By Lindsay                                             S.B. No. 700
         76R333 JJT-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation, administration, powers, duties,
 1-3     operation, and financing of the North Harris County Regional Water
 1-4     Authority; granting the power of eminent domain and the authority
 1-5     to issue bonds and to impose taxes; providing a civil penalty.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7                       ARTICLE 1.  GENERAL PROVISIONS
 1-8           SECTION 1.01.  CREATION.  (a)  A conservation and reclamation
 1-9     district, to be known as the North Harris County Regional Water
1-10     Authority, is created in Harris County.  The district is a
1-11     governmental agency and a body politic and corporate.
1-12           (b)  The district is created under and is essential to
1-13     accomplish the purposes provided by Section 59, Article XVI, Texas
1-14     Constitution.
1-15           SECTION 1.02.  DEFINITIONS.  In this Act:
1-16                 (1)  "Board" means the board of directors of the
1-17     district.
1-18                 (2)  "Commission" means the Texas Natural Resource
1-19     Conservation Commission.
1-20                 (3)  "Director" means a member of the board.
1-21                 (4)  "District" means the North Harris County Regional
1-22     Water Authority.
1-23                 (5)  "Local government" means a municipality, county,
1-24     river authority, or water district or authority acting under
 2-1     Section 52, Article III, or Section 59, Article XVI, Texas
 2-2     Constitution.
 2-3                 (6)  "Person" has the meaning assigned by Section
 2-4     311.005, Government Code.
 2-5                 (7)  "Subsidence district" means the Harris-Galveston
 2-6     Coastal Subsidence District.
 2-7                 (8)  "System" means a network of pipelines, conduits,
 2-8     canals, pumping stations, force mains, treatment plants, and any
 2-9     other construction, device, or related appurtenance used to treat
2-10     or transport water.
2-11                 (9)  "Water" includes:
2-12                       (A)  groundwater, percolating or otherwise; and
2-13                       (B)  any surface water, natural or artificial,
2-14     navigable or nonnavigable.
2-15           SECTION 1.03.  DESCRIPTION OF BOUNDARIES.  (a)  Except as
2-16     provided by Subsections (b) and (c) of this section, the district
2-17     includes all the territory contained within the following area,
2-18     whether the territory contains noncontiguous parcels of land or
2-19     whether the territory is located within the boundaries of any other
2-20     governmental entity or political subdivision of the state:
2-21           BEGINNING at the intersection of the Harris and Waller County
2-22     line with the north right-of-way line of US Highway 290;
2-23           THENCE northwest along the Harris and Waller County line to
2-24     the intersection with Spring Creek;
2-25           THENCE continuing southeasterly along said Harris and Waller
2-26     County line, with the meanders of Spring Creek to the intersection
2-27     of the Waller and Montgomery County line;
 3-1           THENCE southeasterly along the Harris and Montgomery County
 3-2     line continuing with the meanders of said Spring Creek; to the
 3-3     intersection with the City of Houston, corporate limits;
 3-4           THENCE along said City of Houston corporate limits the
 3-5     following:  south approximately one half mile; east approximately
 3-6     one half mile to the City of Humble corporate limits; north along
 3-7     said City of Humble corporate limits approximately one half mile to
 3-8     aforementioned Spring Creek; east along Spring Creek to its
 3-9     confluence with the San Jacinto River to the intersection of US
3-10     Highway 59; easterly and southerly along the take line for Lake
3-11     Houston to the intersection with the southeasterly right-of-way of
3-12     the Union Pacific Railroad southwesterly along said Union Pacific
3-13     Railroad for approximately two miles; south to the north end of
3-14     Duessen Parkway; southeast along the east side of Duessen Parkway
3-15     and along the north side of the access road to the intersection
3-16     with North Lake Houston Parkway.
3-17           THENCE departing said City of Houston corporate limits, west
3-18     along the north side of said North Lake Houston Parkway to the
3-19     beginning of Mount Houston Road, and continuing west on Mount
3-20     Houston Road to the 6900 block to the intersection of Suburban;
3-21           THENCE south along Suburban to the City of Houston corporate
3-22     limits;
3-23           THENCE along said City of Houston corporate limits, the
3-24     following:  west to Hirsch Road; south along the west side of
3-25     Hirsch Road to Langley; west along the south side of Langley to the
3-26     southbound feeder road of US Highway 59; northeast along the west
3-27     side of the feeder road of US Highway 59 to Little York; west along
 4-1     the south side of Little York to Bentley; north along the east side
 4-2     of Bentley to Sagebrush; west along the north side of Sagebrush to
 4-3     Halls Bayou; south along Halls Bayou to Little York; west along the
 4-4     south side of Little York to Aldine Westfield Road; north along the
 4-5     east sides of Aldine Westfield Road to its intersection with the
 4-6     easterly extension of the City of Houston corporate limits; west to
 4-7     the Hardy Toll Road; north along the Hardy Toll Road approximately
 4-8     0.25 mile, east approximately 0.35 mile, north approximately 0.15
 4-9     mile, west approximately 0.35 mile; northwest along the Hardy Toll
4-10     Road approximately 1 mile; southwesterly along an irregular path
4-11     generally west to Carby; west along Carby to Airline Dr.; south
4-12     along Airline Dr. to Canino; west along Canino to Sweetwater; north
4-13     along Sweetwater to West Road; west to Interstate 45/US 75; south
4-14     along Interstate 45/US 75 to south of Bluebell Rd.; southerly along
4-15     an irregular path generally south and west to West Mount Houston
4-16     Rd.; west along Mount Houston Road to a line east of Ella
4-17     Boulevard; south along a line generally parallel to Ella Blvd. to
4-18     south of W. Gulf Bank; west along the south side of W. Gulf Bank to
4-19     Tomball Parkway; northwest along Tomball Parkway approximately 1.5
4-20     miles; west along an irregular path to N.  Houston-Rosslyn Rd.;
4-21     north along N. Houston-Rosslyn Rd. to Vogel Creek; west along Vogel
4-22     Creek to the FWD CRIP RR; south along the FWD CRIP RR to Logview;
4-23     west along Logview to Hollister; south along Hollister to White Oak
4-24     Bayou; east along White Oak Bayou to Twisting Vine; south along
4-25     Twisting Vine to West Little York, west along West Little York to
4-26     Fairbanks N. Houston; south along Fairbanks N. Houston to Cole
4-27     Creek; west along Cole Creek to Hempstead Highway; northwest along
 5-1     Hempstead Highway to West Sam Houston Parkway North.
 5-2           THENCE departing said City of Houston corporate limits and
 5-3     continuing northwest along Hempstead Highway to US 290 at Spencer
 5-4     Road;
 5-5           THENCE northwest along US 290 to the intersection of the
 5-6     Harris and Waller County line, the POINT OF BEGINNING.
 5-7           (b)  The district does not include any area inside the
 5-8     municipal limits of the city of Houston on the effective date of
 5-9     this Act.
5-10           (c)  On annexation of any part of the territory of the
5-11     district by a municipality or incorporation by a municipality of
5-12     any part of the territory of the district, the municipality shall
5-13     assume a pro rata share of all debt of the district payable in
5-14     whole or in part by ad valorem taxes.  The percentage of the
5-15     assumption shall be determined by multiplying the total debt of the
5-16     district payable in whole or in part from taxes by a fraction, the
5-17     numerator of which is the assessed value of the property to be
5-18     annexed or incorporated based on the most recent certified county
5-19     property tax rolls at the time of annexation or incorporation and
5-20     the denominator of which is the total assessed value of the
5-21     property of the district based on the most recent certified county
5-22     property tax rolls at the time of annexation or incorporation.
5-23     After annexation by a municipality of a portion of the territory of
5-24     the district or incorporation over any part of the territory of the
5-25     district, the territory is no longer considered a part of the
5-26     district for any purpose and the district may not impose taxes on
5-27     that territory.
 6-1           SECTION 1.04.  EXCLUSION OF CERTAIN TERRITORY.  (a)  The
 6-2     governing body of a political subdivision within the territory
 6-3     described by Section 1.03 of this Act may request the subsidence
 6-4     district to certify that water systems serving the political
 6-5     subdivision are in compliance with the subsidence district's rules.
 6-6     The subsidence district shall issue a letter granting or denying
 6-7     certification not later than the 30th day after the date the
 6-8     subsidence district receives the request for certification.
 6-9           (b)  The governing body of a political subdivision whose
6-10     water systems the subsidence district has certified under
6-11     Subsection (a) of this section by order may exclude from the
6-12     district the area inside the subdivision's territorial limits.
6-13           (c)  An order issued under Subsection (b) of this section
6-14     must include an accurate description of the boundaries of the
6-15     excluded territory.
6-16           (d)  The governing body of the political subdivision shall
6-17     file a copy of the order in the office of the county clerk of
6-18     Harris County and present a copy of the order to the board.  On
6-19     receipt of the copy of the order, the board shall file with the
6-20     office of the county clerk of  Harris County a description of the
6-21     district's boundaries after the territory is excluded.  The  county
6-22     clerk shall record the order and the description of the district's
6-23     boundaries in the county records.  Immediately after the order and
6-24     description are recorded, the excluded territory is no longer a
6-25     part of the district.
6-26           (e)  The exclusion of territory under this section does not
6-27     diminish or impair the rights of the holders of any outstanding and
 7-1     unpaid bond or note of the district.  The district shall continue
 7-2     to impose taxes each year on the excluded territory at the same
 7-3     rate imposed on other territory in the district and charge fees in
 7-4     the excluded territory to the extent the tax or fee revenue is
 7-5     pledged to pay an outstanding bond or note of the district.  The
 7-6     district shall apply taxes and fees collected under this subsection
 7-7     only to the payment of the excluded territory's pro rata share of
 7-8     the district's indebtedness at the time the territory was excluded.
 7-9     At any time, the owner of all or part of the excluded territory may
7-10     pay in full the owner's share of the excluded territory's pro rata
7-11     share of the district's indebtedness and receive a corresponding
7-12     credit from the district.
7-13           SECTION 1.05.  APPLICABILITY OF OTHER LAW.  This Act prevails
7-14     over any inconsistent provision of general law.
7-15           SECTION 1.06.  FINDING OF BENEFIT.  All the land and other
7-16     property included within the boundaries of the district will be
7-17     benefited by the works and projects that are to be accomplished by
7-18     the district under powers conveyed by this Act.  The district is
7-19     created to serve a public use and benefit.
7-20                            ARTICLE 2.  DIRECTORS
7-21           SECTION 2.01.  BOARD OF DIRECTORS.  (a)  The district is
7-22     governed by a board of nine directors.
7-23           (b)  A vacancy in the office of director shall be filled by
7-24     appointment of the board until the next election for directors.  If
7-25     the position is not scheduled to be filled at the election, the
7-26     person elected to fill the position shall serve only for the
7-27     remainder of the unexpired term.
 8-1           (c)  To be eligible to serve as director, a person must be a
 8-2     qualified voter in the voting district from which the person is
 8-3     elected or appointed if representing a voting district or in the
 8-4     district if representing the district at large.
 8-5           SECTION 2.02.  METHOD OF ELECTION OF DIRECTORS.  (a)  One
 8-6     director shall be elected from each of nine single-member voting
 8-7     districts by the qualified voters of the voting district.
 8-8           (b)  A person shall indicate on the person's application for
 8-9     a place on the ballot the voting district that the person seeks to
8-10     represent.
8-11           (c)  In the manner described by Section 49.103(d), Water
8-12     Code, the board shall redraw the single-member voting districts as
8-13     soon as practicable after:
8-14                 (1)  each federal decennial census; and
8-15                 (2)  any change in the district's boundaries.
8-16           (d)  At the first election after each time the voting
8-17     districts are redrawn:
8-18                 (1)  nine new directors shall be elected to represent
8-19     the single-member voting districts; and
8-20                 (2)  the directors elected shall draw lots to determine
8-21     their terms so that:
8-22                       (A)  four directors serve two-year terms; and
8-23                       (B)  five directors serve four-year terms.
8-24           (e)  Subchapter C, Chapter 146, Election Code, applies to the
8-25     consideration of votes for a write-in candidate for initial
8-26     permanent director or permanent director as if the district were a
8-27     municipality.
 9-1           SECTION 2.03.  SERVICE OF DIRECTORS.  (a)  Temporary
 9-2     directors serve until the initial permanent directors are elected
 9-3     under Section 2.05 of this Act.
 9-4           (b)  The initial permanent directors serve until permanent
 9-5     directors are elected under Section 2.06 of this Act.
 9-6           (c)  Permanent directors serve staggered four-year terms.
 9-7           (d)  A director serves until the director's successor has
 9-8     qualified.
 9-9           SECTION 2.04.  TEMPORARY DIRECTORS.  (a)  The temporary board
9-10     of directors is composed of three individuals appointed by the
9-11     commission.
9-12           (b)  If a temporary director fails to qualify for office, the
9-13     temporary directors who have qualified shall appoint a person to
9-14     fill the vacancy.  If at any time there are fewer than two
9-15     qualified temporary directors, or if the temporary directors cannot
9-16     agree on the appointment, the commission shall appoint the
9-17     necessary number of persons to fill all vacancies on the board.
9-18           (c)  A temporary director is not eligible to be elected under
9-19     Section 2.05 of this Act.
9-20           SECTION 2.05.  INITIAL PERMANENT DIRECTORS.  (a)  The
9-21     temporary board of directors shall:
9-22                 (1)  establish nine single-member voting districts in
9-23     the manner described by Section 49.103(d), Water Code; and
9-24                 (2)  on the third Saturday in January, 2000, hold an
9-25     election to elect nine initial permanent directors.
9-26           (b)  A person who desires to be a candidate for the office of
9-27     initial permanent director may file an application with the
 10-1    temporary board to have the candidate's name printed on the ballot.
 10-2          (c)  For the initial permanent directors' election, the
 10-3    temporary board of directors shall have placed on the ballot:
 10-4                (1)  the name of each candidate filing for the office
 10-5    of director; and
 10-6                (2)  blank spaces to write in the names of other
 10-7    persons.
 10-8          (d)  As soon as practicable after the initial permanent
 10-9    directors have qualified, the directors shall draw lots to
10-10    determine their terms so that:
10-11                (1)  four directors serve terms that expire when
10-12    permanent directors are elected at the first election held under
10-13    Section 2.06 of this Act; and
10-14                (2)  five directors serve terms that expire when
10-15    permanent directors are elected at the second election held under
10-16    Section 2.06 of this Act.
10-17          (e)  Section 41.001(a), Election Code, does not apply to the
10-18    initial permanent directors' election held under this section.
10-19          SECTION 2.06.  ELECTION DATES.  On the third Saturday in
10-20    January in each subsequent even-numbered year, the appropriate
10-21    number of directors shall be elected to the board.
10-22          SECTION 2.07.  COST OF ELECTION OF INITIAL PERMANENT
10-23    DIRECTORS.  The temporary board of the district and the board of
10-24    directors of the subsidence district shall execute an agreement by
10-25    which:
10-26                (1)  the subsidence district shall pay the costs of the
10-27    election under Section 2.05 of this Act; and
 11-1                (2)  the district shall repay the subsidence district
 11-2    for those costs.
 11-3                   ARTICLE 3. ADMINISTRATIVE PROVISIONS
 11-4          SECTION 3.01.  MEETINGS AND ACTIONS OF BOARD.  The board
 11-5    shall meet at least four times each year and may meet at any other
 11-6    time considered appropriate.
 11-7          SECTION 3.02.  EMPLOYEE BONDS.  (a)  Each employee or
 11-8    contractor of the district who is charged with the collection,
 11-9    custody, or payment of any money of the district shall execute a
11-10    fidelity bond in an amount determined by the board and in a form
11-11    and with a surety approved by the board.
11-12          (b)  The district shall pay the premiums on any bonds
11-13    required under this section.
11-14                       ARTICLE 4.  POWERS AND DUTIES
11-15          SECTION 4.01.  GENERAL POWERS AND DUTIES.  (a)  The district
11-16    may exercise all of the rights, powers, privileges, authority,
11-17    functions, and duties necessary and convenient to accomplish the
11-18    purposes of this Act, including those provided by Chapters 36 and
11-19    49, Water Code, except the following provisions of Chapter 36,
11-20    Water Code:
11-21                (1)  Section 36.101;
11-22                (2)  Section 36.116; and
11-23                (3)  Section 36.205(c)(2).
11-24          (b)  The district may not take any action under Section
11-25    36.113(e), Water Code, related to the control or prevention of
11-26    subsidence.
11-27          (c)  The district may:
 12-1                (1)  provide for the conservation, preservation,
 12-2    protection, recharge, and prevention of waste of groundwater,
 12-3    groundwater reservoirs, or subdivisions of groundwater reservoirs
 12-4    in a manner consistent with the purposes of Section 59, Article
 12-5    XVI, Texas Constitution;
 12-6                (2)  provide for a water treatment or water supply
 12-7    system to end subsidence in a manner consistent with Chapter 151,
 12-8    Water Code;
 12-9                (3)  administer and enforce the provisions of this Act;
12-10                (4)  coordinate water services provided inside of,
12-11    outside of, or into the district;
12-12                (5)  contract for production, treatment, or supply of
12-13    water inside or outside of the district; and
12-14                (6)  enter into interlocal contracts under Chapter 791,
12-15    Government Code.
12-16          (d)  The district shall consult with the subsidence district
12-17    on any matter involving subsidence inside of the district's
12-18    boundaries.
12-19          (e)  The rights, powers, privileges, authority, functions,
12-20    and duties of the district are subject to the continuing right of
12-21    supervision of the state to be as exercised by and through the
12-22    commission.
12-23          SECTION 4.02.  DISTRICT RULES.  (a)  The district shall adopt
12-24    and enforce rules reasonably required to implement this Act,
12-25    including rules governing procedure and practice before the board.
12-26          (b)  The district shall print its rules and furnish copies of
12-27    the rules to any person on written request.
 13-1          SECTION 4.03.  FEES AND CHARGES.  (a)  The district may
 13-2    establish fees and charges necessary to enable the district to
 13-3    fulfill the district's obligations under this Act.
 13-4          (b)  The district may establish fees to recover capital
 13-5    expenditures as provided by Chapter 395, Local Government Code.
 13-6          SECTION 4.04.  INSPECTIONS AND INVESTIGATIONS.  The district
 13-7    may enter public or private property in the district to inspect or
 13-8    investigate conditions relating to the district's authorized
 13-9    purposes under the same provisions and restrictions applicable to
13-10    the commission under general law.
13-11          SECTION 4.05.  HEARING AND ORDER.  (a)  The board may:
13-12                (1)  hold hearings, receive evidence from a party in
13-13    interest who appears before the board, compel the attendance of
13-14    witnesses, and make findings of fact and determinations with
13-15    respect to administering this Act or any order or rule of the
13-16    district; and
13-17                (2)  delegate to one or more of its members or
13-18    employees the authority to take testimony and administer oaths in a
13-19    hearing held or authorized to be held by the district.
13-20          (b)  An order of the board must be:
13-21                (1)  in the district's name; and
13-22                (2)  attested by proper members of the board under the
13-23    district's rules.
13-24          SECTION 4.06.  CIVIL PENALTY; INJUNCTION.  (a)  A person who
13-25    violates a rule, permit, or order of the district is subject to a
13-26    civil penalty of not less than $50 and not more than $5,000 for
13-27    each violation or each day of a continuing violation.
 14-1          (b)  The district may sue to recover the penalty in a
 14-2    district court in the county where the violation occurred.  The
 14-3    penalty shall be paid to the district.
 14-4          (c)  The district may sue for injunctive relief in a district
 14-5    court in the county where a violation of a district rule, permit,
 14-6    or order occurs or is threatened to occur.  The court may grant to
 14-7    the district, without bond or other undertaking, a prohibitory or
 14-8    mandatory injunction that the facts warrant, including a temporary
 14-9    restraining order, temporary injunction, or permanent injunction.
14-10          (d)  The district may sue for a civil penalty and injunctive
14-11    relief in the same proceeding.
14-12          SECTION 4.07.  JUDICIAL REVIEW.  (a)  A rule, order, or other
14-13    official action of the district under this chapter may be appealed
14-14    to a district court in Harris County by any adversely affected
14-15    person.  An appeal must be filed not later than the 45th day after
14-16    the date the rule is adopted, order is issued, or other action
14-17    takes effect.
14-18          (b)  On written request of a person who resides or owns real
14-19    property in the district, the board shall make written findings of
14-20    fact and conclusions of law regarding a rule, order, or other
14-21    action of the district and provide a certified copy of the findings
14-22    and conclusions to the person not later than the 35th day after the
14-23    date the district receives the request.
14-24          (c)  The review on appeal is under the substantial evidence
14-25    rule as described by Section 2001.174, Government Code.
14-26          SECTION 4.08.  WATER SUPPLY PLANS.  The district by rule
14-27    shall, as needed but not less frequently than every five years,
 15-1    develop, prepare, revise, and adopt comprehensive water supply
 15-2    plans for various areas of the district.  The plans:
 15-3                (1)  must be consistent with standards adopted by the
 15-4    commission;
 15-5                (2)  must be consistent with regional planning; and
 15-6                (3)  shall include 10-year, 20-year, and 50-year
 15-7    projections of water needs within the district.
 15-8          SECTION 4.09.  ACQUISITION, CONSTRUCTION, AND OPERATION OF
 15-9    SYSTEMS.  The district may:
15-10                (1)  acquire and provide by purchase, gift, or lease a
15-11    water treatment or supply system inside or outside of the district
15-12    boundaries;
15-13                (2)  design, finance, or construct a water treatment or
15-14    supply system and provide wholesale water services inside or
15-15    outside of the district boundaries;
15-16                (3)  operate, lease,  or sell a water treatment or
15-17    supply system the district constructs or acquires; and
15-18                (4)  contract with any person to operate or maintain a
15-19    water treatment or supply system the person owns.
15-20          SECTION 4.10.  SYSTEM CONTRACTS.  (a)  The district may
15-21    contract to receive, treat, and supply water to or from any person
15-22    inside or outside the district.
15-23          (b)  In a contract under this section, the district shall set
15-24    fees according to:
15-25                (1)  the quality and quantity of the water;
15-26                (2)  the difficulty in treating the water;
15-27                (3)  operation and maintenance expenses and debt
 16-1    retirement service costs; and
 16-2                (4)  any other reasonable consideration.
 16-3          SECTION 4.11.  SALE OR REUSE OF WATER OR BY-PRODUCT.  The
 16-4    district may store, sell, or reuse:
 16-5                (1)  water; or
 16-6                (2)  any by-product from the district's operation.
 16-7          SECTION 4.12.  EMINENT DOMAIN.  The district may exercise the
 16-8    power of eminent domain under Chapter 21, Property Code, to acquire
 16-9    property of any kind to further authorized district purposes. The
16-10    district is not required to deposit a bond under Section 21.021(a),
16-11    Property Code.
16-12          SECTION 4.13.  CONTRACTS.  (a)  The district may enter into a
16-13    contract with any person or legal entity regarding the performance
16-14    of any purpose or function of the district, including a contract to
16-15    jointly construct, finance, own, or operate works, improvements,
16-16    facilities, plants, equipment, or appliances necessary to
16-17    accomplish a purpose or function of the district. A contract may be
16-18    of unlimited duration.
16-19          (b)  The district may purchase an interest in a project used
16-20    for a purpose or function of the district.
16-21          (c)  The district may contract for:
16-22                (1)  the purchase or sale of water;
16-23                (2)  the performance of activities within the authority
16-24    of the district to promote the continuing and orderly development
16-25    of land and property in the district through the purchase,
16-26    construction, or installation of works, improvements, facilities,
16-27    plants, equipment, or appliances so that, to the greatest extent
 17-1    possible considering sound engineering practices and economic
 17-2    feasibility, all of the land and property in the district may
 17-3    receive services of the works, improvements, facilities, plants,
 17-4    equipment, or appliances of the district; or
 17-5                (3)  the conservation, ownership, maintenance, or
 17-6    operation of any works, improvements, facilities, plants,
 17-7    equipment, or appliances of the district or another person or legal
 17-8    entity.
 17-9          (d)  The district may purchase surplus property from this
17-10    state, the United States, or another public entity through a
17-11    negotiated contract without bids.
17-12          (e)  An officer, agent, or employee of the district who is
17-13    financially interested in a contract of the type described in
17-14    Subsection (d) of this section shall disclose the interest to the
17-15    board before the board votes on the acceptance of the contract.
17-16          (f)  Notwithstanding any provision of a municipality's
17-17    charter, a contract between the district and the municipality is
17-18    not required to be submitted to the municipality's electorate.
17-19          SECTION 4.14.  GIFTS AND GRANTS.  The district may accept and
17-20    use a gift or grant from the subsidence district from money
17-21    collected by the subsidence district under Chapter 36, Water Code,
17-22    to fund a water treatment or supply system in the district.
17-23                  ARTICLE 5.  NOTES, BONDS, AND TAXATION
17-24          SECTION 5.01.  REVENUE NOTES.  (a)  The board, without an
17-25    election, may borrow money on negotiable notes of the district to
17-26    be paid solely from the revenue derived from any source other than
17-27    ad valorem taxes, including:
 18-1                (1)  tolls, charges, and fees the district imposes;
 18-2                (2)  the sale of water, water or sewer services, or any
 18-3    other service or product of the district;
 18-4                (3)  grants or gifts;
 18-5                (4)  the ownership and operation of all or a designated
 18-6    part of the district's works, plants, improvements, facilities, or
 18-7    equipment; and
 18-8                (5)  contracts between the district and any person,
 18-9    including a local government.
18-10          (b)  The notes may be first or subordinate lien notes at the
18-11    board's discretion.  An obligation may not be a charge on the
18-12    property of the district or on taxes imposed by the district.  An
18-13    obligation may only be a charge on revenue pledged for the payment
18-14    of the obligation.  A tax imposed by the district may not be used
18-15    to pay any part of the obligation.
18-16          SECTION 5.02.  BONDS.  (a)  To carry out a power or authority
18-17    conferred by this Act, the district may issue bonds secured by a
18-18    pledge of ad valorem taxes or of all or part of the revenue derived
18-19    from any source other than ad valorem taxes, including any source
18-20    described by Section 5.01(a) of this Act.
18-21          (b)  In issuing or securing a bond or note of the district,
18-22    the district may exercise any power of an issuer under Chapter 656,
18-23    Acts of the 68th Legislature, Regular Session, 1983 (Article 717q,
18-24    Vernon's Texas Civil Statutes).
18-25          (c)  The district may conduct a public, private, or
18-26    negotiated sale of the bonds.
18-27          (d)  Bonds secured in whole or in part by taxes may not be
 19-1    issued until authorized at an election called and held in
 19-2    compliance with Section 36.180, Water Code.
 19-3          (e)  The district's bonds must:
 19-4                (1)  be authorized by board resolution;
 19-5                (2)  be issued in the district's name;
 19-6                (3)  be signed by the president or vice president of
 19-7    the board, which may be accomplished by facsimile signature;
 19-8                (4)  be attested by the secretary of the board, which
 19-9    may be accomplished by facsimile signature; and
19-10                (5)  bear the district's seal or a facsimile seal.
19-11          (f)  A district bond may be secured by an indenture of trust
19-12    with a corporate trustee.
19-13          (g)  The district may issue bonds in more than one series as
19-14    required for carrying out the purposes of this Act.  The district
19-15    may, in issuing bonds secured by the district's ad valorem taxes or
19-16    by revenue, reserve the right to issue additional bonds secured by
19-17    the district's ad valorem taxes or by revenue that are on a parity
19-18    with or are senior or subordinate to the bonds issued earlier.
19-19          (h)  The resolution authorizing the bonds or the trust
19-20    indenture securing the bonds may specify additional provisions that
19-21    constitute a contract between the district and its bondholders.
19-22    The board may provide:
19-23                (1)  for additional bond provisions; and
19-24                (2)  for a corporate trustee or receiver to take
19-25    possession of the district's facilities if the district defaults.
19-26          (i)  Sections 36.171 and 49.181, Water Code, do not apply to
19-27    bonds or notes issued by the district.
 20-1          SECTION 5.03.  REFUNDING BONDS.  The provisions of this Act
 20-2    that apply to the district's issuance of other bonds, their
 20-3    security, and the remedies of the holders apply to refunding bonds.
 20-4          SECTION 5.04.  APPROVAL AND REGISTRATION OF BONDS.  After the
 20-5    district authorizes bonds, the district shall submit the bonds and
 20-6    the record relating to their issuance to the attorney general for
 20-7    approval.  If the bonds are secured by a pledge of the proceeds of
 20-8    a contract between the district and a municipality or other
 20-9    governmental agency, authority, or district, the district shall
20-10    submit to the attorney general a copy of the contract and the
20-11    proceedings of the municipality or other governmental agency,
20-12    authority, or district authorizing the contract.  If the attorney
20-13    general finds that the bonds have been authorized and each contract
20-14    has been made in accordance with the constitution and laws of this
20-15    state, the attorney general shall approve the bonds and contracts.
20-16    On approval, the bonds shall be registered by the comptroller.
20-17          SECTION 5.05.  FUNDING BY OTHER CONSERVATION AND RECLAMATION
20-18    DISTRICTS.  (a)  The district shall develop a procedure for
20-19    cooperatively funding a district project with money from other
20-20    conservation and reclamation districts inside of the district's
20-21    boundaries if the district project fulfills a governmental purpose
20-22    of both districts.
20-23          (b)  Not later than the 90th day before the date the district
20-24    issues  bonds, other than refunding bonds, to finance a project,
20-25    the district shall provide written notice of the district's
20-26    intention to issue the bonds to each conservation and reclamation
20-27    district inside of the district's boundaries that may be benefited
 21-1    or affected by the project.  The notice must include the value of
 21-2    the bonds planned to be issued, a description of the project the
 21-3    bonds would finance, and a schedule of the portion of the project
 21-4    costs financed by the bonds that may be allocated to each
 21-5    conservation and reclamation district benefited or affected.  The
 21-6    schedule must be prepared by means of a formula certified by the
 21-7    district engineer.
 21-8          (c)  A conservation or reclamation district may enter into a
 21-9    contract with the district for the conservation and reclamation
21-10    district to finance a portion of the proposed project with the
21-11    conservation and reclamation district's resources instead of using
21-12    proceeds from district bonds for that purpose.  The contract must
21-13    be executed before the district issues the bonds.  If a contract is
21-14    executed under this section, the project may not be financed in any
21-15    part with bonds payable with revenue derived from ad valorem taxes.
21-16    As provided in the contract, the district must:
21-17                (1)  reduce the value of the bond issuance to the
21-18    degree that the conservation and reclamation district provides
21-19    project funding; and
21-20                (2)  credit the conservation and reclamation district
21-21    for its contribution to the project financing and adjust the
21-22    allocation of revenue pledged to the payment of the bonds so that
21-23    revenue from the conservation and reclamation district is not used
21-24    to service the bond debt or interest to a degree commensurate with
21-25    the contribution.
21-26              ARTICLE 6.  COMPETITIVE PROPOSALS AND CONTRACTS
21-27          SECTION 6.01.  PROPOSALS FOR CONTRACTS AND SERVICES
 22-1    GENERALLY.  The board is not required to solicit proposals for
 22-2    contracts or services but may solicit proposals to further the
 22-3    interests of the district.  If the board elects to solicit
 22-4    proposals, the board shall make the solicitation in accordance with
 22-5    Subchapter B, Chapter 271, Local Government Code, except as
 22-6    provided by this article.
 22-7          SECTION 6.02.  REQUESTS FOR PROPOSAL; NOTICE.  The district
 22-8    must solicit quotations through a request for proposal.  Public
 22-9    notice of the request for proposal:
22-10                (1)  must include at least a general description of the
22-11    service or item to be purchased or constructed; and
22-12                (2)  may request the submission of unpriced proposals.
22-13          SECTION 6.03.  OPENING PROPOSALS AND PRICED BIDS.  The board
22-14    or a person the board appoints shall open the proposals and solicit
22-15    priced bids from the persons whose proposals qualify under the
22-16    criteria stated in the solicitation for proposals.  The
22-17    solicitation for priced bids must be mailed not later than the
22-18    seventh day after the date the proposals are opened.
22-19          SECTION 6.04.  CONSIDERATION OF PRICED BIDS; AWARD.  (a)  The
22-20    board shall consider the priced bids in open session not later than
22-21    the 30th day after the date the proposals are opened under Section
22-22    6.03 of this Act.
22-23          (b)  The board shall award the contract to the responsible
22-24    offeror whose bid is the lowest evaluated offer that results from
22-25    negotiation.
22-26          SECTION 6.05.  PUBLIC INSPECTION OF BIDS AND PROPOSALS.  The
22-27    board shall make all proposals and bids available for public
 23-1    inspection after the board awards the contract.
 23-2          SECTION 6.06.  NEGOTIATION WITH BIDDERS.  (a)  In the manner
 23-3    provided by the request for proposals and rules of the district,
 23-4    the board may conduct discussions with a responsible offeror who
 23-5    has submitted a priced bid that the board considers reasonably
 23-6    likely to be selected for an award of the contract.
 23-7          (b)  The board shall give offerors fair and equal treatment
 23-8    regarding opportunities for discussion and revisions of proposals.
 23-9          (c)  To obtain best and final offers, the board may allow
23-10    revisions of proposals or bids submitted under this article before
23-11    the contract is awarded.
23-12          SECTION 6.07.  CONTRACT MODIFICATION.  (a)  At any time after
23-13    a contract is awarded under this article and before the contract is
23-14    executed, the board or a person the board appoints to make
23-15    purchases or act on the board's behalf may negotiate a modified
23-16    contract if the modification:
23-17                (1)  is in the best interest of the district; and
23-18                (2)  does not:
23-19                      (A)  substantially change the scope of the
23-20    contract; or
23-21                      (B)  cause a contract amount to exceed the amount
23-22    of the next lowest bid the board received.
23-23          (b)  A modified contract may not take effect without the
23-24    approval of the board.
23-25          SECTION 6.08.  CHANGE OF CONTRACT AMOUNT.  (a)  Except as
23-26    provided by Subsection (b) of this section, the board may grant an
23-27    employee of the district general authority to approve a change
 24-1    order that involves an increase or decrease in contract costs of
 24-2    $50,000 or less.
 24-3          (b)  The board or employee may not approve a change order
 24-4    that would increase the contract price to an amount greater than
 24-5    125 percent of the original contract price unless the change order
 24-6    is necessary to comply with a federal or state statute, rule,
 24-7    regulation, or administrative order, or with a judicial decision or
 24-8    order, that was enacted, adopted, rendered, or issued after the
 24-9    date the contract was executed.
24-10          (c)  The board or employee may not approve a change order
24-11    that would decrease the contract price to an amount less than 82
24-12    percent of the original contract price without the consent of the
24-13    contractor.
24-14          SECTION 6.09.  BID BOND.  (a)  The board may include in the
24-15    request for proposals or bid specifications a requirement that the
24-16    bidder provide a good and sufficient bid bond in the amount of five
24-17    percent of the total contract price if:
24-18                (1)  the contract price exceeds $100,000; or
24-19                (2)  the contract is for the construction of a public
24-20    work.
24-21          (b)  A bid bond required under this section must be executed
24-22    with a surety company authorized to do business in this state.
24-23          SECTION 6.10.  PERFORMANCE BOND.  (a)  The board may require
24-24    an offeror of a proposal or a bidder to provide a performance bond
24-25    to the district for the full amount of the contract if the contract
24-26    price exceeds $50,000.  The bond must be provided before the
24-27    contract work begins and not later than the 30th day after the
 25-1    date:
 25-2                (1)  the contract is executed; or
 25-3                (2)  a purchase order is issued.
 25-4          (b)  This section does not apply to a contract for which
 25-5    Subchapter B, Chapter 2253, Government Code, requires a performance
 25-6    bond.
 25-7                   ARTICLE 7.  MISCELLANEOUS PROVISIONS
 25-8          SECTION 7.01.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
 25-9    (a)  The proper and legal notice of the intention to introduce this
25-10    Act, setting out the general substance of this Act, has been
25-11    published as provided by law, and the notice and a copy of this Act
25-12    have been furnished to all persons, agencies, officials, or
25-13    entities to which they are required to be furnished by the
25-14    constitution and other laws of this state, including the governor,
25-15    who has submitted the notice and the Act to the commission.
25-16          (b)  The commission has filed its recommendations relating to
25-17    this Act with the governor, lieutenant governor, and speaker of the
25-18    house of representatives within the required time.
25-19          (c)  All requirements of the constitution and laws of this
25-20    state and of the rules and procedures of the legislature with
25-21    respect to the notice, introduction, and passage of this Act are
25-22    fulfilled and accomplished.
25-23          SECTION 7.02.  EMERGENCY.  The importance of this legislation
25-24    and the crowded condition of the calendars in both houses create an
25-25    emergency and an imperative public necessity that the
25-26    constitutional rule requiring bills to be read on three several
25-27    days in each house be suspended, and this rule is hereby suspended,
 26-1    and that this Act take effect and be in force from and after its
 26-2    passage, and it is so enacted.