|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
|
relating to increased oversight, openness, transparency, and |
|
accountability for water supply or sewer service corporations. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 67.005, Water Code, is amended by adding |
|
Subsection (g) to read as follows: |
|
(g) If more than 50 percent of the corporation's connections |
|
to provide water or sewer service are within the corporate limits of |
|
a general-law municipality, the municipality, by ordinance or |
|
resolution adopted at least 30 days before the date of the annual |
|
meeting of the members or shareholders of the corporation, may |
|
create a new position on the board of the corporation and appoint a |
|
director to serve in that position as a nonvoting member of the |
|
board. An appointed director serves a two-year term. Except for |
|
voting authority, a director appointed under this subsection has |
|
all of the rights and responsibilities of an elected director. |
|
SECTION 2. 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 3. 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 4. 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 5. 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 6. 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. |
|
SECTION 7. This Act takes effect September 1, 2009. |
|
|
|
* * * * * |