H.B. No. 1920

	AN ACT
	relating to the Palo Duro River Authority, following
	recommendations of the Sunset Advisory Commission.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, and 12,
	Chapter 438, Acts of the 63rd Legislature, Regular Session, 1973,
	are amended to read as follows:
	Sec. 1.  By virtue of Section 59, Article XVI of the
	Constitution of the State of Texas, there is hereby created a
	conservation and reclamation district to be known as "Palo Duro
	Water District," [River Authority of Texas"   (hereinafter sometimes
	referred to as the "Authority")] which shall be a governmental
	agency, a body politic and corporate, and a political subdivision
	of this state.
	Sec. 2.  The district [Authority] hereby created and
	established shall comprise all of the territory contained within
	the Counties of Hansford and Moore and the City of Stinnett
	[Ochiltree]. It is hereby found and determined that all of the land
	thus included in the district [Authority] will be benefited by the
	improvements to be acquired and constructed by the district
	[Authority], and that the district [Authority] is created to serve
	a public use and benefit.
	Sec. 3.  The district, inside or outside its boundaries,
	[Authority within its limits] is hereby empowered: (a) to develop,
	construct or purchase dams and reservoirs. The district
	[Authority] is empowered to construct or to purchase all plants and
	other facilities necessary or useful for the purpose of providing a
	source of water supply and storing, processing such water and
	transporting and distributing it for irrigation, livestock
	raising, agricultural, municipal, domestic and industrial
	purposes. The district [Authority] shall at all times have power to
	develop or purchase additional sources of water and to improve,
	enlarge and extend its water system. The district [Authority] is
	also empowered to make contracts for the purchase of water; (b) in
	order to preserve and protect the purity of the waters of the state
	and of the district [Authority] and conserve and reclaim said
	waters for beneficial use by the inhabitants of the district
	[Authority], to provide all plants, works, facilities and
	appliances incident to or helpful or necessary to the collection,
	transportation, processing, disposal, and control of such waters
	for agricultural, municipal, domestic, oil field flooding, mining
	and industrial purposes; and (c) the district [Authority] is
	empowered to impound, store, control and conserve the storm and
	flood waters and the unappropriated flow waters [within the limits
	of the Authority], including but not limited to the storm and flood
	waters and unappropriated flow waters of Palo Duro Creek and Horse
	Creek, [River and the tributaries thereof within and without its
	watershed] by complying with the provisions of Chapter 1, Title
	128, Revised Civil Statutes of Texas, as amended.
	Sec. 5.  (a) The district may not construct a [No] dam or
	other facility [facilities] for impounding water [shall be
	constructed] until the plans therefor are approved by the
	commission [Texas Water Rights Commission]. The Authority is not
	authorized to develop or otherwise acquire underground sources of
	water.
	(b)  The district [Authority] may sell, trade, or otherwise
	dispose of any real or personal property deemed by the district
	[this Commission] not to be needed for district [Authority]
	purposes, subject to the terms of any deed of trust or other
	indenture [issued by the Commission].
	Sec. 6.  The district [Authority] is authorized to enter
	into contracts with cities and others for supplying water to them.
	The district [Authority] is also authorized to contract with any
	city for the rental or leasing of, or for the operation of the water
	production, water supply, and water filtration or purification [and
	water supply] facilities of such city upon such consideration as
	the district [Authority] and the city may agree. Any such contract
	may be upon such terms and for such time as the parties may agree,
	and it may provide that it shall continue in effect until bonds
	specified therein and refunding bonds issued in lieu of such bonds
	are paid.
	Sec. 7.  The district [Authority] is empowered to obtain
	through appropriate hearings an appropriation permit or permits
	from the commission [Texas Water Rights Commission], as provided in
	Chapter 1 of Title 128, Revised Civil Statutes of 1925, as amended.
	Thereafter such permit, either upon application of the district
	[Authority] or at the will of the commission [Texas Water Rights
	Commission], may be modified by the commission [said Commission]
	after an appropriate hearing to increase or decrease the amount of
	water which may be appropriated[,] and the amount which may be
	stored by the district [Authority] to meet fluctuating demands.
	On[, either upon] application by the district [Authority] or by its
	own action the commission [Texas Water Rights Commission] shall
	redetermine the maximum amount of water which the district
	[Authority] may store in its reservoir and in making such
	determination it shall consider the needs of the cities and others
	that purchase water from the district [Authority].
	Sec. 8.  The district [Authority] is authorized to acquire
	or construct within or without the boundaries of the district
	[Authority,] a dam or dams and all works, plants and other
	facilities necessary or useful for the purpose of impounding,
	processing and transporting water to cities and others for
	municipal, agricultural, domestic, industrial, oil field flooding,
	and mining purposes. The size of the dam and reservoir shall be
	determined by the board [Board of Directors], taking into
	consideration probable future increases in water requirements, and
	the size of the dam shall not be limited by the amount of water
	initially authorized by the commission [Texas Water Commission] to
	be impounded therein. [No dam or other facilities for impounding
	water shall be constructed until the plans therefor are approved by
	the Texas Department of Water Resources.]
	Sec. 9.  The district [Authority] is empowered to acquire
	land within or without the boundaries of the district [Authority],
	and to construct, lease or otherwise acquire all works, plants and
	other facilities necessary or useful for the purpose of diverting,
	further impounding or storing water, processing such water and
	transporting it to cities and others for agricultural, municipal,
	domestic, industrial, oil field flooding, and mining purposes.
	Sec. 10.  (a) For the purpose of carrying out any power or
	authority conferred by this Act the district [Authority] shall have
	the right to acquire by condemnation in the manner provided by Title
	52, Revised Statutes, as amended, relating to eminent domain:
	(1)  the fee simple title to land and other property and
	easements (including land needed for the reservoir and dam and
	flood easements above the probable high water line around any such
	reservoirs) within the boundaries of the district [Authority]; and
	(2)  the fee simple title to land and other property and
	easements (except for land, other property, and easements to be
	used for a dam or dams or facilities for the impoundment or storage
	of water) outside the boundaries of the district [Authority].
	(b)  The district [Authority] is hereby declared to be a
	municipal corporation within the meaning of Article 3268 of said
	Title 52, except that the district [Authority] shall not have the
	right to so condemn any property which may be owned by any other
	political subdivision, city or town; provided, however, that as
	against persons, firms and corporations, or receivers or trustees
	thereof, who have the power of eminent domain, the fee title may not
	be condemned, but the district [Authority] may condemn only an
	easement. The amount of and character of interest in land, other
	property and easements thus to be acquired shall be determined by
	the board [Board of Directors].
	Sec. 11.  The district [Authority] herein created shall be
	and it is hereby empowered to control, store, conserve, protect,
	distribute and utilize the storm and flood waters within the area of
	the district [Authority] for all useful purposes permitted by law;
	also, to carry out flood prevention and control measures within the
	district [Authority] and to prevent or aid in preventing damage to
	the lands of the district [Authority] and the soil and fertility
	thereof; to cooperate with all other districts, departments or
	agencies of the State Government, or any agency, representative,
	instrumentality or department of the United States Government; and
	to receive and accept technical and financial assistance therefrom
	in the accomplishment of the [said] purposes described by this
	section. The district [said Authority] is further authorized and
	empowered to purchase, construct, maintain, or in any other lawful
	manner to acquire, provide and develop all works, facilities,
	improvements, lands, easements and properties, which may be
	necessary or useful in fulfilling the purposes of the district
	[Authority] or any of them.
	Sec. 12.  The district [Authority] is authorized to acquire
	water appropriation permits from owners of permits. The district
	[Authority] is hereby empowered to lease or acquire rights in and to
	storage and storage capacity in any reservoir constructed or to be
	constructed by any person, firm, corporation or public agency or
	from the United States Government or any of its agencies.
	SECTION 2.  Sections 13(a), (b), (c), and (d), Chapter 438,
	Acts of the 63rd Legislature, Regular Session, 1973, are amended to
	read as follows:
	(a)  The board [Board of Directors of the Authority] shall
	have the power to adopt and promulgate all reasonable regulations
	to secure, maintain, and preserve the sanitary condition of all
	water in and to flow into any reservoir owned by the district,
	[Authority] to prevent waste of water or the unauthorized use
	thereof, and to regulate residence, hunting, fishing, boating and
	camping, and all recreational and business privileges, along or
	around any such reservoir, [or any] body of land, or easement owned
	by the district [Authority].
	(b)  The district [Such Authority] may prescribe reasonable
	penalties for the breach of any regulation of the district
	[Authority], which penalties shall not exceed fines of more than
	Two Hundred Dollars ($200.)[, or imprisonment for not more than
	thirty (30) days, or may provide both such fine and such
	imprisonment]. The penalties hereby authorized shall be in
	addition to any other penalties provided by the laws of Texas and
	may be enforced by complaints filed in the appropriate court of
	jurisdiction, provided, however, that no rule or regulation which
	provides a penalty for the violation thereof shall be in effect, as
	to enforcement of the penalty, until five (5) days next after the
	district [Authority] may have caused a substantive statement of the
	particular rule or regulation and the penalty for the violation
	thereof to be published, once a week for two (2) consecutive weeks
	in the county in which such reservoir is situated, or in any county
	in which it is partly situated. The substantive statement so to be
	published shall be as condensed as is possible to afford an
	intelligent direction of the mind to the act forbidden by the rule
	or regulation; one (1) notice may embrace any number of
	regulations; there must be embraced in the notice advice that
	breach of the particular regulation, or regulations, will subject
	the violator to the infliction of a penalty and there also shall be
	included in the notice advice that the full text of the regulations
	sought to be enforced is on file in the principal office of the
	district [Authority], where the same may be read by any interested
	person. Five (5) days after the second publication of the notice
	hereby required, the advertised regulation shall be in effect, and
	ignorance of any such regulation shall not constitute a defense to a
	prosecution for the enforcement of a penalty and, the rules and
	regulations authorized hereby, after the required publication,
	shall judicially be known to the courts and shall be considered of a
	nature like unto that of valid penal ordinance of a city of the
	state.
	(c)  Any duly constituted peace officer, provided such
	officers meet the Texas Law Officers minimum certification
	requirements, shall have the power to make arrests when necessary
	to prevent or abate the commission of any offense against the
	regulations of the district [Authority], and against the laws of
	the State of Texas, when any such offense or threatened offense
	occurs upon any land, water or easement owned or controlled by the
	district [Authority], or to make such arrest at any place, in case
	of an offense involving injury or detriment to any property owned or
	controlled by such district [Authority].
	(d)  Territory may be annexed to the district [Authority],
	whether or not contiguous to the district [Authority], in the
	following manner:
	(1)  A petition praying for such annexation signed by
	fifty (50) or a majority, whichever number is smaller, of the
	resident, qualified voters of the territory or of duly incorporated
	cities or towns sought to be annexed shall be filed with the board.
	The petition shall describe the territory to be annexed by metes and
	bounds, or otherwise, unless such territory is the same as that
	contained within the boundaries of such city or town, in which event
	it shall be sufficient to state that the territory to be annexed is
	that which is contained within the boundaries of such city or town.
	(2)  If the board [Board of Directors] finds that the
	petition complies with and is signed by the number of qualified
	persons required by Subdivision (1) of this subsection, that the
	annexation would be to the best interest of the territory, city or
	town, and the district [Authority], and that the district
	[Authority] will be able to supply water, or cause water to be
	supplied to the territory, city, or town, it shall adopt a
	resolution stating the conditions, if any, under which such
	territory, city, or town may be annexed to the district
	[Authority], and shall fix a time and place when and where a hearing
	shall be held by the board on the question of whether the territory,
	city, or town sought to be annexed will be benefited by the
	improvements, works, and facilities then owned or operated or
	contemplated to be owned or operated by the district [Authority] or
	by the other functions of the district [Authority]. Notice of the
	adoption of such resolution stating the time and place of such
	hearing shall be published one (1) time in a newspaper of general
	circulation in the territory, city, or town sought to be annexed at
	least ten (10) days prior to the date of such hearing. The notice
	shall describe the territory in the same manner in which it is
	required or permitted by this Act to be described in the petition.
	All persons interested may appear at such hearing and offer
	evidence for or against the proposed annexation. Such hearing may
	proceed in such order and under such rules as may be prescribed by
	said board, and the hearing may be recessed from time to time. If,
	at the conclusion of the hearing, the board [Board of Directors]
	finds that the property in such territory, city, or town will be
	benefited by the present or contemplated improvements, works, or
	facilities of the district [Authority], the board [Board of
	Directors] shall adopt a resolution making a finding of such
	benefit and calling an election in the territory, city, or town
	proposed to be annexed stating therein the date of the election, the
	place or places of holding the same, the proposition to be voted on,
	and appointing a presiding judge for each voting place who shall
	appoint the necessary assistant judges and clerks to assist in
	holding the election.
	Notice of such election shall be given by publishing a
	substantial copy of the resolution calling the election one (1)
	time in a newspaper of general circulation in the territory sought
	to be annexed to the district [Authority] at least ten (10) days
	before the date set for the election. Only constitutionally
	qualified electors who reside in the territory, city, or town
	sought to be annexed shall be qualified to vote in said election.
	Returns of the result of said election shall be made to the board.
	The board shall canvass the returns of the election and adopt a
	resolution declaring the results thereof. If such resolution shows
	that a majority of the votes cast are in favor of annexation, the
	board shall by resolution annex said territory to the district
	[Authority], and such annexation shall thereafter be incontestable
	except in the manner and within the time for contesting the
	elections under the Texas Election Code, as amended.
	(3)  The board [Board of Directors], in calling an
	election on the proposition for annexation of territory, city, or
	town, may include as a part of the same proposition or a separate
	proposition for the assumption of its part of the tax-supported
	bonds of the district [Authority] then outstanding and those
	theretofore voted but not yet sold, and for the levy of an ad
	valorem tax on taxable property in said territory along with the tax
	in the rest of the district [Authority] for the payment thereof and
	the levying of maintenance taxes permitted by Section 27 of this
	Act, in which event the voting shall be restricted to
	constitutionally qualified electors. If such election fails, the
	annexed territory, city, or town shall be excluded from the
	district [Authority].
	SECTION 3.  Sections 14, 15, 16, 17, 18, and 19, Chapter 438,
	Acts of the 63rd Legislature, Regular Session, 1973, are amended to
	read as follows:
	Sec. 14.  The district [Authority] is authorized to
	establish or otherwise provide for public parks and recreation
	facilities, and to acquire land for such purposes within the
	district [Authority].
	Sec. 15.  In the event that the district [Authority], in the
	exercise of the power of eminent domain or power of relocation, or
	any other power granted hereunder, makes necessary the relocation,
	raising, rerouting or changing the grade of, or altering the
	construction of any highway, railroad, electric transmission line,
	telephone or telegraph properties and facilities, or pipeline, all
	such necessary relocation, raising, rerouting, changing of grade or
	alteration of construction shall be accomplished at the sole
	expense of the district [Authority].
	Sec. 16.  It shall not be necessary for the board [Board of
	Directors] to call a confirmation election or to hold a hearing on
	the exclusion of lands or a hearing on the adoption of a plan of
	taxation, but the ad valorem plan of taxation shall be used by the
	district [Authority].
	Sec. 17.  (a)  All powers of the district [Authority] shall
	be exercised by the board.  Each director of the board [a Board of
	Directors (sometimes herein referred to as the "Board"), each of
	whom] shall serve staggered, two-year terms that expire on December
	31 of each year. [for a term of two (2) years except for the
	directors appointed by this Act. The following directors are hereby
	appointed:
	[DIRECTOR   RESIDENCE TERM EXPIRING
	[Dee Jackson Spearman, Hansford County, Texas December 31, 1973
	[N. F. (Gus) Renner Spearman, Hansford County, Texas December 31, 1974
	[Robert V. Skinner Spearman, Hansford County, Texas December 31, 1973
	[Bill Logsdon Gruver, Hansford County, Texas December 31, 1974
	[Bob Urban Perryton, Ochiltree County, Texas December 31, 1973
	[Delbert Timmons Perryton, Ochiltree County, Texas December 31, 1974
	[Jerry Garrison Perryton, Ochiltree County, Texas December 31, 1973
	[Robert D. Lemon Perryton, Ochiltree County, Texas December 31, 1974]
	(b)  In [December of 1973 and in] December of each year,
	[hereafter] the Commissioners Court of each county contained in the
	district, except for Hutchinson County, and the city council of the
	City of Stinnett [Authority] shall appoint a director or directors
	[from such county] whose term or terms are about to expire. Any
	vacancy shall be filled for the unexpired term by the governing body
	of the appropriate county or city. Four (4) directors [members of
	the Board of Directors] shall be appointed by the Commissioners
	Court of each county contained in the district, except for
	Hutchinson County, and one director shall be appointed by the city
	council of the City of Stinnett.  Each [Authority, and each]
	director shall reside in the county from which the director [he] is
	appointed.
	(c)  Each director shall serve for the director's [his] term
	of office as herein provided, and thereafter until the director's
	[his] successor shall be appointed and qualified. No person shall
	be appointed a director unless the person [he] resides in and owns
	taxable property in the county or city from which the person [he] is
	appointed. No member of a governing body of a county or the City of
	Stinnett, and no employee of a county or the City of Stinnett shall
	be appointed as director.  Such directors shall subscribe the
	Constitutional oath of office, and each shall give bond for the
	faithful performance of the director's [his] duties in the amount
	of Five Thousand Dollars ($5,000.), the cost of which shall be paid
	by the district [Authority]. A majority shall constitute a quorum.
	If any director moves from the county or city from which the
	director [he] is appointed or otherwise ceases to be a director, the
	Commissioners Court of such county or the city council of the City
	of Stinnett, as appropriate, shall appoint a director to succeed in
	the position [him,] for the unexpired term.
	(d)  Unless the board by resolution increases the fee to an
	amount authorized by Section 49.060, Water Code, each [Each]
	director shall receive a fee of not to exceed Twenty-Five Dollars
	($25.) for attending each meeting of the board [Board], provided
	that no more than Fifty Dollars ($50.) shall be paid to any director
	for meetings held in any one (1) calendar month.  Each director
	shall also be entitled to receive not to exceed Twenty-Five Dollars
	($25.) per day devoted to the business of the district [Authority]
	and to reimbursement for actual expenses incurred in attending to
	district [Authority] business provided that such service and
	expense are expressly approved by the board [Board].
	Sec. 18.  The board [Board of Directors] shall elect from its
	number a president and a vice president of the district
	[Authority], and such other officers as in the judgment of the board
	[Board] are necessary.  The president shall be the chief executive
	officer of the district [Authority] and the presiding officer of
	the board [Board], and shall have the same right to vote as any
	other director.  The vice president shall perform all duties and
	exercise all powers conferred by this Act upon the president when
	the president is absent or fails or declines to act except the
	president's right to vote.  The board [Board] shall also appoint a
	secretary and a treasurer who may or may not be members of the board
	[Board], and it may combine those offices.  The treasurer shall give
	bond in such amount as may be required by the board [Board of
	Directors].  The condition of such bond shall be that the treasurer
	[he] will faithfully account for all money which shall come into the
	treasurer's [his] custody as treasurer of the district [Authority],
	and the board [Board] may adopt a seal for the district [Authority].
	Sec. 19.  The board [Board of Directors], from time to time,
	shall be authorized to make or cause to be made surveys and
	engineering investigations for the information of the district
	[Authority] to facilitate the accomplishment of the purposes for
	which the district [Authority] is created; and may employ a general
	manager, attorneys, accountants, engineers, or other technical or
	nontechnical employees or assistants; fix the amount and manner of
	their compensation; and may provide for the payment of expenditures
	deemed essential to the proper maintenance of the district
	[Authority] and its affairs.  The power to employ and discharge
	employees may be conferred upon the general manager.
	SECTION 4.  Sections 20(a), (b), (d), (e), (f), (g), (h), and
	(i), Chapter 438, Acts of the 63rd Legislature, Regular Session,
	1973, are amended to read as follows:
	(a)  For the purpose of providing a source of water supply
	for cities and other users for agricultural, municipal, domestic,
	industrial, oil field flooding, and mining purposes, as authorized
	by this Act, and for the purpose of carrying out any other power or
	authority conferred by this Act, the district [Authority] is
	empowered to issue its negotiable bonds to be payable from revenues
	or taxes or both revenues and taxes of the district [Authority] as
	are pledged by resolution of the board [Board of Directors].
	Pending the issuance of definitive bonds the board [Board] may
	authorize the delivery of negotiable interim bonds or notes,
	eligible for exchange or substitution by use of the definitive
	bonds.
	(b)  Such bonds shall be authorized by resolution of the
	board [Board of Directors] and shall be issued in the name of the
	district [Authority], signed by the president or vice president,
	attested by the secretary and shall bear the seal of the district
	[Authority]. It is provided, however, that the signatures of the
	president or of the secretary or of both may be printed or
	lithographed on the bonds if authorized by the board [Board of
	Directors], and that the seal of the district [Authority] may be
	impressed on the bonds or may be printed or lithographed thereon.
	The bonds shall mature serially or otherwise in not to exceed forty
	(40) years and may be sold at a price and under terms determined by
	the board [Board of Directors] to be the most advantageous
	reasonably obtainable[, provided that the interest cost to the
	Authority, including the discount, if any, shall bear interest at
	any rate per annum permitted by the Constitution and laws of the
	State as shall be determined by the Board of Directors,] and within
	the discretion of the board [Board] may be made callable prior to
	maturity at such times and prices as may be prescribed in the
	resolution authorizing the bonds, and may be made registrable as to
	principal or as to both principal and interest.
	(d)  The bonds may be secured by a pledge of all or part of
	the net revenue of the district [Authority], or by the net revenues
	of any one (1) or more contracts theretofore or thereafter made or
	other revenue or income specified by resolution of the board [Board
	of Directors] or in the trust indenture. Any such pledge may
	reserve the right, under conditions therein specified, to issue
	additional bonds which will be on a parity with or subordinate to
	the bonds then being issued. The term "net revenues" as used in
	this Section shall mean the gross revenues and income of the
	district [Authority] from all sources after deduction of the amount
	necessary to pay the cost of maintaining and operating the district
	[Authority] and its properties.
	(e)  The district [Authority] is also empowered to issue
	bonds payable from ad valorem taxes to be levied on all taxable
	property therein, or to issue bonds secured by and payable from both
	such taxes and the revenues of the district [Authority]. Where
	bonds are issued payable wholly or partially from ad valorem taxes,
	it shall be the duty of the board [Board of Directors] to levy a tax
	sufficient to pay the bonds and the interest thereon as such bonds
	and interest become due without limit as to the rate or the amount,
	but the rate of the tax for any year may be fixed after giving
	consideration to the money received from the pledged revenues which
	may be available for payment of principal and interest to the extent
	and in the manner permitted by the resolution authorizing the
	issuance of the bonds.
	(f)  Where bonds payable wholly from revenues are issued, it
	shall be the duty of the board [Board of Directors] to fix, and from
	time to time to revise, the rates of compensation for water sold and
	services rendered by the district [Authority] which will be
	sufficient to pay the expense of operating and maintaining the
	facilities of the district [Authority] and to pay the bonds as they
	mature and the interest as it accrues and to maintain the reserve
	and other funds as provided in the resolution authorizing the
	bonds. Where bonds payable partially from revenues are issued it
	shall be the duty of the board [Board] to fix, and from time to time
	to revise, the rate of compensation for water sold and services
	rendered by the district [Authority] which will be sufficient to
	assure compliance with the resolution authorizing the bonds.
	(g)  From the proceeds from the sale of the bonds, the
	district [Authority] may set aside an amount for the payment of
	interest expected to accrue during construction and a reserve
	interest and sinking fund, and such provision may be made in the
	resolution authorizing the bonds. Proceeds from the sale of the
	bonds may also be used for the payment of all expenses necessarily
	incurred in accomplishing the purpose for which this district
	[Authority] is created, including expenses of issuing and selling
	the bonds. The proceeds from the sale of the bonds may be
	temporarily invested in direct obligations of the United States
	Government maturing in not more than one (1) year from the date of
	investment.
	(h)  In the event of a default or a threatened default in the
	payment of principal or of interest on bonds payable wholly or
	partially from revenues, any court of competent jurisdiction may,
	upon petition of the holders of outstanding bonds, appoint a
	receiver with authority to collect and receive all income of the
	district [Authority] except taxes, employ and discharge agents and
	employees of the district [Authority], take charge of funds on hand
	(except funds received from taxes unless commingled) and manage the
	proprietary affairs of the district [Attorney] without consent or
	hindrance by the directors [Directors]. Such receiver may also be
	authorized to sell or make contracts for the sale of water or renew
	such contracts with the approval of the court appointing him. The
	court may vest the receiver with such other powers and duties as the
	court may find necessary for the protection of the holders of the
	bonds. The resolution authorizing the issuance of the bonds or the
	trust indenture securing the bonds [them] may limit or qualify the
	rights of the holders of less than all of the outstanding bonds
	payable from the same source to institute or prosecute any
	litigation affecting the district's [Authority's] property or
	income.
	(i)  Before the district [Authority] shall issue any bonds
	for improvements authorized herein, it shall secure prior approval
	from the commission [Texas Water Rights Commission] in the manner
	provided by Section 51.421, Texas Water Code.
	SECTION 5.  Sections 21 and 22, Chapter 438, Acts of the 63rd
	Legislature, Regular Session, 1973, are amended to read as follows:
	Sec. 21.  The district [Authority] is authorized to issue
	refunding bonds for the purpose of refunding any outstanding bonds
	authorized by this Act and interest thereon. Such refunding bonds
	may be issued to refund more than one (1) series of outstanding
	bonds and combine the pledges for the outstanding bonds for the
	security of the refunding bonds, and may be secured by other or
	additional revenues and mortgage liens. The provisions of this law
	with reference to the issuance by the district [Authority] of other
	bonds, their security, and their approval by the Attorney General
	and the remedies of the holders shall be applicable to refunding
	bonds. Refunding bonds shall be registered by the Comptroller upon
	surrender and cancellation of the bonds to be refunded, but in lieu
	thereof, the resolution authorizing their issuance may provide that
	they shall be sold and the proceeds thereof deposited in the bank
	where the original bonds are payable, in which case the refunding
	bonds may be issued in an amount sufficient to pay the principal of
	and the interest on the original bonds to their option date or
	maturity date, and the Comptroller shall register them without
	concurrent surrender and cancellation of the original bonds.
	Sec. 22.  Any bonds (including refunding bonds) authorized
	by this law, not payable wholly from ad valorem taxes, may be
	additionally secured by a trust indenture under which the Trustee
	may be a bank having trust powers situated either within or outside
	of the State of Texas.  Such bonds, within the discretion of the
	board [Board of Directors], may be additionally secured by a deed of
	trust or mortgage lien upon physical properties of the district
	[Authority] and all franchises, easements, water rights and
	appropriation permits, leases and contracts and all rights
	appurtenant to such properties vesting in the trustee power to sell
	the properties for the payment of the indebtedness, power to
	operate the properties and all other powers and authority for the
	further security of the bonds. Such trust indenture, regardless of
	the existence of the deed of trust or mortgage lien on the
	properties may contain any provisions prescribed by the board
	[Board of Directors] for the security of the bonds and the
	preservation of the trust estate, and may make provision for
	amendment or modification thereof and the issuance of bonds to
	replace lost or mutilated bonds, and may condition the right to
	expend district [Authority] money or sell district [Authority]
	property upon approval of a registered professional engineer
	selected as provided therein, and may make provision for the
	investment of funds of the district [Authority]. Any purchaser
	under a sale under the deed of trust lien, where one is given, shall
	be the absolute owner of the properties, facilities and rights so
	purchased and shall have the right to maintain and operate the same.
	SECTION 6.  Sections 23(a), (b), and (c), Chapter 438, Acts
	of the 63rd Legislature, Regular Session, 1973, are amended to read
	as follows:
	(a)  No bonds payable wholly or partially from ad valorem
	taxes (except refunding bonds) shall be issued unless authorized by
	a majority vote of the constitutionally qualified electors voting
	at such election. [No territory shall be detached from the
	Authority after the issuance of bonds which are payable from
	revenues or taxes or both.] Bonds not payable wholly or partially
	from ad valorem taxes may be issued without an election.
	(b)  Such election may be called by the board [Board of
	Directors] without a petition.  The resolution calling the election
	shall specify the time and places of holding the same, the purpose
	for which the bonds are to be issued, the maximum amount thereof,
	the maximum maturity thereof, the form of the ballot, and the
	presiding judge for each voting place. The presiding judge serving
	at each voting place shall appoint one (1) assistant judge and at
	least two (2) clerks to assist in holding such election. Notice of
	the election shall be given by publishing a substantial copy
	thereof in one (1) newspaper published in each city contained in the
	district [Authority] for two (2) consecutive weeks.  The first
	publication shall be at least twenty-one (21) days prior to the
	election. In any city in which no newspaper is published, notice
	shall be given by posting a copy of the resolution in three (3)
	public places.
	(c)  The returns of the election shall be made to and
	canvassed by the board [Board of Directors of the Authority].
	SECTION 7.  Sections 24, 25, 26, and 27, Chapter 438, Acts of
	the 63rd Legislature, Regular Session, 1973, are amended to read as
	follows:
	Sec. 24.  After any bonds (including refunding bonds) are
	authorized by the district [Authority], such bonds and the record
	relating to their issuance shall be submitted to the Attorney
	General for [his] examination as to the validity thereof.  Where
	such bonds recite that they are secured by a pledge of the proceeds
	of a contract theretofore made between the district [Authority] and
	any city or other governmental agency, authority or district, a
	copy of such contract and the proceedings of the city or other
	governmental agency, authority or district authorizing such
	contract shall also be submitted to the Attorney General. If such
	bonds have been authorized and if such contracts have been made in
	accordance with the Constitution and laws of the State of Texas the
	Attorney General [he] shall approve the bonds and such contracts
	and the bonds then shall be registered by the Comptroller of Public
	Accounts. Thereafter the bonds, and the contracts, if any, shall be
	valid and binding and shall be incontestable for any cause.
	Sec. 25.  All bonds of the district [Authority] shall be and
	are hereby declared to be legal and authorized investments for
	banks, savings banks, trust companies, building and loan
	association, savings and loan association, insurance companies,
	fiduciaries, trustees, guardians, and for the sinking fund of
	cities, towns, villages, counties, school districts, or other
	political corporations or subdivisions of the State of Texas.  Such
	bonds shall be eligible to secure the deposit of any and all public
	funds of the State of Texas, and any and all public funds of cities,
	towns, villages, counties, school districts, or other political
	corporations or subdivision of the State of Texas; and such bonds
	shall be lawful and sufficient security for said deposits to the
	extent of their value, when accompanied by all unmatured coupons
	appurtenant thereto.
	Sec. 26.  The accomplishment of the purposes stated in this
	Act is for the benefit of the people of this state and for the
	improvement of their properties and industries, and the district
	[Authority], in carrying out the purposes of this Act will be
	performing an essential public function under the Constitution.
	The district [Authority] shall not be required to pay any tax or
	assessment on the project or any part thereof, and the bonds issued
	hereunder and their transfer and the income therefrom, including
	the profits made on the sale thereof, shall at all times be free
	from taxation within this state.
	Sec. 27.  The district [Authority] may upon a favorable
	majority vote of the qualified property taxpaying electors of the
	district [Authority,] voting at an election held within the
	boundaries of the district [Authority] for that purpose, levy,
	assess and collect annual taxes to provide funds necessary to
	construct or acquire, maintain and operate dams, works, plants and
	facilities deemed essential or beneficial to the district
	[Authority] and its purposes, and also when so authorized may levy,
	assess and collect annual taxes as provided by the Tax Code to
	provide funds adequate to defray the cost of the maintenance,
	operation and administration of the district [Authority];
	provided, however, that the district [Authority] shall not have the
	power to levy or collect a tax for the maintenance, operation, and
	administration of the district [Authority] which exceeds fifty
	cents (50¢) on the One Hundred Dollars ($100) assessed valuation on
	the property subject to taxation.  Elections for the levy of such
	taxes shall be ordered by the board [Board of Directors] and shall
	be held and conducted in the manner provided by this law relating to
	elections for the authorization of bonds.  The board [Board of
	Directors] shall designate such polling places as they deem fitting
	and proper.  [All taxes levied by the Authority for any purpose
	shall constitute a lien on the property against which levied and
	shall not bar the enforcement or collection thereof.]
	SECTION 8.  Sections 28(a), (b), (d), (e), (f), and (h),
	Chapter 438, Acts of the 63rd Legislature, Regular Session, 1973,
	are amended to read as follows:
	(a)  The tax rolls of the counties situated within the
	district [Authority,] are hereby adopted and shall constitute the
	tax rolls of the district [Authority,] until assessment and tax
	rolls shall be made by the district [Authority].
	(b)  If the district [Authority] issues and delivers bonds
	which are payable wholly or partially from ad valorem taxes, or
	votes the taxes as provided in Section 27 [of the Authority's Act],
	the board annually shall cause the taxable property in the district
	[Authority] to be rendered and assessed for ad valorem taxation,
	and the value of such taxable property to be equalized, and the ad
	valorem taxes in the district [Authority] to be collected, in
	accordance with any of the methods set forth in this section, and
	any method adopted shall remain in effect until changed by the
	board.
	(d)  The laws of this State applicable to counties may be
	adopted and shall be used to the extent pertinent and practicable,
	provided that the board shall have the authority to act as its own
	board of equalization or to appoint three resident, qualified
	electors of the district [Authority] who own taxable property
	therein to act as the board of equalization of the district
	[Authority], and in either case the board of equalization shall
	qualify and perform the duties prescribed by law for county
	commissioners courts acting as boards of equalization.
	(e)  The board shall be authorized to have the taxable
	property in the district [Authority] assessed, its values
	equalized, and/or its taxes collected, in whole or in part, by the
	tax assessors, board of equalization, and/or tax collectors,
	respectively, of any county, city, taxing district, or other
	governmental subdivision in which all or any part of the district
	[Authority] is located; and such property may be assessed and the
	values thereof equalized on the same basis or a different basis than
	that used by any such governmental subdivision.  Such property
	shall be assessed, the values thereof equalized, and such taxes
	collected in the manner and for such compensation as shall be agreed
	on between the appropriate parties, and the functions thus assumed
	by the officials of any such governmental subdivision shall be
	additional duties pertaining to their offices, respectively. The
	ad valorem tax law applicable to each such governmental subdivision
	shall apply to its officials in carrying out such functions for the
	district [Authority].
	(f)  It is specifically provided, however, that under any
	method used all taxable property within the district [Authority]
	shall be assessed on the same basis, and the values thereof shall be
	equalized by only one board of equalization, in an equal and uniform
	manner, as required by the Texas Constitution. If the board desires
	that taxable property shall be assessed and taxes collected by the
	tax assessors and/or collectors of more than one governmental
	subdivision, the board shall either act as its own board of
	equalization or appoint three resident, qualified electors of the
	district [Authority] who own taxable property therein to act as the
	board of equalization, and in either case the board of equalization
	shall qualify and perform the duties prescribed by law for county
	commissioners courts acting as boards of equalization.
	(h)  If the district [Authority] issues and delivers bonds
	payable wholly or partially from ad valorem taxes, the board
	[Board] shall levy and cause to be assessed and collected ad valorem
	taxes sufficient to pay the interest on and principal of said bonds,
	without limit as to the rate or the amount[, after giving
	consideration to any revenues that may be pledged to the payment of
	bonds].
	SECTION 9.  Chapter 438, Acts of the 63rd Legislature,
	Regular Session, 1973, is amended by amending Section 29 and adding
	Sections 1B, 3A, 13A, 19A, 19B, 19C, 19D, 19E, 19F, and 19G to read
	as follows:
	Sec. 29.  (a) The board [Board of Directors] shall designate
	one (1) or more banks within the district [Authority] to serve as
	depository for the funds of the district [Authority]. All funds of
	the district [Authority] shall be deposited in such depository bank
	or banks except that funds pledged to pay bonds may be deposited
	with the trustee bank named in the trust agreement, and except that
	funds shall be remitted to the bank of payment for the payment of
	principal of and interest on bonds. To the extent that funds in the
	depository banks and the trustee bank are not insured by the
	F.D.I.C. they shall be secured in the manner provided by law for the
	security of county funds.
	(b)  Before designating a depository bank or banks, the board
	[Board of Directors] shall issue a notice stating the time and place
	when and where the board [Board] will meet for such purpose and
	inviting the banks in the district [Authority] to submit
	applications to be designated depositories. The term of service
	for depositories shall be prescribed by the board [Board]. Such
	notice shall be published one (1) time in a newspaper or newspapers
	published in the district [Authority] and specified by the board
	[Board].
	(c)  At the time mentioned in the notice, the board [Board]
	shall consider the applications and the management and condition of
	the banks filing them, and shall designate as depositories the bank
	or banks which offer the most favorable terms and conditions for the
	handling of the funds of the district [Authority] and which the
	board [Board] finds have proper management and are in condition to
	warrant handling of district [Authority] funds.  Membership on the
	board [Board of Directors] of an officer or director of a bank shall
	not disqualify such bank from being designated as depository.
	(d)  If no applications are received by the time stated in
	the notice, the board [Board] shall designate some bank or banks
	within or without the district [Authority] upon such terms and
	conditions as it may find advantageous to the district [Authority].
	Sec. 1B.  In this Act:
	(1)  "Board" means the district's board of directors.
	(2)  "Commission" means the Texas Commission on
	Environmental Quality.
	(3)  "Director" means a member of the board.
	(4)  "District" means the Palo Duro Water District.
	(5)  "Member entity" means a county or municipality
	that is a member of the district.
	Sec. 3A.  The district may:
	(1)  lease the hunting rights on property owned by the
	district;
	(2)  develop, manage, or lease property owned by the
	district for any recreational purpose; and
	(3)  lease property owned by the district to a person
	seeking to develop renewable energy resources.
	Sec. 13A.  (a) A county or municipality may withdraw from
	the district or the district may dissolve according to this
	section.
	(b)  In order to withdraw from the district or to dissolve
	the district, the governing body of a member entity must issue an
	order or pass a resolution declaring the intent to withdraw from or
	dissolve the district. The order or resolution must state:
	(1)  the intention to either withdraw from the district
	or call for the dissolution of the district; and
	(2)  the reasons supporting the withdrawal or
	dissolution.
	(c)  Not later than the 30th day after the date the district
	receives an order or resolution under Subsection (b), the district
	shall hold a public hearing on the matter described by the order or
	resolution.
	(d)  In the event of a proposed withdrawal or dissolution
	under this section, the member entities must reach a financial
	agreement that:
	(1)  for a withdrawal of a county or municipality from
	the district, provides for sufficient revenue for maintaining the
	Palo Duro Reservoir and the dam that impounds the water in the
	reservoir; or
	(2)  for a dissolution of the district, provides for
	the transfer of:
	(A)  the ownership rights of the dam to an entity
	that assumes responsibility for the maintenance of the dam and
	liability for actions related to the dam;
	(B)  all assets and liabilities of the district to
	other entities; and
	(C)  the responsibility for the continued
	provision of services, if the district provides services.
	(e)  The board must provide an opportunity for the public to
	comment on the financial agreement described by Subsection (d)
	before the board votes as described by Subsection (f). The period
	for public comment must last not less than 10 days.
	(f)  After consideration of the public comments submitted
	under Subsection (e), the board shall vote on the issue described by
	the order or resolution under Subsection (b). The board may proceed
	with the withdrawal or dissolution only if two-thirds of all of the
	members of the board vote in favor of withdrawal or dissolution.
	(g)  If the board votes in favor of withdrawal or dissolution
	as provided by Subsection (f), the governing body of each member
	entity shall vote on the matter of withdrawal or dissolution.
	(h)  A withdrawal or dissolution authorized under this
	section does not take effect until:
	(1)  the governing body of each county and municipality
	has voted in favor of withdrawal or dissolution;
	(2)  all conditions specified in the financial
	agreement described by Subsection (d) have been met; and
	(3)  all actions described in the financial agreement
	described by Subsection (d) have been completed.
	Sec. 19A.  The board shall develop and implement policies
	that provide the public with a reasonable opportunity to appear
	before the board and to speak on any agenda item at board meetings.
	Sec. 19B.  A director who has a financial interest in a
	contract under consideration by the district for the purchase,
	sale, lease, rental, or supply of property, including supplies,
	materials, and equipment, or the construction of facilities, shall
	disclose that fact to the other members of the board and may not
	vote on or participate in discussions during board meetings on the
	acceptance of the contract. A financial interest of a director does
	not affect the validity of a contract if disclosure is made and the
	director with the financial interest does not vote on the question
	of entering into the contract.
	Sec. 19C.  Not earlier than the 10th day after the date a
	director receives written notice of a charge against the director,
	and after an opportunity to be heard in person or through the
	appearance of counsel at a public hearing on the matter of the
	charge described by the notice, the board may remove a director for:
	(1)  inefficiency;
	(2)  neglect of duty; or
	(3)  misconduct in office.
	Sec. 19D.  (a)  A person who is appointed to and qualifies
	for office as a director may not vote, deliberate, or be counted as
	a director in attendance at a meeting of the board until the person
	completes a training program that complies with this section.
	(b)  The training program must provide the person with
	information regarding:
	(1)  the law governing district operations;
	(2)  the programs, functions, rules, and budget of the
	district;
	(3)  the scope of and limitations on the rulemaking
	authority of the district;
	(4)  the results of the most recent formal audit of the
	district;
	(5)  the requirements of:
	(A)  laws relating to open meetings, public
	information, administrative procedure, and disclosing conflicts of
	interest; and
	(B)  other laws applicable to members of the
	governing body of a water district in performing their duties; and
	(6)  any applicable ethics policies adopted by the
	board or the Texas Ethics Commission.
	(c)  A person appointed to the board is entitled to
	reimbursement for the travel expenses incurred in attending the
	training program regardless of whether the attendance at the
	program occurs before or after the person qualifies for office.
	(d)  The board shall create a training manual that includes
	the information required by Subsection (b). The board shall
	distribute a copy of the training manual annually to each director.
	On receipt of the training manual, each director shall sign a
	statement acknowledging receipt of the training manual.
	Sec. 19E.  The board shall develop and implement policies
	that clearly separate the policymaking responsibilities of the
	board and the management responsibilities of the general manager
	and staff of the district.
	Sec. 19F.  (a) The district shall maintain a system to
	promptly and efficiently act on complaints filed with the district.
	The district shall maintain information about parties to the
	complaint, the subject matter of the complaint, a summary of the
	results of the review or investigation of the complaint, and its
	disposition.
	(b)  The district shall make information available
	describing its procedures for complaint investigation and
	resolution.
	(c)  The district shall periodically notify the complaint
	parties of the status of the complaint until final disposition.
	Sec. 19G.  (a) The district shall develop a policy to
	encourage the use of:
	(1)  negotiated rulemaking procedures under Chapter
	2008, Government Code, for the adoption of district rules; and
	(2)  appropriate alternative dispute resolution
	procedures under Chapter 2009, Government Code, to assist in the
	resolution of internal and external disputes under the district's
	jurisdiction.
	(b)  The district's procedures relating to alternative
	dispute resolution must conform, to the extent possible, to any
	model guidelines issued by the State Office of Administrative
	Hearings for the use of alternative dispute resolution by state
	agencies.
	(c)  The district shall:
	(1)  coordinate the implementation of the policy
	adopted under Subsection (a);
	(2)  provide training as needed to implement the
	procedures for negotiated rulemaking or alternative dispute
	resolution; and
	(3)  collect data concerning the effectiveness of those
	procedures.
	SECTION 10.  Section 325.025(b), Government Code, is amended
	to read as follows:
	(b)  This section applies to the:
	(1)  Angelina and Neches River Authority;
	(2)  Bandera County River Authority and Groundwater
	District;
	(3)  Brazos River Authority;
	(4)  Central Colorado River Authority;
	(5)  Guadalupe-Blanco River Authority;
	(6)  Lavaca-Navidad River Authority;
	(7)  Lower Colorado River Authority;
	(8)  Lower Neches Valley Authority;
	(9)  Nueces River Authority;
	(10)  [Palo Duro River Authority of Texas;
	[(11)]  Red River Authority of Texas;
	(11) [(12)]  Sabine River Authority of Texas;
	(12) [(13)]  San Antonio River Authority;
	(13) [(14)]  San Jacinto River Authority;
	(14) [(15)]  Sulphur River Basin Authority;
	(15) [(16)]  Trinity River Authority of Texas;
	(16) [(17)]  Upper Colorado River Authority; and
	(17) [(18)]  Upper Guadalupe River Authority.
	SECTION 11.  (a)  The following sections of Chapter 438, Acts
	of the 63rd Legislature, Regular Session, 1973, are repealed:
	(1)  Section 1A;
	(2)  Section 2A;
	(3)  Section 2B;
	(4)  Section 4;
	(5)  Section 13(e);
	(6)  Section 28(i); and
	(7)  Section 30.
	(b)  The following sections are repealed:
	(1)  Section 9, Chapter 115, Acts of the 64th
	Legislature, Regular Session, 1975;
	(2)  Section 6, Chapter 17, Acts of the 68th
	Legislature, Regular Session, 1983; and
	(3)  Section 4, Chapter 651, Acts of the 70th
	Legislature, Regular Session, 1987.
	SECTION 12.  (a) Notwithstanding Section 19D(a), Chapter
	438, Acts of the 63rd Legislature, Regular Session, 1973, as added
	by this Act, a person serving on the board of directors of the Palo
	Duro Water District, as renamed by this Act, may vote, deliberate,
	and be counted as a director in attendance at a meeting of the board
	until December 1, 2017.
	(b)  This section expires January 1, 2018.
	SECTION 13.  (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 14.  This Act takes effect September 1, 2017.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1920 was passed by the House on May 2,
	2017, by the following vote:  Yeas 143, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 1920 on May 26, 2017, by the following vote:  Yeas 146, Nays 0,
	1 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1920 was passed by the Senate, with
	amendments, on May 24, 2017, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor