Amend HB 1358 (Senate committee printing) as follows: (1) Between the enacting clause and SECTION 1 of the bill (page 1, between lines 11 and 12) insert the following:ARTICLE 1. AMENDMENT TO CHAPTER 13, WATER CODE (2) Redesignate SECTION 1 of the bill as SECTION 1.01. (3) Strike SECTION 2 of the bill (page 1, lines 30-34) and substitute the following:ARTICLE 2. AMENDMENT TO SUBTITLE C, TITLE 6, SPECIAL DISTRICT LOCAL LAWS CODE SECTION 2.01. Subtitle C, Title 6, Special District Local Laws Code, is amended by adding Chapter 7201 to read as follows:CHAPTER 7201. LA JOYA WATER SUPPLY CORPORATION AND LA JOYA SPECIAL UTILITY DISTRICT SUBCHAPTER A. GENERAL PROVISIONS Sec. 7201.001. DEFINITIONS. In this chapter: (1) "Corporation" means the La Joya Water Supply Corporation. (2) "District" means the La Joya Special Utility District. Sec. 7201.002. NATURE OF CORPORATION AND DISTRICT. (a) The corporation is a water supply corporation in Hidalgo and Starr Counties created under and operating in accordance with Chapter 67, Water Code. (b) If confirmed at an election required by Section 7201.021, the district is a special water authority and special utility district in Hidalgo and Starr Counties created under and essential to accomplish the purposes of Section 59, Article XVI, Texas Constitution, and operating in accordance with Chapters 49 and 65, Water Code. Sec. 7201.003. CONFIRMATION ELECTION REQUIRED. If the creation of the district is not confirmed at a confirmation and initial directors' election held before September 1, 2009, the district is not created and the corporation continues to function in accordance with this chapter. Sec. 7201.004. APPLICABILITY OF OTHER LAW. (a) Except as otherwise provided by this chapter, Chapters 49 and 67, Water Code, apply to the corporation. (b) On confirmation at the election under Section 7201.021, the district: (1) is considered to be a district and a special water authority under Section 49.001(8), Water Code, created by special Act of the legislature, notwithstanding inapplicable provisions of that section; and (2) except as otherwise provided by this chapter, has the general powers and duties provided by Chapters 49 and 65, Water Code, including those provided by Sections 49.211(a) and 65.201(a), Water Code. Sec. 7201.005. REGULATORY CONFLICTS. (a) If a municipality asserts regulatory authority over any geographic area in the district and a municipal regulation applicable to that geographic area conflicts with a rule of the district, the regulation of the municipality prevails. (b) This section does not apply to: (1) rules or regulations concerning potable water quality standards; or (2) conflicts relating to service areas or certificates issued to the corporation or district by the Texas Commission on Environmental Quality. Sec. 7201.006. INITIAL DISTRICT TERRITORY. The boundaries of the corporation and initial boundaries of the district are coextensive with the service areas covered by Certificates of Convenience and Necessity Nos. 10559 and 20785, as recorded on the Texas Commission on Environmental Quality maps associated with those certificates.[Sections 7201.007-7201.020 reserved for expansion] SUBCHAPTER A1. TEMPORARY PROVISIONS Sec. 7201.021. CONFIRMATION AND INITIAL DIRECTORS' ELECTION. (a) On a uniform election date before September 1, 2009, the directors of the corporation shall hold an election to confirm the creation of the district and to elect nine initial directors in accordance with Section 49.103(b), Water Code. (b) Not later than the 90th day before the confirmation election conducted in accordance with this section, the board of directors of the corporation shall adopt an election order that prescribes the qualifications for district board candidates. (c) The ballots for a confirmation election shall be printed to permit voting for or against the proposition: "Creation of a special utility district to replace the La Joya Water Supply Corporation." (d) The initial directors shall draw lots to determine which five of the initial directors shall serve a term of four years and which four shall serve a term of two years. (e) The directors of the corporation, duly qualified and holding office at the time of the confirmation election, shall continue to serve until the district directors elected at the confirmation election qualify for office. Sec. 7201.022. TRANSFER OF ASSETS; DISSOLUTION. (a) If the creation of the district is confirmed under Section 7201.021, the corporation shall transfer the assets, debts, and contractual rights and obligations of the corporation to the district and provide notices and make recordings of the transfer required by the Water Code and general law. (b) Not later than the 30th day after the date of the transfer under Subsection (a), the board of directors of the corporation shall commence dissolution proceedings of the corporation. (c) On dissolution of the corporation, Certificates of Convenience and Necessity Nos. 10559 and 20785 are considered to be held by the district. (d) The board of directors of the corporation shall notify the Texas Commission on Environmental Quality of the dissolution of the corporation and the creation of the district to replace it to effect the transfer of Certificates of Convenience and Necessity Nos. 10559 and 20785 to the district. (e) On receipt of notice under Subsection (d), the Texas Commission on Environmental Quality shall note in its records that Certificates of Convenience and Necessity Nos. 10559 and 20785 are held by the district. The Texas Commission on Environmental Quality shall, as a ministerial act, transfer the certificates to the district without further application, notice, or hearing. A person, party, or entity does not have any right of protest, objection, or administrative review of the transfer prescribed by this section. Sec. 7201.023. EXPIRATION OF SUBCHAPTER. This subchapter expires September 1, 2010.[Sections 7201.024-7201.050 reserved for expansion] SUBCHAPTER B. BOARD OF DIRECTORS Sec. 7201.051. DIRECTORS. (a) The district shall be governed by a board of not fewer than nine and not more than 11 directors, elected in accordance with Section 49.103, Water Code, notwithstanding Subsection (f)(2) of that section. (b) The district's board of directors may add directors' positions to the ballot for a regularly scheduled election as part of the board's election order. (c) Notwithstanding Section 65.103(b), Water Code, the directors of the district shall serve staggered, four-year terms. The term length must be clearly stated on the ballot for an election of directors. (d) An election of directors of the corporation or the district must be held on a uniform election date as provided by Section 49.103(b), Water Code.[Sections 7201.052-7201.100 reserved for expansion] SUBCHAPTER C. POWERS AND DUTIES Sec. 7201.101. GENERAL POWERS AND DUTIES. The district has all of the rights, powers, privileges, authority, functions, and duties provided by the general law of this state, including Chapters 49 and 65, Water Code, applicable to districts created under Section 59, Article XVI, Texas Constitution. Sec. 7201.102. PROVISION OF SERVICE. The corporation or the district shall at all times operate and construct necessary improvements within the certificated areas established by the commission to provide uninterrupted, continuous, and adequate service to existing and future customers for water, sewer, and contract services. Sec. 7201.103. INTERLOCAL CONTRACTS. The corporation or district and the Rio Grande Regional Water Authority may enter into a contract under which the Rio Grande Regional Water Authority may, in accordance with Chapter 791, Government Code, provide administrative or any other contract activities for or with the corporation or district. The corporation or district may enter into interlocal cooperation contracts with any public or private entity, request any necessary regulatory approval required, and charge fees and rates adequate to generate revenue sufficient to cover all expenses of the corporation or district based on cost-of-service principles. Sec. 7201.104. ANNUAL OR SPECIAL MEETING. (a) The board of the corporation shall adopt a date for and provide reasonable notice of the annual membership meeting not later than six months before the meeting. The annual meeting shall be conducted for the purposes of: (1) considering bylaw amendments not inconsistent with this chapter; (2) consideration of information regarding the creation of the district to replace the corporation as prescribed in this chapter; and (3) any other purposes authorized by law. (b) For the purpose of an annual or special meeting that considers a bylaw amendment, the proposed amendment must be furnished to each customer in writing as a numbered, written ballot that includes the customer name and account number for the purpose of ballot counting and verification. For the purposes of corporation bylaw amendment, an amendment is adopted if: (1) at least 30 percent of the member account holders participate in the vote; and (2) a majority of those participating vote in favor of the amendment. (c) For purposes of an information meeting of members regarding membership, customers, or any other issue, there is no quorum requirement. Sec. 7201.105. PROHIBITION ON TAX. Notwithstanding any law to the contrary, the district may not impose an ad valorem tax.[Sections 7201.106-7201.200 reserved for expansion] SUBCHAPTER D. OPERATING PROVISIONS Sec. 7201.201. AUDIT OF CORPORATION OR DISTRICT. (a) Subchapter G, Chapter 49, Water Code, applies to the corporation and district. (b) An individual licensed by the state as a certified public accountant with not less than five years of government accounting experience shall perform the audit required by Section 49.191, Water Code. Sec. 7201.202. RECORDS OF CORPORATION OR DISTRICT. The corporation or district shall comply with all rules and regulations pertaining to records preservation, retention, and destruction promulgated by the Texas State Library and Archives Commission under Chapter 441, Government Code, as made applicable to water districts and utilities. Sec. 7201.203. MAINTAINING NECESSARY RECORDS. The corporation or district shall maintain necessary records and follow cost-of-service principles with respect to provision of retail public water or sewer service or any other service authorized by Chapter 49 or 65, Water Code, or an interlocal contract entered into in accordance with Chapter 791, Government Code. Sec. 7201.204. NEWSLETTER, WEBSITE, AND MEMBERSHIP INFORMATION. The corporation or district shall maintain an Internet website with current information concerning agendas, minutes, policies, monthly financial information concerning revenues and expenses, and quarterly summaries. Membership information shall be furnished to members at the annual meeting, to include summary financial information based on the preceding year's annual audit. Sec. 7201.205. DISCONNECTION OF SERVICE AND CUSTOMER FEES. (a) The corporation or district may not disconnect service of a customer for late payment before the 31st day after the date the district notifies the customer of the overdue payment. (b) After a disconnection caused by the customer's late payment, a district may not charge a customer a fee for restoring or reinstalling service that exceeds $25 or twice the amount of the late payment owed, whichever is less. Sec. 7201.206. RATES FOR SERVICES. The corporation or district, in connection with water or sewer retail public utility services, shall establish lifeline, senior citizen, or minimum consumption level rates for services. The rate impact of such services shall be allocated on the basis of costs of services to achieve conservation principles, while securing necessary reserves for the payment of operating expenses, sinking funds, principal, interest, and debt coverage factors, and any other objective established by the corporation's or district's annual budget. Sec. 7201.207. SERVICE CONTRACT ALLOCATION OF COST AND IMMUNITY FROM CLAIMS. (a) In connection with intergovernmental, interlocal, or wholesale service contracts, including cooperative billing for any contract-based service, the corporation or district shall allocate costs of service ratably for the service, and the corporation or district shall secure indemnity from the contracting party to the extent allowed by law. (b) The district is a governmental unit, as that term is defined by Section 101.001(3), Civil Practice and Remedies Code, and, to the fullest extent provided by law, enjoys immunity from suit and liability, consistent with general law, the Texas Tort Claims Act, Chapter 101, Civil Practice and Remedies Code, and Chapter 49, Water Code, including Section 49.066. SECTION 2.02. (a) The legal notice of the intention to introduce this article, setting forth the general substance of this article, has been published as provided by law, and the notice and a copy of this article have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished under Section 59, Article XVI, Texas Constitution, and Chapter 313, Government Code. (b) The governor has submitted the notice and article to the Texas Commission on Environmental Quality. (c) The Texas Commission on Environmental Quality has filed its recommendations relating to this article with the governor, lieutenant governor, and speaker of the house of representatives within the required time. (d) The general law relating to consent by political subdivisions to the creation of a conservation and reclamation district and the inclusion of land in the district has been complied with. (e) All requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this article are fulfilled and accomplished.ARTICLE 3. EFFECTIVE DATE SECTION 3.01. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.