1-1                                   AN ACT
 1-2     relating to the general powers and authority of water districts;
 1-3     providing a penalty.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subsection (d), Section 49.054, Water Code, is
 1-6     amended to read as follows:
 1-7           (d)  If the board appoints a director to serve as treasurer,
 1-8     that director is not subject to the investment officer training
 1-9     requirements of Chapter 2256 [Section 2256.007], Government Code,
1-10     unless the director is also appointed as the district's investment
1-11     officer under Chapter 2256, Government Code.
1-12           SECTION 2.  Subsection (a), Section 49.057, Water Code, is
1-13     amended to read as follows:
1-14           (a)  The board shall be responsible for the management of all
1-15     the affairs of the district.  The district shall employ or contract
1-16     with all persons, firms, partnerships, corporations, or other
1-17     entities, public or private, deemed necessary by the board for the
1-18     conduct of the affairs of the district, including, but not limited
1-19     to, engineers, attorneys, financial advisors, operators,
1-20     bookkeepers, tax assessors and collectors, auditors, and
1-21     administrative staff.  The board may appoint an employee of a firm,
1-22     partnership, corporation, or other entity with which the district
1-23     has contracted to serve as the investment officer of the district
1-24     under Chapter 2256 [Section 2256.007], Government Code.
1-25           SECTION 3.  Subsection (a), Section 49.060, Water Code, is
 2-1     amended to read as follows:
 2-2           (a)  A director is entitled to receive fees of office of not
 2-3     more than $150 [$100] a day for each day the director actually
 2-4     spends performing the duties of a director.  The fees of office may
 2-5     not exceed $6,000 per annum except for directors of a special water
 2-6     authority which is engaged in the distribution and sale of electric
 2-7     energy to the public.
 2-8           SECTION 4.  Section 49.102, Water Code, is amended by adding
 2-9     a new Subsection (i) and redesignating existing Subsection (i) as
2-10     Subsection (j) to read as follows:
2-11           (i)  A district, at an election required under Subsection
2-12     (a), may submit to the qualified voters of the district the
2-13     proposition of whether a plan as authorized by Section 49.351
2-14     should be implemented or entered into by the district.
2-15           (j)  The provisions of this section shall not be applicable
2-16     to any district exercising the powers of Chapter 375, Local
2-17     Government Code, or any district created by a special Act of the
2-18     legislature that does not require a confirmation election.
2-19           SECTION 5.  Section 49.106, Water Code, is amended by adding
2-20     Subsection (e) to read as follows:
2-21           (e)  A district's authorization to issue bonds resulting from
2-22     an election held under this section, or any other law that allows
2-23     for the qualified voters of a district to authorize the issuance of
2-24     bonds by a district, remains in effect after the election unless
2-25     the district is dissolved or is annexed by another district.
2-26           SECTION 6.  Section 49.107, Water Code, is amended by adding
 3-1     Subsection (g) to read as follows:
 3-2           (g)  Sections 26.04, 26.05, and 26.07, Tax Code, do not apply
 3-3     to a tax levied and collected under this section or an ad valorem
 3-4     tax levied and collected for the payment of the interest on and
 3-5     principal of bonds issued by a district.
 3-6           SECTION 7.  Section 49.108, Water Code, is amended by
 3-7     amending Subsection (e) and adding Subsection (f) to read as
 3-8     follows:
 3-9           (e)  A district that is required under Section 49.181 to
3-10     obtain approval by the commission of the district's issuance of
3-11     bonds must obtain approval by the executive director before the
3-12     district enters into an obligation under this section to collect
3-13     tax for debt that exceeds three years.  This subsection does not
3-14     apply to contract taxes that are levied to pay for a district's
3-15     share of bonds that have been issued by another district and
3-16     approved by the commission or for bonds issued by a municipality.
3-17           (f)  Sections 26.04, 26.05, and 26.07, Tax Code, do not apply
3-18     to a tax levied and collected for payments made under a contract
3-19     approved in accordance with this section.
3-20           SECTION 8.  Subsection (c), Section 49.151, Water Code, is
3-21     amended to read as follows:
3-22           (c)  The board may [by resolution] allow disbursements of
3-23     district money to be transferred by federal reserve wire system.
3-24     The board by resolution may allow the wire transfers to accounts in
3-25     the name of the district or accounts not in the name of the
3-26     district.
 4-1           SECTION 9.  Subsection (a), Section 49.155, Water Code, is
 4-2     amended to read as follows:
 4-3           (a)  The district may pay out of bond proceeds or other
 4-4     available funds of the district all expenses of the district
 4-5     authorized by this section, including expenses reasonable and
 4-6     necessary to effect the issuance, sale, and delivery of bonds as
 4-7     determined by the board, including, but not limited to, the
 4-8     following:
 4-9                 (1)  interest during construction [not to exceed three
4-10     years after acceptance of the project];
4-11                 (2)  capitalized interest not to exceed three years'
4-12     interest;
4-13                 (3)  reasonable and necessary reserve funds not to
4-14     exceed two years' interest on the bonds;
4-15                 (4)  interest on funds advanced to the district;
4-16                 (5)  financial advisor, bond counsel, attorney, and
4-17     other consultant fees;
4-18                 (6)  paying agent, registrar, and escrow agent fees;
4-19                 (7)  right-of-way acquisition;
4-20                 (8)  underwriter's discounts or premiums;
4-21                 (9)  engineering fees, including surveying expenses and
4-22     plan review fees;
4-23                 (10)  commission and attorney general fees;
4-24                 (11)  printing costs;
4-25                 (12)  all organizational, administrative, and operating
4-26     costs during creation and construction periods;
 5-1                 (13)  the cost of investigation and making plans,
 5-2     including preliminary plans and associated engineering reports;
 5-3                 (14)  land required for stormwater control;
 5-4                 (15)  costs associated with requirements for federal
 5-5     stormwater permits; and
 5-6                 (16)  costs associated with requirements for endangered
 5-7     species permits.
 5-8           SECTION 10.  Subsection (b), Section 49.183, Water Code, is
 5-9     amended to read as follows:
5-10           (b)  Except for refunding bonds, or bonds sold to a state or
5-11     federal agency, [after any bonds are finally approved and] before
5-12     any bonds [they] are sold by a district, the board shall publish an
5-13     appropriate notice of the sale:
5-14                 (1)  at least one time not less than 10 days before the
5-15     date of sale in a newspaper of general circulation in the county or
5-16     counties in which the district is located; and
5-17                 (2)  at least one time in one or more recognized
5-18     financial publications of general circulation in the state as
5-19     approved by the state attorney general.
5-20           SECTION 11.  Section 49.184, Water Code, is amended by adding
5-21     Subsection (f) to read as follows:
5-22           (f)  In any proceeding concerning the validity of the
5-23     creation of a district or the annexation of property by a district,
5-24     a certificate of ownership as certified by the central appraisal
5-25     district of the county or counties in which the property is located
5-26     creates a presumption of ownership, and additional proof of
 6-1     ownership is not required unless there is substantial evidence in
 6-2     the official deed records of the county in which the property is
 6-3     located to rebut the presumption.  On request by a district, the
 6-4     central appraisal district of the county or counties in which the
 6-5     district is located shall furnish certificates of ownership and may
 6-6     charge reasonable fees to recover the actual costs incurred in
 6-7     preparing the certificates.
 6-8           SECTION 12.  Section 49.212, Water Code, is amended by
 6-9     amending Subsections (a) and (d) and adding Subsection (e) to read
6-10     as follows:
6-11           (a)  A district may adopt and enforce all necessary charges,
6-12     mandatory fees, or rentals, in addition to taxes, for providing or
6-13     making available any district facility or service, including
6-14     fire-fighting activities provided under Section 49.351.
6-15           (d)  Notwithstanding any provision of law to the contrary, a
6-16     district that charges a fee that is an impact fee as described in
6-17     Section 395.001(4), Local Government Code, must comply with Chapter
6-18     395, Local Government Code.  A charge or fee by a district for
6-19     construction, installation, or inspection of a tap or connection to
6-20     district water, sanitary sewer, or drainage facilities, including
6-21     all necessary service lines and meters, or for wholesale facilities
6-22     that serve such water, sanitary sewer, or drainage facilities that
6-23     (i) does not exceed three times the actual and reasonable costs to
6-24     the district for such tap or connection, [or] (ii) if made to a
6-25     nontaxable entity for retail or wholesale service, does not exceed
6-26     the actual costs to the district for such work and for all
 7-1     facilities that are necessary to provide district services to such
 7-2     entity and that are financed or are to be financed in whole or in
 7-3     part by tax-supported or revenue bonds of the district, or (iii) if
 7-4     made by a district for retail or wholesale service on land that at
 7-5     the time of platting was not being provided with water or
 7-6     wastewater service by the district, shall not be deemed to be an
 7-7     impact fee under Chapter 395, Local Government Code.  A district
 7-8     may pledge the revenues of the district's utility system to pay the
 7-9     principal of or interest on bonds issued to construct the capital
7-10     improvements for which a fee was imposed under this subsection, and
7-11     money received from the fees shall be considered revenues of the
7-12     district's utility system for purposes of the district's bond
7-13     covenants.
7-14           (e)  Chapter 2007, Government Code, does not apply to a tax
7-15     levied, a standby fee imposed, or a charge, fee, or rental adopted
7-16     or enforced by a district under this chapter, another chapter of
7-17     this code, or Chapter 395, Local Government Code.
7-18           SECTION 13.  Section 49.218, Water Code, is amended by adding
7-19     a new Subsection (d), relettering existing Subsection (d) as
7-20     Subsection (f), and adding Subsections (e) and (g) to read as
7-21     follows:
7-22           (d)  A district or water supply corporation may require a
7-23     service applicant, as a condition of service, to grant a permanent
7-24     recorded easement dedicated to the district or water supply
7-25     corporation that will provide a reasonable right of access and use
7-26     to allow the district or water supply corporation to construct,
 8-1     install, maintain, replace, upgrade, inspect, and test any
 8-2     facilities necessary to serve that applicant as well as the
 8-3     district's or water supply corporation's purposes in providing
 8-4     systemwide service.  A district or water supply corporation may not
 8-5     require an applicant to provide an easement for a service line for
 8-6     the sole benefit of another applicant.
 8-7           (e)  As a condition of service to a new subdivision, a
 8-8     district or water supply corporation may require a developer to
 8-9     provide permanent recorded easements to and throughout the
8-10     subdivision sufficient to construct, install, maintain, replace,
8-11     upgrade, inspect, and test any facilities necessary to serve the
8-12     subdivision's anticipated service demands on full occupancy.
8-13           (f)  A district or water supply corporation may also lease
8-14     property from others for its use on such terms and conditions as
8-15     the board of the district or the board of directors of the water
8-16     supply corporation may determine to be advantageous.
8-17           (g)  Property acquired under this section, or any other law
8-18     allowing the acquisition of property by a district or water supply
8-19     corporation, and owned by a district or water supply corporation is
8-20     not subject to assessments, charges, fees, or dues imposed by a
8-21     nonprofit corporation under Chapter 204, Property Code.
8-22           SECTION 14.  Section 49.226, Water Code, is amended to read
8-23     as follows:
8-24           Sec. 49.226.  SALE OR EXCHANGE OF REAL [SURPLUS LAND] OR
8-25     PERSONAL PROPERTY.  (a)  Any personal property valued at more than
8-26     $300 or any land or interest in land owned by the district which is
 9-1     found by the board to be surplus and is not needed by the district
 9-2     may be sold under order of the board either by public or private
 9-3     sale, or the land, interest in land, or personal property may be
 9-4     exchanged for other land, interest in land, or personal property
 9-5     needed by the district.  Except as provided in Subsection (b),
 9-6     land, interest in land, or personal property must be exchanged for
 9-7     like fair market value, which value may be determined by the
 9-8     district.
 9-9           (b)  Any property dedicated to or acquired by the district
9-10     without expending district funds may be abandoned or released to
9-11     the original grantor, the grantor's heirs, assigns, executors, or
9-12     successors upon terms and conditions deemed necessary or
9-13     advantageous to the district and without receiving compensation for
9-14     such abandonment or release.  District property may also be
9-15     abandoned, released, exchanged, or transferred to another district,
9-16     municipality, county, countywide agency, or authority upon terms
9-17     and conditions deemed necessary or advantageous to the district.
9-18     Narrow strips of property resulting from boundary or surveying
9-19     conflicts or similar causes, or from insubstantial encroachments by
9-20     abutting property owners, or property of larger configuration that
9-21     has been subject to encroachments by abutting property owners for
9-22     more than 25 years may be abandoned, released, exchanged, or
9-23     transferred to such abutting owners upon terms and conditions
9-24     deemed necessary or advantageous to the district.  Chapter 272,
9-25     Local Government Code, does [shall] not apply to this section
9-26     [subsection].
 10-1          (c)  Before either a public or a private sale of real
 10-2    property [not required by the district], the district shall give
 10-3    notice of the intent to sell by publishing notice once a week for
 10-4    two consecutive weeks in one or more newspapers with general
 10-5    circulation in the district.
 10-6          (d)  If the district has outstanding bonds secured by a
 10-7    pledge of tax revenues, the proceeds of the sale of property [not
 10-8    required by the district] shall be applied to retire outstanding
 10-9    bonds of the district [when required by the district's applicable
10-10    bond resolutions].
10-11          (e)  If the district does not have any outstanding bonds, the
10-12    proceeds derived from the sale of real or [the] personal property
10-13    [or land not required by the district] may be used for any lawful
10-14    purpose.
10-15          SECTION 15.  Subchapter H, Chapter 49, Water Code, is amended
10-16    by adding Section 49.234 to read as follows:
10-17          Sec. 49.234.  PROHIBITION OF CERTAIN PRIVATE ON-SITE
10-18    FACILITIES.  (a)  A district or water supply corporation that
10-19    operates a wastewater collection system to serve land within its
10-20    boundaries by rule may prohibit the installation of private on-site
10-21    wastewater holding or treatment facilities on land within the
10-22    district that is not served by the district's or corporation's
10-23    wastewater collection system.  A district or corporation that has
10-24    not received funding under Subchapter K, Chapter 17, may not
10-25    require a property owner who has already installed an on-site
10-26    wastewater holding or treatment facility to connect to the
 11-1    district's or corporation's wastewater collection system.
 11-2          (b)  A district or water supply corporation that prohibits an
 11-3    installation described by Subsection (a) shall agree to pay the
 11-4    owner of a particular tract the costs of connecting the tract to
 11-5    the district's or corporation's wastewater collection system if the
 11-6    distance along a public right-of-way or utility easement from the
 11-7    nearest point of the district's or corporation's wastewater
 11-8    collection system to the boundary line of the tract requiring
 11-9    wastewater collection services is 300 feet or more, subject to
11-10    commission rules regarding reimbursement of those costs.
11-11          SECTION 16.  Subsection (c), Section 49.271, Water Code, is
11-12    amended to read as follows:
11-13          (c)  The district may adopt minimum criteria for the
11-14    qualifications of bidders on its construction contracts and for
11-15    sureties issuing payment and performance bonds.  For construction
11-16    contracts over $25,000, the district shall require a person who
11-17    bids to submit a certified or cashier's check on a responsible bank
11-18    in the state equal to at least two percent of the total amount of
11-19    the bid, or a bid bond of at least two percent of the total amount
11-20    of the bid issued by a surety legally authorized to do business in
11-21    this state, as a good faith deposit to ensure execution of the
11-22    contract.  If the successful bidder fails or refuses to enter into
11-23    a proper contract with the district, or fails or refuses to furnish
11-24    the payment and performance bonds [bond] required by law, the
11-25    bidder forfeits the deposit.  The payment, performance, and bid
11-26    bonding requirements of this subsection do not apply to a contract
 12-1    for the purchase of equipment, materials, or machinery not
 12-2    otherwise incorporated into a construction project.
 12-3          SECTION 17.  Subsections (i) and (j), Section 49.273, Water
 12-4    Code, are amended to read as follows:
 12-5          (i)  If changes in plans or specifications are necessary
 12-6    after the performance of the contract is begun, or if it is
 12-7    necessary to decrease or increase the quantity of the work to be
 12-8    performed or of the materials, equipment, or supplies to be
 12-9    furnished, the board may approve change orders making the changes.
12-10    The aggregate of the change orders may not increase the original
12-11    contract price by more than 10 percent.  Additional change [Change]
12-12    orders [to contracts] may be issued only as a result of
12-13    unanticipated conditions encountered during construction, repair,
12-14    or renovation or changes in regulatory criteria or to facilitate
12-15    project coordination with other political entities.
12-16          (j)  The board is not required to advertise or seek
12-17    competitive bids for the repair of district facilities if the scope
12-18    or extent of the repair work cannot be readily ascertained or if
12-19    the nature of the repair work does not readily lend itself to
12-20    competitive bidding [by the district's operator if the cost of the
12-21    repair is less than or equal to the advertising requirements of
12-22    this section].
12-23          SECTION 18.  Subsection (a), Section 49.278, Water Code, is
12-24    amended to read as follows:
12-25          (a)  This subchapter does not apply to:
12-26                (1)  equipment, materials, or machinery purchased by
 13-1    the district at an auction that is open to the public;
 13-2                (2)  contracts for personal or professional services or
 13-3    for a utility service operator;
 13-4                (3)  contracts made by a district engaged in the
 13-5    distribution and sale of electric energy to the public; [or]
 13-6                (4)  contracts for services or property for which there
 13-7    is only one source or for which it is otherwise impracticable to
 13-8    obtain competition; or
 13-9                (5)  high technology procurements.
13-10          SECTION 19.  Subchapter I, Chapter 49, Water Code, is amended
13-11    by adding Section 49.279 to read as follows:
13-12          Sec. 49.279.  PREVAILING WAGE RATES.  In addition to the
13-13    alternative procedures provided by Section 2258.022, Government
13-14    Code:
13-15                (1)  a district located wholly or partially within one
13-16    or more municipalities or within the extraterritorial jurisdiction
13-17    of one or more municipalities may determine its prevailing wage
13-18    rate for public works by adopting the prevailing wage rate of:
13-19                      (A)  one of the municipalities; or
13-20                      (B)  the county in which the district is located
13-21    or, if the county in which the district is located has not adopted
13-22    a wage rate, the prevailing wage rate of a county adjacent to the
13-23    county in which the district is located; and
13-24                (2)  a district not located wholly or partially within
13-25    the extraterritorial jurisdiction of a municipality may determine
13-26    the district's prevailing wage rate by adopting the prevailing wage
 14-1    rate of the county in which the district is located or, if the
 14-2    county in which the district is located has not adopted a wage
 14-3    rate, the wage rate of a county adjacent to the county in which the
 14-4    district is located.
 14-5          SECTION 20.  Subsection (b), Section 49.302, Water Code, is
 14-6    amended to read as follows:
 14-7          (b)  A petition requesting the annexation of a defined area
 14-8    signed by a majority in value of the owners of land in the defined
 14-9    area, as shown by the tax rolls of the central appraisal district
14-10    of the county or counties in which such area is located, or signed
14-11    by 50 landowners if the number of landowners is more than 50, shall
14-12    describe the land by metes and bounds or by lot and block number if
14-13    there is a recorded plat of the area and shall be filed with the
14-14    secretary of the board.
14-15          SECTION 21.  Subsection (a), Section 49.304, Water Code, is
14-16    amended to read as follows:
14-17          (a)  If the board determines that an exclusion hearing should
14-18    be held as provided by Section 49.303(a) or (c), or if a written
14-19    petition requesting an exclusion hearing is filed with the
14-20    secretary of the board as provided by [in] Section 49.303(b)
14-21    [49.303], the board shall give notice of the time and place of a
14-22    hearing to announce its own conclusions relating to land or other
14-23    property to be excluded and to receive petitions for exclusion of
14-24    land or other property.
14-25          SECTION 22.  Subchapter J, Chapter 49, Water Code, is amended
14-26    by adding Section 49.315 to read as follows:
 15-1          Sec. 49.315.  ADDING AND EXCLUDING LAND BEFORE CONFIRMATION.
 15-2    (a)  A district may add or exclude land in accordance with this
 15-3    subchapter:
 15-4                (1)  after a district is created by order of the
 15-5    commission or another governmental entity or by special Act of the
 15-6    legislature; and
 15-7                (2)  before a confirmation election is held as required
 15-8    by Section 49.102.
 15-9          (b)  If land is added or excluded as provided by this
15-10    section, the election to confirm the district required by Section
15-11    49.102 shall be to confirm the district as modified.
15-12          SECTION 23.  Section 49.351, Water Code, is amended by
15-13    amending Subsections (a), (b), and (c) and (g) through (j) and
15-14    adding Subsection (l) to read as follows:
15-15          (a)  A district providing potable water or sewer service to
15-16    household users may establish, operate, and maintain a fire
15-17    department to perform all fire-fighting activities within the
15-18    district as provided in this subchapter and may issue bonds or
15-19    impose a mandatory fee, with voter approval, [bonds] for financing
15-20    a plan approved in accordance with this section, [the establishment
15-21    of the fire department] including the construction and purchase of
15-22    necessary buildings, facilities, land, and equipment and the
15-23    provision of an adequate water supply.
15-24          (b)  After approval of the district electors of a plan to
15-25    operate, [or] jointly operate, or jointly fund the operation of a
15-26    fire department, and after complying with Subsections (g), (h), and
 16-1    (i), the district or districts shall provide an adequate system and
 16-2    water supply for fire-fighting purposes, may purchase necessary
 16-3    land, may construct and purchase necessary buildings, facilities,
 16-4    and equipment, and may employ or contract with a fire department to
 16-5    employ all necessary personnel including supervisory personnel to
 16-6    operate the fire department.
 16-7          (c)  Bonds [issued] for financing a plan approved in
 16-8    accordance with this section [establishment of the fire department]
 16-9    shall be authorized and may be issued, and a district shall be
16-10    authorized to levy a tax to pay the principal of and interest on
16-11    such bonds, as provided by law for authorization and issuance of
16-12    other bonds of the district.
16-13          (g)  A district or districts proposing to act jointly shall
16-14    develop a detailed plan for the establishment, operation, and
16-15    maintenance of the proposed department, including a detailed
16-16    presentation of all financial requirements.  If a district is
16-17    entering into a contract under Subsection (e), the district shall
16-18    develop a plan that describes [in detail] the contract and
16-19    [facilities and equipment to be devoted to service to the district
16-20    and all proposals for providing the service and that] includes a
16-21    presentation of the financial requirements under the contract.  A
16-22    plan required by this subsection may be included in a plan or
16-23    report otherwise required by this title for the creation of a
16-24    district or may be submitted to the commission for approval at any
16-25    time after the creation of the district.  [Before adoption of a
16-26    plan and any contract by the district, the board shall hold a
 17-1    hearing at which any person residing in the district may present
 17-2    testimony for and against the proposed plan and any proposed
 17-3    contract.  Notice of the hearing and the place at which the plan
 17-4    and any contract may be examined shall be posted in two public
 17-5    places within the district at least 10 days before the date of the
 17-6    hearing.]
 17-7          (h)  If a plan was not approved by the commission at the time
 17-8    of the district's creation, after [After] adoption of the plan and
 17-9    any contract by the board, the plan and financial presentation,
17-10    together with any contract and a written report in a form
17-11    prescribed by the executive director describing existing fire
17-12    departments and fire-fighting services available within 25 miles of
17-13    the boundaries of the district, shall be submitted to the executive
17-14    director for consideration by the commission under rules adopted by
17-15    the commission.  [Before approval or disapproval, the commission
17-16    shall hold a hearing.  Notice of the hearing before the commission
17-17    shall be posted by the board in at least two public places in the
17-18    district at least five days before the hearing.]  Before the
17-19    commission approves the application, it must find that it is
17-20    economically feasible for the district to implement the plan and
17-21    meet the provisions of any contract and shall take into
17-22    consideration in giving its approval the general financial
17-23    condition of the district and the economic feasibility of the
17-24    district carrying out the plan or meeting the obligations of the
17-25    contract.  A plan approved by the commission as part of the
17-26    creation of a district does not require further commission approval
 18-1    unless the district materially alters the plan.
 18-2          (i)  After approval of a plan by the commission, the district
 18-3    shall submit to the electors of the district at the election to
 18-4    approve bonds or to impose a mandatory fee for financing the plan,
 18-5    or if no bonds or fees are to be approved, at an election called
 18-6    for approval of the plan, which may be held in conjunction with an
 18-7    election required by Section 49.102, the proposition of whether or
 18-8    not the plan should be implemented or entered into by the district.
 18-9    The ballots at the election shall be printed, as applicable, to
18-10    provide for voting for or against the proposition:  "The
18-11    implementation of the plan for (operation/joint operation) of a
18-12    fire department"; or "The plan and contract to provide
18-13    fire-fighting services for the district."
18-14          (j)  [No funds of the district may be used to establish a
18-15    fire department, to enter into joint operation of a fire
18-16    department, or to contract for fire-fighting services without the
18-17    approval of a plan by the electors as provided in this section.
18-18    However, the district may use available funds for preparation of a
18-19    plan and any contract.]  The operation of a fire department or
18-20    provision of fire-fighting services is an essential public
18-21    necessity, and a district may discontinue any and all services,
18-22    including water and sewer service, to any person who fails to
18-23    timely pay fire department service fees or any other assessment
18-24    adopted by the district to support the fire department or the
18-25    provision of fire-fighting services.
18-26          (l)  Notwithstanding the requirements of Subsections (a)-(j),
 19-1    a district providing potable water or sewer service to household
 19-2    users may as part of its billing process collect from its customers
 19-3    a voluntary contribution on behalf of organizations providing
 19-4    fire-fighting activities to the district.  A district that chooses
 19-5    to collect a voluntary contribution under this subsection must give
 19-6    reasonable notice to its customers that the contribution is
 19-7    voluntary.  Water and sewer service may not be terminated as a
 19-8    result of failure to pay the voluntary contribution.
 19-9          SECTION 24.  Chapter 49, Water Code, is amended by adding
19-10    Subchapter N to read as follows:
19-11                  SUBCHAPTER N.  RECREATIONAL FACILITIES
19-12          Sec. 49.461.  POLICY AND PURPOSE.  (a)  The legislature finds
19-13    that:
19-14                (1)  the provision of parks and recreational facilities
19-15    is necessary and desirable for the health and well-being of the
19-16    people of this state;
19-17                (2)  it is the policy of the state and the purpose of
19-18    this subchapter to encourage persons in districts to provide parks
19-19    and recreational facilities for their use and benefit;
19-20                (3)  within constitutional limitations, the power to
19-21    enact laws vested in the legislature by Section 1, Article III,
19-22    Texas Constitution, is supreme;
19-23                (4)  there is no constitutional inhibition that would
19-24    prohibit the legislature from authorizing districts to acquire,
19-25    own, develop, construct, improve, manage, operate, and maintain
19-26    parks and recreational facilities; and
 20-1                (5)  the general legislative power alone is adequate to
 20-2    support the enactment of this subchapter without reference to any
 20-3    specific constitutional authorization.
 20-4          (b)  This subchapter provides complete authority to a
 20-5    district to develop and maintain recreational facilities.
 20-6          Sec. 49.462.  DEFINITIONS.  In this subchapter:
 20-7                (1)  "Recreational facilities" means parks,
 20-8    landscaping, parkways, greenbelts, sidewalks, trails, public
 20-9    right-of-way beautification projects, and recreational equipment
20-10    and facilities.  The term includes associated street and security
20-11    lighting.
20-12                (2)  "Develop and maintain" means to acquire, own,
20-13    develop, construct, improve, manage, maintain, and operate.
20-14          Sec. 49.463.  AUTHORIZATION OF RECREATIONAL FACILITIES.  In
20-15    addition to the other purposes for which a district is created, a
20-16    district is created for the purpose of developing and maintaining
20-17    recreational facilities for the people in the district.  A district
20-18    may accomplish this purpose as provided in this subchapter.
20-19          Sec. 49.464.  ACQUISITION OF AND PAYMENT FOR RECREATIONAL
20-20    FACILITIES.  (a)  A district may not issue bonds supported by ad
20-21    valorem taxes to pay for the development and maintenance of
20-22    recreational facilities.
20-23          (b)  Except as provided by Subsection (a), a district may
20-24    acquire recreational facilities and obtain funds to develop and
20-25    maintain them in the same manner as authorized elsewhere in this
20-26    code for the acquisition, development, and maintenance of other
 21-1    district facilities.  A district may charge fees directly to the
 21-2    users of recreational facilities and to water and wastewater
 21-3    customers of the district to pay for all or part of the cost of
 21-4    their development and maintenance.  To enforce payment of an unpaid
 21-5    fee charged under this subsection, the district may:
 21-6                (1)  seek legal restitution of the unpaid fee; and
 21-7                (2)  refuse use of a recreational facility to the
 21-8    person who owes the unpaid fee.
 21-9          (c)  The district may not refuse use of facilities or
21-10    services other than recreational facilities to enforce an unpaid
21-11    fee.
21-12          Sec. 49.465.  STANDARDS.  The board by rule shall establish
21-13    standards for recreational facilities to be developed and
21-14    maintained by a district and for the allocation of a district's
21-15    funds for developing and maintaining recreational facilities in
21-16    relation to a district's financial requirements for other purposes.
21-17    To prevent duplication of recreational facilities provided by other
21-18    governmental entities, rules adopted by the board under this
21-19    section must require a district, before developing recreational
21-20    facilities, to make findings that the size and location of the
21-21    facilities have been established in consideration of municipal or
21-22    county recreational facilities, whether existing or proposed, that
21-23    serve or will serve the area in which the district is located.
21-24          SECTION 25.  Subsection (a), Section 51.013, Water Code, is
21-25    amended to read as follows:
21-26          (a)  A petition requesting creation of a district shall be
 22-1    signed by a majority of the persons who hold title to land in the
 22-2    proposed district which represents a total value of more than 50
 22-3    percent of the value of all the land in the proposed district as
 22-4    indicated by the [county] tax rolls of the central appraisal
 22-5    district.  If there are more than 50 persons holding title to land
 22-6    in the proposed district, the petition is sufficient if signed by
 22-7    50 of them.
 22-8          SECTION 26.  Subchapter D, Chapter 51, Water Code, is amended
 22-9    by adding Section 51.122 to read as follows:
22-10          Sec. 51.122.  ADOPTING RULES AND REGULATIONS.  A district may
22-11    adopt and enforce reasonable rules and regulations to:
22-12                (1)  secure and maintain safe, sanitary, and adequate
22-13    plumbing installations, connections, and appurtenances as
22-14    subsidiary parts of the district's sanitary sewer system;
22-15                (2)  preserve the sanitary condition of all water
22-16    controlled by the district;
22-17                (3)  prevent waste or the unauthorized use of water
22-18    controlled by the district;
22-19                (4)  regulate privileges on any land or any easement
22-20    owned or controlled by the district; or
22-21                (5)  provide and regulate a safe and adequate
22-22    freshwater distribution system.
22-23          SECTION 27.  Chapter 51, Water Code, is amended by adding
22-24    Subchapter E to read as follows:
22-25                        SUBCHAPTER E.  ENFORCEMENT
22-26          Sec. 51.221.  PENALTY FOR VIOLATION OF REGULATION.  A person
 23-1    who violates a regulation adopted by a district under this chapter
 23-2    or other law commits an offense.  An offense under this section is
 23-3    a Class C misdemeanor.
 23-4          SECTION 28.  Section 53.021, Water Code, is amended to read
 23-5    as follows:
 23-6          Sec. 53.021.  OFFICERS TO BE ELECTED.  In the election, five
 23-7    supervisors [and the tax assessor and collector] are elected.
 23-8          SECTION 29.  Section 54.014, Water Code, is amended to read
 23-9    as follows:
23-10          Sec. 54.014.  PETITION.  When it is proposed to create a
23-11    district, a petition requesting creation shall be filed with the
23-12    commission.  The petition shall be signed by a majority in value of
23-13    the holders of title of the land within the proposed district, as
23-14    indicated by the [county] tax rolls of the central appraisal
23-15    district.  If there are more than 50 persons holding title to the
23-16    land in the proposed district, as indicated by the [county] tax
23-17    rolls of the central appraisal district, the petition is sufficient
23-18    if it is signed by 50 holders of title to the land.
23-19          SECTION 30.  Section 54.236, Water Code, is amended to read
23-20    as follows:
23-21          Sec. 54.236.  Street or Security Lighting.  Subject to the
23-22    provisions of this section, a district may purchase, install
23-23    [accept], operate, and maintain street lighting or security
23-24    lighting within public utility easements or public rights-of-way
23-25    within the boundaries of the district.  [Such street or security
23-26    lighting facilities must have been constructed by an owner or
 24-1    developer of property within the district and must have been
 24-2    required by a city as a condition to the city granting its consent
 24-3    to the creation of the district pursuant to Section 54.016 of this
 24-4    code.]  A district may not issue bonds supported by ad valorem
 24-5    taxes to pay for the purchase, installation, [development] and
 24-6    maintenance of street or security lighting.
 24-7          SECTION 31.  Subdivision (1), Section 54.772, Water Code, is
 24-8    amended to read as follows:
 24-9                (1)  "Recreational facilities" means parks,
24-10    landscaping, parkways, greenbelts, sidewalks, trails, public
24-11    right-of-way beautification projects, and recreational equipment
24-12    and facilities.  The term includes associated street and security
24-13    lighting.
24-14          SECTION 32.  Subsection (a), Section 54.774, Water Code, is
24-15    amended to read as follows:
24-16          (a)  A district may not issue bonds supported by ad valorem
24-17    taxes to pay for the development and maintenance of recreational
24-18    facilities.
24-19          SECTION 33.  Subsection (a), Section 57.092, Water Code, is
24-20    amended to read as follows:
24-21          (a)  The district may enter into all necessary and proper
24-22    contracts and employ all persons and means necessary to purchase,
24-23    acquire, build, construct, complete, carry out, maintain, protect,
24-24    and, in case of necessity, add to and rebuild all works and
24-25    improvements [within the district] necessary or proper to fully
24-26    accomplish a reclamation plan lawfully adopted for the district.
 25-1          SECTION 34.  Subchapter D, Chapter 57, Water Code, is amended
 25-2    by adding Section 57.093 to read as follows:
 25-3          Sec. 57.093.  ADOPTING RULES AND REGULATIONS.  A district may
 25-4    adopt and enforce reasonable rules and regulations to:
 25-5                (1)  preserve the sanitary condition of all water
 25-6    controlled by the district;
 25-7                (2)  prevent waste or the unauthorized use of water
 25-8    controlled by the district;
 25-9                (3)  regulate privileges on any land or any easement
25-10    owned or controlled by the district;
25-11                (4)  regulate the design and construction of
25-12    improvements and facilities that outfall, connect, or tie into
25-13    district improvements and facilities; or
25-14                (5)  require the district's review and approval of
25-15    drainage plans for property within the district.
25-16          SECTION 35.  Subchapter B, Chapter 101, Civil Practice and
25-17    Remedies Code, is amended by adding Section 101.0211 to read as
25-18    follows:
25-19          Sec. 101.0211.  NO LIABILITY FOR JOINT ENTERPRISE.  The
25-20    common law doctrine of vicarious liability because of participation
25-21    in a joint enterprise does not impose liability on a water district
25-22    created pursuant to either Sections 52(b)(1) and (2), Article III,
25-23    or Section 59, Article XVI, Texas Constitution, regardless of how
25-24    created, for a claim brought under this chapter.
25-25          SECTION 36.  Subchapter B, Chapter 402, Local Government
25-26    Code, is amended by adding Section 402.0205 to read as follows:
 26-1          Sec. 402.0205.  REVENUE BONDS TO PAY FOR DISTRICT SERVICES
 26-2    UNDER CONTRACT.  (a)  In this section, "district" has the meaning
 26-3    assigned by Section 49.001, Water Code.
 26-4          (b)  If a district contracts with a municipality to provide
 26-5    all or part of the water or wastewater services to the
 26-6    municipality, the municipality may issue bonds payable from the
 26-7    revenues of its water and wastewater system to provide funds to
 26-8    make payments owed by the municipality to the district under the
 26-9    contract.
26-10          SECTION 37.  Subchapter Z, Chapter 402, Local Government
26-11    Code, is amended by adding Section 402.908 to read as follows:
26-12          Sec. 402.908.  SALE OF WATER OR SEWER SYSTEM.  A
26-13    municipality, without an election, may sell to a water district
26-14    operating under the authority of Section 59, Article XVI, Texas
26-15    Constitution, a water or sewer system owned by the municipality.
26-16          SECTION 38.  Subchapter Z, Chapter 402, Local Government
26-17    Code, is amended by adding Section 402.909 to read as follows:
26-18          Sec. 402.909.  PROHIBITED EMPLOYMENT OF OR CONTRACTING WITH
26-19    FORMER TRUSTEE OR BOARD MEMBER.  (a)  This section applies to a
26-20    municipality that creates a board of trustees or other board to
26-21    manage and control a water, wastewater, storm water, or drainage
26-22    utility system that the municipality owns.
26-23          (b)  The municipality or a board of trustees or other board
26-24    described by Subsection (a) may not employ or contract with an
26-25    individual who was a member of the board before the second
26-26    anniversary of the date the individual ceased to be a member of the
 27-1    board.
 27-2          SECTION 39.  Subsections (a) and (b), Section 4.03, Chapter
 27-3    1029, Acts of the 76th Legislature, Regular Session, 1999, are
 27-4    amended to read as follows:
 27-5          (a)  The authority may establish fees, rates, and charges,
 27-6    and classifications of fee and rate payers, as necessary to enable
 27-7    the authority to fulfill the authority's purposes and regulatory
 27-8    obligations provided by this Act.
 27-9          (b)  The authority may charge against the owner of a well
27-10    located in the authority's boundaries a fee on the amount of water
27-11    pumped from the well.  The board shall establish the rate of a fee
27-12    under this subsection only after a special meeting on the fee.  The
27-13    board shall by rule exempt from the fee under this subsection those
27-14    classes of wells that are not subject to groundwater reduction
27-15    requirements imposed by the subsidence district, except that if any
27-16    of those classes of wells become subject at a future date to a
27-17    groundwater reduction requirement imposed by the subsidence
27-18    district, then the authority may after that date charge the fee
27-19    under this subsection to those affected classes of wells.  The
27-20    board by rule may exempt any other classes of wells from the fee
27-21    under this subsection.  The board may not apply the fee to a well:
27-22                (1)  with a casing diameter of less than five inches
27-23    that serves a single-family dwelling;
27-24                (2)  regulated under Chapter 27, Water Code;
27-25                (3)  used for irrigation of agricultural crops; or
27-26                (4)  [that produces 10 million gallons or less
 28-1    annually; or]
 28-2                [(5)]  used solely for electric generation.
 28-3          SECTION 40.  Subsection (a), Section 4.06, Chapter 1029, Acts
 28-4    of the 76th Legislature, Regular Session, 1999, is amended to read
 28-5    as follows:
 28-6          (a)  The authority may:
 28-7                (1)  acquire and provide by purchase, gift, [or] lease,
 28-8    contract, or any other legal means, a water treatment or supply
 28-9    system, or any other works, plants, improvements, or facilities
28-10    necessary or convenient to accomplish the purposes of the
28-11    authority, or any interest in those assets, inside of or outside of
28-12    the authority's boundaries;
28-13                (2)  design, finance, or construct a water treatment or
28-14    supply system, or any other supply systems, or any other works,
28-15    plants, improvements, or facilities necessary or convenient to
28-16    accomplish the purposes of the authority, and provide water
28-17    services inside of or outside of the authority's boundaries;
28-18                (3)  maintain, operate, lease, or sell a water
28-19    treatment or supply system, or any other works, plants,
28-20    improvements, or facilities necessary or convenient to accomplish
28-21    the purposes of the authority, that the authority constructs or
28-22    acquires inside of or outside of the authority's boundaries; and
28-23                (4)  contract with any person to operate or maintain a
28-24    water treatment or supply system the person owns.
28-25          SECTION 41.  Sections 53.024, 57.152, and 57.153, Water Code,
28-26    are repealed.
 29-1          SECTION 42.  (a)  In this section "district" means a
 29-2    conservation and reclamation district created under Section 52,
 29-3    Article III, and Section 59, Article XVI, Texas Constitution.
 29-4          (b)  The following are validated and confirmed in all
 29-5    respects:
 29-6                (1)  the creation of a district and all proceedings
 29-7    related to the creation of the district, effective as of the date
 29-8    on which the creation or related proceedings occurred; and
 29-9                (2)  any act or proceeding of a district, including an
29-10    election, not excepted by this section and taken not more than two
29-11    years before the effective date of this Act, effective as of the
29-12    date on which the act or proceeding occurred.
29-13          (c)  Subsection (b) of this section does not apply to:
29-14                (1)  an act, proceeding, director, other official,
29-15    bond, or other obligation the validity of which or of whom is the
29-16    subject of litigation that is pending on the effective date of this
29-17    Act; or
29-18                (2)  a governmental act or proceeding that, under the
29-19    law of this state at the time the act or proceeding occurred, was a
29-20    misdemeanor or a felony.
29-21          SECTION 43.  This Act takes effect immediately if it receives
29-22    a vote of two-thirds of all the members elected to each house, as
29-23    provided by Section 39, Article III, Texas Constitution.  If this
29-24    Act does not receive the vote necessary for immediate effect, this
29-25    Act takes effect September 1, 2001.
                                                               S.B. No. 1444
            _______________________________     _______________________________
                President of the Senate              Speaker of the House
                  I hereby certify that S.B. No. 1444 passed the Senate on
            April 23, 2001, by the following vote:  Yeas 29, Nays 0, one
            present not voting; May 18, 2001, Senate refused to concur in House
            amendments and requested appointment of Conference Committee;
            May 21, 2001, House granted request of the Senate; May 26, 2001,
            Senate adopted Conference Committee Report by the following vote:
            Yeas 30, Nays 0, one present not voting.
                                                _______________________________
                                                    Secretary of the Senate
                  I hereby certify that S.B. No. 1444 passed the House, with
            amendments, on May 15, 2001, by the following vote:  Yeas 139,
            Nays 0, two present not voting; May 21, 2001, House granted request
            of the Senate for appointment of Conference Committee;
            May 26, 2001, House adopted Conference Committee Report by the
            following vote:  Yeas 143, Nays 0, two present not voting.
                                                _______________________________
                                                    Chief Clerk of the House
            Approved:
            _______________________________
                         Date
            _______________________________
                       Governor