1-1 By: Williamson (Senate Sponsor - Sibley) H.B. No. 3597 1-2 (In the Senate - Received from the House May 13, 1997; 1-3 May 13, 1997, read first time and referred to Committee on Natural 1-4 Resources; May 16, 1997, reported favorably by the following vote: 1-5 Yeas 11, Nays 0; May 16, 1997, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the creation, administration, powers, duties, 1-9 operation, and financing of the Parker County Utility District No. 1-10 1; granting the power of eminent domain. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 ARTICLE 1. CREATION OF THE DISTRICT 1-13 SECTION 1.01. CREATION. (a) A regional wastewater 1-14 district, to be known as the Parker County Utility District No. 1, 1-15 is created. The district is a governmental agency and a body 1-16 politic and corporate. 1-17 (b) The district is created under and is essential to 1-18 accomplish the purposes of Section 59, Article XVI, Texas 1-19 Constitution. 1-20 SECTION 1.02. DEFINITIONS. In this Act: 1-21 (1) "Board" means the board of directors of the 1-22 district. 1-23 (2) "Bond" means all interest-bearing obligations, 1-24 including bonds, notes, debentures, certificates, warrants, 1-25 securities, interim certificates or receipts, and other evidences 1-26 of debt issued by the district, whether general or special, 1-27 negotiable or nonnegotiable in form, in bearer or registered form, 1-28 temporary or permanent in form, or with or without interest 1-29 coupons. 1-30 (3) "Customer" means a wholesale user of wastewater or 1-31 other services provided by the district. 1-32 (4) "Director" means a member of the board. 1-33 (5) "District" means the Parker County Utility 1-34 District No. 1. 1-35 (6) "Local government" means a municipality, county, 1-36 or entity created under Section 52, Article III, or Section 59, 1-37 Article XVI, Texas Constitution. 1-38 (7) "Member entity" means a public entity or private 1-39 utility entity that: 1-40 (A) provides retail utility service or regulates 1-41 water, wastewater, sewage, or solid waste within the district; and 1-42 (B) enters into a contract with the district for 1-43 service. 1-44 (8) "Participant entity" means a public entity or 1-45 private utility entity that: 1-46 (A) provides utility service within the 1-47 boundaries of the entity; and 1-48 (B) enters into a contract with the district for 1-49 the construction of and payment for wastewater or other utility 1-50 service projects to be financed or provided by the district. 1-51 (9) "Person" means an individual, firm, association, 1-52 corporation, business trust, partnership, government or 1-53 governmental agency, joint venture, or other legal entity. 1-54 (10) "Service area" means the territory within the 1-55 district and within the corporate limits or defined boundaries of 1-56 all member entities, participant entities, and customers of the 1-57 district, including the areas served by the member entities, 1-58 participant entities, and customers. 1-59 SECTION 1.03. PURPOSES. The district is created to 1-60 accomplish the following purposes: 1-61 (1) to purchase, own, hold, lease, or otherwise 1-62 acquire wastewater collection facilities; 1-63 (2) to build, operate, and maintain facilities to 1-64 treat and transport wastewater; 2-1 (3) to protect, preserve, and restore the purity and 2-2 sanitary condition of water within the district; and 2-3 (4) to provide other utilities within the district if 2-4 the utilities are not otherwise provided. 2-5 SECTION 1.04. BOUNDARIES. The district includes the 2-6 territory contained within the following area: 2-7 BEGINNING at a point in the centerline of Highway 51; said point 2-8 being approximately 31,500 feet north along the centerline of 2-9 Highway 51 from the centerline intersection of Highway 199, said 2-10 point also being in the northern boundary line for the Walnut Creek 2-11 Special Utility District (WCSUD); 2-12 1. THENCE North 90 East, 8200 Feet along the WCSUD boundary; 2-13 2. THENCE South 00 East, 9800 Feet along the WCSUD boundary; 2-14 3. THENCE North 90 East, 6100 Feet along the WCSUD boundary; 2-15 4. THENCE South 00 East, 6700 Feet along the WCSUD boundary; 2-16 5. THENCE North 90 East, 1300 Feet along the WCSUD boundary; 2-17 6. THENCE South 00 East, 992.04 Feet along the WCSUD boundary to a 2-18 point of divergence; 2-19 7. THENCE South 8922'10" East, 20491.62 Feet; 2-20 8. THENCE South 0052'05" East, 26624.35 Feet; 2-21 9. THENCE South 8929'51" West, 215.45 Feet; 2-22 10. THENCE South 0030'09" East, 1930.51 Feet; 2-23 11. THENCE South 8929'51" West, 4703.61 Feet; 2-24 12. THENCE South 0030'09" East, 3134.46 Feet; 2-25 13. THENCE South 8929'51" West, 1041.52 Feet; 2-26 14. THENCE North 7455'09" West, 4870.79 Feet; 2-27 15. THENCE North 6402'36" West, 122.68 Feet; 2-28 16. THENCE South 0030'09" East, 2550.47 Feet; 2-29 17. THENCE South 8929'51" West, 1262.75 Feet to a point in the 2-30 boundary of WCSUD; 2-31 18. THENCE South 00 East, 4103.65 Feet along the WCSUD boundary; 2-32 19. THENCE North 90 West, 45600 Feet along the WCSUD boundary; 2-33 20. THENCE North 00 East, 12400 Feet along the WCSUD boundary; 2-34 21. THENCE North 90 West, 14,200 Feet along the WCSUD boundary; 2-35 22. THENCE North 00 East, 36500 Feet along the WCSUD boundary; 2-36 23. THENCE North 90 East, 25500 Feet along the WCSUD boundary; 2-37 24. THENCE North 00 East, 5900 Feet along the WCSUD boundary; 2-38 25. THENCE North 90 East, 9775.84 Feet to the POINT OF BEGINNING 2-39 and containing 70,490 gross acres more or less. Save and except 2-40 CCN areas numbered 10266, 10285, 12397 (except for dually 2-41 certificated portion), 11719 and 12427. 2-42 SECTION 1.05. FINDINGS RELATING TO BOUNDARIES. The 2-43 legislature finds that the boundaries and field notes of the 2-44 district form a closure. A mistake in the field notes or in 2-45 copying the field notes in the legislative process does not affect 2-46 the organization, existence, or validity of the district, or the 2-47 legality or operation of the district or its governing body. 2-48 SECTION 1.06. FINDING OF BENEFIT. All of the land and other 2-49 property included within the boundaries of the district will be 2-50 benefited by the improvements, works, and projects that are to be 2-51 accomplished by the district under the powers conferred by this Act 2-52 and under Section 59, Article XVI, Texas Constitution. 2-53 SECTION 1.07. FINDING OF STATE BENEFIT. The legislature 2-54 finds that creation of the district will benefit the state by: 2-55 (1) contributing to economic development and 2-56 diversification; 2-57 (2) decreasing the rate of unemployment and 2-58 underemployment; 2-59 (3) stimulating agricultural innovation; 2-60 (4) fostering enterprise growth based on agriculture; 2-61 and 2-62 (5) contributing to the development or expansion of 2-63 transportation and commerce. 2-64 SECTION 1.08. POWERS. (a) Except as provided by this 2-65 section, the district has all of the rights, powers, privileges, 2-66 authority, functions, and duties provided by the general law of 2-67 this state, including Chapters 49, 54, and 65, Water Code, and 2-68 conferred by Section 59, Article XVI, Texas Constitution. This Act 2-69 prevails over any provision of general law that is in conflict or 3-1 inconsistent with this Act. 3-2 (b) The district may not levy or collect ad valorem taxes. 3-3 (c) The rights, powers, privileges, authority, functions, 3-4 and duties of the district are subject to the continuing right of 3-5 supervision of the state to be exercised by and through the Texas 3-6 Natural Resource Conservation Commission. Except as provided by 3-7 this Act or other state law, the district may exercise the rights, 3-8 powers, privileges, authority, functions, and duties conferred by 3-9 this Act without having to obtain approval from the Texas Natural 3-10 Resource Conservation Commission. 3-11 SECTION 1.09. CONFIRMATION ELECTION NOT REQUIRED. Creation 3-12 of the district does not require a confirmation election. 3-13 ARTICLE 2. ADMINISTRATIVE PROVISIONS 3-14 SECTION 2.01. APPOINTMENT OF DIRECTORS. (a) The district 3-15 is governed by a board of directors as provided by this section. 3-16 (b) The governing bodies of the City of Springtown and the 3-17 Walnut Creek Special Utility District shall each appoint three 3-18 initial directors. 3-19 (c) Initial directors serve until permanent directors 3-20 appointed under Subsection (e) of this section take office. 3-21 (d) The Parker County judge, or a person designated by the 3-22 Parker County judge, serves as an ex officio director. A person 3-23 who serves as an ex officio director under this subsection may vote 3-24 on any matter considered by the board. 3-25 (e) Permanent directors shall be appointed as provided by 3-26 Subsection (f) of this section by the governing bodies of the 3-27 member entities of the district not earlier than April 1 or later 3-28 than April 30 of 1998. 3-29 (f) Each member entity shall appoint: 3-30 (1) one director if the number of member entities of 3-31 the district is at least six; 3-32 (2) two directors if the number of member entities of 3-33 the district is at least three, but less than six; 3-34 (3) three directors if there are two member entities 3-35 of the district; or 3-36 (4) six directors if there is one member entity of the 3-37 district. 3-38 (g) Not earlier than April 1 or later than April 30 of each 3-39 year after 1998, the appropriate number of permanent directors, if 3-40 any, shall be appointed to the board as provided by Subsection (f) 3-41 of this section. 3-42 (h) Permanent directors serve staggered four-year terms, 3-43 unless required by the board to serve a term of less than four 3-44 years under Subsection (j) of this section. 3-45 (i) Permanent directors appointed under Subsections (e) and 3-46 (g) of this section serve beginning May 1 of the year in which the 3-47 director is appointed and until the director's successor has 3-48 qualified. 3-49 (j) For purposes of staggering the terms of office of 3-50 directors as required by Subsection (h) of this section, the board 3-51 shall develop a procedure to determine which directors appointed 3-52 under Subsections (e) and (g) of this section serve four-year terms 3-53 and which directors serve terms of less than four years. 3-54 (k) A vacancy on the board shall be filled by appointment 3-55 made by the governing body of the appropriate member entity. An 3-56 appointment under this subsection may be made any time after the 3-57 vacancy occurs. A member entity that makes an appointment under 3-58 this subsection shall provide notice of the appointment to the 3-59 board not later than six hours before the first board meeting 3-60 following the appointment. An appointment made under this 3-61 subsection is effective on the date notice is received by the 3-62 board. If notice of an appointment is not provided as required by 3-63 this subsection, the appointment is not effective until after the 3-64 first board meeting following the appointment. 3-65 (l) The appointment of a director is not valid unless the 3-66 appointment is made as provided by this section. 3-67 (m) A participant entity or customer may not appoint a 3-68 director under this section. 3-69 SECTION 2.02. REMOVAL OF DIRECTORS. A director may be 4-1 removed for any reason: 4-2 (1) by the governing body of the member entity that 4-3 appointed the director; or 4-4 (2) if three-quarters of the directors vote to remove 4-5 the director. 4-6 SECTION 2.03. DIRECTOR QUALIFICATIONS. A person is 4-7 qualified to serve as a director if the person: 4-8 (1) is at least 18 years of age; 4-9 (2) is a qualified voter who resides within the 4-10 boundaries of the district; 4-11 (3) qualifies to serve as a director by taking the 4-12 oath of office; 4-13 (4) except as otherwise provided by this section, is 4-14 eligible to serve as a director under Subchapter C, Chapter 49, 4-15 Water Code; and 4-16 (5) verifies compliance with the requirements of this 4-17 section. 4-18 SECTION 2.04. DIRECTOR VOTING. A director, including the 4-19 chairman elected under Section 2.09 of this article, may vote on 4-20 any matter considered by the board, including a matter authorizing 4-21 a financial commitment to a capital project. This section applies 4-22 to a director notwithstanding that the director was appointed by a 4-23 member entity of the district that is not participating in the 4-24 project being considered by the board. 4-25 SECTION 2.05. DIRECTOR COMPENSATION. (a) Except as 4-26 provided by Subsection (b), a director may not receive compensation 4-27 for serving on the board. 4-28 (b) A director may receive reimbursement for travel or other 4-29 expenses reasonably incurred by the director while acting on behalf 4-30 of the district. The board may adopt reasonable policies governing 4-31 the reimbursement of director expenses under this subsection, 4-32 including a requirement that the director provide written 4-33 verification of expenses. 4-34 SECTION 2.06. EX OFFICIO DIRECTORS. The board may appoint 4-35 or elect ex officio directors of the district and provide for the 4-36 powers and duties of such directors in the bylaws, rules, or 4-37 regulations of the district. 4-38 SECTION 2.07. EXCLUSIVE AUTHORITY OF BOARD. The board has 4-39 the exclusive authority to manage the district. 4-40 SECTION 2.08. POWERS AND DUTIES OF THE BOARD. (a) The 4-41 board shall: 4-42 (1) adopt a seal for the district; 4-43 (2) adopt bylaws to govern matters of the district; 4-44 and 4-45 (3) hold regular and, if necessary, special and 4-46 emergency board meetings. 4-47 (b) The board may amend bylaws adopted under Subsection 4-48 (a)(2) of this section. 4-49 (c) The board shall hold board meetings at a time and place 4-50 specified in the district bylaws. 4-51 SECTION 2.09. ELECTION OF OFFICERS. (a) At the first board 4-52 meeting following the appointment of initial directors under 4-53 Section 2.01(b) of this article, the board shall elect from the 4-54 initial directors primary officers for the district, including a 4-55 chairman, vice chairman, secretary, and treasurer, and any other 4-56 officer that the board determines is necessary. 4-57 (b) At the first board meeting following the appointment of 4-58 permanent directors under Section 2.01(e) of this article, the 4-59 board shall elect from the permanent directors new officers for the 4-60 district. 4-61 (c) Each subsequent year at the first board meeting 4-62 following the appointment of the appropriate number of directors 4-63 under Section 2.01(g) of this section, the board shall elect from 4-64 the directors new officers for the district. 4-65 (d) Officers serve until the election of new officers under 4-66 this section. 4-67 SECTION 2.10. POWERS AND DUTIES OF OFFICERS. (a) The 4-68 chairman of the board elected under Section 2.09 of this article is 4-69 the chief executive officer of the district and the presiding 5-1 officer of the board. 5-2 (b) The vice chairman of the board elected under Section 5-3 2.09 of this article may perform the duties and exercise the powers 5-4 of the chairman if the chairman is absent or fails, refuses, or is 5-5 unable to act. 5-6 (c) The secretary of the board elected under Section 2.09 of 5-7 this article or an assistant secretary: 5-8 (1) shall keep a record of the minutes of the board 5-9 meetings; 5-10 (2) shall maintain the official records of the 5-11 district; and 5-12 (3) may certify the accuracy and authenticity of any 5-13 actions, proceedings, minutes, or records of the board or the 5-14 district. 5-15 (d) The board may provide for additional powers and duties 5-16 of officers elected under Section 2.09 of this article in the 5-17 district bylaws. 5-18 SECTION 2.11. DISTRICT EMPLOYEES. The board may appoint and 5-19 employ any person, firm, corporation, partnership, or other entity 5-20 that the board determines is necessary to conduct the affairs of 5-21 the district, including a general manager, engineer, attorney, 5-22 financial advisor, accountant, or other consultant. 5-23 SECTION 2.12. CONFLICT OF INTEREST. Directors and officers 5-24 of the district are subject to Chapter 572, Government Code. 5-25 SECTION 2.13. OPEN RECORDS. Chapter 551, Government Code, 5-26 applies to the minutes, orders, contracts and related instruments, 5-27 books, records, audits, and other documents of the district. 5-28 SECTION 2.14. DISTRICT BUSINESS. (a) A quorum of the 5-29 directors of the district is required to be present at a board 5-30 meeting for the board to conduct district business. The board 5-31 shall specify in the district bylaws the number of directors that 5-32 constitute a quorum, except that a quorum may not be less than a 5-33 majority of the directors serving on the board. 5-34 (b) The board shall specify in the district bylaws the 5-35 number of votes necessary to approve a matter considered by the 5-36 board, except that the number of votes specified may not be less 5-37 than a majority of the directors present at the meeting in which 5-38 the matter is being considered. 5-39 SECTION 2.15. CUSTOMER ADVISORY COUNCIL. (a) The board may 5-40 establish a customer advisory council as provided by this section. 5-41 (b) A customer advisory council established under this 5-42 section shall consist of one representative of each customer of the 5-43 district. 5-44 (c) A representative serving on a customer advisory council 5-45 established under this section: 5-46 (1) has the powers and duties provided in the bylaws, 5-47 rules, and regulations of the district; and 5-48 (2) may not vote on any matter considered by the 5-49 board. 5-50 (d) A customer advisory council established under this 5-51 section may be abolished by the board. 5-52 SECTION 2.16. ADMINISTRATION AND PLANNING COSTS FEE. The 5-53 district may charge each member entity an annual pro rata fee to 5-54 pay for administration and planning costs incurred by the district 5-55 that are unrelated to capital projects financed by the district. A 5-56 fee charged a member entity under this section may not exceed $2 5-57 per capita population of the member entity, unless the board and at 5-58 least 75 percent of the member entities of the district that 5-59 together have at least 75 percent of the population of the district 5-60 agree to a different fee. 5-61 SECTION 2.17. EXPANSION OF DISTRICT BOUNDARIES. On request 5-62 by a member entity, the boundaries of the district may be expanded 5-63 to include additional or the remaining territory of the member 5-64 entity if: 5-65 (1) the boundaries of the member entity are contiguous 5-66 to the boundaries of the district; and 5-67 (2) the requested expansion is approved by a 5-68 three-quarters majority vote of the directors of the district. 5-69 SECTION 2.18. RULES AND REGULATIONS. The board may adopt 6-1 and enforce reasonable rules and regulations to exercise the powers 6-2 and perform the duties of the district as provided by this Act. 6-3 ARTICLE 3. RIGHTS, POWERS, AND DUTIES 6-4 SECTION 3.01. RIGHTS IN SERVICE AREA. (a) The district may 6-5 provide wastewater collection, treatment, or service within the 6-6 district. 6-7 (b) The district may own, operate, and provide other 6-8 necessary utilities and services within the district, including raw 6-9 water, potable water, water distribution and treatment, solid waste 6-10 collection and disposal, fire, police, and ambulance services, if 6-11 the right to own, operate, or provide the utility or service has 6-12 not been conveyed to another entity, unless the entity to which the 6-13 right has been conveyed agrees to sell, cede, or otherwise convey 6-14 to the district the right to own, operate, or provide the utility 6-15 or service. 6-16 (c) Subsection (b) does not require the district to own, 6-17 operate, or provide other necessary utilities or services within 6-18 the district, unless the district is required to own, operate, or 6-19 provide the utility or service under a permit, certificate, or 6-20 license issued by the state. 6-21 SECTION 3.02. RIGHTS OF OTHER ENTITIES PROTECTED. (a) 6-22 Except as provided by Subsection (b), a customer or prospective 6-23 customer of the district is not required under this Act to secure 6-24 wastewater or other utility service from the district, unless the 6-25 customer or prospective customer enters into a contract with the 6-26 district for that purpose. 6-27 (b) A customer or prospective customer is required under 6-28 this Act to secure wastewater or other utility service from the 6-29 district if: 6-30 (1) the customer or prospective customer is not 6-31 receiving the service from another source; and 6-32 (2) the district provides the service or determines 6-33 that the district will make the service available to the customer 6-34 or prospective customer. 6-35 (c) If a customer enters into a contract with the district 6-36 to secure wastewater or other utility service from the district, a 6-37 user of the service under the contract must connect to the 6-38 district's service system if: 6-39 (1) the user is located within the boundaries of the 6-40 customer; and 6-41 (2) the district's system is available for connection 6-42 at or near the property line of the user. 6-43 (d) A contract under this section may provide that the 6-44 district may: 6-45 (1) require the customer to terminate service provided 6-46 to a user who fails or refuses to pay for that service after 6-47 providing notice as required by law; 6-48 (2) terminate service provided to a customer or user 6-49 who fails or refuses to pay for that service after providing notice 6-50 as required by law; and 6-51 (3) terminate other utility services provided to a 6-52 customer or user if the customer or user fails or refuses to pay 6-53 for any service provided by the district after providing notice as 6-54 required by law. 6-55 (e) This Act does not alter any existing permit, contract, 6-56 or other obligation, or impair the right of any entity to own, 6-57 operate, maintain, or otherwise use, provide, or control water, 6-58 wastewater, solid waste, or liquid waste under the governing law of 6-59 the entity. 6-60 SECTION 3.03. PURCHASE, CONSTRUCT, OR ACQUIRE WORKS AND 6-61 FACILITIES. The district may plan, lay out, purchase, construct, 6-62 acquire, own, operate, maintain, repair, or improve, or contract 6-63 for, within or outside the boundaries of the district, any works, 6-64 improvements, facilities, plants, equipment, and appliances, 6-65 including any administrative properties and facilities, any 6-66 permits, franchises, licenses, or contract or property rights, and 6-67 any levees, drains, waterways, lakes, reservoirs, channels, 6-68 conduits, sewers, dams, storm water detention facilities, treatment 6-69 plants, or other similar facilities and improvements, whether for 7-1 municipal, industrial, agricultural, flood control, or related 7-2 purposes, that are necessary, helpful, or incidental to the 7-3 exercise of any right, power, privilege, authority, or function 7-4 provided by this Act. 7-5 SECTION 3.04. FINANCING CAPITAL IMPROVEMENTS. The district 7-6 is a political subdivision for purposes of Chapter 395, Local 7-7 Government Code. 7-8 SECTION 3.05. ADDITIONAL POWERS. The district may: 7-9 (1) provide for: 7-10 (A) the collection, construction, improvement, 7-11 maintenance, and operation of wholesale wastewater and water 7-12 systems and treatment works necessary to provide wholesale service 7-13 to customers of the district; and 7-14 (B) the acquisition, construction, improvement, 7-15 and maintenance of water supply, reservoir, or interest in water 7-16 supply or reservoir, necessary to exercise and fulfill the powers 7-17 and duties of the district; 7-18 (2) supply water for municipal, domestic, and 7-19 industrial or other beneficial uses or controls; 7-20 (3) collect, treat, process, dispose of, and control 7-21 all domestic or industrial wastes, whether in fluid, solid, or 7-22 composite state; 7-23 (4) gather, conduct, divert, control, and treat local 7-24 storm water or local harmful excesses of water within the 7-25 boundaries of the district; and 7-26 (5) irrigate and alter land elevations within the 7-27 boundaries of the district as needed. 7-28 SECTION 3.06. EMINENT DOMAIN. (a) The district may acquire 7-29 by purchase or eminent domain land, an easement, a right-of-way, or 7-30 other property or improvement within or outside the boundaries of 7-31 the district if necessary or appropriate in exercising the powers 7-32 and performing the functions of the district. 7-33 (b) The power of eminent domain may be exercised by the 7-34 district under Subsection (a) of this section as provided by state 7-35 law, including Chapter 21, Property Code, except that the district 7-36 is not required to comply with the requirements of Section 7-37 21.021(a), Property Code, during the pendency of the subject 7-38 litigation. 7-39 (c) The district is not required in a condemnation 7-40 proceeding brought by the district: 7-41 (1) to pay in advance or give bond or other security 7-42 for costs; 7-43 (2) to give bond for the issuance of a temporary 7-44 restraining order or a temporary injunction; or 7-45 (3) to give bond for costs or supersedeas on an appeal 7-46 or writ of error. 7-47 (d) The district may not exercise the power of eminent 7-48 domain to acquire: 7-49 (1) property located in the existing corporate limits 7-50 of a municipality that is located in whole or in part within the 7-51 district unless the governing body of the municipality in which the 7-52 property is located consents by resolution to the acquisition of 7-53 the property; 7-54 (2) property located outside the boundaries of the 7-55 district to be used as a water supply reservoir unless the county 7-56 in which the reservoir is to be located consents; 7-57 (3) property owned by a county, a municipality, an 7-58 entity created by special act of the legislature under Section 52, 7-59 Article III, or Section 59, Article XVI, Texas Constitution, a 7-60 political subdivision of the state, or an agency or instrumentality 7-61 of a county or municipality; or 7-62 (4) a waterworks system or a wastewater system owned 7-63 by a municipality, an entity created by special act of the 7-64 legislature under Section 52, Article III, or Section 59, Article 7-65 XVI, Texas Constitution, a political subdivision of the state, a 7-66 private party, or a nonprofit corporation. 7-67 (e) If the district exercises the power of eminent domain 7-68 and requires relocating, raising, lowering, rerouting, changing the 7-69 grade, or altering the construction of any railroad, highway, 8-1 pipeline, or electric transmission and electric distribution, 8-2 telegraph, or telephone lines, conduits, poles, or facilities, the 8-3 district shall pay the cost of relocating, raising, lowering, 8-4 rerouting, changing the grade, or altering the construction that 8-5 equals the comparable replacement cost without enhancement of 8-6 facilities minus the net salvage value derived from the old 8-7 facility. 8-8 SECTION 3.07. SERVICE OUTSIDE DISTRICT. The district may 8-9 provide services outside the service area of the district as 8-10 provided by state law. 8-11 SECTION 3.08. DISPOSAL SYSTEMS. (a) The district may 8-12 establish, acquire, operate, and maintain a regional solid waste 8-13 disposal system and a nonhazardous liquid waste disposal system. 8-14 (b) If the district establishes a disposal system under 8-15 Subsection (a) of this section, the district shall provide 8-16 services from the system to: 8-17 (1) users as determined by the board if the services 8-18 are provided within the service area of the district; and 8-19 (2) customers if the services are provided outside the 8-20 service area of the district. 8-21 SECTION 3.09. RULES RELATING TO WATER QUALITY. (a) The 8-22 district may adopt and enforce rules relating to protection of the 8-23 quality of water flowing to or from the areas in or surrounding the 8-24 lakes, reservoirs, and other sources of water supply owned, 8-25 operated, or controlled by the district. 8-26 (b) The rules adopted by the district under Subsection (a) 8-27 of this section must: 8-28 (1) relate to: 8-29 (A) the prevention of waste or unauthorized use 8-30 of water controlled by the district; or 8-31 (B) the regulation of privileges on land, a 8-32 reservoir, or an easement owned or controlled by the district; and 8-33 (2) be consistent with rules and regulations of the 8-34 state. 8-35 SECTION 3.10. RATES, FEES, CHARGES, AND RENTALS. (a) The 8-36 district may adopt, enforce, and collect all assessed charges, 8-37 fees, rates, and rentals that are necessary to provide services and 8-38 facilities to customers and users of the district. Rates, fees, 8-39 and charges assessed under this section may vary according to 8-40 customer class, project, or service area to reflect different costs 8-41 of providing service. 8-42 (b) The district may require a customer to obtain a deposit 8-43 from a user for services or facilities provided by the district. A 8-44 deposit under this subsection may bear interest. 8-45 (c) If the district issues revenue bonds or other 8-46 obligations payable wholly from revenue, the board shall establish 8-47 and revise rates of compensation for water sold and wastewater or 8-48 other services rendered by the district that are sufficient: 8-49 (1) to pay operating and maintenance expenses of 8-50 district facilities; 8-51 (2) to pay the issued bonds as the bonds mature and 8-52 the interest that accrues on the bonds; 8-53 (3) to maintain the district's fund reserve; and 8-54 (4) to maintain other funds of the district provided 8-55 by the resolution that authorized the issuance of the bonds. 8-56 (d) A local government, water supply corporation, or other 8-57 entity that enters into a contract with the district may: 8-58 (1) establish, charge, and collect fees, rates, 8-59 charges, rentals, or other amounts for services or facilities 8-60 provided under the contract; and 8-61 (2) pledge amounts that are sufficient to make the 8-62 required payments under the contract. 8-63 (e) The district may discontinue providing a service or 8-64 facility to prevent an abuse or to enforce the payment of an unpaid 8-65 charge, fee, or rental due and payable to the district. 8-66 SECTION 3.11. REGULATORY POWER OF MUNICIPALITIES. The 8-67 district and the land within the district are subject to any 8-68 ordinances, codes, resolutions, rules, or regulations of a 8-69 municipality, including platting and zoning requirements, that has 9-1 jurisdiction over territory within the district. 9-2 SECTION 3.12. GENERAL CONTRACTING AUTHORITY. (a) The 9-3 district may, if necessary to exercise the powers and accomplish 9-4 the purposes of the district, enter into a contract with the United 9-5 States, any agency of the United States, a municipality, county, 9-6 water supply corporation, an entity created under Section 52, 9-7 Article III, or Section 59, Article XVI, Texas Constitution, or 9-8 other public or private entity. 9-9 (b) The district may enter into a contract for the 9-10 acquisition, purchase, rental, lease, or operation of wastewater or 9-11 water facilities owned or operated by the party contracting with 9-12 the district. 9-13 (c) The district may acquire water appropriation or other 9-14 necessary permits from the state or permit owners. 9-15 (d) A contract that requires payment of money by the 9-16 district may be satisfied from any general or specific source of 9-17 district funds as determined by the board. 9-18 SECTION 3.13. AUTHORITY TO CONTRACT WITH DISTRICT. (a) A 9-19 municipality, county, public agency, political subdivision of the 9-20 state, an entity created under Section 52, Article III, or Section 9-21 59, Article XVI, Texas Constitution, or a water supply corporation 9-22 may enter into a contract with the district if the entity is 9-23 conducting business in whole or part within the district. 9-24 (b) The governing body of an entity that enters into a 9-25 contract under this section with the district may pledge to the 9-26 payment of the contract any source of revenue that is available to 9-27 the governing body, including revenue derived from levying and 9-28 collecting ad valorem taxes. 9-29 (c) If an entity under this section pledges to the payment 9-30 of a contract funds derived from the entity's water system, 9-31 wastewater system, or combined water and wastewater system, the 9-32 payments constitute an operating expense of that system. 9-33 SECTION 3.14. DEPOSITORY. (a) The board, by order or 9-34 resolution, shall designate one or more banks inside or outside the 9-35 boundaries of the district to serve as depository for the funds of 9-36 the district. 9-37 (b) Except as provided by this Act, district funds shall be 9-38 deposited in a depository bank designated under Subsection (a) of 9-39 this section. 9-40 (c) The board may invest district funds: 9-41 (1) in the same manner as provided for the investment 9-42 of county funds; and 9-43 (2) as provided by the Public Funds Investment Act, 9-44 Chapter 2256, Government Code. 9-45 (d) District funds shall be secured in the same manner as 9-46 provided for the deposit of public funds under the Public Funds 9-47 Collateral Act, Chapter 2257, Government Code. 9-48 SECTION 3.15. JOINT AUTHORITY. For purposes of 9-49 accomplishing the objectives and exercising the powers of the 9-50 district, the district may: 9-51 (1) enter into an agreement with a local government 9-52 under the Interlocal Cooperation Act, Chapter 791, Government Code; 9-53 and 9-54 (2) enter into a joint agreement or contract with a 9-55 water supply corporation, municipality, an entity created under 9-56 Section 52, Article III, or Section 59, Article XVI, Texas 9-57 Constitution, a county, a political subdivision of the state, the 9-58 state, or other private or public entity. 9-59 ARTICLE 4. GENERAL FISCAL PROVISIONS 9-60 SECTION 4.01. AUDITS. All funds and accounts of the 9-61 district shall be audited by an independent auditor. A copy of an 9-62 audit required under this section shall be maintained in the 9-63 official records of the district. 9-64 SECTION 4.02. CREATION EXPENSES. (a) The district may pay 9-65 the costs and expenses incurred in obtaining the Walnut Basin 9-66 Regional Wastewater Study and, if conducted, other feasibility 9-67 studies and other costs and expenses incurred in creating and 9-68 organizing the district, including the reimbursement of costs and 9-69 expenses incurred by the City of Springtown and the Walnut Creek 10-1 Special Utility District. 10-2 (b) The district may succeed to and assume rights, 10-3 privileges, duties, and responsibilities, including contractual 10-4 obligations, of the City of Springtown and the Walnut Creek Special 10-5 Utility District relating to the creation of the district. 10-6 SECTION 4.03. TAX EXEMPTION. Accomplishment of the purposes 10-7 of the district benefit the people, property, and industry of the 10-8 state. The district is performing an essential public function 10-9 under the Texas Constitution by accomplishing the purposes of the 10-10 district and is not required to pay any tax or assessment on any 10-11 property or project owned, operated, leased, or controlled by the 10-12 district or any part of that property, and the bonds or other 10-13 obligations issued by the district under this Act and the transfer 10-14 and income from those bonds or other obligations, including the 10-15 profits made on the sale of the bonds, are free from taxation in 10-16 the state. 10-17 ARTICLE 5. BONDS 10-18 SECTION 5.01. ISSUANCE OF BONDS. (a) The district may 10-19 issue bonds to provide district funds to carry out the purposes and 10-20 exercise the powers of the district. 10-21 (b) The district may issue revenue bonds, notes, revenue 10-22 anticipation notes, short-term obligations, refunding bonds, or 10-23 other obligations without holding an election and on terms that the 10-24 board determines to be appropriate. 10-25 SECTION 5.02. PAYMENT AND SECURITY. (a) Obligations issued 10-26 under Section 5.01 of this article: 10-27 (1) may be made payable from all or part of the 10-28 revenues of the district derived from any lawful source, including 10-29 revenues derived from a contract with a customer or other user of 10-30 facilities owned or operated by the district or from the ownership 10-31 and operation of any waterworks system, wastewater system, sewer 10-32 system, solid waste disposal system, or nonhazardous liquid waste 10-33 system, or a combination of those systems; and 10-34 (2) may be paid from and secured by liens on the 10-35 pledges of all or part of the revenue, income, or receipts derived 10-36 from the district's ownership, operation, lease, or sale of the 10-37 property, buildings, structures, or facilities, including the 10-38 proceeds or revenues from contracts with any person, firm, 10-39 corporation, municipality, public agency, or other political 10-40 subdivision or entity. 10-41 (b) Bonds and other obligations of the district may be 10-42 additionally secured by mortgages or deeds of trust on real 10-43 property owned or to be acquired by the district and by chattel 10-44 mortgages or liens on any personal property appurtenant to that 10-45 real property. The board may authorize the execution of trust 10-46 indentures, mortgages, deeds of trust, or other forms of 10-47 encumbrances. The district may also pledge to the payment of the 10-48 obligations all or part of a grant, donation, revenue, or income 10-49 received or to be received from the United States or any public or 10-50 private source. 10-51 (c) The district may pledge all or part of the district's 10-52 revenue, income, or receipts from fees, rentals, rates, charges, or 10-53 contract proceeds or payments to the payment of the district's 10-54 bonds or other obligations, including the payment of principal, 10-55 interest, and any other amounts required or permitted relating to 10-56 the bonds or other obligations. The pledged fees, rentals, rates, 10-57 charges, proceeds, or payments shall be established and collected 10-58 in amounts sufficient, together with any other pledged resources, 10-59 to provide for the payment of expenses relating to the bonds or 10-60 other obligations and for operation and maintenance and other 10-61 expenses relating to those facilities. 10-62 (d) For purposes of Subsections (a) and (c) of this section, 10-63 payments and revenues that are pledged for the benefit of the 10-64 district under Sections 3.13(a) and (b) of Article 3 of this Act 10-65 are revenues of the district. 10-66 SECTION 5.03. TERMS AND CONDITIONS. Bonds and other 10-67 obligations of the district: 10-68 (1) may mature serially or otherwise, except that the 10-69 term of the bonds or other obligations may not exceed 40 years from 11-1 the date of issuance; 11-2 (2) may provide for the subsequent issuance of 11-3 additional parity obligations or subordinate lien obligations under 11-4 terms provided in the resolution that authorized the issuance of 11-5 the bond or other obligation; 11-6 (3) shall be executed and may be made redeemable 11-7 before maturity, issued in the form, denominations, and manner, and 11-8 under the terms, conditions, and detail, and sold in the manner, at 11-9 the price, and under the terms provided by the resolution that 11-10 authorized the issuance of the bond or other obligation; and 11-11 (4) shall bear an interest rate as provided by the 11-12 resolution that authorized the issuance of the bond or other 11-13 obligation. 11-14 SECTION 5.04. NEGOTIABLE INSTRUMENTS. Obligations under 11-15 this article are negotiable instruments for purposes of Chapter 8, 11-16 Business & Commerce Code. 11-17 SECTION 5.05. PROCEEDS. (a) If permitted in the resolution 11-18 that authorized the issuance of the bond or other obligation, the 11-19 proceeds from the sale of the bond or other obligation may be used: 11-20 (1) to pay the interest on the bond or other 11-21 obligation during the period of acquisition or construction of 11-22 facilities to be provided through the issuance of the bond or other 11-23 obligation; 11-24 (2) to pay the operating and maintenance expenses of 11-25 district facilities; 11-26 (3) to create a reserve fund for the payment of the 11-27 principal of and interest on the bond or other obligation; and 11-28 (4) in any other manner that is necessary, 11-29 appropriate, or convenient to accomplish the purposes of the 11-30 district. 11-31 (b) The proceeds from the sale of bonds or other obligations 11-32 may be placed on time deposit or invested as provided by the 11-33 resolution that authorized the issuance of the bond or other 11-34 obligation. 11-35 SECTION 5.06. MISCELLANEOUS. (a) The district is an issuer 11-36 as defined by Section 3.001, Article 3, Chapter 53, Acts of the 11-37 70th Legislature, 2nd Called Session, 1987 (Article 717k-8, 11-38 Vernon's Texas Civil Statutes). Bonds issued by the district under 11-39 this Act and the appropriate proceedings authorizing the issuance 11-40 of the bonds shall be submitted to the attorney general for 11-41 examination if required under Article 3, Chapter 53, Acts of the 11-42 70th Legislature, 2nd Called Session, 1987 (Article 717k-8, 11-43 Vernon's Texas Civil Statutes). If a bond issued by the district 11-44 contains a recital that the bond is secured by a pledge of revenue 11-45 derived from a contract, a copy of the contract and the proceedings 11-46 relating to the contract may also be submitted to the attorney 11-47 general. If the attorney general finds that the bonds submitted 11-48 for examination under this subsection are authorized and that the 11-49 contract was entered into in accordance with the law, the attorney 11-50 general shall approve the bonds and, if submitted, the contract and 11-51 the comptroller shall register the bonds. If bonds and the 11-52 contract are approved by the attorney general and registered by the 11-53 comptroller, the bonds and the contract are incontestable in any 11-54 court or other forum for any reason and are valid and binding 11-55 obligations as provided by the terms of the obligation. 11-56 (b) The district may issue bonds and other obligations as 11-57 provided by Chapter 656, Acts of the 68th Legislature, Regular 11-58 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes), and as 11-59 provided by the Bond Procedures Act of 1981 (Article 717k-6, 11-60 Vernon's Texas Civil Statutes). 11-61 ARTICLE 6. ADDING TERRITORY TO THE DISTRICT 11-62 SECTION 6.01. ADDITION OF MEMBER ENTITIES. (a) On receipt 11-63 of a petition submitted by the governing body of a local 11-64 government, other political subdivision, or private entity, 11-65 including a water supply corporation, the board may add a member 11-66 entity to the district as provided by this section. 11-67 (b) A petition must be submitted in the manner and form 11-68 required in the district bylaws. 11-69 (c) On receipt of a petition, the board shall give notice 12-1 and hold a hearing on the petition to determine if adding the 12-2 member entity to the district: 12-3 (1) will benefit the territory or service area within 12-4 the member entity; and 12-5 (2) is in the best interests of the district. 12-6 (d) If the board determines that the proposed member entity 12-7 should be added to the district, the board shall, subject to 12-8 Subsection (e) of this section, issue an order: 12-9 (1) adding the member entity and the territory or 12-10 service area of the member entity to the district; and 12-11 (2) making the member entity and the territory or 12-12 service area of the member entity subject to the privileges, 12-13 duties, assets, and financial obligations of the district in the 12-14 same manner as other member entities of the district. 12-15 (e) The board shall include in an order issued under 12-16 Subsection (d) of this section a requirement that the member entity 12-17 added to the district must reimburse the existing member entities 12-18 of the district, or directly reimburse the district, for the costs 12-19 incurred in creating and operating the district. Reimbursement 12-20 under this subsection must be an equitable pro rata share of the 12-21 costs paid by the existing member entities or the district. 12-22 SECTION 6.02. APPOINTMENT OF DIRECTORS BY NEW MEMBER ENTITY. 12-23 If the board issues an order under Section 6.01(d) of this article 12-24 adding a member entity to the district, the governing body of the 12-25 member entity shall appoint the appropriate number of directors to 12-26 the board as provided by Section 2.01(g) of Article 2 of this Act. 12-27 ARTICLE 7. MISCELLANEOUS PROVISIONS 12-28 SECTION 7.01. INITIAL DIRECTORS. (a) The governing bodies 12-29 of the City of Springtown and the Walnut Creek Special Utility 12-30 District shall, not later than the 30th day after the effective 12-31 date of this Act, appoint the appropriate number of initial 12-32 directors as required by Section 2.01(b) of Article 2 of this Act. 12-33 (b) The Parker County judge, or the person designated by the 12-34 Parker County judge, shall begin serving as an ex officio director 12-35 as provided by Section 2.01(d) of Article 2 of this Act on the 12-36 effective date of this Act. 12-37 SECTION 7.02. FINDINGS RELATING TO PROCEDURAL REQUIREMENTS. 12-38 (a) The proper and legal notice of the intention to introduce this 12-39 Act, setting forth the general substance of this Act, has been 12-40 published as provided by law, and the notice and copy of this Act 12-41 have been furnished to all persons, agencies, officials, or 12-42 entities to which they are required to be furnished by the 12-43 constitution and other laws of this state, including the governor, 12-44 who has submitted the notice and Act to the Texas Natural Resource 12-45 Conservation Commission. 12-46 (b) The Texas Natural Resource Conservation Commission has 12-47 filed its recommendations relating to this Act with the governor, 12-48 lieutenant governor, and speaker of the house of representatives 12-49 within the required time. 12-50 (c) All requirements of the constitution and laws of this 12-51 state and the rules and procedures of the legislature with respect 12-52 to the notice, introduction, and passage of this Act are fulfilled 12-53 and accomplished. 12-54 SECTION 7.03. EMERGENCY. The importance of this legislation 12-55 and the crowded condition of the calendars in both houses create an 12-56 emergency and an imperative public necessity that the 12-57 constitutional rule requiring bills to be read on three several 12-58 days in each house be suspended, and this rule is hereby suspended, 12-59 and that this Act take effect and be in force from and after its 12-60 passage, and it is so enacted. 12-61 * * * * *