1-1 By: McReynolds (Senate Sponsor - Staples) H.B. No. 2571 1-2 (In the Senate - Received from the House April 23, 2001; 1-3 April 24, 2001, read first time and referred to Committee on 1-4 Natural Resources; May 11, 2001, reported favorably, as amended, by 1-5 the following vote: Yeas 4, Nays 0; May 11, 2001, sent to 1-6 printer.) 1-7 COMMITTEE AMENDMENT NO. 1 By: Barrientos 1-8 Amend HB 2571, Section 3.02 (On page 5, engrossed version) by 1-9 adding new subsection as follows: 1-10 (c) In implementing this section, if the district adopts 1-11 rules that apply to electric, gas and telecommunications 1-12 facilities, pipes and lines, the rules must be consistent with and 1-13 no more stringent than state or federal requirements. 1-14 A BILL TO BE ENTITLED 1-15 AN ACT 1-16 relating to the creation, administration, powers, duties, 1-17 operation, and financing of the Angelina County Water Control and 1-18 Improvement District No. 4; authorizing the imposition of taxes and 1-19 the issuance of bonds and granting the power of eminent domain; 1-20 providing a civil penalty. 1-21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-22 ARTICLE 1. GENERAL PROVISIONS 1-23 SECTION 1.01. CREATION. (a) A conservation and reclamation 1-24 district, to be known as the Angelina County Water Control and 1-25 Improvement District No. 4, is created in Angelina County, subject 1-26 to approval at a confirmation election under Section 2.03 of this 1-27 Act. The district is a governmental agency and a body politic and 1-28 corporate. 1-29 (b) The district is created under and is essential to 1-30 accomplish the purposes of Section 59, Article XVI, Texas 1-31 Constitution. 1-32 SECTION 1.02. DEFINITIONS. In this Act: 1-33 (1) "Board" means the board of directors of the 1-34 district. 1-35 (2) "Commission" means the Texas Natural Resource 1-36 Conservation Commission. 1-37 (3) "Director" means a member of the board. 1-38 (4) "Disposal system" means any system for disposing 1-39 of waste, including a sewer system, drainage system, or treatment 1-40 facility. 1-41 (5) "District" means the Angelina County Water Control 1-42 and Improvement District No. 4. 1-43 (6) "Local government" means a municipality, county, 1-44 river authority, or water district or authority acting under 1-45 Section 52, Article III, or Section 59, Article XVI, Texas 1-46 Constitution. 1-47 (7) "Person" has the meaning assigned by Section 1-48 311.005, Government Code. 1-49 (8) "Pollution" has the meaning assigned by Section 1-50 26.001, Water Code. 1-51 (9) "System" means a network of pipelines, conduits, 1-52 canals, pumping stations, force mains, and all other constructions, 1-53 devices, and related appliances used to transport water or waste. 1-54 (10) "Treatment facility" means a plant, disposal 1-55 field, lagoon, incinerator, sanitary landfill, or other facility 1-56 installed for the purpose of treating, neutralizing, or stabilizing 1-57 waste. 1-58 (11) "Waste" means waterborne liquid, gaseous, or 1-59 solid substances that result from a discharge from a treatment 1-60 facility or disposal system. 1-61 (12) "Water" means groundwater, percolating or 1-62 otherwise, and a lake, pond, impounding reservoir, spring, river, 1-63 stream, creek, canal, or any other surface water, natural or 2-1 artificial, navigable or nonnavigable, that is wholly or partially 2-2 in the district. 2-3 SECTION 1.03. BOUNDARIES. The boundaries of the district are 2-4 as follows: 2-5 BEING all that certain tract or parcel of land lying and 2-6 situated in Angelina County, Texas, out of the D. LEONE 2-7 SURVEY, ABSTRACT NO. 23 and the T. QUEVADO SURVEY, ABSTRACT 2-8 NO. 39 and being described as follows, to-wit: 2-9 BEGINNING at the Northeast corner of WILDWOOD ADDITION, a 2-10 subdivision of record in Cabinet A on Slide 140-B of the Map 2-11 and Plat Records of Angelina County, Texas, and the Northeast 2-12 corner of that certain 17 acre tract described in a deed from 2-13 Bess M. Auld, et al to Arthur M. White, et ux dated January 2-14 3, 1972 and recorded in Volume 384 on Page 71 of the Deed 2-15 Records of Angelina County, Texas, a point for corner in the 2-16 South boundary line of that certain 671.4 acre tract 2-17 described in a deed from Charles M. Raguet to Southern Pine 2-18 Lumber Company dated March 22, 1900 and Recorded in Volume 3 2-19 on Page 428 of the Deed Records of Angelina County, Texas; 2-20 THENCE Westerly with the North boundary line of the said 2-21 WILDWOOD ADDITION, the North boundary line of the said 17 2-22 acre tract, the North boundary line of that certain 54.8 acre 2-23 tract described in a contract of sale and purchase from the 2-24 Veterans' Land Board of Texas to Arthur M. White dated 2-25 February 16, 1950 and recorded in Volume 149 on Page 43 of 2-26 the Deed Records of Angelina County, Texas, and with the 2-27 South boundary line of the said 671.4 acre tract, continuing 2-28 to the Southeast corner of the proposed W.W.T.P. site (to be 2-29 conveyed by Temple-Inland Forest Products Corporation), a 2-30 point for corner; 2-31 THENCE Northerly with the East boundary line of the said 2-32 proposed W.W.T.P. site, continuing to the Northeast corner of 2-33 the said proposed W.W.T.P. site, a point for corner; 2-34 THENCE Westerly with the North boundary line of the said 2-35 proposed W.W.T.P. site, continuing to the Northwest corner of 2-36 the said proposed W.W.T.P. site, a point for corner; 2-37 THENCE Southerly with the West boundary line of the said 2-38 proposed W.W.T.P. site, continuing to the Southwest corner of 2-39 the said proposed W.W.T.P. site, a point for corner in the 2-40 South boundary line of the aforesaid 671.4 acre tract; 2-41 THENCE Easterly with the South boundary line of the said 2-42 671.4 acre tract, continuing to the Northwest corner of the 2-43 aforesaid 54.8 acre tract and the Northwest corner of that 2-44 certain 5.10 acre tract described in a deed from Arthur M. 2-45 White, et ux to Edward M. Hurd, et ux dated January 2, 1976 2-46 and recorded in Volume 434 on Page 116 of the Deed Records of 2-47 Angelina County, a point for corner; 2-48 THENCE Southerly with the West boundary line of the said 54.8 2-49 acre tract, the West boundary line of the said 5.10 acre Gary 2-50 D. Selman tract, and the West boundary line of that certain 2-51 0.273 acre tract described in a deed from Tom Gann And 2-52 Associates, Inc. to Edward M. Hurd, et ux dated November 24, 2-53 1986 and recorded in volume 660 on Page 713 of the Real 2-54 Property Records of Angelina County, continuing to the 2-55 Southwest corner of the said 0.273 acre tract, a point for 2-56 corner in the Northwest margin of County Road No. 65 2-57 (Burkhalter Hollow); 2-58 THENCE Northeasterly with the Southeast boundary line of the 2-59 said 0.273 acre tract and the Northwest margin of the said 2-60 County Road No. 65 (Burkhalter Hollow), continuing to the 2-61 Northeast corner of the said 0.273 tract, a point for corner 2-62 in the South boundary line of the aforesaid 54.8 acre tract; 2-63 THENCE Easterly with the South boundary line of the said 54.8 2-64 acre tract, the South boundary line of the aforesaid 17 acre 2-65 tract, the South boundary line of the aforesaid WILDWOOD 2-66 ADDITION, and the North margin of the said County Road No. 65 2-67 (Burkhalter Hollow), continuing to the Southeast corner of 2-68 the said 17 acre tract and the Southeast corner of the said 2-69 WILDWOOD ADDITION, a point for corner; 3-1 THENCE Northerly with the East boundary line of the said 17 3-2 acre tract and the East boundary line of the said WILDWOOD 3-3 ADDITION, continuing to the point and place of beginning. 3-4 SECTION 1.04. FINDINGS RELATIVE TO BOUNDARIES. The 3-5 legislature finds that the boundaries and field notes of the 3-6 district form a closure. A mistake in the field notes or in copying 3-7 the field notes in the legislative process does not affect the 3-8 organization, existence, or validity of the district, the right of 3-9 the district to issue or refund bonds or to pay the principal of or 3-10 interest on bonds, the right of the district to levy and collect 3-11 taxes, or the legality or operation of the district or its board. 3-12 SECTION 1.05. FINDING OF BENEFIT. All of the land and other 3-13 property included within the boundaries of the district will be 3-14 benefited by the works and projects that are to be accomplished by 3-15 the district under powers conferred by this Act. The district is 3-16 created to serve a public use and benefit. 3-17 ARTICLE 2. ADMINISTRATIVE PROVISIONS 3-18 SECTION 2.01. BOARD OF DIRECTORS. (a) The district's 3-19 powers, rights, duties, and functions are exercised by a board of 3-20 five directors. 3-21 (b) Temporary directors serve until initial directors are 3-22 elected under Section 2.03 of this Act. 3-23 (c) Initial directors serve until permanent directors are 3-24 elected under Section 2.04 of this Act. 3-25 (d) Permanent directors serve staggered four-year terms. 3-26 (e) To be eligible to serve as a director, a person must be 3-27 a resident of Angelina County and reside in the district. 3-28 (f) Each director must qualify to serve as director under 3-29 Sections 49.052 and 49.055, Water Code. The district shall pay the 3-30 premiums for each director's bond required under Section 49.055, 3-31 Water Code. 3-32 (g) A director serves until the director's successor has 3-33 qualified. 3-34 (h) When a director dies, resigns, or is otherwise removed, 3-35 the governor shall appoint a successor to serve for the unexpired 3-36 term. 3-37 SECTION 2.02. TEMPORARY DIRECTORS. (a) The temporary board 3-38 of directors consists of: 3-39 1. Jaime Gonzalez 3-40 2. Josephina Perez 3-41 3. Julia Esteves 3-42 4. Jose Perez 3-43 5. Tomas Fuentes 3-44 (b) If a temporary director fails to qualify for office, the 3-45 temporary directors who have qualified shall appoint a person to 3-46 fill the vacancy. If at any time there are fewer than three 3-47 qualified temporary directors, the governor shall appoint the 3-48 necessary number of persons to fill all vacancies on the board. 3-49 SECTION 2.03. CONFIRMATION AND INITIAL DIRECTORS' ELECTION. 3-50 (a) The temporary board of directors shall hold an organizational 3-51 meeting of the district and take office at that time. The directors 3-52 shall hold the meeting at a location to which a majority of the 3-53 directors agree. 3-54 (b) The temporary board of directors shall call and hold an 3-55 election to confirm establishment of the district and to elect 3-56 initial directors. 3-57 (c) At the confirmation and initial directors' election, the 3-58 temporary board of directors shall have placed on the ballot the 3-59 name of any candidate filing for an initial director's position and 3-60 blank spaces to write in the names of other persons. A temporary 3-61 director who is qualified to be a candidate under Section 2.01 of 3-62 this Act may file for an initial director's position. 3-63 (d) Section 41.001(a), Election Code, does not apply to a 3-64 confirmation and initial directors' election held as provided by 3-65 this section. 3-66 (e) Except as provided by this section, a confirmation and 3-67 initial directors' election must be conducted as provided by 3-68 Sections 49.102(a)-(g), Water Code, and the Election Code. 3-69 SECTION 2.04. ELECTION OF DIRECTORS. (a) On a uniform 4-1 election date, as provided by Section 41.001, Election Code, 4-2 selected by the initial directors, of the first even-numbered year 4-3 after the year in which the district is authorized to be created at 4-4 a confirmation election, an election shall be held in the district 4-5 for the election of three directors to serve four-year terms and 4-6 two directors to serve two-year terms. 4-7 (b) On the uniform election date selected under Subsection 4-8 (a) of this section of each subsequent second year following the 4-9 election, the appropriate number of directors shall be elected. 4-10 SECTION 2.05. MEETINGS AND ACTIONS OF THE BOARD. (a) The 4-11 board shall adopt bylaws at its first meeting or as soon after the 4-12 first meeting as is practicable. 4-13 (b) The board shall meet at least four times each year and 4-14 may meet at any other time provided in its bylaws. 4-15 (c) A majority of the directors constitutes a quorum for the 4-16 transaction of business. Except as otherwise provided in this Act, 4-17 the vote of a majority of directors present at a meeting at which a 4-18 quorum is present is required for board action. 4-19 SECTION 2.06. ORGANIZATION OF BOARD. (a) The board shall 4-20 elect from its members a president, vice president, secretary, 4-21 treasurer, and other officers as necessary. An officer's period of 4-22 service begins at a time provided by the bylaws. 4-23 (b) If a vacancy occurs in a board office, the board shall 4-24 elect one of its members to fill the unexpired period of service at 4-25 the next board meeting. 4-26 (c) The board by its bylaws shall prescribe: 4-27 (1) the powers and duties of each board office; and 4-28 (2) procedures to remove a director from a board 4-29 office. 4-30 SECTION 2.07. INTEREST IN CONTRACT. A director who is 4-31 financially interested in a contract proposed to be executed by the 4-32 district for the purchase of property or services or the 4-33 construction of facilities shall disclose the interest to the board 4-34 and may not vote on acceptance of the contract. 4-35 SECTION 2.08. DIRECTORS' COMPENSATION. (a) Subject to 4-36 Subsection (b) of this section, a director is entitled to receive 4-37 an allowance of $50 a day and reimbursement for actual and 4-38 necessary expenses incurred: 4-39 (1) for each day the director attends a meeting of the 4-40 board; and 4-41 (2) for each day the board authorizes the director to 4-42 attend to district business. 4-43 (b) A director may not receive a per diem allowance for more 4-44 than 20 days in a calendar year. 4-45 SECTION 2.09. GENERAL MANAGER. (a) The board may employ a 4-46 general manager for a term and salary set by the board. 4-47 (b) The general manager is the chief executive officer of 4-48 the district. In accordance with policies adopted by the board, the 4-49 general manager is responsible for: 4-50 (1) administering the board's directives; 4-51 (2) keeping the district's records, including minutes 4-52 of board meetings; 4-53 (3) coordinating with state, federal, and local 4-54 agencies; 4-55 (4) developing plans and programs for the board's 4-56 approval; 4-57 (5) hiring, supervising, training, and discharging the 4-58 district's employees; 4-59 (6) obtaining technical, scientific, legal, fiscal, 4-60 and other professional services; and 4-61 (7) performing any other duties the board assigns. 4-62 (c) The board may discharge the general manager. 4-63 (d) Instead of employing a general manager, the district may 4-64 contract with a local government for the services required by the 4-65 district. 4-66 SECTION 2.10. EMPLOYEE BONDS. (a) The general manager and 4-67 each employee of the district who is charged with the collection, 4-68 custody, or payment of any money of the district shall execute a 4-69 fidelity bond in an amount determined by the board and in a form 5-1 and with a surety approved by the board. 5-2 (b) The district shall pay the premiums on the employees' 5-3 bonds under this section. 5-4 SECTION 2.11. PRINCIPAL OFFICE. The district shall maintain 5-5 its principal office at any place in Angelina County designated by 5-6 the board. 5-7 SECTION 2.12. RECORDS. (a) The district shall keep: 5-8 (1) complete and accurate accounts of its business 5-9 transactions in accordance with generally accepted methods of 5-10 accounting; and 5-11 (2) complete and accurate minutes of its meetings. 5-12 (b) The district shall store its accounts, contracts, 5-13 documents, minutes, and other records at its principal office. 5-14 (c) The district shall permit reasonable public inspection 5-15 of its records during regular business hours. 5-16 SECTION 2.13. SEAL. The district shall adopt a seal and may 5-17 change the seal from time to time. 5-18 SECTION 2.14. SUIT. The district may sue and be sued in its 5-19 corporate name. 5-20 ARTICLE 3. POWERS AND DUTIES 5-21 SECTION 3.01. GENERAL POWERS AND DUTIES. (a) The district 5-22 shall: 5-23 (1) administer and enforce the terms of this Act; 5-24 (2) use its facilities and powers to accomplish the 5-25 purposes of this Act; 5-26 (3) coordinate the provision of water, wastewater, and 5-27 drainage services in the district; and 5-28 (4) control and abate water pollution in the district. 5-29 (b) Subject only to the authority of the commission, the 5-30 district has exclusive authority in the district, superseding the 5-31 authority of any local government, to: 5-32 (1) regulate septic tanks; 5-33 (2) coordinate the provision of water, wastewater, or 5-34 drainage services within, to, or from the district; and 5-35 (3) control or abate water pollution within or caused 5-36 within the district. 5-37 (c) Except as expressly limited by this Act, the district 5-38 has all powers, rights, and privileges necessary and convenient for 5-39 accomplishing the purposes of this Act that are conferred by 5-40 general law upon any conservation and reclamation district created 5-41 pursuant to Section 59, Article XVI, Texas Constitution. 5-42 (d) The powers granted to the district in this Act are 5-43 cumulative of all powers granted by other law. 5-44 SECTION 3.02. DISTRICT RULES. (a) The district shall adopt 5-45 and enforce rules reasonably required to implement this Act, 5-46 including rules governing procedure and practice before the board. 5-47 (b) The district shall print its rules and furnish copies of 5-48 the rules to any person on written request. 5-49 SECTION 3.03. INSPECTIONS AND INVESTIGATIONS. The district 5-50 may enter public or private property in the district's territory 5-51 for the purpose of inspecting and investigating conditions relating 5-52 to its authorized purposes under the same provisions and 5-53 restrictions applicable to the commission. 5-54 SECTION 3.04. CIVIL PENALTY; INJUNCTION. (a) A person who 5-55 violates a rule, permit, or order of the district is subject to a 5-56 civil penalty of not less than $50 and not more than $1,000 for 5-57 each violation or each day of a continuing violation. 5-58 (b) The district may sue to recover the penalty in a 5-59 district court in the county where the violation occurred. The 5-60 penalty shall be paid to the district. 5-61 (c) The district may sue for injunctive relief in a district 5-62 court in the county where a violation of its rule, permit, or order 5-63 occurs or is threatened to occur. The court may grant to the 5-64 district, without bond or other undertaking, a prohibitory or 5-65 mandatory injunction that the facts warrant, including a temporary 5-66 restraining order, temporary injunction, or permanent injunction. 5-67 (d) The district may sue for injunctive relief and a civil 5-68 penalty in the same proceeding. 5-69 (e) The commission is a necessary party to a suit brought 6-1 under this section. 6-2 SECTION 3.05. COURT REVIEW. (a) A person who is adversely 6-3 affected by a rule, act, or order of the district may sue the 6-4 district in district court to set aside the rule, act, or order. 6-5 (b) The suit must be filed not later than the 20th day after 6-6 the date on which the rule, act, or order takes effect. 6-7 (c) If a person challenges in court the validity of all or 6-8 any portion of this Act and does not prevail in the challenge, the 6-9 court shall order the person to pay the reasonable attorney's fees, 6-10 expert witness fees, and other costs incurred by all opposing 6-11 parties in defending this Act. 6-12 SECTION 3.06. SEPTIC TANKS. (a) If the district finds that 6-13 the nature of the soil or drainage in the district requires 6-14 regulation of septic tanks to prevent water pollution or to protect 6-15 the public health, the district by rule may: 6-16 (1) restrict the number and types of septic tanks 6-17 permitted in a specified area; 6-18 (2) forbid the use of a septic tank in a specified 6-19 area; 6-20 (3) forbid the installation of a new septic tank in a 6-21 specified area; 6-22 (4) establish a permit system for the installation of 6-23 a new septic tank in a specified area; or 6-24 (5) seek a gradual reduction of the number or types of 6-25 septic tanks in a specified area. 6-26 (b) Before the board adopts a rule under this section, the 6-27 board shall: 6-28 (1) consult with the commission; and 6-29 (2) hold a public hearing in the area to be affected 6-30 by the rule. 6-31 SECTION 3.07. ACQUISITION, CONSTRUCTION, AND OPERATION OF 6-32 SYSTEMS. The district may: 6-33 (1) acquire and provide by purchase, gift, or lease 6-34 any water service, wastewater service, drainage service, or 6-35 disposal service within the district; 6-36 (2) construct a disposal system and provide disposal 6-37 services within the district; 6-38 (3) operate or sell a disposal system that the 6-39 district constructs or acquires; 6-40 (4) contract with any person to operate or maintain a 6-41 disposal system that the person owns; and 6-42 (5) contract with any person to train or supervise 6-43 employees of a disposal system. 6-44 SECTION 3.08. SYSTEM CONTRACTS. (a) The district may 6-45 contract to receive and treat or dispose of water, wastewater, 6-46 drainage, or waste from any person in the district. 6-47 (b) In a contract under this section, the district shall set 6-48 fees on the basis of: 6-49 (1) the quality and quantity of the water, wastewater, 6-50 drainage, or waste; 6-51 (2) the difficulty in treating or disposing of the 6-52 water, wastewater, drainage, or waste; 6-53 (3) operation and maintenance expenses and debt 6-54 retirement service costs; and 6-55 (4) any other reasonable consideration. 6-56 SECTION 3.09. EMINENT DOMAIN. The district may exercise the 6-57 power of eminent domain under Chapter 21, Property Code, to acquire 6-58 property of any kind in Angelina County that is appropriate for the 6-59 exercise of the district's functions. 6-60 SECTION 3.10. RELOCATION OF FACILITIES. If the district 6-61 requires relocating, raising, lowering, rerouting, changing the 6-62 grade of, or altering the construction of a railroad, highway, or 6-63 pipeline or an electric transmission or distribution, telegraph, or 6-64 telephone line conduit, pole, or facility, the district shall pay 6-65 the cost of that action so as to provide comparable replacement of 6-66 any replaced facility, less the replaced facility's net salvage 6-67 value. 6-68 SECTION 3.11. USE OF PUBLIC EASEMENTS. (a) The district may 6-69 use any public roadway, street, alley, or easement in Angelina 7-1 County to accomplish its purposes, without the necessity of 7-2 securing a franchise or other governmental agreement. The use is 7-3 subject to the authority of a county to require the relocation of 7-4 facilities, at the expense of the district, to permit the widening 7-5 or straightening of a road. The county must give the district 30 7-6 days' notice that relocation is required and specify the new 7-7 location for the facilities along the right-of-way of the road. 7-8 (b) The district may not change, alter, or damage a portion 7-9 of the state highway system or any county road without first 7-10 obtaining the written consent of the Texas Department of 7-11 Transportation or the county, as applicable. The placement of a 7-12 district facility in a state or county highway right-of-way is 7-13 subject to regulation by the Texas Department of Transportation or 7-14 a county, as applicable. 7-15 SECTION 3.12. ADDITION OF TERRITORY. (a) In accordance with 7-16 this section, the district may annex additional territory in 7-17 Angelina County. 7-18 (b) Proceedings for the annexation of territory by the 7-19 district may be initiated by a petition signed by the owners of the 7-20 land proposed to be annexed. The petition must request that the 7-21 board hold a public hearing on the matters set out in the petition. 7-22 (c) The board shall hear and consider the petition and may 7-23 annex the territory if the board determines that the land should be 7-24 annexed. 7-25 (d) The consent of a municipality or other governmental 7-26 entity or political subdivision of the state is not required for 7-27 any annexation of territory by the district. 7-28 SECTION 3.13. ACQUISITION AND DISPOSITION OF PROPERTY. (a) 7-29 The district may purchase, lease, acquire by gift, maintain, use, 7-30 or operate property of any kind that is appropriate for the 7-31 exercise of its functions. 7-32 (b) The board may sell to the highest bidder, at a public or 7-33 private sale, or may exchange any property owned by the district 7-34 that is not required to carry out the district's purposes. Before 7-35 conducting a public or a private sale of property, the district 7-36 shall give notice of its intent to sell the property by publishing 7-37 notice once a week for two consecutive weeks in a newspaper of 7-38 general circulation in the district. 7-39 SECTION 3.14. FACILITIES. The district may acquire, 7-40 construct, extend, improve, maintain, reconstruct, use, or operate 7-41 any facility necessary or convenient to the exercise of its powers, 7-42 rights, duties, or functions. 7-43 SECTION 3.15. CONTRACTS. (a) The district may make contracts 7-44 and execute instruments necessary or convenient to the exercise of 7-45 its powers, rights, duties, or functions. The district may not 7-46 enter into a contract with a term greater than 50 years. 7-47 (b) This section does not prohibit the district from 7-48 purchasing surplus property from the United States through a 7-49 negotiated contract without bids. 7-50 (c) An officer, agent, or employee of the district who is 7-51 financially interested in a contract of the type described in 7-52 Subsection (b) of this section shall disclose the interest to the 7-53 board before the board votes on the acceptance of the contract. 7-54 (d) The directors are subject to Chapter 171, Local 7-55 Government Code. 7-56 SECTION 3.16. COOPERATIVE AGREEMENTS. The district may 7-57 enter into cooperative agreements with other local governments, 7-58 state agencies, or agencies of the United States: 7-59 (1) to perform water, wastewater, drainage, or waste 7-60 disposal management, inspection, and enforcement functions and to 7-61 give technical aid and education services to any party to the 7-62 agreement; and 7-63 (2) to transfer money or property to any party to the 7-64 agreement for the purpose of water quality and waste disposal 7-65 management, inspection, enforcement, and technical aid and 7-66 education. 7-67 ARTICLE 4. GENERAL FISCAL PROVISIONS 7-68 SECTION 4.01. DISBURSEMENT OF MONEY. The district may 7-69 disburse money only by check, draft, order, or other instrument 8-1 signed by the person or persons authorized in the board's bylaws or 8-2 by board resolution. 8-3 SECTION 4.02. FEES AND CHARGES. The district may establish 8-4 fees and charges not to exceed the amounts necessary to enable the 8-5 district to fulfill the obligations imposed on it by this Act. 8-6 SECTION 4.03. LOANS AND GRANTS. (a) The district may 8-7 borrow money and accept grants for its corporate purposes. 8-8 (b) The district may borrow money and accept grants from 8-9 private sources, the United States, the state, and local 8-10 governments. The district may enter into any agreement in 8-11 connection with a loan or grant that does not conflict with state 8-12 or federal law. 8-13 (c) Information of the source, amount, and any restriction 8-14 on expenditure of money the district accepts is public information. 8-15 SECTION 4.04. FISCAL YEAR. The board shall establish the 8-16 district's fiscal year. 8-17 SECTION 4.05. INDEPENDENT AUDIT AND REPORT. (a) The board 8-18 shall have an audit of the district's affairs for each fiscal year 8-19 prepared by an independent certified public accountant of 8-20 recognized integrity and ability. 8-21 (b) The district shall keep at least one copy of the most 8-22 recent audit at the district's principal office. 8-23 (c) The district shall make a copy of the most recent audit 8-24 available for inspection by any interested person during regular 8-25 business hours. 8-26 SECTION 4.06. DEPOSITORY BANKS. (a) The board shall 8-27 designate one or more banks to serve as depository for the 8-28 district's money. The district shall deposit all of its money in 8-29 the designated depository bank or banks, except: 8-30 (1) to the extent provided in a trust indenture, the 8-31 district may deposit bond proceeds and money pledged to pay bonds 8-32 with the trustee bank named in the trust indenture; and 8-33 (2) money pledged to pay bonds shall be remitted to 8-34 the bank of payment for the payment of principal and interest on 8-35 bonds. 8-36 (b) To the extent that money in a depository bank or trustee 8-37 bank is not invested or insured by the Federal Deposit Insurance 8-38 Corporation, the money shall be secured in the manner provided by 8-39 law for the security of state money. 8-40 ARTICLE 5. BONDS AND TAXES 8-41 SECTION 5.01. REVENUE BONDS. (a) For the purpose of 8-42 carrying out a power or authority conferred by this Act, the 8-43 district may issue bonds secured by a pledge of all or part of the 8-44 revenues accruing to the district from a source other than ad 8-45 valorem taxes, including money received from tolls, charges, the 8-46 sale of water or other products, and the provision of services. 8-47 (b) The district's bonds shall: 8-48 (1) be authorized by board resolution; 8-49 (2) be issued in the district's name; 8-50 (3) be signed by the president or vice president; 8-51 (4) be attested by the secretary; and 8-52 (5) bear the district's seal. 8-53 (c) The board may prescribe the form, denomination, and 8-54 interest rate of bonds issued by the district, except that bonds 8-55 must mature serially or otherwise not more than 50 years after 8-56 their date. The board may sell bonds at prices and under terms that 8-57 the board determines to be the most advantageous reasonably 8-58 available. The district's bonds may be made redeemable before 8-59 maturity at times and prices prescribed in the bonds. The 8-60 district's bonds may be secured by an indenture of trust with a 8-61 corporate trustee. 8-62 (d) The district may issue bonds in more than one series as 8-63 required for carrying out the purposes of this Act. The district 8-64 may, in issuing bonds secured by the district's revenues, reserve 8-65 the right to issue additional bonds secured by the district's 8-66 revenues that are on a parity with or are senior or subordinate to 8-67 the bonds issued earlier. 8-68 (e) The resolution authorizing the bonds or the trust 8-69 indenture securing the bonds may specify additional provisions that 9-1 shall constitute a contract between the district and its 9-2 bondholders. The board may provide: 9-3 (1) for additional bond provisions; and 9-4 (2) for a corporate trustee or receiver to take 9-5 possession of the district's facilities if the district defaults. 9-6 SECTION 5.02. REFUNDING BONDS. (a) The district may issue 9-7 refunding bonds to refund outstanding bonds and interest authorized 9-8 by this Act. 9-9 (b) Refunding bonds may: 9-10 (1) be issued to refund one or more series of 9-11 outstanding bonds; 9-12 (2) combine the pledges for the outstanding bonds for 9-13 the security of the refunding bonds; and 9-14 (3) be secured by other or additional revenues. 9-15 (c) The provisions of this Act applicable to the district's 9-16 issuance of other bonds, their security, their approval by the 9-17 attorney general, and the remedies of the holders are applicable to 9-18 refunding bonds. 9-19 (d) Refunding bonds shall be registered by the comptroller 9-20 of public accounts on surrender and cancellation of the bonds to be 9-21 refunded. Alternatively, the resolution authorizing the issuance of 9-22 refunding bonds may provide that the bonds shall be sold and the 9-23 resulting proceeds deposited in the bank where the bonds to be 9-24 refunded are payable, in which case the refunding bonds may be 9-25 issued in an amount sufficient to pay the principal and interest of 9-26 the bonds to be refunded to their option or maturity date. The 9-27 comptroller of public accounts shall register the refunding bonds 9-28 without concurrent surrender and cancellation of the bonds to be 9-29 refunded. 9-30 SECTION 5.03. APPROVAL AND REGISTRATION OF BONDS. After the 9-31 district authorizes any bonds, the district shall submit the bonds 9-32 and the record relating to their issuance to the attorney general 9-33 for approval. If the bonds are secured by a pledge of the proceeds 9-34 of a contract between the district and a municipality or other 9-35 governmental agency, authority, or district, the district shall 9-36 submit to the attorney general a copy of the contract and the 9-37 proceedings of the municipality or other governmental agency, 9-38 authority, or district authorizing the contract. If the attorney 9-39 general finds that the bonds have been authorized and the 9-40 contracts, if any, have been made in accordance with the 9-41 constitution and laws of the state, the attorney general shall 9-42 approve the bonds and contracts. On approval, the bonds shall then 9-43 be registered by the comptroller of public accounts. 9-44 SECTION 5.04. AUTHORIZED INVESTMENTS. Bonds and refunding 9-45 bonds of the district are legal, eligible, and authorized 9-46 investments for a public fund of the state, including the state 9-47 permanent school fund, or a state agency. 9-48 SECTION 5.05. AD VALOREM TAXATION. The district has the 9-49 power to impose ad valorem taxes as conferred by general law upon 9-50 water control and improvement districts, including Chapter 49, 9-51 Water Code. 9-52 ARTICLE 6. MISCELLANEOUS PROVISIONS 9-53 SECTION 6.01. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. 9-54 (a) The proper and legal notice of the intention to introduce this 9-55 Act, setting forth the general substance of this Act, has been 9-56 published as provided by law, and the notice and a copy of this Act 9-57 have been furnished to all persons, agencies, officials, or 9-58 entities to which they are required to be furnished by the 9-59 constitution and other laws of this state, including the governor, 9-60 who has submitted the notice and the Act to the Texas Natural 9-61 Resource Conservation Commission. 9-62 (b) The Texas Natural Resource Conservation Commission has 9-63 filed its recommendations relating to this Act with the governor, 9-64 lieutenant governor, and speaker of the house of representatives 9-65 within the required time. 9-66 (c) All requirements of the constitution and laws of this 9-67 state and of the rules and procedures of the legislature with 9-68 respect to the notice, introduction, and passage of this Act are 9-69 fulfilled and accomplished. 10-1 SECTION 6.02. EXISTING COUNTIES, RIVER AUTHORITIES, AND 10-2 UNDERGROUND WATER CONSERVATION DISTRICTS. Notwithstanding any 10-3 provision of this Act, this Act does not impair, limit, supersede, 10-4 or alter the powers, rights, privileges, duties, functions, or 10-5 jurisdiction of a river authority in existence on the effective 10-6 date of this Act the territory of which comprises at least three 10-7 counties and includes all or part of the district, except that such 10-8 a river authority may not impose or apply any regulatory ordinance, 10-9 rule, or regulation within the district without the agreement of 10-10 the district. 10-11 SECTION 6.03. SEVERABILITY. If any portion of this Act or 10-12 the application of any portion of this Act to any person or set of 10-13 circumstances is held by a court to be unconstitutional, void, 10-14 invalid, or unenforceable, the validity of the remaining portions 10-15 of this Act or the application of the challenged portion of the Act 10-16 to other persons or sets of circumstances shall not be affected by 10-17 the court's holding. It is the intent of the legislature in 10-18 adopting this Act that no portion of the Act become inoperative or 10-19 fail by reason of the unconstitutionality or invalidity of any 10-20 other portion of the Act. 10-21 SECTION 6.04. EFFECTIVE DATE. This Act takes effect 10-22 immediately if it receives a vote of two-thirds of all the members 10-23 elected to each house, as provided by Section 39, Article III, 10-24 Texas Constitution. If this Act does not receive the vote 10-25 necessary for immediate effect, this Act takes effect September 1, 10-26 2001. 10-27 * * * * *