86R33805 AAF-F
 
  By: Hinojosa S.B. No. 2552
 
  (Canales)
 
  Substitute the following for S.B. No. 2552:  No.
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the administration of the Agua Special Utility
  District; creating a criminal offense.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 7201.0513(a), Special District Local
  Laws Code, is amended to read as follows:
         (a)  Before the first election of directors [under Section
  7201.052], the initial board shall establish a program of education
  for directors that includes information on:
               (1)  the history of the district;
               (2)  the district's enabling legislation;
               (3)  Chapters 49 and 65, Water Code, and other laws that
  apply to the district, including the requirements of the:
                     (A)  open meetings law, Chapter 551, Government
  Code; and
                     (B)  public information law, Chapter 552,
  Government Code;
               (4)  relevant legal developments related to water
  district governance;
               (5)  the duties and responsibilities of the board;
               (6)  the requirements of conflict of interest laws and
  other laws relating to public officials; and
               (7)  any applicable ethics policies adopted by the
  Texas Commission on Environmental Quality or the Texas Ethics
  Commission.
         SECTION 2.  Subchapter B, Chapter 7201, Special District
  Local Laws Code, is amended by adding Section 7201.055 to read as
  follows:
         Sec. 7201.055.  COMPOSITION OF BOARD; TERMS. (a)  The
  district is governed by a board of seven directors, each of whom
  occupies a numbered position on the board and represents a unique
  subdistrict containing, as near as practicable, one-seventh of the
  total number of residents in the district.
         (b)  A candidate for a position on the board must:
               (1)  reside in the subdistrict represented by that
  position; and
               (2)  be eligible to hold office under Section 141.001,
  Election Code.
         (c)  The district shall fill a vacancy on the board in
  accordance with Section 49.105, Water Code.
         (d)  Directors serve staggered terms of four years and may
  not serve more than two consecutive terms.
         (e)  A person who has served as a member of the board of
  directors of the corporation is not eligible to serve as a district
  director.
         (f)  If a director is an employee of another taxing entity
  within the district, the board may not employ as an employee, as a
  consultant, or on a contract basis:
               (1)  an elected official of the other taxing entity
  that employs the director; or
               (2)  a person related to that elected official in the
  third degree of consanguinity or affinity as determined under
  Chapter 573, Government Code.
         SECTION 3.  Subchapter B, Chapter 7201, Special District
  Local Laws Code, is amended by adding Sections 7201.056, 7201.057,
  and 7201.058 to read as follows:
         Sec. 7201.056.  FILING OF FINANCIAL STATEMENT BY DIRECTOR.
  (a)  A director shall file the financial statement required of
  state officers under Subchapter B, Chapter 572, Government Code,
  with the Texas Ethics Commission.
         (b)  Subchapter B, Chapter 572, Government Code:
               (1)  applies to a director as if the director were a
  state officer; and
               (2)  governs the contents, timeliness of filing, and
  public inspection of a statement filed under Subsection (a).
         (c)  A director commits an offense if the director fails to
  file the statement required by Subsection (a). An offense under
  this subsection is a Class B misdemeanor.
         Sec. 7201.057.  SUBSTANTIAL BUSINESS INTEREST. For purposes
  of Chapter 171, Local Government Code, a director, in connection
  with a vote or decision by the board, is considered to have a
  substantial interest in a business entity if a person related to the
  director within the third degree by consanguinity or affinity, as
  determined under Chapter 573, Government Code, has a substantial
  interest in the business entity.
         Sec. 7201.058.  GROUNDS FOR REMOVAL. A director may be
  removed from the board if the director:
               (1)  does not have at the time of appointment the
  qualifications required by Section 7201.055(b);
               (2)  does not complete the initial board training
  required by Section 7201.0512;
               (3)  does not complete the education program required
  by Section 7201.054;
               (4)  does not meet the eligibility requirements under
  Section 7201.072; or
               (5)  fails to comply with Section 7201.071.
         SECTION 4.  Chapter 7201, Special District Local Laws Code,
  is amended by adding Subchapter B-1 to read as follows:
  SUBCHAPTER B-1.  DISTRICT ADMINISTRATION
         Sec. 7201.071.  PROHIBITED CONDUCT FOR DIRECTORS AND
  DISTRICT EMPLOYEES. A director or district employee may not:
               (1)  accept or solicit any gift, favor, or service
  that:
                     (A)  might reasonably influence the director or
  employee in the discharge of an official duty; or
                     (B)  the director or employee knows or should know
  is offered with the intent to influence the director's or employee's
  official conduct;
               (2)  accept other employment or engage in a business or
  professional activity that the director or employee might
  reasonably expect would require or induce the director or employee
  to disclose confidential information acquired in the course of the
  director's or employee's duties under this chapter;
               (3)  accept other employment or compensation that could
  reasonably be expected to impair the director's or employee's
  independent judgment in the performance of the director's or
  employee's duties under this chapter;
               (4)  make personal investments that could reasonably be
  expected to create a substantial conflict between the director's or
  employee's private interest and the interest of the district;
               (5)  intentionally or knowingly solicit, accept, or
  agree to accept a benefit for the director's or employee's exercise
  of powers under this chapter or performance of duties under this
  chapter in favor of a third party; or
               (6)  have a personal interest in an agreement executed
  by the district.
         Sec. 7201.072.  ELIGIBILITY OF DIRECTOR AND GENERAL MANAGER.
  (a)  A person is not eligible to serve as a director or general
  manager of the district if the person or the person's relative
  within the third degree by consanguinity or affinity, as determined
  by Chapter 573, Government Code:
               (1)  received 10 percent or more of gross income for the
  previous year from a business entity or other organization, other
  than a governmental entity, that receives money from the district;
               (2)  is employed by or participates in the management
  of a business entity or other organization, other than a
  governmental entity, that receives money from the district;
               (3)  directly or indirectly owns or controls more than
  a 10 percent interest in the fair market value of a business or
  other organization that receives money from the district;
               (4)  serves as a corporate officer or member of the
  board of directors of a business entity or other organization that
  receives money from the district;
               (5)  is a creditor, debtor, or guarantor in an amount of
  $5,000 or more of a person or business entity that receives money
  from the district;
               (6)  uses or receives a substantial amount of tangible
  goods, services, or money from the district other than compensation
  or reimbursement authorized by law; or
               (7)  is required to register as a lobbyist under
  Chapter 305, Government Code, because of the person's activities
  for compensation on behalf of a profession related to the operation
  of the district.
         (b)  A person applying to serve as general manager of the
  district shall disclose any potential violations of Subsection (a)
  before accepting the position of general manager.
         Sec. 7201.073.  GENERAL MANAGER; DUTIES. (a)  The board
  shall employ a person with prior experience and training as general
  manager.
         (b)  The duties of the general manager include:
               (1)  managing the overall strategy and operations of
  the district's projects, services, budget, finances, and community
  relations;
               (2)  consulting with, advising, and supporting the
  board to efficiently accomplish the purposes of the district and to
  ensure compliance with all regulatory, financing, and legal
  requirements;
               (3)  assisting the board in planning, developing, and
  implementing policies to accomplish the purposes of the district;
               (4)  developing and implementing policies to improve
  the district's communication with the district's service community;
               (5)  providing leadership and supervision to district
  employees;
               (6)  creating and maintaining organizational charts to
  improve the district's effectiveness;
               (7)  coordinating and developing short-term and
  long-term goals for the district;
               (8)  monitoring current district projects and
  prioritizing future district projects;
               (9)  evaluating contracts, grants, and commitments as
  authorized by the board;
               (10)  planning, organizing, and directing district
  programs and services, evaluating the results of those programs and
  services, and recommending policies, procedures, and board actions
  based on that evaluation;
               (11)  employing all persons necessary for the proper
  handling of the business and operation of the district and
  determining the compensation of those employees; and
               (12)  performing other general responsibilities as
  determined by the board.
         (c)  The board may assign the duties under Subsection (b)
  only to the general manager. The board may not assign the duties to
  any other person.
         (d)  The general manager is an employee of the district. The
  general manager serves at the pleasure of and reports only to the
  board.
         (e)  The board shall determine the compensation and terms of
  employment for the general manager.
         (f)  The board may increase the compensation of the general
  manager in an amount not to exceed 10 percent of the amount of the
  general manager's compensation immediately before the effective
  date of the increase.
         (g)  If the board enters into an employment contract with the
  general manager, the term of the contract may not exceed two years.
         (h)  It is a ground for termination of the general manager if
  the general manager fails to disclose any potential violations of
  Section 7201.072 as required by that section.
         SECTION 5.  Subchapter C, Chapter 7201, Special District
  Local Laws Code, is amended by adding Section 7201.104 to read as
  follows:
         Sec. 7201.104.  SEARCHABLE DISTRICT EXPENDITURE DATABASE.
  (a)  The district shall establish and post on the district's
  Internet website a database of district check register reports,
  including district expenditures and contracts. The database must
  include the amount, date, description, payor, and payee of the
  expenditures, and, if applicable, parties to the contract.
         (b)  The district may not include in the database under
  Subsection (a) a district employee's salary or personal identifying
  information, as defined by Section 521.002, Business & Commerce
  Code.
         (c)  The district shall prominently display a link to the
  database established under this section on the district's Internet
  website. The information provided in the district check register
  reports must be updated monthly.
         (d)  The district shall keep in the database information
  required by this section related to an adopted budget until the
  third anniversary of the date the budget was adopted.
         SECTION 6.  Section 7201.201, Special District Local Laws
  Code, is amended by adding Subsection (c) to read as follows:
         (c)  Not later than the third day after the date the
  accountant finalizes the audit required by this section, the
  district shall publish the audit on the district's Internet
  website.
         SECTION 7.  Section 7201.204, Special District Local Laws
  Code, is amended to read as follows:
         Sec. 7201.204.  NEWSLETTER, WEBSITE, AND ANNUAL FINANCIAL
  INFORMATION. (a)  The district shall maintain and update monthly
  an Internet website with current information concerning [agendas,
  minutes,] policies, monthly financial information concerning
  revenues and expenses, and monthly [quarterly] summaries.
         (b)  Not later than 72 hours before a meeting held by the
  district, the district shall publish on the district's Internet
  website the agenda for the meeting.
         (c)  Not later than 72 hours after the date the district
  adopts the minutes of a meeting held by the district, the district
  shall publish on the district's Internet website the minutes
  adopted by the district.
         (d)  The district shall provide information, including
  summary financial information based on the preceding year's annual
  audit, to district customers at an annual meeting.
         SECTION 8.  Effective December 31, 2019, Sections 7201.051
  and 7201.052, Special District Local Laws Code, are repealed.
         SECTION 9.  (a)  Not later than December 31, 2019, the board
  of directors of the Agua Special Utility District shall determine
  each subdistrict in accordance with Section 7201.055, Special
  District Local Laws Code, as added by this Act, and in compliance
  with all applicable provisions of the Election Code.
         (b)  The initial election for positions 1, 2, and 3 on the
  board shall be held on the uniform election date in May 2020. The
  initial election for positions 4 through 7 shall be held on the
  uniform election date in May 2022.
         SECTION 10.  Not later than January 1, 2020:
               (1)  a member of the board of directors of the Agua
  Special Utility District shall file a financial statement as
  required by Section 7201.056, Special District Local Laws Code, as
  added by this Act; and
               (2)  the Agua Special Utility District shall establish
  and post on the district's Internet website a database of district
  check register reports as required by Section 7201.104, Special
  District Local Laws Code, as added by this Act.
         SECTION 11.  (a)  The changes in law made by this Act do not
  affect the entitlement of a member serving on the board of directors
  of the Agua Special Utility District immediately before the
  effective date of this Act to continue to serve as a member of the
  board for the remainder of the member's term.
         (b)  A member described by Subsection (a) of this section may
  not serve more than two consecutive terms on the board even though
  one or more of those terms began before the effective date of this
  Act.
         SECTION 12.  The changes in law made by this Act apply only
  to a general manager employed or whose employment contract is
  renewed or extended by the Agua Special Utility District on or after
  the effective date of this Act. A general manager employed or whose
  employment contract is renewed or extended before the effective
  date of this Act is governed by the law in effect on the date the
  general manager was employed, and the former law is continued in
  effect for that purpose.
         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.  (a)  Section 2 of this Act takes effect
  December 31, 2019.
         (b)  Except as provided by Subsection (a) of this section,
  this Act takes effect September 1, 2019.