1-1                                   AN ACT
 1-2     relating to conferring on the Coastal Water Authority the power to
 1-3     abandon or deconstruct a canal, ditch, or lateral; changing the
 1-4     qualifications of the authority's board of directors; and
 1-5     authorizing the authority to issue refunding bonds.
 1-7           SECTION 1.  Section 3, Chapter 601, Acts of the 60th
 1-8     Legislature, Regular Session, 1967 (Article 8280-355, Vernon's
 1-9     Texas Civil Statutes), is amended to read as follows:
1-10           Sec. 3.  The Authority shall have and exercise and is hereby
1-11     vested with all of the rights, powers and privileges, authorities
1-12     and functions conferred and imposed by the general laws of this
1-13     state now in force or hereafter enacted applicable to water control
1-14     and improvement districts and municipal utility districts created
1-15     under authority of Section 59 of Article XVI, Constitution of
1-16     Texas, but to the extent that the provisions of such general laws
1-17     may be in conflict or inconsistent with the provisions of this Act,
1-18     the provisions of this Act shall prevail.  All such general laws
1-19     are hereby adopted and incorporated by reference with the same
1-20     effect as if incorporated in full in this Act.  Without in any way
1-21     limiting the generalization of the foregoing, it is expressly
1-22     provided that the Authority shall have and exercise, and is hereby
1-23     vested with, all of the rights, powers and privileges, authorities
1-24     and functions conferred by Chapters 51 and 54, Title 4, Water Code,
1-25     together with all amendments thereof and additions thereto.  The
 2-1     Authority shall have the power to make, construct, or otherwise
 2-2     acquire improvements either within or without the boundaries
 2-3     thereof necessary to carry out the powers and authority granted by
 2-4     this Act and said general laws.  Not by way of limitation, the
 2-5     Authority shall be authorized and empowered to conserve, store,
 2-6     transport, treat and purify, distribute, sell and deliver water,
 2-7     both surface and underground, to persons, corporations, both public
 2-8     and private, political subdivisions of the state and others, and
 2-9     may purchase, construct or lease all property, works and
2-10     facilities, both within and without the Authority, necessary for
2-11     such purposes.  The Authority is expressly authorized to acquire
2-12     water supplies from sources both within and without the boundaries
2-13     of the Authority and to sell, transport and deliver water to
2-14     customers situated within and without the Authority and to acquire
2-15     all properties and facilities necessary for such purposes, and for
2-16     any and all of such purposes may enter into contracts with persons,
2-17     with municipal, public and private corporations, including the City
2-18     of Houston, and any political subdivision of the state for such
2-19     periods of time, not exceeding forty (40) years, and on such terms
2-20     and conditions as its Board of Directors may deem desirable, fair
2-21     and advantageous and to which the parties may agree; provided, that
2-22     such contracts may provide that they shall continue in effect until
2-23     bonds issued by the Authority to finance the cost of water system
2-24     facilities, and refunding bonds issued in lieu thereof, are paid.
2-25     In addition, the Authority shall have the power to contract with
2-26     others to transport their water and the power to act jointly with
 3-1     others in the performance of all functions and purposes of the
 3-2     Authority.  Provided that the Authority has no existing contractual
 3-3     obligation to any person, corporation or political subdivision to
 3-4     use a particular canal, lateral or ditch to transport or deliver
 3-5     water, the Authority is expressly authorized to abandon, sell,
 3-6     release or deconstruct that canal, ditch or lateral if any of the
 3-7     following conditions apply:  (i) the Authority has not used the
 3-8     canal, ditch or lateral to transport or deliver water to persons,
 3-9     corporations or political subdivisions of the state for a period of
3-10     five (5) years; (ii) there are intervening gaps between the canal,
3-11     ditch or lateral the Authority wishes to abandon, sell, release or
3-12     deconstruct and the Authority's primary canal serving that canal,
3-13     lateral or ditch; or (iii) an adjoining landowner has requested in
3-14     writing that the Authority abandon, sell, release or deconstruct
3-15     the canal, ditch or lateral and no other adjoining landowner has
3-16     objected within thirty (30) days after receiving notice from the
3-17     Authority of its intent to abandon, sell, release or deconstruct
3-18     the canal, ditch or lateral.  [The Authority shall comply with the
3-19     provisions of Chapter 1, Title 128, Revised Civil Statutes of
3-20     Texas, 1925, as amended.] Nothing herein contained shall preclude
3-21     the Authority from acquiring water rights under any law or permits
3-22     heretofore or hereafter issued, provided acquisition of the same is
3-23     approved by order or subsequent permit from the Texas Natural
3-24     Resource Conservation [Water] Commission.
3-25           SECTION 2.  Section 5(a), Chapter 601, Acts of the 60th
3-26     Legislature, Regular Session, 1967 (Article 8280-355, Vernon's
 4-1     Texas Civil Statutes), is amended to read as follows:
 4-2           Sec. 5(a).  The management and control of the Authority is
 4-3     hereby vested in a board of seven (7) directors who shall be at
 4-4     least twenty-one (21) years of age and shall be residents and
 4-5     landowners of Harris County or that part of Chambers and Liberty
 4-6     Counties which are within the boundaries of the Authority.  Four
 4-7     (4) of such directors and their successors, being positions
 4-8     numbered one (1) to four (4) inclusive, shall be appointed by the
 4-9     mayor of the City of Houston with the advice and consent of the
4-10     governing body of such city.  The remaining three (3) directors and
4-11     their successors, being positions numbered five (5) to seven (7)
4-12     inclusive shall be appointed by the Governor of Texas with the
4-13     advice and consent of the Senate, one of whom shall be a resident
4-14     of Chambers County, one a resident of Liberty County and one a
4-15     resident of Harris County.  Vacancies in positions one (1) through
4-16     four (4) shall be filled by appointment by the mayor of the City of
4-17     Houston with the advice and consent of its governing body, and
4-18     vacancies in positions five (5) through seven (7) shall be filled
4-19     by appointment by the Governor of Texas with the advice and consent
4-20     of the Senate.  Any director appointed by the mayor or governor
4-21     shall be entitled to serve as a director pending his approval by
4-22     the said governing body or Senate.  Beginning in the year 2005, a
4-23     person appointed to the board of directors by the Governor of Texas
4-24     need not be a resident within the boundaries of the Authority if
4-25     the person is a resident within the area of Liberty County south of
4-26     U.S. Highway 90 and west of the Trinity River.
 5-1           The directors first appointed shall meet and organize as soon
 5-2     as practicable after the effective date of this Act, and shall file
 5-3     their official bonds and subscribe to the Constitutional oath of
 5-4     office.  The directors first appointed shall serve until April 1,
 5-5     1969, and all terms of office thereafter shall be for a period of
 5-6     two (2) years except for the first term of office after April 1,
 5-7     1969, for positions one (1), two (2) and six (6) which shall be for
 5-8     a term of one (1) year.  No member of the governing body of the
 5-9     City of Houston and no employee of the City of Houston shall be
5-10     appointed as a director.
5-11           At its April, 1969, meeting the board shall reorganize and
5-12     elect from its members a president, vice-president,
5-13     secretary-treasurer and such other officers as it deems necessary.
5-14     A person who is elected to a board office shall serve for two (2)
5-15     years in that capacity or until he ceases to be a director, if this
5-16     event occurs within two (2) years.  At its April meeting of each
5-17     year the board shall elect officers for the offices to be filled.
5-18     If a vacancy occurs in a board office, the directors at the next
5-19     regular board meeting shall elect a person to serve until the next
5-20     April meeting of the board.
5-21           SECTION 3.  Chapter 601, Acts of the 60th Legislature,
5-22     Regular Session, 1967 (Article 8280-355, Vernon's Texas Civil
5-23     Statutes), is amended by adding Section 6(a) to read as follows:
5-24           Sec. 6(a).  The Authority is authorized to issue its
5-25     refunding bonds to refund any Authority bond or obligation in
5-26     accordance with the laws of the state including bonds or other
 6-1     obligations that have previously been defeased by the Authority by
 6-2     escrowing United States Government obligations to pay the
 6-3     principal, interest and redemption price to their maturity date and
 6-4     would otherwise be deemed to be no longer outstanding.  The
 6-5     Authority is authorized to enter into an agreement granting an
 6-6     option to purchase the Authority's refunding bonds on the terms and
 6-7     conditions the board determines advisable, which may be for a term
 6-8     of up to four years.  Alternatively, the Authority may enter into a
 6-9     bond purchase agreement to sell the refunding bonds of the
6-10     Authority on such terms and conditions as the board determines
6-11     advisable, which may provide for delivery of the bonds for a period
6-12     of up to four years.
6-13           SECTION 4.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1646 passed the Senate on
         May 2, 2001, by a viva-voce vote; and that the Senate concurred in
         House amendment on May 26, 2001, by a viva-voce vote.
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1646 passed the House, with
         amendment, on May 23, 2001, by a non-record vote.
                                                Chief Clerk of the House