By: Uresti, Wentworth  S.B. No. 341
         (In the Senate - Filed January 12, 2011; February 14, 2011,
  read first time and referred to Committee on Natural Resources;
  March 14, 2011, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 10, Nays 0; March 14, 2011,
  sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 341 By:  Uresti
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the appointment of a conservator for and authorizing
  the dissolution of the Bexar Metropolitan Water District; providing
  a penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  CONSERVATORSHIP ESTABLISHED
         SECTION 1.01.  Section 1, Chapter 306, Acts of the 49th
  Legislature, Regular Session, 1945, is amended to read as follows:
         Sec. 1.  In obedience to the provisions of Article 16,
  Section 59 of the Constitution of Texas, there is hereby created
  Bexar Metropolitan Water District.[, hereinafter in this Act
  sometimes called the "District."]
         SECTION 1.02.  Chapter 306, Acts of the 49th Legislature,
  Regular Session, 1945, is amended by adding Sections 1A, 34, 35, 36,
  37, 38, and 39 to read as follows:
         Sec. 1A.  In this Act:
               (1)  "Board" means the District's Board of Directors.
               (2)  "Commission" means the Texas Commission on
  Environmental Quality.
               (3)  "Committee" means the Bexar Metropolitan Water
  District Oversight Committee.
               (4)  "Director" means a Board member.
               (5)  "District" means the Bexar Metropolitan Water
  District.
               (6)  "System" means a water utility owned by a
  municipality with a population of more than one million in the area
  served by the District.
         Sec. 34.  (a)  The Commission shall appoint as conservator
  for the District an individual who, at the time of the individual's
  appointment:
               (1)  has demonstrated a high level of expertise in
  water utility management;
               (2)  is not a Director; and
               (3)  has no financial interest in the District or any
  entity that has a contract with the District or that is likely to
  develop a contractual relationship with the District.
         (b)  The conservator's term expires on the date the
  Commission determines that the duties of the conservator under this
  Act have been discharged.
         Sec. 35.  (a)  The conservator shall use District staff to
  carry out the duties assigned to the conservator.  The conservator
  may hire up to three additional persons who will report to and
  assist the conservator if:
               (1)  assistance from District staff is not provided; or
               (2)  the conservator needs special expertise from one
  or more of the persons.
         (b)  A conservator appointed under Section 34 of this Act and
  any additional persons hired by the conservator under this section
  are entitled to receive a salary determined by the executive
  director of the Commission for performing those duties.
         (c)  The District shall pay the compensation of the
  conservator and any additional persons hired by the conservator
  under this section.
         (d)  The executive director of the Commission shall set the
  compensation of the conservator after considering the
  conservator's:
               (1)  level of expertise in water utility management;
  and
               (2)  certifications and education.
         Sec. 36.  (a)  A conservator appointed under Section 34 and
  the persons hired under Section 35 of this Act are entitled to
  reimbursement of the reasonable and necessary expenses incurred by
  the conservator or the persons hired under Section 35 of this Act in
  the course of performing duties under this Act.
         (b)  The District shall pay the expenses incurred by the
  conservator and the persons hired under Section 35 of this Act.  The
  executive director of the Commission shall determine if an expense
  is reasonable and necessary after considering whether the expense
  is:
               (1)  necessary to complete the duties of the
  conservator as assigned by law;
               (2)  at or below the cost of a similar expense incurred
  by other utilities;
               (3)  documented by an invoice, bill, or work order that
  includes details relating to the:
                     (A)  time spent on services; or
                     (B)  cost of supplies; and
               (4)  in accordance with procedures used to minimize
  expenses, including comparing vendor rates or competitive bidding.
         Sec. 37.  (a)  The Board shall work cooperatively with the
  conservator to identify the policies, assets, liabilities, and
  resources of the District.
         (b)  The conservator shall:
               (1)  complete an inventory of and evaluate each
  distinct water system in the District to determine:
                     (A)  the District's basis in or the intrinsic
  value of the infrastructure associated with that water system;
                     (B)  the District's bonded debt and commercial
  paper reasonably associated with or allocable to the infrastructure
  in that water system; and
                     (C)  the adequacy of the water supply sources,
  water storage facilities, and distribution systems located in that
  water system's service area to supply current and projected demands
  in that service area;
               (2)  identify any District assets whose transfer to
  another appropriate public water utility would be likely to
  improve:
                     (A)  service to the former customers of the
  District who would be served by that utility; or
                     (B)  the District's overall efficiency;
               (3)  compile a list and copies of existing contracts to
  which the District is a party, including for each contract:
                     (A)  effective and termination dates;
                     (B)  general scope of the property and services
  involved;
                     (C)  obligations of the District, including
  financial obligations;
                     (D)  how the District benefits from the contract;
  and
                     (E)  whether the District has waived governmental
  immunity;
               (4)  compile a list of the following in regard to the
  District:
                     (A)  property;
                     (B)  rights, including certificates of
  convenience and necessity, pumping rights, and any other rights;
                     (C)  staff; and
                     (D)  internal policies, including employment
  rules, benefits, and an evaluation of the usefulness and efficacy
  of each policy;
               (5)  develop a comprehensive rehabilitation plan for
  the District that:
                     (A)  identifies strategies for restoring the
  District's financial integrity and developing a system of sound
  financial management;
                     (B)  describes a standard of ethics,
  professionalism, and openness expected of each Director and
  employee of the District;
                     (C)  provides a mechanism to enforce compliance
  with District policies, including procurement policies;
                     (D)  identifies ways to enhance the District's
  operational efficiency and improve the District's provision of
  redundancy in water services; and
                     (E)  provides for educating the Board and
  management personnel on improving management practices and
  complying with District policy and state and federal laws and
  regulations; and
               (6)  assess the District's ability to provide reliable,
  cost-effective, quality service to customers, including an
  assessment of operations compared to the best management practices
  of modern utilities.
         Sec. 38.  The conservator shall report to the Commission and
  the Committee quarterly on the progress the conservator has made in
  carrying out the duties under Section 37 of this Act.
         Sec. 39.  At the conservator's request, the state auditor's
  office may audit the District under Chapter 321, Government Code.  
  The District shall reimburse the state auditor's office for the
  cost of the audit.
         SECTION 1.03.  Not later than the 60th day after the
  effective date of this Act, the Texas Commission on Environmental
  Quality shall appoint a conservator for the Bexar Metropolitan
  Water District as required by Section 34, Chapter 306, Acts of the
  49th Legislature, Regular Session, 1945, as added by this Act.
  ARTICLE 2.  ELECTION; EFFECTIVE DATE OF ARTICLES 3 AND 4
         SECTION 2.01.  (a)  In this article:
               (1)  "Commission" means the Texas Commission on
  Environmental Quality.
               (2)  "District" means the Bexar Metropolitan Water
  District.
         (b)  On the next uniform election date following the date of
  preclearance under Section 5 of the federal Voting Rights Act of
  1965 (42 U.S.C. Section 1973c) of all provisions of the Act enacting
  this section that are subject to that preclearance, the commission
  shall hold an election in the district on the question of dissolving
  the district and disposing of the district's assets and
  obligations.  If the commission determines that preclearance under
  Section 5 of the federal Voting Rights Act of 1965 is not required,
  the commission shall hold the election on the next uniform election
  date after the date the commission makes that determination.
         (c)  The commission may contract with another entity to
  conduct the election.  The district shall pay any cost of conducting
  the election.
         (d)  The order calling the election must state:
               (1)  the nature of the election, including the
  proposition to appear on the ballot;
               (2)  the date of the election;
               (3)  the hours during which the polls will be open; and
               (4)  the location of the polling places.
         (e)  The commission shall give notice of an election under
  this section by publishing once a week for two consecutive weeks a
  substantial copy of the election order in a newspaper with general
  circulation in the district.  The first publication of the notice
  must appear not later than the 35th day before the date of the
  election.
         (f)  The ballot for an election under this section must be
  printed to permit voting for or against the proposition: "The
  dissolution of the Bexar Metropolitan Water District and the
  transfer of all the District's assets, obligations, and duties to
  the water utility of the municipality with the largest population
  in the area served by the District."
         (g)  The commission shall certify that a majority of the
  voters voting in the district have voted:
               (1)  in favor of dissolution; or
               (2)  not in favor of dissolution.
         SECTION 2.02.  (a)  Not later than the 20th day after the
  date on which the election results are officially declared, the
  commission shall certify that result to the secretary of state.
         (b)  If the proposition is approved by a majority of the
  voters voting in the election:
               (1)  Article 3 of this Act does not take effect; and
               (2)  Article 4 of this Act takes effect on the date the
  results are officially declared.
         (c)  If a majority of the voters voting in the election do not
  approve the proposition:
               (1)  Article 3 of this Act takes effect on the date the
  results are officially declared; and
               (2)  Article 4 of this Act does not take effect.
  ARTICLE 3.  CHANGES TO THE BEXAR METROPOLITAN WATER DISTRICT IF
  VOTERS DO NOT DISSOLVE THE DISTRICT UNDER ARTICLE 2
         SECTION 3.01.  Section 8, Chapter 306, Acts of the 49th
  Legislature, Regular Session, 1945, is amended to read as follows:
         Sec. 8. (a)  [.] The seven [five (5)] members of the Board of
  Directors are [shall hereafter be] elected to staggered two-year
  terms in an election held on the uniform election date in November.  
  Directors are elected from numbered single-member districts
  established by the Board.  The Board shall revise each
  single-member district after each decennial census to reflect
  population changes and to conform with state law, the federal
  Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.), and any
  applicable court order [for a term of six (6) years each, provided
  that an election for two (2) Directors for a term of six (6) years
  shall be held on the first Tuesday in April, 1954; the terms of
  three (3) members of the present Board shall be, and are, hereby,
  extended to the first Tuesday in April, 1957; and the present
  Directors shall determine such three (3) by lot. Three (3)
  Directors shall be elected on the first Tuesday in April, 1957, and
  two (2) Directors and three (3) Directors, alternately, shall be
  elected each three (3) years thereafter on the first Tuesday in
  April as the six-year terms expire]. At an election of Directors,
  the candidate from each single-member district who receives [The
  two (2) or three (3) persons, respectively, receiving] the greatest
  number of votes is [shall be declared] elected to represent that
  single-member district. Each Director shall hold office until his
  successor is [shall have been] elected or appointed and has [shall
  have] qualified.
         (a-1)  A person is not eligible to serve as a Director for
  more than three terms or for more than a total of seven years of
  service.[;]
         (b)  Such [such] elections shall be called, conducted and
  canvassed in the manner provided by the Election Code. [Chapter 25,
  General Laws of the Thirty-ninth Legislature, Regular Session,
  1925, and any amendments thereto;]
         (c)  The [the] Board of Directors shall fill all vacancies on
  the Board by appointment and such appointees shall hold office
  until a successor elected at the next scheduled election date has
  qualified. [for the unexpired term for which they were appointed;]
         (d)  Any four [any three] members of the Board are [shall
  constitute] a quorum for the adoption or [of] passage of any
  resolution or order or the transaction of any business of the
  District.[;]
         (e)  A Director must [Directors succeeding the first Board,
  whether now or hereafter elected, shall] be a qualified voter of the
  single-member district from which the Director is elected [resident
  electors of Bexar County, Texas, and owners of taxable property
  within the area comprising said District, and shall organize in
  like manner].
         (f)  A payment to a Director for fees of office under Section
  49.060, Water Code, may not be made for a meeting that occurs in a
  different fiscal year from the one in which the payment is made.
         SECTION 3.02.  Section 33A, Chapter 306, Acts of the 49th
  Legislature, Regular Session, 1945, is amended by amending
  Subsection (c) and adding Subsection (g) to read as follows:
         (c)  The oversight committee is comprised of seven [5]
  members appointed as follows [to represent the following members]:
               (1)  two Senators who represent Senate districts that
  include territory within the Bexar Metropolitan Water District, 
  [the Senator sponsor of this Act, or, in the event this Senator
  cannot serve, a Senator] appointed by the Lieutenant Governor;
               (2)  two Representatives who represent [the] House
  districts that include territory within the District, [author of
  this Act, or, in the event this Representative cannot serve, a
  Representative] appointed by the Speaker of the Texas House of
  Representatives;
               (3)  one member with special expertise in the operation
  of public water utilities appointed by the Governor;
               (4)  one member appointed by the Governor to represent
  the public; and
               (5)  one [a] member of the Bexar County Commissioners
  Court who represents a precinct in which customers of the District
  reside.
         (g)  On or before December 31, 2012, the oversight committee
  shall provide a report under Subsection (e) of this section to the
  legislature. The committee is abolished and this section expires
  January 1, 2013.
         SECTION 3.03.  Chapter 306, Acts of the 49th Legislature,
  Regular Session, 1945, is amended by adding Sections 8A, 8B, 8C,
  10A, and 10B to read as follows:
         Sec. 8A.  (a)  To be eligible to be a candidate for or to be
  elected or appointed as a Director, a person must have:
               (1)  resided continuously in the single-member
  district that the person seeks to represent for 12 months
  immediately preceding the date of the regular filing deadline for
  the candidate's application for a place on the ballot;
               (2)  viewed the open government training video provided
  by the attorney general and provided to the Board a signed affidavit
  stating that the candidate viewed the video;
               (3)  obtained 200 signatures from individuals living in
  the District; and
               (4)  paid a filing fee of $250 or filed a petition in
  lieu of the filing fee that satisfies the requirements prescribed
  by Section 141.062, Election Code.
         (b)  In this subsection, "political contribution" and
  "specific-purpose committee" have the meanings assigned by Section
  251.001, Election Code.  A Director or a candidate for the office of
  Director may not knowingly accept political contributions from a
  person that in the aggregate exceed $500 in connection with each
  election in which the person is involved.  For purposes of this
  subsection, a contribution to a specific-purpose committee for the
  purpose of supporting a candidate for the office of Director,
  opposing the candidate's opponent, or assisting the candidate as an
  officeholder is considered to be a contribution to the candidate.
         Sec. 8B.  (a)  A person who is elected or appointed to and
  qualifies for office as a Director on or after the effective date of
  this section may not vote, deliberate, or be counted as a member in
  attendance at a meeting of the Board until the person completes a
  training program on District management issues.  The training
  program must provide information to the person regarding:
               (1)  the enabling legislation that created the
  District;
               (2)  the operation of the District;
               (3)  the role and functions of the Board;
               (4)  the rules of the Board;
               (5)  the current budget for the Board;
               (6)  the results of the most recent formal audit of the
  Board;
               (7)  the requirements of the:
                     (A)  open meetings law, Chapter 551, Government
  Code;
                     (B)  public information law, Chapter 552,
  Government Code; and
                     (C)  administrative procedure law, Chapter 2001,
  Government Code;
               (8)  the requirements of the conflict of interest laws
  and other laws relating to public officials; and
               (9)  any applicable ethics policies adopted by the
  Board or the Texas Ethics Commission.
         (b)  The Commission may create an advanced training program
  designed for a person who has previously completed a training
  program described by Subsection (a) of this section. If the
  Commission creates an advanced training program under this
  subsection, a person who completes that advanced training program
  is considered to have met the person's obligation under Subsection
  (a) of this section.
         (c)  Each Director who is elected or appointed on or after
  the effective date of this section shall complete a training
  program described by Subsection (a) or (b) of this section at least
  once in each term the Director serves.
         (d)  The Board shall adopt rules regarding the completion of
  the training program described by Subsection (a) or (b) of this
  section by a person who is elected or appointed to and qualifies for
  office as a Director before the effective date of this section. A
  Director described by this subsection who does not comply with
  Board rules is considered incompetent as to the performance of the
  duties of a Director in any action to remove the Director from
  office.
         (e)  A Director may not:
               (1)  accept or solicit a gift, favor, or service, the
  value of which exceeds $50 per gift, favor, or service, that:
                     (A)  might reasonably influence the Director in
  the discharge of an official duty; or
                     (B)  the Director knows or should know is being
  offered with the intent to influence the Director's official
  conduct;
               (2)  accept other employment or engage in a business or
  professional activity that the Director might reasonably expect
  would require or induce the Director to disclose confidential
  information acquired by reason of the official position;
               (3)  accept other employment or compensation that could
  reasonably be expected to impair the Director's independence of
  judgment in the performance of the Director's official duties;
               (4)  make personal investments that could reasonably be
  expected to create a substantial conflict between the Director's
  private interest and the interest of the District;
               (5)  intentionally or knowingly solicit, accept, or
  agree to accept any benefit for having exercised the Director's
  official powers or performed the Director's official duties in
  favor of another; or
               (6)  have a personal interest in an agreement executed
  by the District.
         (f)  Not later than April 30 each year, a Director shall file
  with the Bexar County clerk a verified financial statement
  complying with Sections 572.022, 572.023, 572.024, and 572.0252,
  Government Code. The District shall keep a copy of a financial
  statement filed under this section in the main office of the
  District.
         Sec. 8C.  (a)  A Director may be recalled for:
               (1)  incompetency or official misconduct as defined by
  Section 21.022, Local Government Code;
               (2)  conviction of a felony;
               (3)  incapacity;
               (4)  failure to file a financial statement as required
  by Section 8B(f) of this Act;
               (5)  failure to complete a training program described
  by Section 8B(a) or (b) of this Act; or
               (6)  failure to maintain residency in the District.
         (b)  If at least 10 percent of the registered voters in a
  single-member voting district of the District submit a petition to
  the Board requesting the recall of the Director who serves that
  single-member voting district, the Board, not later than the 10th
  day after the date the petition is submitted, shall mail a written
  notice of the petition and the date of its submission to each
  registered voter in the single-member voting district.
         (c)  Not later than the 30th day after the date a petition
  requesting the recall of a Director is submitted, the Board shall
  order an election on the question of recalling the Director.
         (d)  A recall election under this section may be held on any
  uniform election date.
         (e)  If a majority of the voters of a single-member voting
  district voting at an election held under this section favor the
  recall of the Director who serves that single-member voting
  district, the Director is recalled and ceases to be a Director.
         Sec. 10A.  All Board reimbursements and expenditures must be
  approved by the Board in a regularly scheduled meeting.
         Sec. 10B.  The Board may not select the same auditor to
  conduct an audit required by Section 49.191, Water Code, for more
  than three consecutive annual audits.
         SECTION 3.04.  Chapter 306, Acts of the 49th Legislature,
  Regular Session, 1945, is amended by adding Sections 40 and 41 to
  read as follows:
         Sec. 40.  (a)  If the conservator reports to the Commission
  that the District has been sufficiently rehabilitated to provide
  reliable, cost-effective, quality service to its customers, the
  Commission shall evaluate the condition of the District and
  determine whether:
               (1)  the District has been sufficiently rehabilitated
  to enable the District to provide reliable, cost-effective, quality
  service to its customers; and
               (2)  the conservatorship is no longer necessary.
         (b)  Not later than the 60th day after the date the
  Commission receives a report under this section, the Commission
  shall issue an order dissolving the conservatorship if the
  Commission determines the conservatorship is no longer necessary.
         Sec. 41.  (a)  The conservator appointed under Section 34 of
  this Act continues to serve until the conservatorship is dissolved
  under Section 40 of this Act.
         (b)  The Commission may order the District to implement any
  part of the rehabilitation plan developed under Section 37 of this
  Act.
         (c)  If the District fails to comply with a Commission order,
  the Commission may assess a penalty against the District in the
  manner provided by Section 13.4151, Water Code.
         SECTION 3.05.  (a)  Section 8, Chapter 306, Acts of the 49th
  Legislature, Regular Session, 1945, as amended by this Act, applies
  only to a member of the board of directors of the Bexar Metropolitan
  Water District who is elected to the board on or after the effective
  date of this Act.
         (b)  Section 8A, Chapter 306, Acts of the 49th Legislature,
  Regular Session, 1945, as added by this Act, applies only to a
  member of the board of directors of the Bexar Metropolitan Water
  District who is elected to the board on or after the effective date
  of this Act.  A director who is elected before the effective date of
  this Act is governed by the law in effect when the director was
  elected, and the former law is continued in effect for that purpose.
         (c)  For two of the numbered single-member district
  director's positions that expire in 2012, the Bexar Metropolitan
  Water District shall call and hold an election on a uniform election
  date in that year to elect the directors for those positions for
  terms that expire on the uniform election date in November 2013.  
  For the other two director's positions that expire in 2012, the
  district shall call and hold an election on the same uniform
  election date in that year to elect the directors for those
  positions for terms that expire on the uniform election date in
  November 2014.  The district shall determine by lot which
  single-member districts shall elect directors to serve one-year
  terms and which shall elect directors to serve two-year terms.
  ARTICLE 4.  TRANSFER OF DISTRICT ASSETS AND LIABILITIES IF VOTERS
  DISSOLVE THE BEXAR METROPOLITAN WATER DISTRICT UNDER ARTICLE 2
         SECTION 4.01.  Chapter 306, Acts of the 49th Legislature,
  Regular Session, 1945, is amended by adding Sections 50, 51, 52, 53,
  54, 55, 56, and 57 to read as follows:
         Sec. 50.  (a)  The term of each person who is serving as a
  Director of the District on the date of the canvass of the election
  authorized by Article 2 of the Act enacting this section expires on
  that date.
         (b)  Under the Commission's and Committee's oversight, the
  conservator shall transfer or assign to the System, beginning not
  later than the 60th day after the date the election results are
  certified the:
               (1)  rights and duties of the District associated with
  the provision of water services, including existing contracts,
  assets, and obligations of the District;
               (2)  files, records, and accounts of the District,
  including those that pertain to the control, finances, management,
  and operation of the District; and
               (3)  permits, approvals, and certificates necessary to
  provide water services.
         (c)  To the extent that the transfer of an item listed in
  Subsection (b) of this section requires the approval of a state
  agency, the state agency shall grant approval without additional
  notice or hearing.
         (d)  After the conservator has transferred the property,
  assets, and liabilities as prescribed by this section, the
  conservator shall file a written report with the Commission and the
  Committee summarizing the conservator's actions in dissolving the
  District.
         (e)  Not later than the 60th day after the date the
  Commission receives the report and determines that the requirements
  of this section have been fulfilled, the Commission shall enter an
  order dissolving the District and releasing the conservator from
  any further duty or obligation.
         Sec. 51.  This section expires on the fifth anniversary of
  the date the Commission enters an order dissolving the District.
         Sec. 52.  (a)  Not later than five years after the date the
  election results were certified in favor of dissolution under
  Article 2 of the Act enacting this section, the System shall
  integrate the services and infrastructure of the District into the
  System in a reasonable and orderly manner based on the
  consideration of relevant information, including:
               (1)  the location and condition of the infrastructure;
               (2)  debt obligations;
               (3)  costs and revenue; and
               (4)  potential impacts on the customers of the District
  and the System.
         (b)  The System shall provide an annual report on the
  progress of integration to the Commission.  The Commission for good
  cause may grant an extension to complete integration.  If the System
  fails to comply with the requirements of this section, the
  Commission may assess a penalty against the System in the manner
  provided by Section 13.4151, Water Code.
         (c)  Until the date specified in Subsection (a) of this
  section, the System may operate the former District as a special
  project under the System's existing senior lien revenue bond
  ordinances.
         (d)  Once the conservator has transferred the assets,
  obligations, and duties to the System, and at least until the date
  specified in Subsection (a) of this section, the System shall
  provide affordable and reliable water services to all of the former
  ratepayers of the District.
         Sec. 53.  (a)  For a 24-month period following the transfer
  of the employment of any employee of the former District, the System
  may not terminate that employee, except for cause, if the employee:
               (1)  is vested in the retirement program of the
  District on the effective date of this Act; and
               (2)  earns an annual base salary of less than $50,000 on
  the effective date of the Act enacting this section.
         (b)  An employee who qualifies under Subsection (a) of this
  section and who is terminated by the System has the same opportunity
  for appeal as a person employed by the System who is not an employee
  of the former District.
         (c)  The System is not required to employ an employee of the
  District if that person was formerly terminated from, or resigned
  in lieu of termination from, the System.
         Sec. 54.  From the effective date of the Act enacting this
  section until the date election results dissolving the District are
  certified to the Secretary of State, the attorney general may not
  approve any public security, as defined by Chapter 1201, Government
  Code, of the District unless:
               (1)  the Commission consents in writing before
  approval; or
               (2)  the District provides written evidence that
  issuing the public security represents a refunding of outstanding
  debt for the purpose of realizing debt service savings in each year
  that outstanding obligations are refunded and that results in a
  cumulative net present value savings of three percent compared to
  refunded debt service.
         Sec. 55.  (a)  From the effective date of the Act enacting
  this section until the date election results dissolving the
  District are certified to the Secretary of State, a contract or
  other agreement entered into during that period to which the
  District is a party must include a provision that the contract or
  other agreement is subject to:
               (1)  review by the System; and
               (2)  termination by the System at the System's sole
  discretion, including the termination of all rights, duties,
  obligations, and liabilities of the District or the System under
  the contract or other agreement, if the contract or other agreement
  is assumed by the System.
         (b)  A person is not entitled to compensation for loss or
  other damages resulting from the termination of the contract or
  other agreement under Subsection (a)(2) of this section.
         Sec. 56.  From the effective date of the Act enacting this
  section until the date the election results dissolving the District
  are certified to the Secretary of State, the District may not
  dispose of, sell, transfer, assign, impair, or restrict any of the
  District's rights or assets outside the normal and customary course
  of business.
         Sec. 57.  A state agency at which an administrative or
  enforcement action is pending shall grant the District special
  consideration and reasonable extensions to identify and resolve the
  action in a manner satisfactory to the agency.
  ARTICLE 5.  NOTICE; EFFECTIVE DATE OF ACT
         SECTION 5.01.  (a)  The legal notice of the intention to
  introduce this Act, setting forth the general substance of this
  Act, has been published as provided by law, and the notice and a
  copy of this Act 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 Act to the Texas Commission on
  Environmental Quality.
         (c)  The Texas Commission on Environmental Quality has filed
  its recommendations relating to this Act 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 Act are fulfilled
  and accomplished.
         SECTION 5.02.  Except as otherwise provided by Article 2 of
  this Act, this Act takes effect immediately if it receives a vote of
  two-thirds of all the members elected to each house, as provided by
  Section 39, Article III, Texas Constitution.  If this Act does not
  receive the vote necessary for immediate effect, this Act takes
  effect September 1, 2011.
 
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