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  By: Flynn (Senate Sponsor - Nichols) H.B. No. 1920
         (In the Senate - Received from the House May 3, 2017;
  May 11, 2017, read first time and referred to Committee on
  Agriculture, Water & Rural Affairs; May 19, 2017, reported
  adversely, with favorable Committee Substitute by the following
  vote:  Yeas 4, Nays 0; May 19, 2017, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 1920 By:  Rodríguez
 
 
A BILL TO BE ENTITLED
 
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.
 
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