election shall be
  12-16  given as generally set forth for bond elections in Chapter 54,
  12-17  Water Code.  Each resulting district desiring to levy a maintenance
  12-18  tax shall be required to obtain authorization for the tax by a
  12-19  majority vote of the qualified resident electors of the district
  12-20  voting in an election called and held for that purpose.  Notice of
  12-21  the election shall be given as generally set forth for such
  12-22  elections in Chapter 54, Water Code.
  12-23        SECTION 8.03.  APPOINTMENT AND ELECTION OF DIRECTORS.
  12-24  (a)  After the district is divided into two or more districts, the
  12-25  resulting districts shall be separate districts and shall be
  12-26  governed as separate districts, provided that, during a period of
  12-27  90 days after the date of the election to approve division, the
  12-28  board of the original district shall continue to act on behalf of
  12-29  the original district to wind up its affairs.  The board of the
  12-30  original district shall appoint two initial directors to each
  12-31  resulting district to serve terms expiring September 1 of the
  12-32  second year after the creation of each resulting district, and the
  12-33  board of the original district shall appoint three initial
  12-34  directors to each resulting district to serve terms expiring
  12-35  September 1 of the fourth year after creation of each resulting
  12-36  district.  A board member of the original district may be appointed
  12-37  as a director of one of the resulting districts.
  12-38        (b)  If an initial director dies, resigns, or is otherwise
  12-39  removed, the board of the new district shall appoint a successor to
  12-40  serve the unexpired term.  When a director's term expires, his
  12-41  successor shall be elected as provided in Section 2.04 of this Act.
  12-42        SECTION 8.04.  PAYMENT OF DISTRICT DEBTS.  After the division
  12-43  of the original district into two or more districts, the current
  12-44  obligations and any bond authorizations of the original district
  12-45  are protected and are not impaired.  The debts may be paid by
  12-46  taxes, revenues, or assessments levied on the land in the original
  12-47  district as if it had not divided or with contributions from each
  12-48  of the resulting districts on terms stated in the division proposed
  12-49  by the board and approved by the election under Section 8.02 of
  12-50  this Act.
  12-51        SECTION 8.05.  AUTHORITY OF RESULTING DISTRICTS.  After
  12-52  division, each of the resulting districts shall have the power to
  12-53  incur and pay debts created by each district and shall in every
  12-54  respect have the full power and authority of a district created and
  12-55  governed by the provisions of this Act.  Each of the resulting
  12-56  districts shall have the authority to contract with one another for
  12-57  the provision of water and wastewater services and for such other
  12-58  matters as the board of directors of each of the districts deems
  12-59  appropriate.
  12-60        SECTION 8.06.  ASSUMPTION OF OBLIGATIONS.  After division,
  12-61  each of the resulting districts shall assume the obligations of the
  12-62  original district under any agreements or resolutions consenting to
  12-63  the creation of the original district to the extent that such
  12-64  agreements and resolutions do not impose obligations that limit the
  12-65  district's powers and authority to issue bonds for any purpose
  12-66  authorized by this Act.  Any other obligations of the original
  12-67  district shall be divided pro rata among the resulting districts
  12-68  either on an acreage basis or on such other terms as are
  12-69  satisfactory to the resulting districts.
  12-70        SECTION 8.07.  NOTICE TO TEXAS NATURAL RESOURCE CONSERVATION
   13-1  COMMISSION.  Within 30 days after a division election, the original
   13-2  district that confirms a plan for division shall provide written
   13-3  notice of such plan to the Texas Natural Resource Conservation
   13-4  Commission.
   13-5          ARTICLE 9.  ANNEXATION AND DISSOLUTION OF DISTRICT
   13-6        SECTION 9.01.  ANNEXATION.  (a)  Notwithstanding any other
   13-7  provision of law, on the annexation of the district or districts,
   13-8  in the event of division under Article 8 of this Act, the annexing
   13-9  municipality shall:
  13-10              (1)  assume all of the outstanding indebtedness of the
  13-11  district;
  13-12              (2)  dissolve the district within six months of
  13-13  annexation and become the owner of all district assets, including,
  13-14  without limitation, all accounts receivable and the right to
  13-15  collect all outstanding taxes, delinquent taxes, and other
  13-16  indebtedness;
  13-17              (3)  refrain from imposing city taxes on property
  13-18  located within the district at any time prior to dissolution of the
  13-19  district;
  13-20              (4)  provide all city utility, emergency medical, fire,
  13-21  police, garbage collection, and other standard municipal services
  13-22  to residents of the district at the same rate as such services are
  13-23  provided to in-city residents of similar developments; and
  13-24              (5)  with regard to zoning and other land use
  13-25  regulation, honor regional land use planning within the district.
  13-26        (b)  Immediately on annexation of the district, the district
  13-27  shall transfer all district assets to the annexing municipal
  13-28  corporation in accordance with the instruments approved by the
  13-29  annexing municipal corporation and the district.
  13-30                    ARTICLE 10.  AFFORDABLE HOUSING
  13-31        SECTION 10.01.  A minimum of five percent of the residential
  13-32  housing units within the district shall be utilized for the
  13-33  construction of affordable housing, such affordable housing to be
  13-34  distributed among different residential areas within the district.
  13-35  In this section, "affordable housing" means housing available to
  13-36  those with moderate, low, or very low income levels, as those
  13-37  levels are determined periodically by the United States Department
  13-38  of Housing and Urban Development based on the El Paso Standard
  13-39  Metropolitan Statistical Area.
  13-40                 ARTICLE 11.  MISCELLANEOUS PROVISIONS
  13-41        SECTION 11.01.  NO TAXATION.  The accomplishment of the
  13-42  purposes stated in this Act being for the benefit of the people of
  13-43  this state and for the improvement of their properties and
  13-44  industries, the district in carrying out the purposes of this Act
  13-45  will be performing an essential public function under the
  13-46  constitution and shall not be required to pay any tax or assessment
  13-47  on the project or any part thereof, and the bonds or notes issued
  13-48  under this Act and their transfer and the income therefrom,
  13-49  including the profits made on the sale thereof, shall at all times
  13-50  be free from taxation within this state.
  13-51        SECTION 11.02.  FINDINGS RELATING TO PROCEDURAL REQUIREMENTS.
  13-52  The proper and legal notice of the intention to introduce this Act,
  13-53  setting forth the general substance of this Act, has been published
  13-54  as provided by law, and the notice and a copy of this Act have been
  13-55  furnished to all persons, agencies, officials, or entities to which
  13-56  they are required to be furnished by the constitution and other
  13-57  laws of this state, including the governor.  All requirements of
  13-58  the constitution and laws of this state and the rules and
  13-59  procedures of the legislature with respect to the notice,
  13-60  introduction, and passage of this Act are fulfilled and
  13-61  accomplished.
  13-62        SECTION 11.03.  SEVERABILITY.  If any word, phrase, clause,
  13-63  sentence, paragraph, section, or other part of this Act or the
  13-64  application thereof to any person or circumstance shall ever be
  13-65  held to be invalid or unconstitutional by a court of competent
  13-66  jurisdiction in this state, the remainder of the Act and the
  13-67  application of such word, phrase, clause, sentence, paragraph,
  13-68  section, or other part of this Act to other persons or
  13-69  circumstances shall not be affected thereby.  To the extent of a
  13-70  conflict between a provision of this Act and any other law or
   14-1  statute, this Act shall control.
   14-2        SECTION 11.04.  EMERGENCY.  The importance of this
   14-3  legislation and the crowded condition of the calendars in both
   14-4  houses create an emergency and an imperative public necessity that
   14-5  the constitutional rule requiring bills to be read on three several
   14-6  days in each house be suspended, and this rule is hereby suspended,
   14-7  and that this Act take effect and be in force from and after its
   14-8  passage, and it is so enacted.
   14-9                               * * * * *