Amend CSHB 3335 (Senate committee report) by adding the
following appropriately numbered SECTIONS to ARTICLE 1 of the bill
and renumbering subsequent SECTIONS of that ARTICLE accordingly:
SECTION ____. Subchapter A, Chapter 67, Water Code, is
amended by adding Sections 67.0061, 67.0062, and 67.0063 to read as
follows:
Sec. 67.0061. DIRECTOR NOMINATIONS. (a) To be listed on
the ballot as a candidate for election to a director's position, a
person must file with the corporation an application that includes:
(1) the person's written consent to serve, if elected;
(2) biographical information about the person; and
(3) a statement of the person's qualifications,
including:
(A) a statement that the person meets the
requirements of Sections 11.002(1), (3), and (4), Election Code;
and
(B) whether the person is a member of the
corporation.
(b) The application must be filed with the corporation not
later than the 70th day before the date of the annual meeting.
(c) The corporation shall make available director candidate
application forms at the main office of the corporation.
Sec. 67.0062. BALLOT FOR ELECTION OF DIRECTORS. The
secretary-treasurer of the board shall:
(1) have the names of all candidates for each
director's position printed on the ballot; and
(2) not later than the 45th day before the date of the
annual meeting, mail the ballot to each person who is a member or
shareholder, along with a statement of the number of directors to be
elected and the biographical information about each candidate,
including the candidate's qualifications as provided by each
candidate for director in the candidate's application.
Sec. 67.0063. ELECTION OF DIRECTORS. (a) A member or
shareholder may vote:
(1) in person at the annual meeting;
(2) by delivering a completed ballot to the member's
proxy to submit at the annual meeting;
(3) by mailing a completed ballot postmarked not later
than the sixth day before the date of the annual meeting to the
office of the independent election auditor selected by the members
or shareholders at the preceding annual meeting; or
(4) by delivering a completed ballot to the main
office of the corporation not later than noon of the day before the
date of the annual meeting.
(b) The corporation shall place each ballot received under
Subsection (a)(4) in a sealed envelope and shall deliver the sealed
envelopes to the independent election auditor at the annual
meeting.
(c) No person, including the corporation, may use any type
of incentive to encourage a member or shareholder to authorize the
corporation, a committee of the corporation, or another person to
act as the member's proxy in casting the vote of the member in a
director's election. The corporation may provide incentives to
obtain proxies or to encourage attendance at an annual or special
meeting of the members solely for the purpose of establishing a
quorum.
(d) The independent election auditor shall receive and
count the ballots before the annual meeting is adjourned.
(e) For each director's position, the nominee who receives
the highest number of votes is elected.
(f) If two or more candidates for a director's position tie
for the highest number of votes for that position, those candidates
shall draw lots under the direction of the independent election
auditor to determine who is elected.
(g) The independent election auditor shall provide the
board with a written report of the election results.
(h) The board may adopt rules as needed to implement this
section, including rules to ensure the fairness, integrity, and
openness of the voting process.
SECTION ____. Section 67.007, Water Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) The board shall adopt written procedures for conducting
an annual or special meeting of the members or shareholders, which
shall include the following:
(1) notification to eligible members or shareholders
of the proposed agenda, location, and date of the meeting;
(2) establishment of a quorum consisting of proxies
and the votes of members or shareholders present;
(3) nomination and election procedures;
(4) procedures for selecting an independent election
auditor required by Section 67.0063;
(5) approval of the proxy and ballot form to be used;
and
(6) [(5)] validation of eligible voters, proxies,
ballots, and election results.
(d) An independent election auditor must be selected at each
annual meeting for the following annual meeting at which one or more
directors are scheduled to be elected. The independent auditor is
not required to be an experienced election judge or auditor and may
serve as an unpaid volunteer. At the time of selection and while
serving in the capacity of an independent election auditor, the
independent election auditor may not be associated with the
corporation as:
(1) an employee or independent contractor; or
(2) a director or candidate for director.
SECTION ____. Subchapter A, Chapter 67, Water Code, is
amended by adding Section 67.0085 to read as follows:
Sec. 67.0085. AUDIT REQUIREMENTS. Subchapter G, Chapter
49, applies to a corporation with 500 or more members in the same
manner that it applies to a district under that chapter. For
purposes of applying that subchapter to a corporation:
(1) "board" means the board of directors of a
corporation; and
(2) "district" means a corporation.
SECTION ____. A water supply or sewer service corporation
operating under Chapter 67, Water Code, is subject to the audit
requirements of Section 67.0085, Water Code, as added by this Act,
beginning with the first fiscal year of the corporation that begins
on or after September 1, 2009.
SECTION ____. The board of directors of a water supply or
sewer service corporation operating under Chapter 67, Water Code,
shall select an independent election auditor at least 30 days
before the scheduled date of the 2010 annual meeting of the
corporation.