75R10829 JMC-F By Serna, Chavez H.B. No. 2300 Substitute the following for H.B. No. 2300: By Counts C.S.H.B. No. 2300 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, administration, powers, duties, 1-3 operation, and financing of the Paseo del Este Municipal Utility 1-4 District and to the authorization of bonds and the levy of taxes; 1-5 providing civil penalties. 1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-7 ARTICLE 1. GENERAL PROVISIONS 1-8 SECTION 1.01. CREATION. (a) A conservation and reclamation 1-9 district, to be known as Paseo del Este Municipal Utility District, 1-10 is created. The district is a governmental agency and a body 1-11 politic and corporate. 1-12 (b) The district is created under and is essential to 1-13 accomplish the purposes of Section 59, Article XVI, Texas 1-14 Constitution. 1-15 (c) The district has the powers of a municipal utility 1-16 district as provided by Chapter 54, Water Code, and is governed by 1-17 Chapters 49 and 54, Water Code, unless otherwise provided by this 1-18 Act. 1-19 SECTION 1.02. DEFINITIONS. In this Act: 1-20 (1) "District" means the Paseo del Este Municipal 1-21 Utility District. 1-22 (2) "Board" means the board of directors of the Paseo 1-23 del Este Municipal Utility District or a district resulting from a 1-24 division under Article 8 of this Act. 2-1 SECTION 1.03. BOUNDARIES. (a) Except as provided by 2-2 Subsection (c) of this section, the district includes the territory 2-3 contained within the following area: Section 315 1/2, C. D. 2-4 Stewart Survey, El Paso County, Texas; Section 318, C. D. Stewart 2-5 Survey, El Paso County, Texas; Section 319, C. D. Stewart Survey, 2-6 El Paso County, Texas; the south one-half of Section 18, Texas and 2-7 Pacific Railroad Company Survey, Block 79, Township 3, El Paso 2-8 County, Texas; the northeast one-fourth out of Section 18, Texas 2-9 and Pacific Railroad Company Survey, Block 79, Township 3, El Paso 2-10 County, Texas, SAVE AND EXCEPT 39.37 acres described in a deed of 2-11 record at Volume 2039, Page 1312, Real Property Records of El Paso 2-12 County, Texas; the southwest one-fourth of Section 20, Texas and 2-13 Pacific Railroad Company Survey, Block 79, Township 3, El Paso 2-14 County, Texas; Section 22, Texas and Pacific Railroad Company 2-15 Survey, Block 79, Township 3, El Paso County, Texas, SAVE AND 2-16 EXCEPT: (1) 7.889 acres described in deed from Texas Pacific Land 2-17 Trust to Socorro Independent School District, recorded in Volume 2-18 1302, Page 769, Real Property Records of El Paso County, Texas, (2) 2-19 Tracts 2 and 3, as described in deed from the State of Texas to 2-20 375/10 Texas Land L.P., recorded in Volume 2595, Page 1504, Real 2-21 Property Records of El Paso County, Texas, (3) Tracts 2 and 3, as 2-22 described in deed from the State of Texas to MBJR Trust and Barry 2-23 Lang, recorded in Volume 2595, Page 1517, Real Property Records of 2-24 El Paso County, Texas, and (4) the northwest one-fourth of Section 2-25 22, Texas and Pacific Railroad Company Survey, Block 79, Township 2-26 3, El Paso County, Texas. 2-27 (b) A mistake in the patents or field notes or in copying 3-1 the patents or field notes in the legislative process does not 3-2 affect the organization, existence, or validity of the district, 3-3 the right of the district to issue bonds or refunding bonds or to 3-4 pay the principal of or interest on issued bonds, the right of the 3-5 district to levy and collect taxes, or the legality or operation 3-6 of the district or its governing board. 3-7 (c) The district does not include territory described by 3-8 Subsection (a) of this section that is subject to the outstanding 3-9 indebtedness secured by taxes or net revenues of a special utility 3-10 district created under Section 59, Article XVI, Texas Constitution, 3-11 on the effective date of this Act. If territory described by 3-12 Subsection (a) of this section is subject to a tax or net revenue 3-13 pledged by a special utility district created under Section 59, 3-14 Article XVI, Texas Constitution, the territory that is subject to 3-15 the tax or net revenue is excluded from the territory described by 3-16 Subsection (a) of this section. The exclusion of territory under 3-17 this subsection does not affect the validity of this Act. 3-18 ARTICLE 2. ADMINISTRATIVE PROVISIONS 3-19 SECTION 2.01. BOARD. The district shall be governed by and 3-20 all powers of the district shall be exercised by a board of five 3-21 directors. 3-22 SECTION 2.02. DIRECTOR ELIGIBILITY. Except for initial 3-23 directors, a person must meet the requirements of Section 54.102, 3-24 Water Code, to be eligible to serve as a director. A person must 3-25 be at least 18 years of age and a resident of El Paso County or 3-26 Travis County to be eligible to serve as an initial director. 3-27 Notwithstanding Section 49.052, Water Code, employment with a state 4-1 agency, other than the General Land Office or the School Land 4-2 Board, does not disqualify a person from serving as a director. An 4-3 employee of the district may not serve as a director. 4-4 SECTION 2.03. TERMS OF OFFICE AND APPOINTMENT OF DIRECTORS. 4-5 (a) Except for initial directors, directors serve staggered 4-6 four-year terms, with the terms of two or three directors expiring 4-7 September 1 of each even-numbered year. 4-8 (b) The School Land Board shall appoint five initial 4-9 directors as soon as practicable after the effective date of this 4-10 Act. The School Land Board shall appoint two initial directors to 4-11 serve terms expiring September 1, 2000, and three initial directors 4-12 to serve terms expiring September 1, 2002. If a vacancy occurs, 4-13 the School Land Board shall appoint a successor to fill the vacancy 4-14 and to serve the remainder of the unexpired term. Initial 4-15 directors shall serve until permanent directors are elected under 4-16 Section 2.04 of this Act and qualify for office. 4-17 SECTION 2.04. ELECTION OF PERMANENT DIRECTORS. (a) A 4-18 director serves until the director's successor has qualified. An 4-19 election shall be held for the election of the appropriate number 4-20 of permanent directors on the first Saturday in May of each 4-21 even-numbered year. 4-22 (b) The board shall publish notice of an election under this 4-23 section once a week for two consecutive weeks in a newspaper of 4-24 general circulation in the district beginning not later than 14 4-25 days before the date of the election. 4-26 SECTION 2.05. QUALIFICATION OF DIRECTOR. A director shall 4-27 take the constitutional oath of office and, except for initial 5-1 directors, give bond for the faithful performance of the director's 5-2 duties as required by Section 49.055, Water Code. The cost of a 5-3 bond under this section shall be paid by the district. 5-4 SECTION 2.06. MEETINGS AND BOARD ACTIONS. (a) The board 5-5 may establish regular meetings to conduct the business of the 5-6 district and may hold special meetings if necessary as determined 5-7 by the board. The board shall hold a meeting under this section 5-8 within the district unless the board, by a majority vote at a 5-9 public meeting, decides to hold the meeting outside of the 5-10 district. 5-11 (b) A majority of the directors shall constitute a quorum of 5-12 the board. A vote of a majority of the quorum present is necessary 5-13 to take board action. The board may adopt bylaws to govern the 5-14 affairs of the district and may adopt a seal for the district. The 5-15 board may provide in the bylaws that, except for initial directors, 5-16 a director shall receive compensation of $20 for attending a 5-17 meeting of the board. A director may not be paid more than $40 for 5-18 meetings held in a calendar month. 5-19 SECTION 2.07. ORGANIZATION OF BOARD OF DIRECTORS. The board 5-20 shall elect a president and vice president from members of the 5-21 board. The board may elect other officers as are deemed necessary 5-22 by the board. The president is the chief executive officer of the 5-23 district and the presiding officer of the board and has the same 5-24 right to vote as other members of the board. The vice president 5-25 shall perform the duties and exercise the powers of the president 5-26 if the president is absent, fails to act, or refuses to act. The 5-27 board shall appoint a secretary and treasurer. The secretary and 6-1 treasurer may be, but are not required to be, members of the board. 6-2 One person may serve as both secretary and treasurer. The 6-3 treasurer shall give bond in an amount required by the board. The 6-4 condition of the bond shall be that the treasurer will faithfully 6-5 account for all money that comes into the custody of the treasurer. 6-6 The board shall require a bond under this section of at least 6-7 $100,000 if the district has authorized the issuance of bonds. If 6-8 the district has not authorized the issuance of bonds, the board 6-9 shall require a bond of at least $5,000. 6-10 SECTION 2.08. CONFLICT OF INTEREST: CONTRACT. A director 6-11 who is financially interested in a contract that is proposed to be 6-12 executed by the board for the purchase of property or services or 6-13 for the construction of facilities shall disclose the director's 6-14 interest to the board and may not vote on the acceptance of the 6-15 contract. 6-16 SECTION 2.09. DISTRICT EMPLOYEES. The board is authorized 6-17 to employ a general manager and consulting engineers, financial 6-18 consultants, attorneys, and auditors. The general manager shall be 6-19 responsible for: 6-20 (1) administering the board's directives; 6-21 (2) maintaining district records, including minutes of 6-22 board meetings; 6-23 (3) coordinating with federal, state, and local 6-24 agencies; 6-25 (4) developing plans and programs for the board's 6-26 approval; 6-27 (5) hiring, supervising, training, and discharging the 7-1 district's employees; 7-2 (6) obtaining technical, scientific, legal, fiscal, or 7-3 other professional services for the district; and 7-4 (7) performing other duties as assigned by the board. 7-5 SECTION 2.10. EMPLOYEE BONDS. (a) The general manager and 7-6 each employee of the district who is charged with the collection, 7-7 custody, or payment of district money shall execute a fidelity bond 7-8 in an amount determined by the board and in a form and with a 7-9 surety approved by the board. 7-10 (b) The district shall pay the premium on a bond under this 7-11 section. 7-12 SECTION 2.11. PRINCIPAL OFFICE. (a) If the district has 7-13 not issued bonds, the district may maintain its principal office in 7-14 El Paso County or Travis County. If the district maintains its 7-15 principal office in Travis County, the district shall maintain 7-16 duplicates of district records in El Paso County and make the 7-17 duplicate records available for inspection during regular business 7-18 hours. 7-19 (b) If the district has issued bonds, the district shall 7-20 maintain its principal office in El Paso County. 7-21 SECTION 2.12. RECORDS. (a) The district shall keep at its 7-22 principal office: 7-23 (1) a complete and accurate account of the district's 7-24 business transactions in accordance with generally accepted 7-25 accounting methods; 7-26 (2) a complete and accurate record of the minutes of 7-27 board meetings; and 8-1 (3) contracts, documents, and other records of the 8-2 district. 8-3 (b) The district shall permit reasonable public inspection 8-4 of the district's records during regular business hours. 8-5 SECTION 2.13. SUIT. The district may sue and be sued in the 8-6 district's corporate name. 8-7 ARTICLE 3. AUTHORITY OF DISTRICT 8-8 SECTION 3.01. POWERS AND DUTIES. (a) The district shall: 8-9 (1) administer and enforce the provisions of this Act; 8-10 (2) use the facilities and powers of the district to 8-11 accomplish the purposes of this Act; 8-12 (3) coordinate water, wastewater, and drainage 8-13 services within the district; and 8-14 (4) control and abate water pollution within the 8-15 district. 8-16 (b) When designing utility infrastructure and related 8-17 systems, the district shall submit for review to a municipality 8-18 with a population in excess of 300,000, according to the most 8-19 recent federal census, and with a municipal boundary that is 8-20 contiguous to the district the district's design plans and 8-21 specifications for the utility infrastructure and related systems. 8-22 The district shall pay to the municipality a fee for conducting the 8-23 review if the municipality has established a fee that has general 8-24 application for comparable reviews. The municipality shall 8-25 complete the review of the design plans and specifications not 8-26 later than the 60th day after the date on which the plans and 8-27 specifications are delivered to the municipality. In constructing 9-1 the utility infrastructure, the district shall meet or exceed the 9-2 construction standards for materials and installation 9-3 specifications of a municipality with a population in excess of 9-4 300,000, according to the most recent federal census, and with a 9-5 municipal boundary that is contiguous to the district. 9-6 (c) Subject to the authority of the Texas Natural Resource 9-7 Conservation Commission, the district has the authority to control 9-8 and abate water pollution within the district. The authority of 9-9 the district under this subsection does not reduce or eliminate the 9-10 authority of a municipality to control and abate water pollution 9-11 within the district under state or federal law. 9-12 (d) Except as provided by this Act, the district has the 9-13 powers, rights, and privileges necessary and convenient for 9-14 accomplishing the purposes of this Act as provided by general law 9-15 relating to a municipal utility district or water control and 9-16 improvement district created under Section 59, Article XVI, Texas 9-17 Constitution. 9-18 (e) The powers granted to the district by this Act are 9-19 cumulative of powers granted by other law. 9-20 SECTION 3.02. DISTRICT RULES. (a) The district may adopt 9-21 and enforce rules reasonably required to implement this Act, 9-22 including rules governing procedure and practice before the board. 9-23 (b) The district shall keep a record of the district's rules 9-24 and provide a copy of the rules to a person on written request. 9-25 SECTION 3.03. INSPECTIONS AND INVESTIGATIONS. In addition 9-26 to the powers provided by Section 49.221, Water Code, the district 9-27 may enter public or private property located within the district 10-1 for purposes of inspecting and investigating conditions of the 10-2 property relating to the district's authorized purposes. The 10-3 district shall conduct an inspection or investigation in accordance 10-4 with provisions and restrictions applicable to the Texas Natural 10-5 Resource Conservation Commission. 10-6 SECTION 3.04. HEARINGS AND ORDERS. (a) The board may: 10-7 (1) hold hearings, receive evidence from a party in 10-8 interest who appears before the board, compel the attendance of a 10-9 witness, and make findings of fact and determinations relating to 10-10 the administration of this Act or an order or rule of the board; 10-11 and 10-12 (2) delegate the authority to take testimony and 10-13 administer oaths in a hearing held by the district to a member of 10-14 the board or an employee of the district. 10-15 (b) An order of the board must: 10-16 (1) be in the name of the district; and 10-17 (2) be attested to by the appropriate members of the 10-18 board under the district's rules. 10-19 SECTION 3.05. CIVIL PENALTY; INJUNCTION. (a) A person who 10-20 violates a rule, permit, or order of the district is subject to a 10-21 civil penalty of not less than $50 and not more than $1,000 for 10-22 each violation or each day of a continuing violation. 10-23 (b) The district may sue to enjoin a threatened or present 10-24 activity or to recover the penalty in a district court in the 10-25 county in which the violation occurred. A penalty recovered under 10-26 this subsection shall be paid to the district. 10-27 SECTION 3.06. PERMITS; CONTRACTS; COOPERATIVE AGREEMENTS. 11-1 (a) The district is authorized to obtain water appropriation 11-2 permits, construction permits, and other water and wastewater 11-3 discharge permits from the Texas Natural Resource Conservation 11-4 Commission or from permit owners. The district is authorized to 11-5 acquire water or a water supply from a person, firm, corporation, 11-6 municipal corporation, or public agency, the state, the United 11-7 States, or any agency of the state or the United States. The board 11-8 may contract with one or more substantial users of water to acquire 11-9 a water supply under an agreed allocation of storage space between 11-10 the district and the user or the district may contract for the 11-11 district's water supply independently. The district is authorized 11-12 to collect, transport, process, dispose of, and control all 11-13 domestic, industrial, and communal wastes, whether in fluid, solid, 11-14 or composite state. The district is authorized to contract with a 11-15 person, firm, corporation, municipal corporation, or public agency, 11-16 the state, the United States, or any agency of the state or the 11-17 United States for the collection, transportation, processing, 11-18 disposition, and control of all domestic, industrial, and communal 11-19 wastes. The authority of the district under this subsection 11-20 includes the authority to enter into contracts involving 11-21 coordinated infrastructure or regional utility plans. The district 11-22 may not unilaterally require a person, firm, corporation, municipal 11-23 corporation, public agency, or other entity to fund or construct 11-24 utility infrastructure for purposes of extending utilities to the 11-25 district. 11-26 (b) The district may enter into a contract with the state, a 11-27 municipality, an entity created under Section 59, Article XVI, 12-1 Texas Constitution, or another entity to supply water or to provide 12-2 services relating to domestic, industrial, or commercial waste. 12-3 The district is authorized to contract with a person, a 12-4 municipality, or an entity created under Section 59, Article XVI, 12-5 Texas Constitution, to rent, lease, or operate water production, 12-6 water supply, water filtration or purification, and water supply 12-7 facilities and facilities to provide services relating to the 12-8 wastes of the person, municipality, or entity for a consideration 12-9 as agreed to by the district and the person, municipality, or 12-10 entity. A contract under this subsection may provide that the 12-11 contract continues in effect until specified bonds or notes and 12-12 refunding bonds issued in lieu of the bonds or notes are paid. A 12-13 municipality or entity described by this subsection is authorized 12-14 to enter into a contract with the district to fix, charge, and 12-15 collect fees, rates, charges, rentals, or other amounts for a 12-16 service or facility provided under a contract with the district and 12-17 may pledge amounts that are sufficient to make the payments 12-18 required under the contract. 12-19 (c) For purposes of land use planning, the district shall 12-20 encourage owners and developers of land located within the district 12-21 to use and develop the land and buildings in compliance with 12-22 building, housing, and fire codes, subdivision and zoning 12-23 regulations, thoroughfare, water conservation, and land use plans, 12-24 and other land development and safety regulations of an adjacent 12-25 municipality with a population in excess of 300,000, according to 12-26 the most recent federal census. 12-27 SECTION 3.07. FACILITIES. (a) In addition to the authority 13-1 provided by Sections 49.218 and 54.201, Water Code, the district 13-2 may purchase, construct, acquire, own, lease, operate, maintain, 13-3 repair, improve, and extend, at any location within or outside of 13-4 the district, land, or an interest in land, a work, an improvement, 13-5 a facility, a plant, equipment, or an appliance that is incident, 13-6 helpful, or necessary to provide for: 13-7 (1) the control, storage, preservation, transmission, 13-8 treatment, and distribution and use of storm water and floodwater, 13-9 the water of rivers and streams, and underground water for 13-10 municipal, domestic, industrial, and other beneficial uses; and 13-11 (2) the collection, transportation, processing, 13-12 disposition, and control of domestic, industrial, or commercial 13-13 wastes. 13-14 (b) The district may: 13-15 (1) enter into a contract with a person, firm, 13-16 corporation, municipality, entity created under Section 59, Article 13-17 XVI, Texas Constitution, municipal corporation, public agency, or 13-18 other political subdivision of the state; and 13-19 (2) perform any other act consistent with the powers 13-20 of the district and necessary to fulfill the purposes of this Act. 13-21 SECTION 3.08. ACQUISITION AND DISPOSITION OF PROPERTY. The 13-22 district may use a public roadway, street, alley, or easement in El 13-23 Paso County to accomplish the purposes of the district. The 13-24 district is not required to obtain a franchise or other 13-25 governmental agreement to use a roadway, street, alley, or easement 13-26 that is owned by a municipality that is adjacent to the district 13-27 with a population in excess of 300,000, according to the most 14-1 recent federal census, if, before using the roadway, street, alley, 14-2 or easement, the district obtains written consent of the 14-3 municipality to the particular use. The district shall pay a fee 14-4 to a municipality for the use of the roadway, street, alley, or 14-5 easement that equals the lesser of the district's pro rata share, 14-6 based on actual area encumbered, of the fair market value or the 14-7 initial purchase price for the roadway, street, alley, or easement. 14-8 SECTION 3.09. RELOCATION OF FACILITIES. The district may 14-9 relocate, raise, reroute, or change the grade of, or alter the 14-10 construction of, a highway, railroad, electric transmission line, 14-11 pipeline, canal, or drainage ditch, if deemed necessary by the 14-12 board. The district shall pay for any relocation, raising, 14-13 rerouting, changing, or altering under this section, unless 14-14 otherwise agreed in writing by the interested parties. The cost of 14-15 replacement is limited to the comparable replacement of any 14-16 replaced facility, less the replaced facility's net salvage value. 14-17 ARTICLE 4. GENERAL FISCAL PROVISIONS 14-18 SECTION 4.01. DISBURSEMENT OF MONEY. The district may 14-19 disburse money only by check, draft, order, or other instrument 14-20 signed by a person authorized in the bylaws of the district or by 14-21 board resolution. 14-22 SECTION 4.02. FEES AND CHARGES. The district may establish 14-23 fees and charges not to exceed the amounts necessary to enable the 14-24 district to fulfill the obligations of the district as provided by 14-25 this Act. 14-26 SECTION 4.03. LOANS AND GRANTS. (a) The district may apply 14-27 for and receive a loan or grant from the state or the United 15-1 States, or any agency of the state or the United States, or from a 15-2 private entity, for purposes of exercising the powers of the 15-3 district. 15-4 (b) The district may not enter into an agreement under this 15-5 section that violates state or federal law. 15-6 SECTION 4.04. FISCAL YEAR. The board shall establish a 15-7 fiscal year for the district. 15-8 SECTION 4.05. DEPOSITORY BANKS. (a) The board, as provided 15-9 by this section, shall designate at least one bank to serve as a 15-10 depository for the funds of the district. Subject to Section 15-11 49.156, Water Code, the funds of the district shall be deposited in 15-12 a depository bank designated under this subsection. 15-13 (b) Before designating a depository bank, the board shall 15-14 publish notice at least once in a newspaper of general circulation 15-15 in the district to solicit applications from banks interested in 15-16 serving as a depository for the district. The notice shall include 15-17 the time and place of the board meeting at which the board proposes 15-18 to designate a depository bank. The board shall prescribe the term 15-19 of service of a depository bank designated under Subsection (a) of 15-20 this section. 15-21 (c) The board shall review an application received under 15-22 Subsection (b) of this section, including examining the management 15-23 and condition of each bank submitting an application. In reviewing 15-24 an application under this subsection, the board may consider: 15-25 (1) the terms and conditions proposed by a bank for 15-26 handling the district's money; 15-27 (2) the management of the bank; and 16-1 (3) the ability of the bank to handle the district's 16-2 money. 16-3 (d) A bank is not disqualified from being a depository under 16-4 this section because an officer or a director of the bank is a 16-5 member of the board. 16-6 (e) An officer or a director of a bank is not disqualified 16-7 from being a member of the board. 16-8 (f) If the board does not receive an application under this 16-9 section, the board may designate a bank as depository on terms that 16-10 the board finds proper. 16-11 ARTICLE 5. BOND AND TAX PROVISIONS 16-12 SECTION 5.01. TAXES; REVENUE BONDS. (a) For purposes of 16-13 exercising the authority of the district as provided by this Act, 16-14 the district may issue bonds or other obligations that are: 16-15 (1) secured by ad valorem taxes; 16-16 (2) secured by a pledge of all or part of the revenues 16-17 accruing to the district, including revenues received from the sale 16-18 of water or other products, the rendition of service, tolls, 16-19 charges, and any other source of revenue, other than ad valorem 16-20 taxes; and 16-21 (3) secured by both a pledge of all or part of the 16-22 revenues described by Subdivision (2) of this subsection and ad 16-23 valorem taxes. 16-24 (b) An obligation issued by the district shall be authorized 16-25 by resolution of the board, issued in the name of the district, 16-26 signed by the president or vice president, attested to by the 16-27 secretary, and bear the seal of the district. The signatures of 17-1 the president or vice president and the secretary may be printed or 17-2 lithographed on the obligation. The seal of the district may be 17-3 impressed, printed, or lithographed on the obligation. An 17-4 obligation issued by the district: 17-5 (1) shall be in a form prescribed by the board; 17-6 (2) may be in any denomination; 17-7 (3) shall mature serially or otherwise not later than 17-8 50 years from the date of issuance; 17-9 (4) may bear any interest rate; 17-10 (5) may be sold at a price and under terms determined 17-11 by the board to be the most advantageous available; 17-12 (6) may, in the discretion of the board, be made 17-13 callable before maturity at times and prices as provided in the 17-14 obligation; 17-15 (7) may be made registrable as to principal or 17-16 principal and interest; and 17-17 (8) may be secured by an indenture of trust with a 17-18 corporate trustee. 17-19 (c) An obligation under this section may be issued in more 17-20 than one series as required to carry out the purposes of this Act. 17-21 A pledge of revenue may reserve the right to issue additional 17-22 obligations under conditions specified on the pledge. An 17-23 additional obligation is on a parity with or subordinate to the 17-24 original obligation. 17-25 (d) The district is an "issuer" as defined by Section 1, 17-26 Article 717q, Revised Statutes. 17-27 (e) A board resolution authorizing an obligation or a trust 18-1 indenture under this section may include additional terms to 18-2 provide for a corporate trustee or receiver to take possession of 18-3 facilities of the district in the event of default by the district 18-4 relating to the obligation or trust indenture. The additional 18-5 terms, if any, constitute a contract between the district and the 18-6 owner of the obligation. 18-7 (f) The district may not issue bonds that are secured by or 18-8 otherwise encumber permanent school fund land located within the 18-9 district. 18-10 SECTION 5.02. BOND ANTICIPATION NOTES. The district may 18-11 issue bond anticipation notes for purposes of exercising the powers 18-12 of the district. Bond anticipation notes may be secured by a 18-13 pledge of all or part of the revenues of the district. The 18-14 district may authorize the issuance of bonds to pay the principal 18-15 of and interest on bond anticipation notes issued under this 18-16 section. Bond anticipation notes shall be secured by a pledge of 18-17 all or part of the revenues of the district and may be issued on a 18-18 parity with or subordinate to outstanding bonds of the issuer. If 18-19 the resolution or trust agreement authorizing the issuance of bond 18-20 anticipation notes contains a covenant that the notes are payable 18-21 from the proceeds of subsequently issued bonds, the district is not 18-22 required to demonstrate that the revenues that may be pledged to 18-23 the notes are sufficient to pay the principal of and interest on 18-24 the notes for purposes of receiving approval of the attorney 18-25 general or registration by the comptroller. 18-26 SECTION 5.03. REFUNDING BONDS. (a) The district may issue 18-27 refunding bonds to refund outstanding bonds and interest as 19-1 authorized by this Act. 19-2 (b) Refunding bonds may: 19-3 (1) be issued to refund one or more series of 19-4 outstanding bonds; 19-5 (2) combine the pledges for the outstanding bonds for 19-6 the security of the refunding bonds; or 19-7 (3) be secured by additional revenues. 19-8 (c) Refunding bonds may be issued without holding an 19-9 election to authorize the issuance of the bonds. The provisions of 19-10 this Act relating to the issuance of other bonds by the district, 19-11 security for the bonds, approval by the attorney general, and 19-12 remedies of the holders of the bonds apply to refunding bonds. 19-13 (d) Refunding bonds shall be registered by the comptroller 19-14 on surrender and cancellation of the bonds to be refunded or, if 19-15 the resolution authorizing the issuance of refunding bonds provides 19-16 that the bonds shall be sold and the proceeds deposited in the bank 19-17 where the bonds to be refunded are payable, the refunding bonds may 19-18 be issued in an amount sufficient to pay the principal and interest 19-19 of the bonds to be refunded to their option or maturity date. The 19-20 comptroller shall register the refunding bonds without concurrent 19-21 surrender and cancellation of the bonds to be refunded. 19-22 SECTION 5.04. APPROVAL AND REGISTRATION OF BONDS. District 19-23 bond review and approval is governed by Subchapter F, Chapter 49, 19-24 Water Code. 19-25 SECTION 5.05. BONDS ARE AUTHORIZED INVESTMENTS. All bonds 19-26 and notes of the district are legal and authorized investments for 19-27 banks, savings banks, trust companies, savings and loan 20-1 associations, insurance companies, fiduciaries, trustees, and 20-2 guardians and for the sinking funds of municipalities, counties, 20-3 school districts, or other political corporations or subdivisions 20-4 of the state. Bonds and notes of the district are eligible to 20-5 secure the deposit of any and all public funds of the state and any 20-6 and all public funds of municipalities, counties, school districts, 20-7 or other political corporations or subdivisions of the state. 20-8 Bonds and notes of the district are lawful and sufficient security 20-9 for the deposits to the extent of their value. 20-10 SECTION 5.06. TAXATION. (a) Except for land owned by the 20-11 permanent school fund, the board may levy and collect ad valorem 20-12 taxes on land within the district for maintenance, improvements, 20-13 and administration relating to the district in amounts approved by 20-14 the qualified voters of the district in an election held for that 20-15 purpose. 20-16 (b) A maintenance tax or an administration tax shall not 20-17 exceed the maximum approved rate and an approved rate shall remain 20-18 in effect unless a different rate is approved by the qualified 20-19 voters in a subsequent election. 20-20 SECTION 5.07. PROPERTY: RENDITION; VALUATION; LEVY. 20-21 (a) Except as provided by this section, the rendition and 20-22 assessment of property for taxation, the equalization of values, 20-23 and the collection of taxes for the benefit of the district shall 20-24 be conducted in accordance with the law applicable to counties to 20-25 the extent possible. 20-26 (b) The tax assessor-collector of each county shall act as 20-27 the tax assessor-collector for the district for district property 21-1 located in the county. The tax assessor-collector in each county 21-2 shall place on the county tax rolls a column or columns as 21-3 necessary to show the taxes, including the amount of taxes, levied 21-4 by the district, based on the value of the property as approved and 21-5 equalized. The fee charged by each county tax assessor-collector 21-6 for assessing and collecting taxes is one percent of the taxes 21-7 collected and shall be paid and disbursed by the district in the 21-8 same manner as other fees of office. 21-9 (c) The mechanisms available to enforce the collection of 21-10 state and county taxes may be used by the district to enforce the 21-11 collection of taxes levied by the district. The district is 21-12 entitled to require the officers of each county to enforce and 21-13 collect the taxes due to the district in that county as provided 21-14 for the enforcement of state and county taxes. 21-15 (d) Taxes assessed and levied for the benefit of the 21-16 district shall be payable and shall become delinquent at the same 21-17 time, in the same manner, and subject to the same discount for 21-18 advance payment as taxes levied by and for the benefit of the 21-19 county in which the property is taxable. The fee for collecting 21-20 delinquent taxes through prosecution of suit is 15 percent of the 21-21 taxes collected by the suit, to be paid and disbursed by the 21-22 district in the same manner as other fees of office. 21-23 (e) At the same time that the commissioners court levies 21-24 county taxes, the board shall levy a tax on all taxable property in 21-25 the district that is subject to taxation. The board shall 21-26 immediately certify the tax rate to the tax assessor-collector of 21-27 each county that contains territory within the district. 22-1 ARTICLE 6. ADDITION OF LAND TO DISTRICT 22-2 SECTION 6.01. ANNEXATION. Notwithstanding any other law, 22-3 additional territory may be added to the district as provided by 22-4 Sections 6.02, 6.03, and 6.04 of this Act. 22-5 SECTION 6.02. PETITION. (a) An owner or owners of land, 22-6 whether or not contiguous to the territory of the district, may 22-7 file with the board a petition requesting that the land described 22-8 in the petition by metes and bounds or by lot and block number, if 22-9 there is a recorded plat of the area, be included in the district. 22-10 (b) A petition under Subsection (a) of this section shall be 22-11 signed and executed in the manner provided by law for the 22-12 conveyance of real estate. 22-13 (c) The board shall hear and consider a petition received 22-14 under Subsection (a) of this section and may add to the district 22-15 the land described in the petition if: 22-16 (1) the board determines that adding the land to the 22-17 district is advantageous to the district; and 22-18 (2) the water system and other improvements of the 22-19 district are sufficient or will be sufficient to provide service to 22-20 the land added to the district without injuring the land in the 22-21 district before the petition is granted. 22-22 SECTION 6.03. NOTICE AND HEARING. (a) A petition 22-23 requesting that the district annex a defined area shall be filed 22-24 with the secretary of the board and shall be signed by: 22-25 (1) a majority in value of the owners of land in the 22-26 defined area, as shown by the tax rolls of the county or counties 22-27 in which the defined area is located, if the number of landowners 23-1 in the defined area is 50 or less; or 23-2 (2) 50 landowners if the number of landowners in the 23-3 defined area is more than 50. 23-4 (b) The board shall issue an order setting a time and place 23-5 to hear a petition filed under Subsection (a) of this section. The 23-6 hearing shall be held not earlier than the 15th day after the date 23-7 on which the board issues the order. 23-8 (c) The secretary shall issue a notice providing the time 23-9 and place of the hearing set under Subsection (b) of this section 23-10 and describing the area proposed to be annexed. Notice of the 23-11 hearing shall be given by: 23-12 (1) posting copies of the notice in three public 23-13 places in the district and in one public place in the area proposed 23-14 to be annexed for at least seven days before the date of the 23-15 hearing; and 23-16 (2) publishing a copy of the notice in a newspaper of 23-17 general circulation in the county or counties in which the area 23-18 proposed to be annexed is located at least seven days before the 23-19 date of the hearing. 23-20 (d) If the board finds that the proposed annexation is 23-21 feasible and practicable and would benefit the district and the 23-22 area proposed to be added to the district, the board may by order 23-23 receive all or a part of the proposed area as an addition to and 23-24 part of the district. An order issued by the board under this 23-25 subsection shall describe the area added to the district and be 23-26 entered in the minutes. 23-27 SECTION 6.04. ANNEXATION ORDER. (a) A copy of the order 24-1 adding land to the district shall be signed by a majority of the 24-2 members of the board, attested to by the secretary of the board, 24-3 and filed and recorded in the deed records of the county or 24-4 counties in which the district is located. 24-5 (b) On the date that the order is recorded as required by 24-6 Subsection (a) of this section, the area described in the order is 24-7 included in the territory of the district. 24-8 ARTICLE 7. EXCLUSION OF LAND FROM DISTRICT 24-9 SECTION 7.01. PETITION. (a) Notwithstanding any other law, 24-10 the board may, if there is no outstanding board order relating to 24-11 an election for the authorization of bonds payable in whole or in 24-12 part from taxes and the district does not have outstanding 24-13 indebtedness secured by taxes or net revenues of the district, 24-14 order a hearing to be held to exclude land from the district on 24-15 petition of a landowner or on motion of the board. 24-16 (b) A petition to exclude land from the district must 24-17 specifically describe the land to be excluded by metes and bounds 24-18 or by reference to a plat recorded in the plat records of the 24-19 county or counties in which the land is located. The petition must 24-20 be signed by at least 10 percent of the owners of land in the area 24-21 to be excluded or, if the number of owners of land is more than 50, 24-22 by at least five of the owners of land. The petition must be filed 24-23 with the district before the seventh day preceding the date the 24-24 hearing is held to consider the petition. The petition must 24-25 clearly state the grounds supporting the exclusion of the land from 24-26 the district. The board may consider only the grounds stated in 24-27 the petition. 25-1 SECTION 7.02. NOTICE AND HEARING. (a) The board shall hold 25-2 a hearing on petition of a landowner to exclude land from the 25-3 district. 25-4 (b) Notice of hearing under this section shall be published 25-5 by the board once a week for two consecutive weeks in one or more 25-6 newspapers of general circulation in the district. The first 25-7 notice shall be published not earlier than the 40th day or later 25-8 than the 14th day preceding the date of the hearing. 25-9 (c) The board may not exclude land from the district unless 25-10 the board determines that: 25-11 (1) the district has no obligations that will be 25-12 impaired by the exclusion of the land; 25-13 (2) the district will incur no obligations as a result 25-14 of the exclusion; and 25-15 (3) the exclusion is in the best interests of the 25-16 district. 25-17 (d) The board, after considering all engineering data and 25-18 other evidence presented at the hearing and making the 25-19 determinations required by Subsection (c) of this section, shall 25-20 enter an order excluding the land from the district and redefining 25-21 the boundaries of the district as appropriate. If land proposed to 25-22 be excluded contains water or wastewater customers of the district, 25-23 the customers remain customers of the district. Owners of lots 25-24 within the land proposed to be excluded in which water and 25-25 wastewater facilities have been extended retain the right to 25-26 connect to the district's water and wastewater system and become 25-27 district customers. 26-1 SECTION 7.03. EFFECTIVE DATE OF ORDER EXCLUDING LAND. 26-2 (a) Except as provided by Subsection (c) of this section, an order 26-3 of the board excluding land from the district on petition signed by 26-4 the owner or owners of land that is proposed to be excluded takes 26-5 effect on the date on which the board enters the order. 26-6 (b) Except as provided by Subsection (c) of this section, an 26-7 order excluding land from the district on petition signed by less 26-8 than all the owners of land that is proposed to be excluded takes 26-9 effect: 26-10 (1) on the day immediately following the date on which 26-11 a petition under Section 7.04 of this Act must be received by the 26-12 board if the district does not receive a petition under that 26-13 section; or 26-14 (2) on the day immediately following the date on which 26-15 the election returns are canvassed if the exclusion is ratified at 26-16 an election under Section 7.04 of this Act. 26-17 (c) An order excluding land from the district under this 26-18 section may not take effect unless all taxes levied and assessed by 26-19 the district within the land that is proposed to be excluded are 26-20 paid in full. 26-21 SECTION 7.04. PETITION FOR RATIFICATION ELECTION. (a) If 26-22 the board issues an order excluding land on petition signed by less 26-23 than all the owners of land in the area proposed to be excluded, 26-24 the board shall publish a notice that describes the excluded land 26-25 and states that the exclusion will become final unless the board 26-26 receives, not later than the 25th day after the date on which the 26-27 board issues the order, a petition requesting a ratification 27-1 election. A petition under this subsection must be signed by at 27-2 least 10 percent of the qualified voters residing in the area that 27-3 is proposed to be excluded from the district. 27-4 (b) If the board receives a petition under Subsection (a) of 27-5 this section, the order excluding land from the district is not 27-6 effective unless the exclusion is approved by a majority vote of 27-7 the residents of the district at a ratification election held for 27-8 that purpose. 27-9 (c) A ratification election, including notice of the 27-10 election and the qualifications of the voters, shall be conducted 27-11 as provided by Subchapter J, Chapter 49, Water Code. 27-12 ARTICLE 8. DIVISION OF DISTRICT 27-13 SECTION 8.01. CONDITIONS OF DIVISION. (a) The board may, 27-14 if the district does not have outstanding indebtedness secured by 27-15 taxes or net revenues, divide the territory of the district into 27-16 two or more districts. The board may not divide the territory of 27-17 the district if the division results in a district with territory 27-18 of less than 100 acres. On petition of a landowner or on motion of 27-19 the board, the board may consider a proposal to divide the original 27-20 district or any district subsequently created by division. 27-21 (b) The board may not divide territory of the district if 27-22 the division results in numerous utility providers within the 27-23 original territory of the district. The board may divide territory 27-24 of the district for purposes of encouraging and promoting orderly 27-25 development within the original territory of the district and 27-26 facilitating dependable and efficient utility service at affordable 27-27 rates to customers of the district. 28-1 SECTION 8.02. PROVISIONS RELATING TO NEW DISTRICTS. 28-2 (a) Before the board may divide territory of the district or any 28-3 district resulting from a division under this article, the board 28-4 shall: 28-5 (1) determine the terms of the division, including a 28-6 plan to pay and perform the outstanding obligations of the 28-7 district; and 28-8 (2) prepare a metes and bounds description of the 28-9 proposed division. 28-10 (b) Except as provided by Section 8.03 of this Act, if the 28-11 board divides territory under this article, the board shall be 28-12 divided in an appropriate manner consistent with the division of 28-13 the district. 28-14 (c) Districts resulting from a division under this article 28-15 shall be designated in an appropriate manner. 28-16 (d) A district resulting from a division under this article 28-17 shall obtain authorization for the issuance of bonds payable wholly 28-18 or partially from ad valorem taxes by a majority vote of the 28-19 qualified voters of the district voting in an election called and 28-20 held for that purpose. 28-21 (e) A district resulting from a division under this article 28-22 shall be required to obtain authorization for a maintenance tax by 28-23 a majority vote of the qualified voters of the district voting in 28-24 an election called and held for that purpose. 28-25 SECTION 8.03. APPOINTMENT AND ELECTION OF DIRECTORS. (a) A 28-26 district resulting from a division under this article is a separate 28-27 district and shall be governed as a separate district. 29-1 (b) The board shall continue to act on behalf of the 29-2 district for 90 days after the date on which a division under this 29-3 article is approved for purposes of closing the district's affairs. 29-4 (c) The board shall appoint two initial directors for a 29-5 district resulting from a division under this article to serve 29-6 terms expiring September 1 of the first even-numbered year after 29-7 creation of the district, and three initial directors to serve 29-8 terms expiring September 1 of the second even-numbered year after 29-9 creation of the district. A member of the board may be appointed 29-10 as a director of a district resulting from a division under this 29-11 article. 29-12 (d) If a vacancy occurs on the board of directors of a 29-13 district resulting from a division under this article, the board of 29-14 directors of that district shall appoint a successor to serve for 29-15 the remainder of the unexpired term. 29-16 (e) A successor to the board of directors of a district 29-17 resulting from a division under this article shall be elected as 29-18 provided by Section 2.04 of this Act. 29-19 SECTION 8.04. PAYMENT OF DISTRICT DEBTS. A division of 29-20 territory of the district under this article may not impair the 29-21 current obligations or bond authorizations of the district. The 29-22 debts of the district may be paid by taxes, revenues, or 29-23 assessments levied on land in the district or by contributions from 29-24 each district resulting from a division under this article on terms 29-25 stated in the division proposed by the board under Section 8.02 of 29-26 this Act. 29-27 SECTION 8.05. AUTHORITY OF DISTRICTS RESULTING FROM A 30-1 DIVISION. A district resulting from a division under this article 30-2 shall have the power to incur and pay debts created by that 30-3 district, the power and authority granted to the district created 30-4 under this Act, and the authority to enter into contracts with 30-5 other districts resulting from a division under this article for 30-6 purposes of providing water and wastewater services or other 30-7 appropriate purpose. 30-8 SECTION 8.06. ASSUMPTION OF OBLIGATIONS. A district 30-9 resulting from a division under this article shall assume the 30-10 obligations of the district under an agreement or resolution 30-11 consenting to the creation of the district unless the agreement or 30-12 resolution imposes obligations that limit the powers and authority 30-13 of the district to issue bonds for a purpose authorized by this 30-14 Act. The remaining obligations of the district shall be divided on 30-15 a pro rata basis among the districts resulting from a division 30-16 under this article based on the number of acres in a district or on 30-17 terms agreed to by the districts resulting from a division under 30-18 this article. 30-19 SECTION 8.07. NOTICE TO TEXAS NATURAL RESOURCE CONSERVATION 30-20 COMMISSION. The district shall provide written notice of a plan to 30-21 divide the district under this article to the Texas Natural 30-22 Resource Conservation Commission not later than the 30th day after 30-23 the date on which the board of the district decides to divide the 30-24 district. 30-25 ARTICLE 9. ANNEXATION AND DISSOLUTION OF DISTRICT 30-26 SECTION 9.01. ANNEXATION. (a) Notwithstanding any other 30-27 law, a municipality may annex the district, including districts 31-1 resulting from a division under Article 8 of this Act, only if the 31-2 municipality: 31-3 (1) assumes the outstanding indebtedness of the 31-4 district or districts; 31-5 (2) dissolves the district or districts not later than 31-6 six months after the date of annexation; 31-7 (3) assumes the assets, including all accounts 31-8 receivable and the right to collect outstanding taxes, delinquent 31-9 taxes, and other indebtedness of the district or districts; 31-10 (4) refrains from imposing municipal taxes on property 31-11 located within the district or districts before the dissolution of 31-12 the district or districts; 31-13 (5) provides municipal utility, emergency medical, 31-14 fire, police, garbage collection, and other standard municipal 31-15 services to the residents of the district or districts at the same 31-16 rate as is charged to residents within the municipality, or 31-17 residents of similar developments; and 31-18 (6) complies with regional land use planning within 31-19 the district. 31-20 (b) Notwithstanding Subsection (a)(5) of this section, a 31-21 municipality that annexes and dissolves the district or districts 31-22 may impose water supply fees, impact fees, and other assessments 31-23 allowed by state law on property previously located within the 31-24 district or districts, except for property that has received a 31-25 utility service allocation by the district or districts or property 31-26 in which site development has been authorized or commenced. 31-27 (c) The district or districts shall transfer all assets of 32-1 the district or districts to a municipality that annexes and 32-2 dissolves the district or districts, as provided by instruments 32-3 approved by the municipality and district or districts. 32-4 ARTICLE 10. AFFORDABLE HOUSING 32-5 SECTION 10.01. AFFORDABLE HOUSING. (a) It is in the best 32-6 interest of the state to encourage the development of affordable 32-7 housing for the citizens of the state. To the extent that 32-8 territory of the district can be used to accomplish this purpose in 32-9 a manner that is consistent with the constitutional and statutory 32-10 provisions relating to the management of lands dedicated to the 32-11 permanent school fund, the legislature directs that 15 percent of 32-12 all residential development within the district shall be developed 32-13 to provide affordable housing. A minimum of five percent of the 32-14 residential housing units within the district shall be used to 32-15 provide affordable housing, to be located in different residential 32-16 areas within the district. The affordable housing shall be 32-17 dispersed evenly throughout the district to the extent possible and 32-18 may not be concentrated in areas that consist primarily of 32-19 affordable housing units. 32-20 (b) On the sale of permanent school fund land in the 32-21 district that may be used for residential purposes, the School Land 32-22 Board shall, through the imposition of restrictive covenants or by 32-23 deed restriction, restrict property use in a manner that requires 32-24 construction of affordable housing in a percentage sufficient to 32-25 satisfy the requirements of this section. 32-26 (c) In this section, "affordable housing" means housing for 32-27 residents having low or very low income levels, as determined 33-1 periodically by the United States Department of Housing and Urban 33-2 Development, based on the El Paso Standard Metropolitan Statistical 33-3 Area. 33-4 ARTICLE 11. MISCELLANEOUS PROVISIONS 33-5 SECTION 11.01. TAX EXEMPTION. The purposes stated in this 33-6 Act are for the benefit of the people of the state, including the 33-7 improvement of property and industry. The district, in carrying 33-8 out the purposes of this Act, is performing an essential public 33-9 function under the constitution and is not required to pay a tax or 33-10 assessment on a project of the district or on the bonds or notes 33-11 issued by the district under this Act, including the transfer of, 33-12 the income from, and the profits made on the sale of issued bonds 33-13 and notes. 33-14 SECTION 11.02. INITIAL ELECTION. Notwithstanding Section 33-15 2.04 of this Act, the district shall hold its first election for 33-16 permanent directors on the first Saturday in May 2000. 33-17 SECTION 11.03. FINDINGS RELATING TO PROCEDURAL REQUIREMENTS. 33-18 (a) The proper and legal notice of the intention to introduce this 33-19 Act, setting forth the general substance of this Act, has been 33-20 published as provided by law, and the notice and a copy of this Act 33-21 have been furnished to all persons, agencies, officials, or 33-22 entities to which they are required to be furnished by the 33-23 constitution and other laws of this state, including the governor, 33-24 who has submitted the notice and Act to the Texas Natural Resource 33-25 Conservation Commission. 33-26 (b) The Texas Natural Resource Conservation Commission has 33-27 filed its recommendations relating to this Act with the governor, 34-1 lieutenant governor, and speaker of the house of representatives 34-2 within the required time. 34-3 (c) All requirements of the constitution and laws of this 34-4 state and the rules and procedures of the legislature with respect 34-5 to the notice, introduction, and passage of this Act are fulfilled 34-6 and accomplished. 34-7 SECTION 11.04. SEVERABILITY. If any word, phrase, clause, 34-8 sentence, paragraph, section, or other part of this Act or the 34-9 application of this Act to any person or circumstance is ever held 34-10 to be invalid or unconstitutional by a court of competent 34-11 jurisdiction in this state, the remainder of the Act and the 34-12 application of that word, phrase, clause, sentence, paragraph, 34-13 section, or other part of this Act to other persons or 34-14 circumstances are not affected by that holding. To the extent of a 34-15 conflict between a provision of this Act and any other law or 34-16 statute, this Act controls. 34-17 SECTION 11.05. EMERGENCY. The importance of this 34-18 legislation and the crowded condition of the calendars in both 34-19 houses create an emergency and an imperative public necessity that 34-20 the constitutional rule requiring bills to be read on three several 34-21 days in each house be suspended, and this rule is hereby suspended, 34-22 and that this Act take effect and be in force from and after its 34-23 passage, and it is so enacted.