85R25018 JCG-F

By: Sanford H.B. No. 4268

Substitute the following for H.B. No. 4268:

By: Cosper C.S.H.B. No. 4268

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the Celina Municipal Management District No. 2; providing a limited authority of eminent domain; providing authority to issue bonds and impose assessments, fees, and taxes.

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

SECTION 1. Subtitle C, Title 4, Special District Local Laws Code, is amended by adding Chapter 3798 to read as follows:

CHAPTER 3798. CELINA MUNICIPAL MANAGEMENT DISTRICT NO. 2

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 3798.001. DEFINITIONS. In this chapter:

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

(2) "City" means the City of Celina, Texas.

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

(4) "Director" means a board member.

(5) "District" means the Celina Municipal Management District No. 2.

Sec. 3798.002. CREATION AND NATURE OF DISTRICT. The district is a special district created under Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution.

Sec. 3798.003. PURPOSE; LEGISLATIVE FINDINGS. (a) The creation of the district is essential to accomplish the purposes of Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other public purposes stated in this chapter. By creating the district and in authorizing the city and other political subdivisions to contract with the district, the legislature has established a program to accomplish the public purposes set out in Section 52-a, Article III, Texas Constitution.

(b) The creation of the district is necessary to promote, develop, encourage, and maintain employment, commerce, transportation, housing, tourism, recreation, the arts, entertainment, economic development, safety, and the public welfare in the district.

(c) This chapter and the creation of the district may not be interpreted to relieve the city from providing the level of services provided to the area in the district as of the effective date of the Act enacting this chapter. The district is created to supplement and not to supplant the city services provided in the district.

Sec. 3798.004. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) The district is created to serve a public use and benefit.

(b) All land and other property included in the district will benefit from the improvements and services to be provided by the district under powers conferred by Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other powers granted under this chapter.

(c) The district is created to accomplish the purposes of a municipal management district as provided by general law and Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution.

(d) The creation of the district is in the public interest and is essential to:

(1) further the public purposes of developing and diversifying the economy of the state;

(2) eliminate unemployment and underemployment;

(3) develop or expand transportation and commerce; and

(4) provide quality residential housing.

(e) The district will:

(1) promote the health, safety, and general welfare of residents, employers, potential employees, employees, visitors, and consumers in the district, and of the public;

(2) provide needed funding for the district to preserve, maintain, and enhance the economic health and vitality of the district territory as a community and business center; and

(3) promote the health, safety, welfare, and enjoyment of the public by providing pedestrian ways and by landscaping and developing certain areas in the district, which are necessary for the restoration, preservation, and enhancement of scenic beauty.

(f) Pedestrian ways along or across a street, whether at grade or above or below the surface, and street lighting, street landscaping, parking, and street art objects are parts of and necessary components of a street and are considered to be a street or road improvement.

(g) The district will not act as the agent or instrumentality of any private interest even though the district will benefit many private interests as well as the public.

Sec. 3798.005. DISTRICT TERRITORY. (a) The district is composed of the territory described by Section 2 of the Act enacting this chapter, as that territory may have been modified under other law.

(b) The boundaries and field notes contained in Section 2 of the Act enacting this chapter form a closure. A mistake in the field notes or in copying the field notes in the legislative process does not affect the district's:

(1) organization, existence, or validity;

(2) right to contract;

(3) authority to borrow money or issue bonds or other obligations described by Section 3798.251 or to pay the principal and interest of the bonds or other obligations;

(4) right to impose or collect an assessment, or collect other revenue; or

(5) legality or operation.

Sec. 3798.006. APPLICABILITY OF MUNICIPAL MANAGEMENT DISTRICTS LAW. Except as otherwise provided by this chapter, Chapter 375, Local Government Code, applies to the district.

Sec. 3798.007. CONSTRUCTION OF CHAPTER. This chapter shall be liberally construed in conformity with the findings and purposes stated in this chapter.

Sec. 3798.008. CONFLICTS OF LAW. This chapter prevails over any provision of Chapter 375, Local Government Code, that is in conflict or inconsistent with this chapter.

Sec. 3798.009. CONSENT OF MUNICIPALITY REQUIRED. The board may not hold an election to authorize the issuance of bonds until the governing body of the city by ordinance or resolution consents to the creation of the district and to the inclusion of land in the district. The city's consent must be granted in the manner provided by Section 54.016, Water Code, for including land within the corporate limits or extraterritorial jurisdiction of a city.

Sec. 3798.010. EFFECT OF ANNEXATION. Notwithstanding any other law, if all or any part of the territory of the district is annexed by the city into the city's corporate limits, the district retains all of the district's outstanding debt and obligations and continues to operate under this chapter until the district is dissolved under Subchapter G.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 3798.051. GOVERNING BODY; TERMS. The district is governed by a board of five directors who serve staggered terms of four years, with two or three directors' terms expiring June 1 of each even-numbered year. One director is appointed by the city, and four directors are appointed by the commission as provided by Sections 3798.052 and 3798.053, respectively.

Sec. 3798.052. APPOINTMENT AND REMOVAL OF DIRECTOR APPOINTED BY CITY. (a) The governing body of the city shall appoint one director who must be:

(1) at least 18 years of age; and

(2) a resident of the city.

(b) At any time the governing body of the city may remove the director appointed by the city and appoint a director to serve the remainder of the removed director's term.

Sec. 3798.053. APPOINTMENT BY COMMISSION. (a) Before the term of a director other than a director appointed under Section 3798.052 expires, the board shall recommend to the commission the appropriate number of persons to serve as successor directors. The commission shall appoint as directors the persons recommended by the board.

(b) A person recommended by the board under Subsection (a) must be:

(1) at least 18 years of age;

(2) an owner of property in the district;

(3) an owner of stock, whether beneficial or otherwise, of a corporate owner of property in the district;

(4) an owner of a beneficial interest in a trust that owns property in the district; or

(5) an agent, employee, or tenant of a person described by Subdivision (2), (3), or (4).

Sec. 3798.054. VACANCY. If a vacancy occurs on the board, the remaining directors shall appoint a director for the remainder of the unexpired term.

Sec. 3798.055. DIRECTOR'S OATH OR AFFIRMATION. (a) A director shall file the director's oath or affirmation of office with the district, and the district shall retain the oath or affirmation in the district records.

(b) A director shall file a copy of the director's oath or affirmation with the secretary of the city.

Sec. 3798.056. OFFICERS. The board shall elect from among the directors a chair, a vice chair, and a secretary. The offices of chair and secretary may not be held by the same person.

Sec. 3798.057. COMPENSATION; EXPENSES. (a) The district may compensate each director in an amount not to exceed $50 for each board meeting. The total amount of compensation a director may receive each year may not exceed $2,000.

(b) A director is entitled to reimbursement for necessary and reasonable expenses incurred in carrying out the duties and responsibilities of the board.

Sec. 3798.058. LIABILITY INSURANCE. The district may obtain and pay for comprehensive general liability insurance coverage from a commercial insurance company or other source that protects and insures a director against personal liability and from all claims relating to:

(1) actions taken by the director in the director's capacity as a member of the board;

(2) actions and activities taken by the district; or

(3) the actions of others acting on behalf of the district.

Sec. 3798.059. NO EXECUTIVE COMMITTEE. The board may not create an executive committee to exercise the powers of the board.

Sec. 3798.060. BOARD MEETINGS. The board shall hold meetings at a place that is accessible to the public and located in the district or in the city.

Sec. 3798.061. INITIAL DIRECTORS. (a) On or after September 1, 2017, the owner or owners of a majority of the assessed value of the real property in the district according to the most recent certified tax appraisal rolls for the county may submit a petition to the commission requesting that the commission appoint as initial directors the four persons named in the petition. The commission shall appoint as initial directors the four persons named in the petition.

(b) The governing body of the city shall appoint one initial director.

(c) The initial directors shall determine by lot which three positions expire June 1, 2019, and which two positions expire June 1, 2021.

(d) This section expires September 1, 2019.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 3798.101. GENERAL POWERS AND DUTIES. The district has the powers and duties necessary to accomplish the purposes for which the district is created.

Sec. 3798.102. IMPROVEMENT PROJECTS AND SERVICES. (a) Subject to Subsection (b), the district may provide, design, construct, acquire, improve, relocate, operate, maintain, or finance an improvement project or service using money available to the district, or contract with a governmental or private entity to provide, design, construct, acquire, improve, relocate, operate, maintain, or finance an improvement project or service authorized under this chapter or Chapter 375, Local Government Code.

(b) The district may not construct or finance an improvement project, other than a water, sewer, or drainage facility or road, unless the governing body of the city by ordinance or resolution consents to the construction or financing.

(c) The district may issue bonds, notes, or other obligations to maintain or repair an existing improvement project only if the governing body of the city by ordinance or resolution consents to the issuance.

Sec. 3798.103. LOCATION OF IMPROVEMENT PROJECT. A district improvement project may be located inside or outside of the district.

Sec. 3798.104. OWNERSHIP OF IMPROVEMENT PROJECTS. (a) Before a district improvement project may be put into operation, the district must transfer ownership of the project to the city.

(b) The transfer of ownership is complete on the city's acceptance of ownership.

Sec. 3798.105. RETAIL WATER AND SEWER SERVICES PROHIBITED. The district may not provide retail water or sewer services.

Sec. 3798.106. ADDING OR REMOVING TERRITORY. (a) Subject to Subsections (b), (c), and (d), the board may add or remove territory as provided by Subchapter J, Chapter 49, Water Code.

(b) The district may add territory as described by Subsection (a) only if the governing body of the city by ordinance or resolution consents to the addition.

(c) The district and all districts created under Subchapter D collectively may add a total area of not more than 100 acres.

(d) Territory added under Subsection (a) must be contiguous to the district at the time of the addition.

Sec. 3798.107. LIMITED EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain unless the governing body of the city by ordinance or resolution consents to the exercise.

SUBCHAPTER D. DIVISION OF DISTRICT INTO MULTIPLE DISTRICTS

Sec. 3798.151. DIVISION OF DISTRICT; PREREQUISITES. The district, including territory added to the district under Section 3798.106, may be divided into two or more new districts only if the district has no outstanding bonded debt. Territory previously added to the district under Section 3798.106 may be included in a new district.

Sec. 3798.152. LAW APPLICABLE TO NEW DISTRICT. This chapter applies to any new district created by division of the district, and a new district has all the powers and duties of the district.

Sec. 3798.153. DIVISION PROCEDURES. (a) The board, on its own motion or on receipt of a petition signed by an owner of real property in the district, may adopt an order proposing to divide the district.

(b) If the board decides to divide the district, the board shall:

(1) set the terms of the division, including names for the new districts and a plan for the payment or performance of any outstanding district obligations;

(2) prepare a metes and bounds description for each proposed district; and

(3) appoint four initial directors for each new district.

(c) The governing body of the city shall appoint one director for each new district.

Sec. 3798.154. CONTRACT AUTHORITY OF NEW DISTRICTS. The new districts may contract with each other for any matter the boards of the new districts consider appropriate, including the joint construction or financing of a utility improvement.

SUBCHAPTER E. GENERAL FINANCIAL PROVISIONS; ASSESSMENTS

Sec. 3798.201. DISBURSEMENTS AND TRANSFERS OF MONEY. The board by resolution shall establish the number of directors' signatures and the procedure required for a disbursement or transfer of the district's money.

Sec. 3798.202. MONEY USED FOR IMPROVEMENTS OR SERVICES. The district may acquire, construct, or finance an improvement project or service authorized by this chapter or Chapter 375, Local Government Code, using any money available to the district.

Sec. 3798.203. METHOD OF NOTICE FOR HEARING. The district may mail the notice required by Section 375.115(c), Local Government Code, by certified or first class United States mail. The board shall determine the method of notice.

Sec. 3798.204. ASSESSMENTS; LIENS FOR ASSESSMENTS. (a) The board by resolution may impose and collect an assessment for any purpose authorized by this chapter in all or any part of the district.

(b) An assessment, a reassessment, or an assessment resulting from an addition to or correction of the assessment roll by the district, penalties and interest on an assessment or reassessment, an expense of collection, and reasonable attorney's fees incurred by the district are:

(1) a first and prior lien against the property assessed;

(2) superior to any other lien or claim other than a lien or claim for county, school district, or municipal ad valorem taxes; and

(3) the personal liability of and a charge against the owners of the property even if the owners are not named in the assessment proceedings.

(c) The lien is effective from the date of the board's resolution imposing the assessment until the date the assessment is paid. The board may enforce the lien in the same manner that the board may enforce an ad valorem tax lien against real property.

(d) The board may make a correction to or deletion from the assessment roll that does not increase the amount of assessment of any parcel of land without providing notice and holding a hearing in the manner required for additional assessments.

(e) The district may not impose an assessment on a municipality, county, or other political subdivision.

Sec. 3798.205. NOTICE OF ASSESSMENTS. Annually, the board shall file with the secretary of the city written notice that specifies the assessments the district will impose in the district's next fiscal year in sufficient clarity to describe the assessments for the operation and maintenance of the district and the assessments for the payment of debt service of obligations issued or incurred by the district.

SUBCHAPTER F. TAXES AND BONDS

Sec. 3798.251. BONDS AND OTHER OBLIGATIONS. (a) The district may issue, by public or private sale, bonds, notes, or other obligations payable wholly or partly from ad valorem taxes or assessments in the manner provided by Subchapter A, Chapter 372, or Subchapter J, Chapter 375, Local Government Code. Sections 375.207(a) and (b), Local Government Code, do not apply to the district.

(b) In exercising the district's borrowing power, the district may issue a bond or other obligation in the form of a bond, note, certificate of participation or other instrument evidencing a proportionate interest in payments to be made by the district, or other type of obligation.

(c) In addition to the sources of money described by Subchapter A, Chapter 372, and Subchapter J, Chapter 375, Local Government Code, district bonds may be secured and made payable wholly or partly by a pledge of any part of the money the district receives from improvement revenue or from any other source.

(d) Not later than the 30th day before the date the district holds a bond sale, the district shall provide the governing body of the city written notice of the sale.

SUBCHAPTER G. DISSOLUTION

Sec. 3798.301. DISSOLUTION BY CITY ORDINANCE. (a) The governing body of the city may dissolve the district by ordinance.

(b) The governing body may not dissolve the district until:

(1) water, sanitary, sewer, and drainage improvements and roads have been constructed to serve at least 90 percent of the developable territory of the district; and

(2) the district has reimbursed each party that has an agreement with the district for all costs advanced to or on behalf of the district.

(c) Until the district is dissolved, the district is responsible for all bonds and other obligations of the district.

Sec. 3798.302. COLLECTION OF ASSESSMENTS AND OTHER REVENUE. (a) If the dissolved district has bonds or other obligations outstanding secured by and payable from assessments or other revenue, other than revenue from ad valorem taxes, the city shall succeed to the rights and obligations of the district regarding enforcement and collection of the assessments or other revenue.

(b) The city shall have and exercise all district powers to enforce and collect the assessments or other revenue to pay:

(1) the bonds or other obligations when due and payable according to their terms; or

(2) special revenue or assessment bonds or other obligations issued by the city to refund the outstanding bonds or obligations.

Sec. 3798.303. ASSUMPTION OF ASSETS AND LIABILITIES. (a) After the city dissolves the district, the city assumes, subject to the appropriation and availability of funds, the obligations of the district, including any bonds or other debt payable from assessments or other district revenue.

(b) If the city dissolves the district, the board shall transfer ownership of all district property to the city.

SUBCHAPTER Z. SPECIAL BOND PROVISIONS

Sec. 3798.901. APPLICABILITY. This subchapter applies only to bonds payable wholly or partly from revenue derived from assessments on real property in the district.

Sec. 3798.902. CONFLICT OF LAWS. In the event of a conflict between this subchapter and any other law, this subchapter prevails.

Sec. 3798.903. WRITTEN AGREEMENT REGARDING SPECIAL APPRAISALS. Before the district may issue bonds, the district and any person to whom the board intends that proceeds of the bonds be distributed, including the developer, another owner of land in the district, and any entity acting as a lender to the developer or other landowner for the purpose of a project relating to the district, must enter into a written agreement that:

(1) waives for the term of the agreement the right to a special appraisal with respect to taxation by the district under Subchapters B, C, D, E, F, and H, Chapter 23, Tax Code; and

(2) remains in effect for 30 years and is binding on the parties, on entities related to or affiliated with the parties, and on their successors and assignees.

Sec. 3798.904. REQUIREMENTS FOR ADVERTISING BOND ISSUE. A district may not advertise for an issuance of bonds until the completion of at least 25 percent of the projected value of the improvements, including houses and other buildings, that are liable for district assessments and necessary to support the district bonds.

Sec. 3798.905. REQUIREMENTS FOR BOND ISSUE. The district may not issue bonds until:

(1) the district submits to the commission:

(A) an engineer's report describing the project for which the bonds will provide funding, including data, profiles, maps, plans, and specifications related to the project; and

(B) a cash flow analysis to determine the projected rate of assessment, which includes the following assumptions:

(i) each ending balance for debt service in the analysis is not less than 25 percent of the following year's debt service requirement;

(ii) interest income is only shown on the ending balance for debt service for the first two years; and

(iii) the projected rate of assessment is level or decreasing for the life of the bonds issued by the district;

(2) the completion of at least 75 percent of the projected value of the improvements, including houses and other buildings, that are liable for district assessments and necessary to support the district bonds; and

(3) the district has obtained an independent market study from a firm recognized in the area of real estate market analysis supporting the development projects for the real property that is liable for district assessments and necessary to support the district bonds.

Sec. 3798.906. REQUIREMENTS FOR COLLECTION OF REVENUE TO PAY BONDS. The district may not collect an assessment to be used for the payment of bonds until:

(1) the completion of at least 95 percent of the underground water, wastewater, and drainage facilities financed from bond proceeds that are necessary to serve the projected build-out, as certified by the district's engineer;

(2) the district or other appropriate party has secured the groundwater, surface water, and water discharge permits that are necessary to secure capacity to support the projected build-out;

(3) the completion of at least 95 percent of lift station, water plant, and sewage treatment plant capacity sufficient to serve the connections constructed in the project for a period of not less than 18 months, as certified by the district's engineer; and

(4) the completion of at least 95 percent of the streets and roads that are necessary to provide access to the areas served by utilities and financed by the proceeds of bonds issued by the district, as certified by the district's engineer and constructed in accordance with municipal or county standards.

SECTION 2. The Celina Municipal Management District No. 2 initially includes all the territory contained in the following area: BEING a tract of land situated in the William H. Herron Survey, Abstract No. 380, the Daniel Howell Survey, Abstract No. 394, Mary Howell Survey, Abstract No. 396 Benjamin Haile Survey, Abstract No. 397, Martha Herron Survey, Abstract No. 415, George Jay Survey, Abstract No. 488 and the Isaac Walker Survey, Abstract No. 1056, City of Celina, Collin County, Texas, and being all of a called 450.71-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a Special Warranty Deed, recorded in Instrument No. 2008030600026870 of the Official Public Records of Collin County, Texas, all of a called “Tract A” (43.777 acres) and a called “Tract B” (2.500 acres), conveyed to Eland Energy, Inc., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20150722000903310 of the Official Public Records of Collin County, Texas, all of a called 272.545-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20150722000903300 of the Official Public Records of Collin County, Texas, all of a called 154.059-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20070725001023610 of the Official Public Records of Collin County, Texas, all of a called “ Tract One” (78.613 acres), a called “Tract Two” (66.676 acres), a called “Tract Three” (59.916 acres), a called “Tract Four” (0.937 acre), and a called “Tract Five” (18.748 acres), conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081250 of the Official Public Records of Collin County, Texas, all of a called 6.000-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a General Warranty Deed, recorded in Instrument No. 20110831000926240 of the Official Public Records of Collin County, Texas, all of a called 62.434-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081260 of the Official Public Records of Collin County, Texas, and all of a called 167.027-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081290 of the Official Public Records of Collin County, Texas, all of a called 30-feet wide street easement located along the westerly side of said “Tract One”, conveyed to County, of Collin, Texas, recorded in County Clerk’s File No. 96-0067344 of the Land Records of Collin County, Texas, all of a called 30-feet wide street easement located along the westerly side of said “Tract Five”, conveyed to County, of Collin, Texas, recorded in County Clerk’s File No. 96-0067345 of the Land Records of Collin County, Texas, the portion of F. M. 455 (a called 90-feet wide right of way) situated between said “Tract One”, “Tract Two”, Tract Three” and “Tract Four”, the portion of said F. M. 455 along the southerly line of said 167.027-acre tract and the westerly portion of said F. M. 455 along the easterly line of said 167.027-acre tract, and being more particularly described by metes and bounds as follows: BEGINNING at the westernmost, northwest corner of said 450.71-acre Central Frisco, Ltd., tract, same being the southwest corner of a called 50.487-acre tract of land, conveyed to Preston Acreage, L.P. & Spartan Texas Six-Celina, Ltd., as evidenced in a General Warranty Deed, recorded in Volume 5239, Page 1060 of the Land Records of Collin County, Texas, same also being on the easterly right of way line of State Highway 289 (Preston Road); THENCE South 89°58’20” East, departing the easterly right of way line of said State Highway 289 (Preston Road), along a northerly line of said 450.71-acre tract and the southerly line of said 50.487-acre tract, a distance of 985.28 feet to the southeast corner of said 50.487-acre tract; THENCE North 00°33’31” East, along a westerly line of said 450.71-acre tract and the easterly line of said 50.487-acre tract, a distance of 2607.81 feet to the northeast corner of said 50.487-acre tract and the northernmost, northwest corner of said 450.71-acre tract, same being in County Road No. 100, a public use right of way, no record found, same also being on the southerly line of a called 33.356-acre tract of land, conveyed to CR 100 Thirty-Three Partners, LP, as evidenced in a Special Warranty Deed, recorded in Instrument No. 20150224000195720 of the Official Public Records of Collin County, Texas; THENCE North 88°52’34” East, along the northerly line of said 450.71-acre tract, the southerly line of said 33.356-acre tract and generally along said County Road No. 100, a distance of 1066.91 feet to the southeast corner of said 33.356-acre tract; THENCE North 88°40’20” East, continuing along the northerly line of said 450.71-acre tract, the southerly line of a called 93.277-acre tract of land, conveyed to Bellaire Partners, L.L.C., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20160222000196050 of the Official Public Records of Collin County, Texas, and continuing along said County Road No. 100, a distance of 1587.35 feet to the northeast corner of said 450.71-acre tract, and the southeast corner of said 93.277-acre tract, same being the intersection of said County Road No. 100 with County Road No. 97, a public use right of way, no record found; THENCE South 00°26’10” West, Along the easterly line of said 450.71-acre tract, the westerly line of Sharrock Addition, an addition to the City of Celina, Texas, according to the Final Plat, recorded in Volume 2016, Page 80 of the Plat Records of Collin County, Texas, and the westerly line of a called 15.00-acre tract of land, conveyed to Carolyn A. Tipton and Joel C. Molinar, as evidenced in a deed recorded in Volume 4698, Page 2781 of the Land Records of Collin County, Texas, and generally along said County Road No. 97, a distance of 780.68 feet to the northwest corner of a called 40.11-acre tract of land, conveyed to N. E. Coit & CR 101, LP, as evidenced in a General Warranty Deed, recorded in Instrument No. 20081014001224170 of the Official Public Records of Collin County, Texas; THENCE South 00°04’54” West, continuing along the easterly line of said 450.71-acre tract, along the westerly line of said 40.11-acre tract and continuing along said County Road No. 97, a distance of 1861.34 feet to the southwest corner of said 40.11-acre tract, same being the northwest corner of aforesaid “Tract A” (43.777 acres) Eland Energy, Inc., tract, same being the intersection of said County Road No. 97 with County Road No. 101, a public use right of way, no record found; THENCE North 89°35’03” East, departing the easterly line of said 450.71-acre tract, along the northerly line of said “Tract A”, the southerly line of said 40.11-acre tract, and generally along said County Road No. 101, a distance of 402.01 feet to a corner; THENCE North 89°36’37” East, continuing along the northerly line of said “Tract A”, the southerly line of said 40.11-acre tract and said County Road No. 101, a distance of 401.65 feet to the northernmost, northeast corner of said “Tract A”, same being the northwest corner of a called 7.498-acre tract of land, conveyed to Tom Harper, as evidenced in a General Warranty Deed, recorded in County Clerk’s File No. 93-0036670 of the Land Records of Collin County, Texas; THENCE South 00°07’56” East, departing said County Road No. 101, along the easterly line of said “Tract A” and the westerly line of said 7.498-acre tract, a distance of 541.77 feet to the southwest corner of said 7.498-acre tract; THENCE North 89°38’16” East, along a northerly line of said “Tract A” and the southerly line of said 7.498-acre tract, a distance of 630.23 feet to the easternmost, northeast corner of said “Tract A” and the southeast corner of said 7.498-acre tract, same being on a westerly line of aforesaid 272.545-acre, Eland Energy, Inc., tract; THENCE North 00°01’23” West, along an easterly line of said 7.498-acre tract and the westerly line of said 272.545-acre tract, a distance of 116.61 feet to a corner on the southerly line of a called 2.661-acre tract of land, conveyed to Collin County, Texas, as evidenced in a General Warranty Deed, recorded in Volume 5309, Page 7316 of the Land Records of Collin County, Texas; THENCE South 60°05’11” East, continuing along the westerly line of said 272.545-acre tract and along the southerly line of said 2.661-acre tract, a distance of 230.59 feet to a corner; THENCE North 88°50’05” East, continuing along the westerly line of said 272.545-acre tract and along the southerly line of said 2.661-acre tract, a distance of 10.17 feet to the southeast corner of said 2.661-acre tract; THENCE North 00°20’59” West, continuing along the westerly line of said 272.545-acre tract and along the easterly line of said 2.661-acre tract, a distance of 539.73 feet to the northwest corner of said 272.545-acre tract and the northeasterly corner of said 2.661-acre tract, same being on the occupied southerly line of aforesaid County Road No. 101; THENCE North 89°30’33” East, along the northerly line of said 272.545-acre tract and along the southerly line of said County Road No. 101, a distance of 1020.62 feet to the northeast corner of said 242.545-acre tract, same being on the westerly line of called Tracts 1, 2, and 3, conveyed to Joe E. Stalling and wife, Janice K. Stalling, as evidenced in a General Warranty Deed with Vendor’s Lien, recorded in County Clerk’s File No. 93-0075959 of the Land Records of Collin County, Texas; THENCE South 00°31’02” East, along the easterly line of said 242.545-acre tract, the westerly line of said Tracts 1, 2, and 3, the westerly line of a called 9.943-acre tract of land conveyed to Daniel DW Simons and Misty Simons, as evidenced in a General Warranty Deed, recorded in Instrument No. 20070816001143760 of the Official Public Records of Collin County, Texas, the westerly line of Tract 1 and Tract 2, conveyed to Michael M. Patterson and Charles Dawson, as evidenced in a General Warranty Deed, recorded in Instrument No. 20060630000904460 of the Official Public Records of Collin County, Texas, the westerly line of a called 10.692-acre tract of land, conveyed to John D. Dove, as evidenced in a General Warranty Deed, recorded in Volume 3981, Page 359 of the Land Records of Collin County, Texas, and generally along the centerline of said County Road No. 101, a distance of 1945.32 feet to the northwest corner of aforesaid 154.059-acre Central Frisco, Ltd., tract and the southwest corner of said 10.692-acre tract, same being the intersection of said County Road No. 101 with County Road No. 130, a public use right of way, no record found; THENCE North 89°37’24” East, along the northerly line of said 154.059-acre tract, the southerly line of said 10.692-acre tract, and generally along said County Road No. 130, a distance of 776.70 feet to a corner; THENCE North 89°39’58” East, continuing along the northerly line of said 154.059-acre tract and the northerly line of aforesaid “Tract B”, Eland Energy, Inc., tract and continuing generally along said County Road No. 130, a distance of 1861.15 feet to the northeast corner of said 154.059-acre tract, same being the northwest corner of aforesaid 62.434-acre Eland Energy, Inc., tract; THENCE North 89°30’30” East, along the northerly line of said 62.434-acre tract and continuing generally along said County Road No. 130, a distance of 1909.83 feet to the northernmost, northeast corner of said 62.434-acre tract, same being the northwest corner of a tract of land, conveyed to Porfirio Paulino and wife, Ojilvoa Paulino, as evidenced in a General Warranty Deed, recorded in Volume 5674, Page 3250 of the Land Records of Collin County, Texas; THENCE South 00°29’02” East, departing said County Road No. 130, along an easterly line of said 62.434-acre tract, the westerly line of said Paulino tract and the westerly line of a tract of land, conveyed to John C. Kiesling and wife, Rhonda Kiesling, as evidenced in a Warranty Deed, recorded in Volume 4147, Page 717 of the Land Records of Collin County, Texas, a distance of 714.20 feet to the southwest corner of said Kiesling tract; THENCE North 89°33’17” East, along the southernmost, northerly line of said 62.434-acre tract and the southerly line of said Kiesling tract, a distance of 728.71 feet to the easternmost, northeast corner of said 62.434-acre tract, same being in County Road No. 128, a public use right of way, no record found; THENCE South 02°01’47” East, along the easterly line of said 62.434-acre tract and along said County Road No. 128, a distance of 46.49 feet to a corner; THENCE South 01°52’14” East, continuing along the easterly line of said 62.434-acre tract and said County Road No. 128, a distance of 563.63 feet to the southeast corner of said 62.434-acre tract; THENCE South 89°21’14” West, along the southerly line of said 62.434-acre tract, a distance of 32.93 feet to the northeast corner of aforesaid 167.027-acre Eland Energy, In., tract; THENCE South 00°30’22” East, along the easterly line of said 167.027-acre tract and generally along said County Road No. 128, a distance of 2101.08 feet to an inner ell corner of said 167.027-acre tract, same being the southwest corner of Highpoint Estates, an addition to the City of Celina, Texas, according to the Final Plat, recorded in Volume M, Page 116 of the Plat Records of Collin County, Texas; THENCE North 89°26’58” East, along a northerly line of said 167.027-acre tract, the southerly line of said Highpoint Estates and continuing along said County Road No. 128, a distance of 333.00 feet to the easternmost, northeast corner of said 167.027-acre tract; THENCE South 00°23’39” East, along the easterly line of said 167.027-acre tract, for part of the way, passing the westerly right of way line of F. M. 455, a 90-feet wide right of way, continuing along the extension of the easterly line of said 167.027-acre tract and within said F. M 455, passing the easterly right of way line of said F. M. 455, a total distance of 1243.28 feet to the northeast corner of a called 69.149-acre tract of land, conveyed to David Lair and wife, June Lair, as evidenced in a deed, recorded in Volume 816, Page 559 of the Land Records of Collin County, Texas; THENCE in a westerly direction, along the northerly line of said 69.149-acre tract and the southerly right of way line of said F. M. 455, the following:

South 88°31’26” West, a distance of 133.55 feet to a corner;

South 66°55’26” West, a distance of 88.60 feet to a corner;

South 81°35’26” West, a distance of 106.10 feet to a corner;

South 88°31’26” West, a distance of 1210.70 feet to a corner;

South 88°37’26” West, a distance of 210.30 feet to the northwest corner of said 69.149-acre tract, same being the northeast corner of a called 10.00-acre tract of land, conveyed to Terry M. Collins and spouse, Diana Collins, as evidenced in a General Warranty Deed, recorded in Instrument No. 20150205000127830 of the Official Public Records of Collin County, Texas; THENCE South 88°33’08” West, continuing along the southerly right of way line of said F. M. 455 and along the northerly line of said 10.00-acre tract, a distance of 371.93 feet to the northwest corner of said 10.00-acre tract, same being the northeast corner of a called 5.00-acre tract of land, conveyed to Michael S. Armstrong and spouse, Melissa B. Armstrong, as evidenced in a General Warranty Deed, recorded in Instrument No. 20131018001435890 of the Official Public Records of Collin County, Texas; THENCE South 88°55’54” West, continuing along the southerly right of way line of said F. M. 455 and along the northerly line of said 5.00-acre tract, a distance of 319.79 feet to the northwest corner of said 5.00-acre tract, same the northeast corner of a called 20.058-acre tract of land, conveyed to Larry N. Lehman and Robbie C. Lehman, as evidenced in a General Warranty Deed, recorded in Instrument No. 20150608000673760 of the Official Public Records of Collin County, Texas; THENCE South 88°55’57” West, continuing along the southerly right of way line of said F. M. 455 and along the northerly line of said 20.058-acre tract for part of the way, crossing said F. M. 455 along the extension of the northerly line of said 20.058-acre tract, a distance of 427.32 feet to a corner on the curving westerly right of way line of said F. M. 455, same being on the curving easterly line of aforesaid “Tract Two”, Eland Energy, Inc., tract, said curve being a non-tangent curve to the left; THENCE in a southerly direction, along the westerly right of way line of said F. M. 455, the easterly line of said “Tract Two” and along the arc of said curve to the left, through a central angle of 20°27’26”, having a radius of 363.31 feet, a chord bearing of South 36°07’57” West, a chord distance of 129.03 feet and an arc length of 129.72 feet to the end of said curve; THENCE South 00°15’57” East, departing the easterly line of said “ Tract Two”, the westerly right of way line of said F. M. 455, crossing said F. M. 455, passing the southerly right of way line of said F. M. 455 and the northeast corner of aforesaid “Tract Three”, Eland Energy, tract, continuing along the easterly line of said “ Tract Three”, a distance of 1443.40 feet to the southeast corner of said “Tract Three”, same being the northeast corner of a called 85.04-acre tract of land, conveyed to Jane Willard, as evidenced in a General Warranty Deed, recorded in County Clerk’s File No. 96-0039930 of the Land Records of Collin County, Texas; THENCE South 89°51’15” West, along the southerly line of said “Tract Three” and the northerly line of said 85.04-acre tract, a distance of 2639.07 feet to the southwest corner of said “Tract Three”, same being on the easterly line of a called “First Tract”, conveyed to Jane Willard, as evidenced in a Warranty Deed, recorded in Volume 3368, Page 434 of the Land Records of Collin County, Texas, same also being in County Road No. 98, a public use right of way, no record found; THENCE North 00°04’01” West, along the westerly line of said “Tract Three”, the easterly line of said “First Tract” for part of the way and along said County Road No. 98, a distance of 405.05 feet to a corner on the easterly right of way line of aforesaid F. M. 455; THENCE North 03°46’21” West, departing the easterly right of way line of said F. M. 455 and crossing said F. M. 455, a distance of 408.54 feet to a corner on the westerly right of way line of said F. M. 455, same being on the easterly line of a called “Second Tract”, conveyed to Jane Willard, as evidenced in aforesaid Warranty Deed, recorded in Volume 3368, Page 434, same also being aforesaid County Road No. 101; THENCE North 00°03’05” West, departing the westerly right of way line of said F. M. 455, along the easterly line of said “Second Tract”, the easterly line of a called 66.68-acre tract, conveyed to Jane C. Willard, as evidenced in a Special Warranty Deed, recorded in County Clerk’s File No. 93-0007503 of the Land Records of Collin County, Texas, the westerly line of aforesaid 30’ Street Easement to Collin County, Texas, recorded in County Clerk’s File No. 96-0067344, and generally along said County Road No. 101, a distance of 1520.01 feet to the northwest corner of said street easement, same being the southwest corner of aforesaid 30’ Street Easement to Collin County, Texas, recorded in County Clerk’s File No. 96-0067345; THENCE North 00°27’17” West, continuing along the easterly line of said 66.68-acre tract, the easterly line of a called 5.000-acre tract of land, conveyed to Brian Wayne Boyd, as evidenced in a General Warranty Deed, recorded in Instrument No. 20140205000108240, the easterly line of a called 5.000-acre tract of land, conveyed to Brian Wayne Boyd, as evidenced in a General Warranty Deed, recorded in Instrument No. 20140428000404190, both of the Official Public Records of Collin County, Texas, along the westerly line of said 30’ Street Easement, recorded in County Clerk’s File No. 96-0067345, and generally along said County Road No. 101, a distance of 570.00 feet to the southeast corner of aforesaid 272.545-acre, Eland Energy, Inc., tract; THENCE North 89°53’04” West, departing said County Road No. 101, along the northerly line of said 5.000-acre Brian Wayne Boyd tract, recorded in Instrument No. 20140428000404190, the northerly line of aforesaid 66.68-acre, Jane C. Willard tract and the southerly line of said 272.545-acre tract, a distance of 2669.41 feet to the southwest corner of said 272.545-acre tract, same being the southeast corner of aforesaid 450.71-acre, Central Frisco, Ltd., tract; THENCE North 89°54’14” West, along the southerly line of said 450.71-acre tract, the north line of Heritage Phase 3, an addition to the City of Celina, Texas, according to the Final Plat, recorded in Volume 2014, Page 66 of the Plat Records of Collin County, Texas and the northerly line of Heritage Phase 2, an addition to the City of Celina, Texas, according to the Final Plat, recorded in Volume P, Page 632 of the Plat Records of Collin County, Texas, a distance of 2005.13 feet to the southwest corner of said 450.71-acre tract, same being the southeast corner of Morgan Lakes Estates Phase One, an addition to the City of Celina, Texas, according to the Final Plat, recorded in Volume I, Page 591 of the Plat Records of Collin County, Texas; THENCE in a northerly direction, along the westerly line of said 450.71-acre tract and the easterly line of said Morgan Lakes Estates Phase One, the following:

North 00°03’12” East, a distance of 461.22 feet to a corner;

North 07°08’40” East, a distance of 60.21 feet to the point of curvature of a non-tangent curve to the left;

Along the arc of said curve to the left, through a central angle of 06°21’24”, having a radius of 270.00 feet, a chord bearing of South 86°04’27” East, a chord distance of 29.94 feet and an arc length of 29.96 feet to the end of said curve;

South 89°02’33” East, a distance of 222.34 feet to a corner;

North 01°00’05” East, a distance of 107.20 feet to a corner;

North 51°42’33” East, a distance of 398.05 feet to a corner;

North 49°38’51” East, a distance of 210.56 feet to a corner;

North 36°54’05” West, a distance of 462.25 feet to a corner;

North 15°17’56” West, a distance of 60.26 feet to the point of curvature of a non-tangent curve to the right;

Along the arc of said curve to the right, through a central angle of 07°25’01”, having a radius of 530.00 feet, a chord bearing of North 78°46’38” East, a chord distance of 68.56 feet and an arc length of 68.61 feet to the end of said curve;

North 82°26’45” East, a distance of 62.14 feet to a corner;

North 38°02’48” West, a distance of 615.74 feet to a corner;

North 25°29’50” West, a distance of 423.56 feet to a corner;

North 11°11’38” East, a distance of 219.89 feet to a corner;

North 49°12’28” West, a distance of 934.00 feet to a corner;

North 45°38’34” West, a distance of 346.17 feet to a corner;

North 84°06’21” West, a distance of 374.78 feet to the northwest corner of said Morgan Lakes Estates Phase One, same being the westernmost, southwest corner of said 450.71-acre tract, same being on the easterly line of a called 15.071-acre tract of land, conveyed to SMR Family LP, as evidenced in a General Warranty Deed, recorded in Instrument No. 20090526000637370 of the Official Public Records of Collin County, Texas; THENCE North 01°51’32” East, continuing along the westerly line of said 450.71-acre tract and the easterly line of said 15.071-acre tract, a distance of 132.73 feet to the northeast corner of said 15.071-acre tract, same being the southeast corner of a called 16.369-acre tract of land, conveyed to Pyramid Drywall, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20160721000935850 of the Official Public Records of Collin County, Texas; THENCE North 00°50’57” West, East, continuing along the westerly line of said 450.71-acre tract and the easterly line of said 16.369-acre tract, a distance of 1184.08 feet to the easternmost, northeast corner of said 16.36—acre tract; THENCE North 87°07’46” West, continuing along the westerly line of said 450.71-acre tract and the easterly line of said 16.369-acre tract, a distance of 50.86 feet to a corner; THENCE North 00°51’58” West, continuing along the westerly line of said 450.71-acre tract, the easterly line of said 16.369-acre tract and the easterly line of the remainder of a tract of land, conveyed to Marvin T. Wilson and wife, Renetta T. Wilson, as evidenced in a Warranty Deed, recorded in County Clerk’s File No. 92-0004376 of the Land Records of Collin County, Texas, a distance of 489.53 feet to the northeast corner of said Wilson tract; THENCE South 89°48’22” West, continuing along the westerly line of said 450.71-acre tract and along the northerly line of said Wilson tract, a distance of 341.96 feet to the northwest corner of said Wilson tract, same being on the easterly right of way line of aforesaid State Highway 289 (Preston Road); THENCE North 00°16’22” East, continuing along the westerly line of said 450.71-acre tract and along the easterly right of way line of said State Highway 289 (Preston Road), a distance of 51.94 feet to the POINT OF BEGINNING and containing 1,432.8 gross acres of land, more or less, SAVE AND EXCEPT the following two tracts of land: TRACT 1: BEING a tract of land situated in the Benjamin Haile Survey, Abstract No. 397, City of Celina, Collin County, Texas, and being the remaining portion of a called 160.42-acre tract of land, conveyed to Kirk’s Rockin K Ranch & Land Company, Inc., as evidenced in a Special Warranty Deed, recorded in Volume 4139, Page 3116 of the Land Records of Collin County, Texas, and being more particularly described by metes and bounds as follows: BEGINNING at the southwest corner of said 160.42-acre tract, and the northwest corner of a 30’ Street Easement to Collin County, Texas, recorded in County Clerk’s File No. 96-0067345 of the Land Records of Collin County, Texas, same being on the easterly line of a called 272.545-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20150722000903300 of the Official Public Records of Collin County, Texas, same also being in County Road No. 101, a public use right of way, no record found; THENCE North 00°31’00” West, along the westerly line of said 160.42-acre tract, the easterly line of said 272.545-acre tract and along said County Road No. 101, a distance of 417.42 feet to the westernmost, southwest corner of a called 154.059-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20070725001023610 of the Official Public Records of Collin County, Texas; THENCE North 89°58’09” East, departing the westerly line of said 160.42-acre tract, the easterly line of said 272.545-acre tract, said County Road No. 101 and along a southerly line of said 154.059-acre tract, a distance of 417.42 feet to a corner; THENCE South 00°31’02” East, along a westerly line of said 154.059-acre tract, a distance of 417.42 feet to the southernmost, southwest corner of said 154.059-acre tract, same being on the southerly line of said 160.42-acre tract, same also being on the northerly line of a called “Tract Five” (18.748 acres), conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081250 of the Official Public Records of Collin County, Texas; THENCE South 89°58’09” West, along the southerly line of said 160.42-acre tract, the northerly line of said “Tract Five” and the northerly line of aforesaid 30’ wide Street Easement, a distance of 417.43 feet to the POINT OF BEGINNING and containing 4.0 acres of land, more or less. TRACT 2: BEING a tract of land, situated in the Mary Howell Survey, Abstract No. 396 and the Benjamin Haile Survey, Abstract No. 397 and being all of a called 26.620-acre tract of land, conveyed to John O. Rea and wife, Patricia O. Rea, as evidenced in a General Warranty Deed, recorded in County Clerk’s File No. 92-0067367 and all of a called 5.000-acre tract of land, conveyed to John W. Rea and spouse, Patricia O. Rea, as evidenced in a General Warranty Deed, recorded in County Clerk’s File No. 92-0067368, both of the Land Records of Collin County, Texas, and being more particularly described by metes and bounds as follows; BEGINNING at the northeast corner of said 26.620-acre tract, same being the northernmost, northwest corner of a called 167.027-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081290 of the Official Public Records of Collin County, Texas, same also being on the southerly line of a called 62.434-acre tract of land, conveyed to Eland Energy, Inc., as evidenced in a General Warranty Deed, recorded in Instrument No. 20141002001081260 of the Official Public Records of Collin County, Texas; THENCE in a southerly direction, departing the southerly line of said 62.434-acre tract, along the easterly line of said 26.620-acre tract and the westerly line of said 167.027-acre tract, the following:

South 01°29’15” East, a distance of 1335.38 feet to a corner;

North 89°49’39” West, a distance of 508.88 feet to a corner;

South 38°07’37” West, a distance of 430.66 feet to the southeast corner of said 26.620-acre tract; THENCE South 89°52’35” West, continuing along the westerly line of said 167.027-acre tract and along the southernmost line of said 26.620-acre tract, a distance of 297.86 feet to the southwest corner of said 26.620-acre tract, same being on the easterly line of a “Tract Two” (66.676 acres), conveyed to Eland Energy, Inc., as evidenced in said General Warranty Deed, recorded in Instrument No. 20141002001081250; THENCE in a northerly direction, along the westerly line of said 26.620-acre tract and the easterly line of said “Tract Two”, the following:

North 00°59’41” West, a distance of 263.88 feet to a corner;

South 63°10’27” East, a distance of 93.04 feet to a corner;

North 33°29’47” East, a distance of 96.33 feet to a corner;

North 55°28’52” East, a distance of 144.33 feet to a corner;

North 32°30’37” West, a distance of 235.17 feet to a corner;

North 16°40’31” East, a distance of 139.05 feet to a corner;

North 62°31’57” East, a distance of 233.49 feet to a corner;

North 23°42’01” East, a distance of 277.45 feet to a corner;

North 12°49’11” West, a distance of 66.79 feet to the northeast corner of said “Tract Two”; THENCE in a westerly direction, along the northerly line of said “ Tract Two”, a southerly line of said 26.620-acre tract and along the southerly line of aforesaid 5.000-acre tract, the following:

North 84°55’21” West, a distance of 167.79 feet to the south common corner of said 26.620-acre tract and said 5.000-acre tract;

North 84°55’21” West, a distance of 31.54 feet to a corner;

South 27°54’16” West, a distance of 108.75 feet to a corner;

North 47°35’32” West, a distance of 127.34 feet to a corner;

South 22°02’46” West, a distance of 111.09 feet to a corner;

North 51°01’12” West, a distance of 184.77 feet to a corner;

South 66°56’55” West, a distance of 73.70 feet to the southwest corner of said 5.000-acre tract and the northernmost, northwest corner of said “Tract Two”, same being on the easterly line of a called 154.059-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a Special Warranty Deed, recorded in Instrument No. 20070725001023610 of the Official Public Records of Collin County, Texas; THENCE North 00°21’55” West, along the westerly line of said 5.000-acre tract, the westerly line of said 26.620-acre tract and the easterly line of said 154.059-acre tract, a distance of 525.45 feet to the northwest corner of said 26.620-acre tract, same being the southwest corner of a called 6.000-acre tract of land, conveyed to Central Frisco, Ltd., as evidenced in a General Warranty Deed, recorded in Instrument No. 20110831000926240 of the Official Public Records of Collin County, Texas; THENCE North 89°21’14” East, departing the easterly line of said 154.059-acre tract, along the northerly line of said 26.620-acre tract, the southerly line of said 6.000-acre tract and the southerly line of aforesaid 62.434-acre tract, a distance of 1170.10 feet to the POINT OF BEGINNING and containing 31.6 acres of land, more or less. LEAVING a net area of 1,397.2 acres of land, more or less.

SECTION 3. (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, lieutenant governor, and 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 have been fulfilled and accomplished.

SECTION 4. (a) Section 3798.107, Special District Local Laws Code, as added by Section 1 of this Act, takes effect only if this Act receives a two-thirds vote of all the members elected to each house.

(b) If this Act does not receive a two-thirds vote of all the members elected to each house, Subchapter C, Chapter 3798, Special District Local Laws Code, as added by Section 1 of this Act, is amended by adding Section 3798.107 to read as follows:

Sec. 3798.107. NO EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain.

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

SECTION 5. This Act takes effect September 1, 2017.