By: Hinojosa S.B. No. 1056
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the directors and administration of the Hidalgo County
  Water Improvement District No. 3; creating a criminal offense.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle I, Title 6, Special District Local Laws
  Code, is amended by adding Chapter 9054 to read as follows:
  CHAPTER 9054. HIDALGO COUNTY WATER IMPROVEMENT DISTRICT NO. 3
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 9054.0001.  DEFINITIONS. In this chapter:
               (1)  "Board" means the district's board of directors.
               (2)  "Commission" means the Texas Commission on
  Environmental Quality.
               (3)  "Director" means a board member.
               (4)  "District" means the Hidalgo County Water
  Improvement District No. 3.
         Sec. 9054.0002.  NATURE OF DISTRICT. The district is a
  conservation and reclamation district organized to accomplish the
  purposes of Section 59, Article XVI, Texas Constitution, and
  operating as a water control and improvement district in accordance
  with Chapters 49 and 51, Water Code.
  SUBCHAPTER B. ELECTIONS
         Sec. 9054.0101.  ELECTIONS. (a) The district shall hold an
  election on the uniform election date in November of each
  even-numbered year to elect the appropriate number of directors.
         (b)  The district shall contract with the county elections
  administrator as provided by Subchapter D, Chapter 31, Election
  Code, to perform all duties and functions of the district in
  relation to an election of directors.
         (c)  Section 49.110, Water Code, does not apply to the
  district.
         (d)  The exemptions provided by Section 49.111, Water Code,
  do not apply to the district.
         Sec. 9054.0102.  ELIGIBILITY TO VOTE. To be eligible to vote
  in an election in the district, a person must be:
               (1)  a qualified voter as defined by Section 11.002,
  Election Code, on the day the person offers to vote; and
               (2)  a person who resides on land inside the territory
  defined by the boundaries of the district as those boundaries
  existed on January 1, 2011.
         Sec. 9054.0103.  PROCEDURES FOR IDENTIFYING VOTERS;
  PROVISIONAL VOTING. (a) The district shall submit to the registrar
  a description or map of the territory defined by the boundaries of
  the district as those boundaries existed on January 1, 2011, that is
  in sufficient detail to enable the registrar to produce the
  official list of the district's eligible voters.
         (b)  The district shall submit the information required
  under this section not later than the 30th day after the date of the
  last day to order a general or special election.
         (c)  If county election officials are unable to verify
  whether a voter is eligible under Section 9054.0102, the voter may
  be accepted to vote only provisionally under Section 63.011,
  Election Code.
         Sec. 9054.0104.  BOND AND CONTRACT ELECTIONS; NOVEMBER
  DATES. (a) A bond election held by the district must be held in
  accordance with Section 49.106, Water Code, except that the
  district may not hold the election on a date other than the uniform
  election date prescribed by Section 41.001, Election Code, that
  occurs in November of the applicable tax year.
         (b)  A contract election held by the district must be held in
  accordance with Section 49.108, Water Code, except that the
  district may not hold the election on a date other than the uniform
  election date prescribed by Section 41.001, Election Code, that
  occurs in November of the applicable tax year.
  SUBCHAPTER C. BOARD OF DIRECTORS
         Sec. 9054.0201.  DIRECTORS; TERMS. (a) The district is
  governed by a board of five directors.
         (b)  Directors serve staggered terms of four years and may
  not serve more than two consecutive terms.
         Sec. 9054.0202.  VACANCIES. (a) The district shall fill a
  vacancy on the board in accordance with Sections 49.105(a)-(c),
  Water Code.
         (b)  If a position on the board becomes vacant on a date that
  is more than two years before the next scheduled date for an
  election for the office, the board shall:
               (1)  appoint a person to fill the vacant office until a
  person elected to that office has qualified; and
               (2)  hold an election to elect a member to fill the
  vacant office for the remainder of the unexpired term together with
  the next regularly scheduled election for other directors' offices.
         (c)  Section 49.105(d) does not apply to the board.
         Sec. 9054.0203.  QUALIFICATIONS FOR DIRECTOR. (a) To be
  qualified to serve as a director, a person:
               (1)  must be eligible to hold office under Section
  141.001, Election Code, and Section 9054.0204; and
               (2)  must:
                     (A)  own land subject to taxation in the district;
                     (B)  be a user of the facilities of the district;
  or
                     (C)  be a qualified voter of the district under
  Section 9054.0102.
         (b)  Section 49.052, Water Code, applies to the district.
         Sec. 9054.0204.  DISQUALIFICATION OF DIRECTORS. (a) A
  member of the governing body of another political subdivision is
  disqualified from serving as a director.
         (b)  A director is disqualified from serving as a director
  if:
               (1)  the director is appointed or elected as a member of
  the governing body of another political subdivision; or
               (2)  the board determines a relationship or employment
  exists that constitutes a disqualification under Section
  49.052(a), Water Code.
         (c)  A person is disqualified from serving as a director if
  the person or a relative of the person 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.
         Sec. 9054.0205.  DIRECTORS' EDUCATION PROGRAM. (a) The
  board shall establish a program of education for the directors that
  includes information on:
               (1)  the history of the district;
               (2)  the district's statutory authority;
               (3)  laws applicable to the district, including the
  requirements of Chapters 551 and 552, Government Code;
               (4)  relevant legal developments related to water
  district governance;
               (5)  the duties and responsibilities of the board;
               (6)  conflict of interest laws and other laws related
  to public officials; and
               (7)  any applicable ethics policies adopted by the
  commission or the Texas Ethics Commission.
         (b)  The district shall pay from district revenue the costs
  associated with the development of the education program.
         (c)  The education program may include training provided by
  an organization offering courses that have been approved by the
  commission.
         (d)  The board may adopt bylaws modifying the education
  program as necessary to meet district needs.
         Sec. 9054.0206.  MANDATORY EDUCATION FOR DIRECTORS. (a)
  Each director shall complete the education program established
  under Section 9054.0205 before the first anniversary of the date on
  which the director was appointed or elected.
         (b)  The district shall reimburse a director for the
  reasonable expenses incurred by the director in attending the
  education program.
         (c)  A director who is elected to serve a subsequent term
  shall fulfill the education requirements specified by district
  bylaws.
         Sec. 9054.0207.  DIRECTORS' CONFLICTS OF INTEREST. A
  director is subject to the provisions of Chapters 171 and 176, Local
  Government Code, relating to the regulation of conflicts of
  interest of officers of local governments.
         Sec. 9054.0208.  REMOVAL OF DIRECTOR. (a) A director may be
  removed from the board by a majority of the other directors if the
  director:
               (1)  does not have at the time of appointment the
  qualifications required to be eligible to hold office under Section
  141.001, Election Code;
               (2)  does not complete the education program as
  required by Section 9054.0206;
               (3)  does not meet the qualifications for serving under
  Section 9054.0203 or is disqualified from serving under Section
  9054.0204;
               (4)  violates Section 9054.0301;
               (5)  misses one-half or more of the regularly scheduled
  meetings during the preceding 12 months; or
               (6)  has been convicted or plead guilty to a civil or
  criminal offense of:
                     (A)  bribery;
                     (B)  embezzlement, extortion, or other theft of
  public money;
                     (C)  perjury;
                     (D)  coercion of public servant or voter;
                     (E)  tampering with governmental record;
                     (F)  misuse of official information;
                     (G)  abuse of official capacity;
                     (H)  conspiracy to commit or an attempted
  commission of an offense described by Paragraphs (A)-(G); or
                     (I)  an offense related to the management or
  governance of the district.
         (b)  The board shall adopt procedures for the removal of a
  director under this section that are designed to provide due
  process to the director. Procedures adopted under this subsection
  must include reasonable notice and public hearing.
         (c)  The board shall start the process of notice and public
  hearing not later than the 30th day after the date the general
  manager or a director not subject for removal receives notice of a
  violation under Subsection (a). On or before the 60th day after the
  date of the public hearing, the remaining board of directors shall
  make a determination on whether a violation under Subsection (a)
  occurred.
         (d)  Not later than the 30th day after the date the board
  votes to remove a director, the board shall start the process to
  fill the vacancy to replace the director with a qualified person.
         (e)  Reasonable notice and a public hearing are not required
  if the director to be removed expressly and in writing waives the
  notice and hearing.
         Sec. 9054.0209.  FILING DIRECTOR'S FINANCIAL STATEMENT. (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. 9054.0210.  SPECIAL DIRECTOR. (a) The governing body
  of a municipality that enters into a contract or agreement with a
  district located within at least 80 percent of the corporate limits
  or extraterritorial jurisdiction of a municipality may appoint a
  special director to the board. The governing body may appoint not
  more than one special director to serve at a time, irrespective of
  the number of contracts or agreements that are in effect.
         (b)  Notwithstanding Section 51.072, Water Code, a special
  director is not required to own land subject to taxation in the
  district or be a qualified voter of the district.
         (c)  A special director serves as a director only during the
  period a contract or agreement described by Subsection (a) is in
  effect. If a contract or agreement is in effect for a term of more
  than four years, a special director serves a four-year term of
  office. The governing body of the municipality that appointed a
  special director shall fill a vacancy in the office of special
  director.
         (d)  A special director may vote only on a matter before the
  board that is directly related to the subject of the contract or
  agreement between the municipality and the district.
         (e)  A matter on which a special director may vote requires
  at least four affirmative votes for passage.
  SUBCHAPTER D. DISTRICT ADMINISTRATION
         Sec. 9054.0301.  PROHIBITED CONDUCT FOR DIRECTORS AND
  DISTRICT EMPLOYEES. A director or a district employee may not:
               (1)  accept or solicit a 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;
               (6)  have a personal interest in an agreement executed
  by the district; or
               (7)  be employed by, participate in the management of,
  or have a substantial interest in a business entity or other
  organization, other than a governmental entity, which receives
  money from the district.
         Sec. 9054.0302.  PROHIBITED HIRING OR CONTRACTING
  PRACTICES. If a director is an employee of another taxing entity or
  economic development corporation located in Hidalgo County, 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 or
  economic development corporation that employs the director; or
               (2)  a person related within the third degree of
  consanguinity or affinity, as determined under Chapter 573,
  Government Code, to an elected official described by Subdivision
  (1).
         Sec. 9054.0303.  POWERS AND DUTIES OF BOARD MEMBERS. (a)
  The president is the chief executive officer of the district and
  presides at all meetings of the board. The president may execute
  documents on behalf of the district.
         (b)  The vice president shall act as president in the absence
  or disability of the president.
         Sec. 9054.0304.  GENERAL MANAGER. (a) The district shall
  employ a general manager.
         (b)  The general manager serves at the pleasure of and
  reports only to the board.
         (c)  The general manager may not serve as a director on the
  board of directors of the district.
         (d)  To be eligible to serve as the general manager, a person
  must:
               (1)  have previous administrative experience and
  training applicable to special districts as general manager; and
               (2)  be qualified to perform the duties described by
  Section 9054.0305.
         (e)  The general manager is subject to the standards for
  disqualification for serving as a director described by Section
  9054.0204. A person applying to serve as general manager of the
  district shall disclose any potential violations of Section
  9054.0204 before accepting the position of general manager.
         (f)  The board shall determine the compensation and terms of
  employment for the general manager. 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. If the board
  enters into an employment contract with the general manager, the
  term of the contract may not exceed two years.
         (g)  A failure of the general manager to disclose any
  potential violations of Section 9054.0204 is a ground for the
  general manager's termination.
         Sec. 9054.0305.  DUTIES OF GENERAL MANAGER. (a) The board
  may delegate duties to the general manager except as provided by
  Subsection (c). The board may not assign the general manager's
  duties to any other person.
         (b)  The general manager shall:
               (1)  manage the overall strategy and operations of the
  district's projects, services, budget, finances, and community
  relations subject only to orders of the board;
               (2)  consult with, advise, and support the board to
  efficiently accomplish the purposes of the district and to ensure
  compliance with all regulatory, financing, and legal requirements;
               (3)  assist the board in planning, developing, and
  implementing policies to accomplish the purposes of the district;
               (4)  develop and implement policies to improve the
  district's communication with the district's service community;
               (5)  provide leadership and supervision to district
  employees;
               (6)  create and maintain organizational charts to
  improve the district's effectiveness;
               (7)  coordinate and develop short-term and long-term
  goals for the district;
               (8)  monitor current district projects and prioritize
  future district projects;
               (9)  evaluate contracts, grants, and commitments as
  authorized by the board;
               (10)  plan, organize, and direct district programs and
  services, evaluate the results of those programs and services, and
  recommend policies, procedures, and board actions based on that
  evaluation;
               (11)  employ all persons necessary for the proper
  handling of the business and operation of the district and
  determine the compensation of those employees; and
               (12)  perform other general responsibilities as
  determined by the board.
         (c)  The board may not authorize the general manager or other
  employee of the district to execute a contract or documents on
  behalf of the district that have a value of $10,000 or more.
         Sec. 9054.0306.  EXCLUSION OF TERRITORY. (a) This section
  applies to the exclusion of territory by the district under the
  authority of Subchapters J and J-1, Chapter 49, Water Code, and
  Subchapter O, Chapter 51, Water Code.
         (b)  The district may exclude territory on the basis that the
  land is in agricultural use only if the land meets the requirements
  for agricultural use under Section 23.51, Tax Code.
         (c)  The district may exclude territory on the basis that the
  land is nonirrigated property only if the land meets the
  requirements for nonirrigated property under Section 49.309, Water
  Code.
         (d)  The district may exclude territory on the basis of the
  property being urban property only if the property meets the
  requirements of Section 49.3181, Water Code.
         (e)  The district may not exclude territory during the period
  of time between the first day that a candidate may file an
  application under Section 141.040, Election Code, and the day of
  the election in which that candidate appears on the ballot.
         (f)  The board may not initiate an exclusion of territory
  unless the board receives an application or petition requesting the
  exclusion as provided by Subchapter O, Chapter 51, Water Code.
  SUBCHAPTER E. OPERATING PROVISIONS
         Sec. 9054.0401.  WATER CHARGES. The district may not charge
  a rate for the delivery of water to all customers that is greater
  than the lowest comparable delivery rate charged by any other
  irrigation district in Hidalgo County.
         Sec. 9054.0402.  ADDITION OF TERRITORY. The district may
  not annex or otherwise add territory to the district.
         Sec. 9054.0403.  CONSTRUCTION OR EXPANSION OF WATER DELIVERY
  SYSTEM. The district may not construct or extend any water delivery
  system beyond the district boundaries, as those boundaries existed
  on April 1, 2022.
         Sec. 9054.0404.  INFORMATION REQUIRED ON DISTRICT WEBSITE.
  (a) The district shall maintain and update an Internet website.
         (b)  The district shall post regularly for public viewing on
  the district's Internet website in a manner that is searchable and
  intuitive to users:
               (1)  the annual financial statement required by Section
  140.005, Local Government Code;
               (2)  the annual audit report required by Section
  49.191, Water Code, or the annual financial dormancy affidavit
  submitted under Section 49.197, Water Code;
               (3)  budget information of the district described by
  Sections 26.18(4)-(8), Tax Code;
               (4)  property tax rate information of the district
  described by Sections 26.18(9), (10), (12), and (13), Tax Code;
               (5)  operating information of the district described by
  Sections 2051.202(d)(2)-(14), Government Code, if applicable,
  including the name of the general manager; and
               (6)  financial information of the district that
  satisfies the requirements of Sections 403.0241(c)(9)-(11),
  Government Code.
         (c)  The district shall update the information under this
  section routinely as the information and documents become available
  to and are provided by the designated officers or employees of the
  district.
         (d)  Not later than the third day before the date a meeting is
  held by the district, the district shall publish on the district's
  Internet website the agenda for the meeting.
         (e)  Not later than the third day 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.
         Sec. 9054.0405.  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 developed
  under Subsection (a) a district employee's:
               (1)  personal identifying information, as defined by
  Section 521.002, Business & Commerce Code; or
               (2)  salary.
         (c)  The district shall display prominently on the
  district's Internet website a link to the database established
  under this section.
         (d)  The information provided in the district check register
  reports must be updated monthly.
         (e)  The district shall maintain in the database information
  related to an adopted budget as required by this section until the
  third anniversary of the date the budget was adopted.
         Sec. 9054.0406.  ANNUAL FINANCIAL AUDIT REPORT PROVIDED TO
  COMMISSION. (a) The district is subject to the audit requirements
  of Section 49.191, Water Code, unless the district meets the
  requirements of Section 49.197, Water Code. The district is not
  exempt under Section 49.198, Water Code, from the audit report
  unless the district has no outstanding debt obligation or has not
  issued a public security, as defined by Section 1201.002,
  Government Code, during the fiscal year.
         (b)  The district shall include in the annual audit report
  budget-to-actual comparisons in connection with general purpose
  external financial reporting to demonstrate compliance with
  applicable law. The district shall include a budgetary comparison
  schedule of the proprietary fund or enterprise fund to demonstrate
  compliance with applicable law and contractual provisions.
         (c)  The district shall include in the annual audit report a
  statistical section that provides a range of trend data covering
  key financial indicators from the immediately preceding 10 fiscal
  years, including general government revenues and expenditures,
  property tax collections, and debt burden.
         (d)  The district shall prepare and present the commission's
  supplementary information schedules in the district's annual audit
  report. If the district generated more than 70 percent of its
  operating revenue for the delivery of raw water used for municipal
  purpose, the district may not claim in its annual audit report the
  exemption applicable to a district whose only purpose is to provide
  irrigation or navigation facilities or services.
         (e)  The information required by this section must be
  subjected to the auditing procedures applied in the audit of the
  basic financial statements and, accordingly, the independent
  auditor's opinion of the information.
         (f)  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.
         Sec. 9054.0407.  REVIEW AND COMMENT ON BUDGET. The district
  shall develop and implement a program that provides the district's
  wholesale customers an opportunity to review and comment on the
  district's annual budget that applies to the wholesale customers'
  services before the board adopts that budget.
         Sec. 9054.0408.  INTERNET POSTING OF MEETING MATERIALS;
  RECORDING OF CERTAIN HEARINGS. The district is subject to the
  requirements of Section 551.1283, Government Code.
         SECTION 2.  (a) A person who has served as a director of the
  Hidalgo County Water Improvement District No. 3 for more than eight
  consecutive years as of the effective date of this Act is
  disqualified from serving another term as a director of that
  district.
         (b)  A director described by Subsection (a) of this section
  serving on the board of directors of the Hidalgo County Water
  Improvement District No. 3 immediately before the effective date of
  this Act may continue to serve as director of that district for the
  remainder of the director's term.
         SECTION 3.  Not later than the 30th day after the effective
  date of this Act, the board of directors of the Hidalgo County Water
  Improvement District No. 3 shall adopt procedures for the removal
  of a director of that district under Section 9054.0208, Special
  District Local Laws Code, as added by this Act.
         SECTION 4.  Sections 1 through 7, Chapter 1022 (S.B. 2185),
  Acts of the 87th Legislature, Regular Session, 2021, are repealed.
         SECTION 5.  (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 6.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2023.