By Crownover H.B. No. 3804 76R11235 MI-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the Lake Cities Municipal Utility Authority; granting 1-3 the power of eminent domain; authorizing an ad valorem tax; and 1-4 granting the authority to issue bonds. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. VALIDATION OF CREATION; PRINCIPAL OFFICES. (a) 1-7 Under the authority of Section 59, Article XVI, Texas 1-8 Constitution, the creation of the conservation and reclamation 1-9 district known and to be known as Lake Cities Municipal Utility 1-10 Authority is validated and reconfirmed. The Lake Cities Municipal 1-11 Utility Authority is a governmental agency and a body politic and 1-12 corporate. 1-13 (b) The principal offices of the authority shall be located 1-14 in Denton County, Texas. 1-15 SECTION 2. DEFINITIONS. In this Act: 1-16 (1) "Board" means the board of directors of the Lake 1-17 Cities Municipal Utility Authority. 1-18 (2) "LCMUA" means the Lake Cities Municipal Utility 1-19 Authority. 1-20 SECTION 3. BOUNDARIES. (a) LCMUA consists of the territory 1-21 contained in the boundaries of the City of Lake Dallas and that 1-22 part of the City of Shady Shores specifically described in the 1-23 official records of LCMUA. 1-24 (b) The specific territorial boundaries of LCMUA are 2-1 definitively described in the official records of LCMUA. Changes 2-2 to that territory by addition or exclusion shall be reflected in 2-3 the official records of LCMUA. LCMUA must maintain at all times as 2-4 part of its official public records an adequate description of its 2-5 territory that constitutes its official boundaries. All LCMUA 2-6 territory as designated in the official records is subject to 2-7 assessment for the payment of ad valorem taxes. 2-8 SECTION 4. FINDING OF BENEFIT. All land and other property 2-9 included within the boundaries of LCMUA is being and will be 2-10 benefited by the works and projects that are to be accomplished by 2-11 LCMUA under powers conferred by Section 59, Article XVI, Texas 2-12 Constitution. LCMUA is created to serve a public use and benefit. 2-13 SECTION 5. GENERAL POWERS. LCMUA has all of the rights, 2-14 powers, privileges, authority, functions, and duties provided by 2-15 the general law of this state, including Chapters 49 and 51, Water 2-16 Code, applicable to water conservation and improvement districts 2-17 created under Section 59, Article XVI, Texas Constitution. LCMUA 2-18 has in addition the rights, powers, privileges, authority, 2-19 functions, and duties provided by Chapters 54 and 55, Water Code. 2-20 This Act prevails over any provision of general law that is in 2-21 conflict or inconsistent with this Act. 2-22 SECTION 6. BOARD OF DIRECTORS. (a) LCMUA is governed by 2-23 a board of five directors. 2-24 (b) Directors are elected at large by the qualified voters 2-25 residing within the boundaries of LCMUA. 2-26 (c) Directors serve four-year staggered terms. 2-27 (d) A director must: 3-1 (1) be at least 21 years old at the time of election 3-2 or appointment; 3-3 (2) have been a resident within the boundaries of 3-4 LCMUA for at least six months before election or appointment and 3-5 maintain that residence during the director's term; 3-6 (3) never have been convicted of a felony offense or 3-7 any offense of theft; and 3-8 (4) be capable of being bonded. 3-9 (e) A member of a governing body of a municipal corporation 3-10 or an employee of a municipal corporation may not serve as a 3-11 director. 3-12 (f) Each director must qualify to serve in the manner 3-13 provided by this Act, the Election Code, and Chapter 49, Water 3-14 Code. 3-15 (g) A director serves until the director's successor has 3-16 qualified. 3-17 (h) Each director shall subscribe the appropriate oath of 3-18 office and shall obtain the required minimum bond for the faithful 3-19 performance of the director's duties. The cost of the bond shall be 3-20 paid by LCMUA. 3-21 (i) A majority of the board constitutes a quorum. 3-22 (j) A vacancy on the board shall be filled for the unexpired 3-23 term by appointment by the remaining board members. 3-24 (k) A director does not receive any compensation for 3-25 services as a director. 3-26 SECTION 7. OFFICERS. (a) The board shall elect from its 3-27 number a president and vice president and any other officers the 4-1 board considers necessary or appropriate. 4-2 (b) The president is the chief executive officer of LCMUA 4-3 and the presiding officer of all board meetings and proceedings and 4-4 has the same right to vote as any other board member. 4-5 (c) The vice president performs the duties and exercises the 4-6 powers of the president when the president is absent or fails or 4-7 declines to act but may not exercise the president's right to vote. 4-8 (d) The board shall also elect a secretary and a treasurer 4-9 from its members and may combine those offices. The treasurer 4-10 shall give bond in the amount required by the board or by 4-11 applicable state law, the premium to be paid by LCMUA. The 4-12 treasurer's bond shall be conditioned on the treasurer's faithfully 4-13 accounting for all money that comes into the treasurer's custody as 4-14 treasurer for LCMUA. 4-15 SECTION 8. EMPLOYMENT AUTHORITY; GENERAL MANAGER. (a) The 4-16 board as necessary and appropriate may employ professional persons 4-17 including engineers, attorneys, accountants, consultants, and other 4-18 employees. 4-19 (b) The board shall hire a general manager to conduct the 4-20 day-to-day management of LCMUA. 4-21 (c) The board may authorize the general manager to: 4-22 (1) hire and fire employees and independent 4-23 contractors; and 4-24 (2) sign checks and contracts on behalf of LCMUA and 4-25 otherwise conduct the day-to-day management and operations of LCMUA 4-26 without specific board approval of specific transactions. 4-27 (d) The general manager may not: 5-1 (1) employ a person, firm, or entity except at the 5-2 will of the board; or 5-3 (2) sign, without prior board approval, any contract 5-4 on behalf of LCMUA that exceeds the minimum amount of total overall 5-5 value for consideration set by law. 5-6 SECTION 9. SEAL. The board may adopt a seal for LCMUA. The 5-7 seal does not have to be affixed to any act, memorandum, or 5-8 resolution of the board unless the act requires the seal to be 5-9 affixed. 5-10 SECTION 10. ANNEXATION BY PETITION OF QUALIFIED VOTERS. 5-11 (a) Additional territory may be annexed to LCMUA as provided by 5-12 this section. A petition asking for annexation and signed by a 5-13 majority of the qualified voters of the territory proposed to be 5-14 annexed may be filed with the board. The petition must: 5-15 (1) legibly state the name, address, and residence of 5-16 each person signing; 5-17 (2) be signed under oath with the following affidavit: 5-18 "Each of the undersigned swears that she or he is a bona fide 5-19 resident qualified voter of the territory proposed to be annexed 5-20 and has not been offered or paid any consideration in money or any 5-21 thing of value to sign this petition."; 5-22 (3) describe the territory proposed to be annexed by 5-23 metes and bounds or other adequate legal description signed and 5-24 sealed by a qualified registered professional surveyor or engineer; 5-25 and 5-26 (4) be accompanied by a plat that enables the board to 5-27 identify the boundaries and specific territory proposed to be 6-1 annexed. 6-2 (b) The board shall adopt a resolution stating the 6-3 conditions of annexation and setting a time and place for a hearing 6-4 on the annexation if the board finds that: 6-5 (1) the petition is signed by the required number of 6-6 qualified persons and otherwise complies with this section; 6-7 (2) the annexation would be in the best interest of 6-8 the residents of the territory proposed to be annexed and the best 6-9 interest of LCMUA; and 6-10 (3) LCMUA will be able to supply services to the 6-11 territory proposed to be annexed. 6-12 (c) The resolution must: 6-13 (1) state the conditions under which the territory 6-14 proposed to be annexed may be annexed to LCMUA; and 6-15 (2) set a time and place for a hearing by the board on 6-16 the question of whether the territory proposed to be annexed will 6-17 be benefited by the improvements, works, services, and facilities 6-18 then owned or operated or contemplated to be owned or operated by 6-19 LCMUA or by the performance of other functions of LCMUA. 6-20 (d) Notice of the adoption of the resolution stating the 6-21 time and place of the hearing shall be published once in a 6-22 newspaper of general circulation in the territory sought to be 6-23 annexed not later than the 10th day before the date of the hearing. 6-24 The notice shall describe the territory proposed to be annexed in 6-25 the same manner as required by Subsection (a)(3) for the petition. 6-26 Any interested person may appear at the hearing and offer evidence 6-27 for or against the proposed annexation. Witnesses may be sworn at 7-1 the option of the presiding officer of LCMUA. The hearing may 7-2 proceed in the order and under the rules the board prescribes. The 7-3 hearing may be recessed and reconvened from time to time at the 7-4 board's discretion. 7-5 (e) If at the conclusion of the hearing the board finds that 7-6 the territory proposed to be annexed will be benefited by the 7-7 present or contemplated improvements, services, works, or 7-8 facilities of LCMUA, the board by resolution shall make that 7-9 finding and shall call an election in the territory proposed to be 7-10 annexed. The resolution must state the date and place of the 7-11 election and the proposition to be voted on and shall appoint a 7-12 presiding judge or judges and clerks for the election who in turn 7-13 shall appoint the necessary assistant judges or clerks to assist in 7-14 holding the election. The election shall be conducted in 7-15 accordance with the Election Code. 7-16 (f) Notice of the election shall be given by publishing a 7-17 synopsis of the resolution calling for the election once in a 7-18 newspaper of general circulation within the territory sought to be 7-19 annexed not later than the 10th day before the date set for the 7-20 election. Only qualified voters who reside in the territory 7-21 proposed to be annexed may vote in the election. A voter may be 7-22 required to furnish proof of residency. Returns of the election 7-23 results shall be made to the board. The board shall canvass the 7-24 election returns and adopt an order declaring the results. If the 7-25 order shows that a majority of the votes cast favor annexation, the 7-26 board by resolution shall annex the territory into LCMUA. The 7-27 annexation may be contested only in the manner provided by the 8-1 Election Code for contesting an election. 8-2 (g) The board in calling an election on the proposition of 8-3 annexation of territory may call an election over the territory of 8-4 LCMUA to determine whether the LCMUA territory as enlarged by the 8-5 proposed annexation shall assume and be burdened by an ad valorem 8-6 tax necessary and appropriate to support outstanding general 8-7 obligation bonds, bonds voted but not yet sold, and bonds that may 8-8 be voted on in the future and whether an ad valorem tax shall be 8-9 levied upon all taxable property within the territory of LCMUA as 8-10 enlarged by the proposed annexation. The board may provide in the 8-11 election process within the territory proposed to be annexed a 8-12 proposition that the annexed territory shall be subject to a levy 8-13 and assessment for any bonded indebtedness of LCMUA supported by 8-14 the levy and collection of ad valorem taxes. The election shall be 8-15 called and held and notice given in the same manner provided by the 8-16 Election Code and Chapter 49, Water Code, for elections on the 8-17 issuance of bonds. 8-18 (h) Railroad right-of-way that is not situated within the 8-19 defined limits of an incorporated municipality will not be 8-20 benefited by LCMUA services, and therefore railroad right-of-way 8-21 may not be annexed to LCMUA unless the right-of-way is within the 8-22 limits of an incorporated municipality or other governmental body. 8-23 SECTION 11. DISANNEXATION. An election for disannexation 8-24 may be called by the board or by open petition. A disannexation 8-25 election shall be held in the same manner as provided by Sections 8-26 10(a)-(g) of this Act for an annexation election. A disannexation 8-27 may not reduce the tax base necessary to support outstanding bonds 9-1 by levy and assessment of ad valorem taxes. 9-2 SECTION 12. ANNEXATION AND DISANNEXATION BY LANDOWNER 9-3 PETITION. (a) Territory may be added to LCMUA on petition of all 9-4 owners of land in the territory proposed to be annexed. All owners 9-5 of the land proposed to be annexed may file with the board a 9-6 petition asking that the lands described be added to and become a 9-7 part of LCMUA's established territory. The petition must describe 9-8 by metes and bounds the land proposed to be annexed and be 9-9 accompanied by a plat by which LCMUA can ascertain the location, 9-10 description, and identity of the land. The petition must be signed 9-11 and executed in the same manner provided by law for conveyance of 9-12 real property. 9-13 (b) The board shall hear and consider the petition and may 9-14 grant the petition and add the land to LCMUA's existing territory 9-15 if the board considers the addition of the land advantageous and 9-16 beneficial to LCMUA and if services can be provided to the annexed 9-17 territory without injury or detriment to the operation and function 9-18 of LCMUA's existing territory. The determination regarding 9-19 probable or possible injury or detrimental operation or function 9-20 shall be determined solely by the board. 9-21 (c) A petition adding land to LCMUA's territory that is 9-22 granted becomes a part of the official records of LCMUA. The 9-23 board shall require the petitioner to provide a sworn affidavit 9-24 identifying all owners and lienholders of land proposed to be 9-25 annexed and may refuse annexation unless all owners and lienholders 9-26 join in or consent to the petition. 9-27 (d) All landowners of a single tract or parcel may petition 10-1 for voluntary disannexation in the manner provided by this section 10-2 for annexation by landowner petition. The board may refuse to 10-3 grant the disannexation if the board determines that disannexation 10-4 would be detrimental to the interests of LCMUA. 10-5 SECTION 13. POWERS. (a) LCMUA may develop surface or 10-6 underground water storage and supply facilities and construct a 10-7 diversion works, pumps, pumping stations, pipelines, intermediate 10-8 and terminal storage reservoirs, water treatment plants, 10-9 distribution systems, and all other related facilities that will 10-10 facilitate or implement the duty of LCMUA to deliver and distribute 10-11 water within its territory and any other territory for which it 10-12 holds a certificate of convenience and necessity and to purchase, 10-13 improve, modify, or extend any existing water system or systems 10-14 within the certificated territory or outside the certificated 10-15 territory if reasonably necessary or appropriate for the support of 10-16 services within the certificated territory. LCMUA may construct 10-17 all facilities reasonably necessary or convenient to enable LCMUA 10-18 to deliver, treat, and distribute water. 10-19 (b) LCMUA may construct, maintain service, and operate a 10-20 complete wastewater system, including wastewater treatment plant 10-21 sites and collection systems. LCMUA may use public streets, 10-22 alleys, ways, and places for the laying of its water and wastewater 10-23 lines and facilities. 10-24 (c) LCMUA may make contracts for the purchase of water or 10-25 water supplies, purchase treated water, purchase wastewater 10-26 treatment facilities, and make contracts for the purchase or sale 10-27 of treated or untreated water or wastewater. 11-1 (d) LCMUA may apply as necessary for any permit, license, or 11-2 other authorization from the Texas Natural Resource Conservation 11-3 Commission or any other regulatory body in order to conduct any of 11-4 its operations. 11-5 (e) LCMUA may purchase all works, machinery, plants, and 11-6 other facilities and equipment and land, rights-of-way, and 11-7 easements necessary or appropriate for exercising its rights and 11-8 performing its duties under this Act. Subject to the terms of any 11-9 deed of trust or indenture executed by LCMUA, LCMUA may sell, 11-10 trade, or otherwise dispose of any real or personal property the 11-11 board considers unnecessary for LCMUA purposes. Any personal 11-12 property the board considers unnecessary for LCMUA purposes may be 11-13 sold in the manner specified by the board and applicable law. 11-14 SECTION 14. EMINENT DOMAIN. (a) LCMUA has full power of 11-15 eminent domain and may acquire by condemnation any interest in land 11-16 or other property including fee simple title or easements or 11-17 rights-of-way in and upon or under property within and beyond the 11-18 boundaries of LCMUA territory. The exercise of the power of 11-19 eminent domain granted by this Act is governed by Chapter 21, 11-20 Property Code, and any other applicable law. The board by 11-21 resolution shall determine the amount and character of an interest 11-22 in land or other property and easements to be acquired under this 11-23 section. 11-24 (b) If LCMUA, in exercising the power of eminent domain, 11-25 power of relocation, or any other power granted under this Act, 11-26 makes necessary the relocating, raising, rerouting, or changing the 11-27 grade of, or altering the construction of any highway, roadway, 12-1 electric transmission line, telephone or telegraph properties and 12-2 facilities, or pipelines, LCMUA must bear the actual cost of the 12-3 relocation, lowering, rerouting, or changing in grade or altering 12-4 of construction in providing a comparable replacement without 12-5 enhancement of the facilities, after deducting the net salvage 12-6 value derived from the old facility. 12-7 SECTION 15. CONSTRUCTION CONTRACT. A construction contract 12-8 must be procured in accordance with Subchapter I, Chapter 49, Water 12-9 Code. 12-10 SECTION 16. AUTHORITY TO ISSUE BONDS. (a) To carry out any 12-11 power or authority conferred by this Act, the board by resolution 12-12 may authorize the issuance of negotiable bonds payable from revenue 12-13 or ad valorem taxes or both revenue and taxes. Pending the 12-14 issuance of definitive bonds the board may authorize the delivery 12-15 of negotiable interim bonds or notes, certificates of obligation, 12-16 or other similar documents that are eligible for exchange or 12-17 substitution or retirement based upon the proceeds of the 12-18 definitive bonds. LCMUA may refinance any outstanding bonds. 12-19 (b) Bonds must be issued in accordance with Subchapter F, 12-20 Chapter 49, Water Code, and other applicable law. 12-21 (c) Bonds shall be issued in the name of Lake Cities 12-22 Municipal Utility Authority, signed by the president or vice 12-23 president, and attested by the secretary and shall bear the seal, 12-24 or a facsimile seal, of LCMUA. The facsimile signature of the 12-25 president or secretary or both may be printed or lithographed on 12-26 the bonds if authorized by the board, and the seal of LCMUA may be 12-27 impressed, printed, or lithographed on the bonds. 13-1 (d) Bonds shall mature at a time set by the board not to 13-2 exceed 40 years and may be sold at a price or under the terms the 13-3 board determines to be the most advantageous reasonably available. 13-4 Interest on the bonds, including the discount, if any, shall be 13-5 based upon market value at the time of sale and shall be 13-6 established at the discretion of the board at a rate not to exceed 13-7 the maximum rate permitted by law. Bonds may be made callable 13-8 before maturity at a time and price and under the circumstances 13-9 prescribed in the resolution authorizing the bonds and may be made 13-10 registrable or electronically registrable as to principal or as to 13-11 both principal and interest. 13-12 (e) Bonds may be issued in more than one series and at 13-13 different times as required to carry out the purposes and business 13-14 of LCMUA. 13-15 (f) The bonds may be secured by a pledge of all or part of 13-16 the net revenue of LCMUA or by the net revenue of any one or more 13-17 existing or future contracts or other revenue specified by board 13-18 resolution, the trust indenture, or other instrument securing the 13-19 bonds. A pledge of revenue may reserve the right under specified 13-20 conditions to issue additional bonds on a parity with or 13-21 subordinate to the bonds then being issued. "Net revenues" as used 13-22 in this section means the gross revenue of LCMUA less the amount 13-23 necessary to pay the cost of performing the contract and of 13-24 maintaining and operating LCMUA and its properties. 13-25 (g) After the election required by Section 19 of this Act, 13-26 LCMUA may issue bonds payable from ad valorem taxes to be levied on 13-27 all taxable property in LCMUA or secured by and payable from both 14-1 taxes and revenue. If the bonds issued are payable wholly or 14-2 partially from ad valorem taxes, the board shall levy a tax 14-3 sufficient to pay the bonds and the interest on the bonds as the 14-4 bonds and interest become due. The annual tax rate may be fixed 14-5 after considering the money received from other pledged revenue 14-6 that may be available for payment of principal and interest to the 14-7 extent and in the manner permitted by the resolution authorizing 14-8 the issuance of the bonds. 14-9 (h) If the bonds are payable wholly from revenue, the board 14-10 shall fix and revise as needed the rates for water sold and 14-11 services rendered by LCMUA at a rate sufficient to pay the expense 14-12 of operating and maintaining LCMUA facilities and to pay the bonds 14-13 as they mature and the interest as it accrues and to maintain the 14-14 reserve and other funds as required in the resolution authorizing 14-15 the bonds or in the trust indenture or other instruments securing 14-16 the bonds. If the bonds are payable partially from revenue and 14-17 partially from taxes, the board shall fix and revise as necessary 14-18 the rates for water sold and services rendered by LCMUA at a rate 14-19 sufficient to assure compliance with the resolution authorizing the 14-20 bonds and with any trust indenture or other instrument securing the 14-21 bonds. 14-22 (i) From the proceeds of the sale of the bonds, LCMUA may 14-23 set aside amounts to make payments into the interest and sinking 14-24 fund and the reserve fund, and revisions may be made in the 14-25 resolution authorizing the bonds or any trust indenture or other 14-26 instruments securing the bonds. Proceeds from the sale of the 14-27 bonds may be used to pay all expenses necessarily incurred in 15-1 accomplishing the purpose for which LCMUA was created, including 15-2 expenses of issuing and selling the bonds. Proceeds from the sale 15-3 of the bonds may be invested as specified by the resolution 15-4 authorizing the bonds or the trust indenture or other instrument 15-5 securing the bonds. 15-6 (j) Funds accumulated from the payment of bonds and from 15-7 revenue may be invested as specified in the resolution authorizing 15-8 the bonds or in the indenture. 15-9 (k) If a default occurs or is threatened in the payment of 15-10 principal or of interest on bonds payable wholly or partially from 15-11 revenue, a court in Denton County, Texas, may, on petition of the 15-12 holders of outstanding bonds, appoint a receiver with authority to 15-13 collect and receive all income of LCMUA except taxes, to employ and 15-14 discharge agents and employees of LCMUA, to take charge of funds on 15-15 hand, except funds received from taxes unless commingled, and to 15-16 manage the proprietary affairs of LCMUA without the consent of or 15-17 hindrance by the board, individual board members, or other 15-18 employees of LCMUA. The receiver may also be authorized to sell or 15-19 make contracts for the sale of water or renew such contracts with 15-20 the approval of the court that appointed the receiver. The court 15-21 may vest the receiver with other powers and duties the court may 15-22 find necessary to protect the bondholders. The resolution 15-23 authorizing the issuance of the bonds or the trust indenture or 15-24 other instrument securing them may limit or qualify rights of the 15-25 holders of less than all of the outstanding bonds payable from the 15-26 same source to institute or prosecute any litigation affecting 15-27 LCMUA's property or income. 16-1 (l) Any provision in this Act to the contrary 16-2 notwithstanding, before issuing any construction bonds, LCMUA shall 16-3 submit plans, specifications, and other necessary information and 16-4 documents to the appropriate authorities and shall obtain the 16-5 necessary permits or other authorizations from the appropriate 16-6 regulatory bodies, including the Texas Natural Resource 16-7 Conservation Commission. 16-8 SECTION 17. REFUNDING BONDS. (a) LCMUA may issue refunding 16-9 bonds to refund any outstanding bonds authorized by this Act or 16-10 other authority and any interest on those bonds. Refunding bonds 16-11 may be issued to refund more than one series of outstanding bonds, 16-12 may combine the revenue pledged to the outstanding bonds for the 16-13 security of the refunding bonds, and may be secured by other or 16-14 additional revenue and mortgage liens. The requirements of this 16-15 Act with reference to the issuance by LCMUA of other bonds, their 16-16 security, and the remedies of the bondholders apply also to 16-17 refunding bonds. 16-18 (b) Refunding bonds shall be registered by the comptroller 16-19 on surrender and cancellation of the bonds to be refunded. The 16-20 resolution authorizing the bond issue may provide that the bonds 16-21 instead shall be sold and the proceeds deposited in a bank, in 16-22 which case the refunding bonds may be issued in an amount 16-23 sufficient to pay the principal of and the interest on the original 16-24 bonds to their option date or maturity date, and the comptroller 16-25 shall register the bonds without concurrent surrender and 16-26 cancellation of the original bonds. 16-27 SECTION 18. ADDITIONAL SECURITY. (a) Any bonds, including 17-1 refunding bonds, authorized by law and not payable wholly from ad 17-2 valorem taxes, may be additionally secured by a trust indenture 17-3 under which the trustee may be a bank with trust powers situated 17-4 either within or outside this state. The bonds, at the board's 17-5 discretion, may be additionally secured by a deed of trust or a 17-6 mortgage lien on physical properties of LCMUA and all franchises, 17-7 easements, water rights and appropriation permits, leases and 17-8 contracts, and all rights pertinent to those properties, vesting in 17-9 the trustee power to sell the properties to pay the debt, to 17-10 operate the properties and all other powers and authority to 17-11 further secure the bonds. 17-12 (b) The trust indenture, regardless of the existence of the 17-13 deed of trust or mortgage lien on the properties, may contain any 17-14 provisions prescribed by the board for the security of the bonds 17-15 and the preservation of the trust estate, may provide for amendment 17-16 or modification and the issuance of bonds to replace lost or 17-17 mutilated bonds, may condition the right to spend LCMUA money or 17-18 sell LCMUA property on approval of a registered professional 17-19 engineer selected as provided in the trust indenture, and may 17-20 provide for the investment of LCMUA funds. 17-21 (c) A purchaser under a sale under the deed of trust lien, 17-22 where one is given, is the absolute owner of the properties, 17-23 facilities, and rights purchased and has the right to maintain, 17-24 operate, and exercise the properties, facilities, and rights. 17-25 SECTION 19. ELECTION REQUIRED FOR TAX-SUPPORTED BONDS. 17-26 (a) Bonds payable wholly or partially from ad valorem taxes may 17-27 not be issued unless authorized by a majority of the qualified 18-1 voters residing in LCMUA's territory voting in an election called 18-2 for that purpose. Refunding bonds and bonds not payable wholly or 18-3 partially from ad valorem taxes may be issued without an election. 18-4 (b) The board may call an election under this section 18-5 without a petition. The resolution calling the election shall 18-6 specify the time and places of holding the election, the purpose 18-7 for which the bonds are to be issued, the maximum amount of the 18-8 bonds, the form of the ballot, and the presiding judge for each 18-9 voting place. Bonds for water purposes and sewer purposes may, in 18-10 the discretion of the board, be submitted in a single proposition. 18-11 The presiding judge serving at each voting place may appoint one 18-12 assistant judge and two clerks to assist in holding the election. 18-13 Notice of the election shall be given by publishing a substantial 18-14 copy of the resolution calling for the election in a newspaper with 18-15 general circulation in LCMUA on the same day of each of two 18-16 consecutive weeks. The first publication shall be not later than 18-17 the 14th day before the date set for the election. 18-18 (c) The returns of the election shall be made to and 18-19 canvassed by the board. 18-20 (d) The Election Code and other applicable law relating to 18-21 bond elections apply to an election under this section except as 18-22 otherwise provided by this section. 18-23 SECTION 20. DEPOSITORY. The board shall designate one or 18-24 more banks to serve as depository for the funds of LCMUA. All 18-25 LCMUA funds shall be deposited in the depository bank or banks 18-26 except that funds pledged to pay bonds may be deposited with the 18-27 trustee bank named in the trust agreement or other escrow and 19-1 except that funds shall be remitted to the bank or banks of payment 19-2 for the payment of principal of and interest on bonds. To the 19-3 extent that funds in the depository bank and the trustee bank are 19-4 not insured by the Federal Deposit Insurance Corporation, the funds 19-5 shall be secured in the manner provided by law for the security of 19-6 municipal funds. A bank selected by the board is not required to 19-7 go through any bid process or process regarding invitation of the 19-8 banks to become designated depositories. 19-9 SECTION 21. ABOLITION OF LCMUA. (a) LCMUA may be abolished 19-10 by a majority of the qualified voters residing within the territory 19-11 of LCMUA voting at an election held for the purpose. 19-12 (b) The county judge of Denton County, Texas, shall call an 19-13 election if a petition to abolish LCMUA is presented to the county 19-14 judge, duly signed by a majority of the qualified voters residing 19-15 within the territory of LCMUA. Notice of the election shall be 19-16 published and posted in accordance with the Election Code. The 19-17 county judge shall appoint a presiding judge and as many clerks as 19-18 necessary to assist the election judge in holding the election. 19-19 The ballots shall contain the propositions: "For abolishment of 19-20 Lake Cities Municipal Utility Authority" and "Against abolishment 19-21 of Lake Cities Municipal Utility Authority." Only qualified voters 19-22 who reside within the territory of LCMUA may vote at the election. 19-23 (c) If a majority of the votes cast at the election favor 19-24 abolishing LCMUA, LCMUA is abolished. If, at the time of 19-25 abolition, LCMUA has outstanding bonds or other indebtedness 19-26 maturing beyond the year in which abolition occurs, the 19-27 Commissioners Court of Denton County, Texas, shall levy and cause 20-1 to be collected in the same manner that county taxes are assessed 20-2 and collected sufficient taxes on all taxable property within the 20-3 former territory of LCMUA to pay the principal of and interest on 20-4 those bonds and other indebtedness when due. 20-5 SECTION 22. PUBLIC PURPOSE. The accomplishment of the 20-6 purposes stated in this Act is for the benefit of the people of 20-7 this state and for the improvement of their properties and 20-8 industries, and LCMUA, in carrying out the purposes of this Act, 20-9 will be performing an essential public function under the 20-10 constitution. LCMUA is not required to pay any tax or assessment 20-11 on any project, operations, equipment, or personal or real property 20-12 or any part thereof, and the bonds issued hereunder and their 20-13 transfer and the income therefrom, including the profits made on 20-14 the sale thereof, shall at all times be free from taxation within 20-15 this state. 20-16 SECTION 23. TAX ASSESSOR-COLLECTOR. The Denton County tax 20-17 assessor-collector may be used as a tax assessor and collector and 20-18 Denton Central Appraisal District may be designated as a board of 20-19 equalization and cause taxes to be assessed, valuations to be 20-20 equalized, and tax rolls to be prepared. Absent cooperation with 20-21 Denton County and Denton Central Appraisal District, the board, 20-22 before the sale and delivery of LCMUA bonds payable wholly or 20-23 partially from ad valorem taxes, shall appoint a tax assessor and 20-24 collector and board of equalization and cause taxes to be assessed, 20-25 evaluations to be equalized, and tax rolls to be prepared. 20-26 SECTION 24. STATUTORY INTERPRETATION. Nothing in this Act 20-27 shall be interpreted as amending or repealing the statutes 21-1 regarding the priorities of the use of water or any statute 21-2 governing water control. 21-3 SECTION 25. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. 21-4 (a) The proper and legal notice of the intention to introduce this 21-5 Act, setting forth the general substance of this Act, has been 21-6 published as provided by law, and the notice and a copy of this Act 21-7 have been furnished to all persons, agencies, officials, or 21-8 entities to which they are required to be furnished by the 21-9 constitution and other laws of this state, including the governor, 21-10 who has submitted the notice and Act to the Texas Natural Resource 21-11 Conservation Commission. 21-12 (b) The Texas Natural Resource Conservation Commission has 21-13 filed its recommendations relating to this Act with the governor, 21-14 lieutenant governor, and speaker of the house of representatives 21-15 within the required time. 21-16 (c) All requirements of the constitution and laws of this 21-17 state and the rules and procedures of the legislature with respect 21-18 to the notice, introduction, and passage of this Act are fulfilled 21-19 and accomplished. 21-20 SECTION 26. TRANSITION: ELECTION OF DIRECTORS. (a) A 21-21 director who is serving on the effective date of this Act serves 21-22 until the director's successor is elected at the directors election 21-23 in 2000. 21-24 (b) The three directors who receive the largest number of 21-25 votes at the election in 2000 serve four-year terms beginning in 21-26 2000. The remaining two directors serve two-year terms beginning 21-27 in 2000. 22-1 (c) If there is a tie vote between candidates for positions 22-2 three, four, or five, the tie shall be settled between the tying 22-3 directors by agreement of those directors. In the absence of an 22-4 agreement, the tying directors shall settle the tie by drawing a 22-5 high card from a new sealed packaged deck of 52 playing cards. The 22-6 general manager of LCMUA shall shuffle the deck three times, name 22-7 the candidate for whom the drawing is made, and draw from the deck 22-8 with high card prevailing without reference to suit and with the 22-9 ace being high card. If drawing results in a tie, the manager 22-10 shall continue to draw after a reshuffle until there is no tie. 22-11 The high card wins the four-year term. 22-12 (d) In 2002, two directors shall be elected to serve 22-13 four-year terms. 22-14 (e) In 2004, three directors shall be elected to serve 22-15 four-year terms. 22-16 (f) The appropriate number of directors shall be elected for 22-17 four-year terms in each subsequent even-numbered year in accordance 22-18 with the Election Code and Chapter 49, Water Code. 22-19 SECTION 27. EMERGENCY. The importance of this legislation 22-20 and the crowded condition of the calendars in both houses create an 22-21 emergency and an imperative public necessity that the 22-22 constitutional rule requiring bills to be read on three several 22-23 days in each house be suspended, and this rule is hereby suspended, 22-24 and that this Act take effect and be in force from and after its 22-25 passage, and it is so enacted.