1-1 By: Lindsay S.B. No. 1909 1-2 (In the Senate - Filed March 25, 1997; April 2, 1997, read 1-3 first time and referred to Committee on Natural Resources; 1-4 April 29, 1997, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 9, Nays 0; April 29, 1997, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1909 By: Lindsay 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the creation, administration, powers, duties, 1-11 operation, and financing of the North Harris County Regional Water 1-12 Authority; granting the power of eminent domain and the authority 1-13 to issue bonds and to levy and collect taxes; providing a civil 1-14 penalty. 1-15 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-16 ARTICLE 1. GENERAL PROVISIONS 1-17 SECTION 1.01. CREATION. (a) A conservation and reclamation 1-18 district, to be known as the North Harris County Regional Water 1-19 Authority, is created in Harris County without the necessity of a 1-20 confirmation election. The district is a governmental agency and a 1-21 body politic and corporate. 1-22 (b) The district is created under and is essential to 1-23 accomplish the purpose of Section 59, Article XVI, Texas 1-24 Constitution. 1-25 SECTION 1.02. DEFINITIONS. In this Act: 1-26 (1) "Board" means the board of directors of the 1-27 district. 1-28 (2) "Commission" means the Texas Natural Resource 1-29 Conservation Commission. 1-30 (3) "Director" means a member of the board. 1-31 (4) "District" means the North Harris County Regional 1-32 Water Authority. 1-33 (5) "Local government" means a municipality, county, 1-34 river authority, or water district or authority acting under 1-35 Section 52, Article III, or Section 59, Article XVI, Texas 1-36 Constitution. 1-37 (6) "Person" has the meaning assigned by Section 1-38 311.005, Government Code. 1-39 (7) "Pollution" has the meaning assigned by Section 1-40 26.001, Water Code. 1-41 (8) "System" means a network of pipelines, conduits, 1-42 canals, pumping stations, force mains, treatment plants, and any 1-43 other construction, device, or related appurtenance used to treat 1-44 or transport water. 1-45 (9) "Water" means groundwater, percolating or 1-46 otherwise, and any lake, pond, impounding reservoir, spring, river, 1-47 stream, creek, canal, or any other surface water, natural or 1-48 artificial, navigable or nonnavigable. 1-49 SECTION 1.03. DESCRIPTION OF BOUNDARIES. (a) Except as 1-50 provided by Subsection (b) of this section, the district includes 1-51 all the territory contained within the following area, whether the 1-52 territory contains noncontiguous parcels of land or whether the 1-53 territory is located within the boundaries of any other 1-54 governmental entity or political subdivision of the state: 1-55 BEGINNING at the intersection of the Harris and Waller County 1-56 line with the north right-of-way line of US Highway 290; 1-57 THENCE northwest along the Harris and Waller County line to 1-58 the intersection with Spring Creek; 1-59 THENCE continuing southeasterly along said Harris and Waller 1-60 County line, with the meanders of Spring Creek to the intersection 1-61 of the Waller and Montgomery County line; 1-62 THENCE southeasterly along the Harris and Montgomery County 1-63 line continuing with the meanders of said Spring Creek; to the 1-64 intersection with the City of Houston, corporate limits; 2-1 THENCE along said City of Houston corporate limits the 2-2 following: south approximately one half mile; east approximately 2-3 one half mile to the City of Humble corporate limits; north along 2-4 said City of Humble corporate limits approximately one half mile to 2-5 aforementioned Spring Creek; east along Spring Creek to its 2-6 confluence with the San Jacinto River to the intersection of US 2-7 Highway 59; easterly and southerly along the take line for Lake 2-8 Houston to the intersection with the southeasterly right-of-way of 2-9 the Union Pacific Railroad southwesterly along said Union Pacific 2-10 Railroad for approximately two miles; south to the north end of 2-11 Duessen Parkway; southeast along the east side of Duessen Parkway 2-12 and along the north side of the access road to the intersection 2-13 with North Lake Houston Parkway. 2-14 THENCE departing said City of Houston corporate limits, west 2-15 along the north side of said North Lake Houston Parkway to the 2-16 beginning of Mount Houston Road, and continuing west on Mount 2-17 Houston Road to the 6900 block to the intersection of Suburban; 2-18 THENCE south along Suburban to the City of Houston corporate 2-19 limits; 2-20 THENCE along said City of Houston corporate limits, the 2-21 following: west to Hirsch Road; south along the west side of 2-22 Hirsch Road to Langley; west along the south side of Langley to the 2-23 southbound feeder road of US Highway 59; northeast along the west 2-24 side of the feeder road of US Highway 59 to Little York; west along 2-25 the south side of Little York to Bentley; north along the east side 2-26 of Bentley to Sagebrush; west along the north side of Sagebrush to 2-27 Halls Bayou; south along Halls Bayou to Little York; west along the 2-28 south side of Little York to Aldine Westfield Road; north along the 2-29 east sides of Aldine Westfield Road to its intersection with the 2-30 easterly extension of the City of Houston corporate limits; west to 2-31 the Hardy Toll Road; north along the Hardy Toll Road approximately 2-32 0.25 mile, east approximately 0.35 mile, north approximately 0.15 2-33 mile, west approximately 0.35 mile; northwest along the Hardy Toll 2-34 Road approximately 1 mile; southwesterly along an irregular path 2-35 generally west to Carby; west along Carby to Airline Dr.; south 2-36 along Airline Dr. to Canino; west along Canino to Sweetwater; north 2-37 along Sweetwater to West Road; west to Interstate 45/US 75; south 2-38 along Interstate 45/US 75 to south of Bluebell Rd.; southerly along 2-39 an irregular path generally south and west to West Mount Houston 2-40 Rd.; west along Mount Houston Road to a line east of Ella 2-41 Boulevard; south along a line generally parallel to Ella Blvd. to 2-42 south of W. Gulf Bank; west along the south side of W. Gulf Bank to 2-43 Tomball Parkway; northwest along Tomball Parkway approximately 1.5 2-44 miles; west along an irregular path to N. Houston-Rosslyn Rd.; 2-45 north along N. Houston-Rosslyn Rd. to Vogel Creek; west along Vogel 2-46 Creek to the FWD CRIP RR; south along the FWD CRIP RR to Logview; 2-47 west along Logview to Hollister; south along Hollister to White Oak 2-48 Bayou; east along White Oak Bayou to Twisting Vine; south along 2-49 Twisting Vine to West Little York, west along West Little York to 2-50 Fairbanks N. Houston; south along Fairbanks N. Houston to Cole 2-51 Creek; west along Cole Creek to Hempstead Highway; northwest along 2-52 Hempstead Highway to West Sam Houston Parkway North. 2-53 THENCE departing said City of Houston corporate limits and 2-54 continuing northwest along Hempstead Highway to US 290 at Spencer 2-55 Road; 2-56 THENCE northwest along US 290 to the intersection of the 2-57 Harris and Waller County line, the POINT OF BEGINNING. 2-58 (b) On annexation of any part of the territory of the 2-59 district by a municipality or incorporation by a municipality of 2-60 any part of the territory of the district, the municipality shall 2-61 assume a pro rata share of all debt of the district payable in 2-62 whole or in part by ad valorem taxes. The percentage of the 2-63 assumption shall be determined by multiplying the total debt of the 2-64 district payable in whole or in part from taxes by a fraction, the 2-65 numerator of which is the assessed value of the property to be 2-66 annexed or incorporated based on the most recent certified county 2-67 property tax rolls at the time of annexation or incorporation and 2-68 the denominator of which is the total assessed value of the 2-69 property of the district based on the most recent certified county 3-1 property tax rolls at the time of annexation or incorporation. 3-2 After annexation by a municipality of a portion of the territory of 3-3 the district or incorporation over any part of the territory of the 3-4 district, the district may not levy taxes on that territory, and 3-5 the territory is no longer considered a part of the district for 3-6 any purpose. 3-7 (c)(1) As used in this subsection, "planned community" means 3-8 and is limited to a planned community originally established 3-9 pursuant to the Urban Growth and New Community Development Act of 3-10 1970 (42 U.S.C. Section 4501 et seq.) of 15,000 acres or more 3-11 situated in two or more counties, with not more than 25 percent of 3-12 the territory of the planned community being within the district. 3-13 On receipt of a petition requesting the exclusion from the district 3-14 of territory comprising on the effective date of this Act or 3-15 hereafter comprising, but only if the added territory is on the 3-16 effective date of this Act contiguous to the planned community, all 3-17 or a portion of a planned community, which petition is signed by 3-18 the owners of at least a majority by area of the territory proposed 3-19 to be excluded from the district, the board shall promptly call, 3-20 give notice of, and conduct a hearing on such petition. A petition 3-21 submitted under this subsection must describe the boundaries of the 3-22 territory to be excluded from the district. For purposes of this 3-23 subsection, land ownerships separated only by the claims of title 3-24 of the state to the beds and banks of rivers and streams shall be 3-25 deemed to be contiguous. 3-26 (2) If on such hearing, the board finds that the 3-27 petition conforms substantially to the requirements of this 3-28 subsection, the board shall enter an order excluding such territory 3-29 and redefining the boundaries of the district and shall file a copy 3-30 of the order in the office of the county clerk of Harris County, 3-31 who shall record such order in the records of Harris County. After 3-32 the order is recorded, the excluded territory is no longer part of 3-33 the district; provided, however, that territory excluded under this 3-34 subsection is not released from the payment of its pro rata share 3-35 of the district's outstanding indebtedness, and the district shall 3-36 continue to levy taxes each year on the excluded territory at the 3-37 same rate levied on territory in the district until the taxes 3-38 collected from the excluded territory equal its pro rata share of 3-39 the outstanding indebtedness of the district at the time the 3-40 territory was excluded. The taxes collected under this subsection 3-41 shall be applied exclusively to the payment of the excluded 3-42 territory's pro rata share of indebtedness. The owner of all or 3-43 any part of the excluded territory may pay in full, at any time, 3-44 the owner's share of such indebtedness. 3-45 SECTION 1.04. FINDING OF BENEFIT. All the land and other 3-46 property included within the boundaries of the district will be 3-47 benefited by the works and projects that are to be accomplished by 3-48 the district under powers conveyed by this Act. The district is 3-49 created to serve a public use and benefit. 3-50 ARTICLE 2. ELECTION OF DIRECTORS 3-51 SECTION 2.01. METHOD OF ELECTION OF DIRECTORS. (a) The 3-52 directors of the district shall be elected according to the method 3-53 provided by this Act. 3-54 (b) Two directors shall be elected at large by the qualified 3-55 voters of the entire district, and one director shall be elected 3-56 from each of five single-member voting districts by the qualified 3-57 voters of that voting district. 3-58 (c) A person shall indicate on the application for a place 3-59 on the ballot the voting district that the person seeks to 3-60 represent or that the person seeks to represent the district at 3-61 large. 3-62 (d) As soon as practicable after each federal decennial 3-63 census and after any change in the district's boundaries, the board 3-64 shall redraw the single-member voting districts. At the first 3-65 election after the voting districts are redrawn, five new directors 3-66 shall be elected to represent the voting districts. The directors 3-67 elected shall draw lots to determine their terms. 3-68 SECTION 2.02. BOARD OF DIRECTORS. (a) The district is 3-69 governed by a board of seven directors. 4-1 (b) A vacancy in the office of director shall be filled by 4-2 appointment of the board until the next election for directors. If 4-3 the position is not scheduled to be filled at the election, the 4-4 person elected to fill the position shall serve only for the 4-5 remainder of the unexpired term. 4-6 (c) To be eligible to serve as director, a person must be a 4-7 qualified voter in the voting district from which the person is 4-8 elected or appointed if representing a voting district or in the 4-9 district if representing the district at large. 4-10 SECTION 2.03. SERVICE OF DIRECTORS. (a) Temporary 4-11 directors serve until initial directors are elected under Section 4-12 2.05 of this Act. 4-13 (b) Initial directors serve until permanent directors are 4-14 elected under Section 2.06 of this Act. 4-15 (c) Permanent directors serve staggered four-year terms. 4-16 (d) Each director must qualify to serve as director in the 4-17 manner provided by Chapter 49, Water Code. The district shall pay 4-18 the premiums for each director's bond required under that chapter. 4-19 (e) A director serves until the director's successor has 4-20 qualified. 4-21 SECTION 2.04. TEMPORARY DIRECTORS. (a) The temporary board 4-22 of directors is composed of: 4-23 (1) Jim Hufmeister - at large 4-24 (2) Charles Wiggins - at large 4-25 (3) Milton Johnston - Voting District No. 1 4-26 (4) Joe Beneke - Voting District No. 2 4-27 (5) Casey Westel - Voting District No. 3 4-28 (6) Don David - Voting District No. 4 4-29 (7) Robert Haas - Voting District No. 5 4-30 (b) If a temporary director fails to qualify for office, the 4-31 temporary directors who have qualified shall appoint a person to 4-32 fill the vacancy. If at any time there are fewer than three 4-33 qualified temporary directors, the commission shall appoint the 4-34 necessary number of persons to fill all vacancies on the board. 4-35 SECTION 2.05. INITIAL DIRECTORS' ELECTION. (a) The 4-36 temporary board of directors shall establish five single-member 4-37 voting districts in the manner described by Subsection (d), Section 4-38 49.103, Water Code, and shall call and hold an election to elect 4-39 seven initial directors. 4-40 (b) A person, including a temporary director, who desires to 4-41 be a candidate for the office of initial director may file an 4-42 application with the temporary board to have the candidate's name 4-43 printed on the ballot. 4-44 (c) At the initial directors' election, the temporary board 4-45 of directors shall have the name of any candidate filing for the 4-46 office of director as provided by Subsection (b) of this section 4-47 placed on the ballot and blank spaces to write in the names of 4-48 other persons who have declared their candidacies in accordance 4-49 with Subchapter C, Chapter 146, Election Code, as if the district 4-50 were a municipality. The temporary directors, at the time the vote 4-51 is canvassed, shall declare the person who receives the most votes 4-52 in each voting district to be elected as director for that voting 4-53 district and the persons who receive the two highest number of 4-54 votes in the district to be elected as directors for the district 4-55 at large. The district shall include the results of the directors' 4-56 election in its election report to the commission. 4-57 (d) Subsection (a), Section 41.001, Election Code, does not 4-58 apply to the initial directors' election held as provided by this 4-59 section. 4-60 (e) Except as provided by this section, the initial 4-61 directors' election must be conducted as provided by Section 4-62 49.102, Water Code, and by the Election Code. 4-63 SECTION 2.06. ELECTION OF DIRECTORS. On the first Saturday 4-64 in May of the first even-numbered year after the year in which the 4-65 district is created, an election shall be held in the district for 4-66 the election of the directors for Voting District Nos. 1, 2, 3, 4, 4-67 and 5, who shall each serve four-year terms, and the two directors 4-68 for the district at large, who shall each serve two-year terms. 4-69 Thereafter, on the first Saturday in May in each subsequent second 5-1 year, the appropriate number of directors shall be elected to the 5-2 board. 5-3 ARTICLE 3. ADMINISTRATIVE PROVISIONS 5-4 SECTION 3.01. ORGANIZATION OF BOARD. The board shall elect 5-5 from its members a president, vice president, secretary, and other 5-6 officers as necessary. A person elected to board office serves in 5-7 that capacity for a period of two years or until the person ceases 5-8 to be a director, whichever occurs first. 5-9 SECTION 3.02. MEETINGS AND ACTIONS OF BOARD. (a) The board 5-10 shall meet at least four times each year and may meet at any other 5-11 time considered appropriate. 5-12 (b) A majority of the directors constitutes a quorum for the 5-13 transaction of business. Except as otherwise provided in this Act, 5-14 the vote of a majority of directors is required for board action. 5-15 SECTION 3.03. INTEREST IN CONTRACT. A director who is 5-16 financially interested in a contract proposed to be executed by the 5-17 district for the purchase of property or services or the 5-18 construction of facilities shall disclose the interest to the board 5-19 and may not vote on acceptance of the contract. 5-20 SECTION 3.04. GENERAL MANAGER AND EMPLOYEES. The board may 5-21 employ a general manager and employees for a term and salary set by 5-22 the board. 5-23 SECTION 3.05. EMPLOYEE BONDS. (a) The general manager and 5-24 each employee or contractor of the district who is charged with the 5-25 collection, custody, or payment of any money of the district shall 5-26 execute a fidelity bond in an amount determined by the board and in 5-27 a form and with a surety approved by the board. 5-28 (b) The district shall pay the premiums on any bonds 5-29 required under this section. 5-30 ARTICLE 4. POWERS AND DUTIES 5-31 SECTION 4.01. GENERAL POWERS AND DUTIES. (a) The district 5-32 may: 5-33 (1) administer and enforce the terms of this Act; 5-34 (2) use district facilities and powers to accomplish 5-35 the purposes of this Act; 5-36 (3) coordinate the provision of water services inside, 5-37 into, or out of the district; 5-38 (4) execute contracts for the production, treatment, 5-39 or supply of water in the district; and 5-40 (5) sue and be sued in its corporate name. 5-41 (b) Except as expressly limited by this Act, the district 5-42 has all the rights, powers, privileges, authority, functions, and 5-43 duties necessary and convenient for accomplishing the purpose of 5-44 this Act that are provided by the general law of this state, 5-45 including Chapters 36 and 49, Water Code, applicable to a 5-46 conservation and reclamation district created under Section 59, 5-47 Article XVI, Texas Constitution. This Act prevails over any 5-48 provision of general law that is in conflict or inconsistent with 5-49 this Act. 5-50 (c) The rights, powers, privileges, authority, functions, 5-51 and duties of the district are subject to the continuing right of 5-52 supervision of the state to be exercised by and through the 5-53 commission. 5-54 SECTION 4.02. DISTRICT RULES. (a) The district shall adopt 5-55 and enforce rules reasonably required to implement this Act, 5-56 including rules governing procedure and practice before the board. 5-57 (b) The district shall print its rules and furnish copies of 5-58 the rules to any person on written request. 5-59 SECTION 4.03. FEES AND CHARGES. (a) The district may 5-60 establish fees and charges necessary to enable the district to 5-61 fulfill the district's obligations under this Act. A fee 5-62 established under this section may not exceed an amount necessary 5-63 to pay the operation cost of the district. 5-64 (b) The district may establish fees to recover capital 5-65 expenditures as provided by Chapter 395, Local Government Code. 5-66 SECTION 4.04. INSPECTIONS AND INVESTIGATIONS. The district 5-67 may enter public or private property in the district to inspect or 5-68 investigate conditions relating to the district's authorized 5-69 purposes under the same provisions and restrictions applicable to 6-1 the commission under general law. 6-2 SECTION 4.05. HEARING AND ORDER. (a) The board may: 6-3 (1) hold hearings, receive evidence from a party in 6-4 interest who appears before the board, compel the attendance of 6-5 witnesses, and make findings of fact and determinations with 6-6 respect to administering this Act or any order or rule of the 6-7 district; and 6-8 (2) delegate to one or more of its members or 6-9 employees the authority to take testimony and administer oaths in a 6-10 hearing held or authorized to be held by the district. 6-11 (b) An order of the board must be: 6-12 (1) in the district's name; and 6-13 (2) attested by proper members of the board under the 6-14 district's rules. 6-15 SECTION 4.06. CIVIL PENALTY; INJUNCTION. (a) A person who 6-16 violates a rule, permit, or order of the district is subject to a 6-17 civil penalty of not less than $50 and not more than $5,000 for 6-18 each violation or each day of a continuing violation. 6-19 (b) The district may sue to recover the penalty in a 6-20 district court in the county where the violation occurred. The 6-21 penalty shall be paid to the district. 6-22 (c) The district may sue for injunctive relief in a district 6-23 court in the county where a violation of a district rule, permit, 6-24 or order occurs or is threatened to occur. The court may grant to 6-25 the district, without bond or other undertaking, a prohibitory or 6-26 mandatory injunction that the facts warrant, including a temporary 6-27 restraining order, temporary injunction, or permanent injunction. 6-28 (d) The district may sue for injunctive relief and a civil 6-29 penalty in the same proceeding. 6-30 SECTION 4.07. COURT REVIEW. (a) A person who is adversely 6-31 affected by a rule, act, or order of the district may sue the 6-32 district in district court to set aside the rule, act, or order. 6-33 (b) A suit brought under Subsection (a) of this section must 6-34 be filed not later than the 60th day after the date on which the 6-35 rule, act, or order takes effect. 6-36 (c) The standard for review for a suit brought under 6-37 Subsection (a) of this section is by trial de novo. 6-38 SECTION 4.08. WATER CONTROL PLANS. The district by rule 6-39 shall, as needed but not less frequently than every five years, 6-40 develop, prepare, revise, and adopt comprehensive water supply 6-41 plans for various areas of the district. The plans must be 6-42 consistent with standards adopted by the commission and should 6-43 include 10-year, 20-year, and 50-year projections of water needs 6-44 within the district. 6-45 SECTION 4.09. ACQUISITION, CONSTRUCTION, AND OPERATION OF 6-46 SYSTEMS. The district may: 6-47 (1) acquire and provide by purchase, gift, or lease a 6-48 water treatment or supply service within the district; 6-49 (2) design, finance, or construct a water treatment or 6-50 supply system and provide wholesale water services within the 6-51 district; 6-52 (3) operate or sell a water treatment or supply system 6-53 the district constructs or acquires; and 6-54 (4) contract with any person to operate or maintain a 6-55 water treatment or supply system the person owns. 6-56 SECTION 4.10. SYSTEM CONTRACTS. (a) The district may 6-57 contract to receive, treat, and supply water to or from any person 6-58 in or out of the district. 6-59 (b) In a contract under this section, the district shall set 6-60 fees according to: 6-61 (1) the quality and quantity of the water; 6-62 (2) the difficulty in treating the water; 6-63 (3) operation and maintenance expenses and debt 6-64 retirement service costs; and 6-65 (4) any other reasonable consideration. 6-66 SECTION 4.11. SALE OR REUSE OF WATER OR BY-PRODUCT. The 6-67 district may store, sell, or reuse: 6-68 (1) water; or 6-69 (2) any by-product from the district's operation. 7-1 SECTION 4.12. EMINENT DOMAIN. The district may exercise the 7-2 power of eminent domain under Chapter 21, Property Code, to acquire 7-3 property of any kind to further authorized district purposes. 7-4 SECTION 4.13. RELOCATION OF FACILITIES. If the district 7-5 requires relocation, raising, lowering, rerouting, changing the 7-6 grade of, or altering the construction of a railroad, highway, 7-7 pipeline, or an electric transmission or distribution, telegraph, 7-8 or telephone line conduit, pole, or facility, the district shall 7-9 pay the cost of that action so as to provide comparable replacement 7-10 of any replaced facility, less the replaced facility's net salvage 7-11 value. 7-12 SECTION 4.14. USE OF PUBLIC EASEMENTS. (a) The district 7-13 may use a public roadway, street, alley, or easement to accomplish 7-14 district purposes without the necessity of securing a franchise or 7-15 other governmental agreement. The use is subject to the authority 7-16 of a county or municipality to require the relocation of 7-17 facilities, at the expense of the district, to permit the widening 7-18 or straightening of a road. A county must give the district 30 7-19 days' notice that relocation is required and must specify the new 7-20 location for the facilities along the right-of-way of the road. 7-21 (b) The district may not alter or damage a portion of the 7-22 state highway system or a county road without first obtaining the 7-23 written consent of the Texas Department of Transportation or the 7-24 county, as applicable. The placement of a district facility in 7-25 state or county highway right-of-way is subject to regulation by 7-26 the Texas Department of Transportation or the county, as 7-27 applicable. 7-28 SECTION 4.15. ACQUISITION AND DISPOSITION OF PROPERTY. 7-29 (a) The district may purchase, lease, acquire by gift, maintain, 7-30 use, or operate property of any kind that is appropriate for the 7-31 exercise of the district's function. 7-32 (b) The board may sell to the highest bidder, at a public or 7-33 private sale, or may exchange any property owned by the district 7-34 that is not required to carry out the district's purposes. Before 7-35 conducting a public or a private sale of property, the district 7-36 shall give notice of its intent to sell the property by publishing 7-37 notice once a week for two consecutive weeks in a newspaper of 7-38 general circulation in the district. 7-39 SECTION 4.16. ACQUISITION OF FACILITY. The district may 7-40 acquire, construct, extend, improve, maintain, reconstruct, use, or 7-41 operate any facility necessary or convenient to the exercise of the 7-42 district's rights, powers, privileges, authority, functions, and 7-43 duties. 7-44 SECTION 4.17. CONTRACTS. (a) The district may make 7-45 contracts and execute instruments necessary or convenient to the 7-46 exercise of the district's rights, powers, privileges, authority, 7-47 functions, and duties. The district may not make a contract with a 7-48 term greater than 50 years. 7-49 (b) This section does not prohibit the district from 7-50 purchasing surplus property from the United States through a 7-51 negotiated contract without bids. 7-52 (c) An officer, agent, or employee of the district who is 7-53 financially interested in a contract of the type described in 7-54 Subsection (b) of this section shall disclose the interest to the 7-55 board before the board votes on the acceptance of the contract. 7-56 (d) Notwithstanding any provision of a municipality's 7-57 charter, a contract between the district and the municipality is 7-58 not required to be submitted to the municipality's electorate. 7-59 (e) Notwithstanding any other provision of this Act, any 7-60 contract of the district must meet the requirements of Chapter 171, 7-61 Local Government Code. 7-62 SECTION 4.18. COOPERATIVE AGREEMENTS. The district may 7-63 enter into cooperative agreements with other local governments, 7-64 state agencies, or agencies of the United States to accomplish the 7-65 district's purposes. 7-66 ARTICLE 5. NOTES, BONDS, AND TAX PROVISIONS 7-67 SECTION 5.01. REVENUE NOTES. (a) The board, without the 7-68 necessity of an election, may borrow money on negotiable notes of 7-69 the district to be paid solely from the revenues derived from: 8-1 (1) the ownership of all or a designated part of the 8-2 district's works, plants, improvements, facilities, or equipment 8-3 after deduction of the reasonable cost of maintaining and operating 8-4 the facilities; or 8-5 (2) contracts between the district and any person, 8-6 including a local government. 8-7 (b) The notes may be first or subordinate lien notes at the 8-8 board's discretion. An obligation may not be a charge on the 8-9 property of the district or on taxes levied or collected by the 8-10 district. An obligation may only be a charge on revenues pledged 8-11 for the payment of the obligation. A tax levied or collected by 8-12 the district may not be used to pay any part of the obligation. 8-13 SECTION 5.02. BOND ANTICIPATION NOTES; TAX ANTICIPATION 8-14 NOTES. (a) The board may declare an emergency if funds are not 8-15 available to pay the principal of and interest on any bonds of the 8-16 district payable in whole or in part from taxes or to meet any 8-17 other needs of the district and may issue negotiable tax 8-18 anticipation notes or negotiable bond anticipation notes to borrow 8-19 the money needed by the district without advertising or giving 8-20 notice of the sale. A bond anticipation note or tax anticipation 8-21 note matures within one year of its issuance date. 8-22 (b) Tax anticipation notes may be issued for any purpose for 8-23 which the district is authorized to levy taxes. Tax anticipation 8-24 notes shall be secured with the proceeds of taxes to be levied by 8-25 the district in the 12-month period following the date of issuance. 8-26 The board may agree with the purchasers of the notes that the board 8-27 will levy a sufficient tax to pay the principal of and interest on 8-28 the notes and to pay the costs of collecting the taxes. 8-29 (c) A bond anticipation note may be issued for any purpose 8-30 for which a bond of the district may be issued or to refund 8-31 previously issued bond anticipation notes. A district may covenant 8-32 with the purchasers of the bond anticipation notes that the 8-33 district will use the proceeds of sale of any bonds in the process 8-34 of issuance to refund the bond anticipation notes. The board shall 8-35 use the proceeds received from sale of the bonds in the process of 8-36 issuance to pay principal, interest, or redemption price on the 8-37 bond anticipation notes. 8-38 SECTION 5.03. BONDS. (a) To carry out a power or authority 8-39 conferred by this Act, the district may issue bonds secured by a 8-40 pledge of ad valorem taxes or of all or part of the revenues 8-41 accruing to the district from a source other than ad valorem taxes, 8-42 including money received from tolls, charges, the sale of water or 8-43 other products, and the provision of services. 8-44 (b) The district's bonds shall: 8-45 (1) be authorized by board resolution; 8-46 (2) be issued in the district's name; 8-47 (3) be signed by the president or vice president of 8-48 the board; 8-49 (4) be attested by the secretary of the board; and 8-50 (5) bear the district's seal. 8-51 (c) The board may prescribe the form, denomination, and 8-52 interest rate of a bond issued by the district, except that a bond 8-53 must mature, serially or otherwise, not more than 50 years after 8-54 its issuance date. The board may sell a bond at a price and under 8-55 terms that the board determines to be the most advantageous 8-56 reasonably available. A district bond may be made redeemable 8-57 before maturity at times and prices prescribed in the bond. A 8-58 district bond may be secured by an indenture of trust with a 8-59 corporate trustee. 8-60 (d) The district may issue bonds in more than one series as 8-61 required for carrying out the purposes of this Act. The district 8-62 may, in issuing bonds secured by the district's ad valorem taxes or 8-63 by revenues, reserve the right to issue additional bonds secured by 8-64 the district's ad valorem taxes or by revenues that are on a parity 8-65 with or are senior or subordinate to the bonds issued earlier. 8-66 (e) The resolution authorizing the bonds or the trust 8-67 indenture securing the bonds may specify additional provisions that 8-68 constitute a contract between the district and its bondholders. 8-69 The board may provide: 9-1 (1) for additional bond provisions; and 9-2 (2) for a corporate trustee or receiver to take 9-3 possession of the district's facilities if the district defaults. 9-4 (f) Sections 36.171 and 49.181, Water Code, do not apply to 9-5 bonds or notes issued by the district. 9-6 SECTION 5.04. REFUNDING BONDS. (a) The district may issue 9-7 refunding bonds to refund outstanding bonds and interest authorized 9-8 by this Act. 9-9 (b) Refunding bonds may: 9-10 (1) be issued to refund one or more series of 9-11 outstanding bonds; 9-12 (2) combine the pledges for the outstanding bonds for 9-13 the security of the refunding bonds; and 9-14 (3) be secured by other or additional revenues. 9-15 (c) The provisions of this Act that apply to the district's 9-16 issuance of other bonds, their security, their approval by the 9-17 attorney general, and the remedies of the holders apply to 9-18 refunding bonds. 9-19 (d) Refunding bonds shall be registered by the comptroller 9-20 of public accounts on surrender and cancellation of the bonds to be 9-21 refunded. Alternatively, the resolution authorizing the issuance 9-22 of refunding bonds may provide that the bonds shall be sold and the 9-23 resulting proceeds deposited in the bank where the bonds to be 9-24 refunded are payable. In the latter case, the refunding bonds may 9-25 be issued in an amount sufficient to pay the principal and interest 9-26 of the bonds to be refunded to their option or maturity date. The 9-27 comptroller of public accounts shall register the refunding bonds 9-28 without concurrent surrender and cancellation of the bonds to be 9-29 refunded. 9-30 SECTION 5.05. APPROVAL AND REGISTRATION OF BONDS. After the 9-31 district authorizes bonds, the district shall submit the bonds and 9-32 the record relating to their issuance to the attorney general for 9-33 approval. If the bonds are secured by a pledge of the proceeds of 9-34 a contract between the district and a municipality or other 9-35 governmental agency, authority, or district, the district shall 9-36 submit to the attorney general a copy of the contract and the 9-37 proceedings of the municipality or other governmental agency, 9-38 authority, or district authorizing the contract. If the attorney 9-39 general finds that the bonds have been authorized and each contract 9-40 has been made in accordance with the constitution and laws of this 9-41 state, the attorney general shall approve the bonds and contracts. 9-42 On approval, the bonds shall be registered by the comptroller of 9-43 public accounts. 9-44 SECTION 5.06. BOND ELECTION. (a) The district may not 9-45 issue bonds secured in whole or in part by ad valorem taxes without 9-46 an election. 9-47 (b) The district may issue revenue bonds without an 9-48 election. 9-49 SECTION 5.07. AUTHORIZED INVESTMENTS. Bonds and refunding 9-50 bonds of the district are legal, eligible, and authorized 9-51 investments for a public fund of the state, including the permanent 9-52 school fund, or a state agency. 9-53 SECTION 5.08. AD VALOREM TAXATION. (a) The qualified 9-54 voters in the district may, in an election called for the purpose, 9-55 authorize the district to levy and collect ad valorem taxes to pay 9-56 the principal of and interest on bonds issued by the district. 9-57 (b) The qualified voters in the district may, in an election 9-58 called for the purpose, authorize the district to levy and collect 9-59 ad valorem taxes for the maintenance of the district and its 9-60 improvements. 9-61 ARTICLE 6. MISCELLANEOUS PROVISIONS 9-62 SECTION 6.01. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. 9-63 (a) The proper and legal notice of the intention to introduce this 9-64 Act, setting out the general substance of this Act, has been 9-65 published as provided by law, and the notice and a copy of this Act 9-66 have been furnished to all persons, agencies, officials, or 9-67 entities to which they are required to be furnished by the 9-68 constitution and other laws of this state, including the governor, 9-69 who has submitted the notice and the Act to the Texas Natural 10-1 Resource Conservation Commission. 10-2 (b) The Texas Natural Resource Conservation Commission has 10-3 filed its recommendations relating to this Act with the governor, 10-4 lieutenant governor, and speaker of the house of representatives 10-5 within the required time. 10-6 (c) All requirements of the constitution and laws of this 10-7 state and of the rules and procedures of the legislature with 10-8 respect to the notice, introduction, and passage of this Act are 10-9 fulfilled and accomplished. 10-10 SECTION 6.02. EMERGENCY. The importance of this legislation 10-11 and the crowded condition of the calendars in both houses create an 10-12 emergency and an imperative public necessity that the 10-13 constitutional rule requiring bills to be read on three several 10-14 days in each house be suspended, and this rule is hereby suspended, 10-15 and that this Act take effect and be in force from and after its 10-16 passage, and it is so enacted. 10-17 * * * * *