1-1                                   AN ACT
 1-2     relating to the creation of the West Galveston Island Conservation
 1-3     District; providing the authority to impose taxes and issue bonds.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  LEGISLATIVE FINDINGS; PURPOSES.  (a)  The West
 1-6     Galveston Island Conservation District is created as a special
 1-7     district under Section 59, Article XVI, Texas Constitution.
 1-8           (b)  The creation of the district is declared to be essential
 1-9     to the accomplishment of the purposes of Section 59, Article XVI,
1-10     and Section 52-a, Article III, Texas Constitution, and to the
1-11     accomplishment of the other public purposes stated in this Act,
1-12     other than the creation of a navigation district or a port
1-13     authority.
1-14           (c)  The creation of the district is necessary to promote,
1-15     develop, encourage, and maintain employment, commerce, economic
1-16     development, and the public welfare in the area of the district.
1-17           (d)  The creation of the district and this Act may not be
1-18     interpreted to relieve any county or municipality from providing
1-19     services to the area included in the district or to release the
1-20     county or municipality from the obligation it has to provide
1-21     services to that area.  The district is created to supplement and
1-22     not supplant the services of the county or municipality.
1-23           (e)  All of the land and other property to be included within
1-24     the boundaries of the district will be benefited by the works and
1-25     projects that are to be accomplished and the services to be
 2-1     provided by the district under powers conferred by Section 59,
 2-2     Article XVI, and Section 52-a, Article III, Texas Constitution, and
 2-3     other powers granted in this Act.
 2-4           (f)  The district is created to serve a public use and
 2-5     benefit.
 2-6           (g)  The creation of the district is essential to further the
 2-7     public purposes of development and diversification of the economy
 2-8     of the state, the elimination of unemployment and underemployment,
 2-9     and the development or expansion of commerce and is in the public
2-10     interest.
2-11           (h)  The creation of the district is necessary to protect the
2-12     state's natural resources by restoration and protection of natural
2-13     resources along the boundaries of and within the district, through
2-14     improvement projects, matching fund contributions to improvement
2-15     projects by the state or county, and services provided by the
2-16     district under this Act.
2-17           (i)  The creation of the district is necessary to promote,
2-18     develop, and encourage navigation along the state's coastal waters,
2-19     bays, and inlets, including the deepening and widening of
2-20     navigation channels.
2-21           (j)  Each improvement project or service authorized by this
2-22     Act is found and declared to carry out a public purpose.
2-23           SECTION 2.  CONSTRUCTION OF ACT.  This Act shall be liberally
2-24     construed in conformity with the findings and purposes in Section 1
2-25     of this Act.
2-26           SECTION 3.  DEFINITIONS.  In this Act:
 3-1                 (1)  "Board" means the board of directors of the
 3-2     district.
 3-3                 (2)  "Bond" means any type of interest-bearing
 3-4     obligation, including a bond, note, bond anticipation note,
 3-5     certificate of participation, lease, contract, or other evidence of
 3-6     indebtedness.
 3-7                 (3)  "Commission" means the Texas Natural Resource
 3-8     Conservation Commission.
 3-9                 (4)  "County" means Galveston County.
3-10                 (5)  "District" means the West Galveston Island
3-11     Conservation District.
3-12           SECTION 4.  GOVERNMENTAL AGENCY.  Except as provided by
3-13     Section 14 of this Act, the district is a governmental agency, a
3-14     body politic and corporate, and a political subdivision of the
3-15     state.
3-16           SECTION 5.  BOUNDARIES.  The district includes all of the
3-17     territory contained in the following described land:
3-18           BEGINNING at the intersection of the southerly projection of
3-19     the centerline of 103rd Street in the City of Galveston, Texas, and
3-20     the mean high tide line of the Gulf of Mexico on Galveston Island;
3-21           Thence along the mean high tide line of the Gulf of Mexico
3-22     and San Luis Pass in a westerly then northerly direction to the
3-23     intersection of such line with the centerline of FM 3005;
3-24           Thence along the centerline of FM 3005 in a westerly
3-25     direction to the intersection of such line with the Galveston
3-26     County-Brazoria County line;
 4-1           Thence along the Galveston County-Brazoria County line in a
 4-2     northerly direction to the intersection of such line with the
 4-3     centerline of the Intracoastal Waterway;
 4-4           Thence along the centerline of the Intracoastal Waterway in
 4-5     an easterly direction to the intersection of such line with the
 4-6     northerly projection of the centerline of 103rd Street in the City
 4-7     of Galveston, Texas; and
 4-8           Thence along the centerline of 103rd Street in the City of
 4-9     Galveston, Texas, and the northerly and southerly projection
4-10     thereof to the PLACE OF BEGINNING.
4-11           SECTION 6.  FINDINGS RELATED TO BOUNDARIES.  The boundaries
4-12     and field notes of the district form a closure.  If a mistake is
4-13     made in the field notes or in copying the field notes in the
4-14     legislative process, it does not affect the district's:
4-15                 (1)  organization, existence, or validity;
4-16                 (2)  right to issue any type of bond for the purposes
4-17     for which the district is created or to pay the principal of and
4-18     interest on a bond;
4-19                 (3)  right to impose or collect an assessment or ad
4-20     valorem taxes; or
4-21                 (4)  legality or operation.
4-22           SECTION 7.  CONFIRMATION ELECTION.  (a)  The initial
4-23     directors shall meet as soon as practicable after all initial
4-24     directors have qualified for office.  At the first meeting of the
4-25     board, the board shall call an election to be held within the
4-26     boundaries of the district to confirm the creation of the district.
 5-1     Qualifications for voting in any election in the district are the
 5-2     same as those set forth in Section 10 of this Act as qualifications
 5-3     necessary to serve as a director for the district.  The election
 5-4     must be held on the first uniform election date provided by Section
 5-5     41.001, Election Code, that falls on or after the 45th day after
 5-6     the date of the order calling the election.
 5-7           (b)  The district may not issue any bonds or other
 5-8     obligations, impose an assessment or ad valorem tax, or conduct any
 5-9     other activity before a confirmation election is held.
5-10           (c)  The board shall give notice of the confirmation
5-11     election.  The notice must state:
5-12                 (1)  the nature of the election, including the
5-13     proposition that is to appear on the ballot;
5-14                 (2)  the date of the election;
5-15                 (3)  the hours during which the polls will be open; and
5-16                 (4)  the location of the polling places.
5-17           (d)  The ballot shall be printed to permit voting "For
5-18     District" or "Against District."
5-19           (e)  Immediately after the confirmation election, the
5-20     presiding judge of each election precinct shall take returns of the
5-21     result to the board.  The board shall canvass the returns and
5-22     declare the results at the earliest practicable time.
5-23           (f)  If a majority of the votes cast in the election favor
5-24     the creation of the district, the board shall declare that the
5-25     district is created and enter the result in its minutes.  If a
5-26     majority of the votes cast in the election are against the creation
 6-1     of the district, the board shall declare that the proposition to
 6-2     create the district was defeated and enter the result in its
 6-3     minutes.  A certified copy of the minute order declaring that the
 6-4     district is created or declaring that the proposition to create the
 6-5     district was defeated shall be filed with the commission.
 6-6           (g)  If the proposition to create the district is defeated,
 6-7     another election to confirm the creation of the district may not be
 6-8     held until the expiration of six months after the date of the most
 6-9     recent confirmation election.  The board may not call more than
6-10     three confirmation elections.
6-11           (h)  The order canvassing the results of the confirmation
6-12     election shall contain a description of the district's boundaries
6-13     and shall be filed with the executive director of the commission
6-14     and in the deed records of the county.
6-15           SECTION 8.  ANNEXATION.  The district may annex land as
6-16     provided by Subchapter J, Chapter 49, Water Code, subject to the
6-17     approval of the commissioners court of the county.
6-18           SECTION 9.  EXCLUDING TERRITORY.  (a)  At any time during
6-19     which the district does not have outstanding bonds, the board on
6-20     its own motion may call a hearing on the question of the exclusion
6-21     of land from the district in the manner provided by Subchapter J,
6-22     Chapter 49, Water Code, if the board finds that the exclusions are
6-23     practicable, just, or desirable.
6-24           (b)  The board shall call a hearing on the exclusion of land
6-25     or other property from the district if a landowner or property
6-26     owner in the district files with the secretary of the board a
 7-1     written petition requesting the hearing before the issuance of
 7-2     bonds.
 7-3           SECTION 10.  BOARD OF DIRECTORS.  (a)  The district is
 7-4     governed by an initial board of five directors who shall serve
 7-5     until their successors are elected as provided for by this section.
 7-6           (b)  The commissioners court of the county shall appoint the
 7-7     initial directors from persons recommended by members of the
 7-8     commissioners court.  A person is appointed if the county judge and
 7-9     a majority of the commissioners of the county vote to appoint that
7-10     person.
7-11           (c)  As soon as practicable after the first anniversary of
7-12     the date on which the creation of the district is confirmed, the
7-13     board shall call and hold an election to elect the initial
7-14     permanent directors.
7-15           (d)  The election shall be held in the manner provided by
7-16     Section 49.102, Water Code.
7-17           (e)  The election must be held on the first uniform election
7-18     date provided by Section 41.001, Election Code, that falls on or
7-19     after the 45th day after the date of the order calling the
7-20     election.  The initial permanent directors elected at the election
7-21     shall draw lots to determine their terms so that two serve terms
7-22     expiring on the first July 1 of an odd-numbered year after the
7-23     election and three serve terms expiring July 1 of the second year
7-24     after the year in which the first terms expire.
7-25           (f)  An election to elect the appropriate number of successor
7-26     directors shall be held on the uniform election date, established
 8-1     by the Election Code, in May of each odd-numbered year.
 8-2           (g)  To be qualified to serve as a director, a person must be
 8-3     at least 18 years old and:
 8-4                 (1)  a resident and qualified voter of the district;
 8-5     and
 8-6                 (2)  an owner of property in the district.
 8-7           (h)  A director may serve successive terms.
 8-8           (i)  The commissioners court may remove a director for
 8-9     misconduct or failure to carry out the director's duties or for any
8-10     other reason on petition by a majority of the remaining directors
8-11     or a majority of the commissioners court and after notice and
8-12     hearing.
8-13           (j)  A vacancy in the office of director shall be filled by
8-14     appointment by the commissioners court for the unexpired term.
8-15           (k)  As soon as practicable after a director is appointed or
8-16     elected, the director shall execute a $10,000 bond payable to the
8-17     district and conditioned on the faithful performance of the
8-18     director's duties.  Each director's bond must be approved by the
8-19     board, and each director shall take the oath of office for public
8-20     officers prescribed by the constitution of this state.  The bond
8-21     and oath shall be filed with the district and retained in its
8-22     records.
8-23           (l)  After directors are appointed or elected and have
8-24     qualified by executing a bond and taking the oath, they shall
8-25     organize by electing a president, a vice president, a secretary,
8-26     and any other officers the board considers necessary.  The board
 9-1     shall hold successive elections of officers every two years after
 9-2     the election of the initial officers as provided by this
 9-3     subsection.
 9-4           (m)  In accordance with Section 49.060, Water Code, a
 9-5     director is entitled to compensation for service on the board and
 9-6     is entitled to be reimbursed for necessary expenses incurred in
 9-7     carrying out the duties and responsibilities of a director.
 9-8           (n)  A majority of the directors constitutes a quorum.
 9-9           (o)  The vote of a majority of directors is required for any
9-10     official action of the district.
9-11           SECTION 11.  GENERAL POWERS OF DISTRICT.  (a)  Except for the
9-12     limitations set forth in this Act, the district has the rights,
9-13     powers, privileges, authority, and functions conferred by the
9-14     general law of this state applicable to conservation and
9-15     reclamation districts created under Section 59, Article XVI, Texas
9-16     Constitution, including those conferred by Chapter 54, Water Code,
9-17     with respect to the purposes for which the district is created.
9-18           (b)  The district may contract and manage its affairs and
9-19     funds for any district purpose in accordance with Chapter 54, Water
9-20     Code.
9-21           SECTION 12.  SPECIFIC POWERS AND DUTIES OF DISTRICT.  (a)  A
9-22     district has the powers necessary or convenient to carry out and
9-23     effect the purposes and provisions of this Act, including the
9-24     powers granted in this section.
9-25           (b)  The district has perpetual succession.
9-26           (c)  The district may:
 10-1                (1)  sue and be sued in courts of competent
 10-2    jurisdiction, and institute and prosecute suits;
 10-3                (2)  incur liabilities and borrow money on terms the
 10-4    board determines;
 10-5                (3)  issue bonds;
 10-6                (4)  acquire by grant, purchase, gift, devise, lease,
 10-7    or otherwise and hold, use, sell, lease, or dispose of real and
 10-8    personal property, licenses, patents, rights, and interests
 10-9    necessary, convenient, or useful for the full exercise of any of
10-10    its powers under this Act;
10-11                (5)  acquire, construct, complete, develop, own,
10-12    operate, and maintain permanent improvements and provide services
10-13    inside and outside its boundaries, except as specifically limited
10-14    in this Act;
10-15                (6)  enter into agreements with a public or private
10-16    person for the joint use of facilities, installations, and
10-17    property;
10-18                (7)  enter into contracts, leases, and agreements with
10-19    and accept grants and loans from the United States and its
10-20    departments and agencies, the state and its agencies, counties,
10-21    municipalities, and political subdivisions, public or private
10-22    corporations, and other persons and perform all acts necessary for
10-23    the full exercise of the powers vested in it on terms and for the
10-24    term the board may determine to be advisable;
10-25                (8)  acquire property under conditional sales
10-26    contracts, leases, equipment trust certificates, or any other form
 11-1    of contract or trust agreement;
 11-2                (9)  sell, lease, convey, or otherwise dispose of any
 11-3    of its rights, interests, or properties that are not needed for or,
 11-4    in the case of leases, that are not consistent with, the efficient
 11-5    operation and maintenance of the district's improvements;
 11-6                (10)  sell, lease, or otherwise dispose of any surplus
 11-7    material or personal or real property not needed for its
 11-8    requirements or for the purpose of carrying out its powers under
 11-9    this Act;
11-10                (11)  procure and pay premiums to insurers for
11-11    insurance of any type in amounts considered necessary or advisable
11-12    by the board; and
11-13                (12)  do anything necessary, convenient, or desirable
11-14    to carry out the powers expressly granted or implied by this Act.
11-15          SECTION 13.  USE AND ALTERATION OF LAND AND PUBLIC WAYS.
11-16    (a)  Except as otherwise provided by this Act, the district may
11-17    construct all improvements and facilities necessary to accomplish
11-18    the purposes for which it was created on lands, whether publicly or
11-19    privately owned.
11-20          (b)  Before the district may construct an improvement or
11-21    facility on lands owned by the county, the state, a municipality,
11-22    or another political subdivision, the district must obtain from the
11-23    entity prior approval of the plans and specifications of the
11-24    improvement or facility and any required easement, lease, or
11-25    permit.
11-26          (c)  The district shall bear all of the costs, expenses, and
 12-1    damages suffered by owners of property or facilities if the
 12-2    district, in exercising any of the powers conferred by this Act,
 12-3    requires the relocation, adjustment, raising, lowering, rerouting,
 12-4    or changing the grade of or altering the construction of any:
 12-5                (1)  streets, alleys, highways, overpasses,
 12-6    underpasses, or roads;
 12-7                (2)  railroad tracks, bridges, or other facilities or
 12-8    property;
 12-9                (3)  electric lines, conduits, or other facilities or
12-10    property;
12-11                (4)  telephone or telegraph lines, conduits, or other
12-12    facilities or property;
12-13                (5)  gas transmission or distribution pipes, pipelines,
12-14    mains, or other facilities or property;
12-15                (6)  water, sanitary sewer or storm sewer pipes,
12-16    pipelines, mains, or other facilities or property;
12-17                (7)  cable television lines, cables, conduits, or other
12-18    facilities or property; or
12-19                (8)  other pipelines and any facilities or properties
12-20    relating to those pipelines.
12-21          SECTION 14.  PROTECTION OF PUBLIC BEACHES.  (a)  The district
12-22    is not an agency, department, institution, subdivision, or
12-23    instrumentality of this state for purposes of Section 61.022,
12-24    Natural Resources Code.
12-25          (b)  Construction by the district in a critical dune area
12-26    identified by the commissioner of the General Land Office under
 13-1    Section 63.121, Natural Resources Code, that affects or that may
 13-2    affect public health or public access to or use of a public beach
 13-3    must be approved by an order of the commissioners court of the
 13-4    county as provided by Subchapter C, Chapter 63, Natural Resources
 13-5    Code.  Construction by the district on land adjacent to and
 13-6    landward of a public beach that affects or that may affect public
 13-7    health or public access to or use of the public beach must be
 13-8    approved by an order of the commissioners court of the county as
 13-9    provided by Section 61.015, Natural Resources Code.   The district
13-10    may not construct or undertake a project on a public beach seaward
13-11    of the natural vegetation line, as defined by Section 61.001,
13-12    Natural Resources Code.  The district may provide district funds
13-13    for a state, county, or local government project that complies with
13-14    Section 61.022, Natural Resources Code, for the protection of the
13-15    shore or another lawful purpose.
13-16          SECTION 15.  NO EMINENT DOMAIN POWER.  The district may not
13-17    exercise the power of eminent domain.  The county may exercise its
13-18    power of eminent domain to implement a district facility or
13-19    improvement.
13-20          SECTION 16.  POWERS AND DUTIES OF BOARD.  (a)  The
13-21    responsibility for the management, operation, and control of the
13-22    property belonging to the district is vested in the board.
13-23          (b)  The board may:
13-24                (1)  employ all persons, firms, partnerships, or
13-25    corporations considered necessary by the board for the conduct of
13-26    the affairs of the district, including a general manager,
 14-1    bookkeepers, auditors, engineers, attorneys, financial advisers,
 14-2    peace or traffic control officers, architects, and operating or
 14-3    management companies, and prescribe the duties, tenure, and
 14-4    compensation of each;
 14-5                (2)  dismiss employees;
 14-6                (3)  adopt a seal for the district;
 14-7                (4)  invest the district's money in any investments
 14-8    authorized by Subchapter A, Chapter 2256, Government Code, and
 14-9    provide, by resolution, that an authorized representative manage
14-10    the district's funds and invest and reinvest the money on terms the
14-11    board considers advisable;
14-12                (5)  establish a fiscal year for the district;
14-13                (6)  establish a complete system of accounts for the
14-14    district; and
14-15                (7)  designate one or more banks to serve as the
14-16    depository bank or banks.
14-17          (c)  Each year the board shall have prepared an audit of the
14-18    district's affairs by an independent certified public accountant or
14-19    a firm of independent certified public accountants.  The audit
14-20    prepared under this subsection must be open to public inspection.
14-21          (d)  Money of the district shall be deposited in the
14-22    depository bank or banks unless otherwise required by orders or
14-23    resolutions authorizing the issuance of the district's bonds.  To
14-24    the extent that money in the depository bank or banks is not
14-25    insured by the Federal Deposit Insurance Corporation, the money
14-26    must be secured in the manner provided by law for the security of
 15-1    funds of counties.  The board by resolution may authorize a
 15-2    designated representative to supervise the substitution of
 15-3    securities pledged to secure the district's money.
 15-4          (e)  The board may adopt and enforce reasonable rules
 15-5    governing the administration of the district and its programs and
 15-6    projects.
 15-7          (f)  The name of the district may be established or changed
 15-8    by resolution of the board.
 15-9          SECTION 17.  HEARINGS EXAMINER; ADMINISTRATIVE PROCEDURE ACT.
15-10    (a)  The board may appoint a hearings examiner to conduct any
15-11    hearing called by the board, including a hearing required by
15-12    Chapter 395, Local Government Code.  The hearings examiner may be
15-13    an employee of the district or a member of the board.
15-14          (b)  The hearing shall be conducted in accordance with
15-15    Chapter 2001, Government Code.
15-16          SECTION 18.  GENERAL POWERS RELATING TO ASSESSMENTS;
15-17    IMPROVEMENT PROJECTS.  (a)  The board may impose and collect an
15-18    assessment for any purpose authorized by and in the manner provided
15-19    by this Act if the commissioners court of the county approves the
15-20    assessment.
15-21          (b)  The board may undertake an improvement project or
15-22    service that confers a special benefit on all or a definable part
15-23    of the district.  The board may impose and collect a special
15-24    assessment on property in that area, based on the benefit conferred
15-25    by the improvement project or service, to pay all or part of the
15-26    cost of the project or service.  If the board determines that there
 16-1    is a benefit to the district, the district may provide an
 16-2    improvement or service to an area outside the boundaries of the
 16-3    district.
 16-4          (c)  The district may not undertake an improvement project or
 16-5    provide a service unless the district uses a method approved by the
 16-6    General Land Office, the office of the attorney general, or any
 16-7    other governmental entity with the authority to regulate the
 16-8    improvement project or service.
 16-9          SECTION 19.  PROPOSED ASSESSMENTS.  An improvement project or
16-10    service may be financed under this Act after notice of a hearing is
16-11    given as required by Section 21 of this Act and the board holds a
16-12    public hearing on the advisability of the improvement project or
16-13    service and the proposed assessment.
16-14          SECTION 20.  PETITION REQUIRED.  The board may finance an
16-15    improvement project or service if a written petition is filed with
16-16    the board requesting the improvement project or service.  If more
16-17    than 25 persons are qualified voters of the district and own real
16-18    property in the district, according to the most recent certified
16-19    property tax rolls, the petition must be signed by at least 25
16-20    persons who are qualified voters of the district and who own real
16-21    property in the district.
16-22          SECTION 21.  NOTICE OF HEARING.  (a)  Notice of the hearing
16-23    shall be given in a newspaper with general circulation in the
16-24    county.  The publication must be made not later than the 30th day
16-25    before the date of the hearing.
16-26          (b)  The notice must include:
 17-1                (1)  the time and place of the hearing;
 17-2                (2)  the general nature of the proposed improvement
 17-3    project or service;
 17-4                (3)  the estimated cost of the improvement project or
 17-5    service, including interest during construction and associated
 17-6    financing costs; and
 17-7                (4)  the proposed method of assessment.
 17-8          (c)  Written notice containing the information required by
 17-9    this section shall be mailed by certified mail, return receipt
17-10    requested, not later than the 30th day before the date of the
17-11    hearing to each property owner in the district who will be subject
17-12    to assessment at the current address of the property to be assessed
17-13    as reflected on the tax rolls or the address provided by the
17-14    property owner for tax purposes.
17-15          SECTION 22.  CONCLUSION OF HEARING; FINDINGS.  (a)  A hearing
17-16    on the improvement project or service, whether conducted by the
17-17    board or a hearings examiner, may be adjourned from time to time.
17-18          (b)  If the board conducts the hearing, at the conclusion of
17-19    the hearing the board shall make findings by resolution or order
17-20    relating to the advisability of the improvement project or service,
17-21    the estimated cost, the area benefited, the method of assessment,
17-22    and the method and time for payment of the assessment.
17-23          (c)  If a hearings examiner is appointed to conduct the
17-24    hearing, after conclusion of the hearing the hearings examiner
17-25    shall file with the board a report stating the examiner's findings
17-26    and conclusions.  Based on the findings and conclusions of the
 18-1    hearings examiner, the board shall make findings by resolution or
 18-2    order relating to the advisability of the improvement project or
 18-3    service, the estimated cost, the area benefited, the method of
 18-4    assessment, and the method and time for payment of the assessment.
 18-5          SECTION 23.  AREA TO BE ASSESSED.  (a)  The area of the
 18-6    district to be assessed according to the findings of the board may
 18-7    be the entire district or any part of the district and may be less
 18-8    than the area proposed in the notice of the hearing.
 18-9          (b)  Except as provided by Subsection (c) of this section,
18-10    the area to be assessed may not include property that is not within
18-11    the district boundaries at the time of the hearing unless there is
18-12    an additional hearing preceded by the required notice.
18-13          (c)  The owner of improvements constructed or land annexed to
18-14    the district after the district has imposed an assessment may waive
18-15    the right to notice and an assessment hearing and may agree to the
18-16    imposition and payment of an assessment at an agreed rate for
18-17    improvements constructed or land annexed to the district.
18-18          SECTION 24.  OBJECTIONS; IMPOSITION OF ASSESSMENT.  (a)  At a
18-19    hearing on proposed assessments, at any adjournment of the hearing
18-20    or after consideration of the hearings examiner's report, the board
18-21    shall hear and rule on all objections to each proposed assessment.
18-22          (b)  The board may amend a proposed assessment for any
18-23    parcel.
18-24          (c)  After all objections have been heard and action has been
18-25    taken with regard to those objections, the board, by order or
18-26    resolution, shall impose the assessment as a special assessment on
 19-1    the property, shall specify the method of payment of the
 19-2    assessment, and may provide that the assessment be paid in periodic
 19-3    installments, including interest.
 19-4          (d)  A periodic installment of the payment of an assessment
 19-5    shall be in an amount sufficient to meet annual costs for
 19-6    improvements and services as provided by this Act and continue for
 19-7    the number of years required to retire indebtedness or pay for the
 19-8    services to be rendered.  The board may provide interest charges or
 19-9    penalties for failure to make timely payment and may impose an
19-10    amount to cover delinquencies and expenses of collection.
19-11          (e)  If an assessment is imposed for more than one
19-12    improvement project or service, the board may provide that an
19-13    assessment collected for one improvement project or service may be
19-14    borrowed to be used for another improvement project or service.
19-15          (f)  The board shall establish a procedure for the
19-16    distribution or use of any assessment in excess of those necessary
19-17    to finance the improvement project or service for which the
19-18    assessment was collected.
19-19          SECTION 25.  APPORTIONMENT OF COST.  The portion of the cost
19-20    of an improvement project or service to be assessed against the
19-21    property in the district shall be apportioned by the board based on
19-22    the special benefits accruing to the property because of the
19-23    improvement project or service.  The cost may be assessed:
19-24                (1)  equally by front foot or square foot of land area
19-25    against all property in the district;
19-26                (2)  according to the value of the property as
 20-1    determined by the board, with or without regard to structures or
 20-2    other improvements on the property; or
 20-3                (3)  using any other reasonable assessment plan that
 20-4    results in imposing fair and equitable shares of the cost on
 20-5    property similarly benefited.
 20-6          SECTION 26.  ASSESSMENT ROLL.  The board shall impose the
 20-7    assessment against each parcel of land against which an assessment
 20-8    may be imposed in the district after the total cost of an
 20-9    improvement project or service is determined.  With regard to an
20-10    assessment for services, the board may impose an additional annual
20-11    assessment that may be lower but not higher than the initial
20-12    assessment.  The board shall have an assessment roll prepared
20-13    showing the assessment against each property and the board's basis
20-14    for the assessment.  The assessment roll shall be filed with the
20-15    secretary of the board or other officer who performs the function
20-16    of secretary and shall be open for public inspection.
20-17          SECTION 27.  INTEREST ON ASSESSMENTS; LIEN.  (a)  An
20-18    assessment bears interest at a rate specified by the board that may
20-19    not exceed the interest rate permitted by Chapter 1204, Government
20-20    Code.
20-21          (b)  Interest on an assessment between the effective date of
20-22    the order or resolution imposing the assessment and the date the
20-23    first installment and any related penalty is payable shall be added
20-24    to the first installment.  The interest or penalties on all unpaid
20-25    installments shall be added to each subsequent installment until
20-26    paid.
 21-1          (c)  Assessments, reassessments or assessments resulting from
 21-2    an addition to or correction of the assessment roll by the
 21-3    district, penalties and interest on an assessment or reassessment,
 21-4    expenses of collection, and reasonable attorney's fees incurred by
 21-5    the district are:
 21-6                (1)  a first and prior lien against the property
 21-7    assessed;
 21-8                (2)  superior to any other lien or claim other than a
 21-9    lien or claim for county, school district, or municipal ad valorem
21-10    taxes; and
21-11                (3)  the personal liability of and charge against the
21-12    owners of the property even if the owners are not named in the
21-13    assessment proceedings.
21-14          (d)  The lien is effective from the date of the resolution of
21-15    the board imposing the assessment until the assessment is paid.
21-16    The board may enforce the lien in the same manner that the board
21-17    may enforce an ad valorem tax lien against real property.
21-18          (e)  The owner of any property assessed may pay at any time
21-19    the entire assessment against any lot or parcel with accrued
21-20    interest to the date of the payment.
21-21          SECTION 28.  SUPPLEMENTAL ASSESSMENTS.  After notice and
21-22    hearing in the manner required for original assessments, the board
21-23    may make supplemental assessments to correct omissions or mistakes
21-24    in the assessment:
21-25                (1)  relating to the total cost of the improvement
21-26    project or service; or
 22-1                (2)  covering delinquencies or costs of collection.
 22-2          SECTION 29.  APPEAL.  (a)  After determination of an
 22-3    assessment, a property owner against whom an assessment is made may
 22-4    appeal the assessment to the board.  The property owner must file a
 22-5    notice of appeal with the board not later than the 30th day after
 22-6    the date that the assessment is adopted.  The board shall set a
 22-7    date to hear the appeal.
 22-8          (b)  The property owner may appeal the board's decision on
 22-9    the assessment to a district court in the county in the manner
22-10    provided for the appeal of contested cases in Chapter 2001,
22-11    Government Code.  The property owner must file notice of the appeal
22-12    with the district court not later than the 30th day after the date
22-13    of the board's final decision with respect to the assessment.
22-14    Review by the district court is by trial de novo.
22-15          (c)  Failure to file a notice of appeal in the time required
22-16    by this section results in a loss of the right to appeal the
22-17    assessment.
22-18          (d)  If an assessment against a parcel of land is set aside
22-19    by the district court, found excessive by the board, or determined
22-20    to be invalid by the board, the board may make a reassessment or
22-21    new assessment of the parcel.
22-22          SECTION 30.  APPROVAL OF COMMISSIONERS COURT.  An ad valorem
22-23    tax, an assessment, or a combination of an ad valorem tax and an
22-24    assessment, including an apportionment of an assessment, must be
22-25    approved by the commissioners court of the county.
22-26          SECTION 31.  EXEMPTIONS.  (a)  The district may not impose an
 23-1    assessment on the property, equipment, or facilities of a public
 23-2    utility.  For purposes of this section, "utility" means a person
 23-3    that provides to the public gas, electricity, telephone, sewerage,
 23-4    or water service.
 23-5          (b)  Payment of assessments by municipalities, counties,
 23-6    other political subdivisions, and organizations exempt from federal
 23-7    income tax under Section 501(a), Internal Revenue Code of 1986, by
 23-8    being listed under Section 501(c)(3), Internal Revenue Code of
 23-9    1986, shall be established by contract.  Municipalities, counties,
23-10    and other political subdivisions may contract with the district
23-11    under terms and conditions those entities consider advisable to
23-12    provide for the payment of assessments.
23-13          SECTION 32.  TAX FOR BONDS.  At the time bonds payable wholly
23-14    or partly from taxes are issued, the board shall impose a
23-15    continuing direct annual ad valorem tax, for each year that all or
23-16    part of the bonds are outstanding, on all taxable property within
23-17    the district in a sufficient amount to pay the interest on the
23-18    bonds as it becomes due, to create a sinking fund for the payment
23-19    of the principal of the bonds when due or the redemption price at
23-20    any earlier required redemption rate, and to pay the expenses of
23-21    assessing and collecting the taxes.
23-22          SECTION 33.  ESTABLISHMENT OF TAX RATE IN EACH YEAR.  (a)  In
23-23    determining the actual rate to be imposed in each year, the board
23-24    shall consider:
23-25                (1)  the amount that is necessary for maintenance and
23-26    operation purposes, if an operation and maintenance tax has been
 24-1    authorized as provided by Section 34 of this Act;
 24-2                (2)  the amount that is necessary for the payment of
 24-3    principal, interest, and redemption price of each series of bonds
 24-4    payable wholly or partly from taxes;
 24-5                (3)  the amount that is necessary for the purpose of
 24-6    paying all other contractual obligations of the district payable
 24-7    wholly or partly from taxes; or
 24-8                (4)  the percentage of anticipated tax collections and
 24-9    the cost of collecting the taxes.
24-10          (b)  In determining the amount of taxes that are necessary
24-11    each year, the board may consider whether proceeds from the sale of
24-12    bonds have been placed in escrow to pay interest during
24-13    construction and whether the board reasonably expects to have
24-14    revenue or receipts available for other sources that are legally
24-15    available to pay the principal of or interest on or redemption
24-16    price of the bonds.  The board shall impose a tax in the first full
24-17    year after issuance of its first series of bonds.
24-18          SECTION 34.  OPERATION AND MAINTENANCE TAX.  (a)  The
24-19    district may impose and collect a tax for operation and maintenance
24-20    purposes, including funds for planning, constructing, acquiring,
24-21    maintaining, repairing, and operating all necessary land, plants,
24-22    works, facilities, improvements, appliances, and equipment of the
24-23    district and for paying costs of proper services, engineering and
24-24    legal fees, and organization and administrative expenses.
24-25          (b)  An operation and maintenance tax may not be imposed by
24-26    the district until it is approved by a majority of the qualified
 25-1    voters within the district voting at an election held for that
 25-2    purpose.  After the district's voters have authorized an operation
 25-3    and maintenance tax, the board may impose the tax and have it
 25-4    assessed and collected as other district taxes.
 25-5          (c)  An operation and maintenance tax election may be held at
 25-6    the same time and in conjunction with any other district election.
 25-7    The election may be called by a separate election order or as part
 25-8    of any other election order.
 25-9          (d)  The proposition in an operation and maintenance tax
25-10    election may be for a specific maximum rate or for an unlimited
25-11    rate.
25-12          (e)  If the district has any surplus operation and
25-13    maintenance tax funds that are not needed for the purposes for
25-14    which they were collected, the funds may be used for any lawful
25-15    purpose.
25-16          SECTION 35.  FUNDS AVAILABLE FOR PAYMENT OF PROJECTS AND
25-17    SERVICES.  (a)  The cost of any improvement project or service,
25-18    including interest during construction and costs of issuance of
25-19    bonds, may be paid from general or available funds, ad valorem
25-20    taxes, assessments, or the proceeds of bonds payable from revenues,
25-21    ad valorem assessments, grants, gifts, contracts, or leases, or any
25-22    combination of those funds.
25-23          (b)  During the progress of an improvement project or
25-24    service, the board may issue temporary notes to pay the costs of
25-25    the improvement project or service and issue bonds on completion.
25-26          (c)  The costs of more than one improvement project or
 26-1    service may be paid from a single issue and sale of bonds without
 26-2    other consolidation proceeding before the bond issue.
 26-3          SECTION 36.  BONDS.  (a)  For the payment of all or part of
 26-4    the costs of an improvement project or service, the board may issue
 26-5    bonds in one or more series payable from and secured by
 26-6    assessments, ad valorem taxes, revenues, grants, gifts, contracts,
 26-7    or leases, or any combination of those funds.  Bonds may be liens
 26-8    on all or part of the revenue derived from improvements authorized
 26-9    under this Act, including installment payments of special
26-10    assessments, ad valorem taxes, or any other source pledged to their
26-11    payment.
26-12          (b)  The district may issue bonds, and the bonds shall be
26-13    approved in the manner prescribed by Subchapter J, Chapter 375,
26-14    Local Government Code.
26-15          (c)  The board may issue and approve bonds without the
26-16    consent of the county, any municipality, or the commission.
26-17          SECTION 37.  ELECTION TO APPROVE ISSUANCE OF BONDS.
26-18    (a)  Bonds secured by assessments or ad valorem taxes, or a
26-19    combination of assessments and ad valorem taxes, may not be issued
26-20    unless the bonds are approved by a majority of the qualified voters
26-21    in the district voting at an election held for that purpose.
26-22          (b)  Bonds that are not secured by assessments or ad valorem
26-23    taxes, or a combination of assessments and ad valorem taxes, may be
26-24    issued without an election.
26-25          (c)  An election required by this section shall be conducted
26-26    in accordance with Chapter 375, Local Government Code.
 27-1          SECTION 38.  COMPETITIVE BIDDING ON CERTAIN PUBLIC WORKS
 27-2    CONTRACTS.  (a)  Contracts of the district are subject to the
 27-3    competitive bidding requirements of Subchapter I, Chapter 49, Water
 27-4    Code.
 27-5          (b)  This Act states the required procedures necessary for
 27-6    the district to award contracts and supersedes any law or other
 27-7    requirement with respect to the award of contracts.
 27-8          SECTION 39.  DISSOLUTION.  (a)  Except as provided by
 27-9    Subsection (c) of this section, the board by majority vote may
27-10    dissolve the district at any time.
27-11          (b)  Except as provided by Subsection (c) of this section,
27-12    the commissioners court of the county, by a vote of not less than
27-13    two-thirds, may adopt a resolution dissolving the district.
27-14          (c)  The district may not be dissolved if the district has
27-15    any outstanding bonded indebtedness until that bonded indebtedness
27-16    is repaid or decreased in accordance with the order or resolution
27-17    authorizing the issuance of the bonds.
27-18          SECTION 40.  CONTRACTS WITH DISTRICT.  (a)  A municipality,
27-19    county, or other political subdivision of the state, without
27-20    further authorization, may contract with the district to implement
27-21    a project of the district or aid and assist the district in
27-22    providing the services authorized under this Act.  A contract under
27-23    this section may:
27-24                (1)  be for a period on which the parties agree;
27-25                (2)  include terms on which the parties agree;
27-26                (3)  be payable from assessments or any other sources
 28-1    of revenue that may be available for that purpose; or
 28-2                (4)  provide that assessments or other revenue
 28-3    collected at a district project or from a person using or
 28-4    purchasing a commodity or service at a district project may be paid
 28-5    or rebated to the district under the terms of the contract.
 28-6          (b)  The district may enter into a contract, lease, or
 28-7    agreement with or make or accept grants and loans to or from:
 28-8                (1)  the United States, including federal departments
 28-9    and agencies;
28-10                (2)  the state or a state agency;
28-11                (3)  a county, municipality, or other political
28-12    subdivision of the state;
28-13                (4)  a public or private corporation; or
28-14                (5)  any other person.
28-15          (c)  The district may perform all acts necessary for the full
28-16    exercise of the powers vested in the district on terms and for the
28-17    term the board may determine to be advisable.
28-18          SECTION 41.  FINDINGS RELATING TO PROCEDURAL REQUIREMENTS.
28-19    The legislature finds that:
28-20                (1)  the proper and legal notice of the intention to
28-21    introduce this Act, setting forth the general substance of this
28-22    Act, has been published as provided by law, and the notice and a
28-23    copy of this Act have been furnished to all persons, agencies,
28-24    officials, and entities to which they are required to be furnished
28-25    by the constitution and laws of this state, including the governor,
28-26    who has submitted the notice and Act to the commission;
 29-1                (2)  the commission has filed its recommendations
 29-2    relating to this Act with the governor, lieutenant governor, and
 29-3    speaker of the house of representatives within the required time;
 29-4                (3)  the general law relating to consent by political
 29-5    subdivisions to the creation of districts with conservation,
 29-6    reclamation, and road powers and the inclusion of land in those
 29-7    districts has been complied with; and
 29-8                (4)  all requirements of the constitution and laws of
 29-9    this state and the rules and procedures of the legislature with
29-10    respect to the notice, introduction, and passage of this Act have
29-11    been fulfilled and accomplished.
29-12          SECTION 42.  EFFECTIVE DATE.  This Act takes effect
29-13    immediately if it receives a vote of two-thirds of all the members
29-14    elected to each house, as provided by Section 39, Article III,
29-15    Texas Constitution.  If this Act does not receive the vote
29-16    necessary for immediate effect, this Act takes effect September 1,
29-17    2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1686 passed the Senate on
         May 4, 2001, by the following vote:  Yeas 29, Nays 0, one present
         not voting; and that the Senate concurred in House amendments on
         May 25, 2001, by the following vote:  Yeas 30, Nays 0, one present
         not voting.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1686 passed the House, with
         amendments, on May 23, 2001, by the following vote:  Yeas 145,
         Nays 0, two present not voting.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor