By McReynolds                                         H.B. No. 2571
         77R3528 QS-F                           
                                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 Angelina County Water Control and
 1-4     Improvement District No. 4; authorizing the imposition of taxes and
 1-5     the issuance of bonds and granting the power of eminent domain;
 1-6     providing a civil penalty.
 1-8                       ARTICLE 1.  GENERAL PROVISIONS
 1-9           SECTION 1.01.  CREATION. (a)  A conservation and reclamation
1-10     district, to be known as the Angelina County Water Control and
1-11     Improvement District No. 4, is created in Angelina County, subject
1-12     to approval at a confirmation election under Section 2.03 of this
1-13     Act. The district is a governmental agency and a body politic and
1-14     corporate.
1-15           (b)  The district is created under and is essential to
1-16     accomplish the purposes of Section 59, Article XVI, Texas
1-17     Constitution.
1-18           SECTION 1.02.  DEFINITIONS. In this Act:
1-19                 (1)  "Board" means the board of directors of the
1-20     district.
1-21                 (2)  "Commission" means the Texas Natural Resource
1-22     Conservation Commission.
1-23                 (3)  "Director" means a member of the board.
1-24                 (4)  "Disposal system" means any system for disposing
 2-1     of waste, including a sewer system, drainage system, or treatment
 2-2     facility.
 2-3                 (5)  "District" means the Angelina County Water Control
 2-4     and Improvement District No. 4.
 2-5                 (6)  "Local government" means a municipality, county,
 2-6     river authority, or water district or authority acting under
 2-7     Section 52, Article III, or Section 59, Article XVI, Texas
 2-8     Constitution.
 2-9                 (7)  "Person" has the meaning assigned by Section
2-10     311.005, Government Code.
2-11                 (8)  "Pollution" has the meaning assigned by Section
2-12     26.001, Water Code.
2-13                 (9)  "System" means a network of pipelines, conduits,
2-14     canals, pumping stations, force mains, and all other constructions,
2-15     devices, and related appliances used to transport water or waste.
2-16                 (10)  "Treatment facility" means a plant, disposal
2-17     field, lagoon, incinerator, sanitary landfill, or other facility
2-18     installed for the purpose of treating, neutralizing, or stabilizing
2-19     waste.
2-20                 (11)  "Waste" means waterborne liquid, gaseous, or
2-21     solid substances that result from a discharge from a treatment
2-22     facility or disposal system.
2-23                 (12)  "Water" means groundwater, percolating or
2-24     otherwise, and a lake, pond, impounding reservoir, spring, river,
2-25     stream, creek, canal, or any other surface water, natural or
2-26     artificial, navigable or nonnavigable, that is wholly or partially
2-27     in the district.
 3-1           SECTION 1.03.  BOUNDARIES. The boundaries of the district are
 3-2     as follows:
 3-3           BEING all that certain tract or parcel of land lying and
 3-4           situated in Angelina County, Texas, out of the D. LEONE
 3-6           NO. 39 and being described as follows, to-wit:
 3-7           BEGINNING at the Northeast corner of WILDWOOD ADDITION, a
 3-8           subdivision of record in Cabinet A on Slide 140-B of the Map
 3-9           and Plat Records of Angelina County, Texas, and the Northeast
3-10           corner of that certain 17 acre tract described in a deed from
3-11           Bess M. Auld, et al to Arthur M. White, et ux dated January
3-12           3, 1972 and recorded in Volume 384 on Page 71 of the Deed
3-13           Records of Angelina County, Texas, a point for corner in the
3-14           South boundary line of that certain 671.4 acre tract
3-15           described in a deed from Charles M. Raguet to Southern Pine
3-16           Lumber Company dated March 22, 1900 and Recorded in Volume 3
3-17           on Page 428 of the Deed Records of Angelina County, Texas;
3-18           THENCE Westerly with the North boundary line of the said
3-19           WILDWOOD ADDITION, the North boundary line of the said 17
3-20           acre tract, the North boundary line of that certain 54.8 acre
3-21           tract described in a contract of sale and purchase from the
3-22           Veterans' Land Board of Texas to Arthur M. White dated
3-23           February 16, 1950 and recorded in Volume 149 on Page 43 of
3-24           the Deed Records of Angelina County, Texas, and with the
3-25           South boundary line of the said 671.4 acre tract, continuing
3-26           to the Southeast corner of the proposed W.W.T.P. site (to be
3-27           conveyed by Temple-Inland Forest Products Corporation), a
 4-1           point for corner;
 4-2           THENCE Northerly with the East boundary line of the said
 4-3           proposed W.W.T.P. site, continuing to the Northeast corner of
 4-4           the said proposed W.W.T.P. site, a point for corner;
 4-5           THENCE Westerly with the North boundary line of the said
 4-6           proposed W.W.T.P. site, continuing to the Northwest corner of
 4-7           the said proposed W.W.T.P. site, a point for corner;
 4-8           THENCE Southerly with the West boundary line of the said
 4-9           proposed W.W.T.P. site, continuing to the Southwest corner of
4-10           the said proposed W.W.T.P. site, a point for corner in the
4-11           South boundary line of the aforesaid 671.4 acre tract;
4-12           THENCE Easterly with the South boundary line of the said
4-13           671.4 acre tract, continuing to the Northwest corner of the
4-14           aforesaid 54.8 acre tract and the Northwest corner of that
4-15           certain 5.10 acre tract described in a deed from Arthur M.
4-16           White, et ux to Edward M. Hurd, et ux dated January 2, 1976
4-17           and recorded in Volume 434 on Page 116 of the Deed Records of
4-18           Angelina County, a point for corner;
4-19           THENCE Southerly with the West boundary line of the said 54.8
4-20           acre tract, the West boundary line of the said 5.10 acre Gary
4-21           D. Selman tract, and the West boundary line of that certain
4-22           0.273 acre tract described in a deed from Tom Gann And
4-23           Associates, Inc. to Edward M. Hurd, et ux dated November 24,
4-24           1986 and recorded in volume 660 on Page 713 of the Real
4-25           Property Records of Angelina County, continuing to the
4-26           Southwest corner of the said 0.273 acre tract, a point for
4-27           corner in the Northwest margin of County Road No. 65
 5-1           (Burkhalter Hollow);
 5-2           THENCE Northeasterly with the Southeast boundary line of the
 5-3           said 0.273 acre tract and the Northwest margin of the said
 5-4           County Road No. 65 (Burkhalter Hollow), continuing to the
 5-5           Northeast corner of the said 0.273 tract, a point for corner
 5-6           in the South boundary line of the aforesaid 54.8 acre tract;
 5-7           THENCE Easterly with the South boundary line of the said 54.8
 5-8           acre tract, the South boundary line of the aforesaid 17 acre
 5-9           tract, the South boundary line of the aforesaid WILDWOOD
5-10           ADDITION, and the North margin of the said County Road No. 65
5-11           (Burkhalter Hollow), continuing to the Southeast corner of
5-12           the said 17 acre tract and the Southeast corner of the said
5-13           WILDWOOD ADDITION, a point for corner;
5-14           THENCE Northerly with the East boundary line of the said 17
5-15           acre tract and the East boundary line of the said WILDWOOD
5-16           ADDITION, continuing to the point and place of beginning.
5-18     legislature finds that the boundaries and field notes of the
5-19     district form a closure. A mistake in the field notes or in copying
5-20     the field notes in the legislative process does not affect the
5-21     organization, existence, or validity of the district, the right of
5-22     the district to issue or refund bonds or to pay the principal of or
5-23     interest on bonds, the right of the district to levy and collect
5-24     taxes, or the legality or operation of the district or its board.
5-25           SECTION 1.05.  FINDING OF BENEFIT. All of the land and other
5-26     property included within the boundaries of the district will be
5-27     benefited by the works and projects that are to be accomplished by
 6-1     the district under powers conferred by this Act. The district is
 6-2     created to serve a public use and benefit.
 6-4           SECTION 2.01.  BOARD OF DIRECTORS. (a)  The district's
 6-5     powers, rights, duties, and functions are exercised by a board of
 6-6     five directors.
 6-7           (b)  Temporary directors serve until initial directors are
 6-8     elected under Section 2.03 of this Act.
 6-9           (c)  Initial directors serve until permanent directors are
6-10     elected under Section 2.04 of this Act.
6-11           (d)  Permanent directors serve staggered four-year terms.
6-12           (e)  To be eligible to serve as a director, a person must be
6-13     a resident of Angelina County and reside in the district.
6-14           (f)  Each director must qualify to serve as director under
6-15     Sections 49.052 and 49.055, Water Code. The district shall pay the
6-16     premiums for each director's bond required under Section 49.055,
6-17     Water Code.
6-18           (g)  A director serves until the director's successor has
6-19     qualified.
6-20           (h)  When a director dies, resigns, or is otherwise removed,
6-21     the governor shall appoint a successor to serve for the unexpired
6-22     term.
6-23           SECTION 2.02.  TEMPORARY DIRECTORS. (a)  The temporary board
6-24     of directors consists of:
6-25                 1.  Jaime Gonzalez
6-26                 2.  Josephina Perez
6-27                 3.  Julia Esteves
 7-1                 4.  Jose Perez
 7-2                 5.  Tomas Fuentes
 7-3           (b)  If a temporary director fails to qualify for office, the
 7-4     temporary directors who have qualified shall appoint a person to
 7-5     fill the vacancy.  If at any time there are fewer than three
 7-6     qualified temporary directors, the governor shall appoint the
 7-7     necessary number of persons to fill all vacancies on the board.
 7-9     (a)  The temporary board of directors shall hold an organizational
7-10     meeting of the district and take office at that time. The directors
7-11     shall hold the meeting at a location to which a majority of the
7-12     directors agree.
7-13           (b)  The temporary board of directors shall call and hold an
7-14     election to confirm establishment of the district and to elect
7-15     initial directors.
7-16           (c)  At the confirmation and initial directors' election, the
7-17     temporary board of directors shall have placed on the ballot the
7-18     name of any candidate filing for an initial director's position and
7-19     blank spaces to write in the names of other persons.  A temporary
7-20     director who is qualified to be a candidate under Section 2.01 of
7-21     this Act may file for an initial director's position.
7-22           (d)  Section 41.001(a), Election Code, does not apply to a
7-23     confirmation and initial directors' election held as provided by
7-24     this section.
7-25           (e)  Except as provided by this section, a confirmation and
7-26     initial directors' election must be conducted as provided by
7-27     Sections 49.102(a)-(g), Water Code, and the Election Code.
 8-1           SECTION 2.04.  ELECTION OF DIRECTORS. (a)  On a uniform
 8-2     election date, as provided by Section 41.001, Election Code,
 8-3     selected by the initial directors, of the first even-numbered year
 8-4     after the year in which the district is authorized to be created at
 8-5     a confirmation election, an election shall be held in the district
 8-6     for the election of three directors to serve four-year terms and
 8-7     two directors to serve two-year terms.
 8-8           (b)  On the uniform election date selected under Subsection
 8-9     (a) of this section of each subsequent second year following the
8-10     election, the appropriate number of directors shall be elected.
8-11           SECTION 2.05.  MEETINGS AND ACTIONS OF THE BOARD. (a)  The
8-12     board shall adopt bylaws at its first meeting or as soon after the
8-13     first meeting as is practicable.
8-14           (b)  The board shall meet at least four times each year and
8-15     may meet at any other time provided in its bylaws.
8-16           (c)  A majority of the directors constitutes a quorum for the
8-17     transaction of business. Except as otherwise provided in this Act,
8-18     the vote of a majority of directors present at a meeting at which a
8-19     quorum is present is required for board action.
8-20           SECTION 2.06.  ORGANIZATION OF BOARD. (a)  The board shall
8-21     elect from its members a president, vice president, secretary,
8-22     treasurer, and other officers as necessary.  An officer's period of
8-23     service begins at a time provided by the bylaws.
8-24           (b)  If a vacancy occurs in a board office, the board shall
8-25     elect one of its members to fill the unexpired period of service at
8-26     the next board meeting.
8-27           (c)  The board by its bylaws shall prescribe:
 9-1                 (1)  the powers and duties of each board office; and
 9-2                 (2)  procedures to remove a director from a board
 9-3     office.
 9-4           SECTION 2.07.  INTEREST IN CONTRACT. A director who is
 9-5     financially interested in a contract proposed to be executed by the
 9-6     district for the purchase of property or services or the
 9-7     construction of facilities shall disclose the interest to the board
 9-8     and may not vote on acceptance of the contract.
 9-9           SECTION 2.08.  DIRECTORS' COMPENSATION. (a)  Subject to
9-10     Subsection (b) of this section, a director is entitled to receive
9-11     an allowance of $50 a day and reimbursement for actual and
9-12     necessary expenses incurred:
9-13                 (1)  for each day the director attends a meeting of the
9-14     board; and
9-15                 (2)  for each day the board authorizes the director to
9-16     attend to district business.
9-17           (b)  A director may not receive a per diem allowance for more
9-18     than 20 days in a calendar year.
9-19           SECTION 2.09.  GENERAL MANAGER. (a)  The board may employ a
9-20     general manager for a term and salary set by the board.
9-21           (b)  The general manager is the chief executive officer of
9-22     the district. In accordance with policies adopted by the board, the
9-23     general manager is responsible for:
9-24                 (1)  administering the board's directives;
9-25                 (2)  keeping the district's records, including minutes
9-26     of board meetings;
9-27                 (3)  coordinating with state, federal, and local
 10-1    agencies;
 10-2                (4)  developing plans and programs for the board's
 10-3    approval;
 10-4                (5)  hiring, supervising, training, and discharging the
 10-5    district's employees;
 10-6                (6)  obtaining technical, scientific, legal, fiscal,
 10-7    and other professional services; and
 10-8                (7)  performing any other duties the board assigns.
 10-9          (c)  The board may discharge the general manager.
10-10          (d)  Instead of employing a general manager, the district may
10-11    contract with a local government for the services required by the
10-12    district.
10-13          SECTION 2.10.  EMPLOYEE BONDS. (a)  The general manager and
10-14    each employee of the district who is charged with the collection,
10-15    custody, or payment of any money of the district shall execute a
10-16    fidelity bond in an amount determined by the board and in a form
10-17    and with a surety approved by the board.
10-18          (b)  The district shall pay the premiums on the employees'
10-19    bonds under this section.
10-20          SECTION 2.11.  PRINCIPAL OFFICE. The district shall maintain
10-21    its principal office at any place in Angelina County designated by
10-22    the board.
10-23          SECTION 2.12.  RECORDS. (a)  The district shall keep:
10-24                (1)  complete and accurate accounts of its business
10-25    transactions in accordance with generally accepted methods of
10-26    accounting; and
10-27                (2)  complete and accurate minutes of its meetings.
 11-1          (b)  The district shall store its accounts, contracts,
 11-2    documents, minutes, and other records at its principal office.
 11-3          (c)  The district shall permit reasonable public inspection
 11-4    of its records during regular business hours.
 11-5          SECTION 2.13.  SEAL. The district shall adopt a seal and may
 11-6    change the seal from time to time.
 11-7          SECTION 2.14.  SUIT. The district may sue and be sued in its
 11-8    corporate name.
 11-9                       ARTICLE 3. POWERS AND DUTIES
11-10          SECTION 3.01.  GENERAL POWERS AND DUTIES. (a)  The district
11-11    shall:
11-12                (1)  administer and enforce the terms of this Act;
11-13                (2)  use its facilities and powers to accomplish the
11-14    purposes of this Act;
11-15                (3)  coordinate the provision of water, wastewater, and
11-16    drainage services in the district; and
11-17                (4)  control and abate water pollution in the district.
11-18          (b)  Subject only to the authority of the commission, the
11-19    district has exclusive authority in the district, superseding the
11-20    authority of any local government, to:
11-21                (1)  regulate septic tanks;
11-22                (2)  coordinate the provision of water, wastewater, or
11-23    drainage services within, to, or from the district; and
11-24                (3)  control or abate water pollution within or caused
11-25    within the district.
11-26          (c)  Except as expressly limited by this Act, the district
11-27    has all powers, rights, and privileges necessary and convenient for
 12-1    accomplishing the purposes of this Act that are conferred by
 12-2    general law upon any conservation and reclamation district created
 12-3    pursuant to Section 59, Article XVI, Texas Constitution.
 12-4          (d)  The powers granted to the district in this Act are
 12-5    cumulative of all powers granted by other law.
 12-6          SECTION 3.02.  DISTRICT RULES. (a)  The district shall adopt
 12-7    and enforce rules reasonably required to implement this Act,
 12-8    including rules governing procedure and practice before the board.
 12-9          (b)  The district shall print its rules and furnish copies of
12-10    the rules to any person on written request.
12-11          SECTION 3.03.  INSPECTIONS AND INVESTIGATIONS. The district
12-12    may enter public or private property in the district's territory
12-13    for the purpose of inspecting and investigating conditions relating
12-14    to its authorized purposes under the same provisions and
12-15    restrictions applicable to the commission.
12-16          SECTION 3.04.  CIVIL PENALTY; INJUNCTION. (a)  A person who
12-17    violates a rule, permit, or order of the district is subject to a
12-18    civil penalty of not less than $50 and not more than $1,000 for
12-19    each violation or each day of a continuing violation.
12-20          (b)  The district may sue to recover the penalty in a
12-21    district court in the county where the violation occurred. The
12-22    penalty shall be paid to the district.
12-23          (c)  The district may sue for injunctive relief in a district
12-24    court in the county where a violation of its rule, permit, or order
12-25    occurs or is threatened to occur. The court may grant to the
12-26    district, without bond or other undertaking, a prohibitory or
12-27    mandatory injunction that the facts warrant, including a temporary
 13-1    restraining order, temporary injunction, or permanent injunction.
 13-2          (d)  The district may sue for injunctive relief and a civil
 13-3    penalty in the same proceeding.
 13-4          (e)  The commission is a necessary party to a suit brought
 13-5    under this section.
 13-6          SECTION 3.05.  COURT REVIEW. (a)  A person who is adversely
 13-7    affected by a rule, act, or order of the district may sue the
 13-8    district in district court to set aside the rule, act, or order.
 13-9          (b)  The suit must be filed not later than the 20th day after
13-10    the date on which the rule, act, or order takes effect.
13-11          (c)  If a person challenges in court the validity of all or
13-12    any portion of this Act and does not prevail in the challenge, the
13-13    court shall order the person to pay the reasonable attorney's fees,
13-14    expert witness fees, and other costs incurred by all opposing
13-15    parties in defending this Act.
13-16          SECTION 3.06.  SEPTIC TANKS. (a)  If the district finds that
13-17    the nature of the soil or drainage in the district requires
13-18    regulation of septic tanks to prevent water pollution or to protect
13-19    the public health, the district by rule may:
13-20                (1)  restrict the number and types of septic tanks
13-21    permitted in a specified area;
13-22                (2)  forbid the use of a septic tank in a specified
13-23    area;
13-24                (3)  forbid the installation of a new septic tank in a
13-25    specified area;
13-26                (4)  establish a permit system for the installation of
13-27    a new septic tank in a specified area; or
 14-1                (5)  seek a gradual reduction of the number or types of
 14-2    septic tanks in a specified area.
 14-3          (b)  Before the board adopts a rule under this section, the
 14-4    board shall:
 14-5                (1)  consult with the commission; and
 14-6                (2)  hold a public hearing in the area to be affected
 14-7    by the rule.
 14-9    SYSTEMS. The district may:
14-10                (1)  acquire and provide by purchase, gift, or lease
14-11    any water service, wastewater service, drainage service, or
14-12    disposal service within the district;
14-13                (2)  construct a disposal system and provide disposal
14-14    services within the district;
14-15                (3)  operate or sell a disposal system that the
14-16    district constructs or acquires;
14-17                (4)  contract with any person to operate or maintain a
14-18    disposal system that the person owns; and
14-19                (5)  contract with any person to train or supervise
14-20    employees of a disposal system.
14-21          SECTION 3.08.  SYSTEM CONTRACTS. (a)  The district may
14-22    contract to receive and treat or dispose of water, wastewater,
14-23    drainage, or wastes from any person in the district.
14-24          (b)  In a contract under this section, the district shall set
14-25    fees on the basis of:
14-26                (1)  the quality and quantity of the water, wastewater,
14-27    drainage, or waste;
 15-1                (2)  the difficulty in treating or disposing of the
 15-2    water, wastewater, drainage, or waste;
 15-3                (3)  operation and maintenance expenses and debt
 15-4    retirement service costs; and
 15-5                (4)  any other reasonable consideration.
 15-6          SECTION 3.09.  EMINENT DOMAIN. The district may exercise the
 15-7    power of eminent domain under Chapter 21, Property Code, to acquire
 15-8    property of any kind in Angelina County that is appropriate for the
 15-9    exercise of the district's functions.
15-10          SECTION 3.10.  RELOCATION OF FACILITIES. If the district
15-11    requires relocating, raising, lowering, rerouting, changing the
15-12    grade of, or altering the construction of a railroad, highway, or
15-13    pipeline or an electric transmission or distribution, telegraph, or
15-14    telephone line conduit, pole, or facility, the district shall pay
15-15    the cost of that action so as to provide comparable replacement of
15-16    any replaced facility, less the replaced facility's net salvage
15-17    value.
15-18          SECTION 3.11.  USE OF PUBLIC EASEMENTS. (a)  The district may
15-19    use any public roadway, street, alley, or easement in Angelina
15-20    County to accomplish its purposes, without the necessity of
15-21    securing a franchise or other governmental agreement. The use is
15-22    subject to the authority of a county to require the relocation of
15-23    facilities, at the expense of the district, to permit the widening
15-24    or straightening of a road. The county must give the district 30
15-25    days' notice that relocation is required and specify the new
15-26    location for the facilities along the right-of-way of the road.
15-27          (b)  The district may not change, alter, or damage a portion
 16-1    of the state highway system or any county road without first
 16-2    obtaining the written consent of the Texas Department of
 16-3    Transportation or the county, as applicable. The placement of a
 16-4    district facility in a state or county highway right-of-way is
 16-5    subject to regulation by the Texas Department of Transportation or
 16-6    a county, as applicable.
 16-7          SECTION 3.12.  ADDITION OF TERRITORY. (a)  In accordance with
 16-8    this section, the district may annex additional territory in
 16-9    Angelina County.
16-10          (b)  Proceedings for the annexation of territory by the
16-11    district may be initiated by a petition signed by the owners of the
16-12    land proposed to be annexed. The petition must request that the
16-13    board hold a public hearing on the matters set out in the petition.
16-14          (c)  The board shall hear and consider the petition and may
16-15    annex the territory if the board determines that the land should be
16-16    annexed.
16-17          (d)  The consent of a municipality or other governmental
16-18    entity or political subdivision of the state is not required for
16-19    any annexation of territory by the district.
16-21    The district may purchase, lease, acquire by gift, maintain, use,
16-22    or operate property of any kind that is appropriate for the
16-23    exercise of its functions.
16-24          (b)  The board may sell to the highest bidder, at a public or
16-25    private sale, or may exchange any property owned by the district
16-26    that is not required to carry out the district's purposes. Before
16-27    conducting a public or a private sale of property, the district
 17-1    shall give notice of its intent to sell the property by publishing
 17-2    notice once a week for two consecutive weeks in a newspaper of
 17-3    general circulation in the district.
 17-4          SECTION 3.14.  FACILITIES. The district may acquire,
 17-5    construct, extend, improve, maintain, reconstruct, use, or operate
 17-6    any facility necessary or convenient to the exercise of its powers,
 17-7    rights, duties, or functions.
 17-8          SECTION 3.15. CONTRACTS. (a)  The district may make contracts
 17-9    and execute instruments necessary or convenient to the exercise of
17-10    its powers, rights, duties, or functions. The district may not
17-11    enter into a contract with a term greater than 50 years.
17-12          (b)  This section does not prohibit the district from
17-13    purchasing surplus property from the United States through a
17-14    negotiated contract without bids.
17-15          (c)  An officer, agent, or employee of the district who is
17-16    financially interested in a contract of the type described in
17-17    Subsection (b) of this section shall disclose the interest to the
17-18    board before the board votes on the acceptance of the contract.
17-19          (d)  The directors are subject to Chapter 171, Local
17-20    Government Code.
17-21          SECTION 3.16.  COOPERATIVE AGREEMENTS.  The district may
17-22    enter into cooperative agreements with other local governments,
17-23    state agencies, or agencies of the United States:
17-24                (1)  to perform water, wastewater, drainage, or waste
17-25    disposal management, inspection, and enforcement functions and to
17-26    give technical aid and education services to any party to the
17-27    agreement; and
 18-1                (2)  to transfer money or property to any party to the
 18-2    agreement for the purpose of water quality and waste disposal
 18-3    management, inspection, enforcement, and technical aid and
 18-4    education.
 18-5                   ARTICLE 4.  GENERAL FISCAL PROVISIONS
 18-6          SECTION 4.01.  DISBURSEMENT OF MONEY.  The district may
 18-7    disburse money only by check, draft, order, or other instrument
 18-8    signed by the person or persons authorized in the board's bylaws or
 18-9    by board resolution.
18-10          SECTION 4.02.  FEES AND CHARGES.  The district may establish
18-11    fees and charges not to exceed the amounts necessary to enable the
18-12    district to fulfill the obligations imposed on it by this Act.
18-13          SECTION 4.03.  LOANS AND GRANTS.  (a)  The district may
18-14    borrow money and accept grants for its corporate purposes.
18-15          (b)  The district may borrow money and accept grants from
18-16    private sources, the United States, the state, and local
18-17    governments. The district may enter into any agreement in
18-18    connection with a loan or grant that does not conflict with state
18-19    or federal law.
18-20          (c)  Information of the source, amount, and any restriction
18-21    on expenditure of money the district accepts is public information.
18-22          SECTION 4.04.  FISCAL YEAR.  The board shall establish the
18-23    district's fiscal year.
18-24          SECTION 4.05.  INDEPENDENT AUDIT AND REPORT.  (a)  The board
18-25    shall have an audit of the district's affairs for each fiscal year
18-26    prepared by an independent certified public accountant of
18-27    recognized integrity and ability.
 19-1          (b)  The district shall keep at least one copy of the most
 19-2    recent audit at the district's principal office.
 19-3          (c)  The district shall make a copy of the most recent audit
 19-4    available for inspection by any interested person during regular
 19-5    business hours.
 19-6          SECTION 4.06.  DEPOSITORY BANKS.  (a)  The board shall
 19-7    designate one or more banks to serve as depository for the
 19-8    district's money. The district shall deposit all of its money in
 19-9    the designated depository bank or banks, except:
19-10                (1)  to the extent provided in a trust indenture, the
19-11    district may deposit bond proceeds and money pledged to pay bonds
19-12    with the trustee bank named in the trust indenture; and
19-13                (2)  money pledged to pay bonds shall be remitted to
19-14    the bank of payment for the payment of principal and interest on
19-15    bonds.
19-16          (b)  To the extent that money in a depository bank or trustee
19-17    bank is not invested or insured by the Federal Deposit Insurance
19-18    Corporation, the money shall be secured in the manner provided by
19-19    law for the security of state money.
19-20                        ARTICLE 5.  BONDS AND TAXES
19-21          SECTION 5.01.  REVENUE BONDS.  (a)  For the purpose of
19-22    carrying out a power or authority conferred by this Act, the
19-23    district may issue bonds secured by a pledge of all or part of the
19-24    revenues accruing to the district from a source other than ad
19-25    valorem taxes, including money received from tolls, charges, the
19-26    sale of water or other products, and the provision of services.
19-27          (b)  The district's bonds shall:
 20-1                (1)  be authorized by board resolution;
 20-2                (2)  be issued in the district's name;
 20-3                (3)  be signed by the president or vice president;
 20-4                (4)  be attested by the secretary; and
 20-5                (5)  bear the district's seal.
 20-6          (c)  The board may prescribe the form, denomination, and
 20-7    interest rate of bonds issued by the district, except that bonds
 20-8    must mature serially or otherwise not more than 50 years after
 20-9    their date. The board may sell bonds at prices and under terms that
20-10    the board determines to be the most advantageous reasonably
20-11    available. The district's bonds may be made redeemable before
20-12    maturity at times and prices prescribed in the bonds. The
20-13    district's bonds may be secured by an indenture of trust with a
20-14    corporate trustee.
20-15          (d)  The district may issue bonds in more than one series as
20-16    required for carrying out the purposes of this Act. The district
20-17    may, in issuing bonds secured by the district's revenues, reserve
20-18    the right to issue additional bonds secured by the district's
20-19    revenues that are on a parity with or are senior or subordinate to
20-20    the bonds issued earlier.
20-21          (e)  The resolution authorizing the bonds or the trust
20-22    indenture securing the bonds may specify additional provisions that
20-23    shall constitute a contract between the district and its
20-24    bondholders. The board may provide:
20-25                (1)  for additional bond provisions; and
20-26                (2)  for a corporate trustee or receiver to take
20-27    possession of the district's facilities if the district defaults.
 21-1          SECTION 5.02.  REFUNDING BONDS.  (a)  The district may issue
 21-2    refunding bonds to refund outstanding bonds and interest authorized
 21-3    by this Act.
 21-4          (b)  Refunding bonds may:
 21-5                (1)  be issued to refund one or more series of
 21-6    outstanding bonds;
 21-7                (2)  combine the pledges for the outstanding bonds for
 21-8    the security of the refunding bonds; and
 21-9                (3)  be secured by other or additional revenues.
21-10          (c)  The provisions of this Act applicable to the district's
21-11    issuance of other bonds, their security, their approval by the
21-12    attorney general, and the remedies of the holders are applicable to
21-13    refunding bonds.
21-14          (d)  Refunding bonds shall be registered by the comptroller
21-15    of public accounts on surrender and cancellation of the bonds to be
21-16    refunded. Alternatively, the resolution authorizing the issuance of
21-17    refunding bonds may provide that the bonds shall be sold and the
21-18    resulting proceeds deposited in the bank where the bonds to be
21-19    refunded are payable, in which case the refunding bonds may be
21-20    issued in an amount sufficient to pay the principal and interest of
21-21    the bonds to be refunded to their option or maturity date. The
21-22    comptroller of public accounts shall register the refunding bonds
21-23    without concurrent surrender and cancellation of the bonds to be
21-24    refunded.
21-25          SECTION 5.03.  APPROVAL AND REGISTRATION OF BONDS.  After the
21-26    district authorizes any bonds, the district shall submit the bonds
21-27    and the record relating to their issuance to the attorney general
 22-1    for approval. If the bonds are secured by a pledge of the proceeds
 22-2    of a contract between the district and a municipality or other
 22-3    governmental agency, authority, or district, the district shall
 22-4    submit to the attorney general a copy of the contract and the
 22-5    proceedings of the municipality or other governmental agency,
 22-6    authority, or district authorizing the contract. If the attorney
 22-7    general finds that the bonds have been authorized and the
 22-8    contracts, if any, have been made in accordance with the
 22-9    constitution and laws of the state, the attorney general shall
22-10    approve the bonds and contracts. On approval, the bonds shall then
22-11    be registered by the comptroller of public accounts.
22-12          SECTION 5.04.  AUTHORIZED INVESTMENTS.  Bonds and refunding
22-13    bonds of the district are legal, eligible, and authorized
22-14    investments for a public fund of the state, including the state
22-15    permanent school fund, or a state agency.
22-16          SECTION 5.05.  AD VALOREM TAXATION.  The district has the
22-17    power to impose ad valorem taxes as conferred by general law upon
22-18    water control and improvement districts, including Chapter 49,
22-19    Water Code.
22-20                   ARTICLE 6.  MISCELLANEOUS PROVISIONS
22-22    (a) The proper and legal notice of the intention to introduce this
22-23    Act, setting forth the general substance of this Act, has been
22-24    published as provided by law, and the notice and a copy of this Act
22-25    have been furnished to all persons, agencies, officials, or
22-26    entities to which they are required to be furnished by the
22-27    constitution and other laws of this state, including the governor,
 23-1    who has submitted the notice and the Act to the Texas Natural
 23-2    Resource Conservation Commission.
 23-3          (b)  The Texas Natural Resource Conservation Commission has
 23-4    filed its recommendations relating to this Act with the governor,
 23-5    lieutenant governor, and speaker of the house of representatives
 23-6    within the required time.
 23-7          (c)  All requirements of the constitution and laws of this
 23-8    state and of the rules and procedures of the legislature with
 23-9    respect to the notice, introduction, and passage of this Act are
23-10    fulfilled and accomplished.
23-13    provision of this Act, this Act does not impair, limit, supersede,
23-14    or alter the powers, rights, privileges, duties, functions, or
23-15    jurisdiction of a river authority in existence on the effective
23-16    date of this Act the territory of which comprises at least three
23-17    counties and includes all or part of the district, except that such
23-18    a river authority may not impose or apply any regulatory ordinance,
23-19    rule, or regulation within the district without the agreement of
23-20    the district.
23-21          SECTION 6.03.  SEVERABILITY.  If any portion of this Act or
23-22    the application of any portion of this Act to any person or set of
23-23    circumstances is held by a court to be unconstitutional, void,
23-24    invalid, or unenforceable, the validity of the remaining portions
23-25    of this Act or the application of the challenged portion of the Act
23-26    to other persons or sets of circumstances shall not be affected by
23-27    the court's holding. It is the intent of the legislature in
 24-1    adopting this Act that no portion of the Act become inoperative or
 24-2    fail by reason of the unconstitutionality or invalidity of any
 24-3    other portion of the Act.
 24-4          SECTION 6.04.  EFFECTIVE DATE.  This Act takes effect
 24-5    immediately if it receives a vote of two-thirds of all the members
 24-6    elected to each house, as provided by Section 39, Article III,
 24-7    Texas Constitution.  If this Act does not receive the vote
 24-8    necessary for immediate effect, this Act takes effect September 1,
 24-9    2001.