By: Fraser S.B. No. 19

A BILL TO BE ENTITLED

AN ACT

relating to the operation, powers, and duties of certain water districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. GENERAL PROVISIONS

SECTION 1.01. Section 388.005, Health and Safety Code, is amended by adding Subsections (g) and (h) to read as follows:

(g) Except as provided by Subsection (h), this section does not apply to the electricity consumption of a district as defined by Section 36.001 or 49.001, Water Code, that relates to the operation and maintenance of facilities or improvements for:

(1) wastewater collection and treatment;

(2) water supply and distribution; or

(3) storm water diversion, detention, or pumping.

(h) At least once every five years, a political subdivision that is a district as defined by Section 36.001 or 49.001, Water Code, shall for district facilities described by Subsection (g):

(1) evaluate the consumption of electricity;

(2) establish goals to reduce the consumption of electricity; and

(3) identify and implement cost-effective energy efficiency measures to reduce the consumption of electricity.

SECTION 1.02. Section 43.0751(a)(1), Local Government Code, is amended to read as follows:

(1) "District" means a conservation and reclamation [water control and improvement] district [or a municipal utility district created or] operating under Chapter 49 [51 or 54], Water Code. The term does not include a special utility district operating under Chapter 65, Water Code, or a groundwater conservation district operating under Chapter 36, Water Code.

SECTION 1.03. Section 43.0751, Local Government Code, is amended by adding Subsection (r) to read as follows:

(r) To be annexed for limited purposes under this section, an area must be:

(1) in the municipality's extraterritorial jurisdiction; and

(2) contiguous to the corporate or limited purpose boundaries of the municipality, unless the district consents to noncontiguous annexation pursuant to a strategic partnership agreement with the municipality.

SECTION 1.04. Section 375.161, Local Government Code, is amended to read as follows:

Sec. 375.161. CERTAIN RESIDENTIAL PROPERTY EXEMPT. (a) The board may not impose an impact fee, assessment, tax, or other requirement for payment, construction, alteration, or dedication under this chapter on single-family detached residential property, duplexes, triplexes, and quadraplexes.

(b) This section does not apply to an impact fee, assessment, tax, or other requirement for payment for water, sewer, drainage, reclamation, flood control, road, or park and recreational services or improvements of a district operating under this chapter that provides, or proposes to provide, those services or improvements.

SECTION 1.05. Section 552.014, Local Government Code, is amended to read as follows:

Sec. 552.014. CONTRACTS WITH WATER DISTRICTS OR NONPROFIT CORPORATIONS. (a) In this section:

(1) "Project" means a water supply or treatment system, a water distribution system, a sanitary sewage collection or treatment system, works or improvements necessary for drainage of land, recreational facilities, roads and improvements in aid of roads, or facilities to provide firefighting services.

(2) "Water district" [, "water district"] means a district created under Article XVI, Section 59, of the Texas Constitution.

(b) A municipality may enter into a contract with a water district or with a corporation organized to be operated without profit under which the district or corporation will acquire for the benefit of and convey to the municipality, either separately or together, one or more projects [a water supply or treatment system, a water distribution system, a sanitary sewage collection or treatment system, or works or improvements necessary for drainage of land in the municipality]. In connection with the acquisition, the district or corporation shall improve, enlarge, or extend the existing municipal facilities as provided by the contract.

(c) If the contract provides that the municipality assumes ownership of the project [water, sewer, or drainage system] on completion of construction or at the time that all debt incurred by the district or corporation in the acquisition, construction, improvement, or extension of the project [system] is paid in full, the municipality may make payments to the district or corporation for project [water, sewer, or drainage] services to part or all of the residents of the municipality. The contract may provide for purchase of the project [system] by the municipality through periodic payments to the district or corporation in amounts that, together with the net income of the district or corporation, are sufficient to pay the principal of and interest on the bonds of the district or corporation as they become due. The contract may provide:

(1) that any payments due under this section are payable from and are secured by a pledge of a specified part of the revenues of the municipality, including revenues from municipal sales and use taxes [municipal water system, sewer system, or drainage system];

(2) for the levying of a tax to make payments due under this section; or

(3) that the payments due under this section be made from a combination of revenues [from the system] and taxes.

(d) The contract may provide that the district or corporation may use the streets, alleys, and other public ways and places of the municipality for project [water, sewer, or drainage] purposes for a period that ends at the time the indebtedness of the district or corporation is paid in full and the municipality acquires title to the project [system] in accordance with this section.

(e) The contract may provide for the operation of the project [system] by the municipality, and, if so authorized, the municipality may operate the project [system].

(f) A contract under this section must be authorized by a majority vote of the governing body of the municipality.

(g) This section does not authorize a water district or corporation described by Subsection (b) to participate in a project that the water district or corporation is not authorized to participate in under other law.

SECTION 1.06. Section 13.247, Water Code, is amended by adding Subsections (a-1) and (a-2) to read as follows:

(a-1) Subsection (a-2) applies only to a municipality that:

(1) has a population of more than 95,000 and is in a county that has a population of more than 200,000 and borders Lake Palestine;

(2) has a population of more than 30,000 and is in a county that has a population of less than 90,000 and borders Lake Ray Hubbard;

(3) has a population of more than 4,500 and that:

(A) borders Lake Lyndon B. Johnson; and

(B) is located in a county that has a population of less than 45,000 and in which at least one state park and one national wildlife refuge are located; or

(4) has a population of less than 3,000 and is located wholly or partly in a county with a population of more than 1.7 million and that is adjacent to a county with a population of more than two million.

(a-2) Notwithstanding Subsection (a), a municipality described by Subsection (a-1) may provide retail water and sewer utility service in an area certificated to another retail public utility without first having obtained from the commission a certificate of public convenience and necessity that includes the area to be served if:

(1) the area is located within the boundaries of the municipality; and

(2) the municipality provides notice to the commission and the other retail public utility before the municipality begins providing service to the area.

SECTION 1.07. Section 13.255(j), Water Code, is amended to read as follows:

(j) This section shall apply only in a case where:

(1) the retail public utility that is authorized to serve in the certificated area that is annexed or incorporated by the municipality is a nonprofit water supply or sewer service corporation, a special utility district under Chapter 65, Water Code, a fresh water supply district under Chapter 53, Water Code; [or]

(2) the retail public utility that is authorized to serve in the certificated area that is annexed or incorporated by the municipality is a retail public utility, other than a nonprofit water supply or sewer service corporation, and whose service area is located entirely within the boundaries of a municipality with a population of 1.7 million or more according to the most recent federal census; or

(3) the retail public utility that is authorized to serve in the certificated area that is annexed or incorporated by the municipality is a retail public utility, other than a nonprofit water supply or sewer service corporation, and the service area to be acquired is wholly located in a municipality that has a population of more than 30,000 and is in a county that has a population of less than 90,000 and borders Lake Ray Hubbard.

SECTION 1.08. Section 36.0151, Water Code, is amended by adding Subsections (c) and (d) to read as follows:

(c) Before September 1, 2015, the commission may not create a groundwater conservation district under this section in a county:

(1) in which the annual amount of surface water used is more than 50 times the annual amount of groundwater produced;

(2) that is located in a priority groundwater management area; and

(3) that has a population greater than 2.3 million.

(d) To the extent of a conflict between this section and Section 35.012, this section prevails.

SECTION 1.09. Section 36.1071, Water Code, is amended by amending Subsections (c) and (f) and adding Subsection (f-1) to read as follows:

(c) The commission and the Texas Water Development Board shall provide technical assistance to a district in the development of the management plan required under Subsection (a) that [which] may include, if requested by the district, a preliminary review and comment on the plan prior to final approval by the Texas Water Development Board [board]. If such review and comment by the commission is requested, the commission shall provide comment not later than 30 days from the date the request is received.

(f) [The district shall adopt rules necessary to implement the management plan.] Prior to the development of the district's first management plan and [its] approval of that plan under Section 36.1072, the district:

(1) [may not adopt rules other than rules pertaining to the registration and interim permitting of new and existing wells and rules governing spacing and procedure before the district's board; however, the district may not adopt any rules limiting the production of wells, except rules requiring that groundwater produced from a well be put to a nonwasteful, beneficial use. The district] may accept applications for permits under Section 36.113, provided the district does not act on any such application until the district's management plan is approved as provided in Section 36.1072;

(2) may adopt rules pertaining to the registration, interim permitting, metering, production reporting, spacing, and, where applicable, fee payment for authorized or actual production of water from new and existing wells;

(3) may adopt rules governing procedure before the district's board; and

(4) may not adopt any rules limiting the production of wells, except rules requiring that groundwater produced from a well be put to a nonwasteful, beneficial use.

(f-1) After a management plan is finally approved under Section 36.1072, the district shall adopt or amend rules limiting the production of wells or allocating groundwater as necessary to implement the management plan and achieve the applicable desired future condition. A district may not adopt or amend rules limiting the production of wells or allocating groundwater if the district fails to:

(1) adopt a management plan as required by this section;

(2) submit a management plan to the executive administrator as required by Section 36.1072; and

(3) receive approval of the management plan under Section 36.1072.

SECTION 1.10. Section 36.1072, Water Code, is amended by amending Subsection (c) and adding Subsection (c-1) to read as follows:

(c) Once the executive administrator has granted administrative approval to [approved] a management plan:

(1) the executive administrator may not revoke but may require revisions to the approved [groundwater conservation district] management plan as provided by Subsection (g); and

(2) the executive administrator may request additional information from the district if the information is necessary to clarify, modify, or supplement previously submitted material[, but a request for additional information does not render the management plan unapproved].

(c-1) Not later than the 60th day after the date of the administrative approval of a district's management plan under Subsection (c), the executive administrator shall review the management plan to determine whether goals of the management plan are consistent with the achievement of the desired future conditions established under Section 36.108(d) that are applicable to all or part of the district, considering any available information regarding groundwater levels, and:

(1) request additional information from the district;

(2) recommend that the district make substantive changes to the management plan; or

(3) approve the management plan.

SECTION 1.11. Section 36.1073, Water Code, is amended to read as follows:

Sec. 36.1073. AMENDMENT TO MANAGEMENT PLAN. Any amendment to a district's [the] management plan shall be submitted to the executive administrator within 60 days following adoption of the amendment by the district's board. The executive administrator shall review and approve any amendment that [which] substantially affects the management plan in accordance with the procedures established under Section 36.1072.

SECTION 1.12. Section 36.108(n), Water Code, is amended to read as follows:

(n) The districts shall prepare [a] revised conditions [plan] in accordance with development board recommendations and hold, after notice, at least one public hearing at a central location in the [groundwater] management area. After consideration of all public and development board comments, the districts shall revise the conditions and submit the conditions to the development board for review.

SECTION 1.13. Section 36.118, Water Code, is amended by adding Subsections (e-1) and (e-2) to read as follows:

(e-1) Except as provided by Subsection (e-2), in addition to other remedies provided by law, the district is entitled to recover the district's attorney's fees, court costs, and reasonable expenses incurred in closing or capping the well from the owner of the land on which the well is located.

(e-2) An entity that drills a well to develop subsurface resources not owned by the landowner is liable for expenses incurred in closing or capping the well, unless the landowner assumes responsibility for the well.

SECTION 1.14. Section 36.207, Water Code, is amended to read as follows:

Sec. 36.207. USE OF PRODUCTION [PERMIT] FEES AUTHORIZED BY SPECIAL LAW. A district may use funds obtained from production [permit] fees collected pursuant to the special law governing the district for any purpose consistent with the district's approved [certified water] management plan including, without limitation, making grants, loans, or contractual payments to achieve, facilitate, or expedite reductions in groundwater pumping or the development or distribution of alternative water supplies.

SECTION 1.15. Section 36.301, Water Code, is amended to read as follows:

Sec. 36.301. VIOLATIONS RELATED TO [FAILURE TO SUBMIT A] MANAGEMENT PLAN. The commission shall take appropriate action under Section 36.303 if:

(1) a district adopts or amends a rule in violation of Section 36.1071(f-1);

(2) [If] a district [board] fails to submit a management plan or to receive approval [certification] of the [its] management plan under Section 36.1072;

(3) a district fails to timely readopt the management plan or to submit the readopted management plan to the executive administrator for approval in accordance with Section 36.1072(f);

(4) the executive administrator determines that a readopted management plan does not meet the requirements for approval, and the district has exhausted all appeals; or

(5) a district fails to submit or receive approval [certification] of an amendment to the management plan under Section 36.1073[, the commission shall take appropriate action under Section 36.303].

SECTION 1.16. Section 49.059, Water Code, is amended to read as follows:

Sec. 49.059. [DISQUALIFICATION OF] TAX ASSESSOR AND COLLECTOR. (a) The district may employ or contract with any person to serve as its tax assessor and collector who is:

(1) an individual certified as a registered Texas assessor-collector; or

(2) a firm, organization, association, partnership, corporation, or other legal entity if an individual certified as a registered Texas assessor-collector owns an interest in or is employed by the firm, organization, association, partnership, corporation, or other legal entity.

(b) A tax assessor and collector employed or contracted for under this section is not required to be a natural person.

(c) A firm, organization, association, partnership, corporation, or other legal entity serving as district tax assessor and collector shall give a bond as required by Section 49.057 for a natural person.

(d) No person may serve as tax assessor and collector of a district providing potable water or sewer utility services to household users if that person:

(1) is a natural person related within the third degree of affinity or consanguinity to any developer of property in the district, a member of the board, or the manager, engineer, or attorney for the district;

(2) is or was within two years immediately preceding the assumption of assessment and collection duties with the district an employee of any developer of property in the district or any director, manager, engineer, or attorney for the district;

(3) owns an interest in or is employed by any corporation organized for the purpose of tax assessment and collection services, a substantial portion of the stock of which is owned by a developer of property within the district or any director, manager, engineer, or attorney for the district; or

(4) is directly or through a corporation developing land in the district or is a director, engineer, or attorney for the district.

(e) [(b)] Within 60 days after the board determines a relationship or employment exists which constitutes a disqualification under Subsection (d) [(a)], it shall replace the person serving as tax assessor and collector with a person who would not be disqualified.

(f) [(c)] Any person who wilfully violates the provisions of Subsection (d) [(a)] is guilty of a misdemeanor and on conviction shall be fined not less than $100 nor more than $1,000.

(g) [(d)] As used in this section, "developer of property in the district" has the same meaning as in Section 49.052(d).

SECTION 1.17. Section 49.063, Water Code, is amended to read as follows:

Sec. 49.063. NOTICE OF MEETINGS. (a) Notice of meetings of the board shall be given as set forth in the open meetings law, Chapter 551, Government Code, except that if a district does not have a meeting place within the district, the district shall post notice of its meeting at a public place within the district specified by the board in a written resolution, rather than at its administrative office. The board shall specify such public place to be a bulletin board or other place within the district which is reasonably available to the public.

(b) The validity of an action taken at a board meeting is not affected by:

(1) [Neither] failure to provide notice of the meeting if the meeting is a regular meeting;

(2) [nor] an insubstantial defect in notice of the [any] meeting; or

(3) failure of a county clerk to timely or properly post or maintain public access to a notice of the meeting if notice of the meeting is furnished to the county clerk in sufficient time for posting under Section 551.043(a) or 551.045, Government Code [shall affect the validity of any action taken at the meeting].

SECTION 1.18. Sections 49.102(a), (b), (c), and (h), Water Code, are amended to read as follows:

(a) Before issuing any bonds or other obligations, an election shall be held within the boundaries of the proposed district on a uniform election date provided by Section 41.001, Election Code, to determine if the proposed district shall be established and, if the directors of the district are required by law to be elected, to elect permanent directors.

(b) Notice of a confirmation or director election shall state the day and place or places for holding the election, the propositions to be voted on, and, if applicable, the number of directors to be voted on.

(c) The ballots for a confirmation election shall be printed to provide for voting "For District" and "Against District." Ballots for a directors election shall provide the names of the persons appointed by the governing body who qualified and are serving as temporary directors at the time the election is called. If the district has received an application by a write-in candidate, the [The] ballots shall also have blank places after the names of the temporary directors in which a voter may write the names of any candidates appearing on the list of write-in candidates required by Section 146.031, Election Code [other persons for directors].

(h) Unless otherwise agreed, the elected directors shall decide the initial terms of office by lot, with a simple majority of the elected directors serving until the second succeeding directors election and the remaining elected directors serving until the next directors election.

SECTION 1.19. Sections 49.103(a) and (b), Water Code, are amended to read as follows:

(a) Except as provided by Section 49.102, the members of the board of a district shall serve staggered [for] four-year terms.

(b) After confirmation of a district, an [An] election shall be held on the uniform election date, provided by Section 41.001, [established by the] Election Code, in May of each even-numbered year to elect the appropriate number of directors.

SECTION 1.20. Subchapter D, Chapter 49, Water Code, is amended by adding Section 49.1045 to read as follows:

Sec. 49.1045. CERTIFICATION OF ELECTION RESULTS IN LESS POPULOUS DISTRICTS. (a) This section applies only to a district that:

(1) has 10 or fewer registered voters; and

(2) holds an election jointly with a county in which the district is wholly or partly located.

(b) A district may provide for an inquiry into and certification of the voting results of an election under this section if:

(1) the election results indicate that the number of votes cast in the election was greater than the number of registered voters in the district;

(2) the board determines that the election results are likely to be disputed in court; and

(3) the board can determine from the official list of registered voters prepared by the county voter registrar or county elections administrator for the district election which voters were qualified to vote in the district election and can determine from the signature roster from the joint election who voted in the joint election.

(c) To certify the district votes, the board by rule shall adopt a procedure to determine for each person who signed the signature roster as a voter in the joint election:

(1) whether the person's address on the day of the election was in the district; and

(2) how the person voted in the district election.

(d) The certified votes are the official election results.

(e) Certification of the results under this section does not preclude the filing of an election contest.

SECTION 1.21. Sections 49.105(c) and (d), Water Code, are amended to read as follows:

(c) If the number of directors is reduced to fewer than a majority or if a vacancy continues beyond the 90th day after the date the vacancy occurs, the vacancy or vacancies may [shall] be filled by appointment by the commission if the district is required by Section 49.181 to obtain commission approval of its bonds or by the county commissioners court if the district was created by the county commissioners court, regardless of whether a petition has been presented to the board under Subsection (b). An appointed director shall serve for the unexpired term of the director he or she is replacing.

(d) In the event of a failure to elect one or more members of the board of a district resulting from the absence of, or failure to vote by, the qualified voters in an election held by the district, the current members of the board or temporary board holding the positions not filled at such election shall be deemed to have been elected [reelected] and shall serve an additional term of office, or, in the case of a temporary board member deemed elected under this subsection, the initial term of office.

SECTION 1.22. Section 49.108, Water Code, is amended by adding Subsections (g), (h), and (i) to read as follows:

(g) On or before the first day for early voting by personal appearance at an election held to authorize a contract, a substantially final form of the contract must be filed in the office of the district and must be open to inspection by the public. The contract is not required to be attached as an exhibit to the order calling the election to authorize the contract.

(h) A single contract may contain multiple purposes or provisions for multiple facilities authorized by one or more constitutional provisions. The contract may generally describe the facilities to be acquired or financed by the district without reference to specific constitutional provisions. A contract described by this subsection may be submitted for approval in a single proposition at an election.

(i) A contract between districts to provide facilities or services is not required to specify the maximum amount of bonds or expenditures authorized under the contract if:

(1) the contract provides that the service area cannot be enlarged without the consent of at least two-thirds of the boards of directors of the districts that are:

(A) included in the service area as proposed to be enlarged; or

(B) served by the facilities or services provided in the contract;

(2) the contract provides that bonds or expenditures, payable wholly or partly from contract taxes, are issued or made:

(A) on an emergency basis; or

(B) to purchase, construct, acquire, own, operate, repair, improve, or extend services or facilities necessary to comply with changes in applicable regulatory requirements; or

(3) the contract provides that the bonds or expenditures require prior approval by any district that is obligated to pay debt service on those bonds or to pay for those expenditures wholly or partly with contract taxes.

SECTION 1.23. Subchapter D, Chapter 49, Water Code, is amended by adding Sections 49.109, 49.110, 49.111, 49.112, and 49.113 to read as follows:

Sec. 49.109. AGENT DURING ELECTION PERIOD. The board may appoint a person, including a district officer, employee, or consultant, to serve as the district's agent under Section 31.123, Election Code.

Sec. 49.110. ELECTION JUDGE. (a) The notice requirements for the appointment of a presiding election judge under Section 32.009, Election Code, do not apply to an election held by a district.

(b) To serve as an election judge in an election held by a district, a person must be a registered voter of the county in which the district is wholly or partly located. To the extent of any conflict with Section 32.051, Election Code, this section controls.

Sec. 49.111. EXEMPTIONS FROM USE OF ACCESSIBLE VOTING SYSTEMS. (a) Notwithstanding Sections 61.012 and 61.013, Election Code, a district is exempt from the acquisition, lease, or use of an electronic voting system for an election if:

(1) the election is a confirmation election or an election held jointly with a confirmation election on the same date and in conjunction with the confirmation election, except for an election in which a federal office appears on the ballot;

(2) the most recently scheduled district directors' election was not held, as provided by Section 2.053(b), Election Code; or

(3) fewer than 250 voters voted at the most recently held district directors' election.

(b) A district eligible for the exemption under Subsection (a) must publish notice in a newspaper of general circulation in an area that includes the district or mail notice to each voter in the district regarding the district's intention to hold an election without providing a voting station that meets the requirements for accessibility under 42 U.S.C. Section 15481(a)(3) on election day and during the period for early voting by personal appearance. The notice must be published or mailed not later than the later of:

(1) the 75th day before the date of the election; or

(2) the date on which the district adopts the order calling the election.

(c) The notice required by Subsection (b) must:

(1) provide that any voter in the district may request the use of a voting station that meets the accessibility requirements for voting by a person with a disability; and

(2) provide information on how to submit such a request.

(d) The district shall comply with a request for an accessible voting station if the request is received not later than the 45th day before the date of the election.

Sec. 49.112. CANCELLATION OF ELECTION; REMOVAL OF BALLOT MEASURE. Before the first day of early voting by personal appearance, the board by order or resolution may cancel an election called at the discretion of the district or may remove from the ballot a measure included at the discretion of the district. A copy of the order or resolution must be posted during the period for early voting by personal appearance and on election day at each polling place that is used or that would have been used in the election.

Sec. 49.113. NOTICE FOR FILING FOR PLACE ON BALLOT. A notice required by Section 141.040, Election Code, must be posted at the district's administrative office in the district or at the public place established by the district under Section 49.063 of this chapter not later than the 30th day before the deadline for a candidate to file an application for a place on the ballot of a district directors' election.

SECTION 1.24. Section 49.151(c), Water Code, is amended to read as follows:

(c) The board may allow disbursements of district money to be transferred by federal reserve wire system or by electronic means. The board by resolution may allow the wire or electronic transfers to accounts in the name of the district or accounts not in the name of the district.

SECTION 1.25. Sections 49.154(a) and (c), Water Code, are amended to read as follows:

(a) The board may declare an emergency in the matter of funds not being available to pay principal of and interest on any bonds of the district payable in whole or in part from taxes or to meet any other needs of the district and may issue [negotiable] tax anticipation notes or [negotiable] bond anticipation notes to borrow the money needed by the district without advertising or giving notice of the sale. A district's bond anticipation notes or tax anticipation notes are negotiable instruments within the meaning and purposes of the Business & Commerce Code notwithstanding any provision to the contrary in that code. Bond anticipation notes and tax anticipation notes shall mature within one year of their date.

(c) Bond anticipation notes may be issued for any purpose for which bonds of the district may be issued [have previously been voted] or [may be issued] for the purpose of refunding previously issued bond anticipation notes. A district may covenant with the purchasers of the bond anticipation notes that the district will use the proceeds of sale of any bonds in the process of issuance for the purpose of refunding the bond anticipation notes, in which case the board will be required to use the proceeds received from sale of the bonds in the process of issuance to pay principal, interest, or redemption price on the bond anticipation notes.

SECTION 1.26. Section 49.181(a), Water Code, is amended to read as follows:

(a) A district may not issue bonds to finance a project for which the commission has adopted rules requiring review and approval unless the commission determines that the project [to be financed by the bonds] is feasible and issues an order approving the issuance of the bonds. This section does not apply to:

(1) refunding bonds if the commission issued an order approving the issuance of the bonds or notes that originally financed the project;

(2) refunding bonds that are issued by a district under an agreement between the district and a municipality allowing the issuance of the district's bonds to refund bonds issued by the municipality to pay the cost of financing facilities;

(3) bonds issued to and approved by the Farmers Home Administration, the United States Department of Agriculture, the North American Development Bank, or the Texas Water Development Board; or

(4) refunding bonds issued to refund bonds described by Subdivision (3).

SECTION 1.27. Section 49.194, Water Code, is amended by amending Subsections (a), (b), and (c) and adding Subsection (h) to read as follows:

(a) Except as provided by Subsection (h), after [After] the board has approved the audit report, it shall submit a copy of the report to the executive director for filing within 135 days after the close of the district's fiscal year.

(b) Except as provided by Subsection (h), if [If] the board refuses to approve the annual audit report, the board shall submit a copy of the report to the executive director for filing within 135 days after the close of the district's fiscal year, accompanied by a statement from the board explaining the reasons for its failure to approve the report.

(c) Copies of the audit report, the annual financial dormancy affidavit, or annual financial report described in Sections 49.197 and 49.198 shall be filed annually in the office of the district.

(h) A special water authority shall submit a copy of the audit report to the executive director for filing not later than the 160th day after the date the special water authority's fiscal year ends.

SECTION 1.28. Section 49.212, Water Code, is amended by amending Subsection (d) and adding Subsections (d-1) and (d-2) to read as follows:

(d) Notwithstanding any provision of law to the contrary, a district that charges a fee that is an impact fee as described in Section 395.001(4), Local Government Code, must comply with Chapter 395, Local Government Code. A charge or fee is not an impact fee under that chapter if:

(1) the charge or fee is imposed by a district for construction, installation, or inspection of a tap or connection to district water, sanitary sewer, or drainage facilities, including all necessary service lines and meters, for capacity in storm water detention or retention facilities and related storm water conveyances, or for wholesale facilities that serve such water, sanitary sewer, [or] drainage, or storm water detention or retention facilities; and

(2) the charge or fee:

(A) [that (i)] does not exceed three times the actual [and reasonable] costs to the district for such tap or connection;

(B) [, (ii)] if made to a nontaxable entity for retail or wholesale service, does not exceed the actual costs to the district for such work and for all facilities that are necessary to provide district services to such entity and that are financed or are to be financed in whole or in part by tax-supported or revenue bonds of the district; [,] or

(C) is [(iii) if] made by a district for retail or wholesale service on land that at the time of platting was not being provided with water, [or] wastewater, drainage, or storm water detention or retention service by the district[, shall not be deemed to be an impact fee under Chapter 395, Local Government Code].

(d-1) Actual costs under Subsection (d), as determined by the board in its reasonable discretion, may include nonconstruction expenses attributable to the design, permitting, financing, and construction of those facilities, and reasonable interest on those costs calculated at a rate not to exceed the net effective interest rate on any district bonds issued to finance the facilities.

(d-2) A district may pledge the revenues of the district's utility system to pay the principal of or interest on bonds issued to construct the capital improvements for which a fee is [was] imposed under Subsection (d) [this subsection], and money received from the fees shall be considered revenues of the district's utility system for purposes of the district's bond covenants.

SECTION 1.29. Section 49.2121(b), Water Code, is amended to read as follows:

(b) A district may:

(1) accept a credit card for the payment of any fees and charges imposed by the district;

(2) collect a fee[, not to exceed five percent of the amount of the fee or charge being paid,] that is reasonably related to the expense incurred by the district in processing the payment by credit card; and

(3) collect a service charge for the expense incurred by the district in collecting the original fee or charge if the payment by credit card is not honored by the credit card company on which the funds are drawn.

SECTION 1.30. Section 49.216, Water Code, is amended by amending Subsection (e) and adding Subsection (f) to read as follows:

(e) Any peace officer who is directly employed by a district, before beginning to perform any duties and at the time of appointment, must take an oath and execute a bond conditioned on faithful performance of such officer's duties in the amount of $1,000 payable to the district. The oath and the bond shall be filed in the district office.

(f) A peace officer contracted for by the district, individually or through a county, sheriff, constable, or municipality, is an independent contractor, and the district is responsible for the acts or omissions of the peace officer only to the extent provided by law for other independent contractors.

SECTION 1.31. Subchapter H, Chapter 49, Water Code, is amended by adding Section 49.239 to read as follows:

Sec. 49.239. WATER RATES. (a) In this section, "utility" means a person or any combination of persons, other than a district, a water supply corporation that has adopted and is operating in accordance with bylaws or articles of incorporation that ensure that it is member-owned and member-controlled, or a political subdivision of the state, or their lessees, trustees, and receivers, providing potable water service to a district or to the residents of that district.

(b) Notwithstanding the provisions of any agreement, a district may appeal the rate it is charged by a utility for potable water service by filing a petition with the commission. The commission shall hear the appeal de novo, and the utility bears the burden of proof to establish that the rate is just and reasonable and does not adversely affect the public interest. The commission shall presume that the rate adversely affects the public interest if the rate the utility charges on the date the petition is filed is at least 200 percent higher than the rate charged at any time during the 36-month period before the date of the petition. The commission shall set the rates to be charged by the utility, and the utility may not increase the rates without the approval of the commission.

SECTION 1.32. Sections 49.273(d) and (e), Water Code, are amended to read as follows:

(d) For contracts over $75,000 [$50,000], the board shall advertise the letting of the contract, including the general conditions, time, and place of opening of sealed bids. The notice must [shall] be published in one or more newspapers circulated in each county in which [part of] the district is located. [If one newspaper meets both of these requirements, publication in such newspaper is sufficient.] If there are more than four counties in the district, notice may be published in any newspaper with general circulation in the district. The notice must [shall] be published once a week for two consecutive weeks before the date that the bids are opened, and the first publication must [shall] be not later than the 14th [21st] day before the date of the opening of the sealed bids.

(e) For contracts over $25,000 but not more than $75,000 [$50,000], the board shall solicit written competitive bids on uniform written specifications from at least three bidders.

SECTION 1.33. Section 49.351, Water Code, is amended by amending Subsections (a), (b), (c), (f), (i), and (l) and adding Subsection (m) to read as follows:

(a) A district providing potable water or sewer service to household users may, separately or jointly with another district, municipality, or other political subdivision, establish, operate, and maintain, finance with ad valorem taxes, mandatory fees, or voluntary contributions, and issue bonds for a fire department to perform all fire-fighting services within the district as provided in this subchapter and may provide for [issue bonds or impose a mandatory fee, with voter approval, for financing a plan approved in accordance with this section, including] the construction and purchase of necessary buildings, facilities, land, and equipment and the provision of an adequate water supply.

(b) After complying with the requirements of this section [approval of the district electors of a plan to operate, jointly operate, or jointly fund the operation of a fire department, and after complying with Subsections (g), (h), and (i)], the district or districts shall provide an adequate system and water supply for fire-fighting purposes, may purchase necessary land, may construct and purchase necessary buildings, facilities, and equipment, and may employ or contract with a fire department to employ all necessary personnel including supervisory personnel to operate the fire department.

(c) For [Bonds for] financing a plan approved in accordance with this section, bonds and ad valorem taxes must [shall] be authorized and may be issued or imposed[, and a district shall be authorized to levy a tax to pay the principal of and interest on such bonds,] as provided by law for the authorization and issuance of other bonds and the authorization and imposition of other ad valorem taxes of the district.

(f) Before a district imposes an ad valorem tax or issues bonds payable wholly or partly from ad valorem taxes to finance the establishment of [establishes] a fire department, contracts to operate a joint fire department, or contracts with another person to perform fire-fighting services within the district, the district must comply with [the provisions of] Subsections (g), (h), and (i). A district that funds fire-fighting services with revenue, including mandatory fees or voluntary contributions, is not required to comply with Subsections (g), (h), and (i).

(i) After approval of a plan by the commission, the district shall hold an [submit to the electors of the district at the] election to approve the plan, approve bonds payable wholly or partly from ad valorem taxes, and [or to] impose ad valorem taxes [a mandatory fee] for financing the plan. The election [, or if no bonds or fees are to be approved, at an election called for approval of the plan, which] may be held in conjunction with an election required by Section 49.102[, the proposition of whether or not the plan should be implemented or entered into by the district]. [The ballots at the election shall be printed, as applicable, to provide for voting for or against the proposition: "The implementation of the plan for (operation/joint operation) of a fire department"; or "The plan and contract to provide fire-fighting services for the district."]

(l) A [Notwithstanding the requirements of Subsections (a)-(j), a] district providing potable water or sewer service to household users may, as part of its billing process, collect from its customers a voluntary contribution on behalf of organizations providing fire-fighting services to the district. A district that chooses to collect a voluntary contribution under this subsection must give reasonable notice to its customers that the contribution is voluntary. Water and sewer service may not be terminated as a result of failure to pay the voluntary contribution.

(m) If a customer makes a partial payment of a district bill for water or sewer service and includes with the payment a voluntary contribution for fire-fighting services under Subsection (l), the district shall apply the voluntary contribution first to the bill for water or sewer service, including any interest or penalties imposed. The district shall use any amount remaining for fire-fighting services.

SECTION 1.34. Section 49.462(1), Water Code, is amended to read as follows:

(1) "Recreational facilities" means parks, landscaping, parkways, greenbelts, sidewalks, trails, public right-of-way beautification projects, and recreational equipment and facilities. The term includes associated street and security lighting. The term does not include a minor improvement or beautification project to land acquired or to be acquired as part of a district's water, sewer, or drainage facilities.

SECTION 1.35. Subchapter N, Chapter 49, Water Code, is amended by adding Section 49.4641 to read as follows:

Sec. 49.4641. RECREATIONAL FACILITIES ON SITES ACQUIRED FOR WATER, SEWER, OR DRAINAGE FACILITIES. (a) A district may develop and maintain recreational facilities on a site acquired for the purpose of developing water, sewer, or drainage facilities.

(b) A district is not required to prorate the costs of a site described by Subsection (a) between the primary water, sewer, or drainage purpose and any secondary recreational facilities purpose if a licensed professional engineer certifies that the site is reasonably sized for the intended water, sewer, or drainage purpose.

(c) The engineer may consider the following factors in determining the reasonableness of the size of a water, sewer, or drainage site:

(1) the rules, regulations, and design guidelines or criteria of a municipality, county, or other entity exercising jurisdiction;

(2) sound engineering principles;

(3) the impact on adjoining property;

(4) the availability of sites that meet the requirements for the proposed use;

(5) requirements for sanitary control;

(6) the need for a buffer zone to mitigate noise or for aesthetic purposes;

(7) benefits to storm water quality; and

(8) anticipated expansions of facilities resulting from:

(A) future growth and demand for district facilities; or

(B) changes in regulatory requirements.

SECTION 1.36. Sections 49.4645(a) and (b), Water Code, are amended to read as follows:

(a) A district all or part of which is located in Bastrop County, Bexar County, Waller County, Travis County, Williamson County, Harris County, Galveston County, Brazoria County, Montgomery County, or Fort Bend County may issue bonds supported by ad valorem taxes to pay for the development and maintenance of recreational facilities only if the bonds are authorized by a majority vote of the [qualified] voters of the district voting in an election held for that purpose. The outstanding principal amount of bonds, notes, and other obligations issued to finance parks and recreational facilities supported by ad valorem taxes [payable from any source] may not exceed an amount equal to one percent of the value of the taxable property in the district or, if supported by contract taxes under Section 49.108, may not exceed an amount equal to one percent of the sum of the value of the taxable property in the districts making payments under the contract as shown by the tax rolls of the central appraisal district at the time of the issuance of the bonds, notes, and other obligations or an amount greater than the estimated cost provided in the park plan under Subsection (b), whichever is smaller. An estimate of the value provided by the central appraisal district may be used to establish the value of the taxable property in the district or districts under this section. The district may not issue bonds supported by ad valorem taxes to pay for the development and maintenance of:

(1) indoor or outdoor swimming pools; or

(2) golf courses.

(b) On or before the 10th day before the first day for early voting by personal appearance at [Not later than the 10th day before] an election [is] held to authorize the issuance of bonds for the development and maintenance of recreational facilities, the board shall file in the district office for review by the public a park plan covering the land, improvements, facilities, and equipment to be purchased or constructed and their estimated cost, together with maps, plats, drawings, and data fully showing and explaining the park plan. The park plan is not part of the proposition to be voted on, [and the park plan] does not create a contract with the voters, and may be amended at any time after the election held to authorize the issuance of bonds for the development and maintenance of recreational facilities provided under the plan. The estimated cost stated in the amended park plan may not exceed the amount of bonds authorized at that election.

SECTION 1.37. Section 51.072, Water Code, is amended to read as follows:

Sec. 51.072. QUALIFICATIONS FOR DIRECTOR. (a) To be qualified for election as a director, a person must:

(1) be a resident of the state;

(2) [,] own land subject to taxation in the district or be a qualified voter in the district; [,] and

(3) be at least 18 years of age.

(b) Section 49.052 does not apply to a district governed by this chapter whose principal purpose is providing water for irrigation.

SECTION 1.38. Section 51.335, Water Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b) The district shall not usurp functions or duplicate a service already adequately exercised or rendered by the other governmental agency except:

(1) under a valid contract with the other governmental agency; or

(2) as provided by Subsection (c).

(c) The district may finance, develop, and maintain recreational facilities under Subchapter N, Chapter 49, even if similar facilities may be provided by a political subdivision or other governmental entity included wholly or partly in the district.

SECTION 1.39. Section 51.523, Water Code, is amended to read as follows:

Sec. 51.523. BALLOTS. The ballot for an election under this subchapter shall be printed to provide for voting for or against substantially the proposition: "Designation of the area, issuance of bonds, [and] levy of a tax to retire the bonds, and levy of a maintenance tax."

SECTION 1.40. Section 51.527, Water Code, is amended by adding Subsection (c) to read as follows:

(c) After bonds issued for the defined area or designated property are fully paid or defeased, the board may declare the defined area dissolved or may repeal the designation of the designated property. After that declaration or repeal, the board shall cease imposing any special taxes authorized under the adopted tax plan on the property located in the defined area or on the designated property.

SECTION 1.41. Section 53.063(a), Water Code, is amended to read as follows:

(a) Except as provided by Subsection (b), to be qualified for election as a supervisor, a person must be:

(1) a resident of this state;

(2) the owner of taxable property in the district or a qualified voter in the district; and

(3) at least 18 years of age.

SECTION 1.42. Section 54.016(f), Water Code, is amended to read as follows:

(f) A city may provide in its written consent for the inclusion of land in a district that is initially located wholly or partly outside the corporate limits of the city that a contract ("allocation agreement") between the district and the city be entered into prior to the first issue of bonds, notes, warrants, or other obligations of the district. The allocation agreement shall contain the following provisions:

(1) a method by which the district shall continue to exist following the annexation of all territory within the district by the city, if the district is initially located outside the corporate limits of the city;

(2) an allocation of the taxes or revenues of the district or the city which will assure that, following the date of the inclusion of all the district's territory within the corporate limits of the city, the total annual ad valorem taxes collected by the city and the district from taxable property within the district does not exceed an amount greater than the city's ad valorem tax upon such property;

(3) an allocation of governmental services to be provided by the city or the district following the date of the inclusion of all of the district's territory within the corporate limits of the city; and

(4) such other terms and conditions as may be deemed appropriate by the city.

SECTION 1.43. Subchapter D, Chapter 54, Water Code, is amended by adding Section 54.204 to read as follows:

Sec. 54.204. PUBLIC MEETINGS BEFORE CERTAIN WATER RATE INCREASES. (a) A wholesale supplier of water to a district that proposes to increase the rate the district pays for water must conduct at least two public meetings on the proposed rate increase in the district.

(b) The district may pass the increase along to the district's customers only after the public meetings have been held under Subsection (a).

(c) This section applies only to a proposed rate that is at least 200 percent higher than the rate the wholesale supplier charged the district at any time in the preceding 36-month period.

SECTION 1.44. Section 54.236, Water Code, is amended to read as follows:

Sec. 54.236. STREET OR SECURITY LIGHTING. (a) Subject to the provisions of this section, a district may purchase, install, operate, and maintain street lighting or security lighting within public utility easements or public rights-of-way or property owned by [within the boundaries of] the district.

(b) A district may not issue bonds supported by ad valorem taxes to pay for the purchase, installation, and maintenance of street or security lighting, except as authorized by Section 54.234 or Subchapter N, Chapter 49.

SECTION 1.45. Section 54.739, Water Code, is amended to read as follows:

Sec. 54.739. SUBSTITUTING LAND OF EQUAL VALUE. After the district is organized and has obtained voter approval for the issuance of, or has sold, bonds payable wholly or partly from ad valorem taxes [acquires facilities with which to function for the purposes for which it was organized, and votes, issues and sells bonds for such purposes], land within the district boundaries subject to taxation that does not need or utilize the services of the district may be excluded and other land not within the boundaries of the district may be included within the boundaries of the district without impairment of the security for payment of the bonds or invalidation of any prior bond election, as provided by this section and Sections 54.740 through 54.747.

SECTION 1.46. Section 54.744, Water Code, is amended to read as follows:

Sec. 54.744. IMPAIRMENT OF SECURITY. (a) For purposes of the board's consideration of the applications, the lands proposed for inclusion shall be deemed to be sufficient to avoid an impairment of the security for payment of obligations of the district if:

(1) according to the most recent tax roll of the district or the most recently certified estimates of taxable value from the chief appraiser of the appropriate appraisal district, the taxable value of such included lands equals or exceeds the taxable value of the excluded lands; and

(2) either the estimated costs of providing district facilities and services to such included lands is equal to or less than the estimated costs of providing district facilities and services to the excluded lands or any increased estimated costs of providing district facilities and services to the included land, as determined by the district's engineer, can be amortized at prevailing bond interest rates and maturity schedules and the prevailing debt service tax rate of the district, as determined by the district's professional financial advisor, when applied to the increase in taxable value of the included land over the taxable value of the excluded land.

(b) If the district has any[; and (3) the district's] outstanding bonds or contract obligations [are] payable in whole or in part by a pledge of net revenues from the ownership or operation of the district's facilities at the time the board considers an application, the lands proposed for inclusion shall be deemed to be sufficient to avoid an impairment of the security for payment of obligations of the district if[, and] the projected net revenues to be derived from the lands to be included during the succeeding 12-month period, as determined by the district's engineer, equals or exceeds the projected net revenues that would otherwise have been derived from the lands to be excluded during the same period.

(c) In this section, the taxable value of included land means the market value of the land if, before or contemporaneously with the inclusion of the land in the district, the owner of the land waives the right to special appraisal of the land as to the district under Section 23.20, Tax Code.

SECTION 1.47. Section 49.103(g), Water Code, is repealed.

SECTION 1.48. (a) Section 36.1071, Water Code, as amended by this article, applies only to the rulemaking authority of a groundwater conservation district related to a management plan or an amendment to a management plan that is submitted by the district to the executive administrator of the Texas Water Development Board for review and approval on or after the effective date of this article. A district's rulemaking authority related to a management plan or an amendment to a management plan that is submitted to the executive administrator of the Texas Water Development Board before the effective date of this article is governed by the law in effect when the management plan or amendment was submitted, and the former law is continued in effect for that purpose.

(b) The change in law made by this article to Section 36.301, Water Code, applies only to a violation by a groundwater conservation district that occurs on or after the effective date of this article. A violation that occurs before the effective date of this article is governed by the law in effect on the date the violation occurred, and the former law is continued in effect for that purpose.

SECTION 1.49. The legislature finds that an agreement entered into before September 1, 2011, by a municipality and a municipal utility district is an allocation agreement only if:

(1) the district is initially located wholly or partly outside the corporate limits of the municipality;

(2) the agreement strictly complies with the requirements of Section 54.016(f), Water Code, as that section existed immediately before the effective date of this article; and

(3) the agreement is specifically designated by the parties to the agreement as an "allocation agreement" under Section 54.016(f), Water Code.

SECTION 1.50. Not later than December 1, 2011, the Texas Commission on Environmental Quality shall adopt any rules or amendments to existing rules necessary to implement Section 49.4641, Water Code, as added by this article.

SECTION 1.51. (a) Except as provided by Subsection (b) of this section, this article takes effect September 1, 2011.

(b) Sections 54.739 and 54.744, Water Code, as amended by this article, take effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution; otherwise, those sections take effect September 1, 2011.

ARTICLE 2. BELL COUNTY MUNICIPAL UTILITY DISTRICT NO. 1

SECTION 2.01. Subtitle F, Title 6, Special District Local Laws Code, is amended by adding Chapter 8372 to read as follows:

CHAPTER 8372. BELL COUNTY MUNICIPAL UTILITY DISTRICT NO. 1

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 8372.001. DEFINITIONS. In this chapter:

(1) "Board" means the district's board of directors.

(2) "Commission" means the Texas Commission on Environmental Quality.

(3) "Director" means a board member.

(4) "District" means the Bell County Municipal Utility District No. 1.

Sec. 8372.002. NATURE OF DISTRICT. The district is a municipal utility district created under Section 59, Article XVI, Texas Constitution.

Sec. 8372.003. CONFIRMATION AND DIRECTORS' ELECTION REQUIRED. The temporary directors shall hold an election to confirm the creation of the district and to elect five permanent directors as provided by Section 49.102, Water Code.

Sec. 8372.004. CONSENT OF MUNICIPALITY REQUIRED. The temporary directors may not hold an election under Section 8372.003 until each municipality in whose corporate limits or extraterritorial jurisdiction the district is located has consented by ordinance or resolution to the creation of the district and to the inclusion of land in the district.

Sec. 8372.005. FINDINGS OF PUBLIC PURPOSE AND BENEFIT. (a) The district is created to serve a public purpose and benefit.

(b) The district is created to accomplish the purposes of:

(1) a municipal utility district as provided by general law and Section 59, Article XVI, Texas Constitution; and

(2) Section 52, Article III, Texas Constitution, that relate to the construction, acquisition, or improvement of macadamized, graveled, or paved roads described by Section 54.234, Water Code, or improvements, including storm drainage, in aid of those roads.

Sec. 8372.006. INITIAL DISTRICT TERRITORY. (a) The district is initially composed of the territory described by Section 2.02 of the Act enacting this chapter.

(b) The boundaries and field notes contained in Section 2.02 of the Act enacting this chapter form a closure. A mistake made in the field notes or in copying the field notes in the legislative process does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for the purposes for which the district is created or to pay the principal of and interest on a bond;

(3) right to impose a tax; or

(4) legality or operation.

[Sections 8372.007-8372.050 reserved for expansion]

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 8372.051. GOVERNING BODY; TERMS. (a) The district is governed by a board of five elected directors.

(b) Except as provided by Section 8372.052, directors serve staggered four-year terms.

Sec. 8372.052. TEMPORARY DIRECTORS. (a) The temporary board consists of:

(1) Roger Hunter;

(2) Randy Reding;

(3) David Barr;

(4) Karen Walinder; and

(5) David Lazar.

(b) Temporary directors serve until the earlier of:

(1) the date permanent directors are elected under Section 8372.003; or

(2) September 1, 2015.

(c) If permanent directors have not been elected under Section 8372.003 and the terms of the temporary directors have expired, successor temporary directors shall be appointed or reappointed as provided by Subsection (d) to serve terms that expire on the earlier of:

(1) the date permanent directors are elected under Section 8372.003; or

(2) the fourth anniversary of the date of the appointment or reappointment.

(d) If Subsection (c) applies, the owner or owners of a majority of the assessed value of the real property in the district may submit a petition to the commission requesting that the commission appoint as successor temporary directors the five persons named in the petition. The commission shall appoint as successor temporary directors the five persons named in the petition.

[Sections 8372.053-8372.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 8372.101. GENERAL POWERS AND DUTIES. The district has the powers and duties necessary to accomplish the purposes for which the district is created.

Sec. 8372.102. MUNICIPAL UTILITY DISTRICT POWERS AND DUTIES. The district has the powers and duties provided by the general law of this state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution.

Sec. 8372.103. AUTHORITY FOR ROAD PROJECTS. (a) Under Section 52, Article III, Texas Constitution, the district may design, acquire, construct, finance, issue bonds for, improve, and convey to this state, a county, or a municipality for operation and maintenance macadamized, graveled, or paved roads described by Section 54.234, Water Code, or improvements, including storm drainage, in aid of those roads.

(b) The district may exercise the powers provided by this section without submitting a petition to or obtaining approval from the commission as required by Section 54.234, Water Code.

Sec. 8372.104. APPROVAL OF ROAD PROJECT. (a) The district may not undertake a road project authorized by Section 8372.103 unless:

(1) each municipality or county that will operate and maintain the road has approved the plans and specifications of the road project, if a municipality or county will operate and maintain the road; or

(2) the Texas Transportation Commission has approved the plans and specifications of the road project, if the state will operate and maintain the road.

(b) Except as provided by Subsection (a), the district is not required to obtain approval from the Texas Transportation Commission to design, acquire, construct, finance, issue bonds for, improve, or convey a road project.

Sec. 8372.105. COMPLIANCE WITH MUNICIPAL CONSENT ORDINANCE OR RESOLUTION. The district shall comply with all applicable requirements of any ordinance or resolution that is adopted under Section 54.016 or 54.0165, Water Code, and that consents to the creation of the district or to the inclusion of land in the district.

Sec. 8372.106. LIMITATION ON USE OF EMINENT DOMAIN. The district may not exercise the power of eminent domain outside the district to acquire a site or easement for:

(1) a road project authorized by Section 8372.103; or

(2) a recreational facility as defined by Section 49.462, Water Code.

[Sections 8372.107-8372.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 8372.151. ELECTIONS REGARDING TAXES OR BONDS. (a) The district may issue, without an election, bonds and other obligations secured by:

(1) revenue other than ad valorem taxes; or

(2) contract payments described by Section 8372.153.

(b) The district must hold an election in the manner provided by Chapters 49 and 54, Water Code, to obtain voter approval before the district may impose an ad valorem tax or issue bonds payable from ad valorem taxes.

(c) The district may not issue bonds payable from ad valorem taxes to finance a road project unless the issuance is approved by a vote of a two-thirds majority of the district voters voting at an election held for that purpose.

Sec. 8372.152. OPERATION AND MAINTENANCE TAX. (a) If authorized at an election held under Section 8372.151, the district may impose an operation and maintenance tax on taxable property in the district in accordance with Section 49.107, Water Code.

(b) The board shall determine the tax rate. The rate may not exceed the rate approved at the election.

Sec. 8372.153. CONTRACT TAXES. (a) In accordance with Section 49.108, Water Code, the district may impose a tax other than an operation and maintenance tax and use the revenue derived from the tax to make payments under a contract after the provisions of the contract have been approved by a majority of the district voters voting at an election held for that purpose.

(b) A contract approved by the district voters may contain a provision stating that the contract may be modified or amended by the board without further voter approval.

[Sections 8372.154-8372.200 reserved for expansion]

SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS

Sec. 8372.201. AUTHORITY TO ISSUE BONDS AND OTHER OBLIGATIONS. The district may issue bonds or other obligations payable wholly or partly from ad valorem taxes, impact fees, revenue, contract payments, grants, or other district money, or any combination of those sources, to pay for any authorized district purpose.

Sec. 8372.202. TAXES FOR BONDS. At the time the district issues bonds payable wholly or partly from ad valorem taxes, the board shall provide for the annual imposition of a continuing direct ad valorem tax, without limit as to rate or amount, while all or part of the bonds are outstanding as required and in the manner provided by Sections 54.601 and 54.602, Water Code.

Sec. 8372.203. BONDS FOR ROAD PROJECTS. At the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from ad valorem taxes may not exceed one-fourth of the assessed value of the real property in the district.

SECTION 2.02. The Bell County Municipal Utility District No. 1 initially includes all the territory contained in the following area: Being all that certain tract or parcel of land situated in the C. H. Fitch Survey, A-316, the John Lewis Survey, A-512, the S.C. Fitch Survey, A-371, and the Young Williams Survey, A-861, Bell County, Texas, being all of Tract One (called 442.51 acres), Tract Two (called 23.923 acres), and Tract 4 (called 8.440 acres) described in deed to Weldon Whitis and Bruce Whitis in Volume 4441, Page 575, Official Records, Bell County, Texas, and all of that certain called 64.7 acre tract described in deed to Whitis Land Investments, Ltd., in Volume 6622, Page 114, Official Records, Bell County, Texas, and being more particularly described by metes and bounds as follows: BEGINNING at an iron rod at the southeast corner of said Tract 4 (called 8.440 acres), same being in the north line of said Tract One (called 442.51 acres), also being the southwest corner of Tract Three (called 6.747 acres) also described in deed to Weldon Whitis and Bruce Whitis in Volume 4441, Page 575, Official Records, Bell County, Texas, for corner of the herein described tract, THENCE N 17°42'07" E, 444.85 along the west line of said Tract Three and east line of said Tract Two to an iron pipe for corner of the herein described tract; THENCE in a westerly direction along the north line of said Tract Three with the following courses: 1. N 88°11'16" W, 310.38 feet to an iron pipe; 2. S 83°11'40" W, 317.12 feet, to an iron pipe; 3. S 82°58'31" W, 246.70, feet to an iron pipe, for the northwest corner of said Tract Three; THENCE in a southerly direction along the west line of said Tract Three with the following courses: 1. S 10°13'31" W, 26.66 feet; 2. S 29°13'59" E, 10.60 feet; 3. S 01°30'59" E 14.54 feet; 4. S 43°00'42" W, 24.35 feet; 5. S 61°37'21" W, 12.89 feet; 6. S 14°33'54" W, 88.90 feet, to an iron pipe in a fence corner, for an ell corner; THENCE N 71°44'38" W, 190.17 feet, westerly, along a north line of said Tract Three to an iron rod in the north line of said Tract One; THENCE in a westerly direction along the north line of said Tract One with the following courses: 1. N 70°34'14" W, 44.59 feet, an iron rod for corner; 2. N 72°25'22" W, 616.92 feet, an iron rod for corner; 3. N 74°43'06" W, 507.39 feet, an iron rod in the east line of said 64.7 acre tract, for corner; THENCE N 15°55'53" E, 851.78 feet, westerly, along an east line of said 64.7 acre tract to a cedar, for the northeast corner of said 64.7 acre tract; THENCE in a westerly direction a the north line of said 64.7 acre tract with the following courses: 1. N 48°17'37" W, 82.11 feet, a post for corner; 2. N 28°55'27" W, 225.01 feet, a post for corner; 3. N 58°18'37" W, 18.24 feet, an elm for corner; 4. N 75°42'40" W, 266.08 feet, an iron rod for corner; 5. N 75°23'12" W, 237.82 feet, an iron rod for corner; 6. N 73°19'20" W, 164.19 feet, an iron rod for the northeast corner of Lot 5, Block 6, Stoneoak Subdivision, Phase 2, recorded in Cabinet B, Slide 334-B, Plat Records, Bell County, Texas, for corner of the herein described tract; THENCE along the easterly and southerly boundaries of Block 6, Stoneoak Subdivision, Phase 2 with the following courses: 1. S 14°37'25" W, 427.85 feet, an iron rod for corner; 2. S 39°36'49" W, 477.27 feet, an iron rod for corner; 3. N 50°23'11" W, 139.40 feet, an iron rod in the north margin of Stoneoak Dr., for corner; THENCE S 39°36'49" W, 60.00 feet, to an iron rod in the south margin of Stoneoak Dr, for corner; THENCE N 50°23'59" W, 99.90 feet, along the south margin of Stoneoak Dr., to an iron rod for the northeast corner of Block 3, Stoneoak Subdivision, Phase 2, for corner; THENCE along the easterly and southerly boundaries of Block 3, Stoneoak Subdivision, Phase 2 with the following courses: 1. S 39°39'11" W, 139.38 feet, an iron rod for the northeast corner of Lot 5, Block 3, Stoneoak Subdivision, Phase 2, for corner; 2. N 50°23'11" W, 311.48 feet, an iron rod, for corner; 3. N 53°09'02" W, 458.34 feet, an iron rod for the southwest corner of Lot 1, Block 3, Stoneoak Subdivision, Phase 2, same being the southeast corner of Lot 1, Block 1, Stoneoak Subdivision, Phase 1, recorded in Cabinet B, Slide 236-B, Plat Records, Bell County, Texas, for corner; THENCE N 53°50'25" W, 155.91 feet, along the south line of said Lot 1, Block 1, to an iron rod in the east margin of FM 1670, for corner; THENCE S 27°04'56" W, 566.14 feet, along the east margin of FM 1670 for an iron rod in the north line of Lot 6, Block 1, Stoneoak Subdivision, Phase 1, for corner; THENCE along the easterly and southerly boundaries of Lot Lot 6, Block 1, Stoneoak Subdivision, Phase 1, with the following courses: 1. S 53°56'27" E, 155.87 feet, an iron rod for corner; 2. S 27°04'53" W, 145.23 feet, an iron rod for the southeast corner of said Lot 6, Block 1, Stoneoak Subdivision, Phase 1, and corner of the herein described tract; THENCE along the southeasterly along the southerly boundary of said 64.7 acre tract with the following courses: 1. S 56°19'35" E, 696.11 feet, an iron rod, for corner; 2. N 23°01'40" E, 18.36 feet, an iron rod, for corner; 3. S 47°22'19" E, 1346.71 feet, an iron rod, in the west line of said Tract One and an ell corner of the herein described tract; THENCE in a southerly direction along the fenced west line of said Tract One with the following courses: 1. S 45°43'29" W, 521.79 feet, an iron rod, for corner; 2. S 28°59'19" W, 430.76 feet, an iron rod, for corner; 3. S 15°02'24" W, 590.71 feet, a 12" cedar, for corner; 4. S 31°13'21" W, 11.21 feet, a 12" cedar, for corner; 5. S 28°24'41" W, 2.53 feet, an iron rod for the north corner of the called 8.12 acre tract described in deed to the United States of America in Volume 874, Page 283, Deed Records of Bell County, Texas; THENCE S 19°42'32" E, 1187.26 feet, along a east line of said 8.12 acre tract and west line of said Tract One to an iron pipe for the south corner of said 8.12 acre tract, for corner; THENCE S 15°55'45" W, 377.40 feet, along a north west line of said Tract One to an iron pipe for the westerly southwest corner of the herein described tract; THENCE S 78°41'13" E, 2847.43 feet, along a south line of said Tract One and existing fence to an iron pipe in a fence corner, same being an ell corner of the herein described tract; THENCE S 12°34'41" W, 95.71 feet, to a point, for corner; THENCE in a easterly direction 100' north of an parallel to the south line of said Tract One, south line of said Tract Two, and left bank of the Lampasas River with the following courses: 1. N 59°59'13" E, 125.67 feet, a point, for corner; 2. N 78°13'20" E, 288.55 feet, a point, for corner; 3. S 69°41'17" E, 72.82 feet, a point, for corner; 4. S 67°06'56" E, 275.14 feet, a point, for corner; 5. S 58°22'11" E, 271.35 feet, a point, for corner 6. S 46°50'39" E, 512.57 feet, a point, for corner; 7. S 26°54'16" E, 299.38 feet, a point, for corner; 8. S 43°48'14" E, 309.26 feet, a point, for the southeast corner of the herein described tract; THENCE in a northerly direction along the fenced east line of said Tract Two, and east line of the herein described tract, with the following courses: 1. N 14°02'58" E, 481.07 feet, a post, for corner; 2. N 02°07'12" W, 180.92 feet, a post, for corner; 3. N 10°32'57" E, 614.21 feet, a post, for corner; 4. N 49°54'32" E, 229.03 feet, a fence corner post for the northeast corner of said Tract Two; THENCE in a westerly direction along a fenced north line of said Tract Two, and east line of the herein described tract, with the following courses: 1. N 72°21'30" W, 39.54 feet, an iron rod, for corner; 2. N 64°20'47" W, 70.85 feet, an iron rod in a fence corner in the east line of said Tract One, for corner of the herein described tract; THENCE in a northerly direction along the fenced east line of said Tract One, and east line of the herein described tract, with the following courses: 1. N 53°59'40" E, 167.20 feet, an iron rod, for corner; 2. N 59°20'36" E, 58.19 feet, an iron rod, for corner; 3. N 62°55'16" E, 71.72 feet, an iron rod, for corner; 4. N 69°11'44" E, 68.89 feet, a an iron rod, for corner; 5. N 62°45'31" E, 112.05 feet, an iron rod, for corner; 6. N 73°56'23" E, 35.96 feet, an iron rod, for corner; 7. N 61°52'10" E, 86.51 feet, an iron rod, for corner; 8. N 51°31'36" E, 274.08 feet, an iron rod, for corner; 9. N 45°30'37" E, 58.94 feet, an iron rod, for corner; 10. N 35°22'34" E, 111.93 feet, an iron rod, for corner; 11. N 24°37'26" E, 55.46 feet, an iron rod, for corner; 12. N 02°52'20" E, 61.55 feet, an iron rod, for corner; 13. N 05°33'08" W, 125.86 feet, an iron rod, for corner; 14. N 42°54'00" W, 25.42 feet, an iron rod, for corner; 15. N 83°42'20" W, 111.89 feet, a post, for corner; 16. N 79°38'56" W, 59.70 feet, an iron rod, for corner; 17. N 12°35'12" E, 319.71 feet, a 14" cedar, for corner; 18. N 03°59'50" E, 60.17 feet, an iron rod, for corner; 19. N 00°04'49" E, 10.78 feet, an iron rod, for corner; 20. N 24°58'14" E, 56.12 feet, an iron rod, for corner; 21. N 12°05'54" E, 554.94 feet, an iron rod, for corner; 22. N 14°09'42" W, 13.29 feet, an iron rod, for corner; 23. N 54°33'04" W, 43.94 feet, an iron rod, for corner; 24. N 67°13'03" W, 67.22 feet, an iron rod, for corner; 25. N 15°57'36" E, 766.87 feet, an iron rod in a fence corner, same being the most easterly northeast corner of said Tract One, for corner of the herein described tract; THENCE N 76°03'02" W, 608.28 feet, along the fenced north line of said Tract One to an iron rod in a fence corner for an ell corner of the herein described tract; THENCE N 16°06'35" E, 385.98 feet, along a fenced east line of said Tract One to an iron pipe in a fence corner for corner; THENCE N 74°31'12" W, 801.90 feet, along a fenced north line of said Tract One to an iron pipe in a fence corner for corner; THENCE S 16°27'16" W, 399.55 feet, along a fenced line of said Tract One to an iron pipe in a fence corner for corner; THENCE N 71°41'44" W, 1155.49 feet, along a fenced north line of said Tract One to an iron rod for the southeast corner of said Tract Three (called 6.747 acres), for corner; THENCE N 71°42'51" W, 62.25 feet along the south line of said Tract Three and north line of said Tract One to the PLACE OF BEGINNING and containing a called mathematical total of 534.66 acres of land, more or less.

SECTION 2.03. (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, one of the required recipients, 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, the lieutenant governor, and the speaker of the house of representatives within the required time.

(d) 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.

SECTION 2.04. (a) Section 8372.106, Special District Local Laws Code, as added by Section 2.01 of this article, takes effect only if this Act receives a two-thirds vote of all the members elected to each house.

(b) If this Act does not receive a two-thirds vote of all the members elected to each house, Subchapter C, Chapter 8372, Special District Local Laws Code, as added by Section 2.01 of this article, is amended by adding Section 8372.106 to read as follows:

Sec. 8372.106. NO EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain.

(c) This section is not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.

SECTION 2.05. Except as provided by Section 2.04 of this article, this article takes effect September 1, 2011.

ARTICLE 3. MIDLAND COUNTY UTILITY DISTRICT

SECTION 3.01. Subtitle I, Title 6, Special District Local Laws Code, is amended by adding Chapter 9016 to read as follows:

CHAPTER 9016. MIDLAND COUNTY UTILITY DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 9016.001. DEFINITIONS. In this chapter:

(1) "Board" means the district's board of directors.

(2) "Commission" means the Texas Commission on Environmental Quality.

(3) "County" means Midland County.

(4) "Director" means a board member.

(5) "District" means the Midland County Utility District.

(6) "Municipality" means a municipality in whose corporate limits or extraterritorial jurisdiction any part of the district is located.

Sec. 9016.002. NATURE OF DISTRICT. The district is a water control and improvement district created under Section 59, Article XVI, Texas Constitution.

Sec. 9016.003. CONFIRMATION AND DIRECTORS' ELECTION REQUIRED. The temporary directors shall hold an election to confirm the creation of the district and to elect five permanent directors as provided by Section 49.102, Water Code.

Sec. 9016.004. CONSENT OF MUNICIPALITY REQUIRED. The temporary directors may not hold an election under Section 9016.003 until each municipality has consented by ordinance or resolution to the creation of the district and to the inclusion of land in the district.

Sec. 9016.005. FINDINGS OF PUBLIC PURPOSE AND BENEFIT. (a) The district is created to serve a public purpose and benefit.

(b) The district is created to accomplish the purposes of a water control and improvement district as provided by general law and Section 59, Article XVI, Texas Constitution.

Sec. 9016.006. INITIAL DISTRICT TERRITORY. (a) The district is initially composed of the territory described by Section 3.02 of the Act enacting this chapter.

(b) The boundaries and field notes contained in Section 3.02 of the Act enacting this chapter form a closure. A mistake made in the field notes or in copying the field notes in the legislative process does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for the purposes for which the district is created or to pay the principal of and interest on a bond;

(3) right to impose a tax; or

(4) legality or operation.

[Sections 9016.007-9016.050 reserved for expansion]

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 9016.051. GOVERNING BODY; TERMS. (a) Except as provided by Subsection (c), the district is governed by a board of five elected directors.

(b) Except as provided by Section 9016.052, directors serve staggered four-year terms.

(c) If the municipality annexes any part of the territory of the district, the municipality shall appoint one ex officio member to the board to serve as a sixth director.

Sec. 9016.052. TEMPORARY DIRECTORS. (a) The temporary board consists of:

(1) Shelton Viney;

(2) Susie Hitchcock-Hall;

(3) Alan Lang;

(4) David Orr; and

(5) Israel Rodriguez.

(b) Temporary directors serve until the earlier of:

(1) the date permanent directors are elected under Section 9016.003; or

(2) September 1, 2015.

(c) If permanent directors have not been elected under Section 9016.003 and the terms of the temporary directors have expired, successor temporary directors shall be appointed or reappointed as provided by Subsection (d) to serve terms that expire on the earlier of:

(1) the date permanent directors are elected under Section 9016.003; or

(2) the fourth anniversary of the date of the appointment or reappointment.

(d) If Subsection (c) applies, the owner or owners of a majority of the assessed value of the real property in the district may submit a petition to the commission requesting that the commission appoint as successor temporary directors the five persons named in the petition. The commission shall appoint as successor temporary directors the five persons named in the petition.

Sec. 9016.053. NOTICE OF MEETINGS. The district shall provide the municipality with written notice before a meeting of the board.

[Sections 9016.054-9016.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 9016.101. GENERAL POWERS AND DUTIES. The district has the powers and duties necessary to accomplish the purposes for which the district is created.

Sec. 9016.102. WATER CONTROL AND IMPROVEMENT DISTRICT POWERS AND DUTIES. The district has the powers and duties provided by the general law of this state, including Chapters 49 and 51, Water Code, applicable to water control and improvement districts created under Section 59, Article XVI, Texas Constitution.

Sec. 9016.103. COMPLIANCE WITH MUNICIPAL CONSENT ORDINANCE OR RESOLUTION. The district shall comply with all applicable requirements of any ordinance or resolution that is adopted under Section 42.042, Local Government Code, and Section 9016.004 and that consents to the creation of the district or to the inclusion of land in the district.

Sec. 9016.104. COMPLIANCE WITH MUNICIPAL REGULATIONS. (a) Any water, sanitary sewer, drainage, or other infrastructure or public facilities constructed, acquired, improved, maintained, or operated by the district shall comply with any applicable regulations of the municipality in whose corporate limits or extraterritorial jurisdiction the infrastructure or facilities are located.

(b) Any water system constructed, acquired, improved, maintained, or operated by the district shall:

(1) comply with any applicable regulations of the municipality regarding specifications for rural density; and

(2) contain distribution lines that are:

(A) four inches or more in diameter; and

(B) sufficient to provide fire hydrant service according to the municipality's specifications for rural density.

Sec. 9016.105. COUNTY RIGHT-OF-WAY. The district must obtain the approval of the county's governing body of the plans and specifications of any facilities to be installed on property located in a county right-of-way.

Sec. 9016.106. LIABILITY. (a) Neither the county nor the municipality is liable for any claims arising from the operation of the district's water system or other actions or inactions of the district, including labor, safety, or signage, or contamination or other environmental issues.

(b) Any action taken by the municipality is a governmental function.

Sec. 9016.107. COSTS OF LINE RELOCATION. (a) The district is solely responsible for the expense associated with the relocation of any district water line required by:

(1) the county or a municipality; or

(2) a state or federal highway authority, including the Texas Department of Transportation and the Federal Highway Administration.

(b) The district will not unreasonably delay any requested line relocation.

Sec. 9016.108. SERVICES TO BE PROVIDED BY THE DISTRICT, COUNTY, OR MUNICIPALITY. (a) The district may enter into an interlocal contract with the county or municipality to provide governmental functions, including fire protection, trash collection and disposal, and ambulance service.

(b) Notwithstanding Subsection (a), the municipality is authorized to provide sewer and drainage service in the district. The municipality shall establish the amount of the fees to be charged to recipients of sewer and drainage service under this subsection.

(c) Notwithstanding Subsection (a), the district may not provide any services within the territorial limits of the municipality as those limits exist on September 1, 2011.

Sec. 9016.109. ANNEXATION BY MUNICIPALITY. (a) The municipality may annex a part of the territory of the district without annexing the entire territory of the district.

(b) If the municipality annexes all or part of the district:

(1) the annexed territory is not removed from the district; and

(2) the district is not:

(A) dissolved; or

(B) prevented from providing district services to the annexed territory.

(c) If any territory inside the district is annexed, the owner of the property shall pay the same rate of ad valorem tax to the municipality as other residents of the municipality.

(d) By annexing territory in the district, the municipality does not assume any debt of the district.

(e) The district may not contest an annexation by the municipality.

Sec. 9016.110. WATER SERVICE DEADLINE. The district must begin operation of a water system serving at least a part of the district not later than the sixth anniversary of the date that district voters approve the issuance of bonds to provide for the development of the water system.

Sec. 9016.111. LIMITATION ON USE OF EMINENT DOMAIN. The district may not exercise the power of eminent domain:

(1) outside the district to acquire a site or easement for a recreational facility as defined by Section 49.462, Water Code;

(2) in the corporate limits of the municipality as those limits exist on September 1, 2011; or

(3) outside the county.

Sec. 9016.112. PROHIBITION ON DIVISION OF DISTRICT. The district may not divide into two or more districts.

[Sections 9016.113-9016.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 9016.151. ELECTIONS REGARDING TAXES OR BONDS. (a) The district may issue, without an election, bonds and other obligations secured by:

(1) revenue other than ad valorem taxes; or

(2) contract payments described by Section 9016.153.

(b) The district must hold an election in the manner provided by Chapters 49 and 51, Water Code, to obtain voter approval before the district may impose an ad valorem tax or issue bonds payable from ad valorem taxes.

(c) The district may not issue bonds payable from ad valorem taxes to finance a road project unless the issuance is approved by a vote of a two-thirds majority of the district voters voting at an election held for that purpose.

Sec. 9016.152. OPERATION AND MAINTENANCE TAX. (a) If authorized at an election held under Section 9016.151, the district may impose an operation and maintenance tax on taxable property in the district in accordance with Section 49.107, Water Code.

(b) The board shall determine the tax rate. The rate may not exceed the rate approved at the election.

Sec. 9016.153. CONTRACT TAXES. (a) In accordance with Section 49.108, Water Code, the district may impose a tax other than an operation and maintenance tax and use the revenue derived from the tax to make payments under a contract after the provisions of the contract have been approved by a majority of the district voters voting at an election held for that purpose.

(b) A contract approved by the district voters may contain a provision stating that the contract may be modified or amended by the board without further voter approval.

[Sections 9016.154-9016.200 reserved for expansion]

SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS

Sec. 9016.201. AUTHORITY TO ISSUE BONDS AND OTHER OBLIGATIONS. The district may issue bonds or other obligations payable wholly or partly from ad valorem taxes, impact fees, revenue, contract payments, grants, or other district money, or any combination of those sources, to pay for any authorized district purpose.

Sec. 9016.202. TAXES FOR BONDS. At the time the district issues bonds payable wholly or partly from ad valorem taxes, the board shall provide for the annual imposition of a continuing direct ad valorem tax, without limit as to rate or amount, while all or part of the bonds are outstanding as required and in the manner provided by Section 51.433, Water Code.

Sec. 9016.203. LIMITATION ON TAX RATE. Notwithstanding any other provision of this chapter, the projected combined operation, maintenance, and debt service tax rates as of the date of the issuance of any bonds, as described by the commission in a commission order approving the issuance of the bonds, may not exceed 65 cents for each $100 of assessed valuation of property in the district.

Sec. 9016.204. BONDS AND OTHER OBLIGATIONS NOT TO BE PAID BY MUNICIPALITY OR COUNTY. Bonds or other obligations of the district:

(1) may not be paid wholly or partly by taxes imposed by the county or the municipality;

(2) are not debts of the county or municipality; and

(3) do not give rise to a claim against the county or municipality.

SECTION 3.02. The Midland County Utility District initially includes all the territory contained in the following area:

54,050 Acres of Land

Located in Various Sections and Blocks,

T&P RR Co. Survey, Midland County, Texas.

Boundary Being More Fully Described By Metes and Bounds As Follows: BEGINNING at (Y= 10,677,038' and X= 1,736,917') a point in the west line of Section 7, Block 39, T2S and a southerly line of Midland city limits and being the most westerly northwest corner of this tract; THENCE S 14°19' E, a distance of 2685 feet to the southwest corner of said Section 7 and being an ell corner of this tract; THENCE N 75°10' E with the south right-of-way line of West County Road 120, a distance of 7031 feet to a point in the north line of Section 17 this block for a point of deflection of this tract; THENCE S 64°46' E, a distance of 4725 feet to a point in the east line of said Section 17 and in the west right-of-way line of South County Road 1210 also being a point of deflection of this tract; THENCE S 14°23' E with the west right-of-way line of said South County Road 1210, a distance of 6340 feet to a point in the north right-of-way line of West County Road 138 and being an ell corner of this tract; THENCE S 75°41' W with the north right-of-way line of said West County Road 138, a distance of 3340 feet to a point in the west right-of-way line of South County Road 1216 and being an ell corner of this tract; THENCE S 14°52' E with the west right-of-way line of said South County Road 1216, a distance of 1272 feet to a point in the north right-of-way line of West County Road 140 and being an ell corner of this tract; THENCE S 75°29' W with the north right-of-way line of said West County Road 140, a distance of 1974 feet to a point near the northwest corner of Section 29, Block 39, T2S and being an ell corner of this tract; THENCE S 14°16' E, a distance of 26,411 feet to a point near the southwest corner of Section 6, Block 39, T3S and being the most southerly southwest corner of this tract; THENCE N 75°59' E, a distance of 15,901 feet to a point in the east right-of-way line of State Highway 349 and being the most southerly southeast corner of this tract; THENCE N 14°08' W with the east right-of-way line of said State Highway 349, a distance of 18,548 feet to a point near the southwest corner of Condor Aviation Co. Inc. tract and being an ell corner of this tract; THENCE N 75°17' E, a distance of 5227 feet to a point in the east line of Section 35, Block 39, T2S and being an ell corner of this tract; THENCE N 14°23' W, a distance of 1604 feet to a point for an ell corner of this tract; THENCE N 76°20' E, a distance of 5414 feet to a point in the east right-of-way line of Farm to Market Road 715 and being an ell corner of this tract; THENCE N 14°21' W with the east right-of-way line of said Farm to Market Road 715, a distance of 664 feet to a point for an ell corner of this tract; THENCE N 75°23' E, a distance of 2628 feet to a point in the west half of Section 24, Block 38, T2S and being an ell corner of this tract; THENCE S 14°03' E, a distance of 8251 feet to a point for an ell corner of this tract; THENCE N 76°09' E, a distance of 2658 feet to a point in the east right-of-way line of South County Road 1160 and being an ell corner of this tract; N 14°22' W with the east right-of-way line of said South County Road 1160, a distance of 3359 feet to a point in the south right-of-way line of East County Road 160 and being an ell corner of this tract; THENCE N 75°38' E with the south right-of-way line of said East County Road 160, a distance of 10,581 feet to a point near the southeast corner of Section 22, Block 38, T2S and being an ell corner of this tract; THENCE N 14°07' W with the east line of said Section 22, a distance of 5353 feet to a point near the northeast corner of said Section 22 and being an ell corner of this tract; THENCE N 75°40' E, a distance of 1381 feet to a point near the southeast corner of George V. Anderson Jr. tract and the southwest corner of Donna Johnson tract also being an ell corner of this tract; THENCE N 14°03' W with the west line of said Donna Johnson tract and the east line of said George V. Anderson Jr. tract, a distance of 1926 feet to a point near the northwest corner of said Donna Johnson tract and being an ell corner of this tract; THENCE N 75°43' E, a distance of 1355 feet to a point in the east right-of-way line of South County Road 1136 and being an ell corner this tract; THENCE N 13°52' W with the east right-of-way line of said South County Road 1136, a distance of 8663 feet to a point in the southwesterly right-of-way of State Highway 158 and the south right-of-way line of East County Road 130 also being an ell corner of this tract; THENCE N 75°27' E with the south right-of-way line of said East County Road 130, a distance of 3996 feet to a point for an ell corner of this tract; THENCE N 13°57' W, a distance of 5272 feet to a point in the south right-of-way line of East County Road 120 and being an ell corner of this tract; THENCE N 75°41' E with the south right-of-way line of said East County road 120, a distance of 14,750 feet to a point for an ell corner of this tract; THENCE N 14°17' W, a distance of 5276 feet to a point near the northwest corner of Section 51, Block 37, T2S and being an ell corner of this tract; THENCE N 74°54' E, a distance of 10,567 feet to a point in the east right-of-way line of Farm to Market Road 1379 and being the most easterly southeast corner of this tract; THENCE N 13°59' W with the east right-of-way line of said Farm to Market Road 1379, a distance of 3955 feet to a point of deflection of this tract; THENCE N 14°17' W, a distance of 20,565 feet to a point in the southeasterly right-of-way of Interstate Highway 20 and being the most easterly northeast corner of this tract; THENCE S 59°40' W with the southeasterly right-of-way of said Interstate Highway 20, a distance of 22,345 feet to a point in the projection of North County Road 1120 and being a point of deflection of this tract; THENCE N 14°09' W, a distance of 8118 feet to a point near the northeast Section 26, Block 38, T1S and being an ell corner of this tract; THENCE S 75°33' W with the north line of said Section 26, a distance of 2741 feet to a point for an ell corner of this tract; THENCE N 13°46' W, a distance of 3300 feet to a point for an ell corner of this tract; THENCE S 75°45' W, a distance of 2696 feet to a point in the west line of Section 23 and the east line of Section 22, Block 38, T1S and being an ell corner of this tract; THENCE S 14°37' E with the west line of said Section 23 and the east line of said Section 22, a distance of 668 feet to a point for an ell corner of this tract; THENCE S 75°34' W, a distance of 7949 feet to a point near the middle of Section 21, Block 38, T1S and being an ell corner of this tract; THENCE N 14°18' W, a distance of 2716 feet to a point in the north line of said Section 21 and being an ell corner of this tract; THENCE S 75°23' W, a distance of 4294 feet to a point in the north line of Section 20, Block 38, TIS and being a point of deflection of this tract; THENCE S 66°10' W, a distance of 3034 feet to a point in an easterly line of the Midland city limits and being the most northerly northwest corner of this tract; THENCE S 14°33' E with said city limits, a distance of 5372 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°36' W with said city limits, a distance of 2511 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°34' E with said city limits, a distance of 180 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°36' W with said city limits, a distance of 835 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°34' E with said city limits, a distance of 3832 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 75°36' E with said city limits, a distance of 2208 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 14°34' W with said city limits, a distance of 1204 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 75°36' E with said city limits, a distance of 1138 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 15°14' E with said city limits, a distance of 645 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 75°36' E with said city limits, a distance of 4603 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°35' E with said city limits, a distance of 5122 feet to an ell comer of said city limits and being an ell corner of this tract; THENCE N 75°37' E with said city limits, a distance of 659 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°36' E with said city limits, a distance of 2879 feet to a point in the northwesterly right-of-way line of Business Interstate Highway 20 (US Highway 80) and the most easterly southeast corner of said city limits also being a point of deflection of this tract; THENCE N 59°41' E with the northwesterly right-of-way line of said Business Interstate Highway 20, a distance of 4829 feet to a point near the northwest corner of Section 40, Block 38, T1S and being a point of deflection of this tract; THENCE S 14°24' E, a distance of 7260 feet to a point in the east line of Section 45, Block 38, T1S and being 1000 feet southerly of the southeasterly right-of-way line of Interstate Highway 20 and being a point of deflection of this tract; THENCE S 45°05' W 1000 feet southerly and parallel to the southeasterly right-of-way line of said Interstate Highway 20, a distance of 6527 feet to a point in the north line of Section 5, Block 38, T2S and in the south right-of-way line of Farm to Market Road 307 also being a point of deflection of this tract; THENCE N 76°37' E with the south right-of-way line of said Farm to Market Road 307, a distance of 2882 feet to a point near the northeast corner of a 320 acre City of Midland tract in Section 4, Block 38, T2S and being an ell corner of this tract; THENCE S14°25' E with the east line of said 320 acre tract, a distance of 5252 feet to a point in the south line of said Section 4 and the north line of Section 9, Block 38, T2S and being an ell corner of this tract; THENCE N 75°36' E with the north line of said Section 9, a distance of 2768 feet to a point near the northeast corner of said Section 9 and in the west right-of-way South County Road 1140 also being an ell corner of this tract; THENCE S 14°36' E with the west right-of-way line of said South County Road 1140, a distance of 5313 feet to a point in the north right-of-way line of East County Road 120 and being an ell corner of this tract; THENCE S 75°56' W with the north right-of-way line of said East County Road 120, a distance of 5150 to a point in the northeasterly right-of-way line of State Highway 158 and being a point of deflection of this tract; THENCE N 70°55' W with the northeasterly right-of-way line of said State Highway 158, a distance of 4453 to a point near the most southerly southwest corner of a 365.58 acre City of Midland tract as described in Volume 2308, Page 3, Official Public Records of Midland County and the southeast corner of Ralph H White tract also being a point of deflection of this tract; THENCE N 15°31' W with the east line of said Ralph H White tract and a west line of said City of Midland Tract, a distance of 732 feet to a point near the northeast corner of said Ralph H White tract and being a point of deflection of this tract; THENCE N 70°36' W with the north line of said Ralph H White tract, a distance of 171 feet to a point near the northwest corner of said Ralph H White tract and in the east line of a 1.00 acre City of Midland tract as described in Volume 2308, Page 3, Official Public Records of Midland County and being a point of deflection of this tract; THENCE S 15°31' E with the west line of said Ralph H White tract and the east line of said 1.00 acre City of Midland tract, a distance of 733 feet to a point in the northeasterly right of-way line of said State Highway 158 and being a point of deflection of this tract; THENCE N 70°55' W with the south line of said 1.00 acre City of Midland tract and the northeasterly right-of-way line of said State Highway 158, a distance of 415 feet to the southwest corner of said 1.00 acre City of Midland tract and being a point of deflection of this tract; THENCE N 15°31' W with the west line of said 1.00 acre City of Midland tract, a distance of 1252 feet to the northwest corner of said 1.00 acre City of Midland and being a point of deflection of said 365.58 acre City of Midland tract also being a point of deflection of this tract; THENCE S 75°57' W with a south line of said 365.58 acre City of Midland tract, a distance of 1419 feet to a point in the west line of Section 8, Block 38, T2S and being an ell corner of this tract; THENCE N 14'10' W with the west line of said Section 8, a distance of 1274 feet to a point near the northwest corner of said Section 8 and being an ell corner of this tract; THENCE N 75°49' E with the north line of said Section 8, a distance of 36 feet to a point near the southeast corner of Section 6, Block 38, T2S and being an ell corner of this tract; THENCE N 14'12' W with the east line of said Section 6, a distance of 2124 feet to a point 1000 feet southerly of the southeasterly right-of-way line of said Interstate Highway 20 and being a point of deflection of this tract; THENCE S 44°40' W southerly and parallel to the southeasterly right-of-way line of said Interstate Highway 20, a distance of 3968 feet to a point in the Midland city limits and being a point of deflection of this tract; THENCE S 14°09' E with said city limits, a distance of 611 feet to the most southerly southeast corner of said city limits and being an ell corner of this tract; THENCE S 75°32' W with the south line of said city limits, a distance of 10,595 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°23' E with the said city limits, a distance of 750 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°29' W with said city limits, a distance of 677 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°32' E with said city limits, a distance of 781 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°24' W with said city limits, a distance of 1675 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 14°23' W with said city limits, a distance of 1041 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°29' W with said city limits, a distance of 1000 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 14°23' W said city limits, a distance of 500 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°37' W with said city limits, a distance of 3137 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 14°18' E with said city limits, a distance of 570 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°42' W with said city limits, a distance of 1660 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 14°18' W with said city limits, a distance of 567 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°37' W with said city limits, a distance of 3390 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 15°02' E with said city limits, a distance of 709 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 74°54' W with said city limits, a distance of 1040 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 15°03' E with said city limits, a distance of 90 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°34' W with said city limits, a distance of 1064 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE N 14°40' W with said city limits, a distance of 817 feet to an ell corner of said city limits and being an ell corner of this tract; THENCE S 75°44' W with said city limits, a distance of 559 feet to a point of curvature of said city limits and this tract; THENCE around a curve to the left in a southwesterly direction and with said city limits, said curve having a radius length of 10,509 feet, a delta angle of 16°04', an arc length of 2947 feet and a chord length of 2937 feet bearing S 67°42" W to a point of tangency of said city limits and this tract; THENCE S 59°40' W with said city limits, a distance of 6362 feet to the Point of Beginning, containing approximately 54,050 acres of land, more or less. Bearings, distances and coordinates are relative to the Texas Coordinate System, 1983 NAD, Central Zone based on City of Midland's G.I.S Digital Map.

SECTION 3.03. (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, one of the required recipients, 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, the lieutenant governor, and the speaker of the house of representatives within the required time.

(d) 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.

SECTION 3.04. (a) Section 9016.111, Special District Local Laws Code, as added by Section 3.01 of this article, takes effect only if this Act receives a two-thirds vote of all the members elected to each house.

(b) If this Act does not receive a two-thirds vote of all the members elected to each house, Subchapter C, Chapter 9016, Special District Local Laws Code, as added by Section 3.01 of this article, is amended by adding Section 9016.111 to read as follows:

Sec. 9016.111. NO EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain.

(c) This section is not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.

SECTION 3.05. Except as provided by Section 3.04 of this article, this article takes effect September 1, 2011.

ARTICLE 4. HAYS COUNTY DEVELOPMENT DISTRICT NO. 1

SECTION 4.01. Section 1, Chapter 1503, Acts of the 77th Legislature, Regular Session, 2001, is amended by amending Subsections (a) and (c) and adding Subsection (d) to read as follows:

(a) The legislature finds that the creation of Hays County Development District No. 1 (the "district"), [and] the project approved by the Hays County Commissioners Court on January 11, 2000 (the "project"), and other improvement projects described by Section 5A will serve the public purpose of attracting visitors and tourists to Hays County and will result in employment and economic activity in the manner contemplated by Section 52-a, Article III, Texas Constitution, and Chapter 383, Local Government Code.

(c) The legislature further finds that the creation and operation of the district and the acquisition or financing of the project or an improvement project described by Section 5A by the district serve the purpose of Section 59, Article XVI, and Section 52, Article III, Texas Constitution, and that all steps necessary to create the district have been taken.

(d) The legislature further finds that the creation and continued operation of the district is essential to accomplish the purposes of Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other public purposes stated in this Act.

SECTION 4.02. Section 5, Chapter 1503, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows:

Sec. 5. POWERS. (a) The district has all of the rights, powers, privileges, authority, functions, and duties provided by Chapters 375 and 383, Local Government Code, to county development districts and municipal management districts and by Chapters 49 and 54, Water Code, to municipal utility districts.

(b) The district's rights, powers, privileges, authority, functions, and duties include, [including] but are not limited to:

(1) the authority to levy, assess, and collect ad valorem taxes for the purposes approved at the elections conducted on November 7, 2000;

(2) the authority, after approval by voters at an election conducted within the boundaries of the district, to levy, assess and collect taxes for maintenance and operating purposes in the manner set forth in Sections 49.107(a)-(e), Water Code, and for the repayment of bonds, notes, warrants, lease purchase agreements, certificates of assessment, certificates of participation in lease purchase agreements, and other interest-bearing obligations in the manner set forth in Sections 49.106(a)-(d), Water Code, and for all of the purposes for which the district may expend funds;

(3) to establish, levy, and collect special assessments in the manner specified in Sections 375.111-375.124, Local Government Code; provided, however, that Sections 375.161-375.163, Local Government Code, shall not apply to the assessments imposed by the district;

(4) to utilize funds, whether the funds are derived from ad valorem taxes, sales and use taxes, hotel occupancy taxes, assessments, revenues from the project, or any other source, for payment of projects or services in the manner authorized by Section 375.181, Local Government Code, Chapter 54, Water Code, and Chapter 383, Local Government Code;

(5) to enter into obligations, including, but not limited to, lease purchase agreements, certificates of participation in lease purchase agreements, general obligation bonds and notes and revenue bonds and notes, and combination general obligation and revenue bonds and notes and other interest-bearing obligations, in the manner specified in Sections 375.201-375.205 [375.201-375.204], Local Government Code. To enter into these obligations, the district shall obtain only those approvals required for the issuance of obligations by Hays County by Chapter 53, Acts of the 70th Legislature, Second Called Session, 1987, and the approval of the attorney general;

(6) except as provided by Sections 5B and 5C, to adopt the powers of a road district under Section 52(b)(3), Article III, Texas Constitution, in the manner specified in Sections 53.029(c) and (d), Water Code;

(7) to levy, assess, and collect ad valorem taxes to make payments on a contract under Sections 49.108(a)-(d), Water Code, after obtaining those approvals specified in Section 1, Chapter 778, Acts of the 74th Legislature, Regular Session, 1995;

(8) to exercise all of the rights, powers, and authority of a road district, a municipal management district, and a municipal utility district [water control and improvement district which are not specifically contradicted by Chapter 383, Local Government Code]; and

(9) to exercise all of the rights, powers, and authority granted to the district by this Act, and all of the rights, powers, and authority granted to the district by Chapters 383 and 375, Local Government Code, and to a municipal utility district by Chapters 49 and 54, Water Code, which are not contrary to [any provisions of] this Act, to finance, construct, or otherwise acquire an improvement project described by Section 5A or the project or any element of the project identified in the Commissioners Court Order Upon Hearing and Granting Petition Requesting the Creation of Hays County Development District No. 1 and Appointing Temporary Directors dated January 11, 2000, including, but not limited to, a [the] hotel, a residential area of a development, a trail or related feature, a commercial activity or endeavor, a [the] golf course, [the] water, sewer, drainage, and road improvements, [the] organizational costs, and [the] costs of issuance of the obligations of the district.

SECTION 4.03. Chapter 1503, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Sections 5A, 5B, 5C, 5D, and 5E to read as follows:

Sec. 5A. IMPROVEMENT PROJECTS. The district may provide, or it may contract with a governmental or private entity to provide, the following types of improvement projects or activities in support of or incidental to those projects:

(1) the project approved by the Hays County Commissioners Court on January 11, 2000, wholly or partly; or

(2) a public improvement, facility, or service provided by a municipal utility district or municipal management district.

Sec. 5B. ROAD DISTRICT POWERS; BALLOT. If the district adopts the powers described by Section 5(b)(6), a ballot authorized by Section 53.029(c), Water Code, must reference the "Hays County Development District No. 1."

Sec. 5C. ROAD STANDARDS AND REQUIREMENTS. (a) A road project must meet all applicable construction standards, zoning and subdivision requirements, and regulations of each municipality in whose corporate limits or extraterritorial jurisdiction the road project is located.

(b) If a road project is not located in the corporate limits or extraterritorial jurisdiction of a municipality, the road project must meet all applicable construction standards, subdivision requirements, and regulations of each county in which the road project is located.

(c) If the state will maintain and operate the road, the Texas Transportation Commission must approve the plans and specifications of the road project.

Sec. 5D. LIMIT ON POWERS GRANTED BY OTHER SPECIAL DISTRICT LAWS. Except as provided by this Act, the rights, powers, and authority of a road district, county development district, municipal management district, or municipal utility district granted by this Act may be exercised only in the manner provided by:

(1) Chapter 375, Local Government Code, to a municipal management district;

(2) Chapter 383, Local Government Code, to a county development district; and

(3) Chapters 49 and 54, Water Code, to a municipal utility district, including review and approval by the Texas Commission on Environmental Quality for water and wastewater improvements.

Sec. 5E. LIMIT ON EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain outside the district and in the corporate limits or extraterritorial jurisdiction of a municipality unless the governing body of the municipality consents by ordinance or resolution.

SECTION 4.04. Section 8, Chapter 1503, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows:

Sec. 8. LEGISLATIVE FINDINGS. [The legislature finds that the principal function of the district is to provide for development and operation of the project, to facilitate economic development, and to attract visitors and tourists, which will result in employment and economic activity in Hays County.] The legislature finds that the district may provide water and sewer, landscaping, road, drainage, and reclamation services to residential retail or commercial customers in the district. Except for purposes of Section 49.052, Water Code, the [The] district is a district described in Section 49.181(h)(4), Water Code.

SECTION 4.05. Section 9, Chapter 1503, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows:

Sec. 9. ADDITION AND EXCLUSION OF LANDS. (a) Except as provided by Subsection (b), in [In] addition to the authority granted to the district by Section 383.084, Local Government Code, the district may add lands in the manner provided by Section 49.301, Water Code, and may exclude lands in the methods provided by Sections 49.303 through 49.308, Water Code.

(b) Section 42.0425, Local Government Code, applies to the annexation of property in the extraterritorial jurisdiction of a municipality.

SECTION 4.06. The legislature confirms and validates all actions of the Hays County Development District No. 1 that were taken before May 1, 2011, including any elections conducted by the district, including any election to impose maintenance and operation taxes or to adopt the powers of a road district.

SECTION 4.07. (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 Texas Commission on Environmental Quality has filed its recommendations relating to this article with the governor, the lieutenant governor, and the speaker of the house of representatives within the required time.

(c) 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.

SECTION 4.08. This article takes effect immediately if this Act 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 article takes effect September 1, 2011.

ARTICLE 5. EFFECTIVE DATE

SECTION 5.01. Except as otherwise provided by this Act, this Act takes effect September 1, 2011.